55+
financial health By David J. Zumpano
What Exactly is a Trust? Metaphorically speaking, it’s that little red wagon you had as a kid
J
oe recently went into the law office of an attorney, as he had heard a lot about trusts, but didn’t really understand how they worked. He did not want to give up control of his assets, and he feared that having a trust would require him to do so. After sitting down with the attorney and asking what a trust was, Joe was surprised at the answer. The attorney explained that a trust is really like a little red wagon. He asked Joe if he had had a little red wagon as a kid to which Joe promptly replied, “Absolutely!” The attorney pointed out how Joe was in control of that red wagon and whatever he wanted to go in it, went in, and whatever he wanted to come out of it, came out. Joe had full authority to take that wagon anywhere he wanted, and when he was done with it, he got to decide who would play with it. Joe smiled and recalled the memories of his little red wagon and understood completely, but he didn’t understand how that story related to a trust. The attorney then asked Joe to consider, “What if you wrote a book of instructions that was like that little red wagon?” This book of instructions would indicate what assets could go into your trust, what assets could come out of your trust, and to whom and when. Imagine that the little red wagon could also go anywhere you wanted it to go. Joe, acting as the trustee, could invest his assets anywhere he wanted: a local bank, his broker, or even online. The attorney explained that the only difference, when a trust owns assets, is the name on the account. In fact, Joe’s name would still be there, but he would be identified as
a trustee rather than simply his name individually. The attorney further explained that Joe could set his instructions according to what comes out of the wagon (distributions) and who gets to benefit from Joe’s assets (beneficiaries) and when. The attorney continued to identify that if Joe were no longer able to pull the wagon because of a disability or death, the trust would have instructions to identify who got to play with the wagon when he was done with it. This person is referred to as a successor trustee. Just like Joe, the successor trustee would be able to take the wagon anywhere Joe would have allowed, under his instructions. Further, if Joe wanted, he could even restrict what type of investment the successor trustee could utilize. The attorney concluded by expressing that the purpose of a trust is to create a book of instructions that will take all of Joe’s assets and hold them for him and those he chooses, just like his little red wagon held all his precious items as a child. The book of instructions can further identify who gets to control the wagon and who gets to benefit from the wagon, when Joe is no longer able to control it. Do you have a little red wagon? Learn all the ways revocable trusts can benefit you and your family. Call an estate planning attorney today. David J. Zumpano is an attorney and a certified public accountant (CPA). He operates Estate Planning Law Center. He can be reached at 793-3622.
Barrett DeWitt Apartments Applications now being accepted 1400 Kinne St., E. Syracuse, NY 13057
SUBSIDIZED HOUSING For Seniors 62 and Over • Heat & Hot Water Included • Secure Building • 24 hour Emergency Maintenance
Contact: Carolyn Nojaim (315)434-1854 TDD-TYY (800)-662-1220
barrettdewitt@christopher-community.org
Pompei North
Apartments
143 Mary Street • Syracuse, NY 13208 Affordable Housing for low income Seniors and the mobility impaired of any age. FEATURES INCLUDE: • Secure Building • Community room with social activities • Onsite Laundry • Free weekly transportation to Wegmans
For more information call the rental office at: (315) 472-2614 • TDD/TTY 1-800-662-1220 Or visit us at: www.Christopher-community.org
EQUAL HOUSING OPPORTUNITY
Give your word-of-mouth advertising a big boost. Advertise in 55 PLUS August / September 2011 - 55 PLUS
9