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Citi Trust

Six Tough Questions to Ask About Your Trust

Important Points to Consider When Choosing a Professional Trustee
When you entrust your trust assets to a professional trustee, the institution you select assumes responsibility for carrying out the personal wishes you have documented, the administration of your trust, and, in many cases, investment management of your assets. As these are important obligations, it is essential that you choose your trustee with care. You have every right to expect as much from your professional trustee as you do from other investment professionals.

Trust services offered by different professional trustees may seem similar at first glance; however, there may be considerable differences in the level of services and investment results delivered. To help evaluate your professional trustee, review the following checklist:

1. Do you receive a high level of service from your trustee?

Relationship-based service is a critical element of the trust process. Ask yourself about:

  • Relationship: When was the last time your trust investment representative contacted you? Does your trust representative address your needs and questions?
  • Availability: Is the person handling your trust always available to discuss your trust?
  • Continuity: Have you had an uninterrupted relationship with your trust representative?

Access to a personal representative with whom you have a long-term relationship is a weighty issue when selecting a trustee. Trust clients deserve to have a comfort level in the continuity of their relationship with their trust representatives.

Often, a trust client will find that a trust established by a grandparent at a local trust company has been assigned to an unfamiliar trust company. Such changes may have caused some trusts to have different trust officers over the span of a few years. Some professional trustees use a telephone system where a customer service representative fields your call.

An accessible, experienced Trust Officer assigned specifically to your personal trust is one of the keys to a successful trust relationship.

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2. Are you satisfied with the investment performance of your trust?

The preservation and continued growth of trust assets is an important element of your trust. Delivering competitive performance results requires the services of dedicated portfolio managers who are committed to delivering the potential for consistent investment results.

Your professional trustee should have a relationship with several experienced investment managers who will focus their resources on managing the assets in your trust. The level of experience and commitment is reflected in the performance delivered.

Your investment professional needs access to sophisticated investment techniques and advanced technological tools. Working with these investment professionals, the Trust Officer and Trust Investment Committee should regularly review trust accounts to ensure that the investments are appropriate for the overall objectives of the trust and its beneficiaries.

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3. How many investment management alternatives are available?

Your trustee should have exposure to more than one investment discipline. Some professional trustees do not offer customized portfolio management. Other professional trustees offer clients a choice between only one or two investment style selections.

Having access to different investment management styles enhances the ability of a staff of professionals to develop a customized investment strategy for your trust. Your trustee should have the benefit of choosing assets across a wide range of investment classes according to the financial goals and requirements of your particular trust.

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4. Does your trust have proper asset allocation?

Overseeing portfolio risk through diversification without sacrificing portfolio return is the foundation of asset allocation planning.

Your trustee should be thoroughly familiar with the principles of asset allocation when planning your personal trust. A trustee should have the resources available to select an investment strategy that will consider all trust beneficiaries' needs, objectives and risk tolerance level.

Your Trust Officer, along with the Trust Investment Professional, should select the proper mix of stocks, bonds and money market instruments given the ages of the parties affected by the trust and the trust's investment objectives.

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5. Is your trust completely integrated with your overall financial plan?

Your trust representative must take the time to understand the needs and goals of those affected by the trust. A network of trust professionals should work together on a personal basis to deliver quality trust administration and investment management.

Your personal trust, like any aspect of your financial plan, should be reviewed on a regular basis. During the review process, a trustee's role can be crucial. Your trustee should show care and concern for the beneficiaries (both current and future) mentioned in the trust, while being responsive to the needs and objectives expressed in the trust. This means taking the time to understand the financial goals of the trust. It also means providing direction and assistance to develop investment strategies that can work best for your trust as part of your overall financial plan.

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6. How is the trustee compensated?

Hidden trustee fees can deplete your trust's assets. Some trustees may, on the surface, appear to charge a low-priced fee. After adding a setup fee, administration fee, trust tax return fee, commissions on trades and the like, what may seem like a low fee may turn out to be a lot higher than expected.

A competitive, all-inclusive fee schedule eliminates the complexity of item-by-item charges.

Advantages of a Professional Trustee
When you appoint a trust institution as trustee, you enlist the services of seasoned professionals who will devote their full attention to your personal needs, goals and wishes as it pertains to the trust. In addition to the benefits mentioned above, trust account services should include:

  • Annual trust tax return preparation 
  • Bill paying 
  • Income collections from trust assets 
  • Funds disbursement in accordance with the trust agreement 
  • Regular investment review to help ensure that the trust portfolio remains aligned with the trust's investment objectives and requirements

How can Morgan Stanley Smith Barney help?

Building on Morgan Stanley Smith Barney's century-old tradition of managing and protecting assets, Citi Trust offers a broad range of personal trust features to help meet the financial needs of individuals and their families. We bring together:

  • The continued involvement of a personal advisor
  • Over a century of investment management experience and the foremost modern portfolio management practices
  • An individualized approach to financial and estate planning
  • Comprehensive trust administrative services
  • Experienced trust professionals

To find out what our high quality service and professional investment management could mean to your future, call your advisor.

"Citi Trust" is the business name for a wide range of personal trust and estate management, and related services provided by Citigroup Inc. or its affiliates to individuals, families and charitable entities throughout the world. For U.S. clients, trust services are provided by one of the following entities: Citibank, N.A.; Citicorp Trust, N.A.; Citicorp Trust South Dakota; or Citigroup Trust - Delaware, N.A. The service providers are referred to collectively as "Citi Trust." Neither Citigroup nor any of its affiliates provides tax or legal advice. Citi and Citi with Arc Design are trademarks and service marks of Citigroup Inc. and its affiliates, and are used and registered throughout the world.

Citigroup, Inc. and its affiliates do not provide tax or legal advice. You should seek advice based on your particular circumstances from an independent tax advisor. To the extent that this material or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Investment Products: NOT FDIC INSURED . NO BANK GUARANTEE . MAY LOSE VALUE

For more information, please contact your Financial Advisor.

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