Top ten reasons for setting up a trust.


Top 10 reasons for setting up a trust.

In a recent article, Attorney Stephan R. Leimberg points out the top ten reasons why people
create a trust:
1. You feel your beneficiary is unwilling or unable to invest, manage, or handle the
responsibility of a large, immediate, outright gift. Families with minor, handicapped, or
merely financially or emotionally immature children or grandchildren should consider trusts.
2. You would like to postpone full transfer of ownership until your beneficiary is in a
position to handle the property or income properly, or until you (or someone you name) are
ready or able to part with it. For example, you may personally want to keep the income from a
trust for a given number of years – or for your life – and then at the end of the term or at your
death have the principle remaining go to one or more selected individuals or to a charity (a
charitable remainder trust).
3. You want to spread the financial security of property among a number of individuals but
the asset you have in mind (for instance, an apartment house or life insurance policy does not
lead itself to fragmentation.
4. You have particular dispositive plans in mind and control is essential. For example, you
want to prevent your beneficiary (e.g. a son or daughter) from disposing of, or losing the
family business or home to persons outside the family (e.g. through divorce or bankruptcy)

5. You would like to protect the assets from the claims of your own creditors.
6. You want to treat your children or grandchildren equally – yet you own some
property which may appreciate and some property which may fall in value. By placing
both types of property in trust and giving all your children equal shares of that trust,
you can equalize both benefits as well as the risks among them.
7. You want to avoid the mysterious and uncertain (and sometimes costly) process of
8. You want to reduce the probability of a will contest or an “election” by a spouse to
take a state-mandated portion of your estate (roughly 1/3) regardless of what your will
provides. (This is called a surviving spouse’s “right of election”.)
9. You would like all the details of your finances kept as private as legally possible.
10. You would like to relieve yourself of the burden of investing and managing
property and would like to protect yourself in the event of a physical, emotional, or
mental incapacity. (You may want a “step-up trust”, a trust that steps up and takes
over when you don’t want to or can’t manage property.
In summary, there are many options to think about when setting up a trust. For more
information please contact my office today!

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Protecting Your Home For Your Family

We all want to live the Great American Dream. We want the opportunity for prosperity and
success, and an upward social mobility for our family and children, achieved through hard
work in a society with few barriers. And, a big part of that dream has been to own a home
free and clear, with no mortgage. Having a roof over our head is one of our most basic
needs. Plus, it gives us safety, security, and pride. It would be a nightmare to lose it. So,
how do we safeguard our home for our family?
Most people believe the best way is to use a 15-year mortgage to pay off the home as soon
as possible. Others say to put extra payments towards a 30-year mortgage. The problem
with both of these plans is that until you actually pay off the mortgage, they don’t protect
your family against the loss of the home.
What happens if you become critically ill, suffer an accident, become disabled, or lose your
job? Where will you get the money to make your mortgage payments?
Consider, if you have been putting all of your money into paying off your home early, then
isn’t all your savings tied up in the equity of the home? If you don’t have an income are the
banks going to give you a loan to take equity out of your house? Of course not! And the
worst part is that it doesn’t matter if you owe $2,000 or $200,000 on your home, if you can’t
make your monthly mortgage payments, they are going to foreclose, and take your home. If
that happens, then all of those extra payments were for naught. Nobody wants that!

Let me ask you, if you could have a tax write-off, how long do you want it? As long as possible! And, how big a tax write-off do you want? As big as you can get! What is one of your last big tax write-offs? Isn’t it the interest on your mortgage? Does it make sense to not take advantage of this big tax write-off? What if you could put money in a separate account that would grow so you can pay off your home faster, while maintaining the tax write-off as long as possible? On top of that, what if your money would grow tax free, and had no government restrictions on how much you can contribute to it, or penalties for withdrawals. What if that money could be used for other financial priorities like replacing lost income, funding your retirement, or funding your child’s education? Finally, what if it was a self-completing plan that would protect your family against death and disability? Would that be a dream come true? Call me today, and I would be happy to go over a plan that fits your unique needs, to protect your family’s dreams and future. 

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