Creating trusts and trustees
Provided by RBC Wealth Management
and Dave Dupont
The decision to create a trust is a personal one. But, beyond the potential of creating unmotivated children, a trust can be a smart fiscal choice and a way to ensure the legacy you built during your life continues after your death.
What is a trust?
A trust is a legal entity authorized by law. There are two basic categories: a living or inter vivos trust is created during your lifetime, and a testamentary trust is established after death.
The terms of a trust are many and limited only by the imagination. But, some of the most common reasons to establish a trust are to:
• Dictate specific terms and conditions for the distribution of your wealth.
• Plan ahead and ease the burden for loved ones after your death.
• Avoid probate.
• Reduce estate taxes that could take a significant bite from your financial legacy.
• Allow for easier management of cash needs and assets if you become disabled.
• Establish continuity of asset management at death.
• Support a philanthropic cause.
A grantor is the person who establishes and transfers property into the trust. He or she can also be called a settler or donor.
A beneficiary is the person or entity who receives the benefits of the trust.
A trustee has an important role. This is the person who manages and administers the trust. He or she holds a legal but not a beneficial title to the trust assets and has the power over the disposition of the trust property in accordance with the trust agreement.
Work with a professional
A financial professional can help determine what kind of trust is right for your situation. You may also want to consider a professional trustee if you don’t want to burden a family member with the responsibilities and issues that arise from this role.
You worked hard to build your wealth and legacy. A trust and responsible trustee will help to protect both after your death.
The information included in this article is not intended to be used as the primary basis for making investment decisions.
Trust services are provided by third parties. Neither RBC Wealth Management nor its Financial Advisors are able to serve as trustee. RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor.