When we talk about trusts, the vast majority of people have revocable living trusts. There are many reasons for having a trust rather than a will; you easily make changes to your allocated assets, it doesn’t take a long time to create it since it is not going through the court system, AND it does not have a probate. It allows you privacy. Therefore, we consider trusts the cornerstone of the client’s estate plan.

There are many benefits of having trust:

  • If you make a change on the beneficiaries of your trust, you do not need to go and make the same change on all other assets you have.
  • When the trust matures, we can leave our clients to take their time to grieve, whereas if we have a will, we have to start the process immediately.
  • When you have a blended family, oh, well, that is an excellent example of the advantage of having trust.

Our process, in this case, starts with talking with the clients about the trust, funding the trusts, and also talking with the attorney about the drafting preferences on different trust scenarios.

Action Item:

Select few clients and review their trusts. Create the Estate Planning Flow Chart and put the tax implications next to it. If something doesn’t make sense to you, or you are not sure you understand it, call the estate planning attorney who drafted the plan and offer to pay for an hour of their time to understand the plan. This is going to be very beneficial for your clients, but most importantly for you. You, as a financial advisor, will get a much better understanding of why certain trusts are setup in a certain way.