Many high net-worth individuals accumulate their significant wealth through family businesses, real estate, natural resources, or other industries. In some cases, their trust assets consist of these non-conforming or illiquid holdings. Notably, trusts prove to be an efficient vehicle for holding business interests in entities such as LLCs or Limited Partnerships and closely held stock:
LLCs and Limited Partnerships:
- LLCs and Limited Partnerships have become preferred entities for housing trust held assets. Whether the entity holds an operating business or real estate, this structure (with the trust as a member or limited partner) allows for protection of the corpus of the trust from liability as well as consolidation in entity management. LLC managers and general partners can be unrelated third parties or family members, while Cumberland Trust serves as trustee of the member/limited partner trust(s).
Closely Held Stock:
- Trusts are also a preferred tool for housing closely held corporate stock in family businesses or other operating companies. Cumberland Trust’s unique approach to trust-held special assets allows a knowledgeable family member, individual, or committee, designated by the family, to exercise any decision related to the stock on behalf of the trust. This gives trust beneficiaries more direct involvement with assets that in many cases have value to the family beyond their monetary worth.
Some families have a desire to ensure their holdings are responsibly managed under a trustee structure that not only maximizes the value of these assets, but also promotes good stewardship. In many cases, holdings placed in trust may also allow the owner to transfer substantial ownership interests to the younger generation while retaining management control. As an independent, directed trustee, Cumberland Trust is well-positioned to understand and help families retain unique assets held in trust. We specialize in education, administration, and client service, while the client’s chosen professional advisors manage the trust’s assets. This distinct difference sets Cumberland Trust apart from other corporate fiduciaries and allows us to focus on providing our clients with high quality, personalized trust and estate administration services.
Cumberland Trust has a dedicated Special Assets team comprised of professionals who have years of experience working with closely held business interests. Our team coordinates the special asset management in conjunction with an external asset manager selected by the client(s). The asset manager can be a family member or third-party individual. This arrangement empowers clients to remain involved with the special asset management.
It is important to consult an estate planning professional who can help you develop a strategy for your estate plan that is right for you and your family’s specific circumstances, while considering any business interests or special assets.