Advantages and pitfalls of having a trust or family trust

A trust is a kind of a legally binding tool through which one person known as the settler gives property or real estate to another person who is thus known as the trustee to hold for the benefit for the third person called the beneficiary.  A lot of people in the world opt for getting trusts made for their family members and in such a case the trust is known as a family trust. There are both advantages and disadvantages of having trusts and both of them have been mentioned as follows:

Advantages of having a family trust

• Protection from creditors-the first and main advantage of having a trust is that it provides creditor protection of the beneficiaries or trustees.  A trust can help protect assets from personal liabilities.
• Protection against relationship property claims-if you give a trust to your children, then the money or asset held in it can prove immune from relationship property claims or from their partners in case of a divorce or other complication.  This happens mostly in case when the assets are transferred to the family trust prior to enter into a relationship.
• Protecting property from beneficiary- it may not always be possible to give assets to children when you are alive as they may not be able to handle them but if you put them into a trust, then those can be used by them as a source of income later on.

Disadvantages of having a family trust

• Loss of ownership of assets-one of the main disadvantage of having a family trust is that transferring assets into a trust will make you lose ownership or control over them.
• Future law changes-another drawback or negative related to having a family trust is that there are many possible changes that can take place in the legal rules and this can remove effect of the original objectives of trust formation. This can affect you or your purpose in unexpected ways.
• Cost of formation of the trust/transfer of assets-it is important to understand that one may have to pay some costs at the time of formation of trusts.  The exact costs can depend upon the nature of the trust and this too proves to be a slight negative related to one.

Now that you understand both the negatives and positives of having a family trust, you can yourself decide whether you wish to get one made or not.  These can be made with the help of a trust attorney in Northern VA or an asset protection lawyer in Virginia. If you wish to get one made from the best expert and at the most reasonable rates, you can log on to LorrenT.Johnston.com and take the services of one of the most reputed lawyer in town.  He will not only provide you with services but also consultation about all matters related to family law, asset protection and probate law.