As an independent, state-regulated professional fiduciary, GSS Trust acts as a neutral third party to manage everything from revocable living trusts to complex special needs and settlement trusts.

A trust is a fiduciary relationship created to allow one person to manage funds on behalf of another.

  • The Trust is the legal document that creates the arrangement and sets out the duties and discretion of the Trustee.
  • The Trustor (or Grantor) is the term used for the person creating and funding the trust
  • The Trustee is the person or firm named to have control of the assets placed in trust
  • The Beneficiary is the person on whose behalf the trust is created and who is intended to benefit from the assets placed in trust. The Trustor and the Beneficiary may be the same person.
  • The Trust Principal is a general term for assets placed in trust.

There is a wide variety of trust types and assorted provisions that can be included in trusts. Consultation with an experienced attorney is essential to understanding how these alternatives apply in a specific situation.  The following are some of the more common terms used in trusts that GSS manages.

Revocable Living Trust

A Revocable Living Trust (RLT) is created during a person’s lifetime and can be amended or revoked at any time. Upon the grantor’s death or incapacity, the successor trustee (for example GSS Trust) steps in to manage according to the trust’s terms. GSS serves as successor trustee, and upon the activation of its role, becomes responsible for all assets with the RLT. GSS coordinates with your investment advisors, manages real property, fulfills tax obligations, and makes distributions to beneficiaries in compliance with the trust document.

A revocable living trust provides a flexible vehicle for individuals and couples looking to manage their assets in the present and provide for a more streamlined succession plan as they age. You start out as the Trustee of your RLT and can manage it as long as you are able or desire. You can later resign when you are ready for GSS to take over the trust’s management or upon the advice of your attorney or the assessment of your physician. The advantage of an RLT over a Power of Attorney arrangement is that financial institutions are quicker and more accommodating in recognizing the authority of a successor trustee than they are an Agent under Durable Powers of Attorney. This creates for an easier transition, especially in a situation in which you decline rapidly and need a fiduciary to step in, manage assets, and pay for your increased care needs.

Settlement Trust

When an individual receives a significant legal settlement or award, the funds may require professional fiduciary oversight. GSS Trust works with attorneys to structure and administer settlement trusts, ensuring funds are invested, disbursed appropriately, and managed in compliance with any settlement agreement terms.

Common scenarios include a minor beneficiary who requires financial stewardship until they come of age or an individual with a disability who requires a special needs trust to remain eligible for government benefits. GSS Trust has been a trusted professional for the courts in Washington since the early 1990’s, and our and depth of experience expertise in settlement trust administration is unmatched.

Special Needs Trust

Special Needs Trusts (SNTs) are designed to hold assets for a beneficiary with a disability, facilitating distributions to enhance their quality of life without disqualifying them from means-tested government benefits such as Medicaid or Supplemental Security Income (SSI).

GSS Trust has administered SNTs since our founding in 1985 and understands the complex interplay between trust distributions and benefit eligibility. We coordinate with benefit agencies, care providers, and family to ensure trust funds enhance the beneficiary’s quality of life while protecting their benefits.

First-Party Special Needs Trusts are funded with the beneficiary’s own assets, most commonly the proceeds of a settlement or inheritance. These trusts are sometimes called self-settled SNTs and can be established by the beneficiary, a parent, grandparent, or the court. Because the trust is funded with the beneficiary’s own money, Washington State law requires that upon the beneficiary’s death, any remaining funds be used to reimburse Medicaid for services paid on the beneficiary’s behalf during their lifetime before passing to other heirs.

Third-Party Special Needs Trusts are funded entirely with assets belonging to someone other than the beneficiary, typically a parent or grandparent. These trusts have no Medicaid payback requirement. Third-party SNTs can be established in two ways:

  • An inter vivos irrevocable SNT is established and funded during the lifetime of the trustor. This is the optimal choice for a beneficiary with disabilities in need of consistent financial support. The trust can be partially funded at the time it is created to prevent an interruption of distributions, then receive its full funding upon the death of the trustor.
  • A testamentary SNT is created through a last will and testament or a revocable living trust and does not come into existence until the death of the person who created it. A testamentary SNT cannot receive funding until the probate period is complete.

Testamentary Trust

A Testamentary Trust is created within a person’s last will and testament and goes into effect upon the completion of the probate of the will. It is commonly used when someone does not believe that an heir is able to manage funds on their own. Testamentary Trusts often include Special Needs provisions.

Irrevocable Trust

An irrevocable trust is a trust that, once established and funded, generally cannot be modified or revoked by the trustor. Unlike a revocable living trust, an irrevocable trust permanently transfers assets out of the trustor’s estate.

Some irrevocable trusts have mandatory income distributions. The trustee is required to distribute all net income (interest, dividends, etc.) to the beneficiary. The trustee has no discretion to withhold these income distributions, though access to the trust’s principal may remain subject to trustee discretion. Other irrevocable trusts grant the trustee broad discretion over both income and principal distributions, with no mandatory distribution requirement.

Many irrevocable trusts require the trustee to distribute a lump sum amount or percentage of trust assets at certain ages. This set up is commonly used when the trustor wants to pass along the inheritance as the beneficiary matures, while limiting the risk of a young person receiving a large sum before they are ready to manage it responsibly.

Spendthrift Trust

Spendthrift Trust – Most trusts contain provisions to the effect that the beneficiary cannot direct spending of trust assets and cannot make financial commitments that are binding on the trust. The purpose of these provisions is to protect trust assets from creditors of the beneficiary.