Establishing the Trust
A Living Trust comes into operation during your lifetime and is a private agreement that is not made a matter of public record like a will is when it is probated. When Vision Bank is named as Trustee under a trust agreement, we take custody of securities wherever they are held, and perform all the troublesome accounting paperwork that goes with owning property. Most living trusts today are revocable, meaning they may be amended or even terminated at any time during the lifetime of the grantor. This flexibility permits the trust-creator (grantor) to observe how the trust functions meet his needs - and then to make changes accordingly. Sometimes, however, the living trust is made irrevocable - its terms fixed and permanent - after the death or incapacity of one of the grantors. Further, important income and estate tax savings may result.
Management of Trust Assets
Income earned by the assets in the trust is regularly paid to the trust's grantor or to whomever he or she selects to receive it. The trust's investments are under the continual supervision of our Trust Officers. These capable specialists will recommend desirable changes in keeping with the grantor's personal investment goal: including proper asset diversification, a fund to care for the grantor in case of physical or mental incapacity, a secure investment vehicle to provide retirement income without the worries of endless paperwork, or perhaps an Educational Trust for grandchildren.
If the trust's grantor becomes physically and/or mentally incapacitated prior to his or her death, Vision Bank's Trust Department offers several services that will assist the grantor in maintaining independence and avoiding the premature relocation to a nursing facility. Our Trust Officers are well prepared to coordinate the care of a disabled client with the person's Attorney in Fact appointed in a Durable Power of Attorney. We always recommend that workers' compensation insurance be obtained by the trust for the grantor when the client and their Attorney in Fact want to employ caregivers at the home. Of course, sometimes our trust clients do have to relocate to assisted living centers or nursing homes. We can continue to employ companions or personal shoppers at the time if there is no family to assist. The Trust Department can pay all nursing home or other bills to reduce the burden and worry for the trust grantor.
Asset Appraisal and Tax Returns
The Trustee is usually given detailed instructions in the trust agreement regarding how the grantor's personal property, such as furniture, household goods, jewelry or silver, are to be distributed to his or her relatives, or sold at the grantor's death. Instructions as to closing and transferring the grantor's home are common in these types of trusts. Additionally, the Trustee is empowered to have all trust assets appraised for estate tax purposes. The trustee will gather all the tax information the CPA will need to prepare the federal and estate tax returns, as well as the grantor's final personal income tax returns. The trust instrument should authorize the trustee to not only pay these taxes, but to actually sign the returns, and deal with any income tax refund.
Closing the Trust
After all of the tax returns are filed and releases received, the trust instrument may provide instructions to the Trustee to close the trust and distribute the remaining assets to relatives, friends or charities. The trust can continue, if provided in the instrument, for the benefit of another person. For example, if the grantor's heir is disabled relative or underage grandchild, the Trustee can be instructed to pay the net income from the trust for the education, support, welfare, maintenance and health care needs of the grandchild. Ultimately, the trust will terminate, and the grantor must provide terms for the Trustee regarding the final distribution of the remaining assets. The investments could transfer outright to the grandchildren when they reach 30 years of age, for example, or the grantor's favorite charities could also receive a percentage of the assets at that time.
Special Needs Trust
This type of trust is usually established by a grandparent or parent for the benefit of a developmentally disabled relative. These are irrevocable trusts thereby removing the trust assets from the grandparents' or parents' estate for tax purposes. The purpose of the trust is to provide non-essential future needs above the basic food, clothing, shelter, medical expenses that are typically paid for by local, state and federal agencies. The beneficiary's continued eligibility for federal or state aid is not to be jeopardized. The trust funds can be used for special educational and travel benefits that will promote the beneficiary's happiness and welfare. After the beneficiary's death, the remaining funds, or a portion of the funds are often left to the school or an endowment trust to ensure the future of the school. Other relatives or siblings of the original beneficiary may also receive the funds. These types of trusts can be an extension of a prior revocable living trust after the grantor has died.
Trust and Fiduciary Services Available
- Revocable Living Trusts
- Probate of Will
- Charitable Trusts
- Testamentary Trusts
- Educational Trusts
- Special Needs Trusts
- Court-Settlement Trusts
- Guardianship of the Assets
Contact our Trust Officers and schedule a free, one-hour estate planning conference to discuss your estate plans. We do not write legal documents, but our experienced Trust Officers will discuss the options available to you and your family. We will provide you with trust brochures to read on important estate planning topics before you see your attorney.
Call (580) 436-8323 or (580) 436-8322.