Asset Management with a Living Trust

Developing a sound investment management strategy is more than allocating assets and diversifying among the various asset classes. It is also about attaining your financial goals in life.

The long-term security of your family is likely to be a key goal. To reach it, you want to ensure your assets will continue to grow and provide the income your loved ones will need to live comfortably, should you not be able to provide for them. One of the most valuable resources available to help you achieve that goal of long-term financial security is a revocable living trust.

Living trusts: the facts

A revocable living trust allows you to arrange for the management of your assets both while you are alive and after you are gone. By establishing your trust now, you may be able to reduce the stresses and strains your family will experience when forced to make difficult financial and investment decisions after you’re gone.

Think of a trust as a container, a place where you can transfer your securities, bank accounts, mutual funds, real estate or other property. This transfer is accomplished by making the trust the new owner of your assets. However, you retain control while alive, direct what happens to the assets after you’re gone, or are unable to make the necessary decisions about their management. These instructions are contained in a trust agreement that will be implemented and administered by the trustee you name to oversee the trust.

Neither the instructions in the trust agreement nor the trust itself need to have a permanent life. The directions you give today may be altered in any way, at any time as long as you are alive and competent. The trust itself, if necessary, can be revoked, and your assets transferred back to you.

Designed to your specifications

Your trustee will serve as the manager of the trust’s investments. When you name a corporate trustee, such as Central Trust & Investment Company, we assist you in developing the strategy that will best serve you and your family, based upon your personal circumstances. For example, we will review your objectives, risk tolerance, liquidity needs, tax considerations and a host of other variables in order to make certain the investment choices made match your needs and expectations.

When we assist you in formulating and developing an investment management strategy, you may delegate to us in the trust agreement the authority to execute all of the investment decisions. Alternatively, you can require us to submit recommendations for your approval. In all cases, as trustee, we will be responsible for all paperwork and chores associated with the management of your assets.

There is an added benefit, and it’s an important one: by setting up a living trust now and naming us to serve as your investment manager, you can preview our performance. By observing our actions now, you will have the peace of mind that comes from knowing you selected a capable, knowledgeable investment advisor to serve your family.

Protection

When you establish a living trust, you designate two types of beneficiaries. There are the income beneficiaries (typically, you and your spouse), who receive regular payments of the trust’s income or principal as outlined in the trust agreement. At the termination of the trust (your death or some other specified time) those whom you name as your remainder beneficiaries will receive the assets in the trust. The trust can continue beyond your lifetime and become an integral part of your estate plan.

A living trust can operate as a highly efficient organizational tool, providing a unified approach to the management of your assets. For instance, assets such as the proceeds from a life insurance policy or a retirement plan may be paid to a living trust you established.

As a result, you can ensure your family will have a continuous, uninterrupted flow of income. In addition, your trust can contain instructions for an orderly distribution plan for your assets, either over a certain number of years or keyed to certain circumstances.

Finally, having all of your assets under one roof will make it easier for your spouse and other beneficiaries to keep track of how the family’s assets are being managed. They can turn to us, as the successor trustee, with questions or concerns.

Additional benefits

At your death the assets in your living trust will not be subject to the potential delays and costs associated with the probate process. In addition, although the terms of your Will can be made public, a trust is a private document and, generally, escapes public scrutiny.

This latter point can be especially important in the event you become disabled and cannot manage your financial affairs. Contrast the privacy of a living trust, which instructs how your affairs are to be managed at disability or death, with the potential for publicity, time and expense when formal conservatorship proceedings must be commenced in a probate court setting.

A revocable living trust offers a wide range of features and benefits that can help you reach the goal of securing your family’s financial future.

To find out more, please contact us.