Evaluating Your Trust Issues: The Who, Why & When Of Setting Up A Trust Fund


Evaluating Your Trust Issues:

The Who, Why & When of Setting up a Trust Fund


By Paul Jarvis, CFP®

Areavoices Financial Planning Blog


We often associate trust funds with millionaires or the heiresses of well-known hotel chains. However, a trust is often a valuable part of estate planning, no matter how great one’s wealth.

Many times, individuals and families have little knowledge of trusts and the difference between the roles of a trust vs. a will.    By gaining a better understanding of the purpose of a trust, you can better decide whether or not trust provisions are necessary in your financial life.

When evaluating whether a trust makes sense for you and your loved ones, review the following steps:

  • Assess Your Need: Generally speaking, if describing your giving intentions would take more space than is provided by the blank line for a beneficiary designation, then you need a trust.

  • Determine Your Timing: You must decide if you want the trust to go into effect now or at your death. You can also make the trust revocable, which allows you to change the provisions of the trust anytime, or irrevocable, which means its terms cannot be subsequently altered once established.  

  • Name Your Trustee: By far your most important decision is your choice of a trustee – the individual or institution with the fiduciary responsibility to manage your trust’s assets and to honor all of its provisions. This person can be yourself, as in the case of a revocable living trust, or a stand-in for yourself, for when you’re no longer able to manage your assets.

  • Seek Expert Advice: Trusts can be complicated and expensive to set up. Contacting a Certified Financial Planner™ professional can help ease the stress of navigating this complex process. The trust plan created with a CFP® professional can then be taken to a licensed attorney who can render it into legal language relatively efficiently and cost-effectively.

A trust, while not appropriate for everyone, is a tool that offers those with detailed intentions for their assets critical planning, protections, and control. A CFP® professional can help assess the necessity for a trust as well as educate on how various trust provisions function, creating a plan that reflects your wishes, now and after you’re gone.

The CFP Board has provided several key considerations for deciding if setting up a trust should be part of your long-term estate planning in LetsMakeaPlan.org.

ABOUT Paul Jarvis

Paul Jarvis is a CFP Board Ambassador and leads United Capital’s office in Fargo. Read more of Paul’s blog by visiting  financialplanning.areavoices.com or by calling 701-293-2076.