Inquiries about the potential tax benefits of placing investments into a living trust are common in the trust and wealth management field. It is essential to clarify that while living trusts offer numerous advantages, income tax savings are not among them.
Addressing Living Trust Tax Concerns
When individuals establish a revocable living trust to manage their assets, there are no direct income tax advantages. The income and capital gains generated by the trust remain taxable to the grantor, just as they would without the trust. Therefore, if the primary goal is to reduce income taxes, there may be better solutions than a living trust.
Benefits Beyond Tax Savings
The true value of a living trust lies in the myriad of other benefits it provides. At Legacy Private Trust Company, trustees can offer professional investment management services through a living trust. This allows clients to rely on expertise to supervise and optimize their investment portfolios, freeing them from the complexities and worries of day-to-day investment decisions and providing a sense of security.
Ensuring Living Trust Financial Privacy
Another significant advantage of a living trust is the financial privacy it ensures upon the grantor’s death. Unlike a will, which becomes a public document during probate, a living trust remains private. This is particularly crucial for individuals who prefer to keep their financial affairs confidential. While not everyone is a celebrity, maintaining privacy about the distribution of assets can still be valuable to beneficiaries, protecting them from unwanted attention or scrutiny.
Exploring Your Options
For those considering establishing a living trust or wishing to understand its benefits in greater detail, scheduling a consultation with Legacy Private Trust Company is not just recommended, but a crucial step. The team is dedicated to providing personalized advice tailored to unique financial situations and goals, helping clients navigate the complexities of wealth management with confidence and peace of mind. This consultation will provide you with the guidance and support you need to make informed decisions about your financial future.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or connect@lptrust.com.
This newsletter is provided for informational purposes only.
It is not intended as legal, accounting, or financial planning advice.
