America's Most Advisor-Friendly Trust Companies 2024 - 13

2024 AMERICA'S MOST ADVISOR-FRIENDLY TRUST COMPANIES
management and trust administration.
Anyone who refers clients to these de
facto competitors is effectively giving
a rival open license to take over the
accounts.
The good news, of course, is that
dozens of trust companies (even
those affiliated with banks or asset
management firms) have developed
a business model nimble and efficient
enough to cooperate with advisors.
They're happy to stick to their end of
the trust relationship and earn their fee
from administration, fiduciary services
and other specialized functions,
leaving the way the trust assets
are managed to the advisors who
introduce the accounts.
These companies have staked
their future growth on their ability
to work with advisors instead of
against you. They like advisors. They
know the culture and the strategic
considerations you deal with every
day. We call them " advisor friendly "
because that's what they are.
Every year, we profile the companies
that have demonstrated that they want
to work with you. Some are massive,
dominating their jurisdiction, while
others work on a boutique scale.
Many are specialists in various forms
of trusts or hard-to-place assets. Most
provide various forms of support to
help their partners market themselves
as trust experts to clients who want
this level of service and will get it from
someone, one way or another.
A NEVER-ENDING PROCESS
If you're new to working with trusts,
the next few paragraphs aren't
really going to strike you as anything
especially revelatory. All you need
to know is that despite all the media
outrage (or maybe because of it),
Congress has yet to weaken the
proposition for wealthy individuals
moving their money into trusts at all.
There's no legislation and in a narrowly
divided government, it's vanishingly
unlikely that anyone in Washington will
rock the boat.
Start with one of the few sore spots
lingering in the post-COVID tax code:
federal treatment of state and local
income tax. Losing those deductions
is a drag for someone who lives in a
high-tax jurisdiction and has assets
that throw off a lot of income-a
taxable investment portfolio qualifies,
but local business operations or real
estate don't.
The logical solution is to shift those
assets into an out-of-state trust where
the loss of deductibility no longer
hurts. Several top-tier trust states
don't have an income tax or, at the
very least, refuse to tax nonresidents
on capital gains.
In places like Nevada, this basic
arbitrage has turned cross-border trust
activity into a substantial business,
beckoning money from neighboring
California in particular. Even those
who have already used their gift
and generation-skipping transfer tax
exemptions now have an extra $5.5
million apiece to take advantage of
this.
Meanwhile, existing trusts in high-tax
jurisdictions now look less attractive,
so this is an opportunity for advisors
to talk with living grantors (or their
successor trustees) about moving
the trust in order to reduce long-term
drag. The window may be narrow,
but your clients should have at least
until 2024 to make their moves. Don't
waste time.
In general, the tax cuts preserve all the
existing advantages of holding wealth
in trust instead of personally, so it's
not going to hurt to at least run the
numbers. We thought for a while that
family-owned businesses would get
an advantage over those owned by a
trust, but that wasn't the case after all.
The final language fixes that disparity,
and all pass-through businesses get
the same rate. If your clients want to
sell someday and reduce their ultimate
capital gain liability, a trust in a low-tax
state is the way to go.
THE ADVISOR-FRIENDLY TRUST STRUCTURE
Conventional trusts lock the advisor out of the relationship, handing the assets to the
trustee to manage. Make sure your clients work with companies that leave room for you.
GRANTOR
(transfers assets
into trust)
TRUSTEE
(administers
trust)
ADVISOR
(oversees
investments)
BENEFICIARY
(ultimately spends
the money)
13
America's Most Advisor-Friendly Trust Companies 2024

Table of Contents for the Digital Edition of America's Most Advisor-Friendly Trust Companies 2024
