Why Financial Advisors Should Recommend Corporate Trustees

Ted Marquardt

Are you encouraging wealth transfer clients to consider professional trustee services? Learn more about the benefits of choosing a corporate trustee.

Financial Advisors, be prepared! The surge in demand for estate planning services is imminent. Over the next three decades, upwards of $100 trillion will be handed down from one generation to the next through trusts.

Much of this demand will stem from Mass Affluent investors who have a net worth of $2 to $5 million, and tend to be fee-sensitive.  Being fee-sensitive, Mass Affluent investors typically opt to self-trustee without realizing they will undoubtedly incur “trust administration” expenses for attorneys, accountants, and other services over the life of the trust.

Learn More: #1 Mistake in Estate Planning - All I need is a will

Furthermore, because it is an awkward experience, choosing a trustee often gets less attention than deciding what to watch on Netflix! Discussing trustee choices means dealing with a wide-range of emotions and what-ifs, resulting in frustration and little consideration for long-term consequences.

As a trusted fiduciary, you need to ask the tough questions and shepherd your clients through the process of defining estate planning goals.  And part of that process should be ensuring that they fully understand the duties of an individual trustee.

Are you sure about Uncle Bob?

With nearly one-third of advisors recommending self-trustee, are you doing your due-diligence by encouraging clients to consider professional trustee services?  When your client tells you that they have Uncle Bob in mind as the trustee, are you fulfilling your fiduciary responsibilities by asking questions like:

  • Can Uncle Bob manage all the assets held in trust?
  • Can Uncle Bob take care of tax filings and record keeping?
  • Can Uncle Bob distribute assets according to trust terms and beneficiary needs?
  • Can Uncle Bob handle these responsibilities for the life expectancy of the beneficiaries, uninterrupted by illness, vacation,or other disruptions?
  • Can Uncle Bob withstand the legal liability if a beneficiary sues claiming inadequate trust administration?      

If your client is unsure about any of those questions, it is in their and the family's best interest to consider a corporate trustee.  The potential benefits of selecting a corporate trustee are:

  • Provides years of experience in administering trusts, specializing in trust administration, custody, and fiduciary tax reporting services
  • Keeps abreast of legal and tax code changes that may affect the trust
  • Assumes fiduciary responsibility, including fiduciary errors and omissions insurance coverage
  • Offers continuity – staff is available every day that can provide a partnership relationship with multiple team members
  • Acts with best interest in mind of all beneficiaries, both current and future, while implementing trust provisions*

Rely on the professionals

A corporate trustee working with a financial advisor can provide well-balanced service for achieving a client’s goals and objectives. With an advisor-friendly corporate trustee in your corner, you can provide the specialized asset management services that clients and beneficiaries need and expect.

But, how do you find a corporate trustee that delivers world-class professional trustee services and respects your partnership role as the client’s financial advisor?

With Trucendent’s collaborative fiduciary platform for modern estate planning, we help you pair clients and beneficiaries with one of our thoroughly vetted corporate trustee partners that excel at trust administration, managing non-traditionalassets, and demonstrating the advantages of professional trustee services.

Managing a trust is complex. It is emotionally daunting for individual trustees, and fees are unavoidable over the life of the trust.

Let Trucendent help you enlist the services of a proven corporate trustee. We shoulder the burden for your estate planning clients, while the assets remain safe with you, their trusted advisor. Come talk with us today!

*  How a Corporate Trustee Can Help a Financial Planner Meet Their Client’s Goals, NAEPC Journal of Estate & Tax Planning, June, 2009

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