Estate Planning with Multiple Trusts
Have you ever wondered how people and families utilize multiple Trusts? Or maybe why they would do such a thing? Today we’re looking at situations where it might make sense to have more than one Trust.
Multiple Trusts for the Blended Family
Utilizing multiple Trusts in a blended family is an incredible way to make sure everything is allocated the way you intend it to be.
This type of estate planning is brilliant for families that blend when the children are older or full grown. In this instance you both have lived your lives, grown your assets and wealth, and are now choosing to marry each other. When you marry you can utilize multiple Trusts to manage different portions of your assets.
For instance, you can utilize a Trust that oversees your individual property, another that oversees your spouse’s individual property, and then a third Trust that controls your joint property.
This type of smart estate planning dramatically lowers family infighting amongst no the step-siblings. This reduces family drama and needless tears. Each set of children are provided for in a manner that is fair.
Additionally, you can put safeguards into place about who is allowed to manage assets. This means that if your individual Trust is designed to distribute your individual assets to you children upon your death, you can say who manages that distribution. If you know the children are likely to take issue to their step-parent having any involvement in this distribution, you can explicitly name someone else to handle it— limiting drama for your grieving spouse.
This scenario may not be as helpful or effective for families that become blended while the children are very small, but don’t discount their benefit without discussing the option with a skilled estate planning law firm like us!
Multiple Trusts for the couple who married later in life
When you marry after you’ve established your life and already have a head start on building your assets and wealth, it is wisdom to make sure there is clear delineation between your assets and your new spouse’s assets. Many couples choose to use a prenup, but in addition to that it’s a great idea to also utilize multiple Trusts.
The yours, mine, and ours approach is a great approach for estate planning in this type of scenario.
You would have a Trust to manage your assets, your spouse would have a Trust to manage theirs, and you would jointly have a Trust for your shared assets.
This, again, limits issues at the death of one, or both, of you. It prevents loved ones from fighting because you have been crystal clear with your desires for all of your assets— regardless of when the asset was acquired.
Multiple Trusts to Separate Risky Assets
Many people want to separate ownership of their assets. It’s a common choice to put certain assets in one Trust, while putting others in another. This is done to protect you and your Trustee from liability. So, if one asset holds a high level of liability you might decide to put that asset in its own Trust so that if something goes awry and there is a liability issue, your other assets are not lumped into the same pot with it.
Doctors, lawyers, and other professionals with high liability careers will frequently put some of their assets into an irrevocable Trust to shelter those assets in the event that a malpractice lawsuit were to come about. The Trust can protect those assets from being lost in a lawsuit.
Multiple Trusts for those with High Net Worth
Many people with high net worth will utilize multiple Trusts and multiple types of Trusts to protect their assets and to limit tax liability.
When you have high value assets, diversifying ownership can dramatically lower tax liability.
Multiple Trusts for the unmarried person
Every unmarried person needs a solid estate plan. This is because you need to clearly outline what you want to happen to your assets and minor children if you die.
An estate plan that utilizes a Trust is an incredible place to start, but why would a single person want to have multiple trusts? Perhaps you fit into some of the categories above? Perhaps it’s wise to limit tax liability or to shelter assets from potential liability.
Or maybe you’re in a committed relationship but have chosen not to marry for whatever reason. You can set up a Trust to provide for your partner while creating another Trust to care for other loved ones.
Whatever the reason is, we’re here to help! We’ve spent years helping people just like you care for their loved ones, create a plan that is clear, prevent drama, and make a difference for generations to come. Are you ready to set up a Trust (or three)? Call us at (404) 736-6066 or visit our website to schedule a consultation about how we can help you pass your assets and wealth on to future generations!
