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Estate Planning for the Affluent Community


A Living Trust:

Also called a family trust, grantor trust or revocable trust, is a flexible estate planning tool that allows the person(s) who establishes the trust (called the grantor) to control assets for current and future generations. Even with the flexibility and variability that a family trust can provide, it may not be best for everyone. A few of the reasons to create and maintain a living trust are as follows:


Preservation Of Assets:

One of the primary benefits of a living trust is to preserve assets for distribution to future generations. The trust can provide support for the grantor, the grantor's spouse and other generations through income and principal distribution provisions. By limiting the access to trust funds through distributions controlled by the trustee, the family trust prevents possible waste, mismanagement, or excess spending that can deplete assets quickly when directly distributed to beneficiaries. The principal of the trust can be used for needs of the beneficiaries, while ensuring there are assets available to distribute to future generations, such as grandchildren.


Spending Control:

The trustee makes distributions from a trust and the grantor can be, and usually is, the trustee at the beginning. There are many options for distributions that can be provided in the trust document, from income only, to income and unlimited principal. The standard provisions are for the trustee to distribute for the health, education and welfare of the beneficiaries. This provides the ability of the trustee to provide for the beneficiaries' basic needs. Since these categories are broad, a grantor can leave a letter of wishes, which helps guide the trustee as to the types of expenditures contemplated by the grantor for the beneficiaries.


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