Although both living trust and typical investment accounts may offer a vehicle for growing and preserving your wealth, a revocable, intervivos (living) trust offers some advantages over an ordinary investment account. A living trust exists as an independent legal entity which creates significant flexibility to meet your and your family’s financial needs; such flexibility is not available with a brokerage or investment agency arrangement. Also, by establishing a revocable trust, you maintain the authority to alter, amend or terminate it if you wish. A living trust can provide the following:
- A living trust can provide for continued financial management of the trust assets in the event of an illness or your incapacity.
As an independent legal entity, your living trust may continue for your benefit, even if you are unable to act on your own behalf. Your trustee has the authority to pay your everyday bills, ensure your taxes are paid promptly, and even pay health care costs for you, including assisted living expenses. Having a living trust could also avoid the expensive legal and court procedure of having a guardian appointed for you. Brokerage or investment accounts do not offer the ability to provide these services in the event of your incapacity, as you must be capable of acting for yourself.
- At your death, the assets in your living trust may avoid probate and pass directly to your heirs.
You can generally avoid the costs and delays associated with having your assets tied up in an estate administration with the use of a living trust. Your beneficiaries may need and may be entitled to immediate distributions from your trust upon your death. Not having to wait an undue time associated with probate can provide financial and emotional relief for your heirs. Also, a living trust avoids the publicity of a court-mandated estate settlement.
- A living will can be a good complement to your last will and testament.
A living trust may be designed to continue beyond your lifetime and provide for your heirs just as a will does. In fact, your trust could be the primary means for distribution of funds to your beneficiaries rather than a will. You still need a will but it could simply pour over assets that are not part of the trust into the trust. Outright gifts can even be made from your trust, as well as providing financial management for minor children or those beneficiaries with special needs. None of this is possible with a brokerage or investment management account.
Planning for your future needs as well as those of your loved ones is just as important as growing your wealth. At Old North State Trust, LLC, we will work with you to preserve your wealth and your beneficiaries’ financial well-being by providing professional guidance in setting your financial goals. Please call one of our financial consultants if we may be of assistance to you.
Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends. The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics. Readers should be aware that the facts may vary depending upon individual circumstances. The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely.
Susan Willett is the director of trust services and oversees all aspects of trust administration for Old North State Trust, LLC. Old North State Trust, a North Carolina chartered trust company, provides: asset management services; income, estate and trust tax consulting; retirement planning and administration; and trustee and estate services to both individuals and businesses. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call