Directed Trusts: A Powerful Estate Planning Solution

by | Dec 14, 2022 | Wealth Management

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A trust is a fiduciary arrangement that allows a third party or trustee to execute fiduciary functions on behalf of the beneficiaries. Under the traditional trust model, a trust names one trustee (or co-trustees) to oversee the investment management, coordinate trust distributions and perform all administrative responsibilities of the trust. In this model, nearly all decisions surrounding the trust are made by a single trustee.

However, a single trustee may not always have the knowledge, expertise, time or resources to fully administer a trust and handle the workload, especially when the investment portfolio of the trust requires more specialized oversight.

In a directed trust, by contrast, the terms of the trust may separate certain responsibilities traditionally held by a single trustee, depending on the applicable state law. One individual may be named to oversee investments, another to direct beneficiary distributions, while a third party may be responsible for the trust administration.  Directed trusts have gained popularity over the past decade, largely driven by the desire to allow for better overall oversight and management of the trust, especially where there may be more complex assets which require specialized knowledge to properly administer.

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Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

This resource was produced by an affiliate of BFSG and has been distributed for informational purposes only and is not an offer of legal advice, investment advice, or financial planning advice.

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