Schwab as trustee. Your thoughts?

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Lazareth
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Schwab as trustee. Your thoughts?

Post by Lazareth »

I am seeking testimonials or warnings from my fellow Bogleheads on Schwab trust services. My initial effort to explore Schwab Personal Trust Services failed miserably today. I may have just caught them on a bad day…

I am a 30-year satisfied Schwab brokerage customer. Very happy with our “low seven figures” Schwab three-fund portfolio across our IRA’s and taxable account. Schwab Investor checking as well.

My wife and I are age mid-60’s and we are debating whether to use a corporate trustee in our estate plan and if so do we use Schwab or a local, more traditional trust company.

I called the 888-213-4695 phone number featured on the schwab.com products_personal_trust_services information page and I then spent the next ten minutes on hold listening to stock quotes and being bounced around to three different polite humans. All seemed confused as to why I reached them. The third person gave yet me another phone number to call, which I have not.

While on hold at Schwab, I imagined my distraught loved ones calling the Schwab trustee following my demise… hoping for a comforting and responsive voice on the other end but instead experiencing anything like my dysfunctional introduction to the Schwab trust operation.

Thank you in advance for taking the time to respond with any comments that might help me decide on pursuing this further.
a/66, retired, married, enjoy p/t employment.
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backofbeyond
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Re: Schwab as trustee. Your thoughts?

Post by backofbeyond »

We have a Trust set up with CS. I've been a customer of CS since 1993 and have always been happy with their services.

Besides our Trust account, we also have 4 IRA accounts, and a debit card set up with them. In addition, my wife often has foreign funds coming in and once we found out the "how to deposit in our trust account" we've never had any issues.

I find it very odd that you had this issue and would recommend you call them back and explain your concerns, my guess is they will be horrified that such a long term customer had such a run around.

Curious to see what others respond.
The question isn't at what age I want to retire, it is at what income. - George Foreman
Topic Author
Lazareth
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Re: Schwab as trustee. Your thoughts?

Post by Lazareth »

backofbeyond wrote: Wed Feb 05, 2020 2:47 pm We have a Trust set up with CS. I've been a customer of CS since 1993 and have always been happy with their services.

Besides our Trust account, we also have 4 IRA accounts, and a debit card set up with them. In addition, my wife often has foreign funds coming in and once we found out the "how to deposit in our trust account" we've never had any issues.

I find it very odd that you had this issue and would recommend you call them back and explain your concerns, my guess is they will be horrified that such a long term customer had such a run around.

Curious to see what others respond.
Thank you for sharing your experience with Charles Schwab Trust Bank. This is very helpful and I will call them back. I prefer a corporate trustee for the reasons posted by other BH's including Gill, and glad to hear that you are happy with Schwab as I have a longstanding relationship there.
a/66, retired, married, enjoy p/t employment.
bsteiner
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Re: Schwab as trustee. Your thoughts?

Post by bsteiner »

You have to decide whether you want the level of service of a conventional bank or trust company or the lower cost of Schwab or Vanguard.
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Lazareth
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Re: Schwab as trustee. Your thoughts?

Post by Lazareth »

bsteiner wrote: Thu Feb 06, 2020 9:34 pm You have to decide whether you want the level of service of a conventional bank or trust company or the lower cost of Schwab or Vanguard.
Thank you, and thank you for your many helpful contributions elsewhere in the forum. The benefit and protection of my surviving spouse and heirs is my top priority. Cost is a subordinate priority.

Our family situation is relatively simple. No family business, under $2 million including primary residence, one custodian. It's still a merry-go-round of brick-and-mortor banks here in western New England so I the "personal touch" advantage seems questionable. I am attracted to the consistency of Charles Schwab, that they will always be there and available 24/7 with knowledgeable people. In 2018 I closed my professional practice. Just closing the business checking account at my local TD Bank office was a nightmare. Several in-person visits were required and every aspect involved the bank personnel making phone calls to HQ while I sat in the office. Even at a BOA-type bank I'm pretty sure my small trust account will get handed to the new-person so I am skeptical. If convinced of the advantages of a conventional bank over Charles Schwab I would gladly move in that direction.

