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Family Trust Explained: Everything You Need To Know About Family Trust Funds

You are working day in & out and building your wealth for a secure future for yourself & the people you love. But have you ever wondered what would happen to those assets if something were to happen to you? That’s where a family trust fund comes in. 

A family trust is a legal arrangement that allows you to manage your assets and protect your loved ones, even after you. You can ensure that your assets transfer how you want them through family trusts. But a family trust can do more than just protect your assets – it can also be a powerful tool to provide financial security for your family in multiple situations. 

Whether you’re looking to protect your assets from creditors or to provide for a loved one with special needs, a family trust can help you achieve your goals. In this blog post, we’ll take a closer look at what a family trust is, how it works, and the purpose of a family trust. We’ll also explore the different types of trusts available and how you can set up a family trust fund. 

Let us start with understanding what family trust is.

What is a family Trust

 

What is a Family Trust?

 

A family trust is a way to ensure that your assets are distributed per you and that your loved ones are taken care of in terms of finances. 

There are three parties involved- a settlor, a trustee, & a beneficiary.

A settlor creates a trust and then transfers the assets’ ownership to a trustee. The trustee is responsible for managing and administering the trust on behalf of the beneficiaries, who are the individuals or organizations that will benefit from the trust.

A family trust can be revocable; the settlor holds the right to make changes to the trust or dissolve it at any time, or it can be irrevocable, meaning that it cannot be amended or terminated once it has been established. A family trust can effectively protect your assets, minimize tax liabilities, and provide financial security for your loved ones.

This is the family trust meaning. Let us now look at how family trust funds can be used in different situations. 

How Can Family Trust Be Used In Different Situations?

 

How Can Family Trust Be Used In Different Situations?

 

There are many situations in which a family trust can provide financial security and protect assets. Here are a few examples:

  1. Protecting Assets from Creditors- A trust can be used to protect assets from creditors if the settlor becomes legally liable for debts. By transferring ownership of the assets to a trustee, the trust assets are no longer considered the settlor’s personal property and are, therefore, not subject to seizure by creditors.
  2. Providing for a Loved One With Special Needs- A special needs trust can provide financial support for a loved one without affecting their eligibility for government benefits. This family trust fund can pay for medical expenses, housing, and other necessities.
  3. Minimizing Tax Liabilities- An irrevocable trust can transfer assets out of the settlor’s estate, which can help reduce tax liabilities. By transferring ownership of the assets to the trust, the assets are no longer considered part of the settlor’s property and are, therefore, not subject to estate taxes.
  4. Preserving Wealth For Future Generations- A generation-skipping trust can transfer assets to a younger generation, skipping over the immediate offspring. This can help you save for the coming generations.
  5. Managing Assets for Minors or Other Beneficiaries- A testamentary trust can be used to manage assets for the benefit of minors or other beneficiaries who are not yet able to manage their own financial affairs. The trust can provide financial security and ensure that the assets profit the beneficiaries.

This is how family trust funds can be used in various situations. Next, let’s discuss different types of family trusts. 

 
Types of Family Trusts 

 

Types of Family Trusts 

 

Several different types of family trusts can be used to meet your family’s specific needs. Here are a few common types:

  1. Revocable Trust- This type of trust allows the settlor to make changes to the trust or dissolve it at any time. It’s often used to manage assets during the settlor’s lifetime and can be a valuable tool for family trust estate planning.
  2. Irrevocable Trust- An irrevocable trust cannot be modified or forfeited once established. It’s often used to transfer assets out of the settlor’s estate, which can help minimize tax liabilities.
  3. Charitable Trust- A charitable trust is a type of irrevocable trust used to benefit a charitable organization. It can provide a tax deduction for the settlor and can be used to support a cause that the settlor is passionate about.
  4. Special Needs Trust- This type of trust is designed to provide financial support for a loved one with special needs without affecting their eligibility for government benefits.
  5. Spendthrift Trust- A spendthrift trust is used to protect family trust fund assets from creditors and can be a useful tool for individuals who are at risk of mismanaging their finances.
  6. Generation-Skipping Trust- A generation-skipping trust is used to transfer assets to a younger generation, skipping over an intermediate generation. It can help minimize taxes and preserve wealth for future generations.
  7. Testamentary Trust- A testamentary trust is formulated in a will and only becomes effective upon the settlor’s demise. It’s often used to manage assets for the benefit of minors or other beneficiaries who are not in the correct capacity to manage their own financial affairs.

