Trust Protectors Retention of Assets Under Management The

Trust Protectors & Retention of Assets Under Management The FPA of Greater Indiana August 2018 Presented By: Richard L. Randall, JD, CFP Randall, Gentry & Pike, P. C. lifespanusa. com

Firm Update Ø Randall, Gentry & Pike, P. C. Serving Clients in: Indianapolis Northwest Indiana Fort Wayne And Nationally Via Our Special Delivery and e-Planning Services!

Firm Partners Rick Randall ØRetirement Plan Integration; Empowered Inheritance Planning; e-Planning Greg Gentry ØEmpowered Estate Planning™�; Next. Gen Estate PlanningⓇ; e-Planning; Business Planning Whittley Pike ØSpecial Delivery™, Proactive Elder Law™; Empowered Estate Planning™�; Next. Gen Ⓡ

Estate Planning Overview Definition of Estate Planning I Want to Control My Property While I’m Alive and Well Plan for Me and My Loved Ones if I Become Disabled

Estate Planning Overview Definition of Estate Planning Then Give What I Have • To Whom I Want • When I Want • The Way I Want All While Assuring My Wisdom is Transferred Along with the Rest of My Wealth

ESTATE PLANNING PYRAMID SAVE TAXES EXPAND WEALTH PRESERVE WEALTH FAMILY ME “I want to control my property while alive and well, plan for me and my loved ones if I become mentally disabled, and then give what I have to whom I want, when I want and the way I want-all while assuring my wisdom is transferred along with the rest of my wealth. ”

™ TM & © GPS, LLC 2017. Use by National Network members by express permission and under license granted by GPS, LLC. ™

The Empowered Estate Plan™ Ø DEVELOP Your Plan with Counselling Oriented Planning Partners (Empowered Design Program™) Ø COMMIT Yourself and Your Family to a Formal Continuing Maintenance and Education Program (Empowered Legacy Program™) Ø SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom Along With the Rest of Your Wealth (Empowered Inheritance Program™) ™ TM & © GPS, LLC 2018. Use by National Network members by express permission and under license granted by GPS, LLC. ™

Trust Protectors & AUM Retention Three Functions of a Trustee ØDistribution ØAdministration ØInvestment Functions Can Be “Divided” or “Directed”

Trust Protectors & AUM Retention Divided Trusteeship Ø Allowable Under State Law Ø Specific Authority in Some States Ø Uniform Directed Trust Act ØAlso Supports Trust Protector Authority

Trust Protectors & AUM Retention Directed Trusteeship Ø Difference is One Trustee, But That Trustee Directed By Others Ø Allowable Under State Law Ø Specific Authority in Some States Ø Uniform Directed Trust Act ØAlso Supports Trust Protector Authority

Trust Protectors & AUM Retention Importance of Independence “Too Much Control” Ø Business Planning (Attribution Rules) Ø Tax Planning Ø By Analogy, Asset Protection Ø Key to How We Can Best “Defend” Against Creditors and Predators Ø

Trust Protectors & AUM Retention “Independence”—or Lack Thereof! Up—Parents Ø Down—Children & Grandchildren Ø Side to Side—Siblings Ø In Front—Spouse Ø Behind—“Controlled” Employee Ø

Trust Protectors & AUM Retention “Independence”—or Lack Thereof! Ø Important to Note that Same Standard Is Commonly Used for Independent Trustee and Trust Protector (Who Must be Independent)

Trust Protectors & AUM Retention Trust Protector Review Session Ø What is a Trust Protector? ØNon-Trustee, Non-Beneficiary Holder of Powers ØTypically holds powers that the trustee/beneficiary cannot or should not hold

Trust Protectors & AUM Retention Trust Protector Review Session Ø What Can a Trust Protector Do? Ø Most Commonly: ØAmend or Restate Documents ( tax changes, correct ambiguities, correct drafting errors, change financial powers, change situs, change withdrawal rights, change termination date, or for clarity, convenience, and ease of administration) ØWe’ve Recently Added Ability to Approve or Disapprove Distributions

Trust Protectors & AUM Retention Trust Protector Review Session Ø What a Trust Protector Cannot or Should Not Do—We Normally Prohibit: ØExpansion of Trust Protector Powers ØActs that Create a GPA in the Trust Protector ØActs that Impair the Marital Deduction (if applicable) ØActs that Impair Designated Beneficiary Status ØActs Inconsistent with the Trustmaker’s Intent

