Some people think of trusts as tools only used by the super-rich in order to keep their family members from wasting their inheritance or to avoid paying taxes. While there is no question that a trust can offer substantial benefits for wealthy individuals planning their estates, trusts are also beneficial for individuals with more average levels of assets and income.

You don’t have to have millions of dollars in liquid capital in order to create a trust as part of an estate plan. You only have to have valuable assets that you can use to fund the trust. What are common examples of assets people use to create value in a trust?

People often use items of significant value, like homes and investment accounts

Creating a trust offers a variety of benefits. It can structure how beneficiaries use the resources in the trust. It can protect the estate and its beneficiaries from estate taxes. It can also protect individuals who may need Medicaid benefits later in life or who worry that government insurance programs or private creditors may seek their assets after their death.

Assets with significant value, such as retirement accounts, investment accounts and real estate holdings are common tools for funding a trust. The person holding an account or asset transfers ownership to the trust, thus diminishing their personal assets and increasing the value of the trust.

Life insurance policies and bank accounts can also help fund a trust

Many people move their assets into a trust while they are still alive in order to protect their assets or help them qualify for state benefits if they need them in the future.

However, you may feel uncomfortable doing so or may have legal or financial reasons to retain your assets until you die. If that is the case, you can also potentially transfer certain assets to the trust at the time of your death. Bank accounts and life insurance proceeds are common assets used in this manner.

The exact resources that you use to fund a trust and the way that you structure the trust itself will depend significantly on your personal and family circumstances. Carefully considering the options available and getting good advice can help you maximize the benefits of creating a trust.