The Power of Trusts: Safeguarding Your Legacy

Within this framework:

• Trustees: These individuals are entrusted with the duty to manage the trust's assets. They are legally bound to act in the best interests of the beneficiaries, ensuring the desires of the person who created the trust (known as the settlor) are fulfilled.
• Beneficiaries: These are the individuals or entities for whom the assets are held and are intended to benefit.

Trusts can serve multiple purposes, such as:

• Preserving wealth within familial lines, ensuring it benefits your direct descendants.
• Managing and protecting family assets.
• Assisting those too young or unable to manage their own finances.
• Distributing assets while you're still alive.
• Bequeathing assets upon your passing.
• Reducing inheritance tax implications.
• Transferring business assets posthumously.

Illustrating the Importance of a Trust: A Scenario

Consider this: You've dedicated years of hard work, now own your home, and have accumulated savings. Naturally, you'd expect these assets to benefit your loved ones upon your demise. But is that guarantee in place?

Here's a hypothetical situation:

You have a son named Fred, married to Mary-Beth, whom you don't favor. She has children from a previous relationship, strangers to you. Fred and Mary-Beth share a daughter, your beloved granddaughter. Your will stipulates that Fred inherits everything upon your passing, and he does. Tragically, Fred dies a year later without a will, and due to their marriage, Mary-Beth acquires all. Subsequently, she marries Geoff. Upon her unexpected death, your assets, your legacy, are now in Geoff's hands.

This unintended transfer, sidelining your direct descendants, is termed "sideways disinheritance."

To ensure your legacy remains within your intended lineage and protects against unforeseen events like the one above, establishing a trust is a prudent choice.