If you have determined that setting up a trust will help you accomplish your financial goals, the next step includes choosing your trustee—and if you choose a corporate trustee—deciding what capacity you want this trustee to serve.
When you decide a trust is an appropriate arrangement as part of your estate plan, your attorney is sure to ask you whether you have a trustee in mind.
A trustee is responsible for distributing income and principal to the beneficiaries of the trust according to the terms specified by you in the trust agreement. You can name a family member or friend to take on this role, but keep in mind they may not have the time, dedication, and fiduciary expertise to fulfill the duties and responsibilities of managing your trust.
If that’s the case, there is an alternative. A corporate trustee—such as a trust company or bank trust department—provides an objective, third-party opinion solely focused on the long-term goals that you set out for your trust.
Please note that a corporate trustee doesn’t have to be your only trustee, you can name a corporate trustee as a co-trustee along with a trusted family member or friend. This allows the family member or friend to assist you with your trust, but also rely on a co-trustee’s support in the event there are issues or conflicts between the trustee and the trust beneficiaries.
A corporate trustee can be named in your estate documents at the time you write them as either a sole or co-trustee. You can also add in the option so your trusted family member, friend, or beneficiaries can change the corporate trustee should issues arise. Speak to your estate planning attorney for guidance if you choose to implement this strategy.
What capacity do you want your corporate trustee to serve?
Trust companies can serve in many different capacities based on the needs of your family and estate. Many will give you the option to choose the level of support you need, whether it
is engaging them to act as trustee, co-trustee (as described above), agent to trustee, or trust consultant.
Depending on the services you require, a corporate trustee can assist with the following:
- Review and interpret trust documents
- Provide unbiased administration based on the terms and intent of the grantor
- Defend any claims against the trust
- Maintain compliance with the applicable state principal and income act
- Maintain strict audit and due diligence programs
- Calculate the amount of scheduled distributions
- Prepare periodic statements issued to grantors, financial advisors, and money managers as well as grantor’s accountant and attorney
- Provide annual trust tax information letters to beneficiaries and accountants
What should you look for in a corporate trustee?
Choosing the right trustee(s) can help ensure that not only your financial legacy and intentions will be carried out, but it will be done so professionally and objectively for the benefit of your heirs.
Ask potential corporate trustees these questions:
- How many trust officers do you employ and how many relationships are they assigned?
- Do I have a dedicated person and how often will we meet?
- How long has the trust officer served at the company and do they have industry degrees or designations?
- How long can I expect to wait for a decision regarding distributions?
If you already have a trust in place, a corporate trustee can assume the trustee responsibilities—whenever and for however long support is necessary. Simply provide a copy of your original trust documents to your Financial Advisor
to determine if the trust partner can serve as a corporate trustee. Janney works with five preferred independent corporate trustee “partners” that have gone through a screening process for support, capabilities, and expertise. We work closely
with them when needed during the financial planning process.
If you are in the planning stages of drafting a trust, corporate trustees can participate in drafting discussions along with your attorney and Financial Advisor.
Working with Janney
Depending on your financial needs and personal preferences, you may opt to engage in a brokerage relationship, an advisory relationship or a combination of both. Each time you open an account, we will make recommendations on which type of relationship is in your best interest based on the information you provide when you complete or update your client profile.
When you engage in an advisory relationship, you will pay an asset-based fee which encompasses, among other things, a defined investment strategy, ongoing monitoring, and performance reporting. Your Financial Advisor will serve in a fiduciary capacity for your advisory accounts. For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
By establishing a relationship with us, we can build a tailored financial plan and make recommendations about solutions that are aligned with your best interest and unique needs, goals, and preferences. Contact us today to discuss how we can put a plan in place designed to help you reach your financial goals.
Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
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