Northwest Trustee &
7307 N. Division #303
PO Box 18969
Spokane WA 99228
With over two decades in the trust management business in Spokane, we have noticed that people ask the same types of questions when they are trying to decide whether to use us as a trustee. These are good questions, and we hope the following answers make the decision easier.
How can I be sure my money is safe?
In order to trust someone, the first inquiry is whether he or she has a reputation for honesty and integrity. One of the largest bank trust departments in the state hired Stephen Trefts to manage 6 million dollars of trusts, guardianships and probates. Then he joined a large charitable foundation as its executive vice president, where he was responsible for the administration of over 40 million dollars of assets and expectancies. Currently, we are the trustee for many millions of dollars.
Do you have a fidelity bond?
Many court supervised trusts require a fidelity bond; therefore, we manage several trusts that carry the bond. Northwest Trustee & Management Services has Employee Dishonesty Insurance and carries Errors & Omissions Insurance.
What happens to my trust if something should happen to Stephen Trefts?
Please click here for the succession plan for Northwest Trustee & Management Services.
Aren't trusts expensive? What's your fee?
- Our fee is set forth on our published fee schedule. Most charges are computed on an hourly basis. The fee is proportional to the amount of work performed on each account. There is no cost for an initial consultation.
- It has been our experience that, when compared to the size of the estate and peace of mind of a properly planned estate, trust management fees are modest.
- Fees are tax deductible and half is taken from the principal and half from the income.
- With professional management, better investments and tax planning usually far offset any fee.
- At the inception of the trust, you will need an attorney to write or review the document. He or she will charge you directly.
- Additionally, when Northwest Trustee & Management Services receives assets for investment, there will be an investment fee. This is charged in the form of a commission by the investment advisor we hire. The fee is paid out of the trust principal. Our trustee fees are not related to purchases and sales from the trust.
What kind of investment return will you provide for me?
- Northwest Trustee & Management Services strives for a return that will meet the goals of the trust. Return is a function of risk. The investment objectives of most trusts do not allow for wide fluctuation of principal value; because of this, the investments are relatively conservative.
- Return combines two elements: income and growth. Most of our trusts are invested so as to provide increasing income over the years; therefore, the trust is concerned with the growth of principal as well as the rate of income return.
How do you make investment decisions?
- Before trust assets are invested, Northwest Trustee & Management Services, as trustee, takes several important steps. First, we hold discussions with the person creating the trust or the guardian of that person to determine what kind of annual income needs he or she may have. We ascertain immediate cash needs for items such as medical expenses, schooling, auto, travel, etc. Finally, we estimate the length of the trust term.
- After a thorough discussion, written investment objectives will be established. These will include:
- Stability and safety of principal.
- The income percentage goal.
- The growth percentage goal.
- The cash reserve.
- The duration of the trust.
- An asset allocation model.
- We will retain the client's advisors. However, if needed, we will hire an investment advisor who will make an investment recommendation based on these goals. We make an independent analysis of all securities or mutual funds to be purchased.
- We review and approve the investment plan and authorize the purchases to implement the plan.
- We also monitor the performance of the investments on a continuing basis.
Are there tax benefits with a trust?
- With a standard revocable living trust there are no tax benefits. However, with larger estates, a married couple may achieve significant Federal Estate Tax savings with proper trust planning.
- The primary reason for establishing a living trust is for management purposes: to protect against incapacity, or to provide for minors or heirs with physical disabilities.
- A major reason for a living trust is that eventually the assets will avoid the costs and delays of probate. A trust is also more confidential than a will.
- The type of trust that provides income to the family first, and later distributes to a charitable organization, offers many significant tax benefits.
How do I, or my family, know what's going on in the trust? How do I hold you accountable?
- Washington State Trust Laws require that the trustee report at least annually to the trust beneficiaries. Our accounting cycle is usually semi-annual, but accountings may be provided more often if desired.
- The semi-annual accounting includes an income and expense statement as well as a balance sheet. Estimated rates of return are shown for each asset.
- The trust beneficiary (or authorized representative) may review all trust files at any time.
The Perils of Naming a Family Member as Trustee
Cathy has medical issues and her father wisely set up multiple trusts to protect her. Unfortunately, he named a relative as a trustee. The relative, while being well intentioned, developed a personality conflict with Cathy. He also developed serious medical issues of his own due to a car accident. Both sides were battling through their attorneys, which was expensive, and it adversely affected their health. They found out the hard way that it is often better to select an objective professional trustee instead of a family member. We were able to step in and resolve the conflict and make sure that Cathy's trusts were managed efficiently.
“I have dealt with Northwest Trustee & Management Services for several years now. I am a practicing lawyer with an emphasis on estate planning, trusts and estates. Northwest Trustee & Management Services, under the guidance of Stephen Trefts, its president, has done a wonderful job for several of my clients. They have not only managed funds well, but have been involved with a few stressful family situations and were able to balance the needs of family members and the importance of the integrity of the trust. Additionally, they have been involved with managing funds for guardianships and have also performed these services well.”
-Paul M. Larson
Attorney at Law
Larson Berg & Perkins PLLC