How Designing a Trust can Protect Your Legacy

How Designing a Trust can Protect Your Legacy

 Trusts today aren’t your grandmother’s trust. Using a South Dakota Trust, you can have more flexibility and control over the intent.

Now that we know who’s whom in the trust, what other questions do you need to ask?

I’ll start with, what if you are asked to be a trustee. What are your responsibilities?

Remember, you’re the person responsible for the assets being held for the beneficiaries.

If you’re asked to be a trustee for a friend or family member, read the entire document. If you don’t understand it, don’t agree to it.

What are your options when setting up a trust? The two avenues you can take are corporate or individual or a combination and separate out the powers.

Here are some questions you need to ask when setting it up:

What is the duration of the trust or how long is the trust expected to last?

What is the Value of trust assets?

How is it being valued?

Is it liquid or privately held assets?

When deciding who will be the beneficiaries of the trust, ask yourself who do you want to benefit from the assets.

You may know right now that you want your children and your spouse but think of who you would want in the future. Consider any potential change in circumstances.

Such as:





The best way to ensure the trust is used the way you intend is to put it in writing.

An example is where the granddaughter is in her 80s and the trust will not help pay for her care because the trustee is deciding the use of the assets.

Next is the term spendthrift.

This person gives an independent trustee full authority to make decisions as to how the trust funds may be spent for the benefit of the beneficiary. This is needed in a case where the beneficiary can’t be trusted with the money. In a sense it’s to protect them from themselves or other people. Such as a creditor, a former spouse or even lawsuits.

Decide what’s important to you?

How do you want the beneficiary to spend the trust?

The best practice is to set Distribution standards. Those are parameters you get to define.

For Example: You could decide the trust is meant to support higher education. You can set guidelines for what that means. Such as a traditional four-year degree and graduate school but not technical school. You could also set it up so the funds cover an expensive cutting edge medical care to save the beneficiary’s life.

You don’t have to be specific. Discretionary distributions are designed to be more flexible, but it can be risky and a liability for the trustee. Another downside is it’s more complicated to administer.

This leads to the benefits of a South Dakota Trustee infrastructure which allows for a distribution committee.

Thank you for watching. I’m Ann Zuraw and I’m here when you want to discuss trusts


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