Trustee Services

As trustee, we manage all types of trusts, including Revocable Living Trusts, Irrevocable Trusts, Supplemental Care (or Special Needs) Trusts, Court Supervised Trusts and Testamentary Trusts.  Following is a sample list of duties for these types of trusts.  Charitable Remainder Trusts and Life Insurance Trusts have unique requirements and are listed separately.  We will also act as co-trustee or alternate trustee (for a definition of all types of trusts, go to FAQs, Terms and Definitions).

• Meet with the beneficiary and advisors to assist in structuring and funding the trust; and, later, to ascertain the needs of the beneficiary in order to create written investment objectives,
• Retain an investment consultant (usually the beneficiary's investment advisor) to review proper asset allocation and investments to meet the investment objective,
• Approve and monitor all investments,
• Manage farms, commercial property, and other real estate,
• Hold title to all assets and safeguard them (insurance, inspections, etc.),
• Pay all bills and receive all deposits,
• Calendar and track all trust events,
• Periodically visit with the beneficiary and provide supervision of personal caregivers if necessary,
• Provide income and expense accountings and balance sheets to the beneficiary and advisors,
• Do trust tax returns (and the beneficiary's tax return if called upon to do so),
• Under court-supervised trusts, report to the court on an annual basis, and
• After the beneficiary's life, distribute all trust assets in accordance with the terms of the trust document.

Charitable Remainder Trusts

A Charitable Remainder Trust (or split interest trust) is an irrevocable contractual agreement in which the owner of the property transfers assets to a trustee who manages them for the benefit of the owner who will receive the income or trust payout.  The charity or charities of the owner's choice will eventually receive the remainder of the trust assets.  These trusts are carefully proscribed by the IRS.  They are irrevocable and provide three significant tax benefits:  a current tax deduction, a shelter of the capital gain, and avoidance of federal and state estate tax. 

• Work with the owner and his/her professional advisors to design the charitable trust.  This may include providing a detailed income expectancy analysis as well as the charitable tax deduction.
• Review document for administration purposes and conformity to IRS regulations.
• Review assets for the proposed trust to assure their suitability.  This may include arranging for a Phase I environmental assessment, assisting in obtaining an appraisal, and reviewing the real estate with property and farm managers, etc.
• Apply to the IRS to obtain the taxpayer identification number.
• Retain an investment consultant - our goal is to use the client's own investment manager.
• Meet with the client and his/her advisor to prepare investment objectives for the trust.  We will review the trust performance annually with the manager.
• Correspondence with beneficiaries at inception and when needed.
• Provide income and expense accountings and balance sheets annually to the beneficiary(s) and advisors.
• Calendar and track all investments for dividends and interest.
• Keep records for cost basis of all assets.
• Determine allocation of earnings and expenses to income and principal, as well as accounting for capital gains and trust appreciation.
• Keep records for the four tier accounting rules for tax payout purposes.
• Prepare trust tax returns, provide beneficiaries with K-1, and any additional forms if needed.
• Open trust bank account for income and expense.
• Calculate the trust payment based on the annual trust valuation to make the periodic trust distributions.
• Arrange with trust asset managers for funds for quarterly distributions while monitoring cash available each quarter.
• Distribute trust assets in accordance with the terms of the trust document.

Irrevocable Life Insurance Trusts

An Irrevocable Life Insurance Trust (ILIT) is a trust designed to keep the proceeds of a life insurance policy outside of the estate and thus free of estate and income tax.  The grantor (owner) transfers money into the ILIT, and the trustee purchases an insurance policy, or the owner transfers an insurance policy to the trust.  When the insured dies, the life insurance proceeds are paid into the trust for the beneficiaries, who are usually the children of the grantor.  The proceeds may also be used to pay federal and state inheritance taxes.  Sample trustee duties are as follows:

• Receipt and payment of up to four annual premiums
• Notification to beneficiaries after each gift to trust or trust premium receipt
• Annual statement
  
• Premium payment reminder to grantor
• Annual investment review for universal or variable life insurance
• Periodic quality assurance review of the policy

The Backup Trustee

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Many individuals want to retain control of their assets but know that they need to be protected should they become incapacitated through sickness, dementia, accidents, etc.  Our client's attorney created a revocable living trust with her as trustee and us as an alternate.  When the moment came when she needed help, we were able to step in to become the trustee.  We made sure she continued to receive excellent medical care and that she was in a clean and well maintained living environment.  We also continued to pay her bills and handled all of her financial affairs.