Trust Fund and Inheritance: What’s the Difference?

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When planning for the future, it’s essential to understand all your options. Estate planning can be a complex and tricky process if you’re unfamiliar with the tools you can utilize to care for your loved ones after you pass. One decision you must make is whether you want to create a trust fund or inheritance to pass assets to your beneficiaries. Keep reading to learn about these two choices and discover how a Putnam County trusts attorney can help you.

How Do a Trust Fund and Inheritance Differ?

Though many people use these terms interchangeably, a trust fund and inheritance are not the same things.

A trust fund is an estate planning tool that the creator, known as the grantor, establishes to hold assets aside until the terms of their fund are met. They also appoint an individual to manage the assets in the fund until they are ready to be distributed.

An inheritance, on the other hand, acts as more of a gift. Generally, the person who wants to leave something to a loved one, whether it is a small sum of money or sentimental items, will typically note this in their will. They will name the object and the intended beneficiary, who, upon the creator’s death, will receive the inheritance.

What Benefits Should I Consider?

Setting up a trust fund and leaving an inheritance both have their advantages and drawbacks.

Generally, leaving an inheritance is the ideal option for those who do not have a significant amount of assets to pass down to their beneficiaries. Setting up a trust can be expensive, so many who do not have a lot to leave will instead create an inheritance.

While a trust can be expensive, for those with high-value or complex assets, this is a better fit. A trust provides more control over how the funds are distributed and the entity responsible for managing the assets, while providing additional security to the funds. Similarly, assets in a trust are exempt from the probate process.

If I Want to Set Up a Trust Fund, Can a Putnam County Attorney Help?

If you are interested in setting up a trust fund to pass on assets to your beneficiaries after your passing, it’s in your best interest to enlist the help of an experienced estate planning attorney. Unfortunately, many make the mistake of trying to create their own fund, which often leads to their trust being ruled invalid, meaning their beneficiaries will not get the intended assets.

When you’re ready to set up your trust fund or want to leave an inheritance to a loved one, the Law Office of Andres D. Gil, PLLC, can help. Our dedicated legal team has the experience you need to help you through any issues you may face with estate planning. Contact us today to learn more about how we can assist you.

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