Types and Benefits of Personal Trust Accounts

Protecting your assets, securing your loved ones, and gaining peace of mind are only a few reasons why opening a trust account is a good idea. Trusts allow you to place specific conditions on how and when your assets will be distributed, and are a great way to ensure that the things and people you love will be taken care of. They ensure that your assets are allocated efficiently and cost-effectively by avoiding probate costs, and they may protect your assets from creditors and lawsuits.

Trusts are also an effective way to protect the interests of your beneficiaries who may need that protection, such as minors, those with special needs, or potentially spendthrift heirs. “There are many strategic reasons to establish a trust,” says Jennifer Stice, Chief Trust Officer at Town and Country Bank and Peoples Prosperity Bank. “Giving careful attention to the ultimate desired result will guide you to the trust best suited for you. Each trust document is unique in itself-typically there is not a one-size-fits-all.” 

The two main types of trusts are living (inter vivos) trusts and testamentary trusts. A living trust, as the name implies, takes effect while you’re still alive. The primary reasons for setting up this type of trust are:

1. The desire for professional asset management in the event of your incapacity
2. The lack of tie or inclination to manage your financial affairs
3. The desire for a professional trustee to manage your estate after your death, and the desire to “test” the arrangement.
4. Property ownership in more than one state
5. The desire to avoid probate

A testamentary trust is created within a will and only becomes effective after the grantor’s death. Common reasons for choosing a testamentary trust are:

1. The desire to control how your beneficiaries use their inheritance
2. The need to provide for stepchildren from a previous marriage
3. The desire to care for a child with special needs
4. The desire to optimize estate tax planning
5. The wish that trust assets eventually go to a charity or someone other than the initial beneficiary.

Other common trusts include bypass or credit shelter trusts, marital trusts, charitable trusts, and special needs trusts. Because trusts can be customized to meet your goals, it’s important to consult with your estate planning professional, such as your attorney or trustee, for detailed information about the types of trusts that best fit your estate planning needs.

Why Choose a Corporate Trustee to Manage Your Trust Accounts?

Trustees are unbiased and loyal, lessening the chance of family conflict and ensuring peace of mind that your assets will be safely managed according to your preferences. They also have the certifications, knowledge, and experience to carefully manage your assets and protect your information. Finally, Trustees regularly provide reports to beneficiaries, accountants, and attorneys, so you always have access to your information.

Town and Country Bank and Peoples Prosperity Bank is Here to Help!

At Town and Country Bank and Peoples Prosperity Bank, our Trust team has over 80 years of combined experience, so you can rest easy knowing your best interests are our number one priority. To learn more about our trust services, visit our Trust & Investments page, or give us a call today!