A legacy trust, also known as a "wealth trust", is an irrevocable trust which allows you to set aside assets separate and apart from your primary estate.
Since assets placed in a legacy trust are separate and apart from your primary or main estate, this means that asses placed in such a trust are exempt from any claims against your estate by creditors, judgements, or estate or inheritance taxes.
For this reason, legacy trust are an excellent financial vehicle you can use to remove assets from your primary estate and hold them in a separate family savings plane for such things as college tuition, possible financial hardship, or simple asset transfer from one generation to another.
Legacy Trusts – Funding & Distribution
Legacy plans are normally funded through annual gifts and are overseen by an appointed trustee. The donor cannot serve as the trustee – the person responsible for overseeing the trust and dispersing funds from the trust as directed by the owner of the trust.
The types of distribution handled by the trustee of a legacy trust are usually:
- College tuition;
- Income distribution to the donor’s children or grandchildren; or
- Medical or other financial emergency for which the donor may need to tap into the assets of the trust.
The donor may also wish to direct various distributions to family members while alive – once the donor passes away, any distributions from the trust will be subject to probate.
Consult an Estate Lawyer Familiar with Legacy Trusts
Legacy trusts are an excellent way to transfer wealth from one generation of a family to another, while protecting those assets from many of the issues that may reduce the value of property held in an individual’s primary estate.
For that reason, it has long been use as a financial tool for many of America’s most prominent, wealthy families to guarantee that the wealth they worked so hard to secure will be safe for future generations of their families.
Contact the Law Offices of James C. Shields today if you feel a legacy trust may be a good investment for your family.