When Woodland Hills residents first begin to consider the idea of setting up a trust, their first thoughts may be to appoint friends or family members as their trustees. While this may be understandable given the established relationships that they may already have with such parties, oftentimes the duties of a trustee can be complex and difficult for a laymen to completely comprehend. The California Probate Code offers a potential solution to those searching for a qualified trustee. It states that a trust company may be appointed to such a role in the same manner as any individual.
Trust companies are corporate entities that assume fiduciary responsibilities for both personal and business trusts. Often, their services are included in those offered by banks and other financial institutions, or they may simply be private firms whose sole function is trust management. Their staffs often consist of:
- Financial planners
- Portfolio managers
- Tax experts
Not only do trust companies specialize in the management of trust assets, they can assume the role of a personal representative of one’s estate. In such a capacity, they may handle the valuation and dispersal of estate assets, the settling of an estate’s debts and other liabilities, and the preparation and payment of taxes.
Given their obligations to both trust settlors and beneficiaries, trust companies are expected to support any and all actions taken with the respect to a trust’s assets and properties with adequate documentation. The Federal Deposit Insurance Corporation states in its Trust Examination Manual that such companies should maintain current supporting documentation such as trust committee minutes, accounting statements and reviews, receipts for asset transfers, and written approvals for discretionary actions. Records for actions which assign indemnification to a trust company for losses should also be maintained.