Thanks again.
a/66, retired, married, enjoy p/t employment.
Enzo IX
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Re: Schwab as trustee. Your thoughts?

Post by Enzo IX »

I am in the process of using Schwab Trust Services for handling the trust of my estate.

I selected Schwab instead of a smaller local trust company because of mainly their size. They had a workshop that I attended that promoted a smaller local financial services company. I thought that it was strange that they do that instead of promoting their own trust services division. I think they are mainly concerned with the assets under management of the trust. Over lunch with my financial advisor, I told him that I would rather use Schwab's own trust department because of, their size, continuity in the long run, and internal controls hopefully so that my wishes are followed rather that wasted or stolen.

The trust will be basically set up to run for perpetuity, with a set 4% of the January 1st balance to be distributed to first some beneficiaries and then after they pass, four charities that I have currently chosen.

Somewhere down the road, the plan will probably fail, forever is a longtime but hopefully I did some good for the world.

So basically I choose Schwab because of their size and low expenses. My impression of the Schwab Trust Division and Schwab Co. as a whole has been very good.
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Lazareth
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Re: Schwab as trustee. Your thoughts?

Post by Lazareth »

Enzo IX wrote: Fri Feb 07, 2020 3:01 pm ...
The trust will be basically set up to run for perpetuity, with a set 4% of the January 1st balance to be distributed to first some beneficiaries and then after they pass, four charities that I have currently chosen.

Somewhere down the road, the plan will probably fail, forever is a longtime but hopefully I did some good for the world.

So basically I choose Schwab because of their size and low expenses. My impression of the Schwab Trust Division and Schwab Co. as a whole has been very good.
Thank you for sharing your helpful review of Charles Schwab as a corporate trustee, and for the look at your payout plan, helpful too.
a/66, retired, married, enjoy p/t employment.
WildCat48
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Re: Schwab as trustee. Your thoughts?

Post by WildCat48 »

We have four trusts with Schwab acting as the corporate trustee and have been very happy with them, all of those trusts had Northern Trust as the corporate trustee before and we were not happy with NT at all.
illumination
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Re: Schwab as trustee. Your thoughts?

Post by illumination »

I'm in the process of moving a trust from Northern Trust to Schwab.

I get the impression this division is still getting its "sea legs". Not very responsive, pretty basic questions seem to create confusion, personnel doesn't seem very seasoned. My estate attorney was throughly annoyed with them, but I think he might also be a big part of the problem.

I've been beyond happy with Schwab on just about every other account I have with them, but this division seems to need some work.

At the end of the day, I'll take this "punch in the face" because the drop in fees is immense. And I wasn't happy with Northern Trust at any point either.
Gill
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Re: Schwab as trustee. Your thoughts?

Post by Gill »

Interesting to read the comments about Northern Trust and not at all surprising. Unless your relationship is sizable, I.e., eight figures or more, they’re not interested in your accounts and those that are left over from when their minimums were lower will receive little attention.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
LeoB
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Re: Schwab as trustee. Your thoughts?

Post by LeoB »

Thanks for the information about your experiences with Schwab Trust Services! Because I may also consider using Schwab as a trustee in the near future, I am curious about how they are managing your trust's investments. Are they willing to use low-cost index funds, or do they insist on utilizing higher-cost mutual funds?
Ranunculus
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Re: Schwab as trustee. Your thoughts?

Post by Ranunculus »

I was also unimpressed with Schwab’s customer service when I called to ask about trust services. I was bounced around then finally connected to someone who should have been able to help me. He seemed very inexperienced and told me he would call me back with answers to my questions. More than a week passed before he called back and even then he seemed uncertain when the discussion became even slightly technical.

The main drawback to a brokerage trustee is that all assets must be transferred to their firm. If you are highly diversified among real estate, individual bonds and other investments not held at the brokerage they will not be able to manage the estate without liquidating everything, at least that is what I was told.
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patrick013
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Re: Schwab as trustee. Your thoughts?

