[Infographic] 11 Reasons Your Family Should Have a Combined Family Trust

Posted by Tyler Phelps, Vice President of Eastern Point Trust Company on Jun 7, 2016


The notion that “all families should have a family trust” is one that many of the financially savviest advisors agree on. The advantages that family trusts haveare significant, but historically the start-up, maintenance, and administration costs were too hefty for most to undertake. Thus, family trusts have long eluded the vast majority of Americans.

Today, however, it is quite a different story. Families across America are now using Combined Family Trusts for their family, thanks to advancements in financial technologies. The landscape of trust planning has evolved, and as a result, family trusts are now an affordable viable option for families of all shapes and sizes, and the concept that family trusts are “only for the privileged” is no longer true. As a result, many families are missing out on the best way to save, protect, and pass down assets for their loved ones.

Here are 11 reasons why your family should have a Combined Family Trust (if you don’t already):

11 Reasons Your Family Should Have a Combined Family Trust

  1. Provides Asset Protection. Combined Family Trusts are often comprised of an irrevocable trust, or a combination of a revocable trust and an irrevocable trust. Using an irrevocable trust in your family trust offers the most asset protection for your family. Assets held within an irrevocable trust are not considered to be the possession of the grantor or the beneficiaries, so it can protect against creditors and other liabilities (assets in an RLT are not protected from creditors, espouses or bankruptcy).
  2. All Trusts Are Not the Same. Family trusts are flexible in nature and by design. Your family is uniquely diverse, so your trust should be, too. When you create an irrevocable family trust, you can tailor it exactly how you like. This customization ability is maximized with TrustWare™. With over 700,000 different design combinations, you can now afford a family trust that’s right for you – all while allowing you to effortlessly create a trust in less than an hour.
  3. Choose How It’s Used. When you create an irrevocable family trust, you can choose how your assets are used, when they can be received, and even when they can’t be. Award good performance (and deter poor behavior), help your family reach for new heights or support your family when they hit a low… it is your choice.
  4. Investment Growth. No matter if you are busy, relaxed, or somewhere in between, you can direct the family trust’s investments to fit your risk tolerance and investment goals. You have the control to keep your money in cash, money market funds, bonds, stocks, and even ETF’s.
  5. Combining the Benefits. By combining an RLT and an irrevocable trust, you can avoid probate, while protecting your family’s assets for generations. Better yet, you won’t lose the ability to have access and control your assets in the RLT while you’re living your life. It’s like having the key to your family’s treasure chest.
  6. Create a Legacy. Leave behind something more valuable than money can ever be…  a legacy. Become your family’s own Rockefeller, no matter how big or small your estate is. The size of even a modest estate may grow to impressive amounts over time.
  7. Avoid the Probate Headache. Combined Family Trusts can help families completely avoid the expensive and tedious process of Probate. On average, probate takes 6-12 months (with a final will) or 12+ months (without a will) depending on the estate. A recent study found that, on average, 7% of the estate's value will diminish due to the cost of the court probate process. It’s another benefit that you, and your family, will enjoy by having a family trust.
  8. Privacy (It’s No One’s Business). A major problem of only having a will is the lack of privacy that your estate receives after you pass away. All of your private matters and possessions are under public scrutiny during probate. Heirs can contest the terms and make claims against your final will, meaning the wrong things can end up in the wrong hands. The court will determine the rightful heirs and their allocation leaving your family’s financial details open to public scrutiny. A family trust creates a private and protected legal relationship between the Grantor and the beneficiaries using an irrevocable trust, so the terms that you choose cannot be altered, or left open for interpretation and public disclosure.
  9. It Can Be a Beneficiary. A Combined Family Trust can be named as the beneficiary of life insurance and other accounts. In fact, it is one of the best ways to protect against your life insurance, 401k, IRAs, and other accounts being frittered away.
  10. A Bank for Your Family. Combined Family Trusts can serve as a Family Bank. It’s advantageous and prudent for members to use a Family Bank. Selected family can borrow, lend, and transact other functions directly with the family trust on more friendly terms than with an institutional bank.
  11. Flexible, Affordable, and Secure. It has never been easier, more affordable, and quicker to start a family trust than it is today. The growth of financial technologies has closed the loop between what was available for the ultra-wealthy and the middle-class. And Kiss Trust is at the forefront of this financial revolution. Our patented trust creation software, TrustWare, is built around saving you time and money.

It’s not hard to see why families are changing the way they save for their family’s future. Getting started is effortless and quick. Creating a trust is a breeze. And the rest is just a walk in the park. Trust, it’s what we do.

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Tags: Family Trust, Combined Family Trust

The Risk of Using a Personal or Family Trustee

Posted by Ned Armand, President of Eastern Point Trust Company on Nov 28, 2015


Carefully consider the risks of choosing a family member as a personal trustee. While it may seem that they are the natural choice, it can put your estate at significant risk.

