Thinking about trusts is not the favorite for most people. It stirs up a whole cornucopia of thoughts of death, loss and responsibility that are way less fun to think about compared to a post work world and living the good life. Yet, there are many reasons for establishing a trust and many types of trusts to solve significant issues many of us need to find a solution for.
The origins of trusts are traced back to England during Medieval times when a person who was off to fight in the crusades would enter into an agreement with someone they trusted to care for their property and family in the event (and likelihood) of their not returning. Based on English law trusts have evolved over time to provide the same care of property and family after death but many other uses as well.
The different “flavors” of trusts can provide for the special needs for individuals with developmental disabilities, provide a level of asset protection for those in high risk occupations, provide efficiency in minimizing estate taxes, provide assistance for an elder who has difficulty managing their day to day finances and many, many other uses.
There also a significant number of trust vehicles designed to maximize the impact of Philanthropy. Some types provide income for the donor, others will provide income to the charitable beneficiary. Individuals with strong charitable objectives will benefit by knowing the different types and how they can maximize the impact of their gifts.
Typically their are at least three parties to a trust agreement. A donor (the person(s) with the property), the beneficiary(s) and the trustee. A trustee can be anyone who you trust and has the ability to do the job. Friend, relative or business associate could be that person. That being said it does carry a lot of responsibility and taking on that role should not be done without careful consideration.
Being a trustee puts one in the role of being a fiduciary and as such their responsibilities are to act in the interest of the beneficiary(s) and provide a full accounting on a regular basis. This may be beyond the abilities either for experience, time available or interest. Personal beneficiaries are often considered because they know the family members and their needs best. That being said sometimes that is just not enough. A pragmatic solution is for the personal trustee to be a co-trustee with a corporate trustee to provide the best of both worlds. Personal knowledge and relationship combined with fiduciary expertise and record keeping procedures and reporting.
For these reason we have White Oaks Trust Services to be able to provide these types of services to our clients. White Oaks Trust Services can serve in the role of trustee or as a co-trustee with a trusted friend or family member to maximize the protection and accountability to meet a clients needs and fulfill there intent. Our culture is one with long-term client relationships and we have been part of the discussions regarding intent and purpose and can use this knowledge to provide for the needs and protect the interest of your loved ones.
It’s beyond the scope of this article to go into detail on how each type of trust works but over the next few months we will explore different types and their uses.