Post by patrick013 »

Ranunculus wrote: Wed Feb 19, 2020 1:18 am I was also unimpressed with Schwab’s customer service when I called to ask about trust services. I was bounced around then finally connected to someone who should have been able to help me. He seemed very inexperienced and told me he would call me back with answers to my questions. More than a week passed before he called back and even then he seemed uncertain when the discussion became even slightly technical.

The main drawback to a brokerage trustee is that all assets must be transferred to their firm. If you are highly diversified among real estate, individual bonds and other investments not held at the brokerage they will not be able to manage the estate without liquidating everything, at least that is what I was told.
So the trust needs to be simple investment securities apart from other assets possibly held in a different trust. Between VG, Fidelity, and Schwab I think Schwab is the most flexible. VG and Fidelity need their funds in the trust. At Schwab you could have a treasury ladder per the trust written instructions. At Schwab I think they would do that per special instructions. That could be desirable.
age in bonds, buy-and-hold, 10 year business cycle
cheapskate
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Re: Schwab as trustee. Your thoughts?

Post by cheapskate »

Not intending to hijack this discussion, but since this thread already exists, I thought I'd post and ask here. I am looking at Schwab as the successor trustee for our living trust. Their trust fees (which are all inclusive) seems the lowest in the industry (even lower than Vanguard). They seem to setup the trust in Nevada, which seems to have certain benefits (mainly related asset protection), are there any downsides there ? Does anyone have any insights into their asset management ? Are the trust assets 100% invested in a Schwab Intelligent Portfolio, in an asset allocation that is in line with the risk tolerance of the beneficiaries ?
afan
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Re: Schwab as trustee. Your thoughts?

Post by afan »

Ranunculus wrote: Wed Feb 19, 2020 1:18 am I was also unimpressed with Schwab’s customer service when I called to ask about trust services. I was bounced around then finally connected to someone who should have been able to help me. He seemed very inexperienced and told me he would call me back with answers to my questions. More than a week passed before he called back and even then he seemed uncertain when the discussion became even slightly technical.

The main drawback to a brokerage trustee is that all assets must be transferred to their firm. If you are highly diversified among real estate, individual bonds and other investments not held at the brokerage they will not be able to manage the estate without liquidating everything, at least that is what I was told.
I have not spoken with anyone at Schwab about their trustee services. The run around you describe sounds exactly like what I experienced with Fidelity about 7(?) years ago. It was almost impossible to find anyone who even knew they had trustee services. When I finally got someone I was underwhelmed by the information they were able to give me.

According to Schwab's website, they will hold real estate. It does not say much about it. If you would want them to hold RE, then definitely ask as you are considering them.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
tj
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Re: Schwab as trustee. Your thoughts?

Post by tj »

I recall that Schwab had two different trust options, one in Nevada and one somewhere else. I thought i read that on bogleheads. Does that ring any bells for others?

edit: see this post: viewtopic.php?t=286051&start=50#p4663492
abr502
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Re: Schwab as trustee. Your thoughts?

Post by abr502 »

I looked at this in the past. There are two services thru Schwab. One in out of Nevada, where they manage the assets and handle all the distribution, tax prep and all other admin stuff. This is the full service.
There is another service out of Delaware where they work with your investment advisor who has to custody the assets at Schwab and they will be responsible for tax prep, distribution and other admin work. In the Delaware, you have to name an advisor that works with them.

I have a contact at the Delaware office. If anyone interested, PM me.
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mrspock
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Re: Schwab as trustee. Your thoughts?

Post by mrspock »

Call the Schwab Pinnacle number, 7 figures has its privileges. You won’t be on hold for long if ever... they will hook you up: trust services, mortgages, trades... whatever.
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patrick013
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Re: Schwab as trustee. Your thoughts?

Post by patrick013 »

You can download a trust agreement document from the Schwab website. It outlines the basic plan and various options. It probably has the direct number to a trust officer and an account officer. Both will have some responsibility regarding the account.
age in bonds, buy-and-hold, 10 year business cycle
FoolStreet
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Re: Schwab as trustee. Your thoughts?

Post by FoolStreet »

I would love to hear experiences for how schwab invests the assets, what direction they take from a co-trustee, or any other experiences.
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