Those who received their stimulus checks have used the money for diverse purposes. These include getting out of debt, paying current bills, buying a new car, or investing in stocks. These are useful ways to spend your stimulus funds but an even better purpose is to create financial wealth for those you love after you pass on. This is why preparing and maintaining a living trust is so important. Here are other reasons why you should use stimulus funds to create a living trust.
To Protect Your Children's Financial Future
If you feel that your child will not manage money well at age 18, you don't have to give him certain assets until you think he's reached an age where he will be more mature and appreciative of what you worked hard to leave him. With a living trust, you can request that no funds be released until your child turns 25 or even 30.
You Get Freedom from Estate Taxes
If you own certain significant assets that are subject to federal taxes, then living trusts are great to avoid them. Meet with your estate planning attorney to discuss how a living trust can minimize tax liabilities that are associated with estate planning.
Helpful for Special Needs Families
If you're a special needs family, a living trust would work for you. If your child or another relative in your care has special needs, you can contribute funds to your living trust throughout your lifetime. Should you pass away, your trustee would use those funds to care for your child. On the other hand, if you become disabled, it's a good idea to have a trustee to handle your assets.
No Need for Probate
When you establish a living trust, you avoid the probate process. When a person dies without a will or trust, the state becomes the executor of your assets and it might not distribute them the way you would have wanted it to. This is why you should have something in writing that states how you want your assets to be handled.
In conclusion, these are a few reasons why it's wise to use your stimulus funds to create a living trust.
If you need assistance with creating a living trust, contact us. We're here to walk you through the process and answer any questions you might have.