Trust Accounts: Instruments to Protect Assets for Future Generations
Our offerings include revocable living trusts, special needs trusts, and testamentary trusts each designed to provide flexibility for changing family or tax circumstances, continuity, and alignment with your family's estate planning, we offer:
- Revocable Living Trusts
- Special Needs Trusts
- Testamentary Trusts
Revocable Living Trust
Protect Your Assets During Uncertain Times with a Revocable Living Trust
A Revocable Living Trust provides flexibility in that the grantor (creator) can amend the trust to address changing family and tax circumstances. These trusts can also provide protection for your assets during periods of disability, continuity of wealth management for future beneficiaries, and, if properly funded, reduced probate costs and a high level of privacy. In proper circumstances, a revocable trust can provide estate tax savings in the transfer of wealth.
With Towne Trust as your Trustee or Successor Trustee, we will ensure your property is distributed according to the terms of your trust. Assets in a revocable living trust will avoid probate, which saves fees and expenses, and eliminates tie delays in administering your estate plan, assuring continuity in managing the property in your trust. By having a revocable living trust, you will also maintain privacy, since it is not subject to public disclosure.
Frequently Asked Questions about Revocable Living Trusts
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Begin by defining your objectives, whether you're aiming to avoid probate, protect assets, or provide for family members with special needs. Identify the assets you wish to include in the trust, gather necessary documentation, and choose a trustworthy trustee to manage the trust.
Next select the beneficiaries. Clearly outline the terms and conditions under which these assets will be distributed. Consult with a fiduciary professional or estate planning attorney to draft a legally binding document that reflects your goals and meets state requirements. -
An irrevocable trust can help save on taxes in the following ways:
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Transferring assets into an irrevocable trust means you relinquish legal ownership. This effectively removes those assets—and any future appreciation—from your taxable estate, potentially reducing or eliminating estate taxes upon your death.
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The gift tax exemption sets a lifetime limit on how much you can give away without incurring gift taxes. By placing assets into an irrevocable trust, you can secure the current exemption amount, shielding both the assets and their future growth from estate taxation.
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Irrevocable trusts allow you to make tax-free gifts to multiple beneficiaries annually. The trust can hold these gifts, enabling you to utilize the annual gift tax exclusion for several recipients at once—without needing to issue individual checks.
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A family trust involves three key parties: the grantor, the trustee, and the beneficiary. The grantor is the individual who establishes the trust, transferring assets into it. A trustee, who could be a reliable family member, friend, or professional entity, manages the trust according to the grantor's directives. The beneficiaries (or beneficiary) are the individuals who will inherit the assets held in the trust. This set up ensures that the distribution of wealth happens as intended, offering a customized estate planning tool.
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This type of trust offers flexibility, allowing the grantor to modify or revoke it during their lifetime. It's ideal for those seeking to maintain control over their assets while minimizing probate costs and keeping their estate plans private.
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Probate is a court-supervised legal process of settling a deceased person's estate, which involves identifying and gathering assets, paying debts and taxes, and distributing the remaining property to the rightful beneficiaries according to a will or state law. The process may also involve validating the will and appointing an executor or personal representative to manage the estate. Probate can take anywhere from a few months to several years, with most states requiring 6 to 12 months for simpler estates and 1 to 2 years for more complex ones.
Assets held in a revocable living trust are managed by a trustee and distributed according to the trustee's terms, avoiding probate court.
Special Needs Trust: Protect Family Members Living with a Disability
A Special Needs Trust is used to improve the quality of life for a beneficiary without compromising his or her eligibility for public benefits, such as Supplemental Security Income (SSI) and/or Medicaid. The two primary types of special needs trusts are Self-Settled Special Needs Trusts and Third-party Special Needs Trusts.
Common beneficiaries of a Special Needs Trust include:
- A disabled individual who family or friends want to leave an inheritance or make gifts and do not want to disqualify the individual from receiving services and support provided by government benefits.
- An individual who suffered an accident, illness, or injury that caused a disability which resulted in a settlement. A Special Needs Trust is especially beneficial when the injured person has ongoing major medical needs and the settlement proceeds may be insufficient to cover the anticipated lifetime costs of accommodating the disability.
Testamentary Trust
Depending upon the value of one's estate at their time of death, properly structured testamentary trusts may result in substantial estate tax savings for a family.
Frequently Asked Questions about Testamentary Trusts
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Yes, there are two types of testamentary trusts - separate trusts and family trusts. Separate trusts creates one trust for each beneficiary. Family trusts manages all assets in one place and is often used when one beneficiary might need more support than another.
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Testamentary trusts provide helpful guidelines for families with young children, family members with disabilities, or mental illness.
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A testamentary trust is created through your will and begins after your death. Living trusts help to avoid probate, testamentary trusts do not. Testamentary trusts are a great option if you have young children or grandchildren. These trusts typically outline when assets should be distributed to the children, such as once they become legal adults, graduate, or get married. With a testamentary trust you can also dictate how and when the funds are distributed.
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A testamentary trust offers a way to safeguard your beneficiaries from making poor financial choices, maintain eligibility for government assistance for heirs with disabilities, minimize estate taxes, and ensure your assets are distributed in line with your intentions. It is established through your will and becomes active only after your passing.
Top Reasons:- Protect young or financially inexeperienced beneficiaries.
- Preserve benefits for beneficiaries with special needs.
- Protect assets from creditors, lawsuits, or bankruptcy.
- Provide the ability to include instructions for education, medical needs, incentives, etc.
- Reduce or delay estate taxes.
Contact a Member of the Towne Trust Company Team to Schedule Your Appointment
Investment and Insurance products are Not a deposit, Not FDIC-insured, Not guaranteed by TowneBank, Not insured by any state or federal government agency, subject to risk and may go down in value.
The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. Towne Trust Company cannot guarantee that it is accurate, up to date, or appropriate for your situation. You are encouraged to consult with a qualified attorney, accountant, or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.