A trust is a legal entity created by a grantor (you) to hold property and manage it in accordance with instructions, rules and guidelines that you write into the trust instrument. You can serve as trustee and beneficiary of your trust, or you can appoint someone else to do so. The trustee can be an individual, a bank trust department, or another institution. Trusts are a key tool in estate planning and can provide tax benefits, depending on how they are structured.
A Schwab professional can help you determine if a trust is right for your needs. George Pennock, director of trust services consulting at Schwab Trust Company, in Henderson, Nevada, explains that a trust can help you make plans for the unthinkable, even while you are still alive. “A Trust can help you plan for what you want to happen if you lose mental or physical capacity, such as incapacity due to a stroke, Alzheimer’s disease or dementia,” he says. “A Trust can also provide guidance if you are unable to make decisions on your own.”
In addition, a Trust can help you protect your privacy. For example, a Trust can be settled privately, whereas a will becomes part of public record when it goes through the probate process.
A trust can also help you save time, money and aggravation for your family after your death. The probate process can be expensive, time-consuming and difficult to navigate. A Trust can help avoid these challenges and allow your loved ones to have immediate access to the assets you have left behind, often avoiding the need for a conservatorship.
Lastly, a Trust can give you greater control over how your assets are distributed to family members, especially younger or less financially responsible children. Statistics show that most inheritances are spent within 18 to 36 months after receiving them. With a trust, you can appoint a trusted and experienced trustee to manage the trust and ensure that the assets are not frivolously wasted.
The trust process can be complex and requires the assistance of an attorney, who is familiar with state law and trusts. Our team of professionals is well versed in all aspects of trusts and can work with you to create a custom trust that meets your specific goals.
It may take longer to establish a trust, but it can be worth the extra effort to feel confident that your wishes will be followed after your death and that the people and causes you care about will be taken care of in the way that you want them to be. Schwab Trust Company can assist you with establishing a trust and transferring ownership of your assets into the Trust, including real property, business interests, stock portfolios and more. We can help you retitle your assets and transfer the ownership of your home to the trust, as well. We can even manage a trust for you while you are living, if that’s what you prefer.