Estate Planning Trusts – PillarWM
As a high net worth investor, you may be interested in passing on your wealth to your children and other beneficiaries. You can maintain better control of this wealth by setting up a robust estate plan. This includes estate planning trusts to help you protect your estate. If you are contemplating estate planning trusts you can learn about estate planning by requesting a free copy of our book 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning For Families With Liquid Investable Portfolios Between $5 Million and $500 Million.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Table of Contents
Table of Contents
What is Estate Planning?
Most wealthy investors would like to transfer their wealth to their family or other beneficiaries as seamlessly as possible following their passing. However, this wealth transfer becomes challenging if there isn’t a plan or a will in place. Please talk with our wealth managers to learn more about estate planning and how it can help you.
Passing away or becoming incapacitated without making prior preparations forces the court system to distribute your wealth. This often results in delays, heavy taxes, and costly legal fees.
You can get around such issues with the help of estate planning. This refers to a collection of tasks that relate to how your assets will be managed following your passing.
What are Estate Planning Trusts?
If you have never looked into estate planning before, you may be wondering what estate trust definition is. An estate trust is a fiduciary agreement that allows a trustee or a third party to hold assets on a beneficiary’s behalf. You can arrange a trust in a variety of ways depending on how you wish to pass your assets to your beneficiaries.
Revocable vs. Irrevocable Trusts
A trust can be either revocable or irrevocable. It is important to understand the difference between the two before working on estate planning.
A revocable trust is also referred to as a “living” trust. This type of trust helps your assets bypass the lengthy and costly probate process. It also enables you to maintain control of them while you are still alive.
The main advantage of a revocable trust is its flexibility. You can choose to dissolve a revocable trust if you ever change your mind about it. However, this type of trust is still subject to estate tax.
An irrevocable trust can transfer your assets away from your estate, thereby protecting it from estate taxes and probate. The drawback of this trust type is that you cannot alter it after it is executed. This also means establishing an irrevocable trust could cause you to lose control of your assets.
While this drawback may seem discouraging for some, many wealthy investors set up irrevocable trusts because of the reduced estate taxes they are subject to. In addition to this, an irrevocable trust protects your assets if there is a legal judgment against you.
Types of Trusts
There are many different types of trusts. Each of these may be suitable for a certain type of individual or a situation. Some basic trust types include:
As its name implies, a marital trust will offer benefits to your surviving spouse.
This trust is often referred to as a “credit shelter trust”. It bypasses your surviving spouse’s estate to benefit from a federal estate tax exemption.
This trust type outlines your intentions in a will. Any funds in this trust will go through the probate process and will be subject to transfer taxes.
Charitable Lead Trust
This type of trust allows you to transfer a portion of your wealth to a charity and the remainder to your beneficiaries. A charitable lead trust is great for any investor that wishes to engage in philanthropy following their passing.
Charitable Remainder Trust
This trust enables you to receive income for a limited time before the remainder goes to a charity.
Real Estate Trusts
You may be wondering, “what is trust in real estate?”. It is possible to transfer your real estate into a trust. Many investors do this to avoid probate, save on estate taxes, and protect their homes from creditors.
The main drawbacks of real estate trusts are the cost of making the trust and the time it takes to fill out the paperwork. However, most investors are fine with bearing these costs as the advantages of a real estate trust can be great. Please talk to our wealth managers about transferring your real estate to a trust.
When Should I Set Up a Trust?
If you are wondering, “when I need estate trust planning.” The answer is as soon as possible. After all, no one can predict when they will pass away. Passing away without a proper estate plan in place puts an additional burden on your family and beneficiaries and affects their chances of receiving the wealth you intended to give them. For this reason, it is vital to start the estate planning process as quickly as possible.
How a Wealth Manager Can Help You With Estate Planning Trusts
If you are interested in setting up an estate planning trust to take better control of your wealth, you can reach out to various professionals for assistance. Many financial advisors offer estate planning services. However, we would recommend hiring a wealth manager to help you with this task. Please talk with our wealth managers to learn more about our estate planning services.
