NewsNeil Carbone Discusses Collaborative Financial Planning in The Moneyist on MarketWatch
When it comes to trust administration, the choice between an individual trustee and a corporate trustee can significantly impact the efficiency, continuity, and security of managing assets for beneficiaries. Neil Carbone shares his insight with The Moneyist on MarketWatch:
My daughters will inherit our $2 million estate, but one child struggles with depression, and only works occasionally. How do we protect her after we’re gone?
“Among the benefits of having a corporate trustee are that their fees often include services that individuals will pay other professionals to handle,” says Neil Carbone, partner at Farrell Fritz. “They don’t retire or die so there is continuity that an individual cannot provide; they are well-versed in the various duties involved in trust administration; and they have procedures in place to deal with investment management and requests for distributions. A corporate trustee will never have to worry about seeing the beneficiary at Thanksgiving dinner after having denied the beneficiary’s request for a discretionary distribution.”
In addition to the lower expense with an individual trustee, Carbone adds, “there are no investment or distribution committees to deal with so decisions can be made more quickly, and individuals who are members of (or friends of) the family may have a closer connection to the beneficiary and therefore may be more sympathetic to requests for distributions. Serving as a trustee, however, involves real work, real fiduciary duties, and real potential for liability, and individuals with no prior experience may not be well-equipped to serve effectively.”
Establishing a trust allows you to think ahead to the next generation and, as you say, provide for your grandchildren. Think of providing an income for your daughter, if you believe that she could find managing a large sum of money stressful or, indeed, if you believe she could be vulnerable to being taken advantage of by others. As this gentleman painfully attests, it’s all too easy to let someone into your life who sees dollar signs and regards another person’s mental health struggles as an opportunity to help themselves to their life savings.
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