Depending on your situation and your assets, there may be several advantages to establishing a trust. A trust can:

• Provide professional management for your assets during your life and after your death.
• Avoid the need for court-ordered guardianship if you become incapacitated.
• Avoid probate for trust assets at your death.
• Provide for confidential distribution of assets at your death.
• Allow for distribution of assets over an extended period of time.
• In a second marriage situation, provide income for your spouse, if you die, and still protect the principal for your children from a prior marriage.
• Prevent minors from inheriting assets directly and provide professional management of assets for those minors.
• Prevent spendthrift heirs from dissipating assets.
• Protect assets from creditors of beneficiaries.
• Provide for the needs of a handicapped or otherwise incapacitated beneficiary.
• Provide flexibility to deal with unexpected circumstances in the future.

A living trust is created during your lifetime by a written agreement, as prepared by your attorney, between you and the trustee. A testamentary trust is described and created within your Will, and does not take effect until your death.

Your trustee can be a competent individual who is eighteen years of age or older, or a corporate fiduciary having trust powers, such as a bank or trust company. You can name more than one trustee, called co-trustees.

You may want to serve as trustee for your own living trust for a time. You should also name a successor trustee in case you become incapacitated later. Many people have named JCB as trustee or successor trustee because of our experience and the requirement that we be impartial, considering equally the needs of all beneficiaries.

You can retain control over trust assets. However the type of control you retain may affect the tax consequences of the trust. You can retain the right to withdraw income or principal from the trust at any time. You can also retain the right to amend or revoke the trust at any time.

Generally, if you retain any benefits from the trust, such as the right to withdraw income or principal, or if you retain control over trust assets, or the right to change the trust terms, the trust income will be taxable to you. In this case trust assets also are likely to be subject to state inheritance taxes and federal estate taxes when you die.

In addition to specific terms you desire, you should always:

• Name the trustee and provide for a successor trustee.
• Say who is to receive the trust income, and any conditions under which this might change.
• Say when and for what purposes the trustee can or should distribute the principal of the trust.
• Specify when the trust will terminate.
• Say who will receive trust assets upon termination.
• State the powers and responsibilities of the trustee.
• State whether the trust is revocable (for a living trust).