4 (More) Ways to Use a Trust

Trusts can be used to accomplish many goals. Obtaining these goals, however, depend on how the trust is written and what duties are associated with the trust. In many cases, trusts can ensure that property is cared for in a specific way by other people. Last week, we looked at four ways people use trusts.Here are four more situations where people may find trusts to be helpful.

 1. Desire for privacy.

Trusts create privacy by moving property into the name of a trustee. Because of this, the person who granted the property to the trust is no longer of record as the owner. The identity of trust beneficiaries are shielding from the public because trust documents are not public records. While this privacy may not extend to the federal government for tax purposes or for people willing to research transfers of real estate, a trust can provide privacy when it comes to accounts and other property.

 2. Protecting assets.

Depending on when it is formed, a trust can protect assets from future creditors or lienholders. If property is placed in trust and the proper time period has elapsed, future creditors cannot access the property. This creates an additional level of protection for business owners or any individual in an occupation that requires self-funding or investment.

 3. Preserving a way of life for those with special needs.

If someone in your family has special needs, a trust can be created to ensure they remain eligible for benefits while having an additional safety net of family support. While property in a special needs trust can go towards providing additional comfort for the family member, it could also avoid a reduction in governmental benefits. Precision is needed in creating these trusts because they must ensure the asset distributions do not disqualify the family member for benefits.

4. Protecting interests in land that is out of state.

Land held out of state may be held in a trust as opposed to simply being in the name of an LLC or an individual. This formation may be more appropriate if the property is meant to be used for non-rental income purposes, investment, and enjoyment of a beneficiary. A land trust can also keep the property in control of a family for generations while not necessarily disclosing the names of the beneficiaries.