Episode 31 is now available on Bridgeford Trust Company’s Delivering Direction and Control podcast series! In this episode, David Warren – Co-Founder/Chairman of the Board of Bridgeford Trust Company – sits down with guest, Tina Lovejoy – Founder & Facilitator at Frameworks Facilitation – who draws from her background in opera, writing, and consulting to facilitate sessions for families and train advisory teams in family dynamic issues impacting estate and succession planning issues through a language-centric lens.

With a track record of facilitating sessions and workshops for over 1,500 high net worth clients and their families, Tina explains Frameworks Facilitation’s dedication to help families confidently navigate the relational complexity inherent in wealth transfer. As the episode continues, Tina shares more about the process of these sessions, choosing the right words and clarifying the meaning of those words to have productive wealth transfer and financial planning conversations with families as well as partnering with advisors, advisory firms, and trust companies to grow the skills involved in the softer side of wealth transfer.

You can listen to our latest episode on Bridgeford’s podcast page, SoundCloud, iTunes, Spotify, and iHeartRadio.

Bridgeford Trust Company’s Delivering Direction and Control podcast was developed to educate, challenge, and inspire listeners. As we interview experts in the trust planning arena, we keep listeners updated on developments regarding modern trust law and provide practical discussion on the powerful trust planning opportunities available to advisors around the country and the world – all in an effort to deliver far more direction and control to clients and their advisors than ever before. Check out all of our episodes here: bridgefordtrust.com/podcasts.

If you have questions on any of the topics discussed in this latest episode, don’t hesitate to reach out to us via our contact form or call us at (605) 224-9189.

For a myriad of historical reasons, including inherent conflicts of interest, loss of control, constant staff turnover, and unreasonably high trustee fees, large families have understandably turned to individual trustees over corporate trustees over the years.

Simply stated, it can be argued that the traditional trust industry (large bank-based trust departments) is “broken” in the U.S. and used primarily as a tool for banks to capture assets under management. However, because of the proliferation of powerful modern trust law in certain U.S. jurisdictions and in conjunction with the following reasons, there has been an appropriate and very strong resurgence of the corporate trustee in the planning process across the nation and around the globe. This undeniable and exciting “new paradigm” in the trust industry brings an unbundled, conflict free, and cost-efficient trust solution, while delivering far more direction and control than ever before.

Individual v. Corporate Trustee Distinctions

• Importance of Trust Situs Selection. Unless an individual trustee resides in a top-tier trust jurisdiction, such as South Dakota, and properly establishes jurisdiction and applicability of state specific trust law, the trust will not be positioned to avail itself of compelling planning options and protection available in those states. Selecting a corporate trustee in a top-tier jurisdiction brings powerful modern trust law planning tools around asset protection, privacy, and tax planning while delivering tremendous direction and control to settlors of trust, beneficiaries, and advisors through the use of directed trusts and trust protectors.
• Trustee Duty to Use Top-Tier Trust Jurisdictions? Developing case law and other legal authority governing and guiding the fiduciary industry, including the Uniform Probate Code and the Restatement (Third) of Trusts, has clearly identified a duty to select proper trust jurisdiction in the planning process, particularly on the part of trustees. Even further, there is a continuing duty to ensure that jurisdiction is proper, with at least one state Supreme Court case suggesting that there is a duty to decant a trust, or otherwise move a trust to a more favorable trust jurisdiction to protect trust assets. This can’t be accomplished without engaging a corporate trustee in an appropriate top-tier jurisdiction, and an individual trustee could be in violation of their fiduciary duties by not doing so to best protect the trust.
• Professionalism and Expertise. Corporate trustees are generally highly experienced professionals who have a deep understanding of the rules and regulations governing trusts. They are usually experts in fiduciary responsibility and compliance. As a result, they are better equipped to oversee the management of trust assets, maintain proper records, and ensure that all legal and regulatory requirements are met.
• Knowledge of the Law. An individual often does not have sufficient knowledge of the law governing trust administration and taxation. A corporate trustee has deep institutional knowledge of income, gift, estate, and generation-skipping taxes, including capital gains taxes. A trustee must also understand accountings and prepare them when required as well as be aware of changes in the law – all areas where individual trustees are often woefully deficient.
• Objectivity and Impartiality. In many cases, an individual trustee may have a personal relationship with the beneficiaries, which can lead to conflicts of interest or bias. However, a corporate trustee is institutionally objective and impartial and has no personal relationship with the beneficiaries. This means they are better equipped to make decisions, usually made by a trust committee of three or more members, based solely on the interests of the beneficiaries, rather than their own personal interests or biases.
• Continuity and Stability. Corporate trustees have a long history and well-established policies and procedures that ensure the continuity and stability of the trust’s management. Even if the individual who oversees the trust retires or leaves the company or the trust company is acquired, the trust will continue to be professionally managed without any disruptions.

