2025 News and Information

 

To read the full article, visit issuu.com/happeningsmagazinepa/docs/march_2025_pgs_issuu (pages 44-45)

These days every decision comes with endless choices – be it financial, food, or shopping. I remember as a child having three television stations for my viewing pleasure. Now, I can literally watch a channel dedicated to puppies amongst thousands of others. How about trying to select a hummus at the local supermarket? There are so many flavors. I mean, Snickerdoodle, really? Talk about option overload and the inevitable analysis paralysis.

Recently, the Pennsylvania legislature proved it is in favor of providing choices to consumers in the Trust arena. The passage of the Directed Trust Act (Act) permits Trustees of Pennsylvania situated trusts options to engage advisors other than the Trustee to assist with trust management. Perhaps not as exciting as another generation of phones or new mattress store, but the law encourages choice, which is something not typically associated in stodgy trust law.

Directed Trusts have been around for years in other jurisdictions. They allow the powers and duties usually held by Trustees to be shared with other professionals, like accountants or financial advisors. Prior to the passing of the Act, Pennsylvania had no clear law as to roles and responsibilities of non-Trustees involved with Pennsylvania trusts. The ambiguity created uncertainty for Trustees as to duty, responsibility, and even liability when engaging professionals to provide their skills to Pennsylvania trusts. No longer.

The Act outlines three different new advisory roles for trusts situated in Pennsylvania: trust director, trust protector, and trust director for investments. Now, creators of trusts can delegate fiduciary responsibilities to these specific roles.  

There are several benefits for separating duties to the trust protector, director, or investment advisor. First, like everything else, trust assets have become increasingly complex.  Trusts no longer hold just stocks, bonds, and perhaps real estate. On occasion, a trust will include “unique” assets, like closely held family business interests or oil and gas leases. Trustees often lack the expertise to handle “unique” assets. The Act allows a designated party to assume the responsibility of managing the aforementioned unique assets and utilize their specific skill set for the trust’s overall benefit.

Second, trust creators often maintain long-term relationships with their financial advisor, whom they want to have continue managing investments, but not oversee other traditional trustee functions such as handling the beneficiaries, preparing and filing taxes, and following the language of the trust. The Act permits investment advisors to maintain their financial advisory position within the trust promoting continuity and familiarity. 

Finally, according to Pennsylvania Senator Lisa Baker, who sponsored the Act and serves in The Honesdale National Bank footprint, The Act is aimed at, “reducing costs and alleviating administrative burdens [we are] ensuring a more efficient distribution of trust income to beneficiaries and making more funds available for their benefit.”

As a professional Trustee for The Honesdale National Bank, we see the Directed Trust Act as an opportunity. From experience, we often meet with potential customers who have long-established rapport with their financial advisor. These advisors, because of their position, do not have fiduciary powers and/or the expertise to manage the nuances of trusts outside of the investment piece. That is where we can assist. The Act permits a financial advisor and an expert trustee, like The Honesdale National Bank, to work in concert for the trust’s overall benefit. At The Honesdale National Bank, we welcome the opportunity to collaborate. Furthermore, the heart of our culture is serving the best interests of our customers. The ability to increase the resources available to our customers and communities is a refreshing opportunity to support that mission. Ray Kroc one of the founders of McDonald’s said it best, “None of us is as good as all of us.”  

The Directed Trust Act is a welcome addition to the Pennsylvania Trust landscape. Please reach out to our Trust Department staff if you wish to further inquire on our services or the impact of the Act.

 

By: Charles Curtin, JD, LLM, CTFA
Vice President and Trust Officer
The Honesdale National Bank

The Honesdale National Bank is proud to sponsor The Personal Finance Lab and Dream Learn Pitch with Brighter Financial Futures! This world-class, web-based platform offers engaging learning modules, simulations, and competitions like The Personal Budgeting Challenge and The Investing Challenge. Students can compete for prizes and scholarships while gaining valuable financial skills. The next round of competitions is now underway until April 18, 2025. Register at brighterfinancialfutures.org/registration and learn more atdreamlearnpitch.org/terms--conditions.

Honesdale, PA – Today, January 1, The Honesdale National Bank proudly shares that Kate Bryant has officially transitioned to her role as the Bank’s President and CEO. In this capacity, Kate will serve as the Bank’s first female president and CEO as the next step in her more than 20-year career with HNB. This appointment also makes Kate the area’s first female bank president.