A family trust fund is a legal entity that holds assets and property to be passed on to other family members or beneficiaries.
A family trust fund is a legal entity that holds assets and property to be passed on to other family members or beneficiaries. The establishment of patrimonial protection in the form of a family trust brings benefits both to the creator of the agreement, known as the grantor, and to the beneficiaries. The grantor must choose one or more persons to act as a trustee to manage the legal entity. Other steps must also be taken before transferring assets and property to the trust.
A family fund maintains wealth within a family.
A family trust offers one of many financial options when it comes to estate planning. This type of trust maintains a family’s wealth by ensuring that all assets and property pass to loved ones after the grantor’s death. The grantor controls what goes into the trust and who benefits from it. The grantor also works with a trustee who ultimately oversees the family’s trust fund assets after the grantor’s death.
There are certain advantages to creating a family trust fund for both the grantor and the beneficiaries. For example, the family trust provides a secure financial resource for family members, including minor children. Proper account management helps protect assets and prevents any beneficiary from wasting them. In addition, the person who organizes the trust fund can sometimes save on income, donations, and estate taxes. The availability of a family trust also generally allows beneficiaries to bypass the probate and arrange for the assets to be transferred promptly upon the grantor’s death.
In addition to choosing beneficiaries such as a spouse, children, grandchildren or other relatives, the grantor of the family trust fund must choose one or more trustees. A relative or close friend with solid financial experience can act as trustee. An impartial third-party source, such as a property attorney or a financial corporation trust, may also manage the trust fund. Multiple trustees can also be assigned in the event that a trustee dies or is unable to continue to manage the assets.
An important step in establishing a family trust fund involves writing a legal document that states in writing the person’s wishes, names of beneficiaries, property and assets in the trust, names of the trustee or trustees, and special instructions for the trustee or group. of trustees, for example, when and how to disburse funds to particular beneficiaries. The document must be certified and filed with the attorney or trust company. Depending on the place of residence, the grantor may also be required to file a copy of the trust document with the deed registry or equivalent government agency in that jurisdiction. Upon completing the documentation process, the grantor can transfer the assets to the trust.