You’ve always dreamed of creating generational wealth by buying property, then passing it down to your children — and their children. You’ve got the land and house. Now, you just need a trust to handle the second part — preserving them for the next generation.
Unfortunately, research shows that 67% of people in the United States don’t have estate plans. These may include wills or trusts. Fortunately, you can choose to beat this statistic, especially since moving property into a trust offers several benefits for you and your loved ones.
Here’s a rundown of the top benefits of transferring property to a trust.
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A Trust Offers Tax Savings and Creditor Protection
A major reason why you should transfer property to an irrevocable trust is that any property placed in the trust is no longer deemed part of the property owner’s personal estate. As a result, the assets you place in the trust won’t be subject to any inheritance tax.
In addition to saving you on taxes, this type of trust can protect your property from creditors.
Still, keep in mind that when people sell their assets to their trusts, any associated loan accounts will still appear in their personal estates as assets that their creditors can go after. Only when a loan account’s value decreases with time will the complete asset protection benefits of the trust be realized.
A Trusts Provides Protection for Your Children
Another one of the top benefits of transferring property to a trust is that it will protect your young children if something happens to you. Your trustee — the person you appoint to manage your trust’s assets — will administer these assets until your children reach the legal age to take them over.
Also, your trust won’t die. That means any property you house in it can easily transfer from one generation to the next without undergoing estate administration. Estate administration refers to the process of distributing a deceased individual’s estate — or everything they owned — to their intended beneficiaries.
A trust can also eliminate the challenges associated with leaving several heirs an asset that cannot be divided. This may include, for example, a family farm or vacation home.
In addition, events like family disputes or divorce may pose challenges for your personal estate assets. However, any assets you keep in a trust likely won’t be impacted by these events.
How We Can Help with Moving Property into a Trust
Moving property into a trust can help you to protect your assets for the next generation. They can also lead to tax savings and protect your property from creditors.
At Monastra & Grater, LLC, we take pride in helping you to plan for the future through well-thought-out estate planning. We would be glad to help you to navigate the process of transferring property to a trust. Contact us to book a consultation today!