Tamra Inman understands it's not a conversation anyone wants to have. But if you have sizeable cash assets, real estate holdings, farmland, minority children, or all of the above—well, then it's necessary to protect your personal wealth and guarantee that everything is distributed according to your wishes after you've passed on.
We're talking about a trust—a legal and financial framework that ensures your money, real estate, other financial assets, and even young children will go exactly where you want them to after you're gone. A trust can ensure that your heirs receive exactly what you want to pass down to them and when you want them to receive it. It can ensure that posthumous charitable donations are made appropriately. It can keep real estate in the family. It can ensure your minority children are cared for by guardians you choose, should something happen to you before they become adults.
"Its importance is protecting and preserving your assets," says Inman, senior trust officer at Prospect Bank, which offers a range of trust services for those who want the peace of mind that comes with knowing their assets are secure. "Once the decision is made, you don't have to think about it anymore. It's a big relief."
'You want to avoid probate'
Why should you consider a trust with Prospect Bank, which has served Central Illinois citizens since 1973? Because simply having a will is not enough to ensure your assets are distributed according to your wishes. Should the value of your assets meet a certain financial threshold (such as $100,000 in Illinois), your estate goes into a probate court, where a judge ultimately makes decisions regarding the distribution of assets and the guardianship of any minority children.
While that judge may abide by the terms of the will, he's not bound by them, leaving the possibility that the probate court will make decisions counter to your own. Having a trust administered by a fiduciary like Prospect Bank keeps your estate out of probate court altogether. "You want to avoid probate as much as possible," Inman says.
There are other benefits, too. A trust gives you control of your assets even after you’ve passed away—like the amounts you give to your children, for instance, and the timing of how those amounts are distributed. Maybe you want to give one child a lump sum, have another whose funds are distributed monthly, and a third who will receive assets on a 21st birthday. By having Prospect Bank as administrator, you avoid the hurt feelings and disputes that can arise when family members are asked to dole everything out on their own.
"You get siblings fighting their sibling a lot. But when the bank gets involved, we can say no to anybody," Inman says. "It's a lot easier for a bank to say no than it is for a sibling."
And unlike a will, a trust is private. "Nobody sees this unless you're affiliated with the trust," Inman says. "Whereas if you have a will and you go through probate, that thing is filed with the courthouse, and your worst enemy can go pull it and take a look at it. It's a matter of public record. A lot of times, we'll see families with a large amount of assets who don't want people to know how much money is going to a grandkid when they die because some have been taken advantage of. So, privacy is huge."
Never too early to start
When should you begin thinking about a trust? Younger customers tend to make the decision after they have children, Inman says, while older customers are often prompted by the passing of an acquaintance—and the family feud over the estate that follows. But it's never too early, especially once your assets eclipse the state probate threshold, such as $100,000 in Illinois.
Prospect Bank offers both revocable and irrevocable trusts—the former can be altered as long as you're living and mentally competent, but the latter cannot. Prospect Bank can also set up charitable trusts that ensure your money goes to the causes you choose and administer guardianships of minority children. An attorney is necessary to finalize a trust, and Prospect Bank can offer clients a list of local attorneys to choose from if they don't already have their own.
"With a trust, you do it one time, unless you have to make amendments for some reason. You pay a fee to get that trust put in place, but you don't give up anything later in life," Inman says. "So, when you pass away, the trust happens by operation of law, your kids receive funds without having to go through probate. It's cheaper to do a will, but you could also lose a substantial amount of assets due to fees in the probate process."
And once a trust is set up, there's no more worrying about what will happen to your assets after you're gone. "The relief," Inman says, "is invaluable."
Interested in more information about how Prospect Bank can protect your assets with a trust? Contact Prospect Bank by phone at (877) 465-4154, visit its website at BankProspect.com, or stop by any of its 10 Central Illinois and Indiana locations, including the headquarters at 177 West Wood St. in Paris.
