How to Form a Trust That Will Provide for All the Parties You Care About

When you think about how to wisely set up your family, friends, and/or organizations for financial success in the future, whether you are living during that time or not, it can be overwhelming to know what all your options are, how you should even begin to divvy up the money you’ve set aside to pass on, or who to trust in helping you with this process.  Don’t let the fear of the unknown in this case drag you down.  That fear always lead people to one place, and that place is called inaction.

This kind of fear that leads you to inaction leaves you paralyzed, worrying, stressed, frightened, belittled, all of which will not help you in providing for your loved ones.  So, in this blog, I want to share the following:

  1. A few ways to overcome this debilitating fear and
  2. A few options you can use to protect your estate for others’ use.

Overcoming Debilitating Fear

This topic could be a book all of its own, let alone a blog.  Because of this, I do not want to minimize the importance of learning how to overcome fear by trying to cover it all here.  However, I will share a few key insights into how to start to address this monster that is fear and help you move forward to accomplish the work you wish to get done.

  1. Label your fear. Call it what it is. If you don’t know what it is your are specifically afraid of, you will not be able to overcome it.  Without this crucial step, you will doom yourself to failure before you even start.  It’s like solving for “X” in a math problem without the rest of the equation.

  2. Assess your risks.  Make a list of the pros and cons of what could happen if you listen to your fears.  Make a list of the pros and cons of what could happen if you do not listen to your fears.

  3. Act. Based on the risks you assessed in step two, make a plan of action.  Once you do so, you can rest assured that the situation will take care of itself and, therefore, there is literally no need to worry, as worrying will not help you handle the situation better.  If anything, it will actually make you less able to handle the situation moving forward due to increased Cortisol levels in your body.

Protecting One’s Estate

One great option for protecting your estate is to set up a trust.  The great parts about trusts is that you can set one up for anybody you’d like.  You can delegate your estate out numerous people or organizations (such as a charity) or just set up one if you desire.  You can label various people as beneficiaries of the trust, and also determine how they can use the funds and assets in the trust to make sure they do not use the things set aside for them impulsively or recklessly.  Furthermore, you can make your trust span multiple generations if you want to set up your family for, say, a long time.  You can also make the trust accessible during your lifetime, after your lifetime, or both.  Here are a few different types of trusts, provided by CNN Money–a leader in the financial industry and worldwide news coverage:

  • “Revocable Trusts,
  • “Irrevocable trusts,
  • “Credit shelter trusts,
  • “Generation-skipping trusts,
  • “Qualified personal residence trusts,
  • “Irrevocable life insurance trusts, [and]
  • “Qualified terminable interest property trusts.”

Something to note is that with some, if not all, trusts make all the items in the trust will officially not be yours any longer once you establish them.  So:

  1. Choose wisely that which you decide to place in them, leaving impulsivity at the door,
  2. Run all your decisions by trusted counsel and appropriate love ones before solidifying the deal, and
  3. Take time to think about all the stipulations of your trust to make sure you are absolutely sure you want to make the trust a reality.

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