Trusts & Agencies
Irrevocable & Revocable Trusts
Trusts are a very flexible method for managing one’s property for specified goals and objectives. There is any number of possible reasons to create a trust and fund it. A common use is to place assets in the ownership of a Trustee to provide for professional management of those assets for someone who is not capable of doing so. This type of a trust can be used to provide for minor children, people with disabilities, or to benefit an organization with annual gifts over time. The trusts can be made to be either revocable (changed at any time) or irrevocable (cannot be changed except in very limited circumstances). Trusts can also be used to automatically transfer one’s assets on death and avoid probating a Will. Because a “Trust” can be in place for a very long time, it gives a person the ability to “control” what their assets are used for long after they pass away.
A Spendthrift Trust is a special kind of trust that a donor can set up for the benefit of a beneficiary who is not the donor.For example, a parent can set up a Spendthrift Trust for their child. A person cannot set up a Spendthrift Trust for themselves. The key element of this trust is that the person who is funding the trust is different from the person who will benefit from the trust. The reason this is important is that the assets in a Spendthrift Trust have significant protections against creditors of the beneficiary even in cases of divorce and bankruptcy. This protection is allowed because the assets in the trust were never the property of the beneficiary. The assets were the property of the donor and the donor is entitled to establish the terms and conditions of the trust they are funding. A Spendthrift Trust should be considered as a possible significant source of financial security fora child, grandchild, or other beneficiary a grantor wants to provide with such a “safety net.”
A Charitable Trust is an irrevocable trust, that can be set up as perpetual or not, which is established for charitable purposes. This can include a specific organization or a specific church for which you would want to leave funding, generally one that meets the requirements of a "charitable organization," depending on jurisdiction. It provides for charitable giving AND generates income either for you or the charity. As your trustee, SCB Trust Services invests the assets which can grow tax-free.
An Agency Account is one in which a customer will transfer assets for us to manage; however, they keep the ownership of their property in their own name. In this instance, they would name our trust department as their agent for managing the assets. The customer will decide the objective of the account, in which our Trust Officer will manage. The customer is able to take disbursements at their request (noting time allotments for trades if necessary), without having to be a specific age. It is, more simply, an investment account.
A Custody Account is one in which a customer will transfer assets for us to keep track of; however, they will retain ownership and management of the assets for themselves. The customer will decide the objective of the account, manage the objective on their own, and advise of any needs. We are basically just holding the assets for the customer, keeping track of them, and providing regular reporting to the customer. As part of this service, we follow-up on stock splits, corporate buyouts, and class action suits to be sure the customer’s interests are protected. Custody accounts are available for most investment accounts, including IRAs and Agencies.
For additional questions on any trust, or to create a specific trust that meets your direct needs, contact us today!
Email SCBTrust@statecentralbank.com or call 319-526-3862.