Can we help you find something?

Key Takeaways & Insights

Part two of our four-part trustee series focuses on the key topics you should discuss during quarterly reviews with trust beneficiaries.

DOWNLOAD PART 2

 

  • Trustees have an obligation to communicate regularly with trust beneficiaries.
  • Quarterly reviews should address trust investments, operations, outstanding issues, and more.
  • Each review should conclude with a summary of next steps and an outlook for the future.

A fundamental obligation of trustees is to ensure regular and frequent communication with trust beneficiaries, including quarterly reviews that address the following areas or topics:

Overview or Summary of Trust Operations

This summary will include income earned, distributions and investment performance. Depending on your custodial platforms, the generation of these reports should be mostly routine with some manual work needed to polish and collate information.

Investment Review

In addition to the performance reporting of trust assets, the trustee or Private Trust Company (PTC) will need to provide a broad market overview as well as a discussion of the tactical and strategic asset allocation of the trust, review of the investment policy guidelines and distribution provisions, with a summary of what this means to the beneficiary and the trust long term.

Outside managers may join for all or part of this review, depending on logistics (in the case of multiple managers, it is best to have one member of the administrative team handle this, perhaps in conjunction with the Investment Committee). The investment review should also be consistent with the Investment Committee and PTC’s investment approach and philosophy around trust management.

Principal and Income Review

There should be a review at each quarterly meeting, with an in-depth review annually, of the principal and income accounts of the trust, including what this means for beneficiary cash flows and taxes.

Outstanding Issues or Questions

This may reflect longer-term trust projects or objectives plus status updates on each area. For example, a decision to continue distributions to allow a beneficiary to raise income in their personal account to provide for a spouse might have a target goal of wealth to be moved over and progress reports on this objective.

Next Steps and Outlook

Each review will conclude with a summary of changes to objectives and the outlook for future trust investments or distributions.

Manage Taxation of Trusts

The trustee (or PTC) needs to review, at least annually, the state and federal tax returns of the trust in conjunction with the distributions and investment objectives of the trust. PTCs often provide tailored support to family members in the management of tax liability and ensuring a tax-aware approach is applied to all trust management and investments.

At Cerity Partners, our dedicated Family Office team has helped many families with their trustee and fiduciary needs. For
more information on our fiduciary and trustee services, please contact a Cerity Partners advisor.

Read Part One of Trustee Series


Meet the Author

Susan Hartley-Moss

Partner

Susan is a Partner in the New York City office with more than thirty years of experience serving as a senior director in trust, wealth management and family office advisory firms, and as a personal fiduciary advisor to individuals and families. She helps large families and family offices evaluate and establish Private Trust Companies (PTCs) and develops family office governance and operating structures, including fiduciary policies and procedures.

Prior to joining Cerity Partners, Susan was the Director of Fiduciary and Senior Wealth Advisor at EMM Wealth, a fifty-year-old multi-family office serving high-net-worth individuals and families throughout the country.

Susan holds a Bachelor of Arts degree in Finance and Accounting from Barry University in Miami, Florida, and completed a three-year program at the ABA National Graduate Trust School at Northwestern University in Evanston, Illinois. She holds the Certified Trust Financial Advisor designation.

Susan serves on the faculty of the Trust School for the New York Bankers Association and is also a member of the teaching faculty for both the ABA National and Graduate Trust School at Emory University and NYCFEC. Susan is a member of the New York Estate Planning Council and New York Society of CPAs. She has also served as President of the Board of Trustees for the May Mitchell Royal Foundation, where she directed foundation operation and succession.

Susan is a frequent author and lecturer on complex fiduciary matters and has been published in publications including Trusts & Estates magazine. Many of her articles, such as Understanding the Risks and Responsibilities of Serving as Trustee, Converting a Family Office to a Private Trust Company, and Avoiding Family Feuds, are frequently referenced by other professionals.

Connect with Susan

Sign Up for Market & Economic Outlooks

Get the latest insights and analysis from our investment team delivered right to your inbox.