April 14, 2025
The “peace of mind” strategy for wealth management. One of the most useful and flexible wealth management tools is the revocable living trust. Traditionally, we like to point to three basic benefits that these trusts offer.
Professional asset management. After studying your goals and circumstances, our asset-management specialists will propose a diversified investment program appropriate to your requirements. Like many of our customers, you may authorize us to select specific investments on your behalf, confident that we will carry out this responsibility faithfully. (We have no securities to sell, nor do we receive commissions on purchases and sales. Our annual compensation is limited to the moderate fees that we charge as trustee.) Or, if you prefer, you may have each proposed investment change submitted for your approval. Our objective is not only to add to your financial security, but to give you more opportunity to enjoy it.
Uninterrupted family financial protection. A living trust agreement can instruct us to perform a wide variety of special tasks when the need arises. These tasks might be as simple as paying a world traveler’s quarterly estimated taxes while he or she is out of the country . . . or as complex as handling all household financial matters for a customer who has suffered a stroke and needs a housekeeper and nursing home care. Older men and women often find this “future protection” aspect of our services especially attractive. With proper planning, living trusts can do much to avoid the financial management problems that arise during a prolonged period of incapacity—problems that might otherwise have to be dealt with by a court-appointed conservator.
Probate avoidance. Assets placed in a living trust are said to avoid probate because these assets are removed from your “probate estate”— the property controlled by your will. Trust assets are distributed to beneficiaries, or held
in continuing trust, as you direct in the trust agreement. Thus, using a living
trust as the core of an estate plan may lead to reduced settlement costs. More important, delays are avoided. For example, a married person’s living trust can simply keep operating, uninterrupted by estate-settlement procedures, for the
benefit of the surviving wife or husband. Living trusts also help to keep estate plans private. Unlike probated wills, provisions for the distribution of assets contained in living trust agreements do not normally go on public record.
New perspectives. But living trusts can do more. Among the emerging benefits that have appealed to many: Minimizing identity theft. The problem of identity theft has exploded in recent years. A funded revocable trust may have its own tax ID number, rather than using the settlor’s Social Security number. In the event that the settlor’s Social Security number is compromised, the trust assets will still be protected. Protecting aging retirees. More and more retirements are lasting longer than 20 years, and more and more elderly are developing some level of cognitive impairment. A living trust can provide for successor trustees as the beneficiary’s abilities decline. Checks and balances can be built into the plan, in the form of co-trustees or trust protectors. A care manager plan might also be included, to provide annual or quarterly assessments of how the beneficiary is doing. Serving disabled loved ones. A revocable trust may contain special-needs language to provide for an ill relative or incapacitated adult child. The trust may also provide for successor trustees should a caregiver become incapacitated. Asset protection in divorce. If gifted or inherited assets are segregated into a trust, they won’t be commingled with other marital assets. As such, those assets won’t be vulnerable in a subsequent divorce proceeding.
Notwithstanding the decline in estate planning attributable to the increase in the federal exemption from estate taxes, the traditional and emerging benefits associated with revocable living trusts will make them an essential part of late-stage life planning for years to come.
To get started. To set up a living trust with us, you give us your instructions in a
trust agreement, prepared by your attorney, and transfer the stocks, bonds, investable cash, or other assets that you wish to place in your trust. Because the trust agreement is revocable, you can cancel the arrangement if ever you find it unsatisfactory. You also remain free to add assets, withdraw assets, or modify the terms of the trust. Can resourceful management and responsive financial services eliminate all threats to financial security? Not quite. There always remains an element of luck. But as a wise person has said, you can’t just hope to be lucky. You have to prepare to be lucky.
We look forward to assisting you in your preparations