Trust services to strengthen your legacy

Raymond James Trust, N.A., can help coordinate the settlement after a death. We keep detailed records to effectively manage the estate and work with attorneys and accountants to ensure that assets are distributed according to your wishes. This type of settlement is appropriate for those who have set up their estate through trusts, those who cannot or do not want to manage their financial affairs, or those who wish to have assets remain in trust for their family after passing.

Raymond James Trust, N.A., can help move the settlement through the probate process, coordinating with attorneys and accountants while identifying, collecting, valuing and managing your assets, final taxes and so forth. As personal representative or executor, we will keep detailed records to effectively manage the estate, relieve family members of an overwhelming responsibility and provide a high level of personal attention to beneficiaries. This type of settlement is appropriate for those who have their estate set up through a will, those who would like the confidence that comes from knowing that their estate is secure and protected from unnecessary settlement costs and taxes, and those who want their heirs to be provided for properly and their estate settled according to their wishes.

This type of living trust cannot be changed or canceled, but the assets are not considered part of your estate, so they are not accessible by creditors. Irrevocable trusts are typically set up to provide tax savings, asset protection or some other benefit.

The terms of a revocable trust can be canceled or changed, and the trust can be terminated at any time. Revocable trusts do not take assets out of your estate, so they are still accessible to creditors. Living trusts such as this avoid probate and do not become a matter of public record.

There are two main types of charitable trusts that can help you support your favorite cause. A charitable remainder trust (CRT) is an irrevocable trust in which you receive income for life. Upon death, the remaining assets are donated to your charity of choice. A charitable lead trust (CLT) is an irrevocable trust that pays an annuity to a charity for a set number of years, then pays the remaining assets to a named beneficiary upon your death. A donor advised fund (DAF) is an additional alternative charitable giving solution but is not considered a trust.

These trusts give ownership of the life insurance policy to the trust, taking it out of your estate. This can help reduce estate taxes and make proceeds available immediately after your passing. The proceeds from life insurance trusts are used to pay taxes, legal fees, probate costs and other liabilities when the person who created the trust dies. After the debts are paid, the trustee distributes the remaining proceeds to the beneficiary.

Designed to provide financial security and long-term care to a beneficiary with special needs or a disability, a special-needs trust preserves the eligibility for needs-based government benefits, so Supplemental Security Income and Medicaid will still be available to the beneficiary.

Delaware is known as a trust-friendly jurisdiction with innovative laws regarding taxes and asset protection. Through our private label partnership with New York Private Trust Company, Raymond James Trust is able to offer this type of trust to nonresidents. For affluent individuals, establishing a Delaware directed trust offers several attractive benefits such as confidentiality, asset protection, substantial tax advantages, simple transfers and modernizations and liberal investment policies.

A dynasty trust allows individuals with significant wealth to provide for multiple generations of descendants. Typically, a dynasty trust is structured to last the maximum term permitted by law (in perpetuity in some states), allowing trust assets to remain undepleted by transfer taxes for the entire term of the trust.

It can be irrevocable and include a provision which protects trust assets from spendthrift beneficiaries, ex-spouses, and unforeseen creditors and lawsuits. It can also be funded with amounts that take full advantage of the grantor’s gift and estate tax basic exclusion amount and generation-skipping transfer (GST) tax exemption.

The result is that the depletion of trust assets is minimized, asset growth potential is optimized, and the principal is preserved to benefit future heirs.

As this type of trust is taxed more heavily on income, it may be more advantageous to fund the trust with non-income-producing property such as growth stocks, tax-exempt bonds, and cash value life insurance. Other appropriate assets might include real estate, discounted property, and property expected to highly appreciate.

A grantor retained annuity trust (GRAT) is one technique that can transfer wealth with little practical impact on the underlying transaction, yet deliver results. Individuals who experience significant increases in net worth typically consider estate planning after the wealth creation event. However, the best opportunity to transfer wealth and reduce tax exposure often is prior to a business sale, an IPO or merger transaction.

A GRAT can be a powerful wealth transfer tool for an asset expected to rapidly appreciate and can create a meaningful difference in net proceeds for family business owners contemplating a sale or transfer.

An example:

A decision is made to transfer a 20% interest in the closely held shares of the business into a GRAT for a term of two years. Because of the lack of liquidity and marketability, the $10 million worth of shares are valued at $7 million.

If within the period of the GRAT, the business sells for over $100 million, the shares in the GRAT could now be worth $21 million. Utilizing the appreciation and the discounts in the shares transferred to the GRAT, $15 million passes to the children free of gift or estate tax, plus $4 million the owner would leave net of tax, for a total of $19 million.

Had the owner not done the GRAT planning and instead waited until death to transfer the 20% interest to the children, the after-estate tax net value to them would be only $12 million.

This hypothetical example is for illustrative purposes and is not representative of any actual experience. Individual results will vary.

Raymond James Trust, N.A., can work with you to come up with a sound solution for your unique needs, from generation-skipping trusts and marital-bypass trusts to dynasty trusts and beyond.

Raymond James Financial Services, Inc., is affiliated with Raymond James Trust, N.A. Raymond James does not offer tax or legal services. You should discuss these matters with the appropriate professional.