A flexible plan that works to your advantage

What is a living trust?

A living trust is an arrangement you create during your lifetime to provide for yourself and your family both before and after your death. You transfer assets to fund the trust and select a trustee (even yourself) to manage it. Lastly, a Living Trust is a remarkable way of making a significant contribution to a charity of your choice.

What are the advantages of a living trust?

Living trusts have been called the most flexible financial planning device available. The main advantages are: flexibility, control, investment management, tax savings, lower probate costs, swift distribution of trust assets and, last but not least, privacy. Let's take a look at these advantages one by one.

  • Flexibility: A living trust can be either revoked or amended by you, which means you can change the terms of the plan or withdraw assets any time you wish.
  • Control. You name both the beneficiaries and the trustee of the living trust. You can name yourself as the trustee during your lifetime as well as maintain the right to appoint and select successor trustees and beneficiaries. You can also control the income and principal and how much of it you wish to use during your lifetime.
  • Investment management: You may choose a professional trustee to manage the fund on a day-to-day basis thus freeing yourself of the responsibilities while at the same time maintaining control over investment goals and strategies, or, you can choose to give your trustee broad decision making and managerial powers over the trust, while you would receive regular reports as to the current state of affairs.
  • Tax Savings: Your attorney or tax accountant can help you to structure your living trust to maximize the advantages afforded to you under federal estate tax laws.
  • Lower probate costs. The assets you place in a living trust are removed from your estate for probate purposes thus saving you the probate and administrations costs you would have to pay if the same assets were distributed by the terms of a will.
  • Swift distributions of trust assets. The plan of distribution you have pre-determined through the terms of the living trust is carried out immediately at your death avoiding the delays that normally occur under distribution by will.
  • Privacy. Because a living trust bypasses probate, its contents are not a matter of public record. Details of the trust will remain private even after your death.

How does this differ from other charitable gift plans?

By establishing a living trust you are in effect reserving the right to change your mind, so although you are not able to take advantage of the substantial income tax deductions afforded under other plans, such as say an irrevocable trust, nevertheless, there are still many other benefits available including estate tax savings later on.

For example, the trust can be written so that after you lifetime, the value of the assets distributed immediately to a charitable organization completely avoids estate tax.

Conclusion

A living trust is a financial plan that works to your advantage. It allows you the decision making power you may need, along with the overall tax savings you will appreciate, while truly reflecting your support of and commitment to a charitable cause of your choice.

We would be glad to assist you, your tax consultant or lawyer in exploring the living trust option further. Please call us today at:

1.800.992.2383 Ext. 10