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Casual Articles - Selecting a Good Trustee - Factors to Consider When Choosing a Trustee
The main function of a business card is to provide your personal information. Being in the entertainment business, it is crucial to have a business card that is distinct and speaks volume about you and your work. Your business card should contain the basic elements like your name, contact numbers and services you provide. You have the option to put other personal details like home address and home phone number.If you are on the market for a great business card design, you would be surprised at the many options you have. Aside from color and material, the orientation of the business card can also be changed to suit your preferences. Currently there are two options based on orientation: the horizontal and vertical layouts.As their name implies horizontal and vertical layouts differ in presenting information. Although the vertical layout would appear to be more creative, there is really not much you can do when it comes to choosing a style.
6. Familiarity with financial management of himself and others he may employ.
7. The financial ability and level of experience with the assets entrusted.
8. If it’s a family business, the nature and familiarity of the business.
9. The willingness and vitality to serve as an impartial fiduciary.
10. The legal capacity to interpret and administer the agreement fairly to all Beneficiaries.
11. The willingness to accept the appointment and the willingness to accept potential legal liability from disgruntled beneficiaries.
12. Succession planning for a successor Trustee.
SOME BAD TRUSTEES
When choosing a Trustee that is intended to last longer than the life of the original Grantors certain types of Trustees may not be the best qualified to serve.
1. Corporate Trustees or Trust Companies. For the most part these types of Trustees are nothing more than business robots driven by numbers staffed by individuals who have no connection to the Grantors or the Beneficiaries. They administer the
When the gunfire ceased nearly 3 dozen promising lives had ended: A professor doing valuable research about cerebral palsy; Future psychiatrists, biologists, international business executives, and engineers; Musical minds with songs yet to be written and sung; Charity workers, leaving a void for the needy others will fill or that will go unfulfilled; Many hopes, dreams, promises, aspirations, and potential were lost.The following day the remaining students and faculty, alumni, family members, political leaders, and others gathered to gain a sense of what happened and how they would face the future. It was a magnificent program of reflection and contemplation during which many powerful words were spoken, none more powerful than the words at the conclusion.Nikki Giovanni, professor of Black Studies at Virginia Tech, approached the podium using poetry to express her feelings. “We are sad today, and we will be sad for quite a while. We are no
When selecting a Trustee the most important qualities are honesty, stability, dependability, organization, financial experience, and ability to devote time and energy on an impartial basis for the benefit of all Beneficiaries. The Trustee is the most pivotal and critical part of any Trust Agreement.
THE CONCEPT OF A TRUST AGREEMENT
A Trust is a written contract between the Grantor and the Trustee for the benefit of all Beneficiaries which can include the Grantor and any one else he chooses including spouse, children, grandchildren, friends, or charities.
A Trust can be created during one’s life or by will upon death. A trust that is created at death by virtue of a will, is referred to as a Testamentary Trust by the “Testator” (the dead guy). A Trust created during the life of an individual is referred to as, the “Settlor,” the “Grantor,” or “Trustor.” The Trust instrument is referred to as “inter vivos” formed during the life of its creator.
A Trust is an integral part of any estate plan for the purpose of avoiding the Probate Process, minimize the impact of taxation on the transfer of wealth from one generation to another or from one individual to another, or to protect against unwanted and unpleasant potential events like a lawsuit. A Trust can financially provide for a spouse, a minor child or children or yet unborn children, an incapacitated or disabled person, or for persons incapable of managing their financial affairs. A Trust must have enough provisions to adapt itself way beyond the life of the grantor(s) and the Trustee is at the center of the goals of the Trust creators.
Once a Trust is created, the Trust becomes the new legal titleholder of assets either transferred to the Trust, as a gift or as a sale. In order to avoid fraudulent conveyance, the individual giving up his legal right to possession or title and the right to own must in return receive equal fair cash value at the time of the transfer. Otherwise, it’s a “fraudulent transfer” to the detriment of all potential creditors or it’s a gift subject to a gift tax.
THE GIFT TAX ON TAXABLE GIFTS
The gift tax applies to the fair cash value given up at the time of the transfer (not the amount that was originally paid). Taxable gifts are reported on IRS form 709, taxable to the person giving up the right of possession by gifting his assets. The person receiving the gift (in this case the Trust) always receives the gift Tax Free. (Note: the person receiving the gift always obtains it tax free and the person giving the gift is always taxed on it unless it’s less than $12,000 per person beginning in 2006).
TRUSTEE'S POWER DERIVED FROM GRANTOR
A Trust can be revocable or irrevocable, grantor or non-grantor. Revocable is when the “Grantor” retains a power to “void” the Trust Contract. Irrevocable is when the Grantor “severs” all power of possession, the legal title to own the Trust. The concept of “possession” is the legal right to own and vested exclusively to the TRUSTEE. The Trustee’s power is derived from the Grantor(s) by a written agreement (Trust Agreement). The most important person is therefore the Trustee.
