Why Use Trusts?

Are you looking for new ways to protect your family and your money? Would you like to cut estate taxes and probate costs, too?

Trusts are the answer. They are remarkably versatile and can broaden your estate plan.

The particulars are simple. You choose a trustee who manages the trust assets, called the principal, and pays an income to those you want to support, your beneficiaries. You are referred to as the grantor. Your will or a separate legal document is needed to establish a trust.

Typical Trusts
You can set up a trust for anyone for just about any purpose. Here are some typical trust arrangements.

Family trust. You can create a trust in your will, a testamentary trust, for the benefit of your spouse, children and other family members. You direct the trustee to pay the income to or for the benefit of the persons you name. You can also authorize the trustee to advance principal for your beneficiaries' needs (called "invading" the principal).

Typically, a husband and wife each set up a trust in their wills for the surviving spouse's benefit. Each directs that after his or her death, the trust shall continue for the support of their children until the children attain a certain age, say 25 or 30. Then the trustee is to turn over the principal to the children.
Living trust. You might decide to create a trust for your own benefit, a trust that is operative while you are living. This type is called a living or inter vivos (Latin for "between living persons") trust. In this case, you direct the trustee (which can be you or a professional trustee of your choice) to manage the trust assets, pay you the income, and counsel you about the investments. You are kept fully informed about all transactions. You can reserve the right to amend or revoke the trust, to add or withdraw assets, and in some cases to approve investment changes. The trust can continue after your lifetime for the benefit of your family or others, or it can distribute the assets at your death. The trust assets avoid the costs and delays of probate, though their value is included in your estate for federal estate tax purposes.
Charitable remainder trust. You can set up a trust to pay an income for life to you or a family member with the remainder going to Sisters Hospital Foundation. Although we won't receive any benefits until after your lifetime (or the lifetime of the other income beneficiary you may name), we will get the balance of the trust to carry on our important work.

Sometimes called a life income gift, this plan offers you many benefits: sizable income tax savings; potentially greater income from investments; a way to diversify investments while, for most donors, paying no up-front tax on their appreciation; and income for a survivor, if desired.

Please call Julie Snyder at 716-862-1992, or e-mail us at jsnyder@chsbuffalo.org, for more information.

The information in this Web site is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income tax include federal taxes only. Individual state taxes and/or state law may impact your results.