Insights + Resources

A Corporate Trustee Could Be a Smart Choice

Aug 12, 2020

Trust Keyboard
Trust administration is more difficult than many families presume.

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.

Tags: , , , , , ,

More Insights

May 12, 2021

The San Diego Padres signed infielder Fernando Tatis, Jr., to a 14-year, $340 million contract roughly one year after the Los Angeles Dodgers inked outfielder Mookie Betts to a 12-year, $365 million deal. That brings the total to 8 baseball players who have signed long-term, $300+ million contracts. Think he needs estate planning?

May 10, 2021

What does it mean when two of the most powerful voices in American financial life seem to be saying two different things? In one corner, we have the “Oracle of Omaha,” investor Warren Buffett. As one of the nation’s richest people and most frequently sought opinions on business matters, he’s a voice that gets a … Continue reading “Buffett and Powell Talk Inflation”

May 7, 2021

How can you help cover your child’s future college costs? Saving early (and often) may be key for most families. Here are some college savings vehicles to consider

May 5, 2021

Will your retirement dreams match your reality? That’s perhaps the most critical question to ask people who are currently retired. Was your retirement what you expected, or was it something else?

May 3, 2021

A recent survey charting investor sentiment shows that 63% of investors are more interested in protecting their financial assets and planning for uncertainty in the future than anything else.1 There are many reasons for this change, but here are a few of the most impactful to keep in mind.

Insights + Resources >