Do You Need a Trust?

• How do you know if you need a trust?
• How do trusts work?
• How are trusts set up? How much does one cost?
• Who should serve as trustee?

There’s absolutely no reason to feel uncomfortable about not understanding the terminology or technicalities of trusts.

Few people understand them until they discover they need one … and by then it may be too late.

That’s our job – to help you better understand the reasons for trusts and the process involved in establishing them.

A trust is a legal agreement between two parties, the person who creates the trust and the person, institution or independent trust company responsible for administering the trust, the trustee. The trustee manages the assets placed in the trust for the benefit of a third party, the beneficiary.

An overview of some of the types of trusts available:

Personal Trusts: May include Revocable Living Trusts, Irrevocable Trusts, Life Insurance Trusts, Special Needs Trusts and Charitable Trusts.

A living trust is created during one’s lifetime. It provides the assurance of knowing that loved ones are provided for. It allows assets to be distributed quickly and quietly without lengthy court proceedings. A Living Trust can also greatly reduce settlement costs and estate taxes. As the name implies, is a trust that is created during one’s lifetime. Unlike a will, a living trust avoids probate and does not become a matter of public record.

A Living Trust may be appropriate for you, if:

• You want the assurance of knowing that your loved ones are cared for.
• You want assets distributed quickly.
• You want private and quick court proceedings.
• You want to greatly reduce settlement costs and estate taxes.

A revocable living trust allows the person who creates it to retain total control over it by retaining the power to cancel or change the terms of the trust or to terminate it any time. The trust can be changed if circumstances warrant.

An irrevocable trust cannot be changed or canceled. This type of trust is usually set up to provide tax savings, asset protection or some other benefit important to the person who creates it.

At IFS, we are proud to offer the trust services available through Raymond James Trust. Raymond James Trust offers complete personal trust services, including serving as trustee or as an agent or custodian for individual trustees. They also serve living trusts, charitable remainder trusts, life insurance trusts, specialty trusts and IRA rollover trusts. Today, Raymond James Trust manages more than $2 billion in assets for trust clients. In addition, we work together with many partners to suit those with smaller trusts and estates as well. 

• Professional management by trained experts
• Impartiality in making investment decisions and in dealing with your beneficiaries
• State-of-the-art technology to serve our clients better and faster
• The confidence that comes with knowing all transactions are subject to regular audits by external auditors and government regulators

• Safekeeping your trust’s assets
• Collecting interest and dividends payable
• Attending to maturing bonds, stock splits and tender offers
• Executing security transactions through our Financial Advisors
• Maintaining accurate records
• Providing periodic account statements and investment performance reports
• Making payments, distributions and remittances to the beneficiaries
• Providing income and intangible tax information to your tax advisor

Raymond James Trust N.A. is a wholly owned subsidiary of Raymond James Financial, Inc. (NYSE-RJF) which provides financial services to individuals, corporations and municipalities.

Under its federal charter, Raymond James Trust N.A. may act as trustee, custodian, personal representative or agent to the trustee in a wide variety of trust and estate situations in every state of the U.S.

Let us know how the team of IFS and Raymond James Trust can help you. Call us today!

If the time comes that you are no longer able to handle your own affairs, trusts can ensure that there will be someone who is experienced and objective to “mind the store.” If there is a serious illness or disability, a trust ensures that a plan is in place to take care of your needs and those of your loved ones.

When the trust is managed by a full-service trust company, other professional services can be provided, such as bill paying.

Business owners can use trusts to save on estate taxes when passing along businesses to heirs.

Trusts are also useful for blended families with spouses or children from previous marriages. The trust can spell out exactly how marriage affects the inheritance of children or grandchildren from a first marriage.

Naming an independent trust company removes the emotional element often associated with friends or family members having to act as Trustee.

• Attorneys draft trusts.

