WHAT IS A TRUST?

Have you thought about or been advised to consider creating a trust but aren’t quite sure what a trust is?

A trust is legal document that provides instructions for the management of all or part of your property. In other words it describes giving what you want, to whom you want, when you want, and in the way you want. It is recommended that your trust be drafted by an attorney with expertise in the area of estate planning.

The trust document describes:

  • How assets will be managed, and eventually distributed
    • In your active lifetime
    • In the event you become incapacitated
    • After you pass away
  • Who will benefit from your assets – now and in the future
  • Who you want to be responsible for carrying out these instructions

HOW CAN A TRUST BENEFIT YOU?

A trust can help:

  • Provide protection for family members who lack experience in handling financial matters
  • Ensure that funding is available for your specific objectives, such as health care costs, education for grandchildren or charitable interests
  • Manage estate tax exposure and ensure privacy by avoiding probate
  • Provide for a disabled child or relative after your death
  • Protect assets from a creditor’s claims

WHO IS INVOLVED WITH A TRUST?

A living trust will have a few different entities involved.

  • The grantor is the owner of the trust.
  • A trustee manages the assets that are in the trust. You can choose to be your own trustee and manage your affairs as long as you are able, or select another party to be a co-trustee.
  • A successor trustee is named to step in once the trustee is no longer able to.
  • A beneficiary is the person or persons who will receive the trust assets

CHOOSING A TRUSTEE

One of the most important decisions you will make when establishing your trust is the selection of your trustee. Choosing the right trustee can help you avoid legal issues and ensure your estate-planning goals are achieved, so it’s essential to consider your options carefully.

With a revocable living trust, you as grantor typically also functions as trustee. But who will take on this responsibility should you become disabled or die?

Some grantors choose a family member or trusted friend. Another option to consider is a corporate fiduciary as a trustee. Choosing a Corporate Trustee can help ensure that current and future generations benefit from the expertise, prudence, and continuity that a well-established fiduciary can provide.

WHAT IS A DIRECTED TRUST?

A Directed Trust allows your financial advisor to maintain control of the investment management of the trust assets and appoint a separate administrative trustee to execute the administrative fiduciary responsibilities. Learn More