Questions and Answers

I already have a banking relationship. If I need to set up a trust, why would I select your services rather than go to my bank where I already know the people? Would there be any advantage to working with you? Like what?

The people you know at the bank generally would not handle your trust. Trust administration is handled by a separate trust department. That department may be in your community but it may also be located in a different city where your only contact would be by phone. For example, some institutions provide a local trust officer for high net worth clients and give those clients with lesser net worth a toll-free phone number to call when they need help. Bank Trust Officers routinely handle more than 100 clients at a time which means that you may be disappointed with the level of service you receive. By comparison, I limit the number of matters I accept so that I can have enough time to provide a high level of service to each of my clients. Unlike a bank, I do not need to obtain approval from a trust committee or other supervisory personnel so that I can be more nimble and responsive in meeting the needs of my clients. Banks charge a fixed percentage fee regardless of the amount of work they actually do and may charge extra hourly fees for what is called "extraordinary services." Since I charge by the hour, you only pay for the services I actually perform. Unlike many banks, I do not charge an additional fixed percentage fee when the trust terminates or when the assets are transferred to a different trustee.

I have someone who handles my investments and I've done pretty well with them. Why would I need your management services in connection with a trust?

I become involved as a trustee only when an individual no longer wishes to manage his or her own finances or has become incapable of doing so. At that point, my job is much greater than simply investing the assets. In addition to prudently managing the client's assets, it's my responsibility to determine the client's financial needs, establish a budget, and make decisions about what expenses to incur on the client's behalf so that the investment objective is appropriate for the client's financial needs. If a client has a good working relationship with an investment advisor, I am happy to continue working with that advisor, and my role would be to review the performance of the portfolio and make certain that the advisor is investing to accomplish the objectives I have established for the client.

What is it you can do for me that my attorney can't do?

Your attorney provides you with legal advice and prepares legal documents which can include preparation of a trust, health care powers, powers of attorney for asset management, wills, etc. Most licensed professional fiduciaries are not attorneys and, by law, can not provide legal advice or prepare legal documents. The job of a professional fiduciary is to follow and implement the terms of the trust agreement or will or power of attorney. Therefore, the tasks of a lawyer and a fiduciary are quite different and involve different sets of skills -- akin to the difference between an architect who designs a home and the builder who actually builds it. Both are essential to a good, finished product and a collaborative effort is required.

With all of the people I now have handling my affairs -- a lawyer, a tax person, a bank -- why would I need someone else? Wouldn't there be a lot of duplicated effort plus the additional cost? Would it be worth it?

Each professional plays a different but complementary role in providing for the client's well-being. Since they each have different responsibilities, there is no duplication of effort. You need a tax professional to handle your tax matters, a lawyer to handle your legal affairs, and a financial advisor to assist with your investments. A trustee becomes the fourth member of the team when someone needs to step into your shoes to make decisions that either you are unwilling or unable to make for yourself. Of necessity, there needs to be communication between two or more of these professionals and each of them will be billing for their time. But this collaboration is essential in order to avoid costly mistakes and to achieve the best possible results

What factors do you consider in making decisions on behalf of the client?

The standards used in making decisions depend on the circumstances. If the client is a minor, the fiduciary acts in lieu of a parent and makes decisions as a parent would, which are generally based on the parent's determination of what is in the best interest of the child. If the client is an adult, the fiduciary seeks to determine the client's wishes and to carry out those wishes in a prudent manner and in accordance with the terms of the governing document. If the adult client is incompetent, the fiduciary reviews the client's history and past decisions to endeavor to determine what the client's previously expressed wishes would have been when competent. The fiduciary seeks to honor the adult client's beliefs and values and should not impose his or her own values on the client.

For answers to other questions you may have, please feel free to contact me!