A trust is a contractual arrangement in which the trustee (our Trust Department) takes possession of certain property and manages it for the benefit of the trustor (the customer). 

 

While most people like to control their possessions and decide whether to buy, sell or trade them, some property owners are unable or unwilling to make those decisions. In these situations trust departments can take possession of the property and manage it while passing the proceeds to the owner. 

 

Trusts can be living, established during the trustors lifetime or testamentary, established in a will and effective when the trustor(s) dies. Living trusts can be revocable or irrevocable. Testamentary trusts are always irrevocable since the deceased trustor is unable to change the terms of a trust. When the trustor dies and the estate is settled the bank is responsible for following the orders of the will. 

 

Conservatorship trusts can be set up to manage the property of a minor or incapacitated person. The difference between a conservatorship and Guardianship is that the guardian looks after the person and their welfare while a conservator looks after their estate. 

 

Charitable Remainder Trusts are irrevocable trusts that provide for two sets of beneficiaries. The first being the trustor and if married, a spouse. The trustor receives a set percentage of income for your lifetime from the trust. After the trustor passes away the principal (remainder) of the trust is donated to a charitable organization named in the agreement. 

 

Like a trust, an Agency allows the trust department to manage property. In an agency the customer keeps ownership to the property, while in a trust the customer gives the title to the trustee. An agency must cease when the customer dies, while trusts can continue for many years. 

 

Burial Trusts are irrevocable agreements designating the bank to hold funds to pay for the funeral expenses of the Trustor at the time of his/her death.  

 

**First State Bank's trust department not only operates trust and agencies; they also perform services, such as estate planning and settlement, which doesn't necessarily involve a trust relationship. 

 

Benefits of a Trust 

     • Asset protection 

     • Ease of distribution to heirs 

     • Increase opportunities for growth of property 

     • Isolate assets from litigation and liens 

     • Asset and income diversification 

     • Avoiding probate and estate taxes 

     • Privacy 

     • Avoiding lawsuit and judgment losses