When you create a trust you transfer all of your assets, securities, properties, bank accounts,  and real estate to one or more persons whom you “trust”.  You no longer own these assets, the “trust” does.  You still have access to all these assets while you are alive.  You instruct your trust to pay out all income to you during your lifetime, and up on your death whatever is left would be given to your beneficiaries.  You can put instructions in the trust as to who has access to it.   Your property will avoid probate after you die. You will need to appoint a trustee to take care of the trust and follow it’s directions.   During you life, you can be your own trustee, meaning that you can be the person responsible for taking care of all of the assets while you are alive.  You can continue to control your assets and decide what you want to do with them.   After your death, your trust would be passed on to a successor trustee that was named in your original Trust.

A trust is an effective way to protect your assets during the course of your life, as well as after you pass on.  It can provide financial security for your family members after you are gone.

Here are the steps to follow in order to create a trust:

1. Look into the different types of trusts. A “living trust”  is one in which the assets are controlled and used by you during your life, and are dispersed after you die as dictated by the trust.  The probate process is bypassed for all assets included in the trust.

2. Different from a living trust, a “testamentary trust” goes into effect only after you die.  It is typically connected to a will and can reduce or remove estate taxes paid by your beneficiaries.  A testamentary trust is still subject to the probate process.

3. Establish the trust once you have decided on the type that is right for your needs.  Decide who you want as your trustee (the person obligated to ensure that the terms of the trust agreement are implemented).

4. Consult with your financial adviser, lawyer, or banker.

5. Acquire the proper documentation from your adviser (or purchase a software program to assist you) and complete the documents to create the trust.

6. Fund a living trust.  Identify the assets you wish to include in your living trust.  These assets are the ones over which you have control and wish to control during your lifetime.

7. Change the titles of the assets in your living trust; put them in the name of the trust.

That is all there is to it.  Trusts are a great way to help your surviving relatives avoid paying excessive estate tax, or to avoid the entire probate process all together.  The probate process is normally long, drawn out over many months, and carries fees around five to six percent of the total asset value.  This is a good way to spare your family the time and expense of  probate.

Do you know what is common among the following banks – ING Direct, HSBC direct, Raboplus, IY Bank and The One Account? They all are success stories of Direct Banking, thus all were featured in the report ‘Direct Banking Case Studies’ back in December 2004. According to the report presented, the success levels of a few Direct Banks were closely examined, and it was concluded that Direct Banking has proved to be a feasible alternative in the new market.

So, what is direct banking anyway?

A Direct Bank is a bank without any Branch Network. It offers its services through Telephone Banking, Online Banking, Mobile Banking and Mail Banking. Thus, the first thing that comes to mind with Direct Banking is the need for a good and updated IT Infrastructure because it’s the technology that enables you to go direct.

Direct Banking is a comprehensive solution for banks to directly acquire, track and serve customers, through the Internet or mobile, all with the absence of a brick infrastructure. It is a solution that is highly secure, and supports multiple authentication mechanisms.

One of this method’s success factors is the relationship with the customers. There should be a 360 degree view of customers, and a complete balance between customer relationships and the technology used. The relationship should also be interfaced with a powerful online sales enabler infrastructure, to drive customer e-acquisition and extend the bank’s outreach.

Direct Banking has gained ground in the financial services market. It supports demand generation through online sales enablers, and optimizes marketing efforts. This results in a greater conversion of prospects. This type of banking also presents extensive security features, thus enabling the Direct Bank to offer products that are highly secure and able to withstand the onslaught of security threats.

To most, a bank is where the money of many individual lies. However, banks serve more purposes than just storing cash. Because of that, there are different types of banking. Although a single bank can offer several types of banking at once, these types tend to differentiate between the sectors of services offered. According to their functions, banks could be classified into four different types namely commercial, savings, trust, and investment.

Commercial Banking

In this type of banking, investments are made by individuals or firms. These deposits are mostly invested in short term (3-6 months) loans, and can be repaid to the investor whenever he demands them. This helps the bank to keep its assets liquidated while the loans are constantly maturing.

Savings Banking

In this type of banking, small or unused sums of money are deposited in banks for future needs. A particular rate of interest is paid on these deposits. The option to withdraw the deposited amount still remains, but only after a notice had been issued 90 days in advance.

Trust Banking

Individuals, firms and corporations could entrust their funds in this type of banking. The deposits made are classified as trust funds. These deposits have some trust function which comes along with the condition of repayment. Plus, they have certain laws and varying conditions of trust.

Investment Banking

This type of banking requires large sums of money to be invested, thus is best for well off people who want to invest their money. The investments are converted into bonds, acceptances and other investment securities.

Now that you know the types of banks out there, you can choose which would be the best to save your money or that of your company.