Individual Trustee Solution

A NEW MODEL OF TRUST SERVICES

 

Creating a trust requires people to surrender control of that wealth to someone else. For those who worked hard for the money or simply withstood the temptation to spend every dollar, handing the assets over to the trustee represents a tremendous leap of faith. Many soothe the emotional stress by reaching for an individual – a relative or friend – who fills them with complete personal confidence.

Some individual trustees accept the headaches, risks and the paperwork and attempt to do their own version of trust accounting and administration. In the first case, the trustee needs a lot of on-the-job training and support. They are looking for a plug and play solution. Either way, the administrative tasks that any formal trustee actually needs to perform can be overwhelming. Either way, not being in control is not an option.

At the very least, they need a lot of on-the-job training and support while they’re learning the system. Otherwise, while many trust creators have gotten a lot more comfortable with the notion of handing the assets to a corporate trustee, most of the organizations that provide those services have shown scant willingness to cooperate with the people the trust creators wanted to appoint, much less the financial advisors who would ordinarily, continue managing the investments.

Even when trustees are willing to work with advisors, they’re more interested in grabbing the assets and holding on for the long term. They brag about how “sticky” these accounts are for them and their corporate affiliates. And this raises the stakes on any decision to direct your accounts their way. Instead of a business relationship, many advisors find they’re getting into a corporate marriage that’s very difficult to unwind and holding their best clients hostage to the process.