Five Ways Corporate Trustees Can be Replaced

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Many trust documents contain sufficient flexibility around management of trust assets. But what about an irrevocable trust? Can you replace a trustee?

With “advisor-friendly” approaches to trust administration, RIAs can provide investment management services for assets held in trusts.

That’s in contrast to the traditional model, in which a bank trust department has sole investment management responsibility or, at minimum, wants to custody the trust assets.

Advisors often become aware of clients’ trust assets as part of the financial planning process. It’s common to see clients frustrated with the responsiveness of an existing trustee. Those service issues together with the client’s existing trust in the advisor points toward a win-win scenario that increases the advisor’s assets under management. In the most advisor-friendly models, the trust assets can even be held at the advisor’s custodian, enabling seamless management and reporting.

Be aware of five potential ways an existing trustee could be replaced with an advisor-friendly successor trustee. Before zeroing in on each of those, here is a common scenario that creates opportunities to serve clients better while also building AUM.