Financial advisors may work with clients whose financial planning includes trusts, estates, beneficiary arrangements, and multigenerational planning. These situations can involve fiduciary and administrative responsibilities that are separate from investment advice.
Trust services for financial advisors may provide a way to address those responsibilities through a trust company while the advisor continues providing services within the scope of the advisory relationship.
What Are Trust Services for Financial Advisors?
Trust services may include corporate trustee services, trust administration, estate settlement, beneficiary administration, recordkeeping, and other fiduciary responsibilities. The services available depend on the trust documents, the trustee's appointment, applicable law, and the agreement between the parties.
For advisors, an important consideration is how the trust company's responsibilities fit with the firm's existing planning and investment services.
Firms such as Members Trust Company provide trust and estate services and identify financial advisors among the professionals it serves.
How Can a Trust Company Work With an Advisor?
A trust company may serve as trustee while an advisor continues providing financial planning or investment advisory services, where appropriate. The trustee's responsibilities generally arise from the governing documents and applicable requirements.
For example, the trustee may be responsible for administering distributions, maintaining trust records, and communicating with beneficiaries. The advisor may continue providing investment guidance under the advisory relationship.
The specific division of responsibilities should be established in the applicable agreements and understood by the client and other professionals involved.
When Might Advisors Consider Trust Services?
Trust services may be relevant when a client has:
A revocable or irrevocable trust
A need for a corporate or successor trustee
An estate requiring administration
An inherited IRA held through a trust structure
A charitable trust or related planning arrangement
Family or multigenerational planning considerations
An attorney and tax professional may also participate when legal or tax questions arise.
What Should Advisors Evaluate in a Trust Company?
Advisors evaluating trust services for financial advisors may consider the provider's fiduciary structure, scope of services, administration procedures, reporting, communication practices, technology, and regulatory framework.
It can also be useful to establish who handles investment decisions, distributions, beneficiary communications, tax-related information, and other administrative matters.
For example, Members Trust Company works with financial advisors, RIAs, and other financial professionals in connection with trust and estate services.
Conclusion
Trust services for financial advisors may provide a separate fiduciary and administrative resource when a client's planning needs include trusts or estates. The appropriate arrangement depends on the client's documents, circumstances, and the responsibilities assigned to each professional.
Advisors considering a trust company should review the proposed roles, fiduciary duties, administration procedures, and communication process before introducing the arrangement to a client. Firms such as Members Trust Company provides trust and estate services for financial professionals and their clients.
FAQ
What are trust services for financial advisors?
They may include corporate trustee services, trust administration, estate settlement, beneficiary administration, recordkeeping, and other fiduciary functions.
Can an advisor continue working with a client when a trust company is involved?
Depending on the arrangement, an advisor may continue providing financial planning or investment advisory services while the trust company performs its assigned fiduciary duties.
When might a client need a corporate trustee?
A corporate trustee may be considered when a trust document calls for one or when the parties determine that a professional trustee is appropriate.
What should an advisor ask a trust company?
Questions may address fiduciary responsibilities, administration, reporting, communication, investment responsibilities, fees, and the process for coordinating with other professionals.
This article is provided for educational purposes only and does not constitute legal, tax, accounting, or investment advice. Trust, estate, retirement, and tax considerations vary based on individual circumstances and applicable law. Investment products and services are not deposits or obligations of, and are not guaranteed or endorsed by, Members Trust Company, any credit union or government agency. They are not federally insured and are subject to investment risk, including possible loss of principal. Readers should consult qualified professionals regarding their specific circumstances.
Trust services provided by Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. Trust and Investment products are not NCUA/NCUSIF/FDIC insured. May lose value including the possible loss of principal. No financial institution guarantee. Not a deposit of any financial institution. This is for informational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant.
