Trust & Estate Services
TRUST & ESTATE SERVICES - Services to be offered through a preferred service
- Trust Administration
- Trustee Services
- Revocable Trusts
- Irrevocable Trusts
- Life Insurance Trusts
- Rollover IRA
- Custody Services Agency
- Investment Management Agency
- Traditional IRA
- Roth IRA
- Estate Settlement
- Testamentary Trusts
- Special Needs Trusts
- Discretionary Management
- Employee Stock Ownership Plan (ESOP)
- Charitable Remainder Annuity Trust
- Educational IRA
- Revocable Living Trust
- Irrevocable Life Insurance Trust
- Grantor Retained Annuity Trust
- Grantor Retained Uni-Trust
- Systematic Investment
EMPLOYEE BENEFIT SERVICES
- Simplified Employee Pension
- Qualified Plans
- Profit Sharing
- Money Purchase
FINANCIAL PLANNING SERVICES
- Asset Allocation Analysis
- Financial Planning, including:
- Retirement goals
- Education goals
- Estate Planning
- Custody Services Agency – An account where the assets are
held by the Custody Services Agency and day-to-day investment decisions are made
for you in accordance with general instructions you provide in an investment policy
- Investment Management Agency – A wide range of investments
are available to you through an Investment Management Account relationship. Based
on meeting with you and gaining a sound understanding of your financial needs and
goals, we direct and implement an investment strategy that meets your personal needs.
The strategy is designed to meet your unique situation.
- UGMAs – This is a legal framework that allows for the transfer
of assets to a minor without the establishment of a trust by naming a Custodian
to manage the property for the benefit of the minor. The assets in the account transfer
to the minor upon their attainment of the age of majority in their state. Funds
may be used for the benefit of the minor before the minor reaches age 18 or 21.
They are frequently used to accumulate funds intended for education expenses but
are not required to be used in that manner.
- 2503(c) – A trust primarily used to save for college expenses
of a minor. The trust is unique in that gifts to the trust qualify for the annual
gift tax exclusion even though the beneficiary does not have the right to withdraw
the funds. The funds must be available for withdrawal by the beneficiary no later
than age 21.
- Estate Settlement – The personal representative will take
actions to handle family issues and protect estate property including:
- Locate, read, and interpret the will and any codicils thereto;
- Meet with family members and counsel to discuss immediate concerns;
- Make funeral, burial, and perpetual care arrangements as directed or as circumstances
- Take immediate steps for the temporary protection of estate property pending probate
of the will
- Locate financial records and determine nature and location of assets
- Determine if there are outstanding lawsuits initiated by or against the decedent
- Change locks to secure real property
- Change addressees to forward mail to the representative
- Check property insurance coverage and adjust if prudent
- Notify creditors, close accounts
- Notify social security administration, veterans affairs, pension administrators,
After court approval the representative may take actions to distribute assets, file
tax returns, inventory the estate, notify heirs, fund trusts established under the
last will and testament, and complete the probate process with the state.
- Discretionary Management – An account in which the Trust
Department has been given the ability to make changes in a portfolio, within agreed
upon areas, to benefit the account owner / beneficiary.
- Systematic Investment – Systematic Investment Plans help
individuals reach their financial goals with a disciplined approach. Investments
of a fixed sum are made on a regular basis (monthly or quarterly) into the chosen
investment(s) for a specified period of time. This method of investing helps
average out market fluctuations.
- Asset Allocation Analysis – An analysis of the allocation
of assets completed in order to determine exposure and risk as well as suitability
of the asset mix. The traditional view of asset allocation assumes that investments
are allocated among (potentially many) funds, each of which holds (potentially many)
securities. The purpose is to determine the investor's exposures to the key asset
classes and provide information useful in deciding if changes in the asset mix should
- Financial Planning – The process of evaluating the investing
and financing options available to a firm. It includes attempting to make optimal
decisions, projecting the consequences of these decisions for the firm in the form
of a financial plan, and then comparing future performance against that plan.
- Retirement Goals - Financial planning revolving around preparing
for retirement and the goals associated with it.
- Estate Planning - The overall planning of a person's wealth, including
the preparation of a will and the planning of taxes after the individual's death.
Contrary to popular belief, estate planning involves much more than preparing a
will, and it is not only for the rich.
- Will - The document where individuals express their desired distribution
of assets at their death. This document is also used to name guardians for children
who are minors.
- Education Goals - Financial planning surrounding preparing for
education expenses for children and grandchildren and meeting the goals therein.
- Trust Administration – a legal arrangement whereby control
over property is transferred to a person or organization (the trustee) for the benefit
of someone else (the beneficiary); created for tax savings, improved asset management,
or control after death.
- Trustee Services – the appointed institution that manages
assets for the benefit of someone else.
- Revocable Trusts – A trust whereby provisions can be altered
or cancelled dependent on the grantor. During the life of the trust, income earned
is distributed to the grantor, and only after death does property transfer to the
beneficiaries. This type of agreement provides for flexibility and income to the
living grantor, as he/she is able to adjust the provisions of the trust and earn
income, all the while knowing that the estate will be transferred upon death.