Trust Protectors & AUM Retention Trust Protector Review Session Two Critical Questions Who Might Serve? Ø Cannot Be Related to You (“Independent”) Ø Should Have Strong Understanding of the Law Ø Should Have Strong Understanding of the Trust Document How Does Trust Protector Know Your Intent? Can Only Make Changes Based on Your Intent

Trust Protectors & AUM Retention Trust Protector Review Session Ø Ø Third Party Who Can Make Modifications to Your Trust Even When You’re Disabled, After Your Death, or Even After Both Spouse’s Death Can Only Make Changes Based on Your Intent

Trust Protectors & AUM Retention. Trust Protector Review Session Ø Intent Can be Determined by: ØFour Corners of the Trust Document ØMemorandum of Intent ØSigned Writings of Trustmaker ØEPRW (type of signed writing) ØDocumented Communication (Email/Phone Calls) ØPersonalization Checklists from Client ØDesign Templates

Trust Protector Summary for Clients WHO May Serve? Independent Third Party Only (Internal or External) Ø WHEN May Trust Protector Serve? Available to Add Needed Changes After Your Disability or Death (To Benefit Inheritors) Ø WHAT Reasons Can Changes Be Made For Powers Granted and Based on YOUR Intent (Documented in your file!), Not For Just Any Reason Ø

Trust Protectors & AUM Retention Trustee (and Protector) Options Individuals (Watch Age & Relationship) Ø Accountants or Accounting Firms Ø Attorneys or Law Firms Ø Traditional Bank & Trust (Often Reluctant or Refuse to Divide Trusteeship or Accept Direction) Ø Independent Trust Companies (More Open to Divided or Directed Trusteeship) Ø

Randall, Gentry & Pike, P. C. The Trust Settlement Process

Randall, Gentry & Pike, P. C. Personal Protections Planner™�

Empowered Inheritance Program™ Distribution Co-Trustee Provides Protection Against Outside Threats Ø No Investment or Administrative Authority or Responsibility Ø Financial Account Forms Not Honoring Distinction Ø Moving From Distribution Co-Trustee to Distribution Protector to Reach Our Goals Ø

Empowered Inheritance Program™ Inheritor Serves as Sole Trustee on Financial Accounts (and Thus Clearly Controls Investments) Ø Distribution Protector Now Provides Protection Against Outside Threats (Same “Independence”) Ø No Investment or Administrative Authority or Responsibility Ø Simply an Extra Power for Trust Protector! Ø

Empowered Inheritance Program™ Extra Power for Trust Protector! Ø All Distributions Ø “Veto Power” Ø Hybrid Approach

Empowered Inheritance Program™ What About Independent Trust Companies? Ø Some Accept Divided Trusteeships Ø Some More Familiar with Direction From Trust Protector While Retaining Trusteeship Responsibility Ø Fee Schedule for Each Reflects Reduced Liability Ø In Our Experience, Minimum Fees May Still be Concern for Clients With Less Assets Ø In All Cases, You Retain Investment Account

Empowered Inheritance Program™ Inherited Trust Maintenance & Education Ø“Educating Beneficiaries” is a Good Overview ØNuts ‘n Bolts IV “Maximizing Your Inheritance” Provides Proactive Training to Inheritors ØMandatory Enrollment and Voluntary Annual Renewal (Standalone Trust, Updating & Distribution Protection)

Empowered Inheritance Program™ Ongoing Protective Trust is Key to Retention of Assets Under Management Ø Formal Family Engagement Builds Relationship With Inheritors Earlier Ø Trust Explanation and Implementation Requires More Interaction—and Builds Relationship! Ø

Empowered Inheritance Program™ In Short, Program Supports Building Relationship With Inheritors Earlier and in More Ø Both Divided Trusteeships and Directed Trust Keep Family in Control of Assets-–With You as Trusted Advisor Ø MUCH More Likely That Assets Under Management Will be Retained! Ø

Trust Protectors & AUM Retention. Trust Protector Review Session Ø Questions for Today? Ø Next Step is to Attend Our Law Firm CE Series or Meet with One of Us in Person! Ø Thanks for Attending!