Agawam Trust and Management
Trusts 101
Trusts are created to help you protect and manage your assets: during your lifetime, in the event of your incapacity, and after your death.
There are many types of trusts which can serve a variety of purposes and which can be tailored to fulfill your specific objectives.
All trusts are legal acts by which you transfer ownership of property or assets to a trustee in order to achieve specific objectives. The trustee then has the legal duty to follow the
terms written in the trust document.
The trustee, as a fiduciary, must act according to the donor's intentions in the sole interest of the beneficiaries named in the trust.
Who Needs A Trust?
Anyone who wishes to protect their personal and financial interests during their life, in the event of their incapacity, or after their death should consider a trust.
Trusts have traditionally been used by high net worth individuals and families who wish to protect and control assets and property. However, trusts can be very useful to those with more moderate assets and have, therefore become commonly used.
How Are Trusts Beneficial?
Trusts provide control of assets on behalf of the donor, and ensure that assets will be used for donor-specified purposes.
Trusts provide fiduciary oversight and management of the trust property through prudent investment plans, proper safekeeping and accounting of assets, and active administration.
Trusts maintain continuity of your intentions and ensure a smooth transition of your financial affairs in the event of absence, incapacity or death.
Trusts avoid probate and help to maintain your family's privacy.
Trusts can substitute for a durable power of attorney, a will and/or a guardianship.
Trusts protect assets from beneficiary control.
Trusts can protect assets from creditors.
How Do Trusts Work?
Trusts allow for control of assets by you, someone you designate or jointly with another.
Trusts protect the interests and intent of the trust donor.
Property rights are divided between the power to manage the property (the trustees) and the right to enjoy its fruits (the beneficiaries).
Trusts define the rights of the beneficiaries: the right to the income generated versus the right to the principal assets themselves.
Trusts balance the interests of present beneficiaries with those of beneficiaries in the future.
How Are Trusts Used?
Trusts ensure that your assets will be managed in the future according to your wishes, facilitating distribution of assets at the appropriate time. They can be used for equitable splitting of income or assets within families, or for smooth succession of family-owned businesses.
Trusts provide flexibility to tailor the management of your assets to meet your changing needs and goals. For example, trusts are useful for managing financial affairs if you are away for extended periods or are otherwise unable to manage them yourself.
Trusts are used for the successful disposition of assets.
Trusts protect and preserve assets. They can protect assets against creditors and in the event of divorce.
Trusts maintain your privacy by avoiding the guardianship process should you become incapacitated, and they avoid the public nature of probate at your death.
Trusts can provide significant tax advantages and can be used to minimize estate taxes.
