Employ a Trust Management Professional

Physician's Money DigestApril 2006
Volume 13
Issue 4

A trust is a relationshipwhere a trustee holdsthe title to assets for thebenefit of a beneficiary.The trustee could be anindividual person or a financial institution.Recognizing that there will comea day when you won't be able to personallyoversee all of your assets,choosing a trustee is a very importantdecision. While a family member maybe the first person that comes to mind,remember this is an enormous responsibilitythat could turn out to be moreof a burden than an honor. In addition,choosing one relative over anothercould be a source of potential conflict.

Working with a professional trusteecan help you avoid some of these conflicts.It also provides you several otheradvantages. For one thing, you have theassurance of permanent, continuousmanagement of your assets. A professionaltrustee can also be counted on tocarry out the financial plan you outlinein your trust document. Furthermore,with a company acting as your trustee,you don't have to worry about one ofyour relatives passing on before you do,or becoming physically unable to fulfillthe trustee's responsibilities.

To give you a little better understandingof the benefits of trustee services, let'stake a look at two of the major functionsa trust company can coordinate:

•Personal trustee services.When you name a trust company asyour trustee, the company assumesall the responsibilities of handlingand managing your account. Thedirections in your trust document tellthe trustee how you want your financialmatters managed. The companytypically develops an asset allocationand diversified portfolio based on thecurrent and long-term goals of yourtrust. Those assets are regularlyreviewed for consistency with theterms of the trust.

In addition to planning the strategiesbehind your investments, a corporatetrustee can handle the daily maintenanceof your account. Dividends andinterest generated by your investmentswill be collected and reinvested, accordingto your plan. Income and principaldistributions to your beneficiaries canalso be taken care of on a timely basis.The trustee will even handle the filing ofannual fiduciary income tax returns,relieving you from the hassles and timeinvolved in such a task.

•Successor trustee services. Apopular planning option for many individualsis a self-administered livingtrust. This legal document lets youtransfer ownership of your assets toyour trust. You continue to manageyour investment portfolio, acting asboth trustee and beneficiary. You retainfull control of your portfolio, but youhave the advantage of a professionaltrustee to succeed you. If you die,become incapacitated, or even if yousimply decide to dedicate your time toother matters, the professional trusteecan step in to provide a full range ofservices. You can even designate a corporatetrustee and a family member toserve together as cosuccessor trustees.

Joseph F. Lagowski is vice president, investments,

and a financial consultant with AG

Edwards in Hillsborough, NJ. He welcomes

questions or comments at 800-288-0901,

or visit www.agedwards.com. This article

was provided by AG Edwards & Sons, Inc, member SIPC.

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