Delegated or Directed Trust

Definitive Guide on a Delegated or Directed Trust

Delegated or Directed Trust – Everyone has confusion on the pros and cons of each.  Directed trusts are newish (e.g. last 30 years).  Delegated trusts have been around since the 1300’s.  From a trust administration perspective, the biggest difference between the two rests on the trustee level of risk. 

Delegated or Directed Trust – A Reasoning for Two options

Any trustee, if taking a fee and acting as a fiduciary, reviews their duties and obligations for two key issues: their risk and their time. Trust documents outline a trustee risks very well.  Around 30 years ago, several states such as Alaska, Delaware, Nevada, and South Dakota began adding more robust control and choice options to grantors.  These extra controls and choices can reduce the risk to a trustee.  A delegated or directed trust provides options which a grantor needs to consider around the philosophy of their wealth and family. 


Do you write your own blog?

Do you write your own blog?  I do.  Why? At my core I am a geek/nerd who loves to learn.  Especially about the why’s and how’s.  Connecting the dots that are not obvious fascinates me.  I always wanted to be a history professor.  The Q&A below acts as a template anyone can ask themselves to start writing interesting blogs.  If someone asks you, do you write your own blog, you can say yes because I enjoy learning and sharing that knowledge. (more…)

Definitive Guide on Trustee Fees

Finding cost efficient trustee fees frustrates many people. Wealthy and affluent people find using trustee services daunting. Why? Nobody understands the process of how corporate trustee fees calculations. Nobody understands exactly what a trustee does. Why? This 700 year old industry never had true external competition. No competition means no motivation for innovation. Until now… This definitive guide on cost efficient trustee fees will pull back the curtains on what corporate trustees do and how they charge their fees. You can use a trust company with trustee fees on your terms.   (more…)

Advisors in Transition – 3 Easy Tips

Advisors in transition have reached a pain point needing a solution. They want a natural and easy solution to solve that pain point. Examples of those pain points: large wirehouses taking 50% or more of the revenue, stale RIA firms with no succession plan and/or a need for intellectual freedom in this new world. Any advisor in transition starts the search with the internet. The success of any advisor in transition depends on 3 easy tips. (more…)

Advisor friendly trust company top choice – Wealth Advisors Trust

The independent journalists at The Wealth Advisor, the voice of the financial advisor community, has selected Wealth Advisors Trust as one of their top choices for an advisor friendly trust company in 2019.


How a Bank Trustee understands Millennials

A bank trustee works with clients from the WWII to millennial generations.  They generally each have a unique set of characteristics.  Of course, no generation is uniquely the same.  There are variances based on geographic, social, and economic factors.  What makes millennials a somewhat unique group, at least since the WWII generation, are their lives experienced two special situations.  First the integration of technology in everything we do.   Second the break-up and re-structuring of the geopolitical world order after the Cold War.  Millennials and successor generations, like Gen Z, view the world through different experiences and tools than prior generations.  My aha moment came from reading the Urban Institute report on Millennial Homeownership (see page 22).  A bank trustee that understands millennials will provide them and future generations with innovative and collaborative customer services. (more…)

Definitive Guide on Trust Law, a Trust Fund, & Trustee Industry 2019

Advisors have the option to use a trust fund company that does not compete against them. There will be an avalanche of asset transfers between generations over the next 30 years. This blog provides information on the past, present, and future of trust law and the trustee industry. This information will help advisors to make informed decisions on clients’ generational planning choices, and to attract and retain assets.


Trust Distribution Requests – Now Digital

Asking for money from a corporate trustee usually becomes an unhappy experience. It does not have to be. Everybody has stories about these situations. These trust distribution requests usually become complicated by corporate trustees. It does not have to happen. Why does it happen? This question goes back 400 years. It starts with a trustee’s job of protecting the trust assets. And stodgy belief that paper only processes always yield better client results than balancing digital and paper. Corporate trustees love paper and all things manual. We decided to push the trust industry into the digital age. (more…)

Directed Trusts : The Ins and Outs

Directed trusts separates who manages the trust assets and who administers the trust assets.  This rule gives everyone loads of flexibility for anyone using a trust under South Dakota trust laws.  It allows a person to place her property—both investment and business assets—in trust for heirs as income producing property. This process involves directing the control of the management of trust assets to third party such as a financial advisor, family member or family office but not the corporate trustee. A South Dakota Directed Trust is unique because it allows a ‘donor’ (trust geek speak – grantor) to use a decide who will manage, preserve, enhance, and accrue value for all sorts of property placed in a trust.  These assets can include more than stocks, bonds, mutual funds—ranches, mom and pop shops, apartment complexes, valuable artwork, or even jewelry.

South Dakota’s Directed Trust laws allow grantors to split-up the fiduciary responsibilities and duties that normally tag along with financial investments.  A complex situation traditional and unique assets would have a financial advisor managing/overseeing the marketable securities and a hospitality specialist to manage the day-to-day operations of your fast food franchises.  The corporate trustee would only focus on the trust accounting and administration. This also typically results in lower fees because the primary wealth advisor and all parties involved are responsible for fewer burdens.


Creating Your Dynasty: Understanding South Dakota’s Dynasty Trusts

South Dakota’s dynastic trust laws allow every family to potentially become wealthy among the leagues of the ultra-rich. Why limit yourself to keeping up with the Jones when you can be the Jones? The attractive benefits of South Dakota dynastic trusts include the strength of preserving wealth for future generations, protecting those assets as they descend through the generations, and most importantly, the immense income tax savings.

The repeal of South Dakota’s Rule Against Perpetuities allowed for the creation of dynastic trusts. This allows for the money to largely avoid heavy tax burdens and be shielded away from creditors forever. When thinking about creating a South Dakota Dynastic Trust remember WAS: Preserving Your Wealth, Protecting Your Assets, and Potential Tax Savings. Your money WAS, is, and forever will be protected by South Dakota’s trust friendly laws. (more…)

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