noun: Trust
Byrd Settlements makes a larger contribution to the settlement process and clients’ lives than only structured settlements. Over the last 4 years, we have developed relationships and negotiated fees with both Trustees and Financial Advisers who provide exceptional service; and we made sure they will offer a better price for our clients.
We have also established working relationships with trust attorneys who are both responsive and expert, as well as reasonably priced.
In cases where a trust may be needed, we work as Trust Protector with any trustee and/or financial adviser for a nominal fee, allowing clients the flexibility to remove and replace a trustee or financial adviser over the life of the trust, without the hassle of petitioning the court. As such, we resolve issues efficiently and prevent old cases and unhappy clients from requiring attorney attention.
We gladly provide many additional services to attorneys and clients at no additional cost. Our relationships usually save clients around 25% or more in annual fees, which would amount to $5,500 or more, plus interest, per million dollars, per year.
We have no minimums and can coordinate the entirety of a client’s financial settlement management process so attorneys have one point of contact as opposed to a structure broker, a trustee and a trust attorney.
Since we have relationships with multiple service providers, we can recommend at least three options of both trustee and financial adviser in every case, meaning neither attorneys nor their clients need to have six meetings to choose the best option. We can have one meeting and choose from six or more expert firms, who offer lower fees for our clients. We can do all that plus incorporate or eliminate structured settlements all in one meeting.
Individual, Corporate or Boutique? Local trust law or Delaware? We provide more flexibility in choice at a remarkable standard of savings to our clients and we are not limited by artificial corporate minimums.
We believe that flexibility and expert options result in happy clients; and we provide that up front, while providing clients the ability to painlessly adapt in the future all while keeping attorney files closed.
Trusts have evolved from the simple land trusts used to protect, manage and lawfully return the land for soldiers abroad during the crusades in the 12th century to basic testamentary instruments in ancient Rome and eventually into the many iterations of living trusts which exist today.
Many people set up trusts in order to manage their assets while they’re living, and to transfer those assets at the time of their death. Trusts allow you to transfer ownership of property or money to a person who is designated to manage and distribute the assets according to your instructions, for the benefit of another.
Some trusts may provide significant tax advantages, while others are for the benefit of persons unable to handle their affairs. Other trusts provide income for a spouse or beneficiary who is not included among your heirs.
This type of trust is set up while the grantor is still living, and allows the grantor to keep full control of the assets. The grantor also has the ability to revoke or amend the terms of the trust, or change the appointed trustee, while living. A revocable living trust becomes irrevocable when the grantor dies or becomes incapacitated. Many people consider a revocable living trust to be a substitute for a will, because the trust also can instruct how assets should be distributed. It’s extremely difficult, however, for a trust to include everything covered in a will—it can be done but it takes a great deal of planning.
If you have a revocable living trust, you should still have a will. A revocable living trust can reduce the cost of settling an estate, and also the amount of time it takes. Funds held in a trust can be distributed much sooner than assets in an estate. A trust can also protect privacy because assets included in the trust don’t have to pass through probate, which is a court proceeding in which a person’s estate is settled. All creditors are paid off during probate, and heirs receive their shares of the estate after everything is settled. Waiting isn’t usually necessary with a trust—distribution can occur when the trustee feels comfortable making distribution. And, while wills can be contested, trusts very rarely are contested.
A revocable trust can be funded or unfunded at death. If unfunded, the document is held (like your will) in a safe place, and then used when assets are paid to it. If the trust is funded prior to your death, you re-register assets from your name into the name of the trust. Shares of stock for example, are re-registered from belonging to Daniel Smith, to belonging to the Daniel Smith Trust, with Daniel Smith and Susan Jones as trustees. If you fund a trust prior to death, all assets held in the trust bypass probate.
Assets that are in your control at the time of death generally are subject to federal estate taxes. Those not in your control, such as in an irrevocable trust, are not subject to federal tax because they’re not considered as part of your property.
Usually established and used by people with a great deal of assets, irrevocable trusts, as the name implies, can’t be amended or destroyed. Once the trust is set up, it remains in place, giving the grantor no opportunity to change his mind.
Irrevocable trusts are used primarily to reduce estate taxes, though they are also used to protect property for minor heirs. Irrevocable trusts also can be set up to provide income for a beneficiary, and then to divert the income to another place when the beneficiary dies.
Property that is turned over to an irrevocable trust, if set up properly, is no longer considered part of the estate of the person who turned it over. It still may be subject to other taxes, such as gift or capital gains, but those traditionally have been far lower than estate taxes. As with a revocable living trust, assets included in an irrevocable trust do not have to pass through probate.
If you want to leave money or property to a loved one with a disability, you must plan carefully. Otherwise, you could jeopardize your loved one’s ability to receive Supplemental Security Income (SSI) and Medicaid benefits. By setting up a “special needs trust” in your will, you can avoid some of these problems.
Owning a house, a car, furnishings, and normal personal effects does not affect eligibility for SSI or Medicaid. But other assets, including cash in the bank, will disqualify your loved one from benefits. For example, if you leave your loved one $10,000 in cash, that gift would disqualify your loved one from receiving SSI or Medicaid.
A way around losing eligibility for SSI or Medicaid is to create what’s called a special needs or supplemental needs trust. Then, instead of leaving property directly to your loved one, you leave it to the special needs trust.
You also choose someone to serve as trustee, who will have complete discretion over the trust property and will be in charge of spending money on your loved one’s behalf. Because your loved one will have no control over the money, SSI and Medicaid administrators will ignore the trust property for program eligibility purposes. The trust ends when it is no longer needed — commonly, at the beneficiary’s death or when the trust funds have all been spent.
The trustee cannot give money directly to your loved one — that could interfere with eligibility for SSI and Medicaid. But the trustee can spend trust assets to buy a wide variety of goods and services for your loved one. Special needs trust funds are commonly used to pay for personal care attendants, vacations, home furnishings, out-of-pocket medical and dental expenses, education, recreation, vehicles, and physical rehabilitation.
If you can’t come up with a good candidate to serve as a trustee or are leaving a relatively modest sum and don’t want to set up a separate special needs trust, consider a “pooled trust.” These are special needs trusts run by nonprofit organizations that pool and invest funds from many families. Each trust beneficiary has a separate account, and the trustee chosen by the nonprofit spends money on behalf of each beneficiary. Pooled trusts (also called community trusts) are available in many areas of the country.
Partners
Associates
