What does an Independent Trust Company do?

Oct 19, 2021 | Understanding Trust Administration

As an independent trust company, Cumberland Trust specializes in education, administration, and client service, while the client’s chosen financial advisor handles the investment management of the trust’s assets. This distinct difference makes Cumberland Trust unique from other fiduciaries and allows us to focus on providing our clients with the following service benefits:

Education

  • Explain trust provisions, including permissible distributions and pertinent terms.
  • Help the beneficiary(ies) understand the legacy and intent of the grantor.
  • Work with the beneficiary(ies) to understand goals and objectives to best utilize trust assets.
  • Introduce future beneficiaries to trusts and trust concepts, as appropriate and requested by current beneficiary(ies).

Administration

  • Ensure adherence to all pertinent terms of the trust document and governing law.
  • Maintain accurate schedule and value of assets.
  • Maintain detailed accounting of distributions, fees, taxes, and cost basis of assets for tax filings.
  • File and pay taxes on a timely basis in conjunction with client’s CPA.
  • Pay other expenses of the trust, including professional advisory fees, insurance, etc.
  • Perform fiduciary accounting.
  • Provide statements to qualified beneficiaries.
  • Determine appropriate amount of distribution on an annual basis.
  • As permitted by trust document, make discretionary distributions, taking into consideration current and any future beneficiary needs.
  • Be mindful that distributions are made in an advantageous and tax efficient manner.
  • Conduct periodic account reviews and in-depth annual meetings.

Client Service

  • Assist in maintaining family harmony: Act as an objective, neutral, third-party fiduciary, and eliminate conflicts of interest regarding beneficiaries or family members.
  • Provide continuity: Offer permanence and predictability as a corporate entity.
  • Offer flexibility in decision-making and work with the beneficiary(ies) to find creative solutions when unexpected needs arise.
  • Provide a high level of communication and responsiveness from trust officers due to low relationship manager to client ratios.
  • Provide expertise and support for beneficiary issues that may arise (e.g., modern family dynamics related to aging, incapacity, familial disputes, blended families, remarriage/divorce, sibling rivalry, mental illness, incompetence, fiscal irresponsibility, special needs, disabilities, or financial vulnerability).
  • Coordinate the administration of holdings of illiquid or special assets held in trust, such as residential real estate, commercial real estate, oil, gas, or mineral interests, farmland, timberland, and closely held business interests.
  • Offer a flexible, advisor-friendly platform: Collaborate with existing family advisors such as financial advisors, attorneys, CPAs, and financial planners. The clients direct the choice of professional advisors.
  • Administer family foundations.
  • Ability to serve as trustee, co-trustee, executor, co-executor, or agent to a trustee.