Resources for Individuals/Families

Trusts can play an important role in your wealth management plans. Your trusted advisor can tap into a variety of accounts and services through National Advisors Trust that help you as your needs change over time.


Trust Basics

Choosing a Trustee

Your Estate and Your Family

What’s Age Got to Do with it?


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What is a Trust?

A trust is an arrangement in which one party (trustee) manages and is responsible for assets to be used for the benefit of another party (beneficiary). It is a contract that governs how assets are to be managed and sets the conditions that determine when cash or assets may be distributed from the trust. The person who receives cash or assets from a trust is known as the beneficiary.

Role of the Beneficiary, Trustee and Investment Advisor

The Beneficiary

A beneficiary should schedule regular meetings with their trusted Investment Advisor so that both are aware of any changes in the beneficiary’s circumstances. Some key points for the beneficiary to discuss with their investment advisor are:

  • The income needs of the beneficiary.
  • The investment considerations which affect the trust and beneficiary.
  • The overall objectives of the trust.
  • Ways that the relationship with National Advisors Trust can work to the benefit of everyone.

The Trustee

National Advisors Trust’s goal is to perform the administrative duties of a fiduciary in a timely, professional and empathetic manner. National Advisors Trust will have a working knowledge of all administrative matters pertaining to the trust including statements, tax reporting, distribution, administrative provisions and the overall management of your trust.

Your Trusted Investment Advisor

The Trust Agreement, or other documents related to the Trust Agreement, direct that your trusted Investment Advisor manage the trust assets. National Advisors Trust has only administrative and custodial responsibilities, and will follow the Investment Advisor’s direction regarding asset retention, sale of trust assets, and the purchase of trust assets. Regularly scheduled meetings with your Investment Advisor should include discussions regarding the following:

  • Current investment positions of the trust.
  • Discussion of any recommendations for changes to the investment portfolio.
  • Existing long-term investment objectives of the trust.

Revocable Trust (Living Trust)

A Revocable Trust is so named because you can revoke (i.e., change or cancel) it at any time. It is also called a Living Trust because it allows you to enjoy the benefits of a trust while you are still living. A Revocable Trust provides flexibility. It allows you to keep control over your assets while you are alive and maximizes the amount of your property that will benefit your family (or other beneficiaries) after your death. Because assets properly transferred to your Living Trust during life will, upon your death, avoid the costs, expenses and delays involved with the probate process, a Living Trust can result in more of your assets being available for your beneficiaries sooner, at a significantly lesser cost. You may change the terms of the trust or even cancel it, as long as the trust agreement allows you to do so.

Charitable Remainder Trust

A Charitable Remainder Trust is a special type of Irrevocable Trust that may allow you to receive income tax deductions now, get income from the trust for life or for a number of years, and give the balance to a charity on your death. This type of trust is used to benefit charities while providing income, gift and estate tax savings.

Charitable Lead Trust

A Charitable Lead Trust is an Irrevocable Trust for a fixed term of years or a life. During the term of the trust, a charity is the beneficiary Upon termination of the trust, the remainder or principal is given to non-charitable beneficiaries, such as members of your family. This type of trust is used to benefit charities and also may provide income, gift and estate tax benefits.

Charitable Trust or Private Foundation

This Irrevocable Trust benefits one or more charitable organizations. By establishing a Charitable Trust or Private Foundation, an individual may minimize income, gift and estate taxes.

Irrevocable Trust

An Irrevocable Trust is an inflexible, fixed trust. You cannot change or cancel it once it has been signed. Despite this inflexibility, an Irrevocable Trust may be the right choice for many people because it can be used to make gifts to family members in order to help reduce taxes due on an estate at death.

Irrevocable Life Insurance Trust (ILIT)

Also known as the Crummey Trust

An ILIT is an Irrevocable Trust that owns one or more life insurance policies. If this type of trust owns insurance policies on your life, the proceeds payable on your death generally should not be included in your estate for estate tax purposes. This type of trust is commonly used by business owners to provide liquid funds necessary to pay estate taxes.

