Are you ready for some football?

The new football season has kicked off, and with each weekend comes another round of opportunities to see competitors battle it out on the gridiron.

Whether you’re a family of a Friday Night Lights star, cheering on your alma mater or anxiously awaiting Sunday’s slate of NFL games, this is the time of year fans await all offseason.

Cool fall mornings with a light frost on the ground, smell of barbeque coming from tailgaters’ grills, the fans suited up in their team’s colors…all in anticipation of kick-off. Growing up in Texas, I really appreciate and look forward to the football season.

My wife and I met at college, and we always take a family trip to a game each year. My kids have grown up supporting our college team, the Texas Tech Red Raiders, and have closets full of red & black team gear. I always hoped that they would follow in our path and attend the same school. I’ve even planned out how I could buy a house in Lubbock, have my daughter live there and learn to be a landlord, charging roommates rent as a source of income. My son is three years younger, so as my daughter is finishing up, he could take over.

While out for dinner one night, my daughter told us that she wants to go to Baylor University instead of Tech. I have to say that I was caught off-guard — so much for planning.

The best laid plans…often go awry.

This leads me to estate planning. In my years in the trust industry, I have seen well-developed plans and I have seen plans that failed to build in any flexibility. Trusts written without flexibility or the foresight to allow for events that could occur within families can often create hardships.

A traditional trust names a trustee, or co-trustees, to control all aspects of a trust. This can often restrict beneficiaries to using the same trustee for administration, asset selection and investment allocation. On the other hand, a directed trust provides the flexibility of naming a financial advisor separate from the corporate trustee that handles administrative and distribution duties. This feature could enable beneficiaries to work with the financial advisor of their choice rather than being assigned an unfamiliar portfolio manager.

Naming an individual trustee like a family member or friend can be a burden on them as they deal with family issues, their own prejudices and lack of expertise as a fiduciary in trust administration, taxation and investments.

Using a corporate trustee, or company, in this role provides an unbiased trustee for distribution decisions. Corporate trustees take on all of the administrative responsibilities allowing individuals to focus on family issues.

When investing the trust assets, working with an individual investment advisor – rather than a corporate entity – can provide a personalized service and investing that reflects that needs of the beneficiaries. Again using a “directed” trust can allow a grantor to name an administrative corporate trustee, and then separately, allow a family member the flexibility to use the investment advisor of their choice.

Having a solid plan for the future is great. Having a plan for the future that builds in flexibility is better.

And, as my little girl, rather not so little girl, heads off to college, I’ll have yet another reminder to plan but also to remain flexible.

 

Jonathan Kelly is Director Business Development-Trust at Principal Trust CompanyTM. Principal Trust Company is a trade name of Delaware Charter Guarantee & Trust Company, a member of the Principal Financial Group®, Des Moines, IA 50392.

While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

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