The 7 most common signs that you need family trust

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• Family trusts are useful for controlling and protecting assets if you can’t do it yourself.
• There can be significant costs associated with trusts, so they are only useful if you have a lot of money.
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If you’ve spent any time in the financial corners of the internet or have a friend who thinks they’re a financial expert, you’ve probably been told it’s time to set up a family trust. But do you need one? Here are seven of the most common signs that you might need a family trust.

#1 You have complicated finances

Calculation of taxes.

Family trusts help wealthy people organize their finances and how those finances are controlled and dispersed over time. The more complicated your finances, the more useful a family trust will be.

If your assets require significant oversight or management to be successful, but you plan to take time off, undergo risky surgery, or anything else, setting up a trust can ensure that your assets are controlled the way you want them to be. Depending on the type of trust you use, the rules you set can be permanent or can be changed at any time.

#2 There is a chance of a messy inheritance

Inclusion of assets in a trust.

If you’re rich and you’ve taught your kids that money is the only thing that matters, or you’ve spent your life making money and suddenly realize you’ve raised entitled men, you might expect them to be a messy and confrontational meeting when inheritances are divided.

On your death, any inheritance directed by a will goes through probate, which can be lengthy and expensive, and if there are disagreements or legal challenges to the will, then it may never be resolved. A family trust avoids all these problems by allocating inheritances well in advance, with specific rules for when, to whom and how they should be distributed.

Also, while a will can be contested, a family trust is set in stone and much harder to overturn or dissolve.

Additionally, if you are ill, incapacitated or otherwise unable to do business, then a normal will has no effect until you die, whereas a trust takes effect immediately.

#3 You don’t qualify for Medicare

Medicare.

Because the assets put into a trust technically no longer belong to you, the value of your assets declines, meaning that wealthy people reaching retirement age can qualify for Medicare coverage or higher retirement benefits by putting most of their assets into – a family trust.

#4 You want to guarantee a charitable donation

Charity.

Despite your wishes, while you’re alive, once you’re dead your family can do whatever they want. If you have a school or organization that you support and want to continue to support after you’re gone, then a family trust is the only way to do that.

Once you’ve allocated your assets to a trust and listed an organization as one of the beneficiaries, you can continue to make donations many years after you’ve passed on.

#5 You need to disperse your money before you die

Money.

If you’ve been diagnosed with dementia, are going to undergo risky surgery or will be incapacitated for an indefinite period of time, a trust can help you control your assets while you are unable to do so. This not only allows your intentions to be fulfilled, but also prevents people from taking advantage of you. Your family must not hope that you will kick the bucket anytime soon so that your will can finally be adopted.

#6 You need protection

A piggy bank.

Do you work in an industry that is notoriously litigious? Is there any risk that patients, clients, customers or rivals will come after you for all you’re worth? Do you work in a less legal industry? Then a family trust would definitely be at the top of the list of things you should research.

Because a trust is not owned by you but is itself its own legal entity, if you lose a lawsuit, the winner cannot take anything within the trust or anything controlled by the trust. This protects the goods, as well as those to whom they are intended, from legal problems and costly litigation.

#7 You want control after your death

Money.

If you want to include young grandchildren, potential great-grandchildren, mentally unstable people, trusted relatives or incompetent beneficiaries among your beneficiaries, but you don’t trust them enough with a lump sum, then a family trust is the best option.

A family trust allows you to specify exactly how your assets should be treated down to the smallest detail, you can leave money to whomever you want and disperse it over the years after you die. It is generally unwise to leave hundreds of thousands of dollars to a young child or give someone with a dangerous addiction more money to harm themselves or others. Putting stipulations on your inheritance and limiting how much can be withdrawn is a fantastic way to ensure you don’t unintentionally destroy someone’s life when yours ends.

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