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Discussion in 'Community Discussion' started by jkcerda, Jun 13, 2017.
anyone set up one? thinking about setting it up for the family in case I croak out on the road.
Talk to a lawyer or a financial planner.
looking into it, but I wanted a perspective of those who have done it first.
Yes, should help the heirs stay out of probate.
TRYING to figure out the difference between it and the will.
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looks like a trust & a trust fund are 2 different things
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Further reason to talk to a financial planner.
I have some previous experience in this field. Many things come in to play with planning your estate. As you have medical specialties, there are also specialties within the field of law. It's imperative you speak with an estate attorney, not a generalist. Depending on the complexity of your estate, someone with a CFP (certified financial planner) may be very important. Check their status online if they say they have it.
There are many types of trusts and they may be different depending on the country you live in. A "trust fund" is really just a trust that owns assets to periodically pay out. The key factors that come in to play for which type of trust is best for you may include:
Estate total net worth
Type of assets to protect (including real estate owned across state lines - this is a really big deal)
Ages of beneficiaries.
Life Insurance in force (I list this separately because the face value comes in to play for total estate net worth and most people don't realize how much of a role it can play).
You don't want underage children to receive assets. They must enter a trust or a court will appoint someone to handle the finances of your children and you don't have a choice in who that is. A trust allows you not only to choose the trustee, but also in how the assets are distributed and/or used for the benefit of the children.
The last part of that last sentence is vital. If an estate is vast, young people tend not to have the maturity to handle it all at once. This is where the concept of a trust fund comes in to play. I've known people who received a percentage of the trust value at 18/25/30/35 with the majority flowing through at 35. They lost it all. There weren't enough stipulations for them to receive the funds. A trust can instead limit to a certain annual income based on a number of variables. Which can include things like, maintain x grade point average in college, work 30-40 hours per week doing X, etc.
A trust also can't be challenged like a will. Once assets hit a trust, those assets must adhere to the rules of the trust. You also bypass probate costs with anything that moves to the trust, even at death. Which brings up another potential issue. Any trust that you have management interest in while you are alive is included in your estate. That is important if your estate is above a certain value and if LTC (Long Term Care) becomes an issue.
The last piece of advice I'll throw your way is consider a durable power of attorney. It gives someone the ability to handle your affairs if you become legally incapacitated. We had a peer who didn't have one. He experienced a terrible automobile accident that severely incapacitated his long term memory. His wife had to hit the courts any time any decision needed to be made that affected his well being. It was very hard for her.
I hope this gives you some things to consider and helps you have a more efficient first discussion with your planning team. You question is a good one and tends to be left for "some day" which never comes. Then it becomes too late.
I buried my gold bars in numerous undisclosed locations, leaving only scant clues scattered throughout my personal effects. I trust my heirs to have a jolly good time going on a good old fashioned treasure hunt!
Also, there is a trust that is created as a stipulation of the will and a "living trust" which is set up now and ties your hands if you ever want to do something with your own property (sell a house, car, etc.) while you are still living. A living trust is useful only in a few specific situations, generally involving great wealth.
If you don't have over a million, a will is probably all you need.
Interview your estate planners, just like you would financial planners, auto mechanics, doctors and so forth. Some of them will talk you into products that benefit them more than they benefit you!