The subject of trust within a wealth management strategy is often a source of confusion and stressful decision making. Much of this confusion comes about because the term itself, trust, is used generically to describe many differing opportunities to add value in a wealth management strategy. The purpose of this piece to identify these differing situations that trusts can be used to develop a highly efficient and effective wealth management plan.

I’ll use the “Letterman” approach for our purposes today.

10. Protection from creditors through the use of “spendthrift provisions” in a irrevocable trust can be used to effective protect heirs from a variety of bad situations including general creditors and bad marriages and divorces.

9. Consolidate assets by placing the titling of investment assets of various types, especially ones not usually held in a brokerage account, for increased simplicity in managing and ultimately settling an estate.

8. Philanthropic Trusts for the benefit of dollars to a combination to charitable organizations and non-charitable beneficiaries. These have been also discussed in a previous post.

7. Provide for Special Situations are also an important part of meeting individuals wealth management needs. Recently Leona Helmsley left funds to care for her dog. While not in everyone’s wealth transfer plans it points out that trust can be a valuable tool in wealth management plan. Most do not know that Helmsley left the bulk of her estate to charity.

6. Special Needs Trusts sometimes referred to as supplemental needs trusts are valuable tools to provide for individuals who do not have the capacity to manage their own affairs and also qualify for certain Federal and State medical and other benefits.

5. Avoiding Probate costs are a common objective of trusts. The costs of settling probate assets have reduced over the years due to simplification of the laws and the procedures by the states but it can still be a significant issue. Revocable Living Trusts are often created for these purposes , especially if property is owned in multiple states, thus avoiding multiple probate proceedings.

4. Privacy is a key benefit of assets owned in trust(s). Since there is no probate or other proceeding to transfer an estate in trust the size of and the assets within a trust are private and not subject to public scrutiny and/or comment.

3. Assist multiple generations is another feature of well crafted trusts. The likelihood that each person in a family, especially over more than one generation, will have the skills to manage significant wealth is small. Professional expertise in financial issues by a trust officer and investment professionals can provide valuable assistance in preserving and maximizing wealth.

2. Estate tax savings are common objective in the drafting of wills and trust to maximize the amount of resources that will go to the ones that we want to benefit rather than the government via taxes.

1. And the most important, PEACE OF MIND that the people, issues and causes we care about are provided for in the most cost efficient and effective way possible.

Trusts are often misunderstood and assumptions made that because a trust has been established all the above benefits have been provided for. Often this is not the case. When you review the estate plan that exists within your overall wealth management strategy ask your professions which of the above relevant benefits have been provided to give you the PEACE OF MIND that these plans should provide.

The foregoing content reflects the opinions of White Oaks Wealth Advisors and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

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