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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Client Relations Manager
Jennifer A. McCabe
Client Relations Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
November/December 2024
Choose a Trustee you Trust
Choosing a trustee can be relatively simple compared to setting up a trust. But not always. Money can drive a wedge between even the closest families, so choosing between a loved one, a professional advisor or a financial institution as trustee isn't easy.
Getting Started
Families who want to pass on wealth efficiently or ensure specific instructions are followed for the benefit of special-needs children may use a trust to facilitate their wishes. Every trust must have a trustee who has the legal and personal responsibility to carry out the terms of the trust.A trustee may need expertise in multiple areas, depending on the trust's complexity. For example, the trustee must serve as a business administrator to record financial activities, such as scheduled disbursements to beneficiaries, investment results, and more.
That person may also be responsible for managing investments, which even professionals have difficulty doing during volatile economic times. The trustee must also file local, state, and federal tax returns, even if the beneficiaries are receiving tax-free disbursements and may need to understand arbitration should a disagreement between the trust's beneficiaries arise.
Making the Choice
Finding a loved one who can serve proficiently in all these capacities can prove difficult, although this person could hire specific professional help like a CPA or arbitrator. After all, the advantage of having a loved one serve as a trustee is the person's familiarity with the situation. Knowledge of a loved one's philosophy makes it more likely the trustee will follow the original intention of the trust.However, emotions and even money could get in the way and cloud the trustee's judgments. For example, it's easy to see a conflict if a trustee who is also a beneficiary has to decide whether to grant emergency funds to a beneficiary, which could reduce the trust's principal and the trustee's share.
A financial institution serving as trustee might have the multi-disciplinary skills needed and would take the emotions out of decision-making. However, the institution might not have familiarity with the intentions of the trust's creator, the grantor. So, if you plan to create a trust, research your options before making a final decision.
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Centuria Financial Group is not affiliated with Prudential Financial. Centuria Financial Group sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Centuria Financial Group is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Centuria Financial Group and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Sara E. Martin and Jennifer McCabe are employed by David McCabe and not The Prudential Insurance Company of America or its subsidiaries.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
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