Agent for Trustee

Agent for Trustee is an omnibus custody service, which provides administrative support and servicing for Trustees. This type of service is especially helpful for you or your clients who may be serving as trustee for a spouse or family member’s assets. The acting Trustee retains all fiduciary responsibility, but appoints National Advisors Trust as his or her agent with regard to certain non-discretionary duties listed below. This arrangement provides valuable and efficient trust management to assist in the Trustee’s fiduciary responsibilities. National Advisors Trust’s Agent for Trustee service provides asset custody, principal and income cash accounting, trust-style statements, and trust officer consultation and support. In addition, the features of National Advisors Trust’s AdvisorDesk platform are available for use by the Advisor. The Trustee retains access to all account detail and operations through a secure password protected website. Account information can also be accessed by the trust beneficiaries if desired. Client accounts remain fully confidential, supporting all types of assets.

Special Needs Trust

Special needs trusts provide for continuing conservation and enhancement of the assets transferred to the Trust to supplement, not supplant, other benefits for which the beneficiary might be eligible as a result of the beneficiary’s disability, whether through public or private, profit or non-profit corporations or agencies. Trusts can be Self-Settled which are generally funded from a personal injury lawsuit and have a payback provision for benefits paid by a public agency at the death of the disabled person, or may be Third Party which is simply an intervivos or testamentary trust created by a family member with their own funds with the intention of benefiting a disabled person without disqualifying the disabled person for public benefits.

Marital Trust

A Marital Trust typically would be created on your death under the terms of your Living Trust. The trust is designed to benefit the surviving spouse and minimize estate taxes. To achieve the tax benefits, the income from the trust must be paid to the surviving spouse after your death. The surviving spouse may have the right to withdraw part or all of the property, and the trustee may be given the discretion to distribute trust principal to the surviving spouse for certain purposes (e.g., health, education, maintenance and support). The surviving spouse would have the right to designate how and to whom the property in the Marital Trust would be distributed upon his or her death.

Qualified Terminable Interest Property (QTIP)

A QTIP Trust typically would be created on your death under the terms of your Living Trust. This trust is designed to benefit a surviving spouse and minimize estate taxes and possibly Generation-Skipping Transfer Taxes. To achieve the tax benefits, the surviving spouse must receive the income from the trust. In addition, the trustee may be given discretion to distribute principal to the surviving spouse for certain purposes (e.g., health, education, maintenance and support). The major difference between the QTIP Trust and the Marital Trust described in No. 3 is that the grantor — not the surviving spouse — would determine how and to whom the trust property is to be distributed on the surviving spouse’s death. For this reason, QTIP Trusts are often used in second marriage situations.

Bypass Trust


This type of trust would typically be established upon your death under the terms of your Living Trust. It is designed to take advantage of the amount that each of us can give away (during life or at death) without incurring gift or estate taxes. If properly structured, the trust would not be subject to estate taxes in your estate or in the estate of your surviving spouse. Thus, the trust property can pass to your children or other beneficiaries free of estate taxes. The trust usually is structured so the surviving spouse can receive income and principal from the trust. In 2004, the amount that can be given without incurring gift or estate taxes is $1.5 million and is scheduled to increase through 2009

Generation-Skipping Trust

A Generation-Skipping Trust has as its remainder beneficiaries persons who belong to a generation that is at least two generations after yours. For example, a trust that would benefit your child during the child’s life and provide that, upon the child’s death, the assets are to be distributed free of trust to your grandchild is a Generation-Skipping Trust. Because the child does not receive the trust assets free of the trust, the child’s generation has been skipped.

Dynasty Trust

A Dynasty Trust is designed to remain in existence and benefit multiple generations of a family. In some states, the trust must terminate at some point. In other states, such as South Dakota, the trust may remain in existence forever. A Dynasty Trust is a great way to preserve assets for future generations.

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