{"id":1703,"date":"2022-11-30T14:25:11","date_gmt":"2022-11-30T19:25:11","guid":{"rendered":"https:\/\/www.firstfamilywealth.com\/?post_type=oi_article&#038;p=1703"},"modified":"2022-11-30T14:25:11","modified_gmt":"2022-11-30T19:25:11","slug":"the-advantages-of-a-family-trust","status":"publish","type":"oi_article","link":"https:\/\/www.firstfamilywealth.com\/articles\/the-advantages-of-a-family-trust\/","title":{"rendered":"The Advantages of a Family Trust"},"content":{"rendered":"\n<p>Family trusts are an important tool for managing wealth across multiple generations. They can help you avoid the time-consuming and costly process of probate, keep your assets private, minimize taxes, and ensure that your wealth is distributed according to your wishes.&nbsp;<\/p>\n\n\n\n<p>Family trusts tend to be most appropriate for families with large estates or a complicated mix of assets. Depending on your needs, they can help provide for a surviving spouse and other heirs, safeguard assets until beneficiaries have reached adulthood, set conditions on distributions that align with your values, or provide for a child with special needs while still giving them access to government benefits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is a family trust?<\/strong><\/h2>\n\n\n\n<p>A trust is a vehicle that holds and distributes assets. A <em>grantor<\/em> places trust assets under the management of a <em>trustee<\/em> on behalf of a <em>beneficiary<\/em>. In a family trust, the beneficiary is related to the grantor. For example, parents or grandparents might be grantors, while children, grandchildren, nephews, and nieces might be beneficiaries.&nbsp;<\/p>\n\n\n\n<p>Family trusts offer several advantages in estate planning.&nbsp;<\/p>\n\n\n\n<ul>\n<li><em>Greater control<\/em>. When you establish a family trust, you can set specific conditions on when and how your assets are distributed. For example, you can decide that beneficiaries only access the assets when they reach a certain age or milestone, such as graduating from college.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><em>Greater privacy and quicker distribution of assets<\/em>. Because a family trust will typically avoid probate, trust assets may be able to remain private and pass more quickly to beneficiaries.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><em>Potentially lower estate taxes<\/em>. Depending on how the trust is set up, trust assets may no longer be part of your estate and therefore not subject to estate taxes.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Revocable vs irrevocable trusts<\/strong><\/h2>\n\n\n\n<p>While there are several types of family trusts, they fall into two main categories: revocable and irrevocable trusts.&nbsp;<\/p>\n\n\n\n<p><em>Revocable trust<\/em>. A revocable trust allows the grantor to modify the terms of the trust, or even dissolve it after it\u2019s established. The assets in a revocable trust remain a part of your taxable estate while you\u2019re alive, so it provides no immediate tax advantages. Although, when you die, the revocable trust will help prevent your assets from getting caught in probate.<\/p>\n\n\n\n<p><em>Irrevocable trust.<\/em> An irrevocable trust usually can\u2019t be modified once established. It allows you to effectively remove assets from your taxable estate before they are eventually distributed to your beneficiaries. They can be particularly powerful tools if your estate is larger than the estate and gift tax exemption of $12.06 million per individual and $24.12 million per couple, in 2022.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to set up a family trust<\/strong><\/h2>\n\n\n\n<p>Family trusts can be complicated, and you\u2019ll need the services of an estate planning attorney to ensure that yours is set up correctly. Speaking with a financial advisor can help you consider how a family trust may fit into your estate plan and which type best suits your needs.<\/p>\n\n\n\n<p>For example, if your estate falls below the estate tax exemption, it might make sense to set up a revocable trust and retain the right to alter the terms of the trust while avoiding probate and maintaining privacy. If your estate exceeds the exemption, it may be better to establish an irrevocable trust to minimize taxes.&nbsp;<\/p>\n\n\n\n<p>If you are comfortable, your financial advisor can also help educate your beneficiaries on how the trust you chose works and the provisions you\u2019ve made. They can help ensure that trust distributions are made on time, monitor changes in your financial plan and trust law, and make changes to your trust and financial plan as necessary.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"has-small-font-size\">SOURCES:<\/p>\n\n\n\n<p class=\"has-small-font-size\"><a href=\"https:\/\/trustandwill.com\/learn\/family-trust\">https:\/\/trustandwill.com\/learn\/family-trust<\/a><\/p>\n\n\n\n<p class=\"has-small-font-size\"><a href=\"https:\/\/www.investopedia.com\/terms\/i\/irrevocabletrust.asp\">https:\/\/www.investopedia.com\/terms\/i\/irrevocabletrust.asp<\/a><\/p>\n\n\n\n<p class=\"has-small-font-size\"><a href=\"https:\/\/smartasset.com\/financial-advisor\/marital-trust\">https:\/\/smartasset.com\/financial-advisor\/marital-trust<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Family trusts are an important tool for managing wealth across multiple generations. They can help you avoid the time-consuming and costly process of probate, keep your assets private, minimize taxes, and ensure that your wealth is distributed according to your wishes.&nbsp; Family trusts tend to be most appropriate for families with large estates or a [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":1704,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":""},"categories":[],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/oi_article\/1703"}],"collection":[{"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/oi_article"}],"about":[{"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/types\/oi_article"}],"author":[{"embeddable":true,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/comments?post=1703"}],"version-history":[{"count":1,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/oi_article\/1703\/revisions"}],"predecessor-version":[{"id":1705,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/oi_article\/1703\/revisions\/1705"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/media\/1704"}],"wp:attachment":[{"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/media?parent=1703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/categories?post=1703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.firstfamilywealth.com\/wp-json\/wp\/v2\/tags?post=1703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}