3 Factors to Consider When Choosing a Trust Partner

  • June 19, 2018

Let’s face it, selecting a trustee or trust company is probably not high on your “to do” list. It’s a safe bet there are more pressing matters in your life right now than formulating a plan to take care of your loved ones when you pass away or in the event that you are unable to handle your own affairs.

If you feel that way, rest assured you’re not alone. A 2017 survey by Caring.com showed only 42 percent of adults have a will or living trust. For Generation Xers (ages 37-52) the figure is 36 percent and for Baby Boomers (ages 53-71) it’s 58 percent. Not surprisingly, procrastination is the primary reason (“I just haven’t gotten around to it”) for 47 percent of the respondents who said they don’t have a trust or will.

Many people delay their estate planning until faced with a health crisis. Unfortunately, during that time certain factors affecting your planning may make the timing less than optimal. By planning ahead, you will be in a much better position to take care of your family and execute a thoughtful plan that considers your current investment risk tolerance and future needs, is tax efficient and is easier for all, including your loved ones, to understand.

If your plans include a professional (corporate) trustee, here are three factors to consider to help you to make an informed decision when selecting a trust company:

Local presence, boots on the ground
It may sound obvious but first look in your own backyard when selecting a trust company. Make sure you can talk in-person to your trust officer, investment officer and others to help you or your beneficiaries make decisions. All too often people will select a trust company only to find important decisions are being made at the corporate headquarters or regional office several states or hundreds of miles away. Impress upon the trust company the importance of being able to meet in person and talk directly with those empowered to make decisions regarding your trust. Your attorney or accountant may also appreciate the flexibility and convenience of being able to talk with a trust officer or investment officer face-to-face.

Broad geographic footprint
Over the past year, there have been many significant changes in income tax and federal and state estate tax rules and regulations. At the same time, we live in a very mobile society. The odds are pretty high the beneficiaries of your trust and the person you want as trustee may not live in your state. It’s important that your trust company, as well as any other professional services firm including an accounting or law firm, has the expertise to know how the various federal, state and local rules and regulations can impact your trust and investments.

Access to investment, tax and legal professionals
The increase in the stock market over the past several of decades has changed the nature of the trust business. Many older, high net worth individuals may have significant wealth in stocks and bonds. Those clients may need customized or more sophisticated wealth management and tax planning strategies. Having access to wealth advisors and tax professionals is crucial to carrying out your plan and the administration of your trust as you intended.

Choosing the right trust company doesn’t have to be daunting, and by considering these factors you should be in a much better position to partner with the right person and the right firm so that you can be confident that your loved ones will have the benefit of their expert advice.