RBFCU Trust Services

Trust accounts can be used for many purposes, including to:

• Reduce estate taxes
• Support a beneficiary in need of special care
• Control your assets and how they are distributed
• Avoid the expense and delay of probating your will
• Preserve assets for your children until they are grown (in case you should die while they are still minors)
• Create a pool of investments that can be managed by professional money managers for your beneficiaries
• Set up a fund for your own support in the event of incapacity
• Shift part of your income tax burden to beneficiaries in lower tax brackets
• Provide benefits for charity

You can schedule an initial consultation with a financial advisor at no cost and no obligation to you.

The trustee of the trust is a fiduciary, someone who owes a special duty of loyalty to the beneficiaries. The trustee must act in the best interests of the beneficiaries at all times. For example, the trustee must preserve, protect and invest the trust assets for the benefit of the beneficiaries. The trustee must also keep complete and accurate records, exercise reasonable care and skill when managing the trust, prudently invest the trust assets, and avoid mixing trust assets with any other assets, especially his or her own. A trustee lacking specialized knowledge can hire professionals such as attorneys, accountants, brokers, and bankers if it is wise to do so. However, the trustee can’t merely delegate responsibilities to someone else.

Although many of the trustee’s duties are established by state law, others are defined by the trust document. If you are the trust grantor, you can help determine some of these duties when you set up the trust.

These two very important estate planning devices are quite different from each other but serve similar purposes.

A living will lets you manage your health care decisions in case you become incapacitated. It is a legal document that becomes effective if you become so ill or injured that you can’t make responsible health care decisions for yourself. It lets you approve or decline certain types of medical care in advance. A living trust lets you manage your property in case you become incapacitated. It is a revocable trust you create while you are living. You name yourself as trustee and someone else as a successor trustee who automatically steps in to continue managing the property for you if you become incapacitated.

A trustee is an institution or person who is the legal owner of the property held by the trust and who is responsible for using the trust property for the benefit of the trust beneficiaries according to the terms of the trust document. The trustee can be held personally liable if those duties are breached.

You may select one trustee or multiple trustees, depending on your needs. Who you name as trustee will depend on the type of trust you establish and your individual needs and goals.

Generally, you want the trustee to be capable of administering the trust according to the terms of the trust document. In addition to the willingness to serve as the trustee, the person or institution selected may need to have investment experience and good record-keeping abilities. You may also want a trustee who relates well with the beneficiaries and is sensitive and flexible regarding their changing needs.