A family trust is set up to manage property for the future benefit of your family. Those wishing to open a family trust usually do so in order to set aside money for family members at some point in the future, while also protecting their own assets. By moving money from your personal assets into the trust, you protect them creditors or ex-spouses. In order to set up a family trust, you just need to follow these three easy steps.
When creating the trust, you need to decide who will be your settlor, your trustees, and your beneficiaries. The settlor is the person who starts out with the assets, so in the case of a family trust this is you and possibly your spouse. You are allowed to name yourself as a trustee, which means that you will be the one to dole out money. Most people also appoint a second person as a trustee. It is best if this is your lawyer, as they will be able to set up the legal paper work that makes your trust official. The beneficiaries are simply the members of your family.
With the help of a lawyer, it is then time to legally create the family trust. This document will legally codify all the decisions made in step one. It is important that this document is properly written up to make sure that it will hold up under scrutiny from the IRS or other agencies.
The goal of the trust is that it should eventually contain all your assets so that you may pass them on to your children as you see fit, as well as protect them from creditors who may try to seize them upon your death. In an ideal situation, at the time of your retirement all of your assets should be in the trust; this way, you no longer own anything directly in your name, but still have all the benefits of the assets.