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Trusts serve many purposes, provide inheritances to children

Because people work so hard for their money during their lives, they often want to be the ones to decide where it will go and how it will be used after their deaths. Many Michigan residents fail to make plans and arrangements involving their money until it is too late, however. This often means that their wishes are not fulfilled and conflicts easily arise among family members about inheritances. Trusts provide an effective vehicle to prevent these problems and ensure that a deceased's wishes are carried out after-or even during-his or her death.

It was recently discovered that Robin Williams set up three separate trust funds for his children. Early reports indicate that the funds leave a certain amount of money to his three children, now aged 31, 25, and 22, although the exact of money contained in the trusts is yet unknown. The trusts were structured in a three-part sequence, providing for 1/3 of the total amount to be distributed to each child at the age of 21. 50 percent of the remaining amount was given to them upon turning 25, with the balance being distributed at age 30.

The reasons people set up trusts are widely varying because there are many different benefits to creating a trust fund. For some people, the goal is to provide a sizable inheritance for their children and to ensure that they do not blow it in one fell swoop. Others create trusts for the tax advantages. In some cases, a person can enjoy significant tax benefits by putting money into a trust during a certain time in his or her life for later use. Trusts can also be established in order to ensure that there will be adequate money to pay for nursing home care if needed, or other end-of-life expenses. One important kind of trust considered by many people who have children with special needs is a special needs trust. This trust provides financial support for children who may not be able to handle their own finances. Such a trust can also prevent them from losing valuable government benefits if it is set up correctly.

In addition to a special needs trust, there are many other kinds of trusts, including a living trust, a revocable trust and an irrevocable trust. Consulting with an experienced trust attorney and explaining the specific needs and desires for the trusts will allow the attorney to provide useful advice on what kind of trust will be of most benefit in accomplishing the stated goals.

Source: Business Insider, "Robin Williams Set Up A 3-Part Trust Fund For His Kids Amis Money Troubles Before Death," Aly Weisman, Aug. 12, 2014

Source: Business Insider, "Robin Williams Set Up A 3-Part Trust Fund For His Kids Amis Money Troubles Before Death," Aly Weisman, Aug. 12, 2014

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