Is a Trust Right for You?

Article submitted by Ann Guice, the Peoples Bank.
For more information, she can be reached at 228-435-8208.

We Mississippi seniors have worked hard to accumulate our assets, many or few. Upon our death many of us want our children, relatives, and friends or charities to inherit our property. Can we be sure this will happen? Is a will sufficient to distribute our property to our heirs as we wish? It may be, or it may not be. What if conditions change - both in our lives and after our death-that would have made a difference in how we decided to distribute our estate? What if we want certain decisions to be made as our children or grandchildren grow? How can we make this happen?

The answer may be in a "Trust." A trust is a legal document that says how you want your estate to be managed. The Seniors Resource Guide interviewed Ann Guice, MBA, Trust Officer of the Peoples Bank on the Gulf Coast. We asked Ms. Guice to help our readers understand what a trust can do and why it's something we should consider, no matter how large or small our estate may be.

Q: Ms. Guice, what can a Trust do for a senior citizen?

A: A trust is for anyone who wants to take care of his or her family before and after death. Trusts are legal documents that say how you want things and money to be managed. Attorneys who help seniors draw a will can recommend a trust document to administer the estate.

Q: Are trust documents only for the wealthy, or would a senior of moderate means benefit from a trust?

A: No, trusts are not only for the wealthy. There is no legal minimum amount of assets required for a trust, but there may be a practical limit determined by the size of the estate.

Q: Three things you mentioned, "before death," "take care of their families" and "a will" just got my attention. First of all, is a will really necessary?

A: I recommend you consult your attorney to answer that question. A properly drawn will is absolutely necessary for successful, trouble-free administration of your estate. Also, some may think that Mississippi is a "community property" state like our neighbor, Louisiana. This is not correct. We have no forced heirship in Mississippi law. You can leave your property to anyone you wish, so a will is very important.

Q: When you said a trust is for anyone who wants to "take care of their family", does that mean leave money for them after death?

A: It means that and much more. Just leaving a sum of money to a daughter or son may not be in their best interest. How and when they receive the money, however, may determine how effective their inheritance is being used.

Q: Can you give our readers an example of how a trust works?

A: An attorney will draw a will for a client. Again, this is very important and separate from a trust. The client may want his or her estate distributed in a certain way to certain people at certain times. Here's where a trust document comes in. The attorney will create this trust document detailing these matters. For example, one granddaughter may receive a certain sum of money upon her 21st birthday. Or, the trust document may provide for college tuition for a grandson. The application of a trust document is limitless. One more thing, the trust document must be executed by a "trustee." This is a person or an institution like the Peoples Bank with the expertise to make financial decisions and use good, unbiased judgment to carryout the trust document directions.

Q: It sounds like the trustee takes care of the assets according to the trust document, carrying-out the wishes of the deceased. This could make life easier for family members, don't you think?

A: Definitely so. I think we've all heard of some families fighting and breaking apart over inheritances. With a trust, tough decisions are removed from heirs. They're not burdened with these matters and there's nothing to quarrel over. Also, family members may not have the expertise to manage assets; qualified trustees do. In today's financial world, there is no simplicity. Someone not experienced with managing large sums of money could have difficulty managing an inheritance.

Q: Based on your experiences, could you summarize two or three things that seniors should consider before it's too late?

A: The first thing I would recommend is to have a properly drawn will that will clearly state what you want to happen to your estate. You've spent a lifetime working and accumulating an estate. Now, spend a little time and money with an attorney who can make your money work for the next generation. Secondly, determine if a trust is right for you. If so, have your attorney write the trust document with enough flexibility for you and for the trustee who will make decisions after your death. An example would be like this: If the trust specifically says to pay a surviving spouse, the beneficiary, $1000 per month until his or her death, then that's what the trustee must do. If the surviving spouse has a prolonged illness or a serious accident where high medical bills are incurred, there is no flexibility for the trustee to do anything different. However, if the trust document gives the trustee discretion to meet unexpected or changing circumstances, the trustee can meet these timely needs of the beneficiary. Third, after the trust is in place be sure to have assets titled to the trust, not to you as an individual. For example, after you create a trust that includes your residence, you sell your home and buy another; you also acquire a new RV. Are these assets in or out of the trust? This is just one example of matters to consider. Your trustee will guide you making the right decisions and keeping things in order.