The video answer the question, ” What is a delegated trust?” The speaker explains that all trusts are delegated. There’s always someone who handles the trust’s investment duties. The trustees that delegate those investment duties share the same amount of responsibility in the fiduciary investment risk as to the financial advisors.
Thus, if something goes wrong with the investment, the trustees are as liable as the financial advisors. Because of that high level of responsibility, the trustee’s fees are usually a little bit on the high end.
There are benefits to using a delegated trust with an advisor-friendly trust company. One advantage is that the client can choose who the financial advisor will be. Additionally, the financial advisor can decide who the custodian will be. Furthermore, the client gets to choose to be in the best trust state. Those concepts are complex, but the speaker wants interested people to know that they benefit. Another plus to a delegated trust is that it’s straightforward to create.
The downside to creating a delegated trust is that the trustee fee is slightly higher, as stated above. It’s usually 10 to 15 percent higher than other types of accounts.