Creating wealth is an art but preserving it smartly is even a bigger art. Very few people are capable of managing both simultaneously while they are alive. But transferring this wealth to next generation is even more challenging as it involves a web of complex legal formalities.
Every family has a different interest but in most cases, there is an overlay of time-bound needs of cash flow. Since it is difficult to foresee such issues, it is important to look at the nuances of a comprehensive estate plan.
Is A Will Sufficient?
It is important to understand that most people who are aware of estate planning don’t think beyond writing a Will. A Will is a legal declaration of the intention of an individual with respect to his/her property and they want to transfer it after their death. Though it is very well accepted but there are some limitations of it. Firstly, it can only be used after the creators of the Will dies. Changing a Will is another area of concern especially if the creator is unwell. In many cases, it becomes a reason of family dispute.
How to Avoid Such Problems?
The best way to avoid the above mentioned troubles is to set up a private trust to effectively handle your estate planning needs. Private trusts have been around for decades and can be used as an effective means for wealth management. There are three important components of a trust—the creator of the trust, the trustee and the beneficiaries. Private trusts are meant to safeguard families’ interests.
Major Benefits of a Trust
A trust offers strategic benefits, they are flexible and can address diverse needs of close relatives. A combination of a Will and trust should be followed if an estate owners want to exercise control at different levels. Appointments of independent and external individuals as trustees can eliminate biases and protect beneficiaries’ interest successfully.
It also preserves a family’s fortune. Even in situation of disagreements, it protects the assets for future generation. A trust also ensure that wealth is given to the intended beneficiary only while protecting the assets.
Another benefit of a trust is businesses can continue with a trust without any problem. Succession planning in the business is quite transparent also, which is an added advantage. With these benefits, a trust becomes a must for families and businesses which ensure estate planning is done perfectly.