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7 Reasons To Have A Professional Help You Build,
Manage and Protect Your Wealth
FAQs
1. What is a corporate trustee? A corporate trustee is a bank trust department or trust company. Its employees can help you build, manage and protect your wealth when you put your assets in a trust. A trust is simply a legal document that lets you reduce unnecessary legal fees, save taxes and keep control over your assets while you are living, if you become physically or mentally incapacitated, and after you die. When you set up a trust, you need to name someone (a trustee) to manage the assets your trust controls. While you can choose just about any adult, there are very good reasons why you should consider a corporate trustee. (Back to Top) 2. 7 Reasons To Use A Corporate Trustee 1. You'll gain the advantage of years of experience. Because they manage trusts on a daily basis, they are familiar with all kinds of trusts, tax and estate planning strategies, and the legal responsibilities of a trustee. They can manage the assets in your trust now and/or after you die as your trust directs--buying and selling assets, paying bills, filing tax returns, maintaining accurate records, and distributing income and assets. Most have experience with all kinds of assets, including stocks and bonds, real estate, farms, closely held businesses, mineral properties, international investments, and collectibles. 2. You'll enjoy the potential of even greater
investment returns. After discussing your financial goals, risk tolerance and long-term objectives with you, they will recommend the best investment strategy for you. Then, depending on how involved you want them to be, they can provide ongoing advice, or even make decisions for you, to make sure your investments stay on track to reach your goals. 3. You'll protect your wealth because corporate trustees are regulated by both state and federal agencies. Also, most courts consider them "experts" and expect them to meet higher standards than a nonprofessional. 4. You'll receive reliable, professional
service. 5. You'll value their objectivity. 6. You'll tap their rich sources of advice and
referrals. 7. You'll enjoy peace of mind. 3. When would I use a corporate trustee? If you set up an irrevocable trust (like a charitable or life insurance trust) or you plan to make gifts in trust -- strategies often used to save estate taxes by removing assets now from your taxable estate -- you will probably need to name someone other than yourself as trustee for tax reasons. A corporate trustee is a natural choice to make sure your irrevocable trust is administered properly. If you set up a revocable living trust - which
will avoid probate when you die and prevent court
control of your assets at incapacity -- you can be
your own trustee. Even so, there are many benefits
to having a corporate trustee involved. They can
assist you in several ways... 4. As Trustee As trustee, a corporate trustee has full responsibility for managing your trust assets according to your instructions. This would be an excellent choice if you are elderly and have no one you can trust to take care of your financial affairs. You may be widowed, have no children or other trusted relatives living nearby (or don't want to burden them), or you and your spouse may be in declining health. Even if you are capable of managing your own
trust, a corporate trustee can be a wise choice.
You may not have the time, desire or investment
experience to manage your trust yourself. Or
perhaps you just feel that someone with more time
and experience could do a better job than you. 5. As Co-Trustee If you want to take advantage of a corporate trustee's investment experience but still be involved, you could have one work with you as co-trustee. Developing a working relationship with a corporate trustee now lets them become familiar with your objectives, your trust and your beneficiaries' needs and personalities while you are around and able to provide guidance and input. It would also let you see how they would perform
in your absence, let you evaluate their investment
performance and service, and let you see how
comfortable you feel with them overall - a kind of
"trustee test drive." 6. As Investment Agent You could also name a corporate trustee as agent. While a co-trustee has equal responsibility with you (usually both signatures are required to transact business), an agent can have as much responsibility as you wish. You can have an agent manage only a portion of
your trust's assets (your stocks and bonds, for
example) or just provide you with investment
advice, with you making all final investment
decisions. 7. As Successor Trustee If you decide to be your own trustee (for example, of your revocable living trust), consider naming a corporate trustee as your successor trustee. In this capacity, they will step in and manage your trust for you when you can no longer act due to incapacity or death. Many people like the idea of having a professional take care of the paperwork, tax filings and other final details. (Back to Top) 8. Couldn't I name a relative or friend instead? You could, but keep in mind that family and friends are not always a good choice to be involved with your trust. They may be too busy with their own affairs, may reside in a distant area, may not get along with other family members, or may not be responsible or experienced enough to manage the trust assets. An innocent error by a well-meaning but inexperienced relative or friend could negate your careful planning and cost your beneficiaries thousands of dollars. One option is having a relative (perhaps one or
