Using a Corporate Fiduciary in your Estate Plan

Choosing the right people to carry out an estate plan is just as important as designing the plan correctly. We spend a considerable amount of time with our clients discussing who should fill financial roles in their estate plans. Those roles include estate administrator, durable power of attorney, and trustee of an ongoing trust for a minor or special needs beneficiary.  

When it comes to financial roles, our clients must choose either a corporate fiduciary, such as a bank or trust company, or an individual. This post discusses situations in which a corporate fiduciary may be the right choice for our clients.

Giving Unique Assets

We often have clients who would like a child or other beneficiary to receive a specific asset.

To understand this situation, consider our friends Jack and Jill Smith. Jack and Jill have four children, Adam, Betsy, Carl, and David. Their total assets are $1M, and include a family cabin property worth $400K. Adam and his family use the cabin the most, and Jack and Jill would like to see him end up with it as part of their plan. What are their options?

Creating a Personal Financial

Our firm handles estate planning, not financial planning. However, to effectively help our clients, we often need them to create a good personal financial. Sometimes this is for an estate planning client working on a distribution scheme that requires good numbers or who needs a good list of assets to fund a revocable trust. Sometimes it is for an adult child who is trying to get their parent’s finances in order or trying to decide how to pay for long term care. Sometimes clients who are business owners need a financial to give to the bank, perhaps along with supporting documents. This article explains how we recommend our clients go about this, and includes an Excel template that can be useful in doing this.

Trust Tax 101

Trusts are considered a kind of business for tax purposes. They have their own tax ID and will receive their own 1099s from whatever assets they own.

In most businesses, the owners choose how the business’s income will be taxed when the business is set up. Most small businesses are set up as “flow-through” entities, meaning that if the business earns income, the owners pay the taxes in proportion to their ownership. The business files a tax return, but does not pay any taxes. Most large corporations are taxed at the corporate level, meaning the company pays all taxes on its income. The shareholders only pay tax to the extent they receive a dividend from the company.

In trusts,

Preparing for Your Estate Planning Consultation

Every estate plan we do starts with a free consultation. We get a lot done during those meetings, but they (honestly) don’t require much preparation. Here’s what to know about the agenda and how to prepare.

Background Information

The first agenda item is always to cover the basics of what an estate plan does, talk about how the process works, and answer general questions.

Next is a chance to get to know a little bit about you.