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Christopher R. Hibbard, ChFC®, CRPC®, CFS®
Vice President, Wealth Management
Teachers Investment Services
Located at Teachers Federal Credit Union
5439 Sunrise Highway
Holbrook, NY 11741
Phone: 631-698-7000 Ext. 6020
Email: christopher.hibbard@lpl.com
CRPC conferred by College for Financial Planning.
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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Christopher Hibbard is a financial advisor with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Teachers Federal Credit Union (TFCU) and Teachers Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Teachers Investment Services, and may also be employees of TFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, TFCU or Teachers Investment Services. Securities and insurance offered through LPL or its affiliates are:
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