Insurance money and trust, the two seem to be unrelated, but in fact they are interdependent, and together they build a stable wealth inheritance and protection system. The insurance money is like a strong city wall, guarding the safety and stability of the family; The trust is like a beacon of wisdom, pointing out the direction for the future development of the family.
Use trust to solve problems that insurance can't solve
Relying solely on insurance for wealth inheritance and debt segregation has limitations. Let's take a closer look at what this problem looks like:
It is difficult for policyholders to completely isolate the risk of debt
Although the insurance policy is the property of the policyholder and the cash value of the policy is owned by the policyholder, the cash value of the policy may still be the subject of enforcement when the policyholder is in debt. The safest way to do this is to transfer ownership of the policy, for example by setting up a trust to become a separate entity, thereby essentially segregating the debt.
Insurance inheritance is not the original intention of the settlor
While there are unique advantages to passing on through insurance, the designation of a deceased beneficiary can allow for a smooth transfer of assets to the intended person. This type of inheritance has significant advantages over traditional inheritance. The compensation received by the beneficiary is based on the beneficiary's property, not the insured's estate, so it does not need to be used to pay off the insured's debts during his lifetime, and debt segregation can be achieved to a certain extent. However, if only insurance is used to complete the pass, the death benefit will usually be paid in a lump sum to the deceased beneficiary. If the amount is not large, it is fine, but once the amount is large, it will also face huge challenges for the beneficiary, how to use the money properly, and how to maintain the independence of the property during the marriage, these are the risks that may be faced in the subsequent succession.
These issues can be easily resolved by changing the beneficiary to a trust. In the trust, the distribution of benefits to different beneficiaries can be clearly stipulated, including the standards, conditions, time, and frequency of the distribution of trust benefits, so as to have a binding and incentive effect on the beneficiaries. Therefore, the trust can be said to be the settlor's hand reaching out from the grave to help him fulfill his unfulfilled wishes.
Trusts also need the blessing of insurance
When it comes to the benefits of trusts, it's really exciting, but you know what? For large policies, insurance docking trust is the best choice! In turn, trusts also need the blessing of insurance, and the two can be said to be the best partners. If you set up a family trust directly, the threshold is quite high, at least 10 million yuan is required. However, by connecting insurance with trusts, the threshold for setting up trusts can be greatly reduced, and the leverage effect of insurance can also be fully utilized.
In addition to taking the premium scale as the standard, the threshold can also be set according to the amount insured, such as 3 million insurance amounts. At this time, when the adult premium is converted, the threshold becomes low and low. For example, a 35-year-old man buys leveraged life, with an insurance amount of 10 million, and pays for 20 years, with an annual premium of less than 170,000. After the death of the insured, 10 million will enter the trust, and he can take care of everyone he wants to take care of according to the insured's wishes.
The added advantage of an insurance trust
The range of beneficiaries is broader
We know that the range of beneficiaries of an insurance policy is relatively limited, and a trust can greatly expand this scope. It can include not only close relatives, but even descendants of unborn children. In addition to natural persons, legal persons or organizations can also be beneficiaries, such as charitable associations. Therefore, the setting of the beneficiary of the trust gives us a lot of imagination.
Privacy
Whether it is a legal succession or a testamentary succession, it is difficult to guarantee privacy, but trusts can do it. We can think of a family trust as a parent contract, and each beneficiary gets a sub-contract. The information between the various beneficiaries is segregated, which means that each beneficiary only needs to know his own contract, and he does not know the situation of the other beneficiaries. The advantage of this is that you can avoid a lot of unnecessary troubles and disputes. With these additional advantages, the Insurance Trust undoubtedly provides more flexible and effective options for our wealth management and inheritance.
The best time to set up an insurance trust
The timing of both the purchase of insurance and the setting up of a trust is very important. The purchase of insurance needs to be done when the financial situation is good, and the establishment of a trust should also be done when the family's wealth is healthy, the settlor is mentally healthy, and the family relationship is healthy. If we are already suspected of deliberately avoiding debts, then the establishment of a trust can easily be broken down. Therefore, when setting up a trust, we need to ensure three "health": the settlor's mental health, the health of family relationships, and the health of family wealth. Only in this way can we be fully prepared for future wealth inheritance and risk management. At the same time, it is necessary to prepare in advance to better cope with the uncertainties and challenges ahead.
Insurance money is a powerful tool for risk management, which can provide financial support for families in the event of an accident and ensure the continuation of life. Trusts, on the other hand, are an ingenious wealth management tool that ensures that family wealth can continue to grow and be passed on to future generations through professional asset allocation and risk management.
The combination of insurance money and trust has achieved the perfect integration of risk protection and wealth inheritance. The insurance fund provides a stable capital for the trust**, and the trust provides a broader value-added space for the insurance fund through its unique institutional advantages.
In this era of uncertainties, insurance money and trusts have built a solid wealth protection barrier for us. Let us enjoy a good life at the same time, but also lay a solid foundation for the future development of the family.
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