The trustee's role is to manage the potentially adverse interest of
beneficiaries while also adhering to trust administration rules and
ATLANTA, June 5, 2014 /CNW/ - Atlantic Trust, the U.S. private wealth
management division of CIBC (NYSE: CM) (TSX: CM), says that conflicts
can arise from trusts that pay income to current beneficiaries while
preserving principal for future beneficiaries. State laws can help
balance these parties' interests.
"Too often, the trust agreement provides little guidance or fails to
give trustees the discretion they need to serve both sides equitably,"
says Judith A. Saxe, managing director and senior wealth strategist for
Lifetime beneficiaries generally want the largest possible payout, while
future (remainder) beneficiaries prefer trust assets to increase in
value. Trusts prescribing income payments often require trustees to
invest to maximize income rather than optimizing trust assets by
investing for total return. "Trustees can get caught in the middle of
this delicate balance," says Saxe.
Trustees' primary responsibilities are making distributions and
investing the assets. Legally, they must be impartial to both sets of
beneficiaries when exercising these roles.
To assist with the issues presented by proper investment and appropriate
distribution of trust assets, many states have adopted variations of
two Uniform Laws: the Uniform Prudent Investor Act and the Uniform
Principal and Income Act. Saxe says that applying these laws in the
context of specific family situations is an important element of
prudent trust administration.
In an ideal world, grantors would either outline their wishes precisely
in regard to balancing the interests of current and remainder
beneficiaries or give trustees enough discretion to invest trust assets
equitably and make distributions, she says.
For more information about common trust administration questions, visit
Atlantic Trust's Online Resource Center, or read "A Trustee's Delicate Balance: Family Legacy Planning in Difficult Times," at www.atlantictrust.com.
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
solutions. 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 12 full-service locations throughout the U.S. with
$24.4 billion in assets under management (as of April 30, 2014). 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 Wealth Management provides relationship-based advisory services and
an extensive suite of leading investment solutions to meet the needs of
personal, institutional and high-net-worth clients through an extensive
distribution network, that includes CIBC Private Wealth Management,
CIBC Wood Gundy and CIBC Investor's Edge. Our asset management, retail
brokerage and private wealth management businesses combine to create an
integrated offer, delivered through nearly 1,500 advisors across
Canada. In addition, CIBC Asset Management provides global money
manager services to institutional and high-net-worth clients and
industry-leading retail investment solutions through our two mutual
fund familiesCIBC and Renaissanceand the CIBC family of managed
SOURCE: Atlantic Trust Private Wealth Management
For further information:
Media inquiries: Caroline Van Hasselt, Director, CIBC External Communications and Media Relations, (416) 784-6699, firstname.lastname@example.org or Carolyn Donnelly, Atlantic Trust Director of Marketing, (404) 881-3417, email@example.com.