Trust Administration
Trusts are established for many different reasons and can accomplish several different goals. Four primary reasons trusts are established are to protect the beneficiaries, to significantly reduce estate and gift taxes, to help protect assets from creditors, and to help in the management of assets.
By way of example:
- Few parents or grandparents would be comfortable leaving a sizable sum of money directly to a twenty-two year old child or grandchild. Although the law in every state would allow a twenty-two year old to directly inherit assets, prudence would suggest that someone should be providing guidance to such a child or grandchild in order to avoid expensive “youthful discretions”. A trust can be used to manage assets until a child or grandchild reaches a more responsible age.
- Likewise few of us would willingly pay more taxes than we were required to. Simply by adding provisions to ones Will, a client can significantly reduce the total estate taxes that will be due upon death.
- Parents and grandparents often work a lifetime in order to leave their descendants with a sizeable nest-egg. With the divorce rate as high as it is today, parents and grandparents must be concerned with the prospect of their hard earned assets ending up in the hands of a descendant’s ex spouse. Trusts can be established for children and grandchildren with provisions that can protect the assets from creditors – often times including future ex spouses. Such trusts can remain in place until the child or grandchild reaches an age at which divorce would seem unlikely.
- Finally, some assets are difficult to manage. Few individuals understand the complexities of modern portfolio management. Trusts can be used to obtain expertise in asset management and asset allocation.
To the uninitiated, a trust can be a very confusing concept but it does not have to be. Our Trust Department has administrative experience and knowledge to work with you and your legal advisors to help you make the appropriate decisions.
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