Managing and protecting assets is way tougher than earning money and assets. Trust me, most of us are not smart enough while managing the assets. Honestly, can you take a consolidated statement of all your finance and assets in minutes? I hear most people say no.
Predominantly, lack of knowledge or interest in managing the assets can lead to unpleasant things in life. Further, planning your finances and estate properly can provide much-needed relief and happiness.
Why Do You Need to Manage Your Money and Assets?
The reason is very simple. It is your hard-earned money and assets. After all, you might want to save your assets for you and your family to survive uncertain events in life, such as incapacitation, loss of income, dismissal, and so on.
Insurance may cover your medical expenses, but what about your survival, personal loan repayments, credit card bills, and business liabilities?
Advantages of a Living Trust
What is a Living Trust? A Living Trust is an estate planning option that describes how the assets are to be managed at the incapacitation or death of the original owner. A living trust comprises three types of stakeholders, a grantor, a trustee, and one or more beneficiaries.
- The grantor adds assets and funds to the trust.
- The trustee manages the assets and funds of the trust.
- The beneficiaries receive the benefits of the trust.
Having said that, an irrevocable living trust can protect all of your properties and liquid assets from probates and creditors. Immeasurably, a living trust is the best possible protection for your finance and real-estate.
How to Keep Your Assets and Money Safe Against Uncertain Events
Personally, I have seen some people lose their assets to creditors when their business fails. I will quote you an example.
Assume, John has “X” amount as surplus in his savings account and shareholdings. Also, he is living in his own property. Suddenly, he met with an accident and couldn’t continue his business. Alternatively, he has a personal loan and few credit card bills to pay. Plus, he has signed a personal guarantee form while taking a business loan.
Now, creditors have all the right to attach John’s property and other liquid assets towards his outstanding loan amount. On the other hand, John should take care of the survival of his wife and children as well.
What could he do? In such scenarios, no creditors or court of law can attach if the assets are secured under a living trust.
Difference Between a Will and a Living Trust
A will is like an open book. Anybody can probe to know what all are included in the will. The information about the will can be obtained easily by law firms and creditors. Above all, your intention of writing a will is to distribute your assets and money to your loved ones. It can become compromised when a third person can access the details.
However, a living trust will maintain the trust information secretly. Notably, only the grantor, trustee, and the beneficiaries can access the details of trust holdings. That way, it is out of reach for probate and creditors.
In reality, there are laws across states that protect the rights and administration of a living trust.
Being organized always helps. Generally, many of us do not understand as to why being organized is important. While paying taxes, your figures may mismatch with the actual record. Concurrently, keeping all the records in an organized way will help you identify the dispute. Moreover, you might spend only a little time on tax filing when you are organized.
Plus, reviewing your personal finances becomes easy that way. Consequently, you will never hesitate to review your personal finance to see where you stand. Thus, it can help in making an informed decision when it comes to personal finance.
Altogether, managing personal finance and assets is essential for each and every individual. You may be a businessman or a professional, you will need some sort of arrangement to take care of yourself and your family when the need arises. Being organized and protecting the assets through a living trust can ensure the safety of your assets and liquid money.
In all probability, you can safeguard your family against unpleasant times in life, but you should have the proper plan in place to do that.