A Phoenix family trust is a very valuable tool when it comes to estate planning and controlling your assets. Family trusts are a specific type of living trust where the beneficiary of the trust is related to the person who established the trust. A Phoenix family trust is actually one of the most common kinds of trusts in Arizona. Legally speaking, the family trust is no different than any other kind of trust but this type of specialty program comes with many different benefits to you, your beneficiaries, and your estate planning agenda.
Appealing Tax Advantages
When you transfer assets from parents to children or spouse to spouse after death, there are certain taxes involved in this process. Many people choose to use Phoenix family trusts to lower their inheritance taxes to the absolute minimum. One of the biggest benefits of trusts in this country is that beneficiaries will not be required to pay income taxes on the money in the family trust program. This is especially important because it not only impacts the amount of tax they would normally pay if the money was not in a trust and considered income, it would also impact their tax credits, tax brackets, and qualifications for tax programs – meaning, their earned income could face a much higher tax rate if a trust was not established and they received an inheritance. This could cost them a large chunk of their inheritance and the money they make at their regular job.
Protect Your Assets
When you place your assets into a family trust you are ensuring the protection of your assets for your beneficiaries. If you die without a family trust, your estate must then go through the probate court that will then decide how your assets should be divided – this will surely do two things, cost your family time, and cost your family money in legal fees. Your family is likely to lose large amounts of your estate if you died with any unsettled bills or settlements against you. If you established a family trust, your assets would be protected for your family and creditors would not be able to pursue funds from the trust. Another unique benefit to a Phoenix family trust is that you will be able to designate how your assets are spent. For example, you could hold the funds in an account for a minor child, or mandate that the money is spent on something such as college tuition. Establishing a family trust is essential for those who want to protect their loved ones when it comes to estate planning.