Professional trustees have deep knowledge of how to manage a trust. They help ensure compliance with legal and regulatory requirements, mitigate risks and provide stability.
Naming family members as trustees can be problematic because of family dynamics, disputes, and problems. Professional trustees are independent and objective. They follow protocols and will uphold their fiduciary responsibility without emotional baggage.
Peace of Mind
Professionals like CunninghamLegal can help you achieve peace of mind by managing your trust assets and overseeing investment strategies, legal matters, accounting/audits, and tax planning. Their expertise and experience instill confidence and ensure compliance, which can help you avoid mistakes and minimize risk. They also have access to in-house support in the form of financial and legal experts, which can streamline their processes and make it easier for beneficiaries to receive the services they need.
Avoiding Conflicts of Interest
Professional trustees can be much more unbiased than family members who may have preexisting relationships with beneficiaries and thus could be influenced by those relationships. It avoids misunderstandings or disagreements that might lead to conflict and even lawsuits.
Additionally, a professional trustee will not know any family dynamics or issues between family members and, therefore, cannot make decisions based on emotions. Instead, they will follow a formal set of protocols established by their trust company and the terms in your document. It will ensure that your trust achieves the results you desire.
Another benefit of working with a professional trustee is that they will be less likely to commit errors or missteps. This is because they have experience doing this work and are familiar with the rules and regulations that trustees must follow. On the other hand, family members will have to get up to speed and might miss an essential aspect of a transaction or rule.
Professional trustees also have deep knowledge of the types of assets held in a trust and will be able to optimize the performance of the faith. For example, they will be able to understand and apply investment strategies that maximize returns on investments and have the expertise needed for legal matters, accounting/audits, and tax compliance. In addition, they will understand the disability system and how to navigate it to the beneficiary’s advantage.
Tax Savings
Professional trustees have the experience and expertise to manage your trust. They understand the legal and tax regulations, investment considerations, public benefits options, and other factors that must be considered in managing the trust. Their education, experience, and objectivity provide the foundation for sound decisions that minimize potential conflicts of interest.
They know how to keep books and records, file income tax returns, and provide beneficiaries with annual statements of trust activity. They can also streamline and automate many of the trust’s administrative activities, saving families time and reducing administration costs. They can also help reduce the trust’s income taxes by structuring distributions tax-efficiently.
Family members often need help keeping up with the requirements of serving as trustees and may miss important deadlines or make mistakes that could be costly to the trust. A simple mistake by an inexperienced trustee can negate all the careful planning you’ve done and potentially cost your beneficiaries thousands of dollars.
Unlike a family member, a professional trustee does this daily for families like yours and has systems to manage the trust assets and meet all reporting and recordkeeping obligations. They save your family time and effort by handling distributions, managing investments, filing trust tax returns, and addressing issues with beneficiaries. They also provide the added peace of mind of knowing a qualified, professional trustee is serving in your best interests and avoiding conflicts of interest.
Investment Management
Professional trustees offer various services that may require more work for family members to provide. These include investment management, which can be performed by the trust or an external service provider, and asset allocation strategies to help your trust achieve its goals.
Professional trustees must uphold fiduciary standards, meaning that they must prioritize the welfare of their beneficiaries in their decision-making. Their experience and knowledge of the complexities of trust administration can ensure that your estate plan’s directives are carried out.
They have extensive educational backgrounds and are usually required to have certification from the Society of Trust and Estate Practitioners (STEP) or other similar organizations. It demonstrates their commitment to maintaining the highest standard of excellence. Their legal knowledge and ability to interpret complex trust documents help them to comply with regulations. Additionally, they often save trust beneficiaries significant amounts of money by utilizing tax laws to their advantage.
In addition, they can act as an objective third party to say no to requests from beneficiaries that are not in the trust’s best interest. This is especially important if a beneficiary has a substance abuse problem, as the grantor’s trust document may prohibit distributions to this type of person. Moreover, it can be difficult for family members to understand complicated financial transactions that are part of the trust assets.
Arman Ali, respects both business and technology. He enjoys writing about new business and technical developments. He has previously written content for numerous SaaS and IT organizations. He also enjoys reading about emerging technical trends and advances.
