Trusts Promote Family Trust

 This guest post is from Rachel H. Dever, Regent Law 3L and current Wills, Trusts, and Estates student:

When estate planning for the future, there are several different instruments one can use to pass wealth and assets to your loved ones. A trust is one of those instruments that uniquely protects privacy, family unity, and potentially tax avoidance.

If you have a family trust, your family can choose what they want to do with their assets. You will not have to worry about state interference because the trust already designates who gets what. A trust is not probated through the court system, it is a private document. Families who do not have a trust or a will risk allowing the state to distribute their assets in a way it deems right, rather than in a way that the family thinks is appropriate. The legislature in each state creates a scheme of distribution of assets when someone does not have estate planning documents. When a family has a trust, they will not have to worry about the state interfering because the trust dictates how to distribute the wealth and assets. This instrument can help to keep a family’s wealth and assets private as well.

A trust also promotes family unity as your family is in the best position to know how best to take care of the family in the future. The law gives people the freedom of disposition. This means people can distribute their assets in whatever way they want, as long as there is a document to support this intent.  Having a trust and talking about the trust with your family leads to family unity, as the entire family can be on the same page for how the assets are to be distributed. The grantor gets to choose the manner and method of distribution of assets instead of the state making those choices. To build unity, you want the family to choose how to pass the assets instead of leaving the decision up to the state.

Finally, a trust may sometimes be a smart way to reduce the amount of taxes one has to pay when distributing their assets. With the help of an attorney and a trust, you can plan for the future in the most tax advantageous manner. This may allow you to transfer your assets and either avoid or delay paying taxes. The goal is to minimize taxes and keep as much of the wealth and assets as possible to support your family.

A trust promotes family trust by protecting your privacy, promoting family unity, and planning in a tax advantageous manner.

Proverbs 3:5-6 says, “Trust in the Lord with all your heart and lean not on your own understanding; in all your ways acknowledge Him, and He will make your paths straight.”