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DEAR TRUST OFFICER:
I’m turning 65 this year and thinking about retirement. How long should I plan for? —ANXIOUS PRE-RETIREE
DEAR ANXIOUS:
According to the latest data from the National Vital Statistics Reports (July 15, 2025, reporting on 2023 experience), a male age 65 should expect to live 18.2 more years (to age 83.2) and a female 20.7 years (to age 85.7). Half of 65-year-olds will die sooner, half later.
That tells us nothing about you, of course. How’s your health? Your family history? You’ll want to take these into account, and you probably should plan for longer than you expect to live.
Here’s another way to look at the numbers from that report. For every 100,000 men, how many reach age 85? 35,518 men do. For every 100,000 women, 49,225 reach age 85. Mortality increases precipitously after that, as shown in the table below.
Number of survivors of 100,000 people
|
At age |
Men |
Women |
|
75 |
62,860 |
75,228 |
|
80 |
51,062 |
64,735 |
|
85 |
35,847 |
49,655 |
|
90 |
19,252 |
30,673 |
|
95 |
6,432 |
12,715 |
|
100 |
1,069 |
2,826 |
Source: National Vital Statistics Report, Volume 74 Number 6
Does that help answer your question?
Article ©2026 M.A. Co. All rights reserved. Used with permission.
Ten years ago, Grantor created a charitable lead trust for a 20-year term. The trust paid an annuity to an independently operated donor-advised fund. However, the value of the trust assets has grown far greater than anticipated when the trust was set up. The trustee, who is the sole remainder beneficiary, proposes to accelerate the next ten payments to the donor-advised fund, paying the full amount without discount for the time value of money. The fund is all in favor of the arrangement, as it will devote those funds for charitable purposes. Once the payments are made, the trust will terminate and the beneficiary will receive the remaining trust assets.
The trustee, worried about adverse tax consequences, asked the IRS to rule on whether the arrangement might be treated as self-dealing, as a taxable expenditure, or if there might be a tax upon the trust termination. In Private Letter Ruling 202614004, the Service ruled that there will be no tax problem.
Having the assets of a trust grow in value far beyond expectations is a wonderful problem to have. In this case, even though the trust was irrevocable, a solution was found that was fully consistent with the grantor’s intentions in setting up the trust.
Article ©2026 M.A. Co. All rights reserved. Used with permission.
In a thorough estate plan, one of the trickier assets to handle is amounts owned in a qualified retirement plan, such as an IRA, a 401(k) plan, or a 403(b) plan. The complications are twofold.First, distribution of such assets is not controlled by a will provision, but by the beneficiary designation on the account. The assets pass outside the supervision of the probate court. Second, these assets have potential income tax liabilities attached to them, unlike other inherited assets.
Each of these complications was amply illustrated in a recent Wall Street Journal article, “One Small Fortune, 36 Grandkids and an Inheritance Stuck in Limbo” (May 15, 2026).
The facts
Ed and Val Lyon updated their estate plan in 2014, when they were in their 80s. Among Ed’s assets was a 403(b) account at the University of Chicago, where Ed had been a urologist at the medical school for nearly 40 years. One of the requirements for retirement plan accounts is that a surviving spouse must be the sole beneficiary of the account. However, the spouse is permitted to waive that right in writing. Val had executed just such a waiver in 1998. The couple agreed that Val would not need that money, that it should go to their heirs.
The couple’s assets were held in a revocable living trust. In the 2014 planning update, that trust would divide into 36 separate subtrusts, one for each of their grandchildren, after Ed’s death. Thus, the 403(b) account would be split among the 36 trusts. They also gave a son-in-law power of attorney over their financial affairs.
In 2019, when Ed was ailing and Val was incapacitated, the son-in-law contacted TIAA, the custodian for the retirement account, to be certain that the beneficiary designations reflected the 2014 estate plan update. TIAA said that they had nothing on the update, so the son-in-law filed a new beneficiary form. Ed and Val died soon after. At that time the retirement account was worth $1.2 million.
Then, according to the Journal, Ed’s estate plan “got bogged down in what amounted to paperwork issues.” TIAA sent a letter rejecting the new beneficiary designation form, saying it was not properly signed. The University told the family that under plan rules, a new spousal waiver was required every time the plan beneficiary was changed, so Val’s 1998 waiver didn’t count. They also said that the power of attorney did not extend to the right to waive the spousal inheritance rights.
The family sued TIAA and the University in federal court to have Ed and Val’s estate plan implemented as they wished, but they lost. The case is now on appeal to the Seventh Circuit Court of Appeals. Meanwhile, the account has grown in value to $1.7 million.
The takeaway
Dividing $1.2 million among 36 beneficiaries results in just $33,333 for each of them. Is that a large enough inheritance to justify creating a trust to manage it?
Probably not. However, the article does not suggest that this was Ed’s only asset, and there is no hint as to just how large his estate was. It seems likely that each grandchild’s trust held other assets as well.
