America’s Most Advisor-Friendly Trust Companies Showcase - Flipbook - Page 19
2026 AMERICA’S MOST ADVISOR-FRIENDLY TRUST COMPANIES
to ensure that it achieves the goals set
by its creators. Trust administration
issues, deadlines, and procedures
can strangle otherwise financially
sophisticated people in red tape.
This is a fiduciary role and as such, the
penalties for failure are clear-cut and
severe. Your clients already know what
you do to manage their money, but the
trustee relationship is likely to be new
and somewhat outside their experience.
You want to remain the primary point
of contact between clients and the
trust company, and therefore, you have
to have a basic understanding of the
primary duties of the corporate trustee
and any trust officers assigned to your
clients’ accounts.
officers will perform miscellaneous
activities on behalf of the beneficiaries
as part of their overall ethic of service.
DIRECTED AND
DELEGATED TRUSTS
Thanks to innovations in the trust
code in many states, truly advisorfriendly companies are happy to let the
advisor keep investing the assets and
collecting management fees. From the
advisor’s perspective, only the client’s
satisfaction level changes.
Back in the 1990s, some states altered
the rules to allow the creators of a
trust to direct the trust company to
follow the investment choices of an
outside advisor. Trusts set up under
these terms are generally classified as
“directed” trusts.
Similar arrangements leave control over
the investments with the trustee but
allow that function to be delegated to
an outside advisor. Naturally, these are
considered “delegated” trusts.
Whether the trust is delegated or
directed, as far as the portfolio is
concerned, the advisor (you) is
the boss. The advisor earns the
WHICH TRUSTS MAKE SENSE?
SUGGEST THIS
TRUST TYPE . . .
. . . FOR THIS
PLANNING NEED
ASSET PROTECTION
Reduce vulnerability to legal
and creditor claims
DYNASTY
Provide truly long-term
succession
CRT
Generate current income and a
charitable bequest later
SPENDTHRIFT
Prevent heirs from gaining
direct access to funds
Discretionary tasks give the trustee
more room for personal interpretation.
If the trust is silent on an issue, the
trustee’s fiduciary duty may require
him or her to make discretionary
decisions. For example, a trust may
indicate that the trustee can make
principal payments “after considering
other sources of income available to
the beneficiary,” in which case, the
trustee should demand extensive
documentation from the beneficiary
before making a decision.
QTIP
Give surviving spouse support
before children inherit
GRAT
Provide grantor with
income from assets
GST
Avoid triggering
generation-skipping tax
ILIT
Hold life insurance to pay
estate tax or other liabilities
CRUMMEY
Preserve lifetime
gift tax exclusion
Even if certain tasks are not explicitly
mandated in the trust itself, many trust
SPECIAL NEEDS
Provide support for a disabled
relative or loved one
Nondiscretionary tasks are not
optional. These include making income
payments monthly, quarterly, annually,
or as otherwise directed by the trust.
Trustees must also pay out principal
as set forth in the trust and attend
to all other matters the trust directs.
Tax and other filing deadlines must
be met in full. Any additional duties or
instructions explicitly called for in the
trust documents must be carried out.
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