A trust is an agreement that you make that says in writing how you want your property managed and distributed.

A trust agreement involves three parties:

• The Trustor - or creator - is you, the person who creates the trust
• The Trustee - is the person who deals with your property according to the terms of the trust. You can be the trustee or you may name another person or bank trust department. You should also name a back-up trustee.
• The Beneficiary - is the person or persons that you want to receive the income and eventually your property. This can be you (and your spouse) during your lifetime and your children (or anyone else you choose) after your death.

In order for a trust to be effective, you must transfer property to the Trust, either as soon as possible after signing the trust or upon your death. Some people choose to have the document drafted now but wait to transfer property until later, sometimes until death by providing in their will that their estate is to be transferred to a trust.

A revocable living trust may be amended or revoked at any time prior to your death so long as you remain competent. However, at your death the trust becomes irrevocable and no changes are then allowed. A trust established in your will is irrevocable or cannot be changed.

Reasons for establishing a trust:

• Provide for financial management of your assets
• Promote privacy in the details of your financial affairs, particularly using a living trust
• A living trust can avoid the need of probating your estate
• A living trust generally does not allow for court supervision, a trust in your will can provide court supervision
• Reduce or eliminate estate taxes
• Continued care and support of loved ones after your death, especially in the case of those with special needs
• A living trust will provide continuity of asset management if you should become incapacitated
• A vehicle to make charitable gifts during your lifetime or after your death
• Provide for the distribution of your assets, either at death or at the termination of your trust after a specified time or event.

• A revocable living trust is not better than a properly drafted will in reducing taxes - Estate tax planning can be done in either a will utilizing a testamentary trust or through a living trust
• A living trust cannot totally avoid many of the costs associated with probate - Even with a living trust you may have expenses for document preparation, tax return preparation, transfer of assets and attorney costs.

Top of Page

--------------------------------------------------------------------------------

Do you need an Estate Plan?

Anyone who owns property - a car, home, business, investments, retirement plans, collectibles, personal property, etc. - needs an estate plan. By having an estate plan you direct how you want your property distributed after death. If you don't have a plan, the courts may end up making the decisions for you. Depending on your particular situation, your estate plan may be as simple as just having a will, or may involve using more involved strategies to avoid estate taxes and insure that your business or property remain in the family for years to come. Give us a call as you consider your estate plan needs.

What does an Executor do?

An "Executor" is someone appointed by a person in a Will to carry out the Will's provisions, which includes the following:

• Manage and provide for the safekeeping of the estate's assets

• Notify creditors and pay debts
• File claims for pension & profit-sharing benefits, social security and veterans' benefits
• Collect any sums owed to the estate
• Sell assets when directed by the will or required by law to pay the estate's expenses
• Distribute assets to beneficiaries
• Choose a tax year for the estate and file the decedent's final federal income tax return
• File state death-tax returns & complete & file the federal estate-tax return
• Keep detailed records of all estate transactions and submit records to beneficiaries &/or the probate court

It is very important that you give serious consideration, before selecting your executor, whether he or she will be able to and willing to handle the duties and responsibilities of the job. Many individuals select a bank trust department to serve as their Executor or Co-Executor due to the confidential, impartial and experienced representation the bank can provide. It is often difficult and time consuming for a family member to carry out the duties of an Executor, especially if they must collect debts from other family members or if they encounter disagreements with siblings.

How often should you review your estate plan?
It is generally a good idea to review your plans whenever any of the following occur to yourself, your beneficiaries or even your child's guardian:

· Births/Adoptions or Deaths
· Marriages or Divorces
· Moves out of state
· Inheritances or substantial changes in your estate value (up or down)
· Substantial changes in your business
· Retirement
· Tax law changes

Top of Page

Return to Investment Management Services