In 2014, when the estate plan was updated, if someone other than a surviving spouse inherited retirement plan assets the required minimum distribution (RMD) each year could be determined by the heir’s life expectancy. For a young person, the RMDs would be very small, he or she would get decades of tax-deferred growth in the account. By splitting up the distribution 36 ways, each grandchild would have his or her own RMD schedule, with the youngest getting the maximum income tax benefit.
This tax planning strategy was too good to last, and was eliminated in 2020. Now, the general rule is that income taxes must be paid on inherited retirement plan assets within 10 years after the death of owner.
The more important lesson is that beneficiary designations should not be taken for granted. They need to be reviewed from time to time, to keep them in harmony with the overall estate plan. Failure to take this routine step may result in delays in distribution as well as extra estate settlement costs.
Article ©2026 M.A. Co. All rights reserved. Used with permission.
Why do so many financially successful individuals and their families look to trust institutions to meet their financial management needs? Several reasons come to mind:
Trusts offer unique benefits in comprehensive wealth management.
We provide a team approach, a fully staffed department with individuals who bring a diverse range of skills to the job.
Our services are fee based, we are not compensated by generating transactions or through commissions for the sale of particular products.
We are a corporate fiduciary, authorized by the banking authorities to act as a trustee for individuals and institutions in the management and distribution of their assets.
What can be accomplished with this power to delegate the authority to manage property in a trustee? Trusts can be individually tailored to address many different financial goals. As a result, there’s no such thing as a “typical trust.” All trusts have something in common. They have assets that require careful management, and that job falls to the trustee.
Essentials of every trust
The creator of a trust is customarily called the grantor. The grantor works with an attorney to prepare the trust agreement, which will give the trustee the instructions about the management of the trust and the distribution of income and principal. Every trust has beneficiaries, for whose protection the trust has been created. The grantor may be the first and foremost beneficiary of a revocable living trust—or the grantor and spouse. Otherwise, other heirs are named, whose interests will vest at various times, as specified in the trust agreement. If the trust is revocable, the grantor may amend it at any time, even terminate it. If the trust is irrevocable, such as a trust created at death by a will, it normally cannot be changed without court proceedings.
Finally, there must be a trustee. That could be an individual or a corporate fiduciary, such as us.
When should you consider a trust?
Trusts offer advantages in wealth management that are not available with ordinary investment accounts. Trusts can be used to achieve some or all of the following objectives:
Provide lifetime financial protection for a surviving spouse.
Establish inheritance management for minors, and incapacitated or disabled family members.
Protect assets from creditors.
Reduce or eliminate death taxes.
Increase financial privacy and confidentiality regarding wealth distribution.
Implement a program of philanthropy.
Protect an estate plan from claims by disgruntled heirs.
Provide complete financial management in the event of your own incapacity.
Whatever the reason for creating your trust, the next question is crucial: Whom should you choose as your trustee? Who has the qualifications to see to it that your trust plan will succeed? Where would you look for the right trustee?
Who should be your trustee?
Typically, a trust grantor is deciding between a corporate fiduciary (a company that has been granted the legal right to act as a trustee, such as us) and an individual, such as a family member, friend, or business associate. Factors that should be considered include:
Judgment and experience. Inexperienced trustees may dissipate the trust assets, or make administrative mistakes that result in delay or other problems.
Impartiality. A trust typically has current income beneficiaries and future or remainder beneficiaries. The interests of both types of beneficiaries must be balanced carefully. Conflicts need to be resolved by a trustee that all the beneficiaries can respect.
Investment sophistication. The Uniform Prudent Investor Act and other laws governing the investment of trust assets must be adhered to. The trustee should be able to increase returns or reduce portfolio volatility, and must be able to diversify the portfolio.
Permanence and availability. Many trusts are expected to last a decade or more. Corporate trustees have the advantage of perpetual existence.
Sensitivity to individual beneficiaries’ needs. Understanding the individual needs of trust beneficiaries is very important, and on this issue many will assume that the friend or family member has the advantage. This is not necessarily the case, but sometimes an individual will be made cotrustee to handle such decisions. Even so, a corporate trustee might be brought into the process for an objective voice and to prevent unreasonable distributions.
Accounting and recordkeeping. Detailed trust records are required, and few individuals are equipped to handle this chore properly.
Fees. There is a chance that the fees charged for trust administration will be lower when a friend or family member is named as trustee. However, when a trustee is serving for little or no compensation, it becomes hard to give the trust the attention that it deserves.
In the usual case, the trust assets consist of ordinary investment assets, such as stocks, bonds, or mutual funds. In that situation, a corporate trustee is likely to be a very cost-effective alternative.
The central features of today’s trusts are professional asset management, conducted under fiduciary safeguards, in a segregated vehicle, which is bankruptcy-remote from the manager. This is what we do.
Article ©2026 M.A. Co. All rights reserved. Used with permission.
INVESTMENT PRODUCTS/SERVICES ARE:
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NOT GUARANTEED BY THE BANK - MAY LOSE VALUE
