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Wealth Management & Trust FAQs

AWM&T

AWM&T is a state-chartered trust company that provides financial planning, investment management and trust services to the American Armed Forces, whether active duty, retired or honorably discharged veterans.

AWM&T is a not-for-profit, tax-exempt organization wholly owned by AAFMAA. Our net income above expenses returns to AAFMAA and ultimately back to our Members. We only serve military clients and promise you that you’ll always have a personal contact with us — never a call center.

As a fee-only financial planner and investment manager, AWM&T does not charge commissions. We believe this eliminates the inherent conflict of interest that exists if you use a broker who is compensated by selling commission-based products. Our comprehensive financial planning is offered at a flat fee. Investment management and trust services are charged an annual fee based on a percentage of assets under management. View our fee structure here.

Because we are a state chartered and regulated trust company, we have a fiduciary obligation to place our clients’ interests first, ahead of our own. A stock broker does not have to meet this standard.

  • You can create a trust to come into effect during your lifetime (inter vivos or living) or upon your death (testamentary).
  • A trust created during your lifetime can be either revocable or irrevocable. A revocable trust can be changed at any time – you may remove the property you place in the trust, change its terms or terminate it all together. An irrevocable trust may not be amended or changed in any way once you’ve set it up and any property you’ve placed in it is now titled to the trust and not an asset owned by you as an individual.
  • Either trust can be structured to provide for property management and distribution after your death.
  • Trusts used for tax planning are generally irrevocable. If you own a life insurance policy, you might want to consider using an Irrevocable Life Insurance Trust (ILIT) as the owner and beneficiary of your policies to provide maximum estate tax protection and long term asset management for the proceeds.
  • It’s possible to reduce federal estate tax through the use of a bypass or credit shelter trust, which will allow assets in the estate of the first spouse to die to “bypass” the surviving spouse’s estate, even though the survivor may receive distributions from the trust.
  • If you’d like to ensure that future generations are provided for, a generation skipping trust can create a platform to provide financial stability for years to come.
  • There are almost as many types of trusts as there are members with individual family needs and expectations. The one thing they all have in common is the need for a trustee to manage and distribute the trust’s assets in accordance with their directions.
  • Your trustee is responsible for seeing that the wishes you express in your trust are carried out – and is also responsible to your beneficiaries for proper asset management. Trusts require extensive recordkeeping and tax reporting – also the responsibility of your trustee.

Financial Planning

We will ask you to provide us with information about your family, income and expenses, current assets and investments, income tax returns, current retirement schedules or projections, existing insurance and estate planning documents. We will also discuss your personal and financial goals and timeframe.

We expect that most financial planning engagements will encompass four meetings between you and one of our professionals. Once all the initial information has been collected and analyzed, there will be the opportunity to review the results of our initial analysis and discuss any modifications that need to be made if it appears that any of your goals cannot be met. The final plan and recommendations will be presented at the fourth meeting.

The fee for a comprehensive financial plan is $2,100. We provide financial planning services on a “fee only” basis; there is no obligation or expectation that any of the plan recommendations be executed through AAFMAA or any of its affiliates, although you are free to do so if you wish.

Yes.  Financial planning is offered separately from investment management or trust services.

All AWM&T client assets are held by an independent custodian, Northern Trust. Your money is never commingled with other assets, assets of AWM&T, or those of AAFMAA. Northern Trust currently has custody of over $6.1 trillion in assets. In addition ,assets have the backing of AAFMAA.

Trust Services

  • You’re familiar with how you already own property – an account may be in your name alone or in joint name with a spouse. Your home may be held in “joint tenants with rights of survivorship”. A trust is simply a form of property ownership, not unlike the ones you already know.
  • What distinguishes a trust is that legal “ownership” of the property is the name of trustee, whose only interest in the property is the responsibility to manage it for the trust’s beneficiaries – the people whom you wish to benefit.
  • Think of a trust as an empty box. You create the box and then fill it with assets – commonly such investment assets as mutual funds, stocks and bonds. Because you’ve created the box, you get to determine how the assets inside of it will be made available to your beneficiaries – when, how much, and under what conditions.
  • Many people create trusts to provide for their immediate family members. Perhaps you’re concerned that your spouse has no experience or interest in managing money and would need assistance. Your children might still be quite young and you know that any assets they might receive would have to be managed for their benefit.
  • Depending upon relevant state law, you might wish to create a trust for your own benefit, designating a trustee to be responsible for investing and managing its assets, making distributions to you as you direct.
  • Your beneficiaries don’t need to be too young, too old, or financially irresponsible for a trust to make sense as part of your overall plan. Maybe they simply don’t have the time or inclination to manage assets for themselves. Or perhaps you want to make sure that the property you’ve set aside for their benefit will be there for them, and not subject to their creditors.
  • If you’d like to include one or more charities as part of your plan, trusts can be designed to provide a benefit to your favorite causes.
  • You can create a trust to come into effect during your lifetime (inter vivos or living) or upon your death (testamentary).
  • A trust created during your lifetime can be either revocable or irrevocable. A revocable trust can be changed at any time – you may remove the property you place in the trust, change its terms or terminate it all together. An irrevocable trust may not be amended or changed in any way once you’ve set it up and any property you’ve placed in it is now titled to the trust and not an asset owned by you as an individual.
  • Either trust can be structured to provide for property management and distribution after your death.
  • Trusts used for tax planning are generally irrevocable. If you own a life insurance policy, you might want to consider using an Irrevocable Life Insurance Trust (ILIT) as the owner and beneficiary of your policies to provide maximum estate tax protection and long term asset management for the proceeds.
  • It’s possible to reduce federal estate tax through the use of a bypass or credit shelter trust, which will allow assets in the estate of the first spouse to die to “bypass” the surviving spouse’s estate, even though the survivor may receive distributions from the trust.
  • If you’d like to ensure that future generations are provided for, a generation skipping trust can create a platform to provide financial stability for years to come.
  • There are almost as many types of trusts as there are members with individual family needs and expectations. The one thing they all have in common is the need for a trustee to manage and distribute the trust’s assets in accordance with their directions.
  • Your trustee is responsible for seeing that the wishes you express in your trust are carried out – and is also responsible to your beneficiaries for proper asset management. Trusts require extensive recordkeeping and tax reporting – also the responsibility of your trustee.

Trust Administration Fees:

  • 0.20% per annum in addition to Investment Management Fees

Irrevocable Life Insurance Trusts:

  • $1,000 per year (during lifetime of insured)

Please note that AAFMAA Wealth Management & Trust is prohibited from the unauthorized practice of law and cannot draft any documents for clients; we would be pleased to provide recommendations for counsel, if requested.

Accounts do not have to be trusts to receive investment management services.  We provide investment management for both taxable and non-taxable (IRA, Roth) investment accounts.

All AWM&T client assets are held by an independent custodian, Northern Trust. Your money is never commingled with other assets, assets of AWM&T, or those of AAFMAA. Northern Trust currently has custody of over $6.1 trillion in assets. In addition ,assets have the backing of AAFMAA.

No. We would be pleased to provide recommendations for counsel, but we cannot practice law and cannot draft any documents for you.

Yes.  We can be named to start serving as your trustee upon your death or disability.

Our trust charter allows us to serve as trustee in 44 states and the District of Columbia. Please call us at 910-307-3500 to discuss your particular situation.

Contact

We have three offices across the United States. If you are in the Fayetteville, NC, area, please call us at 910-307-3500. In the Washington, DC, area, call our Reston, VA, office at 703-707-8020. You can also contact us anytime toll free at 1-800-522-5221, or by email at wealthmanagement@aafmaa.com.