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 spousereceives poor financial advice, imprudent investment and tax decisions could follow. And there is always the danger your spouse could fall victimto financial fraud. Bad advice could prove hurtful not only to your spouse’swelfare, but may 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.By creating a trust under will, you establish a legal arrangement making a trustee responsible for certain assets. The trust will also specify whowill benefit 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 yourtrustee the discretion 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. You can choose a periodic amount to be drawn from thetrust or establish a set percentage of the trust’s assets to be used as income. You may also give your trustee the discretion to pay out enough ofthe 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 New Orleans)Back to Top

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