Vanguard National Trust Company?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
shawcroft
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The Vanguard National Trust Company

Post by shawcroft »

Magnus:
Hard to believe it has been about 2 years since this post was updated. I was one of the guys who looked at a whole bunch of trust companies. My summer 2011 findings as to costs, pros and cons remain about the same. I did speak with BNY Mellon and will dig out their information to update my earlier post.
The bottom line is, for us, Vanguard Trust Company offers the most appealing mix of services and costs with the most important consideration: The likelihood they will stay true to the fiduciary standard.
My bride has a real preference for face-to-face contacts and a bricks and mortar. Me?... no so much.
Owing to that, our "final" candidates for trust service were: JPMorgan Chase, USAA, FIdelity, and Vanguard. My meeting with JPMorgan Chase was really hilarious- they are very comfortable snowing people with malarkey and are clearly nothing more than asset-gathers. They trotted out 5 people to meet with me (I didn't expect that) and were greatly disappointed my wife wasn't with me- despite my never saying she was going to attend. I told them I viewed this as a first meeting to gather information, was the numbers guy in the family, often asked blunt questions which made her uncomfortable, and was quite resistant to "relationship building".
Let me dig out the BNY Mellon stuff and post a few other thoughts in a few days. Hope these thoughts help my Boglehead colleagues.
Shawcroft
magnus
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Re: Vanguard National Trust Company?

Post by magnus »

I take it by your response that you are working with VNTC and satisfied with their results?
stjoe56
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Re: The Vanguard National Trust Company

Post by stjoe56 »

shawcroft wrote:Magnus:
Hard to believe it has been about 2 years since this post was updated. I was one of the guys who looked at a whole bunch of trust companies. My summer 2011 findings as to costs, pros and cons remain about the same. I did speak with BNY Mellon and will dig out their information to update my earlier post.
The bottom line is, for us, Vanguard Trust Company offers the most appealing mix of services and costs with the most important consideration: The likelihood they will stay true to the fiduciary standard.
My bride has a real preference for face-to-face contacts and a bricks and mortar. Me?... no so much.
.
Shawcroft
I have used/have knowledge of US Trust of New York, Fidelity Trust, and Vanguard Trust. This is definitely you get what you pay for. My personal experience with US Trust is that it will work with you to set up whatever type of portfolio you want. It has fantastic experience with complex trusts and trusts where there is disagreement among the beneficiaries. I originally left it due to its high expenses. I am probably going to return to US Trust in the next month, because now that I am older, I realize that I need its trust management experience. Yes it is pricey. But now I feel it is worth it. With Fidelity, a relative had a $500K trust account of which she was the beneficiary, a $100K personal account and a $10K IRA. Each account was invested among 30 different mutual funds. At the low end was Vanguard. It is more of a cookie cutter approach. I have had two accounts there. One where I was the grantor and a child was the beneficiary. Other was personal. You are an S&P investor, sorry you get Total Stock Market. You are an investor with a Value preference, sorry you get Total Stock Market. You are an resident of a high tax state and have a bunch of in-state muni bonds, they will get liquidated and you will end up in Intermediate Term Tax exempt. I have great trepidation how it is going to handle accounts where the beneficiaries have conflicting goals/needs.

SJ
RNJ
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Re: Vanguard National Trust Company?

Post by RNJ »

My wife and I are in the process of establishing new trusts for our young children. There has been a change in available trustees requiring a re-thinking of our estate planning. One of our biggest concerns is finding trustees who know our children and will also know how to handle the investment side of things. This thread, which I stumbled upon accidentally, may have provided the answer in the form of VNTC serving as investment managers or as co-trustees with family members. I would like to have family responsible for distribution decisions and Vanguard responsible for the investment decisions.

As I've seen on this forum, I might do "better" (return-wise), but I could do infinitely worse. And I trust Vanguard.

I'd appreciate any thoughts of those who have used VNTC, or who might have a similar arrangement or experience with a corporate trustee.