These are some types of family trusts. Let us now understand how to set up a family trust fund.

Setting Up A Family Trust Fund

 

Setting Up A Family Trust Fund

 

The following are the steps involved in setting up a family trust:

  1. Choose a Trustee- The trustee is the person or organization responsible for managing and administering the trust. It’s essential to choose someone who is trustworthy and capable of handling the trust assets.
  2. Determine the Beneficiaries- The beneficiaries are the individuals or organizations that will benefit from the trust. It’s important to clearly define who the beneficiaries are and how they will receive the trust assets.
  3. Identify the Trust Assets- The trust assets are the property that will be transferred to the trust. This can include cash, investments, real estate, and other property types.
  4. Create the Trust Document- The trust document is the legal document that defines the terms of the trust, including the roles and responsibilities of the trustee, the beneficiaries, and the settlor.
  5. Transfer the Trust Assets- The trust assets must be transferred to the trustee in order for the trust to be effective. This can be done through a deed, a transfer of ownership, or other appropriate means.

It’s important to consider legal requirements, asset protection, and tax planning when setting up a family trust fund. A legal & financial advisor can ensure that the trust is formed correctly and meets all the legal requisites. They can also help with how to use the trust to attain your asset protection and tax planning goals.

So, this is how you set up a family trust. In the final section, let us look at another investment alternative that can help you build your legacy while providing multiple other benefits as well.

The Bottom Line 

 

In conclusion, a family trust is a powerful tool that can be used to manage assets, protect loved ones, and provide financial security in various situations. Whether you’re looking to protect your assets from creditors, provide for a loved one with special needs, or preserve wealth for future generations, a family trust fund can be an effective way to achieve your goals. Setting up a trust can be a complex process, but with the proper guidance and planning, you can create a trust that meets your family’s unique needs.

Just like how you want to leave enough & proper finances for your loved ones, we know you also want to leave certain values along with the bank figures. While a family trust can help you plan your financial front, a wealth management alternative like Secvolt can help enhance your numbers, manage your wealth, and at the same time, build the legacy you have always wanted to leave behind with your loved ones. 

For more information about Secvolt, visit www.secvolt.com.

Secvolt is a quant hedge fund that can cater to all your wealth management needs. With the help of its intelligent quant models & advanced investment strategies, Secvolt has helped its clients sail smoothly through all these economic tides. In 2022, they made as amazing as 262.1% cumulative returns, a year when we saw even the titans fighting for breath.  

So, if you’re ready to take control of your & your loved one’s finances & values, consider getting on board with Secvolt.

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Ashish Verma

Ashish Verma is the founder and CTO of Secvolt, with close to 10 years of experience in the IT industry. He has been the technical backbone of the company and has worked tirelessly to make the technical infrastructure robust. He is a passionate entrepreneur who generates solutions that have the potential to bring change.

In order to ease the client’s interaction with Secvolt, he has strived to develop the business’s technological foundation and establish a user-friendly platform. Ashish has also contributed substantially to smoothening the company’s administration and ensuring that there are no lacunae in the broad structure of the organization. 

Early Years

Coming from a middle-class family, he was aware of the problems that people faced while using technology. He sought to create something that was simple to use yet had a powerful effect. As he studied computer science, he became eager to offer a solution to real issues. He began his professional career at Amdocs, where he gained expertise in client management while catering to more than 20 clients. Later, he moved to Citicorp, where he had exposure to the investment industry. His time at Amdocs and Citi enabled him to produce high-standard, efficient, and scalable technical infrastructure.

He left corporate jobs for his startup because he was passionate about working on the concept of a smart city platform. He expanded the concept internationally and even collaborated with Global Dignity-Kuwait. Things didn’t work out for him the first time. He states, “My failures didn’t stop me from experimenting and trying new things.” He rose from the ashes like a phoenix and founded FewerClicks, an End to End IT solution company.

He worked on the creation of Solster Finance, a decentralized financial platform based on the Solana blockchain. He created this platform single-handedly which has helped the team raise a $1M investment and a revenue of more than $5M within 6 months of launching. 

He has previously worked on many blockchain technologies and cryptocurrency ventures, which include Decentralized Finance Applications (Defi), Decentralized Applications (Dapps), File Contracts (SIA, record-keeper), Smart Contracts (rust, solidity), and NFT Development. His experience and effective communication have helped many team members understand Secvolt effectively and the underlying technology it is powered by.

