Trusts are an essential financial planning tool. While many believe that trusts are only useful to the extremely wealthy, this isn’t the case. Trusts can be used by people at all wealth levels who wish to retain greater control over their assets after they’re gone.

What Should I Know When Creating a Trust?

1. You Create the Terms

With a will, whoever you name as beneficiary will receive all or a portion of your assets after you die. With a trust, you not only decide who receives how much of your assets after you’re gone but how and when the person will receive them. Instead of one lump sum, you can disperse assets via a fixed monthly payment. You can also set conditions to meet before the asset transfer can take place, such as requiring an heir to complete schooling.

2. The Trust Owns Your Assets

Any assets placed in an irrevocable living trust become the property of that trust, so you can’t later decide to remove assets and take them back into your possession. On the plus side, you aren’t obligated to pay taxes on anything held in the trust since you don’t own them. A trustee is responsible for overseeing funds and making sure the terms of your trust are carried out. When choosing a trustee, look for a person with sound financial planning skill. 

3. Trusts Can Help You Avoid Probate

Probate is the lengthy process of proving a will valid and dispersing assets to heirs. Trusts are not subject to probate since all assets pass directly into the ownership of the trust after you die. Not only does this save your family time, but it’s also great from a financial planning perspective, as it cuts down on expensive legal fees incurred during the probate process. 

First established in 1932, First & Peoples Bank and Trust Company is a long-standing member of the Greenup County, KY community. They have six branches throughout the county, located in Russell, Ashland, Flatwoods, Greenup, South Shore, and another location in Russell at 400 Ferry St. Along with providing trustworthy banking service to local clients, they’re also a great source of financial planning knowledge. Not only can they help with trust creation, but they also counsel clients on retirement planning and even offer investment guidance to help expand your assets. Call (606) 836-0211 today to speak with a bank representative about building a trust. You can also learn more about their financial planning services by visiting the website.