- Irrevocable Trusts – A trust that, once it’s set up,
cannot be changed at all. This is to prevent fraudulent activities and to take advantage
of tax planning benefits.
- Life Insurance Trusts – A trust that owns or is the beneficiary
of life insurance policies. These trusts, often called 'Wealth Replacement Trusts'
are often used when estate tax is a concern.
- Testamentary Trusts – A trust created as a result of explicit
instructions from a deceased's will. Typically, the remaining estate of the deceased
(trustor) will act as the body of the trust, and the executor will manage it until
the beneficiaries are capable of doing so individually.
- Special Needs Trusts – A trust created to ensure that disabled
beneficiaries will be able to enjoy the use of the property intended to be held
for their benefit. These trusts are often written and managed in such a way
as to avoid the loss of government benefits.
- Revocable Living Trust – A living trust (or family
trust) is a formal revocable trust, usually set up by an attorney, in which the
owner (also known as a grantor or settler) specifies who will receive the trust
assets when the owner dies. The owner transfers ownership of assets to the trust
but keeps control of the trust assets during his or her lifetime and can change
the trust at any time. Assets in the living trust bypass probate and may be
transferred quicker than assets that must pass through probate. Privacy is
also maintained because the trust assets are not included in the public information
filed as part of probate.
- Irrevocable Life Insurance Trust – Life insurance proceeds
are free from income taxes when they are paid to ones survivors. However, the death
benefits on policies are included in the taxable estate of the deceased if the deceased
owned the life insurance policy. Irrevocable Life Insurance Trusts ownership of
the life insurance policy effectively removes the life proceeds from the estate
of the insured for estate tax purposes. Contributions to the trust to pay
the premiums may be subject to gift tax or not, depending upon the way the trust
is established. Qualified counsel should be retained to establish the trust.
Once established, the grantor may not change the trust. The trustee, however,
may change the insurance owned by the trust, subject to the powers given to the
trustee in the trust document.
- Grantor Retained Annuity Trust – A GRAT is an irrevocable
trust funded with a single contribution of assets. The trust pays a percentage
of the initial contribution back to the donor for a fixed period. The income
to the donor may be fixed or include a predetermined increase. At the end
of the term the balance of assets are distributed to the beneficiaries of the trust.
GRATs are designed to shift future appreciation on the assets held in the trust
to the beneficiaries with minimal gift tax implications.
- Grantor Retained Uni-Trust – A GRUT is an irrevocable trust
funded with a single contribution of assets. The trust pays an income to the
donor which is calculated annually as a fixed percentage of value of the trust assets
for a fixed period of time. At the end of the term the balance of assets
are distributed to the beneficiaries of the trust. If trust assets enjoy favorable
appreciation the value transferred to the beneficiaries may be significantly greater
than the value for which gift taxes or exemptions were expended. These benefits
are lost if the grantor dies during the term of the trust.
- Charitable Remainder Annuity Trust – a charitable remainder
annuity trust (CRAT) provides a fixed income for life to the Grantor or a chosen
beneficiary. Assets are transferred into a trust and managed by the trustee
named in the trust document. When the trust terminates, the remaining
assets in the trust are transferred to the charity(ies) named in the trust document.
This is an excellent tool to generate current income from a highly appreciated asset
without incurring current income tax from the sale of that asset. The CRAT
can also generate substantial current charitable donations. Frequently, the
Grantor replaces the value of the assets transferred to the Trust through life insurance
purchased with some of the income generated through the sale of the assets inside
- Charitable Remainder Uni-Trust – A charitable remainder uni-trust
(CRUT) provides a variable income for life to the Grantor or a chosen beneficiary.
Assets are transferred into a trust and managed by the trustee named in the trust
document. When the trust terminates, the remaining assets in the trust are
transferred to the charity(ies) named in the trust document. This is a tool
to generate current income from a highly appreciated asset without incurring current
income tax from the sale of that asset. The CRUT can also generate substantial
current charitable donations. Frequently, the Grantor replaces the value of
the assets transferred to the Trust through life insurance purchased with some of
the income generated through the sale of the assets inside the trust.
- Qualified Plan – Retirement plans are “qualified plans”
when they qualify for favorable tax treatment under the Internal Revenue Code (IRC).
Benefits of being a qualified plan include tax deductibility of both employee and
employer contributions. Earnings accrue on a tax-deferred basis. Plans
are available for small, sole proprietor, businesses and mammoth corporations.
Qualified plans may be defined contribution or defined benefit plans or a hybrid
of the two.
- Defined benefit plans - The IRC defines this type of plan as any
plan that is not a defined contribution plan. The plan promises to pay a predetermined
benefit, based on the employee’s earnings, age and years of service, at retirement.
Funding defined benefit plans can be difficult and has led to a marked decrease
in their use.