more of your adult children) and a corporate
trustee work together. This would give you the
professional experience and objectivity of a
corporate trustee and the personal involvement of
someone who knows you. 9. Do I lose control if I use a corporate trustee? Not if the trust is prepared correctly. With most trusts, you can change your trustee at any time if you aren't satisfied. Even with an irrevocable trust, you or your beneficiaries can have the right to change the corporate trustee. Also, the trustee you select must follow the
instructions you put in your trust - while you are
living, if you become incapacitated, and after you
die. That's because a trust is a binding legal
contract, and your trustee can be held liable if he
or she doesn't follow your instructions. 10. How safe are trust assets? Even if a bank or trust company fails, trust assets are safe. By law, trust assets must be kept separate from all other assets. For example, they cannot be loaned out, mixed with the corporate trustee's own assets or used to satisfy its creditors. Because of these safeguards, trust assets are not insured by the FDIC. You are also protected against fraud, theft (for
example, if an employee takes trust assets and
disappears), or if they make an error administering
your trust. But, of course, there is no insurance
or bond that will protect you if your assets lose
value simply due to a decline in market values. 11. Should everyone use a corporate trustee? No, of course not. But many more people should consider one. Most people are just not aware of the many benefits a corporate trustee can offer them and their families. You need to look objectively at your situation and the type of trust you set up. If you have a modest estate and your trust is fairly simple, you may be fine being your own trustee and having a capable family member step in for you when you can no longer manage your trust yourself. But if your estate is larger, has a variety of
assets, includes tax planning, or if you doubt your
relatives' capabilities or intentions, definitely
consider a corporate trustee. 12. Are there any disadvantages to using a corporate trustee? Because they must objectively follow the instructions for the trusts they manage, some beneficiaries (especially those who want the money now instead of when the trust states) have found them to be uncooperative. But that may be exactly what you want. One reason why many trusts are set up, and a corporate trustee chosen, is to keep a beneficiary from getting the money until Mom and Dad (or whoever set up the trust) intended. However, if you are concerned about a corporate
trustee being too "impersonal," you can always name
a family member or close friend to act with them as
co-trustee. 13. Is a corporate trustee expensive? Most are very reasonable, especially when you compare their fee to the costs of paying others for estate and tax planning advice, for investment management, for preparing tax returns, and for investment trading commissions. A corporate trustee typically provides all these services and more for only a small percentage of the value of the assets they manage for you. (Fees are published, so you can find out what they are.) And because their compensation is based on how much those assets are worth (instead of on how many trades they make for you), a corporate trustee is motivated to help your assets grow.
14. How can I evaluate a corporate trustee? Talk to several. Visit them if you can. Ask how long the trust department has been in business, how many trusts they manage, minimum and average size of trusts they manage (most require a certain amount of assets) and how much experience their people have in the trust business. Compare investment returns, fees (including when and how much the last increase was), and services. Ask to see samples of statements or reports you would receive and see how easy they are to understand. Facts and numbers are important, but so are the
people. Do they seem to genuinely care about you
and your family? Do they listen and seem to
understand your concerns? Can you understand them?
How confident are you that they will be there for
you and your family when they are needed? 15. Could a Corporate Trustee Help You? Look at These 17 Real-Life Situations Building Wealth with Professional Asset Management • My spouse took care of all our investments. Since he (she) died, I don't know what to do or whom to trust. • I don't know where I should invest my money. I'm so confused by everything I read. • I just received a large inheritance. I've never had to invest this much money before. • I travel a lot now (business or pleasure) and I don't have time to manage my investments like I used to. • I recently sold my business (or other assets). Now I just need to figure out how to invest my money. • I just received a large settlement from a lawsuit, divorce, etc. Wealth Protection with Retirement/Estate
Planning Smooth Settling of an Estate Peace of Mind at Incapacity Caring for Loved Ones/Gifts |
There are 8 sections to FAQs:
• Living Trusts
• Estate Taxes
• Who Should Be Beneficiary of Your IRA
• Corporate Trustees
• Charitable Remainder Trusts
• Life Insurance Trusts
• The Duties and Responsibilities of a Successor Trustee
• Funding Your Living Trust
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Tel: 850-939-3535
Fax: 850-939-3539
E-Mail: Fountain@FountainLaw.com
Internet: http://www.FountainLaw.com
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