The importance of a Trust Agreement

Hello Caton Team Followers – for those of you who caught my Instagram Stories this morning – here is the information on Ttust Agreements I found on as promised.  Never hesitiate to reach out to The Caton Team with any questions and we can point you in the right direction.

What is a trust?

You’ve heard of trust fund babies — those enviable young adults who live a worry-free life since they don’t have to earn a living. Just what exactly is a trust fund that provides them an income, and for that matter, what is a trust?

A trust is a vehicle to pass assets to a trustee, who in turn holds those assets — in a trust fund — for a third party, such as a beneficiary. Trusts can be an appealing option if your aim is to minimize taxes, protect assets and avoid the probate process. If you create a trust, you also can control how and to whom those assets will be disbursed. You can choose trustees to carry out your wishes. Many people create trusts to minimize hassle and fees for their loved ones, or to create a legacy of charitable giving.

What is the benefit of a trust?

The primary benefit of a trust is that it allows you to determine where your assets go and when your beneficiaries have access to them. A trust can save your beneficiaries from paying estate taxes and court fees, and can protect your assets from beneficiaries’ creditors or from loss through divorce settlements. It also lets you specify where remaining assets should go in the event of a beneficiary’s death. This can be helpful in a family that includes second marriages and step-children.

Trusts also allow you to pass on assets quickly and privately. By contrast, settling an estate through a traditional will may trigger the probate process, which can take a months or even years and can be a public process. With a trust, much of that delay can be avoided, and the entire process is private. This can save your beneficiaries from unwanted scrutiny or solicitation.

Common types of trusts

There are many types of trusts, and each is structured to accomplish different goals. Here are a few examples of commonly used trusts:

  • Marital or “A” trusts: Places assets into a trust when one spouse dies; income generated by those assets goes to the surviving spouse, and the principal often goes to the couple’s heirs when the surviving spouse dies.
  • Credit shelter trusts: These trusts allow both spouses to take full advantage of their estate tax exemptions, which in 2018 is a whopping $11.18 million per person, or $22.36 million per married couple. Assets above this amount are generally subject to a 40 percent estate tax once the second spouse dies. When the exclusion amount is held in a credit shelter trust, the surviving spouse can receive income from the trust’s assets until death, at which point the trust’s beneficiaries receive its assets free of estate taxes. These have become less popular since 2011, when a change in tax law enabled the executor of an estate to elect portability of a deceased spouse’s exemption to the surviving spouse.
  • Charitable remainder trust: The inverse of the charitable lead trust, in that it allots a given amount of income for beneficiaries and the remainder to specified charities.

Revocable vs. irrevocable trusts

People often think of a trust as an alternative to a will—a way of passing on wealth after one’s death. However, you can also create a trust and pass on assets during your lifetime. A revocable trust, also called a living trust, can be altered and even dissolved so long as you’re alive. It will usually keep your assets out of probate but you probably won’t escape estate taxes.

An irrevocable trust, on the other hand, cannot be altered once it has been created. By creating an irrevocable trust, you give up control of your assets but can protect beneficiaries from probate and estate taxes. Most revocable trusts convert to irrevocable trusts upon the death of the grantor — the person who set up the trust.

Why create a living trust?

You might consider creating a living trust for one of several reasons:

  • If you would like someone else to accept management responsibility for some or all of your property.
  • If you have a business and want to ensure it operates smoothly with no interruption of income flow in the event of your death or disability.
  • If you want to protect your assets from the incompetency or incapacity of yourself or your beneficiaries.
  • If you wish to minimize the chance that your will may be contested.

Choosing a trust that works for you

When considering a trust, always seek professional advice to make sure you’re making the right decision for yourself and your loved ones. An estate planning attorney or financial advisor can provide you with expert advice about whether a trust could be a useful component in your long-term financial plan.