A wealth manager is a unique type of financial advisor that offers a variety of services in addition to estate planning. They deal exclusively with high net worth and ultra-high net worth clients. This makes them well suited to help you set up an estate trust.
Some of the ways a wealth manager can help you include:
Recommending the Right Type of Trust
As mentioned earlier, there are a variety of different trusts you can set up. Each of these offers different advantages, so you will need to choose the right one for your situation. A wealth manager is well-versed with various trust types and can recommend the right one for your needs.
For example, if you wish to benefit from a federal tax exemption, the wealth manager may recommend setting up a bypass trust. Similarly, if you wish to divide your wealth between a charity and your beneficiaries, they may recommend setting up a charity lead trust.
A wealth manager can help you find the right solution to achieve your estate planning end goal, whatever it may be. You can learn more about estate planning by requesting a free copy of our book 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning For Families With Liquid Investable Portfolios Between $5 Million and $500 Million.
Helping You With Your Assets
Wealth managers can also offer to help you with your assets. If you would like to expand your portfolio and include some of your assets in your trust, you will need to follow the right approach. Learn about some safe portfolio expansion strategies by reading our special guide.
In addition to this, a wealth manager may also be able to help you improve your portfolio performance. This can help you grow your wealth so that you can leave more for your children and beneficiaries. You can read about some of our portfolio performance improvement strategies in our special guide.
Assisting With the Setup Process
Setting up a trust can be both a lengthy and costly process. You can ask a wealth manager to assist you with the paperwork and minimize delays in the setup process. They may also be able to help you find low-cost solutions for setting up your trust.
How Do Wealth Managers Charge?
Before hiring a wealth manager to help you set up a trust, you should familiarize yourself with their fee structure. Wealth managers do not charge an hourly rate or a flat fee for their services. Instead, they charge a fixed annual fee based on a percentage of the asset value they are managing.
This fee structure also allows you to use the wealth manager’s other services without paying extra. These other services include:
- Portfolio Analysis
- Asset Management
- Retirement Planning
- Tax Planning
What Makes a Good Wealth Manager?
There are plenty of wealth managers that offer services for wealthy investors such as yourself across the country. However, it would help if you understood the characteristics and qualities that make a good wealth manager. This includes:
Experience is invaluable for anyone in a wealth manager role. The best wealth managers are those that have been practicing in the industry for many decades. This experience helps them understand which strategies work or not work well for different types of investors.
They can then channel the knowledge they have gained towards helping their more recent clients such as yourself. If you need to choose between an experienced wealth manager and one that has begun practicing only recently, you should opt for the more experienced one.
A wealth manager must possess expertise in a variety of areas as they provide multiple services for wealthy investors. While most wealth managers possess an educational background in finance, they learn much of what they know on the job. This knowledge is vital during the estate trust setup process, so you should ensure your wealth manager understands their services inside out. You can test a wealth manager’s knowledge by asking them some of the questions we discuss in our guide to choosing a financial advisor.
A wealth manager may possess experience and knowledge. However, these alone won’t make them the right person for the job. A good wealth manager should also be reliable.
This means they should make an effort to maintain communications with you and to offer advice whenever needed. If you are consistently having difficulty reaching a wealth manager over email or the phone, you should avoid hiring them.
Wealth managers are skilled at creating financial plans to help you achieve your financial goals. However, each plan should be tailored with your unique financial knowledge and goals in mind. This is because one-size-fits-all financial plans are rarely suitable for all investors.
The right wealth manager will take the time to understand your background and needs before crafting a specialized plan just for you.
Why Choose Pillar Wealth Management
With over six decades of industry experience under our belt, Pillar Wealth Management remains one of the premier wealth management firms in the country. You can count on our wealth managers to offer the right advice on estate trusts and to assist you with the setup process.
We offer personalized attention for each of our clients and take the time to understand your unique needs. Please set up a free first meeting with our wealth managers to get started with an estate trust.
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