Financial Advisors
Top 5 Benefits of Trust Services That Your Clients Might Not Know About
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.
Enhancing Your Practice: The Advantages of Offering Trust Services
Incorporating trust services into your offerings can significantly enhance your ability to manage client needs effectively. Here, you’ll discover six key ways you can benefit from utilizing LPL’s Trust Services, powered by The Private Trust Company. 1. Maintaining Consistency and Continuity with Your Clients By offering trust services to your clients, you get the opportunity to manage assets across generations and ensure a seamless transition of wealth. This continuity helps in building a lasting relationship with your client’s extended family, securing a role as a trusted advisor for future generations. 2. Helping Your Clients with Trustee Duties—and Providing Greater Value Trust management involves complex responsibilities that can be daunting for clients. By working with LPL’s Trust Services’ team, you can provide crucial guidance to help avoid potential pitfalls when setting up a trust with an attorney. Through LPL’s Trust Services team you can offer to connect your clients with professional trustees, enhancing the trust’s administration and relieving family members from an often difficult and thankless job. 3. Assisting When a Family Member Isn’t a Good Choice to Be a Trustee Not all family members are suited to manage trusts, due to potential conflicts of interest or lack of financial acumen. You can step in to help select a competent trustee, thus preserving family harmony and ensuring that the trust is managed according to the settlor’s wishes. 4. Supporting a Second Spouse Without Leaving Funds Outright Trusts can be strategically used to provide for a second spouse while protecting the inheritance rights of children from previous relationships. Trusts can be structured to offer financial support to the spouse during their lifetime, with the remaining assets distributed to the children, ensuring fairness, and fulfilling your client’s objectives. 5. Providing for Children Without Disincentivizing Them A major concern for many parents is to support their children financially without curbing their motivation to succeed independently. Through incentive trusts, you can help set conditions that encourage personal development and achievement, such as educational accomplishments or career milestones before trust funds are disbursed. 6. Finding a Flexible Trustee The needs of trust beneficiaries can change over time, requiring trustees who can adapt to new circumstances and make discretionary decisions that benefit the trust. You can aid your clients in selecting a trustee who not only understands the legal and financial aspects of trust management but is also capable of adjusting strategies as needed to meet the beneficiaries’ evolving needs. Incorporating trust services into your practice not only broadens your scope of client services but also enhances your role as a comprehensive steward of your client’s financial health. By addressing specific family dynamics and long-term financial planning needs, you can significantly improve client satisfaction and retention, ultimately fostering a more robust and resilient advisory practice. Have questions? Get in touch with us. Stay connected: Follow The Private Trust Company on LinkedIn For Financial Professional Use Only Tracking #589560
6 things to understand about trusts
As a financial advisor, understanding the benefits and importance of trusts for your clients can greatly enhance their financial security and help achieve their long-term goals. In this article, you’ll discover: Why trusts are not just for the affluent, but can be valuable tools for individuals of all financial backgrounds The differences between trusts and wills, and the advantages trusts offer How the two main types of trusts work – revocable and irrevocable By gaining a deeper understanding of trusts, you can make informed decisions about incorporating them into your estate planning strategy for clients. 1. A trust enables individuals to better control their assets. And this isn’t just after their passing, either – a trust can be used during a client’s life. Establishing a trust provides a safety net, ensuring that assets are used in accordance with the creator’s intentions. A trust’s creator, or grantor, essentially transfers assets to a trustee, who manages the assets on behalf of the beneficiaries—and does so by following the guidelines outlined in the trust. Trusts are beneficial for various reasons. They offer: A way to potentially avoid probate A smoother and more efficient transfer of their wealth to beneficiaries Potential protection against creditors, shielding assets from potential claims and lawsuits. The flexibility to allocate assets to beneficiaries in a manner that aligns with their values and long-term goals. The ability to provide for specific needs, such as education, healthcare, or even charitable causes 2. There are two primary types of trusts: revocable and irrevocable. Revocable trusts, also known as living trusts, offer flexibility and control during the client’s lifetime. Clients can modify or even revoke the trust while they’re still alive. Assets placed in a revocable trust remain part of the client’s estate and are subject to estate taxes. However, a revocable trust does avoid the probate process. In contrast, irrevocable trusts are permanent and cannot be altered or terminated without court approval. Once assets are transferred to an irrevocable trust, they are most often no longer considered part of the client’s estate and are not subject to estate taxes. Irrevocable trusts provide greater asset protection and can be used for estate planning strategies, such as minimizing estate taxes and providing for specific beneficiaries. The decision of which type of trust to establish depends on your clients’ individual circumstances and financial goals. Revocable trusts offer flexibility and control, while irrevocable trusts provide greater asset protection and estate planning benefits. 3. Trusts are not solely reserved for the affluent. They offer a wide range of benefits that can be advantageous to individuals of all financial backgrounds. Establishing a trust serves as a proactive measure to safeguard your clients’ assets, ensuring they’re managed and distributed according to their wishes, even when your clients are no longer able to do so themselves. Contrary to popular belief, trusts are not exclusively reserved for the rich and famous. While trusts are often associated with affluent individuals looking to protect their assets and pass down wealth to future generations, they can also be a valuable tool for people of more modest means. Trusts can be used to manage and distribute assets, provide for the care of loved ones, and even minimize taxes and potentially avoid probate. Ultimately, trusts can benefit anyone looking to protect and manage their assets, regardless of their financial status. 4. Trusts and wills do different things for clients. While a will is an important estate planning tool, it’s not designed to offer certain protections available under a trust. For instance, one key difference between a will and a living revocable trust is that the living trust has an incapacity clause that states who your clients want to manage their affairs in the event they are unable to do so during their lifetime. The primary function of a will is to determine to whom or what assets titled in an individual’s name are conveyed. A trust can actually disperse those assets to beneficiaries over a more reasonable period of time or at certain ages. Wills are necessary to designate who gets what, but trusts can actually help protect your clients’ assets, reduce their tax obligations, and define the management of their assets according to their wishes. 5. There are many factors to consider when deciding if a trust is right for your clients. Some of those factors include age, health, marital status, and financial situation. A trust can be useful if your clients have one of the following wishes or attributes: Have a complex financial situation Want to leave a legacy for their loved ones Would like to protect assets from creditors, nursing home costs, and other potential threats Provide for loved ones in the event of death or incapacity. 6. Addressing trusts with your clients. Even if you’re not an estate planning attorney or an expert in estate planning strategies, bringing up topics like trusts can help ensure your clients are thinking through all of their goals – and help you formulate the right financial strategy for them. Plus, addressing trusts with clients can demonstrate your value as much more than an investment manager, but highlight your capabilities as a wealth manager. If your clients do want to create a trust, you can then bring in an estate planning attorney to create a trust that addresses their specific needs. Have questions? Get in touch with us. 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