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Estate Planning: 11 Things to Do Before You Die

Death is not a topic anyone wants to think about, let alone talk about.  However, it is the inevitable outcome of life and something we can plan for.  I learned the hard way when my father passed of a heart attack – we were in the midst of planning for this day – we just hadn’t gotten that far.  It took me months to comb through boxes and boxes of paperwork to piece together everything.  I wouldn’t wish this on anyone.  So today, you can take steps to make the end a little more manageable for your family.  I found this article on Legal Zoom and thought I would share it here.  It takes but a moment to create a trust, to write down the passwords and your wishes.  Do it now – in good health – and know, when the time comes – you have helped your family with the one thing they don’t ever want to think about.  

– Thank you for reading – Sabrina


Estate Planning: 11 Things to Do Before You Die


Pondering your own mortality is probably not high on your list of enjoyable activities, and yet getting your affairs in order is advisable for everyone.

You may think “estate planning” is only for the wealthy, or that—since you’re relatively young and/or healthy—you don’t need to worry about such things, but neither is true.

Even people with modest assets can benefit from end-of-life planning, which encompasses much more than just writing a last will and testament. And, as we all know, death doesn’t discriminate by age or any other factor.

A little forethought now about how you would like things to go once you’re incapacitated or gone can give you great peace of mind now, as well as spare your loved ones a lot of hassle later.

What are some of the most important things you can do now? Here is a handy estate planning checklist.

  1. Gather important documents and contact information.

Property deeds, vehicle titles, official certificates (birth, marriage, etc.), the contact information for your attorney, insurance broker, doctor—all of these are things you can gather and put in the same, safe place now to make it easier for your loved ones later.

As a bonus, getting all these materials together should also make compiling your estate plan easier, as you will have a lot of the necessary information at your fingertips.

  1. Execute a last will and testament.

A will is one of the most important estate planning documents you can have, as it details where you would like your property go after your death. Unless you make a will, you are leaving things up to your state’s intestacy laws, which apply when someone dies without a will. And you should not assume that the state will make the same choices you would have made.

When you create a will, you, the testator, name an estate administrator or executor: a person you trust to handle the distribution of your estate. You can also name a legal guardian for any minor children and their property, as well as leaving instructions for the care of your pets.

  1. Complete a living will or advance directive.

A living will or advance directive is a legal document in which you name someone to communicate with medical personnel regarding your treatment preferences should you become incapacitated or otherwise unable to express your preferences yourself.

Issues addressed in living wills generally include breathing tubes, feeding tubes, and other life-sustaining medical treatments.

  1. Put in place a power of attorney.

A durable power of attorney allows you to name someone to be in charge of making decisions for you if you become incapacitated. You may choose to name a separate health care power of attorney for medical decisions and a financial power of attorney for financial decisions.

A health care power of attorney works hand-in-hand with a living will to ensure that your wishes regarding medical treatment are followed. A Health Insurance Portability and Accountability Act (HIPAA) authorization is also necessary to allow others to speak with doctors and nurses about your condition.

  1. Establish a living trust.

A living trust can be a great way for you to make sure your wishes are followed after your death, as well as providing for fast distribution of your assets to beneficiaries, avoiding estate taxes and keeping your financial affairs private.

With a living trust, you, as the grantor, retain control over any property placed within the trust throughout your lifetime. Upon your death, your pre-chosen successor trustee gains control of the trust and will then distribute your assets according to your instructions—all bypassing probate, thus saving both time and money.

An irrevocable trust can also serve as asset protection, to protect your property from being touched by creditors or lawsuits.

  1. Update your beneficiaries.

If you have life insurance, retirement accounts, pensions, or pay-on-death (POD) or transfer-on-death accounts, make sure your beneficiaries are up to date, as these accounts transfer according to their beneficiary designations; your last will does not control them. Any time there is a change in your family situation is a good time to review your beneficiaries.

  1. Secure your digital assets.

Along with online bank, investment, and shopping accounts, many people also have social media accounts that need handling upon the death of the owner.

Facebook, for instance, has a special section in which you can select someone to take over your account upon your passing, but you should also think about what you want to happen with websites, blogs, and any other online activities in which you participate.

