There are countless benefits of a family trust. First and foremost, a family trust is a trust that is created specifically to benefit of members of a particular family. It is established to protect and manage the assets of the family for the existing and for future generations.
As a function of the trust, assets are transferred into the trust and the trustees become the legal owners of the trust property, as opposed to the individual, for the benefit of the beneficiaries.
While this process may seem daunting, the many benefits of a family trust make the effort worthwhile. Some of these benefits include:
Protection Against Spendthrift Beneficiaries
Unfortunately, no all family members are as fiscally responsible as others. One of the benefits of a family trust is that it can provide long-term protection of family assets; even for more financially “risky” family members. The income or capital needs of family members can be provided for through the trust as their needs arise rather than handing over your assets to your children who may dispose of them in a reckless manner thus leaving them in poor financial standing in the long term.
Protection of Family with Illness or Special Needs
A family trust may be used to provide for children or other family members who require medical care, have special needs, or are unable to manage their own affairs. In addition to providing for the special needs of the family member, a family trust can also ensure that when the settlor dies, no other family members assume control of the family assets for themselves and limit or change the assets used to care for the special needs or situation.
Protection Against Creditors
With a family trust, a settlor transfers their property to the trust (the trustees now own the assets as opposed to the settlor). Therefore, the transferred property is no longer subject to claims from future creditors, provided certain conditions are met at the time of settlement.
Protection Against Relationship Property Claims
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