Trust services are an integral part of estate planning and wealth management, and utilizing trust services can offer your clients substantial benefits — which can lead to a path to financial independence and confidence. At LPL, you have access to trust services that can expand your value to your clients. Here are the top five ways in which trust services can benefit your clients:
1. Asset Protection
- The benefit: Trusts can provide a robust mechanism for protecting assets from creditors, lawsuits, and other claims. Assets in an irrevocable trust can offer protection from creditors and predators, ensuring that your clients’ wealth is preserved for their intended beneficiaries.
- How you can help your clients: If you have clients with substantial assets, make them aware that trusts can offer this type of protection, as they may only be thinking of trusts in terms of asset transfer – and not protection.
2. Estate Tax Reduction
- The benefit: Trusts can be structured to minimize the impact of estate taxes, thereby potentially maximizing the inheritance passed on to beneficiaries. This is particularly beneficial for your clients with larger estates or those close to tax thresholds.
- How you can help your clients: Work with estate planning attorneys to craft trusts that take full advantage of available tax exemptions and deductions, potentially saving beneficiaries significant amounts in taxes.
3. Control Over Wealth Distribution
- The benefit: Trusts allow your clients to specify exactly how, when, and under what conditions their assets are distributed to beneficiaries. This can include stipulations that beneficiaries reach a certain age, achieve specific milestones like graduating college, or even stipulations related to lifestyle choices.
- How you can help your clients: Help your clients develop a distribution plan that aligns with their values and goals, ensuring that wealth is transferred in a way that encourages positive outcomes for beneficiaries.
4. Avoidance of Probate
- The benefit: One of the most significant advantages of trusts is their ability to bypass the probate process. Probate can be lengthy, public, and expensive, potentially diminishing the value of the estate and complicating the distribution process.
- How you can help your clients: Explain the benefits of avoiding probate and assist in setting up trusts that streamline the transfer of assets, making the process quicker, private, and less costly for beneficiaries.
5. Planning for Incapacity
- The benefit: Trusts are not only useful for planning for death but also for potential incapacity. A properly structured trust can dictate how a client’s affairs should be managed if they become unable to make decisions for themselves.
- How you can help your clients: Assist your clients in choosing trustees who can step in to safeguard assets and assist in the management of their financial affairs in accordance with the trust’s guidelines, ensuring continuity and adherence to your client’s wishes.
While the benefits are clear, setting up and managing trusts involves careful planning and ongoing management. You can play a crucial role in this process by:
- Providing Personalized Advice: Each of your clients has a unique situation, and trusts must be tailored to their individual needs and goals. You can provide customized advice based on an in-depth understanding of your client’s financial situation and family dynamics.
- Coordinating with Other Professionals: Effective trust management often requires collaboration with other professionals, such as attorneys and tax advisors. You can coordinate this team to establish that all aspects of the trust are handled correctly.
- Monitoring and Adjusting Strategies: As laws change and personal circumstances evolve, trusts may need to be revised. You can monitor these changes and recommend adjustments to trust strategies as needed.
The Private Trust Company offers a range of services that can significantly enhance your ability to manage your client’s assets for generations. By incorporating these services into your offerings, you’re not only protecting your clients’ wealth but also providing a structured way to pass on legacies, establishing a long-term plan and your client’s financial confidence.