While individual trustees may be suitable in very limited cases, the advantages of corporate trustees far exceed any perceived disadvantage, particularly in light of powerful modern trust law, the vital importance of jurisdiction selection, and potential liability facing trustees who don’t properly protect trust assets by moving trusts into top-tier jurisdictions.

To learn more about the importance of selecting proper jurisdiction while utilizing a professional corporate trustee, we encourage you to explore this detailed educational brochure that addresses important modern trust law concepts. And as always, please contact us via our contact page or by calling (605) 224-9189 with any questions you may have.

Episode 30 is now available on Bridgeford Trust Company’s Delivering Direction and Control podcast series! In this episode, David Warren – Co-Founder/Chairman of the Board of Bridgeford Trust Company – sits down with guest, Judge Patrick Riley, who’s impressive career began as a young lawyer in the DA’s office, then started his own law firm where he became a prolific civil and criminal litigator doing both plaintiff and defense work followed by his appointment as judge and finally his focus on trustee services.

During their conversation, Judge Riley speaks about some of the big cases he’s handled and how being a plaintiff’s lawyer and recovering sizable amounts of money for people who didn’t know how to handle large sums of money introduced him to the concept of a financial fiduciary which is really what transitioned him into the trusts and estates world, working as an independent trustee.

As the conversation continues, Judge Riley discusses his judicial time and after his retirement, his subsequent focus on trustee services for families and the corporate world fueled by his tremendous fiduciary training and background. Recognizing the many differences in family needs and structures, as well as the different approaches of processing the trusts, Judge Riley became a resource for someone who is in need of a fiduciary position – not just as a co-trustee, but special trustee, trust protector, distribution advisor – allowing the families that he works with to have pure independence in the choice.

You can listen to our latest episode on Bridgeford’s podcast page, SoundCloud, iTunes, Spotify, and iHeartRadio.

Bridgeford Trust Company’s Delivering Direction and Control podcast was developed to educate, challenge, and inspire listeners. As we interview experts in the trust planning arena, we keep listeners updated on developments regarding modern trust law and provide practical discussion on the powerful trust planning opportunities available to advisors around the country and the world – all in an effort to deliver far more direction and control to clients and their advisors than ever before. Check out all of our episodes here: bridgefordtrust.com/podcasts.

If you have questions on any of the topics discussed in this latest episode, don’t hesitate to reach out to us via our contact form or call us at (605) 224-9189.

Bridgeford Trust Company is excited to once again be the lead sponsor, as well as a presenter this year, at the 15th Annual STEP International Tax & Estate Planning Forum, presented by STEP LA. Taking place on Thursday, May 4th and Friday, May 5th in Laguna Beach, CA, this much anticipated event addresses the latest issues for international private client planning presented by leading national and international speakers, including our Co-Founder and Chairman, David Warren, who will be presenting on a panel that will discuss an international perspective on privacy protections for UHNWIs.

The Power of U.S. Trusts for International Families

The United States continues to be the jurisdiction of choice for international families because of powerful modern trust law planning tools available in top-tier jurisdictions such as South Dakota, including Domestic Asset Protection Trusts and Foreign Grantor Trusts as well as progressive privacy trust laws and tax planning opportunities. These are just a few of the unique planning solutions available under South Dakota law that are important for families across the globe to consider when selecting the best U.S. trust situs.

