Contrary to popular belief, trusts aren’t only for the wealthy

Learn how to set up a trust

Setting up a trust often costs at least a few thousand dollars, given that the process typically requires paying for a lawyer’s time. An article lays out the step-by-step process one should follow in order to set a trust up.

Trusts are estate planning tools

They’re used as a way to designate assets to beneficiaries while skirting certain taxes and maintaining one’s privacy. They can hold a wide range of assets, including cash, real estate, stocks, businesses, and more.

The median trust fund contains roughly $285K

That’s according to data from the US Federal Reserve. There isn’t a specific net worth that can help determine whether or not someone needs a trust—but contrary to popular belief, trust funds can be great estate planning tools, even for people who aren’t ultra-wealthy.

It’s not always clear whether a will or a trust is the best for an individual estate

While trusts are typically more expensive to set up than a will, they also help beneficiaries avoid specific types of taxes, depending on the type of trust. Wills typically go through probate, whereas trusts do not. An article offers a list of questions to consider when deciding between the two.

Trusts offer ways to reduce the taxes beneficiaries pay on assets in one’s estate

People of different socioeconomic classes often decide to establish a trust to avoid certain taxes. When someone dies and leaves assets to beneficiaries in a will, those beneficiaries must pay specific taxes a trust's beneficiaries avoid. It all depends on the type of trust.

Special needs trusts help financially care for dependents with disabilities.

Both individuals and businesses can establish trusts

Business trusts can allow trustees to manage a beneficiary’s stake in a business, and more. There are many different specific types of business trusts.

Certain trusts can bypass estate taxes—but the terms can't be changed

Putting money and other financial assets in an irrevocable trust is one way to avoid estate taxes. There are some cons to this trust, like the fact that you can't change the terms of the trust or assets in the trust after they're set. But a big pro is that any financial assets in an irrevocable trust aren't considered part of your estate, meaning they aren't subject to death taxes.

A growing number of Americans are leaving trust funds behind for their pets

A pet trust ensures that an animal receives financial support and care if its owner can no longer care for the pet. Some lucky dogs have inherited millions of dollars from their owners.

Revocable trusts are typically subject to estate taxes

Irrevocable trusts, however, are not. Both types help beneficiaries avoid probate, the lengthy court process that administers a person’s estate upon death.

In a trust, the trustee is often the same person as the beneficiary

While a trustee is supposed to be a neutral third party whom the grantor appoints to manage their trust, they can be (and often are) the same person as the beneficiary. While that seems counterintuitive, trustees have a legal obligation to manage assets impartially and in the trust’s best interest.

Explore a visual of 16 different types of trusts

While all trusts fit into one of two categories (revocable or irrevocable), many other types of trusts exist for more specific circumstances. Think: pet trusts and special needs trusts.

Revocable trusts are more flexible than irrevocable trusts

Irrevocable trusts are almost impossible for the grantor to change or dissolve. With a revocable trust, the grantor can alter or dissolve the trust at any time. However, there are upsides to irrevocable trusts, too—such as the fact that they’re typically not subject to estate taxes, unlike revocable trusts.

A revocable living trust is the most common type of trust

With a revocable trust, the grantor can alter or dissolve the trust at any time. A living trust, is one that the grantor creates during their lifetime (as compared to a “testamentary” trust, which a grantor establishes in their will to be read after death).

History’s largest intergenerational wealth transfer is happening in the next few decades

The founder of a multifamily office firm offers lessons on how to preserve wealth for generations from a global perspective, like educating younger family members.

Not all alternative investments are easy to invest in

For instance, some alternative investments are only available to accredited investors or high-net-worth individuals. Others have relatively high fees compared to traditional investments.

Americans are projected to inherit $105T over the next 30 years

Today, someone's financial standing has more to do with their families than any other outside factor. Of the more than $100T of projected inheritance, that money is concentrated among a few wealthy estates and families.

