L’Observateur / May 3, 2000

Are you confident your spouse will be able to prudently handle your assets after you’re gone? If your spouse is experienced in managing investments, you can be assured your assets will be wisely invested. However, when yourspouse is a financial newcomer, leaving substantial assets outright could have a devastating effect on your family’s financial future.

Financial Dangers Managing substantial assets can be challenging even for an experienced investor. Thus, for a spouse unaccustomed to making financial decisions,managing a large inheritance could be overwhelming. If your spouse receivespoor financial advice, imprudent investment and tax decisions could follow.

And there is always the danger your spouse could fall victim to financial fraud. Bad advice could prove hurtful not only to your spouse’s welfare, butmay eventually diminish assets that would have passed on to your children and grandchildren.

A Trust To The Rescue Your assets don’t have to be left vulnerable to unnecessary investment losses. You can use your will to protect your spouse’s financial well-being. Bycreating a trust under will, you establish a legal arrangement making a trustee responsible for certain assets. The trust will also specify who willbenefit from those assets. The trustee has the legal duty to prudentlymanage the assets you place in the trust for the benefit of the person or persons you name as the trust’s beneficiaries.

Name Your Spouse As Beneficiary

When your will transfers assets to the trust that would have been otherwise left to your spouse, your trustee will manage the assets according to the instructions in the trust agreement and may use the assets to pay your spouse a life income. You may also consider giving your trustee thediscretion to let your spouse draw on the principal when necessary.

Specific benefits of a trust under will are:

Assured Income

You may make a specific arrangement for your spouse’s lifetime income. Youcan choose a periodic amount to be drawn from the trust or establish a set percentage of the trust’s assets to be used as income. You may also giveyour trustee the discretion to pay out enough of the trust to meet your spouse’s needs.

Reliable, Professional Management

If you name a professional trustee, your trust will assure that an experienced organization will prudently manage your assets for the financial security of your family.

Disability Protection

Your trust can also be used to handle financial matters for your spouse if he or she becomes disabled or cannot live independently.

Potential Tax Savings

A trust under will may be useful for avoiding or reducing potential estate taxes on assets to be inherited by your children in the future.

Use a trust under will to take good care of your spouse and protect your family’s assets.

Alan S. Moore is a Financial Advisor of Legg Mason Wood Walker, Inc., adiversified investment brokerage and financial services firm in (branch city).

Legg Mason Trust Company (LMTC) is a corporate trustee providing administrative services for custody, management and trusteeship of personal trusts and employee benefit trusts. Together they can provide you,your family and your business with some of the highest-quality trust services available today.

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