Clients with significant or complex financial arrangements may have planning needs that extend beyond investment management. Trusts, estates, charitable arrangements, business interests, and multigenerational planning can involve ongoing administrative and fiduciary responsibilities.
Trust services for high-net-worth clients may provide trustee and administrative support when those responsibilities are part of a client's financial or estate plan.
What Do Trust Services Include?
Trust services vary based on the type of trust, governing documents, and responsibilities assigned to the trustee. Services may include corporate trustee services, trust administration, estate settlement, beneficiary administration, recordkeeping, and distribution administration.
A trust company may also coordinate with the client's financial advisor, attorney, and tax professional when their respective responsibilities overlap.
Many firms including Members Trust Company provides trust and estate services to individuals and works with financial professionals involved in client planning.
Why Does Trustee Selection Matter?
A trustee may have ongoing responsibilities that continue for years or across generations. Depending on the trust, those responsibilities can include following the terms of the governing document, reviewing distribution requests, maintaining records, communicating with beneficiaries, and coordinating with other professionals.
The trustee's authority and duties depend on the trust documents and applicable law. Clients should understand those responsibilities before selecting a trustee.
How Can Advisors Work With a Trust Company?
A financial advisor may continue providing investment management or financial planning services while a trust company handles the fiduciary responsibilities assigned to it.
For example, an advisor may provide investment recommendations within the advisory relationship while the trustee administers distributions and maintains trust records. An attorney may address legal matters, while a tax professional addresses tax questions and reporting.
Clear documentation of these roles can help the client understand which professional is responsible for each function.
Trusts and Charitable Planning
Some clients include charitable giving within their estate or financial planning. Depending on the structure, a trust may include charitable beneficiaries or other charitable provisions.
Tax treatment can vary based on the assets involved, the structure used, and the client's circumstances. Clients considering charitable planning should consult qualified legal and tax professionals.
A trust company may have fiduciary or administrative responsibilities when appointed to a charitable or estate-related trust.
What Should Clients and Advisors Consider?
When evaluating trust services for high-net-worth clients, relevant questions may include:
What fiduciary responsibilities will the trustee assume?
How will distributions be administered?
Who will communicate with beneficiaries?
How will the trustee coordinate with the financial advisor?
What reporting and recordkeeping will be provided?
Which legal and tax responsibilities remain with outside professionals?
How are fees and other administrative costs addressed?
The answers should be consistent with the trust documents and applicable agreements.
Conclusion
Trust services for high-net-worth clients may provide fiduciary and administrative support for trusts, estates, beneficiary arrangements, and certain charitable structures. The appropriate arrangement depends on the client's circumstances, governing documents, and the responsibilities assigned to each professional.
Members Trust Company provides trust and estate services and works with financial professionals involved in client relationships. Advisors and families considering trust services should review the proposed fiduciary responsibilities and administrative arrangements with qualified professionals.
FAQ
What are trust services for high-net-worth clients?
They may include trustee services, trust administration, estate settlement, beneficiary administration, recordkeeping, and distribution administration.
Can a financial advisor work with a corporate trustee?
Depending on the arrangement, an advisor may continue providing financial planning or investment advisory services while the trustee performs its assigned fiduciary responsibilities.
Can a trust company administer an estate?
A trust company may provide estate settlement or related fiduciary services when appointed and authorized to do so.
Should attorneys and tax professionals be involved?
Legal and tax questions should generally be addressed by qualified professionals with the appropriate expertise.
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.
