The value of having a corporate fiduciary on your side

When it comes to the complexities of managing trusts and settling estates, a corporate fiduciary can remove some of the burdens typically placed on families. “We believe every family would benefit from having a professional steeped in the areas of wealth transfer and fiduciary concepts on their team of advisors,” says Anthony Fittizzi, a wealth strategies executive for Bank of America Private Bank. Such experienced professionals, working with your appointed trustees and other advisors, or working together with professionals administering your accounts where you have selected Bank of America as your corporate trustee or executor or to otherwise manage your assets, can help you accomplish important goals, such as:

• Mitigating taxes, where appropriate, so that more of your estate can benefit family members or your philanthropic priorities
• Managing assets to ensure that wealth is distributed to the people and organizations you wish to benefit, for the purposes you intended
• Protecting assets for your beneficiaries, helping ensure they’re safe from potential creditors, lawsuits, or even ex-spouses in the case of a beneficiary’s divorce

How Bank of America can help you

Estate plans are an integral part of planning for your wealth and pursuing your goals. They can be very complex, and many aspects of your plan will need to be implemented by your executor and/or trustee. Yet when it comes to acting as a trustee of a trust or the executor of an estate, there are many requirements to which one must adhere that can make the job for the uninitiated seem daunting.

The duties and responsibilities of a trustee can be complex and time consuming.

You might be inclined to choose an individual who knows you and your family, perhaps even a family member. Settling an estate or administering a trust, though, often requires highly technical expertise and a substantial time commitment for which few individuals are prepared. After you are gone, the personal relationships that exist among your appointed executor and/or trustee, your family members, and the beneficiaries of the estate or trust may become strained if things do not go smoothly.

In addition, the individual may be placed in the uncomfortable — and even unwanted — position of making unpopular decisions that potentially affect one or more beneficiaries with whom the individual trustee has a personal relationship. Moreover, fiduciaries — whether individual or corporate — can incur financial liability for errors and/or omissions, including imprudent investment decisions. As a result, the responsibilities this individual will assume during an already stressful and emotional time may become a considerable burden.

Putting the plan into action

The process starts with gaining an intimate understanding of an individual’s or family’s unique needs, says Sara Burns, a wealth strategies advisor with Bank of America. Several years ago, while working as a Bank of America trust officer supporting Merrill clients, Burns received a call from a Merrill advisor whose widowed client wanted to ensure that she’d be cared for in the event of her incapacity. Among her goals: avoiding becoming a burden to her daughter, a successful businesswoman living in another city.

Burns recommended a revocable living trust designed for incapacity protection. As the mother grew older and less able to manage her affairs, her daughter took over as trustee, with Bank of America serving as agent. Burns, acting as the Bank of America trust officer, communicated regularly with care providers and the daughter. Aſter the mother’s death, Burns helped facilitate settlement of the estate and trust, including establishment of the resulting new trust for the daughter.

Another client couple, owners of a successful business, wanted a way to protect their assets if they were to die unexpectedly. Since they had adolescent children, the couple wanted to ensure their children were cared for and their assets protected until the children were old enough to manage their inheritance. Like many parents, they were reluctant to leave their children “forever bound to answering to a corporate trustee,” Burns says. “That’s a common concern.”

Burns, working with the clients and their attorney, discussed various options, such as having the beneficiaries become co-trustees with Bank of America once they reached a certain age. “This allows the children to work alongside the institution, learning the benefits of preserving money in the trust and perhaps planning a legacy for their own children,” Burns says. At the appropriate time, the children would take over as trustees, replacing the corporate trustee.

It's very common for families to name their adult children to serve in a trustee role. "When two or more siblings are asked to work together, it's inevitable that conflict will likely arise." says Jean Kim, a wealth strategist with Merrill’s Strategic Wealth Advisory group. "Even when only one sibling is appointed, there is a perception that this sibling is looking out for their own best interest, and not balancing the best interests of all the family members." Having the corporate trustee serve even as a co-trustee creates a check and balance that helps put other family members at ease.

For complex financial needs

As an individual’s or family’s wealth and needs grow, so, too, do the roles corporate fiduciaries might play. “As a neutral party, an independent trustee can help minimize family conflict by making objective decisions, based on the trust provisions, so that a conflicted family member doesn’t have to,” Fittizzi says. Moreover, corporate fiduciaries bring continuity from one generation to the next, as well as deep expertise in wealth management and investment management. Bank of America, for example, offers fiduciary expertise in wealth transfer planning, including specialty asset management, trust administration (including Delaware trusts), sustainable and impact investing, charitable giving through trusts, donor-advised funds, private foundations, and more.

Fittizzi worked with one couple who had more than $100 million in assets from a family business started generations ago. The matriarch, a direct heir to the business, and her husband, then in their 50s, were looking to diversify their holdings. “They wanted an impartial party to assist in the design, construction and implementation of an investment management strategy,” Fittizzi says. The first step was to create a formal, written investment policy statement reflecting the family’s objectives.

“They were interested in estate tax efficiency, but their concerns went far beyond taxes,” Fittizzi recalls. “While recognizing the need for family members to pursue their own lives, the couple wanted strategies to help them instill and preserve values of family, faith and philanthropy.” To offer their beneficiaries financial freedom without having wealth become a deterrent to hard work and accomplishment, the couple wanted to ensure that distributions to their children would be managed according to detailed provisions they’d worked out with their family attorney.

Before suggesting specific solutions, Fittizzi and his team spent the first several months just getting to know the family and understanding their priorities and goals at a deeper level.

Over time, meeting the family’s complex needs involved their attorney creating more than 20 trusts and entities—including multiple dynasty trusts for children, grandchildren and subsequent generations; trusts for spouses of the couple’s children; and philanthropic trusts that would enable family members to specify future causes. Along with their personal tax advisor and estate attorney, working with Bank of America fiduciary and trust specialists to review and implement their estate plan helped this couple address their concerns, and the process is ongoing. As the family grows and evolves, Fittizzi adds, “We will be here for them, working in lockstep with their outside legal counsel and tax advisors, helping the family all along the way.”

While not every individual or family needs this level of support, having professionals steeped in the areas of wealth transfer and fiduciary concepts available to help clients define their objectives and bring life to those goals across multiple generations is a critical part of any advisory relationship.

Trust and estate services from Bank of America

With a corporate fiduciary like Bank of America¹, you benefit from the professional expertise of our dedicated wealth transfer professionals and our Estate Settlement and Trust Administration teams. We can offer you and your family continuity that extends across generations and will work closely with family members to maintain an understanding of and sensitivity to evolving needs through the years.

Bank of America is the largest provider of trust services in the country² and has deep fiduciary knowledge as well as experience with a broad range of personal and charitable trusts. Bank of America also helps clients by serving as executor, a role in which our nationwide presence and ability to provide day-to-day management of nonfinancial assets may be particularly useful.