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Trusts can be a very sensible way to obtain professional investment management with a minimum of risk, tax exposure and day-to-day worry. A trust is simply the means by which you assign legal title to and fiduciary responsibility for the disposition of your financial assets to another person or entity. That entity, usually a trust services provider such as First Midwest Trust Division, is obligated to carry out these activities according to your wishes.
There are two basic types of trusts. A testamentary trust is established upon death by the terms of a decedent’s will. This type of trust provides the means of carrying out those terms. Much more common today are living trusts. A living trust can be established at any time prior to death, and can be freely directed by the person creating it. Major benefits of a living trust are:
- Professional investment management with fiduciary responsibility
- Protection in the event of incapacity
- Avoidance of Probate
- Greater privacy and control
- Protection of Beneficiaries
First Midwest Trust is experienced in helping to establish and manage many different types of trusts. We’ll be happy to sit down with you and explain their various advantages in greater detail. The important thing to know is this: our goal - and our responsibility - is to create an individual financial plan that provides long term growth and stability in accordance with your wishes and in the best interest of those you love.
Revocable Trust - A revocable trust is a legal agreement between an individual (the Grantor) and a Trustee, which can be changed until death or disability. The agreement provides for the management of any assets turned over to the Trustee and imposes certain duties and obligations on the Trustee in regard to the management of these assets. The agreement also provides for the disposition of the trust’s assets upon the death of the individual. The individual is charged a fee based on the market value of the account.
Irrevocable Trust - A legal agreement between an individual (the Grantor) and the Trustee, which cannot be changed after it has been signed. In exchange for giving up control of the assets, the Grantor can gain significant tax advantages and delay the transfer of assets to his heirs. This trust is not to be confused with a Revocable Trust, which becomes irrevocable after the Grantor has died. An Irrevocable trust cannot be changed after it has been signed.
Testamentary Trust - A Testamentary Trust is a trust established by an individual as part of his/her Last Will & Testament. This type of trust provides for asset management after death and distribution of the assets at some later time. Because the trust is not funded prior to death, the individual’s assets will go through the probate process and the trust will be funded after the probate process has been completed.
Land Trust - An arrangement where title to Illinois real estate is held by a Trustee. The Trustee’s only duty is to deal with the trust when and as directed by the beneficiaries. The beneficiaries retain full management and control of the real estate and exercise all rights of ownership other than holding or dealing with the legal title.
Exchange Trust - An arrangement where an owner of real estate can defer capital gains by exchanging said property for "Like Kind" property. First Midwest Trust acts as an intermediary during the transaction.
Guardianship - A court appointed position where First Midwest Trust is charged with protecting the assets of an individual. This type of Guardianship is referred to as "Guardian of the Estate."
Contact a First Midwest Trust Representative
*Trust Services are offered through First Midwest Bank. Most trust products are not FDIC insured.
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