TRUSTS for Everyone?
First on the agenda is determining whether there are any 'trust' needs.
When there are, then the mechanisms of applying them can require the input of a variety of professionals, depending upon the complexities. There may be the need of using any one or a combination of the qualifications of a Lawyer, an Accountant, A Financial Planner, a Doctor and perhaps other's unique expertise.
Even the most modest of Estates may truly need the benefits offered in setting up a trust.
There is a little ditty that shares a truth:
' I know what I know.' (My eyes are brown.)
' I know what I don't know.' ( The Pope's eyes are...?)
' I don't know what I don't know.' ( that I have 'distant' cousin in the XYZ galaxy with *** for eyes
...and for many of us...how a trust might better
protect my assets).
What are Trusts and should I consider them?
A Trust is a legal relationship where someone else holds possession and control of assets or property for someone else's benefit. Someone who manages a trust is a trustee.
If someone wants you to act as a trustee for their Trust it is important that the settlor of the Trust have their Estate fully organized in the same way that you would expect them to be organized if they requested you act as their Executor.
The responsibilities of a trustee for a Trust may have a limited or short duration or they may be ongoing for an extended period. It is proactive to have an alternative or back up plan for this responsibility.
Trusts have many uses. They can be useful both in life and death.
Considerations that could make a Trust a useful vehicle for your needs might include:
* A tax reduction method ( Estate Freeze and income splitting for example)
* To protect and, or to keep control out of the hands of beneficiaries (as in the case of minors or disabled beneficiaries)
* To avoid and, or protect property from legal difficulties
* To maintain confidentiality (a consideration for Alter-Ego Trusts; also when more personal control is desired)
* Charitable considerations
* Retirement considerations
* To protect 'partners' who need management assistance
Also consider that there may be a down side as well:
* There is typically an associated expense to control and manage a Trust
* Trusts are typically taxed as an individual in the highest tax bracket
* The control, once had, is generally gone
Often times a Trust is chosen as a vehicle of responsibility and the associated love for our future generations so the pros and cons become irrelevant.
Considerations of Trusts may require the expertise of one or many of your trusted Professionals. It is usually wise to coordinate that effort. Share your questions, opinions and observations.
If someone wants you to act as a trustee for their Trust it is important that the settlor of the Trust have their Estate fully organized in the same way that you would expect them to be organized if they requested you act as their Executor.
The responsibilities of a trustee for a Trust may have a limited or short duration or they may be ongoing for an extended period. It is proactive to have an alternative or back up plan for this responsibility.
Trusts have many uses. They can be useful both in life and death.
Considerations that could make a Trust a useful vehicle for your needs might include:
* A tax reduction method ( Estate Freeze and income splitting for example)
* To protect and, or to keep control out of the hands of beneficiaries (as in the case of minors or disabled beneficiaries)
* To avoid and, or protect property from legal difficulties
* To maintain confidentiality (a consideration for Alter-Ego Trusts; also when more personal control is desired)
* Charitable considerations
* Retirement considerations
* To protect 'partners' who need management assistance
Also consider that there may be a down side as well:
* There is typically an associated expense to control and manage a Trust
* Trusts are typically taxed as an individual in the highest tax bracket
* The control, once had, is generally gone
Often times a Trust is chosen as a vehicle of responsibility and the associated love for our future generations so the pros and cons become irrelevant.
Considerations of Trusts may require the expertise of one or many of your trusted Professionals. It is usually wise to coordinate that effort. Share your questions, opinions and observations.
Are there different kinds of Trusts?
In general terms, there are three types of Trusts:
* Inter Vivos or Living Trusts where assets or property are transferred into a Trust while the Settlor or Donor is still alive. These Trusts are typically taxed at the highest rates.
* Joint Partner and Alter Ego Trusts are Living Trusts but qualify for a taxation rate that follows the normal measuring procedure that you would qualify for from year to year.
* Testamentary Trusts become effective 'after death' and assets or property are moved into the Trust according to the will after the Estate is settled. This activity is typically taxed at the 'living' rate.
Trusts can be quite diverse in their use and it can take the input and coordination of several Professionals to accomplish the desired results in the most effective way.
Please understand that the information provided here is not
' legal opinion'. It is simply a guideline to imply the potential complexity and need to become as well informed about Trusts as each individual circumstance demand.
* Inter Vivos or Living Trusts where assets or property are transferred into a Trust while the Settlor or Donor is still alive. These Trusts are typically taxed at the highest rates.
* Joint Partner and Alter Ego Trusts are Living Trusts but qualify for a taxation rate that follows the normal measuring procedure that you would qualify for from year to year.
* Testamentary Trusts become effective 'after death' and assets or property are moved into the Trust according to the will after the Estate is settled. This activity is typically taxed at the 'living' rate.
Trusts can be quite diverse in their use and it can take the input and coordination of several Professionals to accomplish the desired results in the most effective way.
Please understand that the information provided here is not
' legal opinion'. It is simply a guideline to imply the potential complexity and need to become as well informed about Trusts as each individual circumstance demand.
