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Top 10 Reasons to Use a Corporate Trustee

Top 10 Reasons to Use a Corporate Trustee

  1. Experience

    Corporate trustees are experienced in the administration of trusts and estates.  They can act more efficiently and knowledgeably in fiduciary matters.  A good Trust Officer has procedures to ensure matters are addressed in a safe and timely manner, that assets are not overlooked and that trust assets are invested appropriately. 

  2. Regulatory Oversight

    A corporate fiduciary is subject to many levels of oversight from internal auditors, outside auditors, and government regulators.  Part of those government regulations include requirements for insurance and fidelity bonding as well.  This makes the likelihood of malfeasance and loss less likely and also improves the possibility of recovery.

  3. Impartiality

    The corporate fiduciary must be objective and administer the trust of Will as it is written.  Sometimes individual trustees have a tendency to favor one class of beneficiaries over another or to be subject to pressure from one class.  While a corporate fiduciary may be subject to pressure, there is no personal benefit from favoring one over the other.

  4. Professional Network

    Corporate fiduciaries have a network of professionals from whom they can get answers to difficult questions.  They can refer beneficiaries to competent legal and accounting professionals when there is a need.

  5. Tax Management

    Most corporate fiduciaries have tax expertise, or have contracted with competent tax preparers, so they are able to handle trusts properly from a tax perspective.

  6. Family Harmony

    As mentioned above, parents will often name a child as the Personal Representative or trustee of their trusts.  Often the trustee must make tough choices which are not popular with beneficiaries of the Trust.  When this involves family members, the Trustee child is put in a difficult position.  A corporate fiduciary does not face those personal issues.  This allows the trustee to make the best possible decision, preserving harmony within the family, sometimes by being the “bad guy.” 

  7. Avoid Conflict of Interest

    Often the child who is acting as Trustee has an interest in the Trust, or his/her children may be residual beneficiaries of the Trust.  Take for example, the Special Needs Trust.  One sibling may be Trustee for a Special Needs Trust for a disabled sibling.  The residual beneficiaries of that Special Needs Trust often are the disabled individual’s nieces and nephews – which would include the Trustee’s children.

  8. Continuity

    When a Corporate Trustee is named, there is always someone who is monitoring the Trust.  There is no need to go to court to change Trustees when an individual Trustee dies or wishes to resign.

  9. Legal Knowledge

    A Corporate Trustee is generally familiar with the state laws governing the administration of Trusts or the settlement of Estates.

  10. Recordkeeping

    Often Trusts are required to file annual court reports or to provide accounting to beneficiaries.  Individuals who serve as Trustee might not have the ability to keep or provide such reports.  Required Trust reporting is a standard part of trust administration for a corporate fiduciary.   

    A CORPORATE TRUSTEE MAY BE THE BEST OPTION

    SVA Plumb Trust Company provides administrative services through various types of client relationships. Through a traditional trust relationship, SVA Plumb Trust Company acts as trustee or successor trustee for a trust. As a trustee or as an agent, we can facilitate both required and discretionary distributions and financial reporting to beneficiaries.

    SVA Plumb Trust Company is an independent South Dakota-chartered trust company offering a combination of expertise in trust administration and access to sound, disciplined investment management.

All information herein has been prepared solely for informational purposes only and opinions are subject to change. Past performance is not indicative of future results and all investments involve the risk of loss of principle. For information on how these general principles apply to your situation, consult an investment professional.

Article Topic Expert: Tammy Parks

Tammy is the President of SVA Plumb Trust Company, LLC. She administers trusts and other fiduciary accounts for high net worth clients and their families. These include trusts and other individually managed accounts as well as trust services without investment management. Tammy works closely with clients to help them with their estate planning concerns and objectives.

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