America’s Most Advisor-Friendly Trust Companies Showcase - Flipbook - Page 8
2026 ADVISOR-FRIENDLY TRUST COMPANIES
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Others use them to bypass the cost
and publicity of probate. Privacy is a
particularly significant consideration:
unlike a will, which becomes public
record, a trust allows for confidential
wealth transfer.
Many clients establish trusts for the
benefit of specific family members.
Trusts can support minor children,
individuals with disabilities, or financially
capable adults who would benefit
from structured asset protection. They
help shield wealth from creditors, limit
exposure in matrimonial disputes, and
prevent unnecessary depletion through
mismanagement.
structures allow the grantor to retain an
interest while simultaneously providing
financial benefits to another party,
a structure commonly deployed in
charitable giving.
When a trust mandates distributions,
beneficiaries are taxed on that income
rather than the trust itself. When
income accumulates at the trust level,
it faces taxation at compressed trust
brackets. For grantor trusts, the settlor
is taxed on trust income as if they still
owned the assets, a structure that can
be used deliberately in sophisticated
planning scenarios where the grantor
wants to pay income taxes on behalf of
beneficiaries, thereby preserving more
wealth inside the trust.
Tax implications require careful
navigation. The benefits of estate
and gift tax savings must be weighed
against income taxation on trust
assets, where brackets are significantly
compressed. Distributing income
strategically to beneficiaries in lower
tax brackets can provide meaningful
efficiencies and preserve more wealth
for future generations.
STRUCTURING TRUSTS FOR
MAXIMUM BENEFIT
The choice of trust structure depends
entirely on the client’s objectives.
Revocable living trusts offer flexibility
during the grantor’s lifetime but provide
no asset protection or estate tax
benefits. Irrevocable trusts remove
assets from the estate, potentially
reducing estate taxes and shielding
wealth from creditors. Testamentary
trusts, created through a will, become
irrevocable at death and are commonly
used for structured inheritance planning.
Discretionary or “sprinkling” trusts
give trustees authority to distribute
income based on beneficiaries’ needs,
preserving wealth while accommodating
flexibility. Certain annuity or unitrust
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