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Types of Trusts

Is a trust for me?

Trusts will help you achieve personal, financial and legal objectives, such as saving on estate taxes, minimizing probate, avoiding a guardianship, providing asset management and assuring personal wishes are carried out after your death. For many individuals, these objectives can be summarized into one overall goal - to grow, protect and preserve assets for you and loved ones.

In many cases, wise planning will call for a trust company to act as the trustee for a trust established to achieve a personal financial goal. In other cases you may receive guidance on estate planning and the selection of an attorney to finalize the estate plan. Whatever your needs, the staff of MEMBERS Trust company will work with you to implement a plan to achieve your personal goals and manage the assets you have worked so hard to accumulate.

Living Trusts

A living trust is a trust you can set up during your life. Living trusts are an excellent way to avoid the cost and hassle of probate - the court process following a person's death -- because the property you transfer into the trust during your life passes directly to the trust beneficiaries after you die, without court involvement. The successor trustee -- the person you appoint to handle the trust after your death -- simply transfers ownership to the beneficiaries you named in the trust.

Testamentary Trusts

A testamentary trust is a trust created by a will, effective only upon death.

  • Set up under a will to be funded at death for one or more beneficiaries. This trust is important if you have minor children.
  • Flexible - you designate the terms including the use of funds.
  • Specific regarding who manages the trust assets. MEMBERS Trust Company can be named to serve in that capacity.

Other Trusts

An Insurance Trust can accomplish multiple financial needs including providing immediate cash for an estate, avoiding federal estate taxes and creating a certain asset or account to achieve a special purpose.

A Spendthrift Trust is a trust created for a beneficiary who lacks the capacity to manage the assets. The trustee keeps control of the trust income, distributing money to the beneficiary as needed, and sometimes paying third parties (creditors, for example) on the beneficiary's behalf, bypassing the beneficiary completely. Spendthrift trusts typically contain a provision prohibiting creditors from seizing the trust fund to satisfy the beneficiary's debts. MEMBERS Trust Company, if named trustee, would manage the assets after your death and distribute them according to the standards and wishes set up by the trust.

A Charitable Trust offers you the opportunity to leave your personal legacy by making a substantial gift to a charity. Charitable Trusts also achieve income and estate tax savings for the person who creates the trust.

A Marital Life Estate Trust or AB Trust is a trust that allows couples to reduce or avoid estate taxes. Each spouse puts his or her property in an AB trust. When the first spouse dies, his or her half of the property goes to the beneficiaries named in the trust -- commonly, the grown children of the couple -- with the crucial condition that the surviving spouse has the right to use the property for life and is entitled to any income it generates. When the surviving spouse dies, the property passes to the trust beneficiaries. It is not considered part of the second spouse's estate for estate tax purposes. Using this kind of trust keeps the second spouse's taxable estate half the size it would be if the property were left directly to the spouse.

 

Trusts offered through MEMBERS Trust. Trust products are not Federally insured, are not obligations of or guaranteed by Superior Trust Services or Superior Credit Union, and involve investment risks, including possible loss of principal.

 

 

Jan von der Embse
1381 N. Perry Street, Ottawa, OH 45875
419-879-4841
jan.vonderembse@lpl.com

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