Requently Asked Questions

Who does a trust benefit?
What are the duties of an executor?
When should I consider an estate plan?
Why do I need a will?
What is the difference between a living trust and a testamentary trust?
Does the FDIC insure trust funds?

Q: Who does a trust benefit?

A: Beneficiaries who are:

• Minors or those who lack a certain level of mental maturity;
• Individuals in ill health;
• Those inexperienced in financial matters;
• Individuals dealing with creditor judgments and;
• Individuals surrounded by undue influence.

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Q: What are the duties of an Executor?

A: The responsibilities of an executor are to:

• Arrange with your attorney the probate of your will;
• Collect, inventory, value and protect your assets;
• Manage your property, including your business during the settlement period;
• Distribute your assets to your heirs as directed in your will;
• Pay your estate taxes, expenses and debts and;
• Prepare and file income tax and estate tax returns.

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Q: When should I consider an estate plan?  

A: You should consider an estate plan if:

• You are 18 or older;
• You have children;
• You own a home or property;
• You own a business;
• Your estate is valued at $1,500,000 or more (in the year 2004 and 2005);
• You anticipate inheriting money or if;
• You donate money to charity.The 1st 1,500,000 of every estate is tax-free at the federal level, but beyond that tax rates can soar as high as 50%. Sometimes large inheritances, insurance settlements, or retirement plan payouts can push a taxpayer into a higher tax bracket.

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Q: Why do I need a will?   

A: You need a will so that you can:

• Direct how your estate will be distributed;
• Insure the security of your family;
• Name the executor of your choice;
• Name a guardian for your minor children;
• Take advantage of estate tax savings opportunities and;
• Avoid additional settlement costs and delays.

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Q: Difference between a Living Trust & a Testamentary Trust?  

A: A Living Trust:

• Takes effect during your life;
• Includes you as one of the beneficiaries and;
• Is a private matter between you, the trustee, and the beneficiaries.

A: A Testamentary Trust:

• Takes effect upon your death, as outlined in your will;
• Does not include you as a beneficiary and;
• Is a matter of public record and open to public inspection.

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Q: Does the FDIC insure trust funds?

A: Trust funds are normally invested in stocks, bonds and other income-producing assets, which are not bank deposits. As a result, FDIC insurance is limited to cash (up to $100,000) that is invested in  bank deposits, such as CD’s or income awaiting distribution.