A corporate fiduciary is a bank or trust institution that acts on behalf of another party. In this role, the corporate fiduciary manages the given party’s financial assets and may implement discretionary decisions intended to benefit the owner of the assets.
In a recent episode of our Wealth Matters Radio Show, our attorneys sat down with Timothy Sheehan & Karen Havey of BNY Mellon to discuss the different benefits of using a corporate fiduciary.
While there are a number of benefits, many organizations or individuals who employ corporate fiduciaries are simply seeking help or advice to prepare their families and protect their wealth.
Guidance
Corporate fiduciaries usually have many connections that help guide decisions regarding spending and investment. This is different from individual fiduciaries who may hire outside sources to provide similar guidance. Karen Havey, Family Wealth Strategists at BNY Mellon, explains the role in more detail:
“Really it’s just sitting with clients and providing the options and assuring them that it will be okay. It’s a combination of getting a document or documents in place that [the client] is comfortable with and making sure that the appropriate people are named.”
Havey also says it is “very important” to involve your family with your plans. A corporate fiduciary can help you prepare your family in advance or offer guidance after your death.
Preparing the Family
If something tragic happens before you are able to discuss your wealth with your children or spouse, then your corporate fiduciary can help guide them. Many individuals are nervous that when their child suddenly receives an enormous amount of wealth, it will impact their drive to earn their own income. In other cases, there is a concern that an heir may not have the resources to manage such large assets. Corporate fiduciaries are there to help prepare families on how to utilize these assets effectively. Havey explains:
“If [the heir] has been a business owner and they all of a sudden come into 50 or 100 million dollars and they’ve lived modestly up to that point, it takes a long time for them to become comfortable with the wealth…So you kind of introduce the concepts slowly.”
Protecting Assets
Above all, a corporate fiduciary is there to protect the wealth you worked so hard for. Timothy Sheehan, Senior Director of Business Development at BNY Mellon, believes:
“The most common thing that we see is asset protection, number one. People are looking to protect their assets.”
A corporate fiduciary lies outside of your inner circle. By enlisting them to protect your assets, you remove the personal bias that could influence a family member charged with running your estate. This also eliminates any perceived conflict of interest as the co-fiduciary is a neutral party who has no direct ties to your assets. The fiduciary simply administers your estate in terms of your will or trust without any emotional strain.
Want to hear the whole conversation? Check out our Wealth Matters Radio Show.
The show airs live on the 4th Wednesday of every month at 8:30am, on Gwinnett Business Radio X.
