“Trust fund baby” implies someone born into a wealthy family, but even families with less than $1 million in assets can benefit from a revocable trust.
A key benefit of trust is to control the ages at which children receive their inheritance when both parents die. Without a trust, sons and daughters as young as 18 years of age receive full distribution of their inheritance in Minnesota. Alternatively, a trust allows parents to preselect the ages that their children must reach before receiving any trust assets, and not all of the trust assets need to be distributed at once. For example, parents could let a child inherit one-third (1/3) of their trust inheritance at age 30, half of the remainder at age 35 and the rest at age 40. That way, the children aren’t in danger of losing everything should they make foolish mistakes with their initial distribution from the trust. » Read more..
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Trouble, rather than convenience, may result when Mom adds son Jimmy to a bank account or other asset — the so-called jointly held account. A better plan for enabling Jimmy to write checks and to take other actions on behalf of an aging or disabled Mom is for Mom to create a durable power of attorney document. » Read more..
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Age, family situation and wealth play big roles in managing and preserving our assets during life, and distributing our assets at death. The basic planning documents for accomplishing those goals are a Will, a Revocable Trust, a Durable Power of Attorney and a Health Care Directive.
There is no one-size-fits-all formula for what makes sense for individuals at certain ages and under certain circumstances, but the following are factors to consider:
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