Trusts Aren't Traditional Anymore

Trusts were traditionally thought of as tools which only the wealthiest families could use to manage, invest and grow wealth for future generations. This is no longer true - the asset management services offered in the Trust Department of Union Bank are available to everyone who has a need to:

• Create and Grow Wealth.
• Protect and Preserve Wealth.
• Make Tax-Advantaged Distributions During Their lifetimes.
• Make Tax-Advantaged Distributions At Their Death.
  

The services which help you Protect and Preserve Wealth offer the ability to provide financial assistance to family members who have relied upon you for their support or who have special needs that will continue after your death. Every prudent financial plan includes a powerful source of hidden wealth in the form of Life Insurance. Life Insurance can be purchased to meet a wide variety of goals including:

• Protecting young families if tragedy should take away a parent and their income.
  
• Protecting a surviving spouse later in life.
  
• Caring for surviving family members with special needs.
  
• Providing a method for making tax-advantaged transfers of wealth during life.
  
• Providing a method for making tax-advantaged transfers of wealth at death.
  
• Providing the liquidity to save a family farm or business from forced sale to pay estate taxes.
  
• Replacing wealth that has been lost to transfer taxes or given to favored charities rather than to the government.

Protection and preservation of the wealth created through life insurance is best accomplished by creating a trust to manage the assets and fulfill your personal goals of taking care of loved ones in your absence. The hallmarks of a sound plan include:

• Selection of a corporate trustee who will have the financial strength, stability and qualified staff to provide professional asset management.
  
• Selection of a corporate trustee who will give personal attention to the needs and concerns of loved ones who are the beneficiaries of your plan.
  
• Selection of a trust option that has the greatest tax advantages.
  
• Selection of an insurance product that fulfills your goals with the least cost and greatest financial protection.

A trust created to manage life insurance proceeds may take one of several forms depending upon the goals you wish to accomplish. A Contingent Beneficiary Trust is appropriate in circumstances where you might name a surviving spouse as the primary beneficiary, but if they do not survive the insured, then the benefit passes to a trust for the care of the Insured's children or aged parents.

The benefit may be payable directly to a Testamentary Trust that is created upon death by an appropriate provision in the Insured's will or separate trust instrument. Such a trust may have provisions that pertain to the special needs of a disabled child or specify support of a child's college plans as well as their daily maintenance requirements.

The death benefits from multiple policies that you have purchased yourself or that are employer provided can be paid to a single Intervivos Life Insurance Trust as the beneficiary thereby streamlining the claims process. The trust will then manage and distribute the principal and income according to the instructions that you have left for the benefit of a surviving spouse or minor children based on their needs and their ability to manage money.

An Irrevocable Life Insurance Trust, can be established while you are alive to own insurance policies and fund insurance premium payments. Such a trust offers the benefit of maximizing lifetime gift tax exemptions and is a powerful estate planning tool for passing wealth free of estate taxes. An Irrevocable Life Insurance Trust may be appropriate where the goal is to:

• Replace wealth that is gifted to charitable organizations, thereby reducing the size of the taxable estate, rather than being paid to the government in taxes.
  
• Replace wealth that is lost to the costs of transferring your estate to heirs, including estate taxes.
  
• Provide the ready cash needed by trust beneficiaries to purchase a family business or farm from your estate.
  
• Make the most tax-advantaged transfer of wealth to your children.

The asset management specialists within Union Bank's Personal Trust & Wealth Management Department are available to provide more specific information that will benefit your unique situation and to work with your professional advisors to implement a strategy that will meet your needs.

*Investment services offered through Union Bank & Trust Company’s Trust Division.
Investment products: Not FDIC Insured - No Bank Guarantee - May Lose Value.