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Wealth Management, Trust & Estate Planning

An Overview of Estates and Trusts

If you want to learn more about protecting your assets, it’s beneficial to learn more about estates and trusts. There are many good reasons to consider these to preserve your wealth for your loved ones.


An estate is the total valuation of any assets, investments, or interests an individual holds. This can include physical belongings (think cars or artwork), land, real estate, cash, and intangible property (investment accounts, stocks or bonds, life insurance policies, and Social Security benefits). Summed up, it’s everything someone owns or may have a controlling interest in, minus any debts they have.


A trust is a relationship where a person (the trustor) gives someone else (the trustee) control to keep the title to assets or property for the benefit of another person (the beneficiary). For example, a single parent (the trustor) could give control of their assets to a relative (the trustee) for the benefit of their child (the beneficiary) in the case of their death. The trustee is responsible for using the money for the benefit of the beneficiary as directed by the trust.

Different Types of Asset Ownership

Jointly Owned - 2 Types
  1. Right of Survivorship - meaning the assets transfer to the surviving owner immediately
  2. Tenants in Common - means your share of the assets goes to your heirs
Named Beneficiary
  • An asset that has a designated beneficiary, such as life insurance policies
Solely Owned
  • The asset is owned by one person alone

Components of Estate Planning

Power of Attorney

This is a written document authorizing another person to act on someone’s behalf.


A will designates your wishes after your death. It’s a legal document that directs what you want to happen to your assets and who will care for your children.

Living Will

A living will is also referred to as an advance medical directive. It’s a legal document that specifically states what a person wants to have done (or not done) in case they are unable to communicate their wishes themselves.


Trusts are legal fiduciary arrangements to hold assets and property.

Types of Wills


A simple will designates who will inherit your belongings or assets after you die.


This type of will establishes a trust to receive assets in the event of the person’s death.


This type of will puts an estate into a trust before the person’s death.


This is a handwritten will that wasn’t witnessed by anyone.


An oral will is when someone tells someone else (or multiple people) what their wishes are.


A joint will is one document that contains the wills of two people (typically a husband and wife).

Types of Trusts


A testamentary trust is activated after someone’s death. There are three main types of this kind of trust:

  • Bypass - a trust that is funded up to a ‘lifetime exemption’
  • Marital Power of Appointment - a trust where assets are put in it for the spouse
  • Qualified Terminable Interest Property (QTIP) - this type of trust benefits a spouse of the second marriage and the children from the first marriage
Living Trust

A living trust is where all the assets are placed in the trust while the person is still alive.

Advantages and Disadvantages of Trusts

There are advantages and disadvantages with trusts.

Some of the advantages are:
  • Reducing/eliminating estate taxes
  • Avoiding probate
  • Having all assets under one plan
  • They aren’t permanent and can be changed
  • It’s quicker to distribute the assets
Some disadvantages are:
  • You have to transfer all of the assets
  • Transactions must be kept separate
  • There is a cost involved
  • Laws can vary from state to state

Items for Organizing Your Estate

  • List out all of your assets
  • Decide how you want your assets to be distributed and who should get them
  • Decide if you want a power of attorney prepared
  • Execute a will
  • Execute a living will
  • Make sure beneficiaries on all life insurance and benefit plans are updated
  • Learn more about trusts and decide if one would be good for you
  • Learn the benefits of estate taxes
  • Retain an attorney to establish the trust if you decide it’s right for you
  • Relax and enjoy knowing you have a finished estate plan

If you’re considering setting up a trust, it would benefit you to speak with a financial advisor. While an attorney will write up the trust, they aren’t financial advisors equipped with knowing what would be appropriate for your trust. A financial advisor you work with understands your goals and can help you aim to accomplish those goals within the trust.

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