CONSEQUENCES WHEN GRANTOR NAMES HIMSELF TRUSTEE
If there is a provision in the Trust Agreement for the Grantor to name himself as the Trustee for his list of Beneficiaries, which includes himself, then he runs the risk of frivolous liability and harsh tax consequences, since he has elected himself the Pope by blessing himself and kissing his own ring.
FACTORS TO CONSIDER WHEN CHOOSING A TRUSTEE:
A true Trustee is an independent person not related to the Grantor(s) by blood or marriage or is an independent trust company, bank, or corporate body. The selection of a Trustee is the most significant part of any Trust Agreement.
When choosing a Trustee, several factors should be considered:
1. Location of the assets. Real estate, for example, has a definite location and the Trustee more familiar with the financial and tax implications of the property should be given weight.
2. The individual Trustee’s physical location (home address) in relation to the Beneficiaries.
3. The types of assets. Tangible or intangible, cash or near cash.
4. Relationship of the individual Trustee to the Grantor’s family.
5. An understanding of the intra-family dynamics of all the Beneficiaries.
6. Familiarity with financial management of himself and others he may employ.
7. The financial ability and level of experience with the assets entrusted.
8. If it’s a family business, the nature and familiarity of the business.
9. The willingness and vitality to serve as an impartial fiduciary.
10. The legal capacity to interpret and administer the agreement fairly to all Beneficiaries.
11. The willingness to accept the appointment and the willingness to accept potential legal liability from disgruntled beneficiaries.
12. Succession planning for a successor Trustee.
SOME BAD TRUSTEES
When choosing a Trustee that is intended to last longer than the life of the original Grantors certain types of Trustees may not be the best qualified to serve.
1. Corporate Trustees or Trust Companies. For the most part these types of Trustees are nothing more than business robots driven by numbers staffed by individuals who have no connection to the Grantors or the Beneficiaries. They administer the
It was only yesterday that your company had four job openings. The HR staff was able to fill these positions with ease. In fact, some days you wondered if you had one too many recruiters on board.Over the past six months, business has been great. You can’t keep up with the demand. You’ve approved 10 new requisitions for staff while your internal HR team works on replacing five key employees that left for the competition.The job openings are listed with a number of contingency recruitment firms, who only get paid if they make successful placements. It’s been weeks and you have yet to see results.If this sounds familiar then it’s time to analyze your relationship with your recruitment vendors.Relationships matter-Think about it. How hard would you work on a RFP if you knew the potential client sent the specs out to 20 other companies? The same goes for contingency recruiting. If you’ve placed your job openings with a number of
Once a Trust is created, the Trust becomes the new legal titleholder of assets either transferred to the Trust, as a gift or as a sale. In order to avoid fraudulent conveyance, the individual giving up his legal right to possession or title and the right to own must in return receive equal fair cash value at the time of the transfer. Otherwise, it’s a “fraudulent transfer” to the detriment of all potential creditors or it’s a gift subject to a gift tax.
THE GIFT TAX ON TAXABLE GIFTS
The gift tax applies to the fair cash value given up at the time of the transfer (not the amount that was originally paid). Taxable gifts are reported on IRS form 709, taxable to the person giving up the right of possession by gifting his assets. The person receiving the gift (in this case the Trust) always receives the gift Tax Free. (Note: the person receiving the gift always obtains it tax free and the person giving the gift is always taxed on it unless it’s less than $12,000 per person beginning in 2006).
TRUSTEE'S POWER DERIVED FROM GRANTOR
A Trust can be revocable or irrevocable, grantor or non-grantor. Revocable is when the “Grantor” retains a power to “void” the Trust Contract. Irrevocable is when the Grantor “severs” all power of possession, the legal title to own the Trust. The concept of “possession” is the legal right to own and vested exclusively to the TRUSTEE. The Trustee’s power is derived from the Grantor(s) by a written agreement (Trust Agreement). The most important person is therefore the Trustee.
CONSEQUENCES WHEN GRANTOR NAMES HIMSELF TRUSTEE
If there is a provision in the Trust Agreement for the Grantor to name himself as the Trustee for his list of Beneficiaries, which includes himself, then he runs the risk of frivolous liability and harsh tax consequences, since he has elected himself the Pope by blessing himself and kissing his own ring.
FACTORS TO CONSIDER WHEN CHOOSING A TRUSTEE:
A true Trustee is an independent person not related to the Grantor(s) by blood or marriage or is an independent trust company, bank, or corporate body. The selection of a Trustee is the most significant part of any Trust Agreement.
When choosing a Trustee, several factors should be considered:
1. Location of the assets. Real estate, for example, has a definite location and the Trustee more familiar with the financial and tax implications of the property should be given weight.
