OPS Weekly Newsletter Blog Estate Planning

Hello friends!

This week, we’re going to start breaking down some of the nuances of estate planning and talk about the wrap-up of the Tokyo Olympics, along with how we helped a client plan for a once-in-a-lifetime vacation.

Before we get into that, this Saturday marks the 20th anniversary of the September 11th terrorist attacks. We will never forget the people who lost their lives that day or in the long wars that followed or the heroism of our first responders.

We get a lot of questions about estate planning, and it’s a big, complicated process — especially if people don’t get pieces in place years ahead of time. This week we want to focus on trusts: what they are, some common forms, and why they’re important to understand.

A trust is an estate planning tool that allows a legal entity to hold property or assets (money, stocks, bonds, a business, etc.) for a person or organization. A trustee can sometimes be a neutral third party, or the grantor, who is responsible for managing the assets. The grantor, or creator, sets up the trust and populates the assets. The beneficiary is the person/people/entity who receives the trust fund assets.

Trusts can have a variety of forms and stipulations. The main reason to establish any trust is to set up the terms for how assets are to be held, gathered, or distributed in the future — and this is what makes it different from other estate planning tools. Usually, the grantor creates an arrangement that is carried out after they are no longer mentally competent or alive.

There are many different kinds of trusts to suit a variety of needs. Among the most common is a revocable trust, also known as a living trust. This type lets the grantor better control assets during their lifetime. It allows the grantor to place assets into a trust that can transfer to any number of designated beneficiaries after the grantor’s death — usually to children or grandchildren. The primary benefit is that the assets avoid probate and because the trusts are not made public, the estate is distributed with privacy. The grantor can change or revoke the trust, unlike an irrevocable trust, which gives tax benefits to the grantor to give away control of the assets to the trust fund.

Another common type, the charitable trust, is created to benefit a particular charity or the general public. This form includes a charitable remainder annuity trust that pays a fixed amount per year. A charitable remainder unitrust passes assets to a specific charity upon the expiration of the trust. This has two main benefits: the donor establishing the trust contributes assets and is eligible for a charitable deduction, and the assets in the trust pay a fixed percentage of income to the beneficiary during the life of the trust.

There are many more kinds of trusts out there for all sorts of needs. If you’re not sure what kind or kinds would work best for you, give us a call — the sooner we can help you start estate planning, the more flexibility you’ll have to make decisions.

In the upcoming weeks, we’ll bring you more information on the details of estate planning. Let us know if you have any questions you’d like us to answer!

In other news, the Tokyo Olympics concluded the Paralympic Games over the weekend. It was a terrific event with incredible athleticism from around the world. More countries medaled in this Games than ever before. China finished at the top of the medals rally, followed by the British and then the Russians. The Games had everything we love about international sports — veteran winners coming back to defend titles, people whose last Games ended poorly returning stronger than ever for podium finishes, and new talent shocking the world. It was a sensational event. If you missed any of it, you can find videos of many events and great moments here.

That’s it for us — as always, we’ll be back with you next week.

How We Help:

 When we do planning for clients, the result is always a rough draft. As our clients’ lives change, we must be able to go back to the drawing board and revise their financial plans — this is very common. And as big, sometimes unexpected, decisions come up, clients often want reassurance that those decisions align with their financial planning. Obsidian is here to have meaningful conversations when it comes to achieving a goal or crossing off a bucket list item.

This week, we heard from a client considering a once-in-a-lifetime trip for next year that goes beyond what she would typically spend in her yearly travel. She was offered a wonderful opportunity to travel with some seasoned cruisers who can offer a lot of exciting upgrade opportunities.

She shared her estimated budget with us and asked if it would impact her day-to-day lifestyle. We reviewed her most recent plan assumptions and guided her with unbiased feedback. In this case, what she wants to do is well within her plan and the reassurance reduced her anxiety about her choice to live out an amazing experience.

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Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member FINRA/SIPC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.