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Krista Biernbaum

May 15 , 2017

Investment Basics: A Flexible, Multipurpose Planning Tool

A Flexible, Multipurpose Planning Tool

Do you need a trust? Before you say “no,” take some time to learn more about some of the things a trust can do for you. A trust is simply a legal arrangement under which you transfer assets to a trustee’s care. The trustee then holds and manages those assets for the benefit of one or more beneficiaries. Essentially, a trust is a  multipurpose planning instrument that delivers a surprisingly wide range of benefits.

 

Manage Assets

 

Managing assets requires time and patience. You may not have the time or the interest to stay on top of your investments. You may also worry about your ability to manage your assets effectively if you were to become ill or disabled. A trust can remove these concerns by ensuring that your assets are managed in ways that will preserve them for you and your loved ones.

 

Protect Your Assets

 

Lawsuits are a fact of modern life. Placing assets in trust for your child instead of giving them to your child outright can be an effective way to help protect them for the younger generation.

 

Facilitate Charitable Gifts

 

A charitable remainder trust allows you to give assets to a charity of your choice without giving up the income from those assets during your life. A charitable lead trust pays income to a charity and then returns the trust’s remaining assets to an individual beneficiary when the trust ends. Both types of trust offer tax advantages.

 

Protect the Interests of a Minor

 

A trust can manage assets held for the benefit of a child or grandchild. And, if you are concerned about a child’s ability to handle large sums of money or other types of property, you can stagger distributions throughout adulthood. For example, a trust can arrange to have a beneficiary receive one third of the gift at age 25, one third at age 30, and the balance at age 35.

 

Provide for Special Needs Individuals

 

A trust can ensure that a special needs child or another relative with special needs will benefit after your death. Choosing a reliable trustee gives you peace of mind that your trust will be managed as you intended.

 

Flexible Solutions

 

A trust established during your lifetime is called a living trust. A trust set up in a will is known as a testamentary trust.

 

Living trusts may be either revocable or irrevocable. A revocable living trust generally names you or you and your spouse as trustee(s) and beneficiary(ies). As the trust creator (or grantor), you can change the trust’s terms, add or withdraw funds, or even end the trust whenever you choose. So you retain control over the assets.

 

An irrevocable trust is designed to ultimately benefit someone other than you, the grantor. In your trust agreement, you specify whom the trust will benefit (both in terms of income and corpus), how it will operate, and who will manage the trust property. You generally cannot make changes to the terms of an irrevocable trust.

 

Let Us Help

 

A trust is a flexible financial tool that can be highly useful in a variety of circumstances. To find out if a trust is right for you, please contact Security National Bank Wealth Management here.

 

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