A trustee serves to supervise your assets on your behalf. Essentially, they ensure that your investments are well-managed and properly administered. They see to the trust, which is a legal agreement that allows you to reduce fees and save money on taxes while still allowing you to control your assets.
In putting up a trust, you have the option to name an individual trustee or a corporate trustee. The former is a single entity that manages your investments while the latter is a trust company that takes care of your assets for you. Typically, they get paid with a percentage of the value or amount they manage.
There are several advantages to enlisting the help of a corporate trustee than an individual one, such as:
Families with complicated dynamics can benefit significantly from the neutrality of corporate trustees. These organizations are imposed with the responsibility to carry out the stipulations in a trust to the letter and without bias.
While you may think that your family won’t get into a fight over your assets, there’s always the risk of resentment and disputes. Avoid this issue altogether by hiring a corporate trustee to oversee the execution of your will when the time comes.
Here are the factors that you should consider when choosing a corporate trustee:
- Reputation – Your corporate trustee should be known as having a reliable and credible character. They have built a reputation on the trust of their former and current clients. Check what others are saying about them and see for yourself if the reviews are accurate.
- Experience – The trust company must have people in their employ who have had extensive experience in the industry. This way, you can be sure that they can determine potential issues and provide expert assistance through innovative solutions.
- Network – A primary advantage of having an extensive network is that you can expect quality service through the trustee’s resources. It’s better if they have access to the best legal team and other necessary advisors.
- Approach – Assess how the corporate trustee does business. You should be comfortable enough with the way they work. Find one who is flexible, consultative, and innovative. They should be someone who can meet your needs as well as preferences.
- Pragmatism – Trustees must have a pragmatic attitude in that they should be able to administer the trust with all practicality. Their decisions must all be based on logic and not feelings, even when emotions typically run high during the execution of the will, for instance.
Corporate trustees are the ones in charge of executing the trust account. They have a lot of administrative skills, such as record-keeping, accounting, initiating distributions, and preparing tax documents. Trust companies do perform all these tasks daily, so you can be sure that they’ve become proficient at their job.
3. Fiduciary responsibility
Fiduciary duty pertains to the relationship between two entities that require the fiduciary to prioritize the principal’s interest. This ensures that no conflict of interest takes place.
One example of fiduciary-duty defined relationships are between a trustee and beneficiary, like with estate arrangements and implemented trusts. Since the trustee has legal ownership of the beneficiary’s properties, they can take care of the assets on behalf of the principal. However, their decisions must put the needs of the grantor first, not their own.
Corporate trustees are bound by law to put your interests first. With this, you can be confident that you get the best quality of service, as well as the highest level of trust, loyalty, and care.
4. Legal protection
Trust companies follow the regulations set by the state and federal government. Since they are deemed as experts in the industry, they have a higher responsibility in ensuring that they don’t game the system with their in-depth knowledge of the technicalities.
Hiring a corporate trustee also protects your trust assets since these must be separate from other company resources. It prevents the organization from loaning it with other assets. Plus, you get an extra layer of defense against fraud and theft.
A primary difference between individual and corporate trustees is that the latter allows for continuity. These corporations operate unceasingly so you can be sure to reach them during emergencies. The organization won’t become sick or pass away while serving as your trustee.
A corporate trustee provides significant aid in executing your trust. They are impartial entities that ensure that they will administer your will to the letter. They’ve also garnered in-depth expertise through their experience, so they are equipped with the knowledge and skills to deal with your situation. Moreover, they have the legal burden to do right by you and put your interests first.