Serving as a trustee requires technical talent, sound judgment, discretion, integrity, objectivity and the ability to work with all of the beneficiaries involved
ATLANTA, July 20, 2015 /PRNewswire/ - A grantor's choice of trustee is as important to a trust's success as the provisions it contains, according to Atlantic Trust, the U.S. private wealth management division of CIBC (NYSE: CM) (TSX: CM).
"The primary role of a trustee—holding title to property for the benefit of another—sounds simple enough on its surface, but selecting a trustee is really a complex decision with many nuances," says Judith A. Saxe, managing director and senior wealth strategist for Atlantic Trust.
Anyone, including a family lawyer or accountant, close friends or financial institutions, can technically serve as a trustee. However, Saxe says, it's important to select someone who is not only experienced in planning and crafting trust agreements, but who can also relate well with the beneficiaries while also managing all of the various other tasks associated with trust administration.
For example, it would be crucial, in a marital trust that is designed to minimize a couple's estate taxes while also providing for a surviving spouse's financial needs, that the trustee be able to relate well to the grantor's spouse. Other questions to consider when evaluating trustee candidates include:
- Does the trustee have the capacity and depth of knowledge for the tasks involved in trust administration, including filing the trust tax return and other required filings?
- Will the trustee act impartially when making distributions of income or principal while also balancing the needs of both income and remainder beneficiaries?
- Does the trustee have familiarity or experience with specific types of trust assets such as real estate or a closely held business?
- Would the grantor trust this individual to manage his or her finances in the event that he or she becomes mentally incapacitated?
An institution with substantial fiduciary experience and a deep bench of professionals is often best equipped to offer the expertise, stability and permanence that individual trustees cannot provide, which can be especially helpful for multigenerational, long-term family planning, Saxe says.
"In addition, an institutional trustee can manage the accounting and tax-reporting requirements that are subject to internal and regulatory oversight," she adds. "Such a trustee also has formal processes and procedures for handling distributions and deciding on beneficiary requests."
About Atlantic Trust
Atlantic Trust is one of the nation's leading private wealth management firms, offering integrated wealth management for high-net-worth individuals, families, foundations and endowments. The firm considers clients' financial, trust, estate planning and philanthropic needs in developing customized asset allocation and investment management strategies. Experienced professionals deliver a broad range of solutions, including proprietary investment offerings and a robust open architecture platform of traditional and alternative managers. Atlantic Trust operates in 13 full-service locations throughout the U.S., with $27.3 billion in assets under management as of April 30, 2015. For more information, visit www.atlantictrust.com.
CIBC is a leading Canadian-based global financial institution. Through our Retail and Business Banking, Wealth Management and Wholesale Banking businesses, CIBC provides a full range of financial products to individual, small business, commercial, corporate and institutional clients in Canada and around the world. CIBC owns a 41 percent equity interest in American Century Investments®, a major U.S. asset management company, serving financial intermediaries, institutions and individuals, and acquired Atlantic Trust, a premier U.S. private wealth management firm, in January 2014. You can find other news releases and information about CIBC in our Media Centre on our corporate website at www.cibc.com.
SOURCE Atlantic Trust Private Wealth Management