Probate is a legal process that determines if someone’s will is valid

The executor of the will in question not only collects estate assets, but also pays outstanding taxes and more. Grantors sometimes opt for a revocable trust instead of a will so their assets avoid probate in the event of their death.

Half of the richest people in the US are finding ways around death taxes

One of the main purposes of the federal estate tax is to crack down on generational wealth, so wealth isn't concentrated among a select few. However, the ultra-rich have found ways around paying these taxes. This ProPublica article investigates the practices used by half of the 100 richest people in the US to avoid death taxes.

People with annuities (annuitants) tend to skew older, with most approaching retirement age

However, others also invest in an annuity contract when they come into a large sum of money, like an inheritance. There are lots of myths surrounding annuities, such as the idea that they're only for the wealthy.

The debate over estate taxes centers on wealth inequality

Since the modern federal estate tax was implemented, people have felt strongly about whether or not to keep it. Much of the debate boils down to equality: Proponents say the tax creates better income equality between the rich and poor, while opponents say it's an inequitable tax only placed on the wealthy.

Addressing psychological barriers to building wealth

Almost half of adults in the US report owning no investable assets. For many, the barrier to entry is the belief that investing is too complex for them to get involved. Consulting with a financial psychologist, this article addresses the cognitive bias that causes so many people to miss out on financial opportunities, and offers tips on how to get past the anxieties and just begin.

'Trust is one of the greatest economic forces on earth' - Charlie Munger

Three ways to save for your child’s future

Parents can open a custodial Roth IRA when their child starts to earn income (think: summer job), which can help them start saving early. For example, 529 accounts help parents save for college, while UTMA/UGMA accounts function like trusts.

More than half of today's family offices—the private companies that help ultrawealthy individuals manage their fortunes—were incorporated after 2010.

Reasons the wealthy like to give to universities

Every year, higher education receives the lion’s share of philanthropy for key reasons. Universities have huge budgets and can handle big sums. They also oversee a broad range of initiatives tailored to an individual’s goals, and are particularly credible institutions with long track records and strong brands.

Contrary to popular belief, random investments can outperform managed funds.

Family offices have a median of $476M in managed assets

There are several types of family offices that cater to ultra-high net worth individuals, starting with single-family offices that cost an average of $3.2M annually.

How the wealthy are preparing for an estate tax clip

In 2017, the federal government passed a tax bill that raised the estate tax threshold for individuals and married couples. However, this exemption was temporary and is set to expire at the end of 2025. This Bloomberg Tax podcast episode explains what wealthy individuals are doing to protect their estates before the tax change. Listen here.

Family offices are estimated to manage more assets globally than hedge funds

As baby boomers prepare to transfer more than $84T in assets to the next generation over the next 20 years, family offices’ impact is expanding.

Roughly 90% of generational wealth dries up by the third generation, epitomized by the phrase 'shirtsleeves to shirtsleeves in three generations.'

Alternative investments carry unique tax implications

The specifics depend on the type of alternative asset, as well as how long you hold it for, and your income.

How universities manage their endowments

The CNBC video report explores how elite universities like Harvard handle their massive endowments, the ethical debates around their investments, and the tension between growing wealth and rising college costs. If you’re curious about where billions of dollars in higher education go, why tuition remains high despite huge endowments, or how student activism is pushing for ethical investing, this video offers a revealing, accessible look at the financial engines behind America’s top colleges.

Gifting money is one way to avoid death taxes

Gifting money while you're alive is one way people avoid estate and inheritance taxes. There is a yearly cap on how much you can give to a person before that money is taxed—but there isn't a cap on how many people you can give money to in a year.

What are college endowments? An expert explains

College endowments are meant to last forever. That's why some of the oldest, most prestigious schools in the US have lasted so long. A higher education finance expert weighs in on how these funds work and offers fascinating tidbits on how they impact university finances.

