When you hear the term “trust,” what comes to mind?
For many, it’s scenes from movies or TV shows where trusts play a role in plotlines filled with intrigue, family dynamics or high-stakes decisions. On screen, trusts are often linked to sprawling estates and moments of grandeur, but in real life, they’re much more practical — and far more accessible.
Trusts aren’t just for the dramatic storylines we see in entertainment. They’re tools for anyone who wants to ensure their children are cared for, make things simpler for loved ones after they’re gone or shield their assets from life’s unexpected twists. They may not come with the twists and turns of a big screen storyline, but they do come with something far better: peace of mind.
What Exactly Is a Trust?
A trust is a legal arrangement that allows you (the “grantor) to transfer assets to a third party (a “trustee”), who manages them on behalf of someone else (your chosen “beneficiaries”). It’s a flexible tool for securing your assets, avoiding probate, ensuring your plans are carried out exactly as you envision — and more.
How Can You Use a Trust?
Let’s take a closer look at 10 ways a trust can work for you:
1. Protecting What’s Yours
A trust can act as a safeguard, shielding your assets from creditors, lawsuits or financial risks that your beneficiaries might face. For example, if a family member goes through a divorce, faces bankruptcy or becomes involved in a legal dispute, a trust can help ensure that the wealth you’ve worked hard to build stays secure and safe from outside claims.
2. Simplifying Estate Planning
A trust gives you control over how your assets will be distributed, ensuring your wishes are followed and your loved ones aren’t left with unnecessary complications. It centralizes your plans, making them easier to manage — especially if you have property in multiple states or complex financial arrangements. By setting clear terms in advance, a trust helps streamline estate planning, reducing potential confusion and stress for your family.
3. Avoiding Probate
One of the most practical benefits of a trust is that it allows your family to avoid probate, the often lengthy and expensive legal process required to settle a will. Unlike wills, which go through probate and become public documents, trusts keep your family’s financial and personal affairs private. This can be especially important for families who value discretion when it comes to their assets and estate plans.
A properly structured trust also ensures that assets are distributed much faster, sparing your loved ones unnecessary delays or expenses during what is already a difficult time.
4. Reducing Taxes
Trusts can help reduce estate taxes, income taxes for beneficiaries and even capital gains taxes (the taxes owed when an asset is sold for more than what it was originally purchased for). For example, if you leave stocks or property in a trust, your heirs may benefit from a stepped-up cost basis.
Here’s what that means:
When your heirs inherit the asset, its taxable value is reset to its current market value (not what you originally paid for it). If they sell it later, they only pay taxes on the increase in value after they inherited it. This adjustment can save them a significant amount in taxes, helping preserve more of what you’ve passed on.
5. Customizing Inheritance Plans
Trusts are an excellent tool for building generational wealth, helping you pass on assets securely and ensuring they’re used to support your family’s future. If you’re concerned about how your beneficiaries will handle their inheritance, a trust lets you set specific terms. You could distribute funds gradually, tie them to milestones (such as graduating college) or set conditions based on age or financial responsibility.
6. Caring for Loved Ones with Special Needs
Special needs trusts provide financial support for loved ones with disabilities while preserving their eligibility for government benefits like Medicaid or Supplemental Security Income (SSI). By appointing a trustee, you can ensure funds are used wisely to care for your loved one’s needs.
7. Preventing Family Conflicts
Trusts can bring clarity to inheritance plans, ensuring everyone understands exactly how assets will be distributed. This is especially valuable for individuals in blended families, where it’s important to balance the needs of a current spouse with the inheritance rights of children from a previous marriage. By setting clear terms, you can reduce misunderstandings, avoid disputes and help your family focus on supporting one another.
8. Supporting Business Succession
If you own a family business, a trust can protect it from being divided among heirs or mismanaged. By specifying how ownership and management will transfer, you can ensure the business thrives for future generations.
9. Planning for Incapacity
A trust ensures your financial affairs are managed if you become incapacitated. The trustee can make financial decisions, pay bills and manage investments on your behalf without the need for court intervention.
10. Making Charitable Contributions
Trusts can make it easier to contribute to the causes that matter most to you. They allow you to direct donations to charities, establish scholarships or fund community projects in a way that reflects your values. In addition to leaving a meaningful impact, charitable trusts may also offer tax benefits, helping you maximize the resources available for giving.
Who Should You Work With to Set Up a Trust?
Setting up a trust might feel overwhelming, but having the right team makes all the difference. Trusts can range from simple to complex, with key components that professionals can guide you through. Here are the people you want on your team:
- Trust Officer: Oversees the management of the trust, ensuring your wishes are carried out and offering personalized, local expertise
- Estate Planning Attorney: Drafts the trust documents, ensures legal compliance and helps structure the trust to meet your goals
- Financial Advisor: Provides guidance on which assets to include in the trust and ensures it fits into your overall financial strategy
A Final Thought
Trusts might be featured in dramatic movie storylines, but in real life, they’re far more practical — and deeply personal. They provide peace of mind by helping you protect what’s most important: your loved ones, your assets and your future.
Preparing for the future doesn’t have to feel overwhelming. Our local trust officers are here to listen, guide and ensure your wishes are carried out in a way that fits your life and goals. In the end, it’s about creating security and care for the things you value most.
As a Certified Trust and Fiduciary Advisor (CTFA), Michael Dustin is a vice president and senior trust officer for Bank of Utah. He brings over 30 years of experience to the job and is dedicated to providing clients with comprehensive estate and financial planning services. Michael holds both a bachelor’s and master’s degree in finance from the University of Utah. Outside of work, he enjoys skiing, golfing and spending time with his wife and four children.
