Can I Retain Control of Assets with a Trust?

Control of assets
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A trust allows greater control of assets.

People tend to have strong opinions about money.

This involves budgeting, investing, and gifting.

For this reason, many people have distinct goals for estate planning.

According to a recent FED Week article titled “Control of Assets a Key Issue in Deciding on a Trust,” those who have specific plans for the eventual distribution of their assets would benefit from a living trust.

Control of assets is a priority for many Americans.
Certain trusts provide greater control of assets than others.

A trust provides several benefits.

With a trust one can avoid probate and keep asset distributions private if the trust is properly funded.

The trust also can provide a seamless transition of financial management should the trustmaker become incapacitated.

Who is the trustmaker (also known as a grantor, settlor, or trustor)?

The trustmaker is the individual who creates the trust.

The trustmaker also can serve as the initial trustee.

To provide greater control of assets during incapacity, the trustmaker also should name a co-trustee or successor trustee.

This is ideal.

Why?

Because the family will not need to apply for conservatorship through the court regarding assets titled to the trust.

If you desire greater control of assets while you are alive, you maybe tempted to provide for a successor trustee rather than a co-trustee.

Although this would allow you to retain full control while you are alive, you must formally resign or be formally removed (e.g., due to incapacity) from your role before the successor trustee would be authorized to manage trust assets while you are alive.

If you select a co-trustee, this individual will be able to take immediate control of assets in the trust should you become incapacitated.

When selecting an appropriate type of trust for your unique circumstances, you will need to determine what your goals are and how much control of assets you want to retain while you are alive.

What are your basic options?

Irrevocable Trusts

With these trusts, the trustmaker gives up control over trust assets to a separate trustee.

Although this means you will no longer be able to manage the assets while you are alive, it protects the trust from your future creditors and excludes the assets from your taxable estate.

These trusts are popular for tax planning and for asset protection purposes.

Revocable Trusts

With a revocable trust, the trustmaker may serve as the trustee and retain control of assets within the trust.

The trustmaker also may collect and use the investment income generated by assets in the trust.

Assets also can be retitled back out of the trust and returned to the name of the trustmaker.

This trust is beneficial for financial management in the event of incapacity.

It also allows for the distribution of assets outside of probate.

Discuss your goals with an experienced estate planning attorney to create a trust to meet your unique needs.

Reference: FED Week (Jan. 21, 2021) “Control of Assets a Key Issue in Deciding on a Trust”

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