Bharat Bhise: What you need to know about trust funds

Bharat Bhise believes that a trust is a useful estate-planning tool for passing on assets that are held by trustees for the beneficiaries. Setting up a trust fund can be a complicated process, but it offers a lot of advantages, such as letting you avoid probate or the transfer of assets in court. This increases privacy as well as the ease of transfer and lets you determine more definitively to whom your assets are to be distributed to and how. Depending on the assets, you can also avoid estate taxes that may make the transfer difficult.

After you decide that you want to set up a trust fund, you need to decide what type to set up. There are two types of trusts, and type of trust you set up depends on what you plan to do with it. Revocable trusts are trusts that can be altered, and may be the way to go if you believe you’ll be alive and well for a long time. This means you can alter the design of how the trust will work over time should you change your mind. You can even terminate the trust if you wish. It only becomes irrevocable with your death and the distribution and assets shift to your beneficiaries. This is also ideal if you have health problems, as the trustee overseeing its management can help you. Recovable trusts help you avoid probate, but not estate taxes.

Conversely, irrevocable trust funds cannot be changed once it has been implemented, and is advisable if you are worried about estate taxes. Assets that you will be transferring away from you won’t be under your taxable estate.

Essentially, Bharat Bhise recommends considering whether or not you feel good about releasing your assets completely from your control when determining which approach to take. This is important so you can enjoy the tax benefits on an estate level and if you are trying to qualify for government benefits.