Imagine rewarding your grandchildren for reaching certain goals, providing income to your favourite charity, or ensuring a loved one is cared for after you’re gone.

All of these scenarios are possible, as well as many others, by establishing trusts.

A trust is a legal arrangement where one person holds legal title to an asset (the trustee) and manages it for the benefit of another person, persons, or organization (the beneficiaries).

Most people are familiar with testamentary trusts, which are set up through a will and activated upon death. For example, your will may state that in the event of both parents dying, a portion of the estate will be held in trust until your children reach a certain age. You can also create trusts to reduce taxes owed by your estate, or to divide assets between your children after ensuring your spouse is cared for.  A trust can also serve to protect your business, at least for a period of time, after you’re gone.

Living trusts are less familiar. However, they can be used in a number of creative ways to benefit you or people and organizations you care about. For example, you can establish a charitable remainder trust for your favourite charity. Typically, the assets you place in this type of trust go to the charity when you die. In the meantime, you enjoy any earnings made by the assets in the trust.

Another interesting approach is a values trust. This provides payments to your beneficiaries when they reach certain milestones or achievements. For example:

  • Your children or grandchildren receive an award when they graduate from college or university.
  • If they start their own business, the trust provides an interest free loan.
  • The trust can top-up salaries for beneficiaries who work in the non-profit sector.
  • When your children or grandchildren pay off the first half of their mortgage, the trust pays the balance.

Now, if you’re wondering how you could ever afford to set up a trust, you do have options. Trusts can be funded through life insurance policies. This allows you to pay a monthly amount that suits your budget. The trust receives the insurance payout when you die, while your beneficiaries receive the trust proceeds.

Trusts provide many options to benefit and protect you, your beneficiaries, or your business. As financial advisors, we can guide you through the process of setting up a trust with the help of your attorney or accountant.  And as licensed insurance agents, we can help you fund one or more trusts with a life insurance policy. Overall, we can help you set up a trust that benefits you, your family, or your business, in a way that suits your lifestyle and budget.

Contact us for your complimentary appointment today.