It’s common custom to sit down with an attorney to plan a will and determine how your assets will be distributed after your passing. You want to make sure the objectives for your wealth are fulfilled, even if you are not there to oversee them. Establishing a relationship with a trust company also can add to that peace of mind, says Maurice Quiroga of PNC Wealth Management. “When you create that estate plan, you’re doing it for the benefit of your loved ones, and a trust company is going to implement the strategy that you’ve underwritten.”
Creating a trust will give you control over how your property is allocated, so decision of who will manage it is an important one. While a family member or other individual can be named as trustee, appointing a trust company as trustee often can alleviate potential complications. “A family member can bring insight and perspective, but at the same time, that insight can color the trustee’s judgment and make challenging decisions difficult,” Quiroga explains. “In addition, the family is going through the grieving process and they don’t understand the immediate responsibilities needed to administer the estate. A trust company is positioned to do that immediately.”
A corporate trustee also can be named as co-trustee with the individual, achieving the best of both worlds, Quiroga says. “The trust company will have the expertise in management and administration, while the family brings insight and history to the process.”
If you choose to work with a corporate trustee, there are three key considerations that should be assessed, says David Presson, director of investments at First Bank: (1) the experience and knowledge of the company; (2) the fee structure; and (3) the handling of assets and investments. “Trusts can be very complex, so work with someone who understands trust law, the tax issues associated with it, and other intricacies,” he says.
As you interview trust companies, the fee structure can be a determining factor. “Some people may shop around and look for the cheapest management fee, but that’s not always the best idea—would you want to go to the cheapest doctor or dentist?” Presson says. “You want to understand what those fees are, and what is included.”
Because trusts can contain millions of dollars in assets and investments, you want to make sure the account is well-managed long after you are gone, Presson notes. “A trust gives you more control over the asset-transfer process, but you want to make sure a corporate trustee is going to do a good job of balancing all the needs of the parties named in the trust. As a trust company, we have a fiduciary duty to take care of all interested parties, not just one beneficiary over another.”
In addition to those factors, Quiroga stresses the importance of finding an institution with a reputation of safety and security, and a strong holding company backing it. A company with a local presence and resources also will go a long way to helping your loved ones handle the tangible and intangible assets of the estate. “Understanding things like probate rules or knowing the best auction houses in St. Louis are important elements of the trust administration.”
With the complexity of trusts, and the range of options available—from revocable to charitable—you want the comfort of knowing someone is protecting and managing your assets properly, both while you’re living and after you’re gone.