The Trust as Asset Management

Protecting your assets.As an estate planner, I am always advising my clients about the benefits of using a revocable living trusts. A trust can keep your loved ones out of the probate court when you die, and provides tremendous asset protection for your beneficiaries, and allows you to keep all of your personal family affairs private. But one aspect of a trust that is often overlooked is that it is a very effective way to manage your assets even when you can’t.

Transferred to the Trustees

Once a trust is executed, the assets to be held in the trust are transferred to the Trustees of the trust. The Trustees of the trust are then saddled with the responsibility of managing the assets of the trust. For a grantor who needs help managing assets, appointing a co-trustee to serve with the grantor allows the grantor to let a third party manage the assets. This can be a very simple and efficient way to transfer control to a trusted family member or friend.

Hiring a Durable Power of Attorney

Yet even more significant, consider the situation where a grantor becomes incapacitated. Without a trust, loved ones need to rely on a durable power of attorney which is usually very difficult. For a durable power of attorney to be effective, the agent needs to be properly appointed, the document needs to be broad enough to authorize the action that needs to be taken, and the third party must be willing to recognize the authority of the document. All are variables that often times frustrate the effectiveness of the document.

On the other hand, if the assets are owned by the trust, the designated Trustee of the trust has unquestionable authority to manage the trust assets. A much better solution. So you see, proper estate planning is critical to your personal and financial success.

As always, we are offering a free estate plan review, please contact us. 775.852.2600

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