Insights + Resources

A Corporate Trustee Could Be a Smart Choice

Feb 7, 2022

In an ideal world, managing a family trust would be simple. There would be no stress, no big learning curve, and no great time commitment involved. Unfortunately, the world is not ideal, and heirs who become trustees are often left with headaches. A corporate trustee may be a good option.

“Sure,” a named trustee may think, “I can follow the rules, pay the taxes, and make sure this asset goes to this person or organization. I am confident I can deal with any issues.”

Okay, but what if the trust includes income-producing real estate, intellectual property created with collaborators, or a large investment portfolio? A trustee can quickly lose confidence when trying to understand these assets; let alone, the tax and legal issues linked to them. Additionally, the greater the complexity of the estate, the wider the door opens for family arguments about the way trust assets are being handled.

Keep in mind that this article is for informational purposes only. It is not a replacement for real-life advice, so make sure to consult a financial professional before modifying your trust strategy.

Corporate trustees bring objectivity, knowledge, and rigor to trust administration. As they are either trust companies or bank trust departments, they are regulated by state and federal agencies. They are held to a fiduciary standard: they have to act in the client’s best interest.^1,2

Many of the professionals working for corporate trustees are knowledgeable about multiple kinds of assets and the strategies used to administer them. Plus, they are resources; if you need more knowledge about a particular matter, they may have it or be able to connect you with someone who does.¹

While an heir essentially takes on a part-time job in becoming a trustee, the professionals employed by corporate trustees make trust administration their career. As they are outside your family, they are not at risk of letting your family’s history or tensions influence their work.

How much does corporate trust administration cost? The annual fee commonly ranges between 0.25% to 2.00% of the trust assets. Your family may feel that professional trust management is well worth this expense. A corporate trustee may even be named as a successor trustee in the event that no financially responsible trust beneficiaries remain. If you need a recommendation, reach out to a dedicated financial professional at Epic Capital and we would be happy to share our contacts with you.

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Tags: Certified Financial Planner Charlotte NC, Estate Planning, Family Wealth, financial advisor charlotte nc, Investment Planning, Personal Finance, taxes