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Money Matters

Joshua Bradburn CFP®
Vice President at Charles Schwab in Santa Monica.

Why Our Financial Plan Should Include a Trust
(Continued from Monthly Columns)

Most of us are familiar with wills, and likely have one in place. But when people think of trusts, they often picture something reserved for the very wealthy. That’s not the case. A personal trust can actually be helpful for people in a variety of situations.

Simply put, a trust is a legal relationship in which the trustee, who can be you or someone you name, holds legal title to assets and manages them on behalf of the beneficiaries of the trust. Those beneficiaries could include you, your family, or your favorite charities. The assets inside the trust could include your home, investment accounts, and more. You can set up the trust so you always have access to the assets at any time. For example, you could sell investments held in the trust to pay college tuition for a child.

Trusts can offer a number of benefits:
​•​Maintains the integrity of your estate
​•​May minimize transfer/estate taxes
​•​Helps your beneficiaries avoid the expense, delay, and publicity of probate
​•​Allows you to create rules for how your assets will be distributed
​•​Allows for charitable giving strategies
​•​Enables sound financial decision-making, should you become incapacitated
​•​Allows for detailed planning in unique family situations, such as ongoing care for a special needs child

A common approach we see is an individual setting up a trust and acting as the trustee, with the intent to do so until their death. This gives them the latitude to hand over trustee responsibilities to someone else, should they be unable to continue due to age or illness.

Deciding who should succeed you as trustee is a critical decision. Your trustee should be able to impartially manage your financial assets, and be willing to assume all the accompanying legal complexities and administrative duties. They should be able to fulfill this responsibility for the full term of the trust, which could be decades into the future.

Because of the responsibilities, time commitment, and knowledge the role demands, many people choose a corporate trustee to succeed them. A corporate trustee offers the benefits of financial expertise, unbiased decision making, fiscal responsibility, and sworn fiduciary duty to always act in the best interest of the trust and its beneficiaries. This provides continuity to ensure that your wishes are carried out and your estate is carefully managed into the future. A corporate trustee can serve as the sole trustee, or as co-trustee, working alongside a family member or trusted individual you choose.

A trust can serve as an integral part of your overall financial plan. It offers tremendous flexibility in establishing stability and security for your family now and into the future.

Joshua Bradburn, CFP®, is a financial consultant at the Charles Schwab branch in Santa Monica. He has over nine years of experience helping clients achieve their financial goals. Follow Josh on Twitter @JoshBradburnCS. Some content provided here has been compiled from previously published articles authored by various parties at Schwab. Charles Schwab & Co., Inc., Member SIPC.

Information presented is for general informational purposes only and is not intended as personalized advice. Employees of Charles Schwab & Co., Inc. are not estate planning attorneys and cannot offer tax or legal advice, or create and prepare legal documents associated with such plans. Where such advice is necessary or appropriate, please consult a qualified legal or tax advisor. (0917-74KE)



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