2. The individual Trustee’s physical location (home address) in relation to the Beneficiaries.
3. The types of assets. Tangible or intangible, cash or near cash.
4. Relationship of the individual Trustee to the Grantor’s family.
5. An understanding of the intra-family dynamics of all the Beneficiaries.
6. Familiarity with financial management of himself and others he may employ.
7. The financial ability and level of experience with the assets entrusted.
8. If it’s a family business, the nature and familiarity of the business.
9. The willingness and vitality to serve as an impartial fiduciary.
10. The legal capacity to interpret and administer the agreement fairly to all Beneficiaries.
11. The willingness to accept the appointment and the willingness to accept potential legal liability from disgruntled beneficiaries.
12. Succession planning for a successor Trustee.
SOME BAD TRUSTEES
When choosing a Trustee that is intended to last longer than the life of the original Grantors certain types of Trustees may not be the best qualified to serve.
1. Corporate Trustees or Trust Companies. For the most part these types of Trustees are nothing more than business robots driven by numbers staffed by individuals who have no connection to the Grantors or the Beneficiaries. They administer the
Not many are aware that as of the 23rd of May, Ebay has introduced a new seller policy that all international cross sellers. (i.e sellers who are registered at one country but also list their items in another country) can no longer list their items in any other country other than their registered country unless they have a verified paypal account.Now Ebay's reason for doing this is to claim it is to prevent fraud, but one may ask how about those sellers who do not use paypal, who only accept cheques or bank wire? A service acknowledged by the banks themselves as extremely safe for both parties, as a trace can be placed on the bank account in the case of any irregularities or seller non performance. Ebay is still adamant that such sellers, still must have a verified paypal account inorder to cross sell.Of course what many seller's suspect is this is not about preventing fraud at all (if that is the case, then sho
TRUSTEE'S POWER DERIVED FROM GRANTOR
A Trust can be revocable or irrevocable, grantor or non-grantor. Revocable is when the “Grantor” retains a power to “void” the Trust Contract. Irrevocable is when the Grantor “severs” all power of possession, the legal title to own the Trust. The concept of “possession” is the legal right to own and vested exclusively to the TRUSTEE. The Trustee’s power is derived from the Grantor(s) by a written agreement (Trust Agreement). The most important person is therefore the Trustee.
CONSEQUENCES WHEN GRANTOR NAMES HIMSELF TRUSTEE
If there is a provision in the Trust Agreement for the Grantor to name himself as the Trustee for his list of Beneficiaries, which includes himself, then he runs the risk of frivolous liability and harsh tax consequences, since he has elected himself the Pope by blessing himself and kissing his own ring.
FACTORS TO CONSIDER WHEN CHOOSING A TRUSTEE:
A true Trustee is an independent person not related to the Grantor(s) by blood or marriage or is an independent trust company, bank, or corporate body. The selection of a Trustee is the most significant part of any Trust Agreement.
When choosing a Trustee, several factors should be considered:
1. Location of the assets. Real estate, for example, has a definite location and the Trustee more familiar with the financial and tax implications of the property should be given weight.
2. The individual Trustee’s physical location (home address) in relation to the Beneficiaries.
3. The types of assets. Tangible or intangible, cash or near cash.
4. Relationship of the individual Trustee to the Grantor’s family.
5. An understanding of the intra-family dynamics of all the Beneficiaries.
6. Familiarity with financial management of himself and others he may employ.
7. The financial ability and level of experience with the assets entrusted.
8. If it’s a family business, the nature and familiarity of the business.
9. The willingness and vitality to serve as an impartial fiduciary.
10. The legal capacity to interpret and administer the agreement fairly to all Beneficiaries.
11. The willingness to accept the appointment and the willingness to accept potential legal liability from disgruntled beneficiaries.
12. Succession planning for a successor Trustee.
SOME BAD TRUSTEES
When choosing a Trustee that is intended to last longer than the life of the original Grantors certain types of Trustees may not be the best qualified to serve.
1. Corporate Trustees or Trust Companies. For the most part these types of Trustees are nothing more than business robots driven by numbers staffed by individuals who have no connection to the Grantors or the Beneficiaries. They administer the
There are times that when you finally have a list for your clients, you will find that the list stops to grow. So you are just stuck with what you have. But then the objective is to continue to increase this list so that you can also increase the profitability of your business. So that your list will not remain stagnant, you need to follow these tips.1. You need to create your own system of list building. How would that be? Of course, you will need to monitor whatever result you may get with your own list building. From there, you can create the system that would work for your business. This takes time to know the trend of the results but definitely rewarding at the end of it all.2. Learn about active list building. Remember that in this industry, there should be no passive list building – it is purely active. Even if your list of members seems to decrease, this should still push you for active list building. Because that would mean that
FACTORS TO CONSIDER WHEN CHOOSING A TRUSTEE:
A true Trustee is an independent person not related to the Grantor(s) by blood or marriage or is an independent trust company, bank, or corporate body. The selection of a Trustee is the most significant part of any Trust Agreement.
