You may want to create a trust to protect your family and preserve your wealth. The peace of mind provided by good estate planning is often enhanced by making sure the person or firm to whom you entrust your assets is as well known for integrity as his or her skill. Family members and friends are often unaware of the complexities or time commitment required to administer a trust and the small disagreements that often arise.
The careful handling of delicate family dynamics and impartiality are hallmarks of the Allen Trust Company approach. When we serve as your fiduciary, you can count on our honesty and integrity as well as specialized knowledge of applicable laws.
Below are just a few different types of trusts we are able to administer.
Revocable Living Trust
This type of trust is established during your lifetime. This formal, written legal document enables you to transfer ownership of your titled property and/or assets from your name to a trust account that you control.
The settlor reserves the right to revoke, withdraw, or cancel the trust during his/her lifetime. As the settlor, you have total control over the assets in the trust during your lifetime, after which the trust becomes irrevocable
Features and Benefits
Lifetime of Settlor
▪ Gives full control of assets
▪ Allows trust to be amended or revoked during the settlor's lifetime
▪ Provides investment management of assets
▪ Offers bill paying if desired
▪ Permits settlor to "test" trustee and its handling of trust
▪ Provides trust administration/record keeping services if professional trustee is named
Incapacity of Settlor
▪ Handles financial affairs of settlor
▪ Relieves family members of burdens of managing settlor's financial affairs
▪ May include flexible powers to carry out settlor's wishes
Death of Settlor
▪ Becomes irrevocable upon settlor's death
▪ Assets in trust avoid probate and publicity
▪ Provides asset management continuity after settlor's death
▪ Includes flexible distribution alternatives
▪ Assets are includable in settlor's taxable estate.
▪ Trusts can be structured to provide maximum use of estate-exemption amount to save on estate taxes.
An irrevocable trust is one that cannot be altered, amended, or revoked by the settlor once it has been created.
Features and Benefits
Because it is irrevocable, this type of trust may provide tax-savings benefits that a revocable trust cannot by reducing the estate's tax liability. It can also provide income to your children, grandchildren, or others heirs as you instruct. You specify the beneficiaries of the trust, how it will function, and who will serve as trustee.
▪ Assets transferred to trust are considered taxable gifts but are exempt from federal gift tax if the value is less than or equal to the tax exemption amount.
▪ Additional appreciation of assets is not taxable to the settlor.
▪ Assets transferred to most irrevocable trusts are not counted as part of settlor's taxable estate, thus reducing estate tax liabilities.
IRA - Individual Retirement Account
Traditional and Roth IRAs are established by individual taxpayers, who are allowed to contribute 100% of compensation (self-employment income for sole proprietors and partners) up to a specified maximum dollar amount. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status, and coverage by an employer-sponsored retirement plan. Roth IRA contributions are not tax-deductible.
A conservator handles the financial affairs of a ‘protected person,’ that is one who has been determined by the court to be either incompetent or incapacitated. A conservator may be appointed by the protected person, by a Revocable Living Trust (RLT), or by the court.
A court-appointed conservator must answer and account to the court each year. The court oversees the conservatorship. A conservator appointed by a RLT does not have court supervision. The wishes of the protected person are set forth in the trust document, and the conservator follows those instructions.
A conservator is vested with broad and specific authority to handle the financial and business affairs of a protected person, in contrast to a guardian, whose authority centers on the personal welfare of the protected person. The conservator has a fiduciary's high responsibility to appropriately manage those financial affairs and protect estate assets.
Life Insurance Trust
You may establish this irrevocable trust to provide liquidity for estate taxes that will be due upon your death.
Features and Benefits
With this type of arrangement, your life insurance trust owns the life insurance policy. Proceeds from your life insurance trust may not be counted as part of your taxable estate, thereby reducing estate tax liabilities. Policy proceeds can be paid to or held in trust for survivors. Another common use of irrevocable life insurance trusts is for wealth replacement, especially with a charitable remainder trust.
▪ The trust owns the policy, thereby removing it from the settlor's estate, which can save in estate taxes.
▪ Proceeds distributed from the trust or held further in trust may be distributed income tax free.
▪ Contributions may qualify for annual gift tax exclusion.
An Escrow Account is an account generally held in the name of the depositor and escrow agent, which is returnable to depositor or paid to third person on the fulfillment of escrow condition; e.g., funds for payment of real estate taxes are commonly paid into an escrow account of the bank-mortgager by a mortgagee.
Allen Trust Company can, at your request, provide any of the following custodial services.
▪ Safekeeping of Assets
▪ Income Reinvestment
▪ Buy/Sell Securities
▪ Rendering statements
▪ Collection of Income
▪ Income Distribution
▪ Handling of Capital changes