A family trust is a legal entity created to manage and protect the assets of a family. It is a type of trust that allows a grantor to transfer assets to a trustee to manage on behalf of a beneficiary. Family trusts have become increasingly popular as they offer numerous benefits to those who set them up.
Tax Savings
One of the main benefits of placing assets in a family trust will is the tax savings. By transferring assets to the trust, the grantor can reduce their taxable estate and thus, save money on taxes. The trust can also be used to minimize capital gains taxes as the assets can be transferred to the trust without triggering the tax.
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Asset Protection
Another benefit of a family trust is the asset protection it provides. Assets placed in a trust are generally not subject to creditors, lawsuits, or other legal claims. This can be invaluable for families with significant assets that need to be protected from creditors or other legal claims.
Estate Planning
The family trust can also be used for estate planning purposes. It can be used to ensure that assets are passed down to the intended beneficiaries and to minimize estate taxes. Furthermore, it can be used to create a financial plan that ensures the family’s financial security and allows for the orderly transition of assets to the next generation.