SOA Trust Advisory

At SOA Trust Advisory, we deliver a custom approach for family trusts and asset management.

We can help you choose the right solutions for your estate planning goals.

  • If you are establishing a new will or trust, we can help you determine who the trustee or trustees should be.
  • If you are a corporate trustee, we can help you evaluate your options for managing the assets.
  • If you are a family member who serves as a trustee, we can help you reduce risk by converting to a directed trust.
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Comparing directed trusts and traditional trusts

Determining whether to create a directed trust or a traditional trust will depend on the specific needs and goals of the trust creator and beneficiaries. Both types of trusts have their own advantages and are suited for different situations. Here are some key factors to consider:

Directed Trust

  • Control

    Control In a directed trust, the trustee is directed by a trust advisor or trust protector who has specific powers, such as directing investments or making distribution decisions. This allows for more specialized expertise and control over certain aspects of the trust.

  • Flexibility

    Directed trusts can be more flexible as they allow for the separation of duties among different parties. For example, one advisor might manage investments while another oversees distributions.

  • Reduced liability for trustees

    Because the trustee is following the direction of advisors or protectors, their personal liability can be limited, potentially reducing the risk of taking on the role.

  • Customization

    Directed trusts can be tailored to meet specific needs, such as incorporating complex investment strategies or addressing unique family dynamics.

Traditional Trust

  • Simplicity

    Traditional trusts often involve a single trustee who manages all aspects of the trust, which can simplify administration and decision-making.

  • Unified responsibility

    With one trustee responsible for all decisions, there is a single point of accountability, which can streamline communication and management.

  • Time-tested structure

    Traditional trusts have a long history and are well understood by legal and financial professionals, which can make them easier to implement in standard situations.

  • Customization

    Traditional trusts can be tailored to meet specific needs, such as incorporating complex investment strategies or addressing unique family dynamics.

Choosing between a directed trust and a traditional trust involves considering factors such as the complexity of the trust’s assets, the need for specialized management, the importance of flexibility and the cost of administration.

How It Works

A directed trust is an estate planning vehicle that protects the assets, the beneficiaries and the trustees.

By delegating certain responsibilities to the investment advisor and the distributions advisor, the trust assets can be better managed and the trust can be more effectively administered. Allowing the trustee and the advisors to do what they do best aligns with the best interests of the current and future beneficiaries.

SOA Trust advisory specialization and reduce risk with a directed trust diagram
SOA Trust advisory specialization and reduce risk with a directed trust diagram

Increase specialization and reduce risk with a directed trust

Establishing a directed trust — or converting an existing trust to a directed trust — can make it easier for the trustees to fulfill their fiduciary responsibilities. It can also help protect them from liability risk by bringing in experts to handle investment management and distribution decisions.

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To learn more about how we can use trusts to help you meet your estate planning goals, please contact:

Charles Hamowy, CFP®, CPA/PFS

CEO, Founding Partner charles.hamowy@soawealth.com