What one does with their wealth is as personal as deciding what church to attend. There are several options for protecting your lifelong work or inheritance, passing assets to the future generations of your family, or simply securing what wealth exists to protect it from double taxation. 1 When considering these options and potential problems, a trust administration checklist comes in handy to ensure you cross your Ts and dot your Is. These decisions will affect your family for years to
come, so making the right decision the first time is important.
1. Find A Trust Company That Makes You Feel Comfortable
Perhaps the most important thing to consider when finding a trust company is feeling comfortable with your advisor and his associates. And by comfort, we don’t mean nice chairs in the advisor’s office or snacks in the lobby. When considering placing your assets with a trust company you should feel comfortable that your advisor appreciates your goals and what your wealth means to you. Without a comfortable working relationship, how can you be certain your financial goals are in
Choosing a trust company is very personal decision because this company will be deciding how your heirs will receive distributions from the trust you’ve created. This power can be guided by your informed decision making when creating the trust. A Letter of Intent in a client’s will allows your advisor to have a sense of your wishes, desires, and concerns when distributing your wealth. Do you want to create a generation (or several) of trust fund kids, do you want to fund charities in your loved one’s memory, or plan for some mixture of both? Either way, comfort with your advisor makes settling these decisions and the assurance they will be carried out much more certain.
2. Know What You Want Out Of Your Wealth
Creating a charitable foundation, ensuring your grandkids can afford college tuition, or providing a stable income for a surviving spouse or children upon one’s death are all stable and sound reasons to consider placing one’s assets in a trust. Are you scared your heirs will blow every hard earned penny as soon as they get their hands on it? Many of America’s celebrity rags to riches stories have plenty of examples of overnight millionaires losing everything through bad planning. 2 Perhaps the most important part of your trust administration checklist is knowing what you want to do with your wealth. 3 Your family’s philosophy about money must be discussed with your wealth advisor. Still, family investments and long-term goals are different depending on what type of asset you have—either real property or financial investments. Managing an apartment complex requires different planning than investing in the stock market. In the same sense, knowing how to distribute these assets to your heirs in the most tax-friendly way requires pre-planning.
3. Know Your Goals
Without proper planning, one’s estate can be flustered with problems you’d never expect to face. With clear plans of your wishes, a trust administrator can professional manage the estate, its disbursements, and handle the government- mandated paperwork required of it. This assumption of liability and risk allows the trust creator and its beneficiaries to enjoy the benefits without the worry. What do you need to do with your money? Do you need to provide for a disabled child long after you’re gone or keep together your commercial investments to pay for your grandkids college? Do you really know what to expect for education costs by the time the grandkids make through high school? Too much control is sure to cause headaches in the future. Ultimately, an advisor can help you figure out these obstacles and place your assets in the right trust for your goals.
4. Understand The Road Ahead
Establishing a trust to manage your assets for the next generation, minimize your tax burden, or to cover the costs of your grandkids education comes with many responsibilities and concerns. Understanding the consequences of long-term planning lets the trust’s creator enjoy the peace of mind that their assets will be properly given to whom they chose and under their conditions. But don’t get too relaxed. Families with multiple children must make sure their assets are in separate trusts so that an overly gracious trustee can’t disburse too much money to one beneficiary over another. What purchases would you allow the trustee to approve?
Can the beneficiaries ever take from the original investment (invade the corpus)? Further, what kind of assets are you passing on—real property, financial investments, or a mixture of both? These are just a few of the many concerns that can be handled like a nicely wrapped Christmas gift by the right wealth advisor. Choose your advisor wisely.
5. Appreciating The Consequences Of Your Decision
The rewards of placing one’s assets in a trust allow a peace of mind and well-being for many families around the world. Using a trust administration checklist and knowing you’ve found the right advisor, deciding how to distribute what you’ve accumulated to your loved ones, and understanding the consequences of those decisions is a worthwhile cause and a smart financial decision. A trust administration checklist is a helpful guide to the tough decisions one faces when planning their financial future. Making smart decisions is key to having your assets passed on as you dictate, all while ensuring the least minimum tax burden for your heirs and trust beneficiaries. Plan wisely, plan soon and use a trust administration checklist.