- Defined contribution plans - Instead of defining the benefit the
plan will pay at retirement, this type of plan defines the contributions the employer
will make to the account. It is difficult to determine what the actual benefit
will be at retirement under this type of plan because it varies based on numerous
factors including investment return of the contributions.
- Hybrid plans - A hybrid plan has the features of both a defined
contribution and a defined benefit plan. These types of plans have increased in
popularity as the workforce becomes more mobile.
- Employee Stock Ownership Plan (ESOP) – a qualified retirement
plan in which employees receive shares of the common stock of the company for
which they work and the company receives an investment tax credit. Trust
providers can assist with trustee, investment and administrative services for
- Rollover IRA – A rollover IRA is funded with a distribution
from a qualified retirement plan such as a 401(k). When individuals change
jobs their employer may require or allow a distribution from the qualified plan
they participated in as an employee. Distributions from qualified plans must
be rolled over into another qualified plan in order to avoid immediate taxation
and penalties if the recipient does not qualify for one of the exceptions to the
10% penalty tax. Rolling the funds over into an IRA is one option that will
preserve the tax-deferred status of retirement savings. Loan provisions available
in the qualified plan (such as a 401(k) are lost when the funds are rolled over
into an IRA. There are other options that preserve the loan features.
Non-rollover contributions may be made to a rollover IRA but create limits to your
future options with respect to that IRA so it is best to have a separate IRA for
- Traditional IRA – a custodial account in which individuals
may set aside earned income in a tax-deferred retirement plan.
- Roth IRA – a custodial account that is funded with after-tax
earned income. Distributions of principal and interest are made tax-free (subject
to conditions). Unlike traditional IRAs, distributions are not required upon
attainment of certain age.
- Simplified Employee Pension – An employer funded pension
plan. The employer may make tax-deductible contributions of the lesser of
15% of an employee’s earnings or $24,000. Annual contributions are not
required but if any contributions are made they must be made based upon a predetermined
formula for all eligible employees. Distributions are subject to the same
rules as IRAs.
- SIMPLE – A qualified retirement plan designed for small companies.
The employer may make contributions of 2% of each eligible employee’s income
or match employee contributions up to 3% of the employee’s earnings.
Maximum contributions are tied to inflation and include catch-up provisions for
individuals age 50 and above.
- Profit Sharing – There are a number of different profit sharing
plans. Employer contributions to the plans are discretionary but must be made
based on a set formula when made. Funds are held in a separate account for
each employee. Employers may have other retirement plans in addition to the
profit sharing plan and the flexibility to determine whether to make contributions
and the amount of contributions annually provides the employer with cash flow flexibility.
Per employee contribution limits are generous and maximums are subject to cost-of-living
- Money Purchase – Money Purchase Plans are defined contribution
plans where the employer contributions are mandatory. If the employer does
not contribute the required amount annually an excise tax is due. These plans
have generous maximum contribution amounts.
- 401(k) – Employees elect to contribute pre-income tax dollars
to the plan. The plan document and Internal Revenue Service requirements limit
the maximum an employee may contribute as both a percent of income and a total annual
contribution. Employers may “match” some or all of employee contributions
but are not required to do so. Investments in the account grow on a tax deferred
basis. Generally, several investment options are available for plan participants,
often including company stock. Employees may move money between funds without
incurring a taxable event. Any business, large or small, may establish a 401(k)
plan. There are both traditional 401(k) plans and the newer ROTH 401(k) plans.
ROTH 401(k) plan contributions are not deductible at the time contributions are
made but distributions made at retirement are tax-free.
- Educational IRA (Cloverdell Education Savings Account) –
Contributions of up to $2,000 per year may be contributed to a Cloverdell account
for a child age 17 or under. Funds in the account grow tax deferred and may
be withdrawn tax-free to pay eligible schooling costs. If the funds are not
used by the beneficiary, the beneficiary may elect to roll the funds over into a
new Cloverdell Education Savings Account for another family member beneficiary (including
the child of the original beneficiary). Withdrawals for non-education purposes are
taxable and subject to a penalty. Contributions are subject to income limits based
on the income of the donor.
Cetera Investment Services LLC is an independent, registered broker/dealer and
registered investment advisor. Member
Securities and insurance products offered by Cetera Investment Services LLC:
* Not FDIC insured * May go down in value * not financial institution guaranteed
* Not a deposit * not insured by any federal government agency. Advisory services
may only be offered by Investment Adviser Representatives in connection with an
appropriate Cetera Investment Services LLC Advisory Services Agreement and disclosure brochure as provided.
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Investment Executives are registered to conduct securities business and licensed
to conduct insurance business in limited states. Response to, or contact with residents
of other states will only be made upon compliance with applicable licensing and
registration requirements. The information in this website is for U.S. residents
only and does not constitute an offer to sell, or a solicitation of an offer to
purchase brokerage services to persons outside of the United States.
* For a comprehensive review of your personal situation, consult your Tax Advisor.
Neither Cetera Investment Services LLC, nor any of its representatives, may give tax advice.
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