Key Takeaways

  • Family trustees can put your estate at risk due to the lack of professional experience that institutional trustees have. A trustee checklist can help understand these risks.
  • Even the most trusted family member is influenced by bias when guiding family trusts.
  • While treated as a fiduciary under court law, your family member trustee may not understand this role, which may put them at unnecessary, legal risk.

The Natural Choice

When it comes time to select a trustee who will oversee your financial affairs after your death, it's only natural to consider family members for the role of family trustee and entrust them with your financial affairs after your passing. Blood ties make them good candidates for handling your estate, ensuring that everything will be done according to your wishes without any oversight beyond the trust you've placed in them.

If a family member isn't available, or if you don't feel sanguine about entrusting any of them with such a vital role, you might want to select a close friend as a personal trustee. After all, they've known you for years; they know your opinions and beliefs and have stuck with you through thick and thin, right?

You might want to think twice.

A grandmother in Indiana was appointed a family trustee of a college fund established for her grandson by a wealthy family friend. In the eight years between the time the trust was set up and the time the boy was ready for college, it appears that granny looted the trust of more than $100,000, possibly for gambling. She's on the run and was last believed to be somewhere in Louisiana.

A trusted family member, a grandmother no less, left in charge of a grandson's trust. Now the boy has no money for college, and his entire future is derailed.

It's tough to think about a family trustee or personal trustee failing to follow your wishes after your death, but the one way to make sure that never happens is to select a trustee who is licensed by a state banking authority, with fiduciary responsibility and experience. An impartial third-party trustee with oversight by government authorities will guarantee that your wishes are followed and that those who are supposed to receive distributions get them as intended.

A family trustee or personal trustee may seem like the obvious choice, but when you think of the possible disasters that can come from failing to ensure proper oversight and ethical practices, a third-party trustee just makes sound financial sense.

Download a Personal Trustee Checklist See How Kiss Trust Compares
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Tags: Trustee, Family Trust

New Baby, New Finances

Posted by Ned Armand, President of Eastern Point Trust Company on Nov 18, 2015


Having a baby is a life-changing event. Your focus shifts to the new life that has joined the family and virtually nothing stays the same. Among the things most impacted by a baby are the family finances.

Key Takeaways

  • Flexible Spending Accounts are supported by many employers, and offer employees the ability to set aside pre-taxed income to cover child expenses – such as daycare.
  • Saving for your child's financial future by funding a Kiss Trust has many financial, legal, and tax benefits
  • A final will and life insurance should be in place and paired with an irrevocable trust to ensure that your child's future is secure, no matter where life takes your family.


Prepare for Your Newborn Baby

Parents need to prepare the following when a baby joins the family: 

  1. Have a savings plan. Thankfully, today’s new parents have the convenience of all-in-one savings tools, proven by courts, government agencies, and financial institutions, to secure family finances. For a modest fee, parents can create and modify trusts and savings plans that change with their family’s shifting needs.
  1. Elect a guardian. Select a guardian and (real) trustee with a trust that has a Health Education Support and Maintenance provision to best safeguard your child in the event of your death. Without an elected guardian, judges determine where to place an orphaned child.
  1. Apply for life insurance. To ensure loved ones are cared for, you will need to reassess your life insurance. Proceeds of life insurance should go to a spendthrift trust to ensure that the assets last.
  1. Prepare a will. Create a will to allocate assets after your passing. To be valid, often a will must comply with certain state-specific requirements. This fluid document can be changed as often as necessary.
  1. Consider child care. If both parents plan to return to work, families need to consider licensed day care centers to care for their newborn. The government offers two tax breaks to assist with this expense. One option is a Flexible Spending Account (FSA). This enables the wage-earner to set aside money tax-free to cover eligible child care expenses. The maximum allocation is $5,000, although some plans may offer less. Be cautious to not set aside more money than you anticipate spending, since remaining funds may not roll over to the following year.

    The other tax break is a tax credit of up to $3,000 for eligible child care expenses for one child or $6,000 for two or more children. A Financial Advisor will help determine if your budget will permit one parent to stay home to be the primary caretaker.

These five financial elements will afford your child a security net to best prepare for the unexpected. Other newborn financial considerations include applying for a Social Security number and birth certificate, updating the W-4 form, and adding the newborn to your insurance plan.

With the responsibility of caring for a new baby comes the responsibility of caring for your family’s financial future. Once the basics are addressed, parents need to consider their options for savings plans. A self-help trust creation tool can help you plan for and secure your finances to ensure your family members are taken care of today, tomorrow, and further down the road.

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Tags: Family Trust

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