Law Blog

What are Common Uses for Trusts?

People establish trusts to save money on taxes, pay for younger family members’ education, and avoid disputes in probate court.

You might associate trusts with trust fund babies, but many beneficiaries of trusts had already reached retirement age by the time the trust was established. Some people even establish trusts and list themselves as beneficiaries. Setting up a trust to pay yourself your own money might seem like a roundabout way of doing things, but estate planning lawyers advise people to do it often. Likewise, a trust can enable you to provide separate streams of income to different family members who would otherwise fight with each other about the financial support you give them. If you are considering setting up a trust, a St. Petersburg trust administration lawyer can help you draft a trust document that will enable the trust to fulfill its intended purpose.

Trusts Can Neutralize Animosity Among Family Members

The local news sections of newspapers tell of probate disputes that have been going on for years. If your children do not get along with each other, or if your children from a previous marriage have never accepted your current spouse, do not expect that things will get better after you die. The bitter probate disputes that you read about in the news started long before the person whose estate the parties are fighting over died. The best way to avoid this problem is to set up a trust now.

For example, you can set up a trust fund with instructions that the trustee must pay a certain amount or a certain percent of the trust toward the postsecondary education of each of your education. It should also contain provisions about possible uses for the money besides education. This way, you can see with your own eyes that each of your children is getting their fair share.

Trusts are Just One Way to Help Your Family Save Money

The biggestreason that people set up trusts is to help them save money on taxes. Estate taxes only apply to assets that go through probate after the owner of the assets dies, and trusts do not go through probate. This means that, even if you and your spouse are beneficiaries of the trust while you are alive, and your spouse inherits the trust when you die, you can save money on taxes by having the assets belong to the trust instead of to you. Trusts are just one strategy for keeping assets out of probate; there are also cash gifts and transfer on death (TOD) and payable on death (POD) accounts, among others.

Contact Kruse Law Group About Trust Administration

Even if you plan to live many more years, and even if you have not come close to achieving your financial goals, it is not too early to contact a St. Petersburg trust administration lawyer about establishing a trust. Contact Kruse Law Group in St. Petersburg, Florida to set up a consultation.