While trusts may seem complicated, the reality is that they are simpler than their popular image may suggest.

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rustrade-indonesia.com A trust is a legal agreement between yourself and a trust company. Essentially, you place your assets into an account and the trust company agrees to manage the assets and execute your instructions regarding their distribution.
To illustrate the advantages of having a trust, consider the case of a newly-retired couple living on their life savings because they decided to avoid the perceived complexity of having a trust account: They get by (letfs say they have 1,000,000 in the bank) then one day the husband dies. Half of the money is transferred to his wife, tax free in accordance with the law. This means the wife gets 500,000. Then one day she dies and the government takes its share in taxes. The couple has four children, so whatfs left over is split four ways:
Government (taxes) 200,000
Children 800,000 (200,000 each)
In other words, the government takes as much as each child receives.
Whether or not this is fair is academic since this is the law and thatfs how inheritances are decided in such a case. There is another way though: With a trust fund, the couple in our example couldfve set it up to let them receive 50,000 each year for the rest of their lives, with the rest to be distributed tax free to their heirs when they die.
As the example above shows, having a trust can yield clear benefits while being simple and straightforward as any other financial plan. While trusts may seem complicated, the reality is that they are simpler than their popular image may suggest.

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