When you think about a trust, you probably think about million dollar accounts for wealthy individuals. The reality is that most trusts aren't for the rich and famous but rather for people of lower incomes. Trusts can be beneficial for people of all backgrounds, even if they only have a few thousand dollars.
One thing you may not have known is that you can open a trust with little to no assets. Normally, you wouldn't do this unless you have a valid reason to do so, because it would be costly to maintain the small number of assets. Here's a little bit more about how much money you really need to open a trust fund.
How much is the cheapest trust fund?
For the simplest, bare-bones trust fund, you need approximately $100 for the deposit along with a few hundred dollars to set up the account. Once you set this up, you deposit your assets into the fund. The assets can literally be anything, from lottery winnings to stocks. You can deposit assets at any time.
What are the benefits of opening a trust fund?
There are numerous reasons to open a trust fund. For example, they reduce tax liability for those who are your beneficiaries. They can also reduce your personal tax burden while you're alive. Even better, a trust fund allows you to decide how you transfer assets to others in your family. You have much more control than simply signing over the asset.
Can you set up a trust fund on your own?
While it is possible, it is not advisable. There are multiple kinds of trusts, and depending on the assets you want to protect, a trust may actually not be the right choice for you. If you do decide to have a trust, they are extremely detail-oriented. Most people work with an attorney to make sure the documents are accurate. Attorneys usually charge a one-time, basic fee for setting up a trust, but your specific attorney can give you more details on how much your trust will cost to set up depending on the preferences you have.
These are a few facts about trusts. They're not just for people with many assets, and they can help you reduce tax liability and other issues you deal with during life and after death. They're an ideal way to control how your assets are passed on when you pass away: You'll dictate exactly what you want to see occur.