If you are attending the forum, be sure to stop by our booth to talk with our team about these powerful U.S. trust strategies that Bridgeford Trust Company offers for domestic and international families. You’ll also learn more about Bridgeford International – the global planning and business development engine for the Bridgeford family of companies, promoting the power of U.S. modern trust law and sophisticated risk planning solutions around the world. We’d love to connect and talk about how we may be able to collaborate to best serve the international community.

Bridgeford Dinner at STEP LA

Bridgeford will be hosting a dinner after the first day’s sessions at Mozambique restaurant on Thursday, May 4, 2023 at 7:30pm. If you are available to join us, please RSVP to mroberson@bridgefordtrust.com.

Bridgeford California

We are especially excited to be at this event, given the recent launch of Bridgeford California. If you missed the announcement on Bridgeford Advisors’ recent expansion and launch event scheduled for May 2, 2023 in Newport Beach, you can learn more and register at: https://www.bridgefordtrust.com/bridgeford-california/.

We hope to see you in California!

As domestic and international families continue to seek privacy and asset protection in an increasingly transparent world, there continues to be a debate over whether offshore asset protection trusts, available in jurisdictions such as Nevis and the Cooks Island, are better asset protection vehicles than U.S. domestic asset protection trusts, available in a small number of states including South Dakota. As the United States has emerged as both a privacy and asset protection “haven” globally, South Dakota law renders the debate moot and provides settlors an easy to understand and compelling option for obtaining asset protection – bringing both domestic and offshore asset protection strategies together in one trust instrument, thereby providing a solution that brings the “best of both worlds”.

Domestic Asset Protection Trusts

Similar to an offshore asset protection trust, a domestic asset protection trust (DAPT) legally shields assets from third party liability and lawsuits while permitting settlors to retain some control over the trust assets and enjoy a discretionary benefit during their lifetime. Therefore, an individual can establish a DAPT that is fully discretionary, meaning settlors can receive financial benefit from the trust (income and discretionary principal distributions), and protect trust assets from creditor claims and lawsuits, while maintaining control over the investment management function through the directed trust structure.

South Dakota has one of the oldest and most progressive self-settled domestic asset protection provisions in the U.S. With its two year “look back” fraudulent conveyance statute, South Dakota’s provision is among the shortest in the country.

Bringing Together Domestic and Offshore Strategies

South Dakota Statute 55-3-47 provides a mechanism that provides both domestic and offshore asset protection within one trust instrument. If a judgment is obtained in any action brought against a trustee of a South Dakota trust for payment, where a foreign court declines to apply the law of South Dakota relative to the asset protection nature of the trust in determining the validity, construction, or administration of such trust, or the effect of a spendthrift provision, the statute clearly indicates that the trust company has no power or authority under South Dakota law to recognize or pay the judgment.

Under the statute, the only power granted to the trust company is to resign and appoint a successor trust company in accordance with the terms of the trust instrument and convey the trust property to the successor trustee. Presumably, the judgment obtained would then be returned unsatisfied and the creditor would need to commence the action against the successor trustee.

In this instance, it is important to note that there is nothing in the statute preventing a South Dakota trust company from transferring the trust and its assets to an offshore successor trust company, properly named in the document, thereby creating a very formidable asset protection strategy utilizing both domestic and offshore asset protection in one trust instrument. By operation of law and under appropriate trust provisions, the trust assets can be transferred offshore only when needed. Until the offshore asset protection is needed, the trust is administered in South Dakota and assets are held in the U.S. Therefore, the settlor truly enjoys the “best of both worlds” by avoiding the negative attributes associated with having a trust administered in an offshore jurisdiction (high costs, unstable governments, potential restrictive access to assets) while availing themself of the protection benefits of an offshore jurisdiction, should the need arise.

When coupled with South Dakota’s powerful privacy provisions – considered the best in the nation – this asset protection planning technique available under South Dakota law is yet another example of the vital importance of selecting the best U.S. trust jurisdiction in the trust planning process. To learn more about this powerful planning tool used for both U.S. and international families, you can watch our webinar – Domestic Asset Protection Trusts: A Powerful Planning Tool for Both U.S. and International Families.

For more information on bringing together domestic and offshore asset protection strategies, please contact us via our contact page or by calling (605) 224-9189.