"My partners and I have been using Peak (formerly Alaska Trust Company) as a trustee of income tax and estate planning trusts for some 20 years and innumerable trusts. Never once has Peak disappointed me, my partners or any of my clients; never once has any client lost any money to IRS on an audit where a Peak trust was involved."
"I have only had very positive experiences working with Peak Trust Company. Everyone I have worked with has always been very responsive and friendly. They work hard to provide quick, efficient and practical solutions for clients."
"There’s no question Peak has the experience and skill to handle complex issues, but I recommend Peak to all of my clients because they treat my clients like royalty."
"A great trust company to work with, attentive, responsive, and professional."
Q. What is the difference between a will and a revocable trust?
A. The main difference between a will and a revocable trust is how they are administered once the defining event has occurred (death). Additionally, a Will is designed to govern the distribution of all assets in your estate. A trust only governs those assets held or owned by the trust, which can include nearly your entire estate.
A will must be administered through a process called probate. Each state has different probate procedures. Generally, probate is expensive and time consuming, although there are exceptions. Additionally, probate is a public process.
A revocable trust is administered by the trustee(s) of the trust and does not have to go through probate, thus saving time and money. Additionally, revocable trusts allow for greater privacy as they are confidential documents and are not subject to public access.
Q. What is a trust?
A. A trust is a legal arrangement (contract) in which an individual or entity (trustee) holds property for the benefit of other persons (beneficiaries). The trust terms, decided by the creator/grantor, will govern how and when assets can or will be distributed to the beneficiaries.
Q. If I have a will do I need a trust?
A. This depends on what you are looking to accomplish. If you are looking to avoid probate, gain greater confidentiality of your final estate plan and provide specific instructions as to how and when assets will be distributed to beneficiaries, a revocable trust may be a vehicle to consider.
Q. If you are looking to accomplish all of the above and avoid estate/gift taxes, an irrevocable trust may be a vehicle to consider.
A. It is important to note that only assets retitled (owned) in the name of the trust are governed by the trust. Assets held outside the trust will be governed by either your Will or your state intestate laws.
While trusts can be very flexible, they can be diverse and complex. Therefore, discussing your wishes and desires with competent estate/trust planning counsel is essential.
Q. Do I need to work with a trust company in my state? Country?
A. No, you do not need to work with a trust company (trustee) in your state or county. With today’s flexible laws, you can work with a trust company of your choice rather than have your options defined by state lines.
Q. How much does it cost to set up a trust?
A. The cost to create a trust can vary greatly and depend on many factors, such as the complexity of the trust/estate plan, type of trusts, number of trusts, etc. The most important point in creating a trust is working with competent legal/tax counsel. A poorly drafted trust document can create many problems.
Q. How much money do I need to have to make a trust worthwhile?
A. As long as you can find a provider with an economical fee structure, all clients can benefit from trusts. It depends less on the dollar value of the assets to be placed in trust and more about how you would like those assets to be distributed.
Q. Are there any disadvantages to using a trust?
A. Unfortunately, trusts are not free to create. However, once created, assuming they are properly drafted, there are typically very few downsides, if any. Especially, when the trusts are governed by flexible laws, such as Alaska.
When planning with irrevocable trusts, the assets inside the trust do not receive a step-up in basis upon the grantor’s death. However, there may be ways to achieve this step-up. You should fully discuss this with your legal/tax counsel to avoid any unanticipated or undesired consequences.
Q. Are there different types of trusts?
A. There are many different types of trusts, revocable and irrevocable, grantor and non-grantor, charitable, defective-grantor trusts, qualified personal residence trusts. The list is quite long. Again, competent legal/tax counsel will help you to determine the right trust(s) for you and your family.
Q. What’s the difference between an irrevocable and revocable trust?
A. The difference between a revocable trust and an irrevocable trust comes down to control. A revocable trust is one that is typically controlled by grantor (creator) and can be easily terminated. The assets of this trust are considered to be owned for legal and tax purposes by the grantor.
An irrevocable trust is one that is typically controlled by an independent, third-party trustee. The assets of this trust are not considered to be owned by the grantor or the beneficiary, instead they legally belong to the trust. Due to the lack of control, these trusts can be used for more advanced estate/financial planning, including the avoidance of estate/gift taxes.
Q. How is a trust set up?
A. Creating a trust is a relatively easy process. The trust is drafted by a competent attorney, often one who specializes in trust and estate planning. Once the document is drafted, it is funded and managed by the trustee(s).
Q. How is a trust invested?
A. A trust can be invested in a variety of ways. Trusts do not have prohibited or restricted assets, as long as the investments and investment strategies are permitted by the trust document.