  1. Plan final arrangements.

Final arrangements can include organ donation, as well as funeral plans, including how they are to be paid for. Pay-on-death bank accounts are often the best way to handle funeral expenses.

Your will isn’t the best place to include this information because it often isn’t read immediately, so a letter to your estate administrator or a trusted loved one is best.

  1. Make copies and store.

Once you have gathered all your estate planning documents, make copies and store the original and copies in a safe place, such as a fireproof safe in your home or a safe deposit box. Make sure at least one other person will be able to access these documents after your death.

  1. Talk with your loved ones.

Just getting everything down on paper is a great step forward in estate planning, but talking with your loved ones about your wishes is priceless. The clearer they are on what you want, the more likely it is that your wishes will be followed—and the fewer problems they will have, as they won’t have to guess your intentions.

This talk doesn’t have to be all grim and dire, however. You can also take this opportunity to talk to them about your life and memories, and even pass along cherished photographs and stories.

  1. Keep everything current.

Once you put together your estate plan, don’t just put it in that safe place and forget about it. At least yearly, perhaps on your birthday, you should revisit the documents to make sure they still reflect your intentions.

And a bonus: Get the help you need.

While there is no legal requirement that you consult an estate planning attorney, you may want to speak with an attorney to make sure you have adequately addressed all potential concerns while running through the above estate planning checklist.


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Don’t Let the Bed Bugs Bite

The National Pest Management Association’s Vice President of Public Affairs, Missy Henriksen, shares the following tips for avoiding these pests while traveling.

Check Your Room. If you don’t want to let the bedbugs bite, thoroughly inspect your room for signs of infestation. Henriksen advises placing your luggage in the bathroom when you first arrive in your hotel room, because there’s no place for bedbugs to hide in most bathrooms. Next, says Henriksen, “Pull back the sheets and inspect the mattress seams, particularly at the corners, for pepper-like stains or spots or even the bugs themselves. Adult bedbugs resemble a flat apple seed.” Also look behind the headboard, inside chair and couch cushions, behind picture frames, and around electrical outlets. If you see anything suspicious, notify management and change rooms (or better yet, establishments) immediately.

Request A Different Room. If you do have to change rooms, don’t move to a room adjacent to or directly above or below the site of the bedbug infestation. “Bedbugs can easily hitchhike via housekeeping carts and luggage or even through wall sockets,” notes Henriksen. “If an infestation is spreading, it typically does so in the rooms closest to the origin.”

Cover Your Bags. Even if you don’t see any signs of bedbugs, you should still take precautions. Never place luggage on a hotel bed or floor. Use luggage racks if available, and place your suitcase in a protective cover. Even a plastic trash bag will suffice.

Keep Everything Off the Floor. Despite the name, bedbugs lurk in many spots, not just where you sleep. Always be vigilant when you travel. Avoid putting your personal belongings on the floor of an airplane, bus, train, or taxi. Keep your small bag or purse on your lap at all times, and seal your bigger bags inside plastic or protective covers before checking or storing them in overhead bins.

Treat Your Luggage and Clothes After Travel. “The best way to prevent bedbugs is to remain vigilant both during travel and once you return home,” says Henriksen. The National Pest Management Association offers the following checklist to make sure you leave the bedbugs behind:
• Inspect your suitcases before bringing them into the house, and vacuum all luggage before storing it.
• Consider using a handheld garment steamer to steam your luggage; this can kill any bedbugs or eggs that might have hitched a ride home.
• Immediately wash and dry all of your clothes—even those that have not been worn—in hot temperatures to ensure that any stowaway bedbugs are not transported into your drawers or closet.
• Keep clothes that must be dry-cleaned in a plastic bag and take them to the dry cleaner as soon as possible.
• If you suspect a bedbug infestation in your home, contact a licensed pest professional promptly. Bedbugs are not a DIY pest, and the longer you wait, the larger the infestation will grow. A trained professional has the tools and knowledge to effectively treat your infestation.

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