TRUST BASICSIs a Trust Right for Your Estate

Plan?

CREATING AN ESTATE PLAN

Over half of all Americans do not have an estate plan

LACK OF KNOWLEDGE is a common reason why

people have yet to create a plan

Understanding more about estate planning may encourage you to

start your estate plan

What Is a Trust?

A separate legal entity

• the person who creates the trustA grantor

• the individual, or company, that manages and oversees the trustA trustee

• you must designate one or more beneficiary

Beneficiaries

A beneficiary may be a person, an organization, a charity, or even a pet

• trust terms are created by the grantor and may include almost anything as long as the term is not illegal or impossible to fulfill

Terms

•you must transfer assets to be used to fund the trust into the trust

Funding

Assets may be cash, stocks, property, or almost anything else of value

Why Include a Trust?

PROBATE AVOIDANCE1

A properly constructed trust allows the assets held in the trust

to avoid the probate process, making them immediately

available to beneficiaries

TAX ADVANTAGES2

A trust can help decrease your taxable estate at the time of your death,

thereby lowering the amount of gift and estate taxes due from your estate

CONTINUED CONTROL3

A trust allows the grantor to create

trust terms that will, in effect, allow a certain amount of

continued control over the use of the assets

by the beneficiaries

STAGGERING INHERITANCE4

A large inheritance left to a young,

or financially naïve beneficiary, can be a huge mistake

A trust allows you to stagger the gift over many years, decreasing the likelihood that the gift will be

squandered

GUARDING ASSETS FOR MINORS5

Gifts cannot be left to minors

CREATING A TRUST is an excellent way to

guard the gift and grow the funds until the intended beneficiary is

old enough to legally benefit from the gift

Types of Trust

Testamentary

• a testamentary trust is a trust that does not become effective until your death

Inter Vivos (Living)

• an inter vivos, or living, trust becomes effective as soon as all of the formalities of creation are completed and assets are transferred into the trust to fund the trust

Revocable

• a revocable trust is a trust that can be changed by you, the grantor, at any time and for any reason

Irrevocable

• as the name implies, an irrevocable trust is one that cannot be changed once effective

Assets transferred into an irrevocable trust cannot be removed once

transferred and are legally no longer owned by the grantor

Specialized Trusts

Trusts were once used primarily by wealthy families to pass the family

wealth down to succeeding generations

Now, even the average estate planner can make use of one of the many

specialized trusts

ASSET PROTECTION TRUST1

ASSET PROTECTION TRUST1

Protects assets from beneficiary who is irresponsible or naïve with money

Protects assets from creditors of the beneficiary

SPECIAL NEEDS TRUST2

Also referred to as a Supplemental Needs Trust

Provides additional funds to a special needs beneficiary over and above benefits from government assistance programs

Prevents gifted assets from disqualifying beneficiary from assistance programs

CHARITABLE TRUST4

Provides gifts to charity

Charitable lead trust gifts to charity first and then to non-charity beneficiary

Charitable remainder gifts to non-charitable beneficiary first with remaining assets to charity

PET TRUST5

Provides for your pet when you die

Can direct details of pet’s life

PET TRUST5

GENERATION SKIPPING TRUST6

GENERATION SKIPPING TRUST6

Protects assets that are exempt from the generation skipping tax

Used to transfer assets to future generations

LEARN MORE ABOUT TRUSTS

IN PORTLAND OREGON

LEARN MORE ABOUT TRUSTS

IN PORTLAND OREGON