You may not be the wealthiest person on the planet (to be serious, few people are), but that doesn't mean that you shouldn't protect what you do have. A trust is a great way to do that.
Some people believe that trusts are something for the wealthy and well-to-do, but the truth is that a trust can be a good choice for anyone with any assets to protect. Even if your only asset is going to be life insurance, that is enough to consider setting up a trust to receive those funds.
Is there an amount of money you need before you set up a trust?
In most cases, trust funds can be started with as little as $100 in deposits and no more than a few hundred dollars in fees to your attorney or bank. Once the fund is in place, you can set up deposits into it or designate which funds you'd like to go to the trust upon your death. Since this involves legal paperwork, it's a good idea to have your attorney look over anything you fill out or complete the trust's deposit schedule on your behalf.
What can you deposit into a trust?
The benefit of a trust is that you don't only have to deposit cash. You can deposit other items such as real estate, stocks, personal possessions and more.
What is the point of a trust fund?
A trust fund helps reduce the taxes your family could have to pay on your estate by taking possessions out of your name and placing them into the trust. You also retain control over how those funds are distributed, which is highly warranted in cases where you have a number of beneficiaries who could fight over any remaining estate assets. By setting aside assets in a trust, you retain control of how those assets are divided, eliminating the risk of conflicts in most cases.
Trusts are independent, so it's very important to work with a legal advisor when setting one up. Simple mistakes can end up costing you or your loved one money in the future, and the trust may not distribute assets as you intended if you make errors when setting it up. While this can be more costly than setting up a basic trust on your own, it's worth the security of knowing that your assets and loved ones are protected following your death.