The Importance of Stability in Estate Planning

Tab 1

Summer 2013

When it comes to estate planning, much has been said about minimizing the tax bite. Yet equally crit­ical is the issue of stability: Is your estate plan prop­erly structured to carry out your wishes for as long as possible? Does it ensure financial protection for your loved ones for multiple generations?


“You need to look into the future,” says Ted Aus­tin, Market Leader for The Private Client Reserve. “This is your opportunity to help take care of your family when you’re no longer able, to steward your legacy for the next generation and generations to come.”


While U.S. Bank and its representatives do not offer tax and legal advice, here are some things you may want to consider when working with your advi­sors on the creation or administration of your plan.


Choosing a Reliable Trustee

Rather than selecting a relative or friend to manage your trust, a corporate or institutional trustee may be a better answer. “Your relative or friend is aging too, even if he or she is younger than you are, and might not be around or be capable over the long haul to step in and act when you need them most,” Austin says.

Tab 2

Summer 2013

A corporate or institutional trustee, on the other hand, can bring experience and resources to the table, says Sally Mullen, Chief Fiduciary Officer for The Private Client Reserve. “In addition to managing the investable assets, the corporate trustee may be able to administer special assets such as closely held business interests, real estate or oil and gas holdings.”


A corporate trustee also may stand the test of time. “While corporate employees change over time, the institutional memory continues,” Mullen says.


A corporate trustee can make tough decisions, not based on emotions. “As a corporate trustee, I don’t have to worry about seeing a family

member at Thanksgiving dinner after I may have had to say no to a request that was outside the intent of the original trust,” Austin says.


Look for an institutional trustee with a solid track record. “A trustee is a fiduciary, and fiduciaries are required to put your interests before their own interests,” Mullen says. “Integrity, loyalty and the highest ethical standards are required.”


If you still want to involve a relative or friend, a common compromise is to name co-trustees — one a personal confidante, the other a bank — to “make joint decisions,” Mullen says.


Building a sound investment portfolio

Tab 3

Summer 2013

Selecting a Location

Another important consideration for your plan is where the trust is based. Trusts are governed under the laws of the state in which they are legally administered.


Certain states, such as Delaware, South Dakota,Nevada and Ohio, have enacted legisla­tion toprovide more flexibility in trust administra­tion,”

Mullen says. Potential benefits might include:


  • Bifurcation of administrative and investment management responsibility
  • Little or no state income tax, which may reduce tax liabilities for sales made
  • The ability to extend trusts in perpetuity (often known as dynasty trusts) instead of having to terminate and distribute the trust after a certain number of years

       The Private Client Reserve's New Trust Office in Delaware





Tab 4

Summer 2013

Titling Assets Into Your Trust

If you don’t transfer the assets, the trust is just an empty shell. “If you want your home in the trust, you have to change the title to the name of the trust — the same with your investment and bank accounts,” Austin says. “The trustee only has control over assets that have been properly transferred into the trust.”


Mullen tells the cautionary tale of a client who had all necessary documents but “neglected to sign a quit claim deed transferring the title of her assets from her name to the trust, so the trust was neverfunded.” After the client’s death, her property went

through the probate process, incurring taxes, fees and other aggravations. “The execution of the plan depends on whether assets have been properly reg­istered,” Mullen says.


That’s a scenario everyone wants to avoid — and one that underscores the importance of carefully creating and revising your estate plan as you age and as changes in your family and financial life occur. “A properly structured estate plan may be the best way to provide for the people and charities you care about when you no longer have the ability to take care of those things yourself,” Austin says.


Please see important information below.  

Wealth Transfer