Thanks!
Last edited by RNJ on Mon Apr 29, 2013 3:41 am, edited 1 time in total.
magnus
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Re: Vanguard National Trust Company?

Post by magnus »

It interests me that in all of the postings there is not one mention made of Northern Trust. Is it possible that Northern does not have a multi state presence therefore a lack of participation?
bsteiner
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Re: Vanguard National Trust Company?

Post by bsteiner »

I have good relationships with all but one of the banks and trust companies mentioned (in alphabetical order, Bank of America (U.S. Trust), BNY Mellon, HSBC, JPMorgan Chase, Northern Trust and Wells Fargo), and several others. (I don't know anyone in the trust department at Peoples United, which is a smaller regional bank. Your lawyer should likewise have good relationships with several banks and trust companies, and should be able to introduce you to people at several of them.

The trustees' duties include investments (including hiring someone to do the investments), deciding on discretionary distributions (where the Will or trust agreement gives the trustees discretion), and recordkeeping (including preparing or hiring someone to prepare the income tax returns).

A bank or trust company will almost always use the lawyer who prepared the Will or trust agreement. If they didn't, then lawyers would send their clients to a different bank or trust company. Where a bank or trust company (or an individual) is an executor, there's generally a good deal of legal work involved in adminstering the estate. However, after the estate is wound up and the assets distributed to the trusts under the Will, there usually isn't that much legal work on an ongoing basis, though occasionally something arises that needs legal work, such as a unitrust election, dividing a trust, or decanting a trust (transferring the trust assets into a new trust).

While most clients name individual trustees, some clients name a corporate trustee. Sometimes the client doesn't have any individuals who are appropriate, or for some other reason wants a corporate trustee. For this purpose, I'll assume that you've already decided that you want a corporate trustee, or that you're seriously considering a corporate trustee.

Corporate trustees typically charge about 1% per year, a bit more on smaller relationships, and less on larger relationships. If they invest in their own mutual funds (which they'll do where they want to invest in an asset class but the amount involved is too small to easily buy individual securities), they'll credit their management fee at the mutual fund level (but not the other expenses of the mutual fund) against their trustee's fees.

It's possible to have a trust with a corporate trustee but have someone else be responsible for the investments. Sometimes we need to create a trust in a jurisdiction with a particular provision in its law, and all we need is a trustee in that state so we can use that state's law. This comes up most often in the case of an asset protection trust, or an accidentally perfect nongrantor trust (APNT) (one that's not a completed gift, still in the estate, but pays its own income taxes). There are about a dozen states where these trusts can be created, including Alaska, Delaware, Nevada, South Dakota. If the surviving spouse is not a U.S. citizen, the most common way to qualify for the marital deduction is to create a qualified domestic trust (QDOT) with a corporate trustee, but we might not need the corporate trustee to handle the investments. In these cases, we can usually get a corporate trustee for either a flat fee of $5,000 to $10,000 a year, or in some cases about 0.4% or 0.5% per year. As others have noted, if later on the corporate trustee ends up managing the assets, they'll then get their usual fees. However, while it's happened in a few cases, absent some special circumstance (such as an asset protection trust, an APNT, or a QDOT), it's not very common to have a corporate trustee that isn't managing the assets.

Vanguard is less expensive than the typical bank or trust company. Vanguard charges 0.7% on the first $1 million, 0.35% on the next $1 million, and 0.2% above $2 million, plus $2,500 per year. They don't offset their expenses at the fund level against their trustee's fees. While most banks and trust companies will aggregate the assets in related trusts for purposes of the break points, I don't know if Vanguard will do this. However, Vanguard is still likely to be substantially less expensive than the typical corporate trustee, and if they invest in index funds, the trust won't incur the costs of active management.

I've only had one or two clients name Vanguard as a trustee in their Wills, and so far none of them has died, so I don't know how it will work when the time comes to set up the trusts. With a conventional bank or trust company, the beneficiaries are usually able to meet with the trust officer in person from time to time, and if need be, I can speak with the trust officer, or someone higher up. If a more complicated issue arises, there will usually be people at the bank or trust company whom I know and can speak with. I don't know if that would be the same at Vanguard (or a similar institution).

