Standalone Retirement Trust Legal Topic Library

Legal Topic Library

Standalone Retirement Trusts (SRTs)

What is a Standalone Retirement Trust (SRT)?

A Standalone Retirement Trust (SRT) is a special type of trust. A standalone retirement trust, (SRT) for short, is a trust used to provide asset protection and maximized tax deferred growth for spouses, children, and other loved ones. This means more assets go to the people you care about.

The SRT is popular and can benefit you and your loved ones because it:

Protects inherited retirement accounts from beneficiaries’ creditors as well as predators and lawsuits
Ensures retirement accounts go to whom you designate – and nobody else
Allows for experienced management and oversight of assets by a professional trustee
Prevents beneficiaries from reckless spending or gambling
Enables proper planning for a special needs beneficiary
Permits you to name minor beneficiaries as immediate beneficiaries without court-supervised guardianship
Facilitates generation-skipping transfer tax planning

What is Estate Planning?

Estate planning is how you can take care of your loved ones even after you are no longer able to do so. The three purposes of estate planning are: 1) Control your property while you are alive and well; 2) Provide for yourself and your loved ones if you become incapacitated/disabled; 3) Give what you have to whom you want, the way you want, when you want.

Estate planning addresses the consistent and hardest parts of life, which is when someone passes away. In my opinion, estate planning’s purpose is to help a family’s transition as they cope during such a difficult period in their lives. It is a gratifying and purpose-filled legal service.

Comprehensive estate planning takes the whole person into account. It involves selecting trusted individuals to carry out one’s wishes and drafting documents that carefully guide and protect future generations. Estate planning also goes beyond taxes, wealth, and medical decision making: Many people choose to include things like recorded oral histories and precious heirlooms in their plans. This makes estate planning not just about property, but about the legacy, values, and vision you want to pass along to future generations.

Do I need to do estate planning?

Every individual has different needs, and to receive a full appraisal of your needs for estate planning, I would advise you to schedule a complimentary initial meeting to discuss your situation.
Estate planning addresses the consistent and hardest parts of life, which is when someone passes away. In my opinion, estate planning’s purpose is to help a family’s transition as they cope during such a difficult period in their lives. It is a gratifying and purpose-filled legal service.

What is a trust?

A trust is an estate planning strategy. It offers you protection in the event of incapacity and allows for great flexibility with how your property is distributed after the person has passed away.

What is a Trustee?

A Trustee is the person who administers your trust. In this sense, a Trustee is similar to the Personal Representative of a will. However, a trust is private, while a will is public.

A Trustee also has duties to the trust’s beneficiaries, called fiduciary duties. This means that a Trustee could be found legally liable if the Trustee inadequately administers a trust. I would suggest that a Trustee contact an attorney specializing in Trust Administration for help.

Who should I pick as trustee?

Trustees manage assets contained within a trust. To figure out how to select the right person for the job, first consider whether the trustee should be an individual or a financial institution. If choosing an individual, pick someone you know who is diligent and detail-oriented, and whom you trust to carry out your clear instructions.

What does a successor trustee do?

A successor trustee can also be either an individual or an institution. This party serves as a back-up, or successor, to the original trustee in case the first trustee passes away or is incapable or unwilling to perform their duties regarding the management of your trust.

Should I pick a corporate trustee?

While it’s straightforward enough to pick a friend or family member you think will be up to the task, picking a corporate trustee is the best option for some people. Banks and trust companies that focus on trusteeship provide expert management. Being unrelated to your personal life, you can also rely on them to be impartial. However, corporate trustees do come at a cost.

What are the advantages of a trust?

A trust is a private document that is not available for non-interested people to access and read. A trust being to protect an individual as soon as the individual signs the trust, not just when the individual passes away.

A trust allows you to have provisions that govern how and when your property is distributed to your descendants. This allows for a continuation of parenting influence and can help descendants continue to reach their potential as they continue through life.

What are the disadvantages of a trust?

A trust is generally more expensive than a will. While it is an effective tool, it is less affordable for many people than a will.

A trust is also more “high maintenance than a will.” For a trust to work best, you have to actively manage ownership of your property for the trust to continually control your property. This process is called “funding.” It is best to counsel with an estate planning attorney to determine the best options to fund your trust.

Why would I want to give my children their inheritances through a trust?

A trust grants you control over time, which means that while a will effectively distributes your property all at once, you can spread out distributions over time or place pre-requisites that your descendants have to fulfill before they can access your property. A trust can mirror your parenting style and personalize distributions to your descendants according to their unique situations.

Is a will or trust better for me and my family?

The decision to have a will or trust is an incredibly personal and unique decision. I advise that you meet with an estate planning attorney to help you understand your options and to help you make the best decision for yourself and your family.

Why does an 18-year old need an estate plan?

Even an 18-year-old has property, and that 18-year old probably cares who would get their property if they pass. Also, a good estate plan also has incapacity planning, which protects the 18-year-old in case of incapacity.

How can I modify a trust?

There are three ways in which you can modify a trust:

1) Amendment: These are smaller changes, such as changing the name of a beneficiary, that is inserted into the trust binder and explains what has been deleted and added.

2) Restatement: This is when your desired changes are large enough that it is easier to simply re-print the entire document. Your estate planning attorney should state within your trust the dates of previous restatements.

3) Re-drafting: This is not trust modification per se. You are revoking any prior trust and beginning again. While there are situations in which this may be a desirable action, this does require you to fund your property into this trust, whereas the other modification options do not.

I invite you to meet with me to discuss which option is best for you in your circumstances.

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