Skip to Content

We are a Veteran Owned Business, providing 20% discounts for Veterans, First Responders, Elementary and High School teachers. Please contact us to set up a phone or Zoom meeting. Taking care of you and your family, It's What We Do!

Klenk Law
Directed-trusteeship

Directed Trusteeship; How to Keep Your Trusted Wealth Advisor.

Posted on Fri Sep 9, 2016, on Directed Trust

From Our “Ask a Question” Mailbag: A Directed Trust maybe the answer to your problem! 

Most Recently Updated August 9, 2018.

“I am considering setting up an Irrevocable Trust to hold assets for my children.  But, I want my current wealth manager investing the trust property. Unfortunately, if I pick a corporate trustee, they will use their money manager.  How do I force the corporate trustee to use my financial advisor?”

Directed Trust

Form a Directed Trust.

Setting up an Irrevocable Trust for your family is an excellent way to provide asset protection and do tax planning. Because typically the trustee controls fund management, some people decided against forming these trusts. Professional trustees often select their favorite money managers.  This excluded grantor’s trusted financial advisors.  These concerns resulted in the invention of the Directed Trust.

The Directed Trustee Takes on Administrative Duties.

When a trust is created with a Directed Trustee, the trust terms divide responsibilities between the corporate trustee and an investment manager.  Usually, the trust terms give the bank or trust company administrative functions.  These duties include tax preparation, paying bills and determining distributions.  The trust terms exclude the trustee from investing trust funds.  Instead, the trustee is obligated to take “direction” for investment from someone else.  Another party is assigned the right to invest assets. In the alternative, the terms grant a neutral person (friendly to the Grantor) the power to select the investment manager.  This person “directs” the Trustee’s investment.  In other words, the advisor “directs” the “directed trustee.” The Trustee is excused from all responsibility and must follow instructions.  In this way, this neutral person may appoint the trusted wealth advisor.

Your Favorite Investment Advisor “Directs” Trust Investments.

While the neutral person may select the trusted wealth advisor, he can also remove and replace the advisor.  This way you can have all the asset protection and tax advantages of an Irrevocable Trust while maintaining your long standing relationships.  But, if your personal money manager should fall out of favor, removal is easy.

There are several ways to set up a Directed Trust.  Therefore, I suggest we set up a free consultation so we can see which option best fits your situation.

More Planning Questions?

The Directed Trust is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Directed Trust

I hope that this article was helpful in explaining the Directed Trust. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

 

Tags:

Asset Protection, Directed Trust, Directed Trusteeship, Estate Planning, Estate Planning Attorney, Estate Planning Lawyer, Group Photo, Irrevocable Trust, Trusts

What Our clients are saying

Klenk Law Logo
Stars

I was referred to Peter after my divorce to put documents together to protect my assets. He suggested a number of documents that would help protect my children and their future. Also, he put together wills, power of attorney and living wills. I initially spoke with him on the phone, he took 30-40 minutes to understand my situation and explain the benefits of having such documents. After a week or two, I met with him in his office and signed the documents. Everything else was remote phone calls and emails. He re-explained these documents and what whom to share. I am in good hands.

Klenk Law Logo
Stars

I contacted Peter through his website using the free consultation link for a question regarding a will. While I was expecting only a few minutes, it was a lengthy conversation. He made sure he understood the situation by asking many questions before offering advice. He then went through my options and results of each one. He left it up to me to decide if I wanted to proceed and did not push me toward one or another. His website has very useful information which I definitely researched before I called him. While I decided not to proceed at this time, I feel I had enough information to make that decision. I would not hesitate to hire him should I need to in the future.

Klenk Law Logo
Stars

Peter explained a complex subject very clearly, helped us to decide the best approach to managing our estate and then made it very easy for us to execute the required documents. He will be a valuable resource for years to come and clearly has a great understanding of estate law that will lead to innovative solutions for us. I would unhesitatingly recommend him for estate planning.

Klenk Law Logo
Stars

Peter Klenk made a complex subject understandable and allowed us to move forward with our estate planning. He was patient with our questions and creative in the solutions he proposed.

Klenk Law Logo
Stars

I have worked with Peter Klenk & his associates for some time now and I have found them to be ultra-qualified, knowledgeable and diligent about their work. I highly recommend them.

Let us put our expertise to work for you.

Free consultation within 24 hours.