Personal Trust Services

Transcription

1 Personal Trust Services

2 Morgan Stanley Trust National Association 1 Morgan Stanley Trust, N.A. is dedicated to providing comprehensive and customized trustee services to wealthy families. As an experienced fiduciary, we offer all the necessary investment and administrative support required to manage a broad spectrum of personal trusts. With its headquarters in Delaware and having several locations throughout the U.S., Morgan Stanley Trust National Association ( Morgan Stanley Trust, N.A. ) is able to work closely with clients nationwide. Our clients can benefit from Delaware s preferred set of fiduciary and trust taxation laws, ensuring privacy, protection, longevity and potentially significant tax advantages. Our trust professionals can help manage a trust in a number of capacities whether a client decides to name Morgan Stanley Trust, N.A. as sole or co-trustee or decides to name us as an agent for them as trustee over their own trust. By leveraging the breadth and depth of Morgan Stanley s world-class investment management platform, we offer our clients a full array of equity, fixed income, alternative and tax-sensitive investment styles. Our open architecture platform is a leader in the industry and enables Morgan Stanley Trust, N.A. to access investment managers not typically available to fiduciaries. Our clients can benefit from our ability to deliver fiduciary services and the Morgan Stanley investment platform. WE OFFER OUR CLIENTS A FULL ARRAY OF EQUITY, FIXED INCOME, ALTERNATIVE AND TAX-SENSITIVE INVESTMENT STYLES Trustee/Co-Trustee As trustee, Morgan Stanley Trust, N.A. has the ability to administer all facets of a personal trust account. Our trust professionals work with clients to help build a comprehensive wealth plan for the trust, in line with the clients wealth management goals and objectives. We strive to deliver superior performance results based on that wealth plan and to work with clients or their beneficiaries to adjust the wealth plan as circumstances and/or needs evolve. Administrative Agent As administrative agent, Morgan Stanley Trust, N.A. will assist an individual trustee in managing the trust by providing a full range of custodial, tax preparation and proxy services.

3 Morgan Stanley Trust National Association 3 Custodian As custodian, Morgan Stanley Trust, N.A. will hold trust assets for safekeeping, buy and sell securities, collect income earned by trust assets, distribute income and/or principal and provide regular statements reflecting assets and transactions. Trust and Estate Settlement/Execution Our trust professionals will ensure strict adherence to settlement instructions and protection of the client s interests. Morgan Stanley Trust, N.A. can act as executor of an estate or assist in settling an estate through a trust where Morgan Stanley Trust, N.A. is named trustee. Our Trust Settlement Services (which are distinct from trustee services provided to continuing trusts) include custody of assets including real property, arranging for the sale of personal assets of the decedent, reviewing and filing estate tax returns, paying debts and expenses and distributing trust assets. Estate Settlement and Execution As executor, Morgan Stanley Trust, N.A. will work with the decedent s attorneys and advisors to ensure that the collection, valuation and distribution of all estate assets are made in accordance with the terms of the will. PERSONAL TRUSTS CAN HELP A FAMILY ACHIEVE TAX- EFFICIENT GIFTING, EFFECTIVE WEALTH PRESERVATION AND WEALTH TRANSFER. Personal Trusts Personal trusts are an important tool in the wealth management process. They can help a family achieve tax-efficient gifting, effective wealth preservation and wealth transfer. Among the reasons wealthy individuals and families consider establishing trusts include: Control, security, continuity of management and transition of assets Reduce tax liabilities and avoid probate Professional asset management Assistance with life-changing events Morgan Stanley Trust, N.A. specializes in sophisticated personal trust services that can help meet varying personal, tax, financial, investment and estate planning needs. Our trust professionals work with wealthy individuals, their families, attorneys and investment professionals to construct effective and efficient trust strategies.

