Trust Connection A Monthly Report on Trust News and Information
October 2012
Choosing A Trustee
A trust is often an important step toward fulfilling your financial goals and establishing a sense of order in your life. There are specific material advantages to having a trust: continuity of asset management, privacy, tax savings and more. Often the terms of the trust live on after you are gone. You cannot control changes in your family’ s life or in the tax law, but you can choose a trustee that will respond to these changes. When selecting a trustee, you typically have three choices:
An individual Common wisdom holds that you can save money and maintain control by appointing a person you know— one of your children, a close friend or relative— as trustee. You can also appoint a financial advisor. But, few individuals have the time, financial and legal knowledge, business expertise and resources to manage your trust effectively. Additionally, the individual who accepts may not understand or be ready for the personal liability that can arise from performing the trustee responsibilities.
A local bank’ s trust department A bank where you have your checking account may offer trustee services through its trust department. It may seem like a logical choice, the people are friendly and they are local. But, while the bank may be a convenient distance from your home or work, the trust department may be hundreds or thousands of miles away and the jurisdiction may not be the most favorable location in terms of tax laws, investment opportunities or other regulatory restrictions.
The Independent Trust Company Independent Trust Companies arose from the joint desire of financial advisors to retain their client relationships after the primary decision maker died and the client’ s desire to have their trusted investment advisor, attorney, accountant, and other professionals involved with their families at such a critical time.
How does this Partnership Between Advisors Work?
Traditional banks and trust companies have separate departments for investment management and trust administration. The Trust Company-RIA Firm partnership simply separates investment management and trust administration into different companies. This arrangement makes National Advisors Trust a“ directed trustee” and is called“ bifurcation”.
What is a Directed Trust?
Generally, a directed personal trust is one under which the grantor or beneficiary has the power to direct that the trust’ s investments be managed by someone other than the trustee. Under a directed trust arrangement, the trustee performs all other important functions necessary to carry out the terms of the governing trust agreement, including having frequent and necessary communications with the beneficiaries, but refrains from commenting on the investments.
What is the Advantage?
You are able to specify that your investment advisor directs National Advisors Trust, you get the continuity you want for your family in both investment philosophy and the people. The service is delivered at the same cost or less than the national bank model, but on a local level. This provides the best of both worlds – the comfort and stability of a regulated financial institution to
Bart Albrigo Senior Vice President 9454 Wilshire Blvd, Suite 710 Beverly Hills, CA 90212
623-255-3384 voice 310-362-0311 fax 1-877-511-WEALTH( 9325)
Bart. Albrigo @ BHWM. com
BHWM believes there must be a Sacred Trust between Wealth Management Advisors and clients. This is the cornerstone on which BHWM is built.
9454 Wilshire Boulevard, Ste 710, Beverly Hills, CA 90212 877-511-WEALTH www. BHWM. com
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