Generally, fees for trust services are spelled out in the trust document. Under normal circumstances, they are calculated annually, based on the level of responsibility assumed by the trustee and the value of the assets in the trust.  At Raymond James, the minimum is $500,000 and fees are charged quarterly or monthly.  A portion may be tax-deductible. *Fees may vary

Ultimately, it is the purpose of the trust that determines how the assets are invested, and it is the responsibility of the trustee to see that the purpose is carried out. Often, the person who creates the trust will name a professional investment manager to work with the trustee and make investment recommendations based on the goals of the trust, the needs of the beneficiaries and the time horizon.

Many people often choose a family member while others prefer to name an independent trust company to handle their affairs. Trustees who don’t deal with trusts on a regular basis can be overwhelmed by the duties required of them. Also, naming an independent trust company removes the emotional element often associated with friends or family members acting as Trustee and assures that your wishes are fulfilled exactly as they are spelled out in the trust. Choosing a trustee to manage your personal affairs could be one of life’s most important decisions. Everyone wants the assurance of knowing they are dealing with a highly ethical, established firm that will provide them with clear guidance and respect their wishes.

A beneficiary is the person, institution or organization that receives the proceeds from a trust or from an insurance policy when the insured dies.

A charitable remainder trust is an irrevocable trust that enables an investor to give highly appreciated assets to his or her favorite charity and still derive lifetime income and enjoy tax advantages.

Net estate is the sum of the market value of an individual’s assets, less liabilities. These assets may include real estate, personal property, businesses, bank accounts, investments, IRAs or other retirement benefits, and life insurance.

A life insurance trust allows the trustee to purchase a life insurance policy with the person who owns the estate as the insured and the trust as the owner. Usually, the trust is also the beneficiary of the policy. The proceeds from a life insurance trust are often used to pay taxes, legal fees, probate costs and other liabilities when the person who created the trust dies.

A revocable trust is one that can be revoked or amended by the person who creates it. An irrevocable trust may not be revoked or amended.

A special needs trust can be an effective way to provide financial security for disabled individuals and those with special needs. A special needs trust can be used to provide funds for essential life expenses of a disabled individual. This can include things such as hiring a caregiver, education, travel, clothing, furniture, or crucial medical treatments.

A trust is a legal agreement between two parties, the person who creates the trust and the trustee, who may be a person, an institution or an independent trust company.

A trustee is the person, institution or independent trust company managing the trust. A co-trustee manages a trust in cooperation with a family member or someone else. The trustee has a fiduciary responsibility to act in the best interest of the trust.

A client may appoint Raymond James Trust to serve as sole trustee, or appoint both a family member/friend/trusted advisor and Raymond James Trust to serve together as co-trustees.

Trustees are obligated to act in the best interests of both current and future trust beneficiaries – an often complex and time-consuming responsibility. They must comply with specific trust document provisions as well as state and federal laws that govern trusts. Trustees also typically have a number of administrative duties, including:

• Maintaining complete, accurate records of income, principal, distributions, purchases and sales of trust assets
• Preparing and filing fiduciary income tax returns
• Overseeing service providers
• Managing beneficiary distributions

Learn about the various trust solutions available to your clients:

Charitable Remainder Trust

A charitable remainder trust is an irrevocable trust that enables an investor to give highly appreciated assets to his or her favorite charity and still derive lifetime income and enjoy tax advantages.

Life Insurance Trust

A life insurance trust allows the trustee to purchase a life insurance policy with the person who owns the estate as the insured and the trust as the owner. Usually, the trust is also the beneficiary of the policy. The proceeds from a life insurance trust are often used to pay taxes, legal fees, probate costs and other liabilities when the person who created the trust dies.

Revocable/Irrevocable Trusts

A revocable trust is one that can be revoked or amended by the person who creates it. An irrevocable trust may not be revoked or amended.

Special Needs Trust

A special needs trust can be an effective way to provide financial security for disabled individuals and those with special needs. A special needs trust can be used to provide funds for essential life expenses of a disabled individual. This can include things such as hiring a caregiver, education, travel, clothing, furniture, or crucial medical treatments.