Alex Lyden, Chief Fiduciary Officer and Trust Counsel at Evercore Trust Company, explains why trusts can play a central role in a thoughtful estate plan. From tax planning and asset protection to greater control over distributions and the management of unique family assets, trusts can provide significant benefits and flexibility for individuals and families.
Key Highlights
- Tax and Estate Planning: Depending on individual circumstances, trusts may help reduce estate and income tax exposure, remove future appreciation from an estate, and enhance the tax efficiency of charitable giving.
- Control and Protection: Trusts allow individuals to establish how, when and for which purposes beneficiaries receive distributions. They can also help with planning for beneficiaries with special needs, provide certain protections from creditors, and allow assets properly transferred to the trust during life to avoid the formal probate process at death.
- Flexibility and Asset Management: Contrary to the common misconception that trusts are set in stone, a properly drafted trust may provide considerable flexibility for trustees and beneficiaries, subject to applicable law. Trusts can also offer an efficient way to manage special assets, such as a family-owned vacation property, that may be difficult to divide or could create conflict if owned jointly by family members.
