Understanding How Trust Companies Work
According to Caring.com, approximately only 42% of Americans have a will or a living trust. This is usually because people do not understand the process. A trust company can help people manage their trust in the most beneficial way for them and their families. A trust company is an entity, often a division of a commercial bank, that can serve as an agent or trustee to either a personal or business trust. Rather than choosing an individual to act as a trustee, a trust company can fill the same role. The company will manage the trust and oversee the eventual transfer of assets to beneficiaries.
What Is a Trust Company?
By definition, a trust company is a separate corporate entity owned by a bank or other financial institution, law firm, or independent partnership. Its function is to manage trusts, trust funds, and estates for individuals, businesses, and other entities. But what exactly is a trust? A trust is an arrangement that allows a third party or trustee to hold assets or property for a beneficiary or beneficiaries.
A fiduciary is an organization or an individual with the responsibility to act on behalf of others to manage their assets. Trust companies get their name because they act in a fiduciary capacity for their clients.
Trust Company or a Financial Advisor?
People often wonder if they should go through a trust company or a financial advisor for their needs. Trust companies often provide a broader range of services than financial advisory firms. They can also help you manage the daily operations of trusts. Oftentimes financial advisory is broader and can offer services in many different areas of finance. Whether you want to use a trust company or a financial advisor comes down to what you need.
A trust company’s ultimate goal is to successfully manage your trust. By using a trust company, you can leave behind having to coordinate between your financial planner, your broker, and your tax consultant all at once. For more information on our trust company, give us a call today.