How do I add a Loan Trust?

Q. How do I add a Loan Trust? 

 

A. For an existing Loan Trust, on the Investment screen enter the details of the existing plan, selecting Loan Trust as the Type. Ensure that you select the radio button next to 'No' in answer to the question 'Is this a new investment?'. Most importantly, you should enter the current balance (of the Trust itself) under 'Balance', and the balance of the loan under 'Loan Balance'.

For a new Loan Trust, on the Investment screen, enter a new investment, selecting Loan Trust as the Type. Ensure that you select the radio button next to 'Yes' in answer to the question 'Is this a new investment?'. Set up a transfer into the Trust under Advanced Settings > Transfers / Additional Contributions. Instructions on setting up transfers can be found here.

If you set-up planned withdrawals from the Loan Trust (under Advanced Settings > Planned Withdrawals), these will cease (automatically) once the outstanding value of the loan has been 'repaid'.

How a Loan Trust is viewed.

With regards to what is shown via 'Let's See',  this will depend on what exactly you are looking at - for instance, if you have opened the Detailed Info > Investments panel, then we do show the value of the Trust account itself - but this does not, in any way, imply that we are counting the entire value of the Trust account as being inside the clients' Estate (it's merely the value of the named Trust account). By contrast, in  any of the various charts  (e.g. Liquid Assets, or Net Worth, which one can select from the 'dropdown' menu, immediately below the chart itself), then we represent the Trust as being wholly *outside* of the clients' ownership, and you won't see the Trust appearing at all. In fact, the only 'chart' that *would* incorporate the Trust will be the option named 'Plan Worth'.

The charts (in the Let's See screen) are not able to incorporate some fraction of an account, so the value of any individual account must be represented as either/or (i.e. it's either 'owned', or it isn't).

The one place to see definitively what is/is not included in a client's Estate, at any given point in time, is the Overview > Legacy screen - in this screen, one would see that only the remaining balance of the loan falls inside a client's Estate, at the time of Mortality.

 

Further reading:

How can I use Voyant to show the impact a Loan Trust has on a client's Estate?