Trusts related to wealth transfers can also offer tax benefits. By utilizing an irrevocable trust, a client could transfer assets out of his/her name and into the trust, so the income could be picked up by children or grandchildren at a lower tax rate. This strategy is particularly relevant for clients who have more than they believe they need, yet still want future growth potential for their estates and a potential reduction of income taxes on trust earnings. An irrevocable trust can also potentially provide protection against creditors and predators.

Establishing ‘Trust’ With Clients

Legacy and multi-generational wealth planning can be difficult areas to tackle. Trusts can serve as an organizational tool and provide your clients security, privacy and the ability to maintain and pass wealth onto future generations.

By implementing a trust, clients have the opportunity to select an impartial, objective third party who can help manage any disagreements and settle things in an amicable way. When selecting a corporate trustee, like a private trust company, consistency, objectivity, value and expertise should be considered.

By tapping into the many benefits of trusts, advisors can offer a range of solutions for their clients’ needs, particularly during periods of transition. The process underscores trust within the relationship and may provide clients with assurance that their financial future is well planned.

Finding The Right Expertise

It can undoubtedly be overwhelming to think about utilizing trusts in your practice if they are outside of your expertise. Advisors who don’t specialize in this area can look to outsource trust services to a third party in order to maintain the benefits of offering trust services to clients, without being bogged down by complex estate law and related practices.

The next byline in this series will explore how trusts can help you grow your business and factors to consider when outsourcing trust services.

Dean Mioli is director of investment planning, Independent Advisor Solutions by SEI.

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