Financial Advisor Robert Russell Discusses Four Things You Should Know About Trusts

Financial Advisor Robert Russell offers information about trusts – helping others understand how they can better direct their estate and protect their assets.

Dayton, OH – November 28, 2012 – Robert Russell, President of Russell & Company, recently explained four important things everyone should know about trusts.  “There are four basic things that are essential in figuring out if a trust is right for you, or if the trust you already have is doing its job,” remarked Robert Russell.

Robert continued to explain four important things to know about trusts:

  • There are many types of trusts, but the most basic is a revocable trust, sometimes referred to as a living trust.  A revocable trust is advisable when you have after-tax accounts (not your IRA’s, 401K’s, 403B’s or other pre-tax retirement plans), and you do not want them to go through probate.  A revocable trust directs your estate privately, so there is neither a public announcement nor a judge involved in making sure your estate is settled without debt.  A revocable trust can also distribute money over time, if your goal is to spread distribution to your family for many years after you pass away.  Many times we see trusts distributed this way when the grandchildren are young.  So as you can see, the benefits of using a revocable trust can be great.  Revocable trust owners need to be aware that if they become disabled their successor trustee must follow their instructions.  In essence, the trust can be revoked or changed by you, but your child who takes over in the event you are disabled does not have that same flexibility. What to watch out for: The biggest possible misstep with a revocable trust comes when you, as the grantor of the trust, become disabled and your adult child takes over when there is language specific to healthcare and your direction to pay for that care from your trust.  In this situation, any protection of your assets from long-term care that your child could have used to protect your hard-earned dollars from a medical spend-down is lost.
  • Irrevocable trusts can have many strings attached.  You need to know what those are before you enter into an agreement that cannot be changed without court involvement.  Irrevocable trusts are great for holding life insurance outside of your taxable estate, if you have no intention of getting to your cash value in the future.  Some irrevocable trust planning makes sense when certain types of real estate are involved.  Experienced Elder Law Attorneys know how to create hybrid trusts that offer some of the desirable benefits of an irrevocable trust while offering more flexibility and less problematic strings attached.
  • You cannot wrap a trust around your IRA.  Your IRA is a pre-tax asset, and it is directed at your death by beneficiary designations.  It is critical that you keep a copy of your beneficiary designation form with your legal documents.  In the event you die and the custodian cannot find your IRA beneficiary designation, your IRA is paid to your estate and ends up becoming a probate asset that goes through the full process of probate. This cost and delay of probate can easily be avoided by maintaining a copy of your IRA beneficiary designation form.
  • In many situations trusts make sense, but if the trusts are not funded, the benefits are lost.  All too often a person seeks out the least expensive trust option desiring value for their money but end up getting absolutely nothing for their money.  Once you have a trust, you must link it to the accounts you want governed by the terms and conditions of your trust (could be revocable or irrevocable).  For instance, if you have a CD at Happy People’s Bank for $100,000, and you want it to be distributed to your family through your revocable trust but the statement comes – and it is your name on the account registration – then none of the benefits of the trust are realized.  The CD will go through probate and the instructions you left behind after your death will be ignored.  Funding a trust is not hard, but you need to take the time to make sure all the institutions that hold your money have a copy of the trust that reflects the proper ownership of your assets to the trust and not to you, in your name individually, or jointly, if married.

Robert also stressed the importance of getting the opinion of an advisor who can confirm that the assets you own are in fact properly wired to your trust.  “Take some time to discuss your trust planning options, and when you decide they are right for you make every effort to ensure they are properly attached to your assets so they ultimately go to those you love,” said Mr. Russell.

For more information on this topic, or to learn how Robert Russell can help, please visit www.theirapros.com.

About Robert Russell:

In only nine short years, Robert Russell has amassed an impressive list of clients and credentials. He often contributes to CNBC, Fox Business, The Wall Street Journal, US News and World Report, and he also co-hosts “Retirement Rescue Radio” on 1290 AM and 95.7 FM WHIO.

Russell is an Investment Advisor Representative (IAR), 2nd generation wealth advisor and member of the Ed Slott Master Elite IRA Advisor Group. He was acknowledged as one of the top “40 Professionals under 40” by the Dayton Business Journal and was honored as a Five Star Wealth Manager – Best in Client Satisfaction by Cincinnati magazine.

Russell is also nearing completion of a book titled, “Retirement Held Hostage,” in which he outlines several of the strategies that have brought him to the top of his field.

Securities offered through Kalos Capital, Inc.,  Member FINRA, SIPC. Investment Advisory Services offered through Kalos Management, Inc., 3780 Mansell Rd. Suite 150, Alpharetta, GA  30022,  (678) 356-1100.  Russell & Company is not an affiliate or subsidiary of Kalos Capital, Inc. or Kalos Management, Inc.

Neither Kalos Capital, Inc. nor Kalos Management, Inc make any endorsements or opinions about the coursework required to become a member of Ed Slott’s Master Elite IRA Advisor Group and as such cannot guarantee the accuracy or completeness within.

A policy change may incur fees and costs, and may also require a medical examination.

This scenario is for illustrative purposes only and does not represent and actual client.  Results may vary.