Feb 8, 2023
Trusts have been a popular tool for families for centuries, but with the changing landscape of modern families, trusts have had to evolve and adapt to meet the ever-changing needs of families in today's world. Gone are the days when trusts were only used by the wealthy to protect their assets from creditors and reduce estate taxes. Today, trusts are increasingly being used by families of all sizes and income levels to provide financial security, protect relationship property, and set up inter-generational investment structures.
In this article, we will explore how trusts for modern families have changed and why they are more important than ever before.
A trust is a legal arrangement in which a trustee holds assets for the benefit of one or more beneficiaries. The trustee is responsible for managing and distributing the assets according to the terms set out in the trust agreement. Trusts can be used for a variety of purposes, including providing financial security and long-term support for families and protecting assets from creditors.
There are several reasons why a family may choose to use a trust. Some of the most common reasons include:
With four in 10 new marriages involving re-marriage, according to WEALTH Magazine, blended families are becoming the new norm, and trusts have adapted in recent years to accommodate these often complex situations and needs. In many cases, both partners have children and assets from their previous relationships, and it can be difficult to ensure that everyone is provided for in the event of death or disability. Trusts can be used to ensure that each person’s assets and children are protected, even if one partner predeceases the other.
People are living longer than ever before. With longer life expectancies, families need to plan for the long-term care of their elderly members. Trusts can be used to provide financial support for elderly family members, including paying for medical expenses and long-term care. This can help ensure that elderly loved ones are provided for and can maintain their independence for as long as possible.
An intergenerational wealth trust is used to help build wealth through investments over the maximum trust duration of 125 years. Over time this will help to support your children, grandchildren, great-grandchildren and so on. By building on this over time, it will help to create a greater support system for when your family needs it for generations to come.
Trusts can be used to provide financial support for future generations, including paying for education, medical expenses, and other necessities. Trusts can also be used to ensure that assets are passed down from one generation to the next, preserving the family’s wealth and ensuring that it continues to support future generations.
Modern families are often faced with complex relationship property issues, and trusts can be used to protect the property rights of both partners. Relationship property is property that is acquired during a relationship and is usually divided equally between the partners in the event of a separation or death. Having a trust can help to make sure that in any scenario, both parties' property rights are protected.
With a trend of couples opting not to marry becoming increasingly common, estate planning can cater for this also. With a less traditional outlook on relationships comes a contemporary look on trusts. Without a prenuptial agreement, it could become messy if separation or death were to occur. Setting up a trust that aligns with both partners wishes will help to avoid any unnecessary headache.
House affordability has become a recent issue with increasing mortgage rates and increased inflation in recent years. This has led to a growing number of particularly young people or first home buyers to consider investing with friends or family. Sharing the ownership costs of a property with friends or family is a popular trend, but it can also lead to complicated legal issues. A trust can help ensure that the ownership rights and responsibilities of each person are clearly defined, which can help avoid disputes down the line. Trusts can also be used to ensure that each person’s investment in the property is protected, even if one person decides to sell their share or the property is sold.
There are many different potential setups for this type of investment so it is important to consider all options before launching into a decision. Seeking individual advice that is unbiased and separate from your friends and family is an important first step before investing.
Trusts have come a long way since their inception and have had to adapt to meet the changing needs of modern families. If you are new to trusts or need help navigating the process, our expert team can help you.
Here at Trustees Executors, our team specialise in creating trusts that are tailored to your needs and financial goals. Our team of experienced professionals can help your family create trusts that meet your unique needs that will provide financial security for generations to come. We will help you to understand the different types of trusts available and guide you to choose the best option for your circumstances.
If you would like to understand more about trusts our team can help you to understand the legal and financial implications of trusts and ensure that all of the necessary steps are taken to establish a trust that provides financial security and peace of mind.
For more information or to contact us for a consultation contact us here.