When choosing a Trustee, several factors should be considered:
1. Location of the assets. Real estate, for example, has a definite location and the Trustee more familiar with the financial and tax implications of the property should be given weight.
2. The individual Trustee’s physical location (home address) in relation to the Beneficiaries.
3. The types of assets. Tangible or intangible, cash or near cash.
4. Relationship of the individual Trustee to the Grantor’s family.
5. An understanding of the intra-family dynamics of all the Beneficiaries.
6. Familiarity with financial management of himself and others he may employ.
7. The financial ability and level of experience with the assets entrusted.
8. If it’s a family business, the nature and familiarity of the business.
9. The willingness and vitality to serve as an impartial fiduciary.
10. The legal capacity to interpret and administer the agreement fairly to all Beneficiaries.
11. The willingness to accept the appointment and the willingness to accept potential legal liability from disgruntled beneficiaries.
12. Succession planning for a successor Trustee.
SOME BAD TRUSTEES
When choosing a Trustee that is intended to last longer than the life of the original Grantors certain types of Trustees may not be the best qualified to serve.
1. Corporate Trustees or Trust Companies. For the most part these types of Trustees are nothing more than business robots driven by numbers staffed by individuals who have no connection to the Grantors or the Beneficiaries. They administer the
Six Reasons to K.I.S.S. “Very often, people confuse simple with simplistic. The nuance is lost on most.” - Clement Mok, Chief Creative Officer, Sapient We’ve all heard THIS acronym, K.I.S.S. – Keep it Simple, Stupid! While I prefer, Keep it Splendidly Simple; the point is the same. Make it simple! All of us have heard the phrase. All of us nervously laugh and knowingly nod our heads when we hear it. All too often we don’t follow this sage advice. We’ve all heard the joke that a consultant is someone who will tell you about how to design, build and sell a watch, when all you wanted to know was the time. We are stereotyped often as people who like to make things more complicated, if for no other reason, than to justify our fee. While I don’t completely agree with the stereotype, as is usually true with these things, it contains a grain of truth. I believe we can serve both ourselves and our
6. Familiarity with financial management of himself and others he may employ.
7. The financial ability and level of experience with the assets entrusted.
8. If it’s a family business, the nature and familiarity of the business.
9. The willingness and vitality to serve as an impartial fiduciary.
10. The legal capacity to interpret and administer the agreement fairly to all Beneficiaries.
11. The willingness to accept the appointment and the willingness to accept potential legal liability from disgruntled beneficiaries.
12. Succession planning for a successor Trustee.
SOME BAD TRUSTEES
When choosing a Trustee that is intended to last longer than the life of the original Grantors certain types of Trustees may not be the best qualified to serve.
1. Corporate Trustees or Trust Companies. For the most part these types of Trustees are nothing more than business robots driven by numbers staffed by individuals who have no connection to the Grantors or the Beneficiaries. They administer the Trust assets but they lack the sensitivity of the people they are hired to serve. Generally they are very slow in responding to the needs of Beneficiaries and usually react in the interest of the Trust Company not their clients.
2. Banks as Trustees. They are too slow in making decisions, are ultra conservative, and always afraid to make decisions without first consulting their legal department. They have self-preserving motives and generally have no clue or understanding about the individual family dynamics of the people they are intended to serve.
3. Lawyers as Trustees. Lawyers are very up on the ins and outs of legal maneuvers and they have been trained to handle legal matters but generally have no financial experience or expertise in the management of assets. Even when they hire others in those financial roles, they are usually way too expensive and in some cases they make the assets their life’s insurance policy.
4. Accountants as Trustees. Accountants are good at keeping scores but generally lack visibility into the future. They have been trained to accumulate information but very tunneled visioned to make investment decisions. While there are notable exceptions to lawyers and accountants, generally they lack qualities to administer and provide full service or to take legal liability to serve as Trustees.
5. Family members as Trustees. It’s not a very good idea to have a family member become the Trustee of anything. The problem is mistrust. If you want to watch a family tear itself apart when it comes to money, especially with lots of money, you can go to family court or watch the Anna Nicole Smith’s made-for-TV drama.
SELECTING A TRUSTEE IS COMPLICATED
Selecting a Trustee can very complicated and you will not generally find individuals ready and willing to assume those fiduciary responsibilities, even when compensation is not an issue. Some Grantors have opted for co-Trustees and even Trust Protectors to ease the responsibility. See my article on “Trust Protectors.” Generally Trustees are more willing to accept the position if they know that they have a back up for consultation with someone who is closer to the Grantor’s family.
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