Using Family Trusts (CONT’D FROM PAGE 24)
ah’s attorney tells her that if she makes the trust revocable, all of the business assets will remain under the ownership of the family. As a result, they will be at the risk of being attached by creditors or lost in lawsuits. The assets might also be seized to satisfy any nursing home bills incurred by the person who establishes the trust. For these reasons, Sarah decides to set up an irrevoca- ble trust. Because the trust will own the business assets, they will not be subject to above risks of loss, either before or after Beth dies. The terms of an irrevocable trust can address the de- mands of complex family dynamics. Here are a few exam- ples: To Protect The Income Of A Young Child Adam and Sylvia, who own all of the stock of ABC Com- pany, have a nine-year-old child named Jane. They estab- lish an irrevocable trust that designates Adam’s brother Jason as the trustee. In the event of the death of the par- ents, Jason will run the enterprise. Jane, the trust’s bene- ficiary, will receive stock dividends and distributions from any assets. To Avoid Sibling Disputes Andrew and Beth are concerned that when they die their children might squabble about the family business assets, putting the organization’s survival at risk. Daughter
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