4 Morgan Stanley Trust National Association 5 Customized Personal Trust Solutions Several trust strategies exist to help protect and transfer assets among immediate family members. Some of these include: Revocable Living Trust A revocable living trust is a flexible estate planning tool whose primary purpose is to help individuals avoid probate and have a plan in place for incapacity or death. Revocable refers to the fact that it can be changed or terminated by the grantor during his/her lifetime. The trust becomes irrevocable upon the grantor s death. Irrevocable Trust An irrevocable trust can serve as a tax planning tool. Assets placed in an irrevocable trust are generally not counted as part of an estate, thus saving on estate taxes. Certain irrevocable trusts can also provide income tax savings. Provisions of an irrevocable trust cannot be changed once established. Testamentary Trust A testamentary trust is established under a will or trust and does not go into effect until the grantor s death. Children s Trusts There are several different types of trusts that are used to make significant controlled gifts to children. These include minor s trusts (also known as 2503(c) trusts) and Crummey trusts. Credit Shelter Trust The purpose of a credit shelter trust (also known as bypass trust, unified credit trust, family trust or A/B trust) is to ensure a spouse s exemption from estate taxes is utilized. Typically funded at death, this trust is most often established under a will or a revocable living trust. Credit shelter trusts often pay income to the surviving spouse for life. QTIP Trust A qualified terminable interest property trust ( QTIP ) is a trust for the benefit of the spouse that qualifies for the estate tax marital deduction. This type of trust allows one to provide lifetime income for a spouse and still control the ultimate distribution of trust assets for selected beneficiaries. GIFTING WEALTH WITHIN THE FAMILY IS A COMMON WAY INDIVIDUALS TRANSFER THEIR ESTATE. Family Gifting Strategies Gifting wealth within the family is a common way individuals transfer their estate. There are several very effective gifting strategies available that, in addition to facilitating the transfer of assets to family members allow a grantor to retain some control over the process and the use of those assets. Some of these gifting strategies include the following: Grantor Retained Annuity Trust A sophisticated gifting strategy employed by wealthy individuals, this irrevocable trust freezes the value of assets transferred to the trust for tax purposes at the time the trust is established. Grantors retain an interest in the assets transferred to the trust, while the gift is the remainder interest in the trust assets. Qualified Personal Residence Trust As one of the largest components of an estate, a home may be an estate tax liability all by itself. A qualified personal residence trust ( QPRT ) may allow an individual to remove the home s value from his/her estate while maintaining the right to live in the home for a number of years before ownership is transferred to the trust beneficiaries.

5 Morgan Stanley Trust National Association 7 Tax Planning and Sophisticated Philanthropic Solutions Planned giving arrangements not only ensure that a favorite charity or institution benefits from a trust, but they also provide a tax-efficient way for a family to leave a lasting legacy in the future. Morgan Stanley Trust, N.A. professionals have the experience and resources to guide wealthy families in their charitable contributions and can customize solutions to meet various wealth preservation needs and philanthropic goals. Outright Gift An outright gift to a favorite charity can produce an income tax deduction if the gift is made during the donor s life, or can reduce a taxable estate if the gift is made at the donor s death. Donor-Advised Fund As a tax-qualified public charity, this fund allows a donor to recommend (but not command) how contributions will be distributed to selected various charitable organizations. Contributions to a donor-advised fund are tax deductible in the year the contribution is made. Charitable Gift Annuity With a charitable gift annuity, a donor can receive guaranteed distributions for life in exchange for making a direct gift to a charity. Distributions are paid in the form of an annuity. Part of each payment is a return to the donor for the gift, so only a portion is taxable as ordinary income. The donor may take a charitable income tax deduction in the year the gift is made. Charitable Remainder Trust Aside from ensuring a substantial contribution to a favorite charity(ies), these irrevocable trusts can help wealthy individuals and families defer capital gains taxes, increase spendable income from unproductive investments, qualify for charitable income tax deductions and reduce or eliminate estate tax liabilities. MORGAN STANLEY TRUST, N.A. PROFESSIONALS HAVE THE EXPERIENCE AND RESOURCES TO GUIDE WEALTHY FAMILIES IN THEIR CHARITABLE CONTRIBUTIONS. Net Income Make-Up Charitable Remainder Unitrust ( NIMCRUT ) The NIMCRUT is a specialized version of a charitable remainder unitrust that distributes to the donor or other beneficiaries the lesser of 1) the fixed percentage of the value of the trust revalued each year; or 2) the income of the trust as determined by state law or the governing instrument. Charitable Lead Trust The opposite of a charitable remainder trust, a charitable lead trust uses either an annuity or unitrust income payout structure to pay the charities first. At the end of the trust s term, remaining assets are usually transferred to the donor s beneficiaries. Significant income tax deductions are achieved if the donor creates the trust during his/her lifetime. Family Foundations Contributions to a private or public charitable foundation are generally tax deductible whether they are made during the donor s lifetime or upon his/her death. These contributions create a perpetual vehicle for the management of the donor s charitable wishes.

6 At Morgan Stanley Smith Barney, we are dedicated to providing individual investors with some of the finest thinking, resources and services in the financial world. Professionals from across our firm support various investment needs and customize wealth planning solutions to help investors and their families control their wealth and secure their legacy. Morgan Stanley Trust, N.A. understands that naming someone as trustee is the ultimate expression of faith and confidence. As such, we strive to provide our clients with superior trust solutions and administration services. Please contact your Morgan Stanley Smith Barney Financial Advisor for more information about our services and how we can help facilitate effective wealth preservation and wealth transition for you and your family.

7 Morgan Stanley and Morgan Stanley Trust National Association do not render advice on tax and tax accounting matters to clients. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Personal Trust services are provided by Morgan Stanley Trust National Association, a wholly-owned subsidiary of Morgan Stanley. Morgan Stanley Smith Barney LLC and Morgan Stanley Trust National Association are affiliates and fiduciaries and fiduciary-related services are provided through Morgan Stanley Trust National Association. Investments and services offered through Morgan Stanley Smith Barney LLC, and accounts carried by Morgan Stanley & Co. Incorporated; members SIPC Morgan Stanley Trust National Association NY CS /10 CLF #32566 #PS24055 GP P-N05/09