You may have heard that the Social Security Administration officially announced that Social Security recipients will receive a 1.6% cost-of-living (COLA) adjustment for 2020. Those increased payments will start in January 2020. The purpose of the COLA is to help the purchasing power of Social Security benefits keep pace with inflation. Congress first enacted the COLA provision as part of the 1972 Social Security Amendments, with automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.
Atlanta Financial Blog
Benefits of Professional Trustees
What is a professional trustee?
When you set up a trust, you must name a trustee to manage and administer the assets in your trust. Generally, professional trustees are experienced individuals that work in a trust department in a bank or in a trust company.
Do you need a professional trustee?
In determining whether you need a professional trustee, consider the following:
- Family dynamics: Is this a blended family situation? Are you living with a non-related party? Is there a history of litigation or contentiousness between family members? Are there family members who cannot manage money?
- Complicated Administration: Can your family members handle the accounting and record keeping demands? Is there a complex disposition of assets? Do you have difficult tax situations?
- Special Assets: Is there a closely held business? Is there non-residential real estate?
- Burden Factor: Does your family have the necessary financial awareness, astuteness, and acumen?
If any of the above-mentioned situations apply to you, the possibility of appointing a third-party trustee should be considered. Third-party trustees offer many benefits, including:
- A professional trustee exercises independent judgment and discretion to reduce contention among the beneficiaries. This is especially important in blended families.
- A professional trustee typically has years of experience in the legal, tax, and administrative duties of executer and trustee. Doing it right the first time could save money in the long run.
- A professional trustee provides long term succession and oversight for trusts which will be around for a long time. Unlike an individual, a professional trustee has a continuing existence; death or disability will not interrupt service to you or your family.
- A professional trustee has a duty to ensure that the trust assets will be properly invested consistent with prudent investor standards.
- A professional trustee frees you and your family from day-to-day administration tasks.
A professional trustee can serve you in a number of ways. For example, if you do not have the time, desire, or experience to manage and administer the trust yourself, you can name a professional trustee to take over the responsibility of managing the trust and overseeing investment management, pursuant to your wishes. Furthermore, if you want to take advantage of a professional trustee’s experience but still be involved, you can designate yourself as trustee and a professional as co-trustee. Additionally, if you want to be the trustee of your trust initially, but want to leave the responsibilities to professionals when you are no longer able to manage the trust, you can name a professional trustee as a successor trustee.
In our experience, families oftentimes struggle with selecting the best and most qualified person to act as trustee. Remember to always consider potential conflicts that could arise between family members. If you are struggling with this decision, call me at 678-282-0296 to discuss.
The holidays are the perfect time to express our thanks for your business and to think about those less fortunate. Please join us for our 11th Annual Holiday Open House and Toys for Tots Collection on Thursday, December 12, 2019, 11:30 am – 1:30 pm at our office – 5901-B Peachtree Dunwoody Road, Suite 275, Atlanta, GA 30328. Lunch will be served.
All of us at Atlanta Financial want to congratulate Harrison Fant on recently passing his five year anniversary at Atlanta Financial in September. Since joining AFA in 2014, Harrison has rapidly ascended through the different positions to his current position as Wealth Manager. Harrison has a unique combination of technical financial planning skills and the ability to present those complex concepts in easily understandable ways to all of his clients.
In working with my retired or soon-to-be retired clients, perhaps the most frequent question I am asked is “What is the best way to withdraw from my investment and retirement accounts in retirement in order to provide me my desired retirement income?” I believe they ask me this question because many of them have investments in a mix of different accounts with varying tax characteristics such as taxable investment accounts, IRAs, 401k or retirement plan accounts, Roth IRAs, and possibly real estate investments such as rental property. In addition to that, they may also have retirement income coming in from multiple sources and at different times such as Social Security income, pension income, and deferred compensation. If you are interested in increasing what you can spend in retirement and reducing the impact taxes have on your retirement nest egg, it is important to have a multi-year retirement income plan that takes into account the impact taxes will have on both your retirement income sources, and the withdrawals you take from your different investment and retirement accounts.