Why choose personal trust services from Principal Trust?
|Wide Variety of Trust Types*||Competitive Advantage||Delaware Advantages|
|Asset Protection||No minimum trust size requirements||Ability to split administrative and investment responsibilities|
|Special Needs||Pricing||Depth of asset protection|
|AB (also known as Marital, Family trusts)||Priority service||Duration of Trust (Perpetuity)|
|Charitable Lead or Remainder Trusts||Sales tools and support||Confidentiality|
|Irrevocable Life Insurance Trust (ILIT)||Delaware Trust situs||Potentially reduce tax liability|
* For a complete listing please call (800) 332-4015 or see our Services section below.
Advantages of a Delaware Trust
Unlike many states, a trust sitused in Delaware allows for the separation of investment powers and the administrative powers of the trustee. This separation permits a Delaware trustee to be solely responsible for administration of the trust and another adviser (called an Investment Adviser) to be responsible for investment decisions historically available only to trustees.
This gives your client, the Grantor or beneficiary of a trust, the ability to use the fiduciary expertise of a corporate trustee while maintaining the familiarity of working with you as their investment advisor.
A client does not need to be a resident of the state to take advantage of creating or using a Delaware trust. In addition to above, clients can benefit from:
- Delaware has eliminated the Rule Against Perpetuities, which means the trust term has no limit.
- Delaware trusts preserve confidentiality, since Delaware courts do not supervise trust administration.
- Delaware does not impose state taxes upon trusts where one or more trust beneficiaries live outside of Delaware.
If your client is the Grantor or a beneficiary of a personal trust, they may be able to have you provide the investment management services for the assets held under the trust and to be administered under Delaware law if they are not satisfied with the following:
- Quality of current trustee; responsiveness and/or expertise.
- Investment performance
- Taxation of the trust's income and capital gains in the current situs of the trust (the state law under which the trust is governed as stated in the trust document would need to be reviewed to see if this is a benefit in Delaware)
- Escalating fees and costs for such matters as court accountings
- A state not friendly to:
- Segregating administrative and investment responsibilities
- Coordinating the management of different trusts in different locations
From providing informational materials for you to distribute to your clients, to effectively administering the trust, Principal Trust will support you and your client every step of the way.
Your client will be assigned a dedicated Trust Officer who will:
- Review trust document prior to executing a new, or moving an existing, trust
- Administer protection for assets, ensuring that they are administered according to the provisions of the trust
- Conduct unbiased interpretation of trust provisions towards beneficiaries, including managing the relationship between income and remainder beneficiaries
- Issue distributions as directed by the trust document, including decisions of discretionary requests
- Oversee proceedings against the trust
- Prepare reports - including activity statements, preparation and submission of necessary tax filings, and Crummey notices
- Execute on the provisions of the trust upon termination
Clients who can benefit from a personal trust may have:
- A desire to manage assets at a more complex level than a will provides
- Heirs who are unequipped to maximize benefits from a potential (or recent) inheritance
- An income from a current trust
- A need to provide continued care provisions for a special needs child
- A charitable purpose for their wealth or potential wealth accumulation
- An interest in inheritance equalization or transfer of a family business
- An interest in creating a family wealth legacy or averting taxes at death
- A need for asset preservation techniques
- A desire to arrange their financial affairs
- A recent or upcoming life event
Some of the most common types of personal trusts we service are:
- Asset Protection (TR910) – A type of trust used to protect assets from creditors. Asset protection trusts may be particularly useful for business owners, and people working in highly litigious fields (doctors, professional athletes, etc.)
- Special Needs (TR875) - A trust which can be used to provide support for a disabled person while maintaining their eligibility for governmental assistance.
- A-B (TR853) – A type of trust plan designed to eliminate or reduce the federal estate tax liability of a married couple over the deaths of both spouses using their lifetime exemptions. Particularly useful trust if client has children from a first marriage.
In an A-B Trust plan:
"A" Trusts may also be known as: "B" Trusts may also be known as:
- Marital Trust
- By-Pass Trusts
- Credit Shelter Trusts
- Family Trust
- Qualified Terminable Interest Property Trusts ("QTIP Trust")
- ILIT (TR424) – A life insurance policy purchased and owned by a trust which retains the proceeds of the insurance policy in the trust and out of a client's estate for purposes of probate and federal estate taxes.
- Crummey Trusts
- Charitable Lead (TR895) or Charitable Remainder Giving (TR896) - Charitable trusts (see list below) allow clients to remove assets from their estate, obtain an income tax deduction, and in some cases secure an income stream that can be used to purchase life insurance for the benefit of heirs.
There are many types of Charitable Trusts, including:
- Charitable Split-Interest Trusts
- Charitable Lead Trusts
- Charitable Remainder Trusts
- Charitable Remainder Annuity Trust ("CRAT")
- Charitable Remainder Unitrusts ("CRUT")
- Charitable Remainder Unitrusts with Net Income Make-up Provisions ("NIMCRUT")
In addition to the more common types listed above, Principal Trust services a wide range of trust types, including but not limited to:
- Dynasty Trusts
- Generation Skipping Trusts
- Grantor Trusts
- Grantor Retained Income Trusts ("GRIT")
- Qualified Personal Residence Trusts ("QPRT")
- Revocable Trusts
- Spendthrift Trusts
- Testamentary Trusts
Consumer materials for Personal Trusts:
Personal Trust Client Guide (TR934)
Educate clients about personal trust solutions.
Estate Planning – It's more than just a will (TR994)
Mail or leave this with clients to introduce them to the need for and benefits of a personal trust solution.
Agent for Trustee (TR1023)
Help your clients save time and maintain the validity of a trust by hiring an Agent for Trustee.
Personal Trust Case Studies
Learn how other advisors are using personal trusts to close business.
Personal Trust Advisor Guide (TR933)
Provides an overview of how to identify prospects for a personal trust solution and actionable ideas to expand your estate planning business.
Approach Letter (TR909)
Use this letter to introduce yourself and generate interest in trust services.
Personal Trust Questionnaire (TR924)
This one-page flyer focuses clients to help them determine if a personal trust should be part of their estate plan.
COMPANION PIECE: Personal Trust Questionnaire – Clarifying Questions (TR927)
Use in conjunction with TR924 to deepen the discussion around a client's needs for a personal trust solution.
If you have a personal trust opportunity or question, please contact our Personal Trust team at (800) 332-4015.