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Sacramento Estate Planning—You Don’t Have to Be Rich to Set Up a Trust

Published by Trudy Nearn on April 8, 2014


Trust funds. If you’re like most Americans, you’ve already heard of this term before and might be under the impression that a trust fund works only for the ultra-rich. The “wealthy”, after all, have more than a few assets to move around and transfer to family, friends, or other entities after they pass away and a trust allows them to do it with minimal intrusion from creditors and tax collectors. However, you could benefit from having one.

Yes, trust funds allow a person’s money to continue to be useful to his beneficiaries, long after he passes, but trusts aren’t exclusive for ultra-high net worth individuals. Middle class citizens could also use a trust fund to make sure that their assets, large or small, would be properly distributed to named heirs. A U.S. News article by Joanne Cleaver for the U.S. News starts with the line, “You don't have to be wealthy to benefit from trusts,” and proceeds to explain three instances where a trust fund can be useful:

"Not everything about the future is unknowable. Some family circumstances are all too predictable: divorce, disability and dumbfounding behavior.

Trusts can be a defense against these asset-shattering factors, estate lawyers say.

In the past, trusts have been the moat protecting the wealthy from estate taxes. But only about 0.3 percent of estates are likely to be hit with federal estate taxes, thanks to the high ceilings for such taxes ($5.34 million for single taxpayers and $10.68 million for married couples), says California lawyer Dennis Sandoval, who is also the director of education for the American Academy of Estate Planning Attorneys. Now, trusts are coming in handy as a first line of protection against illness and other potential complications."

To begin the process of setting up a trust fund, you will need to hire a Sacramento estate planning attorney and provide the details on all accounts and deeds that you intend to place in the trust. Keep in mind that the principle behind a trust is to remove an asset from your possession and transfer it to a legally-designated entity. Almost any type of asset—including houses, savings accounts, even money market accounts—can be placed into a trust.

If you believe you are ready to set up a trust or would just like to talk to a professional and get your questions answered; feel free to contact a trusted Sacramento estate planning firm like Generations to discuss the pros, cons, and your expectations as to how the trust will function and operate.

(Source: When to Leave Your Money in a Trust, US News, Feb. 27, 2014)

Category: Industry News


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