He possesses the ideal combination of strategic thinking and excellent business insight. He is responsible for formulating technical aspects of the company’s strategy to guarantee alignment with business objectives. With his drive to experiment with new technologies, he has helped Secvolt achieve a competitive edge. Being in charge, Ashish never holds back in encouraging the different departments to make profitable use of technology, helping to grow as an unstoppable team at Secvolt!

Hanif Shaikh

Hanif Shaikh is the founder and CMO of Secvolt, with over 8 years of experience in the industry. He plays a crucial role when it comes to the growth of Secvolt. Since the beginning, he has acted as a mentor for each and every employee of the company, and he makes an effort to be accessible to his staff anytime they need him. 

Hanif first entered the Blockchain and Crypto world in 2016, and nothing has stopped him since. He views blockchain as a transparent platform that provides authority and accountability back to the people. He consistently believes that “overcommunication is better than miscommunication.” He has lived by this motto with his staff, clients, and networks.

Early Years

Hailing from Gujrat, a state in India, he is following his dream to contribute to making this world a better place. In the process, he has struggled, made some mistakes, and learned lessons from those mistakes to achieve success in life. His entrepreneurial attitude dates back to his childhood when he learned from his father’s business and aspired to have it all. He came from a humble background and had ambitions to succeed in life.

He has developed two successful businesses from scratch, and in the process, he has inspired young people to start their own businesses. He was an integral part of the Quora Mumbai Meetups and helped it become a great success in a short period of time. Later, he began organizing meetups to raise awareness about blockchain, cryptocurrencies, and their applications. He also shared his knowledge of ICOs, highlighted reputable ICOs, and established a small cryptocurrency community on WhatsApp groups.

He chose to go on a Blockchain Tour in India in 2019 and met some fascinating people. Throughout his journey, he has been able to build an extensive and robust network that has aided Secvolt’s growth. Because of his expertise and understanding of the Crypto Industry, he has been featured on several news channels and has advised the youth on the subject.

He is in charge of the company’s marketing operations and is responsible for developing its marketing strategy and vision. He oversees a group of passionate marketing professionals and plans promotional strategies with the goal of making  Secvolt a global brand. 

He is a perfect blend of a practical attitude and innovative business acumen. He believes in the ability of individuals to perform exceptionally well when given an environment to experiment and explore their passions; a culture that he has built at Secvolt.

Divakar Choudhary

Divakar Choudhary is the founder and CEO of Secvolt who has been trading for more than six years now. He started the business in 2018 with the conviction that if anybody could dominate the market, it was him. He poured all of himself into the business and turned Secvolt into a market-beating machine.

Divakar developed the fundamental quant models that perform risk management and capture alpha using his skills from the previous organization and his time spent in the market. In order to make the system effective, he backtested risk mitigation algorithms and worked on them for more than 4 years to produce results.

Early Years

He began his crypto journey in 2013 after getting his first gaming Laptop and melded in with the Blockchain community like sunbeams on the ocean. He created many YouTube channels at the age of 15 and businesses by the time he was 17. Technology has always piqued Divakar’s interest. He endeavored and succeeded at freelancing in his effort to achieve financial independence. However, he soon realized that freelancing would always keep him in the rat race, and the only way out would be to build a machine yielding generational wealth.

Soon, he started trading using his own capital but suffered a loss in the market. He says, “95% of people lose money & the rest 5% make money from the loss of those 95%.” He then began working on an effective technique to be included in this 5% after losing part of his own assets during the early stages of trading. He began evaluating quant strategies using statistical models.

With his methodology, he once produced a 20% ROI in a single month. With the zeal of creating something exceptional, he borrowed money from friends and family and generated decent returns for them using primitive quant models. Month after month, the system’s efficiency and the competence of the man behind it allowed for excellent market returns.

In the beginning, Divakar worked on his laptop for over 18 hours. It took every ounce of his energy as he executed about 530+ deals daily for 4 years to create this company from the ground up. In 2021, he increased his volume by 827%, trading a total of $52 million and hitting a single account.

In his words-

“What does becoming “THAT” GUY mean to you? Who did you need when you were young? Be that person!”

He is a perfect example of someone who followed his passion and made a fortune from it! He dreamt of creating generational wealth as a youngster, envisioned it as an adult, and is now making it a reality with Secvolt!