Living in Retirement

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What a trust can do for you

April 10, 2013

You've planned carefully and worked steadily to accumulate your wealth. But what happens when you're no longer around or perhaps become unable to manage your finances? What can you do, for example, to make sure that your hard-earned money is protected and distributed among your family the way you want, that your tax situation is managed properly, and that your charitable goals are fulfilled?

Stay in charge

To help handle these and other complex concerns, you may want to include a trust as part of your overall estate plan.

With a trust, assets such as investments or real estate are held by a trustee whom you name to oversee and administer them on behalf of your beneficiaries. Trusts are an excellent way to manage and help safeguard your assets while you're alive and to conserve and control their distribution after your death. They have many advantages; you may want to establish one to accomplish any or all of the following:

  • Control and customize distribution. The most common reason for creating a trust is to ensure that your assets will be divided according to your wishes. There are trusts that let you explicitly define the "who," "how," and "when" associated with your money's distribution, including whether the arrangement is for lifelong management of your assets or to preserve them over several generations. And your instructions can be customized to suit you and your beneficiaries as well.
  • Minimize the administrative burden. You probably want to do everything you can to avoid potential hassles for your loved ones. Creating a trust and appointing a qualified trustee can insure that your assets are properly managed—which is especially beneficial if money is left to a child or other beneficiary who may be too inexperienced or unwilling to handle the responsibility.
  • Maintain privacy. As your estate is settled, you can keep your wealth and its distribution a private matter because most trusts are not subject to the public record (and the potentially expensive probate process) as a will would be.
  • Achieve charitable goals. Looking for a program that benefits you, your beneficiaries, and your charity, too? A charitable trust may provide a tax benefit to you while allowing you to contribute to your favorite charity and leave assets to your family according to a predetermined schedule.
  • Manage taxes. A trust can help with your current tax situation and potentially reduce the amount paid for estate taxes, allowing you to leave more money for your heirs.

How to get started

If you're debating whether your personal situation could benefit from a trust, give us a call. Our specialists will provide you with initial guidance to help you determine whether the decision is right for you. And if it is, we can help make sure you have the type of trust that meets your needs.

What else we can do

Once you have a trust in place, Vanguard National Trust Company, a federally-chartered trust company, can provide trust services, including trust administration and investment management.

With our trust services, you'll continue to receive the same low-cost, client-first focus you've come to expect from Vanguard. Our salaried trust professionals receive no commissions, so the advice and services they offer are driven solely by your interests and those of your beneficiaries. We'll step in to partner with you and assume trustee responsibilities when and for however long you need us—all at a cost that's less than what many investors pay just to hold mutual funds at other companies.

Read more about how we can serve your trust.

This is the first in a series of articles to help you understand trusts. Read additional articles from our series:


Notes:

  • Vanguard National Trust Company is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
  • Investments are subject to risk.
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