We often hear of individuals having a “knee-jerk” reaction to naming a corporate trustee or executor. They may be worried about losing control or concerned about fees. Naming a trustee or executor to safeguard family wealth is a very important decision. At Pennsylvania Trust, we have over thirty years of experience as a fiduciary handling complex trusts and estates. Our fiduciary services include Trust Administration (as trustee or co-trustee) and Estate Administration (as executor or co-executor).
A trust is a relationship in which a person (the settlor or grantor) creates a trust for the benefit of certain individuals or charities (the beneficiaries) and directs the trustee to hold and distribute the trust assets in accordance with the terms of the trust instrument. Trusts and the laws that govern them are complicated. As a trustee or co-trustee, Pennsylvania Trust can be responsible for:
Investment Management: We will define the investment objective for the trust, based on time horizon, tax considerations, and risk profile of the beneficiaries. We will establish the appropriate asset allocation and manage the portfolio on an ongoing basis with input from our strategy and research teams.
Asset Management: We will safeguard, administer, and value the trust assets, including specialty assets such as real estate, artwork, oil and gas, and partnership interests.
Distributions: We will work to understand the needs of the beneficiaries and evaluate and make distributions, both mandatory and discretionary, based on the wishes of the grantor. Compared to a non-professional trustee, such as a friend or family member, a corporate trustee can deliver advice in a balanced, objective manner. Because the interests of beneficiaries can sometimes be at odds, a corporate trustee can be in the best position to balance the interests of all beneficiaries and mediate any disputes that might arise.
Recordkeeping: We will maintain all trust records, including original documents, accountings, nonjudicial settlement agreements, tax returns, account statements and transactions, and beneficiary correspondence.
Tax Preparation and Planning: We will prepare and file all necessary tax returns and evaluate the tax impact of investment and distribution decisions.
Pennsylvania Trust can be appointed as successor trustee for an existing trust or named as trustee of a new trust to serve now or in the future. For a new trust, it is important to make sure that the trust is well drafted to carry out the client’s intent and guide the trustee in the decision-making process. We can assist in this process, working collaboratively with our client’s estate planning attorney. We also recommend that the trust document contain language permitting named individuals or beneficiaries to remove and replace the corporate trustee, providing maximum flexibility for our client and his/her family in the future.
The administration of an estate is often complex, and time-sensitive decisions need to be made during what is an emotional time for family members. It is not uncommon for the estate settlement process to take over a year, and the consequences of making a mistake along the way can lead to litigation, a decrease in the value of the estate, and broken relationships among family members. It is important to consider whether an individual executor has the time, inclination, and sophistication to handle the project, or whether a corporate executor is more appropriate. As executor or co-executor, Pennsylvania Trust can be responsible for:
Identification, Collection, Valuation and Sale of Assets: We will identify, collect, and prepare an inventory of estate assets, and obtain appraisals as needed. We will also handle the sale of assets, including real estate.
Investment Management: We will collect and manage investable assets and ensure that the investment strategy is consistent with the distribution and liquidity requirements of your estate.
Payment of Debts and Expenses: We will coordinate the review and payment of all debts and estate administration expenses.
Tax Preparation and Planning: We will file all necessary federal and state estate and income tax returns, and provide advice concerning post-mortem tax planning and elections.
Distribution and Closing of Estate: We will handle the distribution of estate property in accordance with the document terms and close out the estate by way of agreement or accounting, as appropriate.
At Pennsylvania Trust, we recognize that acting on behalf of our clients is a tremendous responsibility. We welcome the opportunity to discuss your interest in our Trust and Estate Administration services.
Leslie Gillin Bohner, Esq. is Executive Vice President, Chief Fiduciary Officer and General Counsel at Pennsylvania Trust.