The Role of the Trustee

The feature that creates the ability to achieve privacy for these assets is the use of a special type of corporate trustee-whose duties are to carry out your instructions. The corporate trustee does not invest or manage trust assets. His role is strictly limited to acting as your agent and nominee and executing documents as you request.

This role differs significantly from that of a typical trustee. The responsibilities are, likewise, dissimilar from the traditional responsibilities assumed by a trustee. Most trust companies are in business to manage assets-and they charge substantial fees for performing these services. The company makes investment decisions for the trust and distributes funds according to the terms of the trust agreement. Specific requests by the settlor or the beneficiaries must be reviewed by trust officers and their counsel to make sure that legal responsibilities and fiduciary duties are satisfied. Within this bureaucratic structure, even relatively simple matters are time consuming and expensive to accomplish. Although these traditional trust services can be useful for a client who needs extensive independent asset management for an elderly or minor beneficiary, that is not the type of arrangement that most of our clients prefer.

Instead, our clients who create a Privacy Trust generally want to maintain control and authority over their property-while using the trust company only for the limited purpose of holding legal title and executing necessary documents as instructed. The requirements for the trust company are:

  1. It must be adequately capitalized and bonded to assure the safety of trust assets.
  2. It must be licensed and regulated by state banking authorities.
  3. Trust officers at the company must have authority to respond quickly and efficiently to all instructions from the settlor.

When the proper precautions are taken to guarantee the safety of the property and we are satisfied that the trust company will carry out directions in a timely manner, the Privacy Trust can be created.


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