Credit union members may have financial needs that extend into trusts, estates, beneficiary arrangements, and fiduciary administration. These needs can arise during estate planning, after a death, or when a family establishes a trust for ongoing asset administration.
Trust services offered by credit unions can vary by institution. Some credit unions work with a separate trust company to provide trustee and related fiduciary services.
What Trust Services May Include
Trust services can cover several types of administration, depending on the provider and the governing documents. Potential services include:
Corporate trustee services
Trust administration
Estate settlement
Beneficiary administration
Distribution administration
Recordkeeping
Fiduciary oversight
The specific services available depend on the credit union's structure, its relationship with a trust provider, and applicable requirements.
Can Credit Unions Provide Trust Services Through a Partner?
A credit union may establish a relationship with a trust company when members need trustee administration or other fiduciary services. This type of arrangement can allow the credit union to maintain its existing member relationship while a separate trust company handles the responsibilities assigned to it.
Members Trust Company, for example, works with credit unions and their members in connection with trust and fiduciary services.
Under this type of arrangement, the trust company may serve as trustee or provide defined administrative services. The responsibilities of each organization should be explained clearly so members understand which entity is providing each service and which organization has fiduciary responsibility.
What Does a Trustee Do?
A trustee administers a trust according to its governing documents and applicable law. Depending on the trust, duties may include reviewing and processing distributions, maintaining records, communicating with beneficiaries, and coordinating with other professionals.
A trustee may also have responsibilities related to investment management when those responsibilities are assigned under the trust documents or applicable agreement.
Legal and tax matters may require involvement from an attorney or tax professional.
When Might a Member Need Trust Services?
Trust services may become relevant in several situations, including:
Creating a trust as part of an estate plan
Naming a corporate trustee
Administering an existing trust
Settling an estate
Managing beneficiary arrangements
Administering certain retirement assets held through a trust
Addressing charitable provisions within a trust
The appropriate service depends on the member's circumstances and governing documents.
What Should Members Ask About Trust Services?
Members considering trust services may want to ask:
Who will serve as trustee?
What fiduciary responsibilities will the trustee have?
Which organization will administer the trust?
How will distributions be handled?
Who communicates with beneficiaries?
What reporting and recordkeeping will be provided?
What fees or administrative costs apply?
How will the trust company coordinate with the member's advisor, attorney, or tax professional?
These questions can help clarify the structure before services begin.
How Do Trust Services Fit With Other Financial Services?
A member may have relationships with several financial professionals. A credit union may provide banking or other financial services, a financial advisor may provide investment advice, and a trust company may serve as trustee.
Each professional has a defined role. The member should understand how those roles interact and which organization is responsible for each service.
Members Trust Company works with credit unions and financial professionals in connection with trust and estate services.
Conclusion
Trust services offered by credit unions can vary, and some institutions may work with a separate trust company to provide trustee and fiduciary administration. Members considering these services should review the provider's responsibilities, applicable agreements, fees, and communication procedures.
Members Trust Company provides trust and estate services in relationships involving credit unions and other financial professionals. The appropriate trust arrangement depends on the member's circumstances, governing documents, and applicable requirements.
FAQ
Do all credit unions offer trust services?
No. Trust services vary by credit union, its structure, and the services available through the institution or its trust relationships.
Can a credit union work with a separate trust company?
Yes. A credit union may establish a relationship with a trust company to provide certain trustee or fiduciary services.
What services can a trust company provide?
Depending on the engagement, services may include trustee administration, trust administration, estate settlement, beneficiary administration, and recordkeeping.
Who handles legal and tax questions?
Legal questions should be directed to a qualified attorney, while tax questions should be reviewed with a qualified tax professional.
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.
