Some people in Missouri who are preparing an estate plan may be surprised to learn that wealth rarely lasts more than three generations. Dividing the estate among heirs, estate and income taxes and risk all dissipate wealth over time. Traditional estate planning can lead to a person’s grandchildren receiving very little of the family money.
Over time, even a large estate will be reduced in size if there are four children, each of them have several children of their own and the estate is subject to tax. However, there is another way of passing down wealth, and that is by thinking in terms of providing heirs with an opportunity.
With this approach in mind, people can set up a family trust that can support their heirs for generations to come. In many ways, a family trust may be more empowering to beneficiaries in the long run. Rather than creating heirs who are dependent on family wealth, a family trust gives them the chance to pursue their own path.
A family trust is one of many different types of trusts that can be created to aid family members in certain circumstances. Another type of trust is a special needs trust. This is a type of trust that can be established to care for family members with disabilities. A special needs trusts distributes the inheritance to the family member according to a schedule determined by the trust owner. In this way, both the family member and the assets are protected. For example, a trust might be set up so that the income goes to the beneficiary but the main assets are not touched. Estate planning, trusts and laws around trusts and taxes can be complex and subject to changes, so it may be best to discuss the plans for the trust with an attorney who has experience with these matters.
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