As a continuation of the discussion about estate planning, this is an overview of trusts, which is another option available.
In certain cases, trusts can offer a level of protection and control that may not be available through a will. Make no mistake though, a trust doesn’t necessary replace a will – it is another tool you can use to make sure that your family and your assets are looked after properly.
Richard Cayne of Meyer International wants you to know what your options are when contemplating how to divvy up your assets.
What is a trust?
Whereas a will has instructions on how an entire estate is to be distributed, a trust usually is set up to handle specific assets or to take care of distributions for specific beneficiaries. For example, the payout from a life insurance policy or assets left for a child can be controlled through a trust.
A trust, well, entrusts a third party, the trustee, with the responsibility for the assets until certain conditions are met. Monies in a charitable trust can be disbursed by a trustee until it’s fully paid out; a trustee can handle assets left to a minor until he or she reaches a certain age.
Richard offers: “A trustee can be either a person or an institution. You have to consider how formal or complicated you want or need the trust to be when deciding who the trustee will be.”
Types of trusts
As with any financial tool, fortunately or unfortunately, there are a number of types of trusts to choose from.
You can choose a living, or inter vivos, trust, which is set up while you are still alive. This gives you the additional option of creating it as a revocable trust, meaning that you can alter by yourself it as long as you live. An irrevocable trust means you can’t change it without the beneficiary’s signature. Or you can instruct for a testamentary trust to be set up after you pass away.
“It isn’t unusual to use both a will and trusts to distribute your assets,” says Richard. “You just need to be aware of the various tax and legal implications when making your decision.”
The main reasons to use trusts along with a will is usually to avoid taxes or to simplify the probate process. The problem is, each jurisdiction is different when it comes to estate or inheritance taxes as well as how a will is executed, so if nothing else, you need to get the most up to date information on the laws and regulations that might influence your planning.
To continue this conversation, contact Richard Cayne at Meyer International.
About Richard Cayne
Richard Cayne is originally from Montreal, Canada, and currently resides in Bangkok Thailand with his wife Akiko Cayne and their two young children. He runs the Meyer Group of Companies (www.meyerjapan.com). Previously, he resided in Tokyo, Japan, for over 15 years, advising high-net worth Japanese families.
Richard has over 19 years of experience creating innovative international tax and wealth management solutions. He is also currently the CEO of Asia Wealth Group Holdings Limited (www.asiawealthgroup.com), an ISDX (ICAP Securities & Derivatives Exchange, a London-based stock exchange) listed Financial Holdings Company.”