June 19, 2022 | Business | No Comments
Trusts have the potential to be a very strong instrument for helping business owners secure their assets and achieve their wealth goals.
The purpose of trusts is to offer legal recourse for your possessions. In the terms of business owners, a trust can be a useful instrument for preventing beneficiaries and possible creditors (including past spouses) from having direct access to trust assets.
5 Advantages of Using Trust in Business
Here are five advantages to converting your firm to a trust.
1-Minimization of estate taxes
The assets entrusted to the trust will continue to grow beyond the estate. While it applies to a persons life exclusion, all future growth is tax-free.
2-Asset protection and confidentiality
The assets of the trust are protected from prospective creditors and do not have to be reported on individual balance sheets. Asset preservation is a crucial aspect of accumulating wealth. As a business owner, it’s much more important.
3-Planning for the future
The trust can be written in such a way that it provides a succession that is in line with your company’s legacy goals. The legacy of your company depends on succession planning.
4-Maintaining proper asset access and control
Moving a commercial enterprise into a trust with the advice of a wealth counselor and an attorney allows business owners to keep the right level of control.
5-Avoiding the possibility of a state income tax
It may be feasible by using the trust arrangement to reduce property taxes on a significant amount of the sales price as you arrange for a liquidity event.