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. 


Trustee Services Explained

Trustee services are important to making sure your trust is administered correctly. It can be difficult to give up the control of your trust money to an outside company.  The extra trustee fees gives people doubt. Often, individuals will hire friends or family members to serve as trustee for their trust. Sometimes this is a great idea, but sometimes it is not. (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…)

The Secure Act affects your retirement planning

What is the Secure Act?

This year the House of Representatives passed the Setting Every Community Up for Retirement Enhancement Act, known as the Secure Act.  The purpose could help Americans save for retirement, unfortunately, Individual Retirement Accounts, 401(k)s, and Roth IRAs will have their value reduced. Waiting for Senate approval, the Secure Act gives non-spouse beneficiaries 10 years to pay out all the money of an IRA. The effect to beneficiaries – a huge tax hit for distributions. This could place beneficiaries in a higher tax bracket.  (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.


Last Will & Testament

Last Will & Testament

A few days ago, I finished reviewing and approving my third Will & Testament.  I have revised my Will three times – at 25, 42 and 50.  Just part of the normal process we all need to go through.  We all have the same worries about taking care of our family.  Reviewing a Will also means reading related documents.  I have a few partnerships and trusts plus my medical and financial Power of Attorney forms.  Creating these documents occurred at different times.  Finally, all of these documents have to be in sync.  211 pages.  Ugh!  However, the review focus of a Will & Testament plus related documents hinges on more than tax and legal stuff.  We all need to consider our assets, philosophy of our money and our family.  Not easy.

As a co-founder of Wealth Advisors Trust Company, I hold myself accountable to the best estate planning practices.  We all learn by sharing processes, successes, and failures.



Trust Administration Handbook – ABCs

Preparing a Trust Administration Handbook for guidance as to the efficient handling of tax issues and long-term goals of the grantor can be the difference between financial success or destitution.


Trust Distribution: Goals, Priorities & Purpose

Trust distribution guidelines in the trust document create the foundation of success or failure. Parents and grandparents must consider how trust distribution definitions fall under the supporting or enabling type.  Having some plan leads to a balanced outcome for current and future generations. 


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