Corporate Trustee: Who Makes The Investment Decisions?

Deciding who to appoint as a trustee is one of the most important financial decisions you can make. A trustee is a person or institution that manages a trust on behalf of the grantor (the person who sets up the trust) for the benefit of one or more named beneficiaries. Trustees have a fiduciary duty to act in the best interests of the grantor and beneficiaries and are responsible for managing the trust, distributing and investing trust assets, careful record-keeping, and compliance with state and federal tax laws and other regulations. A corporate trustee is a bank or specialised company that acts as a trustee and has specific knowledge, expertise, and experience in administering trusts. So, does a corporate co-trustee make all investment decisions?

Corporate trustees are impartial and objective

Corporate trustees are also able to provide stability and continuity to a trust, as they do not die and are not affected by the death of directors. This can be beneficial for long-term investment strategies and for building a relationship with beneficiaries.

The objectivity of corporate trustees means they can make decisions without emotional involvement. This can be a double-edged sword, however, as their impartiality can sometimes come across as insensitive or rigid to family members.

Overall, corporate trustees offer a valuable service by providing an unbiased and objective approach to managing trusts, which can be especially useful in complex or emotionally charged situations.

They have a fiduciary duty to act in the best interests of beneficiaries

A corporate trustee is a bank trust department or trust company that helps individuals build, manage, and protect their wealth. They are responsible for funding the trust, managing assets, investing, paying bills, keeping records, distributing income and proceeds to beneficiaries, and filing tax returns and any other required reports.

Corporate trustees have a fiduciary duty to act in the best interests of the beneficiaries. This means that they must:

• Be loyal to the beneficiaries, acting solely in their best interests
• Avoid conflicts of interest and remain impartial when making decisions
• Perform their duties with skill and care, regardless of prior experience
• Keep beneficiaries fully informed about trust activities, while maintaining strict confidentiality with respect to outsiders
• Invest the assets based on specific criteria, such as the trust's duration and underlying mission
• Serve the best interests of all beneficiaries, even in cases of complex or competing needs
• Administer the trust according to the specific terms and wishes of the grantor

By fulfilling their fiduciary duty, corporate trustees can provide individuals with peace of mind that their financial affairs will be managed effectively, even after they are no longer able to do so themselves.

They have extensive investment management experience

A corporate trustee is a bank or a specialised company that manages trusts. They are legally responsible for managing the trust in accordance with the terms of the trust document. They have a fiduciary duty to act in the best interests of the beneficiaries and must carry out the terms of the trust in an objective manner.

Corporate trustees have extensive investment management experience. They have a deep understanding of fiduciary requirements and extensive investment management experience. They can help with investment strategies, taking into account the specific criteria of the trust, such as its duration and underlying mission. They can also provide ongoing advice and make decisions to ensure investments stay on track to reach financial goals.

Corporate trustees have experience with all kinds of assets, including stocks and bonds, real estate, farms, closely held businesses, mineral properties, international investments, and collectibles. They can also refer clients to attorneys and other qualified professionals.

The advantage of a corporate trustee is that they are not emotionally involved and can, therefore, be more objective in their decision-making. They are also regulated by state and federal agencies and are considered experts by most courts.

However, one of the disadvantages of a corporate trustee is that they are likely to be unfamiliar with the goals, desires, and concerns of the beneficiaries. As a result, their decision-making may appear insensitive to some family members.

Corporate trustees are perpetual and provide stability and continuity

Corporate trustees are perpetual and, as such, provide stability and continuity. They do not die, unlike friends and family members, and they have a wide range of experience in administering trusts. They carry out a trust's terms impartially and dispassionately, adhering strictly to its terms.

Corporate trustees are a registered legal entity with shareholders and directors. The primary advantages of a corporate trustee are limited liability, easier separation of assets, asset protection, smooth succession, and support services. They have a fiduciary duty to act in the best interests of the beneficiaries and are regulated by state and federal agencies. They are also expected to meet higher standards than non-professionals.

The disadvantages of a corporate trustee include higher costs and a potential lack of familiarity with the goals, desires, and concerns of the beneficiaries. Their decision-making may appear insensitive to some family members, and they often require that assets be held in their custody.

Overall, corporate trustees can provide stability and continuity due to their perpetual nature and expertise in trust administration.

They are regulated by state and federal agencies

Corporate trustees are regulated by both state and federal agencies. They are also held to a higher standard by the courts, which consider them experts.

As fiduciaries, corporate trustees have a duty of obedience to the terms of the trust, a duty of prudence and reasonableness in making administrative and investment decisions, a duty of objectivity in treating beneficiaries equally, and a duty of transparency in providing trust information and accountings. They must also comply with state and federal tax laws and other regulations.

Corporate trustees are legally responsible for managing the trust in accordance with the terms of the trust document and are bound to act in the best interests of the grantor and beneficiaries. They are held to the highest standard of the law—the fiduciary duty. If unprotected, they can risk their personal assets while serving the family.

Some of the critical tasks a corporate trustee must complete include the administration of the trust, the accounting of trust activity, and the filing of federal and state returns, all while adhering to the fiduciary standard and documenting every task.

Frequently asked questions