Family offices’ estimated wealth is expected to hit $9.5T by 2030

The number of family offices, and how much money under their management, is growing rapidly both in the US and around the world.

Estate planning involves organizing your financial documents—and making sure your family knows where to find them

This article offers tips for keeping yourself organized, such as the list of documents your family may need and suggestions for where to keep the files, both digital and physical.

Some multibillion-dollar pension funds depend on hedge funds

Pensions are responsible for safeguarding the retirement plans of many corporate and government employees alike. Pensions differ from 401(k) plans and sometimes rely on alternative assets, like hedge funds, to insulate their portfolios of billions of dollars from volatility in financial markets. Read the case top pension advisor Cambridge Associates makes for hedge funds.

Some Ivy Leagues are worth billions of dollars, managing massive endowments to support their operations and investing donations for long-term growth rather than spending them.

Family offices have been increasing their allocations to private credit

Private firms that manage family fortunes have been investing more in alternatives like venture capital and real estate, impacting the wider financial world.

Historically, only about 1% to 2% of Americans had to pay the federal estate tax

Recent IRS data shows that between 2011-16, that number dropped even lower: The federal estate tax only impacts about 0.2% of Americans. Death taxes typically only impact the rich, and the federal estate tax is no exception.

Pension plans investing over 60% in stocks had the highest real returns in 2024

In order to ensure that retirees received all the retirement funds a company or other institution may have promised them, pensions were often limited to investing in run-of-the-mill assets like government securities, investment-grade bonds, and blue-chip stocks. But as market conditions have evolved, pensions are increasingly being invested in a wider range of assets, including alternative investments.

Less than a third of wealth transfers to the second generation

Just 12% of family wealth reaches the third generation, and 3% makes it to the fourth. Family offices work to prevent that kind of attrition and ensure family fortunes are passed to the next generation.

The pros of exchange-traded funds include ease of access through brokerage apps and retirement savings accounts

One unexpected perk is that ETFs are typically associated with lower capital gains tax requirements. Read this list to learn more about the benefits of investing in ETFs.

HSAs are frequently criticized for exacerbating inequality in healthcare access

Health savings accounts offer large tax advantages, but require personal contributions. Some argue that the tax advantages benefit wealthy individuals more than anyone else and that HSAs don't do much to help people who can't afford to regularly contribute to one. As a result, HSAs only decrease costs for those who can comfortably invest in them, and health inequalities between high-income and low-income individuals are exacerbated.

Some argue that a massive emergency fund can hurt more than it helps

A financial advisor makes the case for an emergency fund that isn't too overstuffed. An emergency fund that is too large, he argues, can mean that you'll miss other opportunities to grow your wealth.

Explore a guide to 529 college savings plans

Investors put after-tax dollars into these education-earmarked accounts, and like a 401(k) or IRA, they invest them into stocks, bonds, or funds. When it comes time to withdraw, investors do not pay any taxes on distributions. However, the money must be used for approved expenses like college tuition, textbooks, and trade schools.

The scope of 529 plans has expanded, but 529s still have some drawbacks

The tax-advantaged accounts can be used to pay for K-12 education, apprenticeship programs, and student loans, in addition to their original purpose: paying for college. But 529s have downsides, such as fees and penalties for non-qualified uses.

How much tax you would owe on a $14M inheritance

“Death taxes” refer to estate and inheritance taxes—fees imposed on wealth transfers after someone passes. While the federal estate tax only applies to estates over $13.61 million in 2024, some states, like Washington, have their own taxes.

Famed investor Ray Dalio and his wife, Barbara Dalio, have donated money to help fund new investment accounts for US children called 'Trump Accounts.'

The Dalios have committed $250 per child to 300,000 children under 10 years old in Connecticut who live in ZIP codes where the median income is less than $150K—an expected total of at least $75M. The money is designated for "Trump Accounts," or investment accounts with $1K provided to children to put towards education or starting a small business.