The phrase “trust fund” often brings to mind a particular type of person, someone who comes from a wealthy family with an excessive amount of money available to spend. Although there are families who have that kind of generational wealth that’s passed down to them through a trust fund, it’s not as common as you may think. In fact, more families with a modest amount of financial assets are using trust funds for various reasons.
Trusts 101: How They Work
Generally speaking, a trust allows a grantor to contribute property that will be held by a second party for the benefit of the beneficiary. The person who manages the trust, known as the trustee, who is often a trusted family member. In some cases, there may be more than one trustee, referred to as co-trustees. The beneficiary or beneficiaries of a trust can be anyone to whom the grantor wishes to transfer assets.
Using Trusts to Help Beneficiaries with Special Needs
Depending upon your family’s situation, you may want to set up a trust for a specific purpose. For example, a Special Needs Trust is designed to protect assets for children and adults with special needs without jeopardizing their ability to collect Social Security or Medicaid benefits
Regardless of your financial status, a trust fund can be a valuable tool for protecting you and your family. Because everyone’s specific situation is different you should consult with an attorney who has extensive experience drafting Special Needs Trusts. An attorney who focuses is in this area will be more familiar with the various options and can guide you in making the right decision.