727.441.9022
611 Druid Rd E • Suite 105 • Clearwater, FL 33756
V. Raymond Ferrara, CFP®
Chairman
Chief Executive Officer
TO TRUST OR NOT TO TRUST
JANUARY/FEBRUARY 2018 | TAMPA BAY MAGAZINE 91
Eric R. Ebbert, MBA, CFP®
President
Chief Operating Officer
Estate planning is an essential part of every written financial
plan. A cookie cutter approach to estate planning doesn’t usually
work well and some of the decisions can be complicated and very
difficult to make. Do you want to leave the money out right to
the children where they are left to their own devices? How many
times does first generation money disappear with the second
generation? Is it better to leave the money in trust for them? For
those who want to rule from the grave, leaving the inheritance
in trust allows one to do so. However, the terms of your trust can
also be creative and flexible. But there is so much more to consider.
Do all of the beneficiaries have the time, talent and inclination
to manage the inheritance? Could there be a squabble among
the heirs? Does a beneficiary have a special need? Are the
beneficiaries going to be happily married forever? Do you want
your assets to potentially pass to the spouse in a divorce? Could
there be a current or future problem with drugs or perhaps health
issues? Do you want to possibly protect the inheritance from the
beneficiaries’ creditors? Do you want the inheritance to pass down
your bloodline over multiple generations? Answers to these and
other questions may help guide your decision about creating a
trust with an attorney.
Once you decide that setting up a trust is a good idea, one of
the most important decisions to make will be about the trustee
of the trust. Often people will want a close relative to oversee
the money. Why not name Uncle Charlie, Aunt Sally, or a close
friend. However, this can put the relative or friend in an awkward
position with the beneficiaries regarding the management of the
money (especially in a declining market), dispersal from the trust,
etc. It also assumes that they have the ability to properly manage
the assets and the time to do so. Who will take over when they
become sick or die?
There are benefits to naming a corporate trustee, including their
expertise in trust administration with set policies and procedures.
They are regulated by both federal and state law. The corporate
trustee will work closely with your financial, legal and tax
advisors. They are impartial when dealing with beneficiaries.
Finally, they provide a great deal of continuity and permanence.
The beneficiaries should have the right to fire the trustee and to
hire a new corporate trustee, but not a friend down the street.
Sometimes the beneficiaries can act as co-trustees, but without a
power to disburse funds to themselves.
But aren’t corporate trustee’s expensive? Some probably are.
But consider the potential cost of not using a professional trustee.
While one often thinks of big banks as a corporate trustee, there
are less expensive and equally competent independent trust
companies. In working with our clients we look at their needs and
desires and then match those against multiple trust companies
to determine the best fit.
Whether thinking about naming a professional corporate trustee
in your estate documents, or perhaps changing the trustee of an
existing trust, please keep in mind that there are alternatives to
those you see advertised in the media. If you would like to learn
more about independent trust companies and their benefits, please
schedule a complimentary meeting with us.
About ProVise Management Group, LLC: ProVise is a financial planning and investment management firm registered with the Securities and Exchange Commission
(SEC) and has been in business since 1987. Our 13 professional advisors serve approximately 1100 clients in over 30 states. As of 9/30/17 we were managing approximately
$1.4 billion for our individual, corporate, not-for-profit and 401k retirement plans. Please visit our website at: provise.com. Investment Advisory Services offered through
ProVise Management Group, LLC. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations
are complex and are subject to change.