What are the benefits of a trust?
A trust is a legal entity that can hold title to “own” assets for the benefit of another. Benefits can include the ability to control the assets during a time of illness or disability or long after you pass, protect your assets from creditors, and reduce estate taxes. It simply depends on the type of trust you choose and what your specific goals are.
Who needs a trust?
You may benefit from a trust if:
- Your beneficiaries are not ready to receive a large lump sum inheritance (including grandchildren).
- You own real property in multiple states.
- Your total estate is above the estate tax exemption limits (in Washington State, the 2024 limit is $2.193 MM).
- You require asset protection from creditors.
- You want to provide financial management and asset protection for a surviving spouse.
- You have a beneficiary who has special needs (including substance abuse and addiction).
- A beneficiary is incarcerated.
- You are concerned about your beneficiaries’ spouse(s).
- You have a blended family.
- You need protection from unintentional disinheritance.
- You want to eliminate disharmony in the family or emotional stress.
Keep in mind that not every situation will require a trust. It’s best to speak with your financial advisor and attorney to determine which estate planning documents are necessary as you may only need to create a Last Will & Testament.
Why would someone want to designate a trust company as trustee or personal representative in a will?
If you create a trust, you name a trustee – someone who holds title to the property and/or assets and manages or distributes them according to your wishes. We have a fiduciary duty to carry out your wishes, according to the governing document and Washington state statute.
The same holds true for naming HFG Trust as Executor or Personal Representative on a Last Will and Testament (Will). HFG Trust will carry out your wishes as to the terms of the will without the emotional toll to beneficiaries and family members.
We call this a FACT:
As a fiduciary we act on behalf of the current beneficiaries as well as remainder beneficiaries, named in the document, as you want them carried out. Fiduciary duties include duty of care, loyalty, good faith, confidentiality, prudence and disclosure.
We charge a fee commensurate with the size of your trust or estate with no additional fees for managing financial assets.
We understand the sensitive nature of managing your estate.
You can trust us to carry out your wishes, without any emotional toll.
*If applicable, charges for property managers, required real estate appraisals, inspections, environmental surveys, and tax returns prepared by outside accounting firms will be deducted from the trust.
When do the fees begin?
No fees are charged until the work begins. Simply naming HFG Trust as trustee or personal representative does not incur any fees. Fees begin when we, as trustee or personal representative, begin to manage the trust and/or estate assets.
Is creating a trust complicated?
Trusts have become fairly straight forward and a lot less costly to form. While setting up a trust may cost slightly more upfront than simply writing a will, there are cost-savings and tax benefits to consider in the long term, along with the notion that you will have greater control over your assets than you might achieve with an ordinary will.
Can you have multiple trusts?
Yes. It all depends on your goals and objectives.
Which attorneys do you work with?
We are familiar with most estate planning attorneys in the Tri-Cities area. We can work with your current attorney, or we can recommend one based on your unique need—whichever is best for you.
Beneficiary: A person or organization that receives payments or assets from a trust.
Grantor: Also, known as the “trustor” or “settlor,” the person who transfers the property or asset into the trust.
Trustee: The individual or entity responsible for holding and managing trust property for the benefit of the beneficiary (i.e. manager).
Estate Assets & Taxable Estate: All assets, including property, owned by the decedent on the date of death. All assets, even if located in another state, and any asset that was revocably transferred. This also includes transfers taking effect at death (e.g. a Payable on Death or Transfer on Death account).
Testamentary: Created by or within a Last Will and Testament
Irrevocable: Cannot be changed by the grantor. Assets cannot be reclaimed.
Revocable: Can be altered or changed at any point during the grantor’s lifetime, and assets can be reclaimed. Typically, a revocable trust becomes irrevocable upon the grantor’s death.
Last Will and Testament Glossary
Last Will and Testament: A last will and testament doesn’t take effect until after the person’s death. It provides specific instructions about what to do with their possessions and will indicate whether the deceased leaves their estate to another person(s) a group or wishes to donate to a charity.
Executor or Personal Representative: An executor is a personal representative named in your will. It does not have to be a relative or a beneficiary of your estate. Some people choose to name a professional, such as a trust company as executor/personal representative. A personal representative is in charge of handling the legal and financial affairs of the decedent’s estate, managing any income the estate is still generating, sell real estate and vehicles, track down the decedent’s distant family members and similar activities.
Have more questions?
Most people do! We offer free consultations so you can speak to us directly about your needs, and we will work with you to identify the goals you have for your legacy. Please feel free to come with a list of questions. We are also happy to review your documents if you feel comfortable.
Mary Ann Goebel, Trust Administrator
This information is not legal advice/counsel and is only intended to be general information regarding trusts.