If there are assets other than securities and mutual funds, a conventional corporate trustee will be able to deal with them, but Vanguard (or a similar institution) might not.

I would be interested in hearing about the experiences of others in working with Vanguard or a similar institution where the testator has died and the trusts under his/her Will have been set up.

Most clients who want a corprorate trustee give some individual or individuals the power to change the corporate trustee, so if the relationship isn't working out, or if due to changed circumstances the bank or trust company named in the Will is no longer appropriate, there's a way to change to a different bank or trust company.
lhl12
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Re: Vanguard National Trust Company?

Post by lhl12 »

I too am interested in hearing of folks' experience working with Vanguard where the testator has died, the trust has been funded, and the beneficiaries are now working with Vanguard as trustee (taking distributions, receiving information on AA, etc.). It seems that there are many who have researched competitors and who have named Vanguard as trustee but very few if any who have experience with them in a funded, fully operational capacity.
stjoe56
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Re: Vanguard National Trust Company?

Post by stjoe56 »

lhl12 wrote:I too am interested in hearing of folks' experience working with Vanguard where the testator has died, the trust has been funded, and the beneficiaries are now working with Vanguard as trustee (taking distributions, receiving information on AA, etc.). It seems that there are many who have researched competitors and who have named Vanguard as trustee but very few if any who have experience with them in a funded, fully operational capacity.
I cannot tell you exactly about working with Vanguard after the testator's death but close to it.

Years ago, I funded a trust for my daughter and allowed Vanguard to be the sole trustee. I am out of the picture so this is a second hand comment. My daughter has commented it is sometimes difficult to get ahold of the Vanguard rep. This has resulted in problems of some missed distributions (e.g., she changed banks and could not inform Vanguard). Vanguard sent them out and they bounced back. She said she has had to track down the missed payments rather than Vanguard attempting to contact her.

SJ
kharna
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Re: Vanguard National Trust Company?

Post by kharna »

I have had some experience dealing with Vanguard trust after the testator's death. The best advice I can give you is hire an attorney that specializes in trust issues and make sure everything is spelled out in detail how you want the trust administered .I would have the attorney review before you agree to anything and again when the trust is executed .Although the advice sounds obvious we did not follow it, our family was more focused on my mothers illness. My mothers attorney was well past retirement age and not well versed in trust issues, and her trust bears little resemblance to her intent sadly this was not well enough defined in her will.
I don't even know where to begin,

Extended amount of time to set up trust after the testator's death, nearly six months and enough time on the phone with them to qualify as a part time job.

Poor communication,

Tax burden shifted to beneficiaries of trust, approximately 22% of disbursement goes to taxes.

I would take a pass on the trust from Vanguard. My experience is with an irrevocable trust. ( due to family member being financially immature ) My expectations were that there would have been a protocol for setting up the trust after the testators death and this would have clearly defined to beneficiaries and all involved. Clearly my expectations were to high in this case.
magnus
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Re: Vanguard National Trust Company?

Post by magnus »

Apparently, from all I have read from the various postings there are two important ingredient's in working with a "Trust Company: (a) have a knowledgeable Attorney set up the Trust Document's and (b) utilize a local (at least in state) Trust Company. I plan on doing both.
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Teetlebaum
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Re: Vanguard National Trust Company?

Post by Teetlebaum »

My concern with Vanguard is that they apparently won't be responsible for real estate. So unless I make an heir a co-owner of my house (that's my only real estate), it'll have to go through probate?
shawcroft
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Re: Vanguard National Trust Company?

Post by shawcroft »

Ah, this thread has come back. I note I made a post a few months back which should have had a follow-up message. Let me dig into my records and try it again!
Shawcroft
shawcroft
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The Vanguard National Trust Company

Post by shawcroft »

And here goes with the update. I poked around and found out that Fidelity has changed things a bit so I revised my outline on their trust services to reflect the new fee schedule.
As my previous posts on this thread indicate, I’ve spoken with a number of financial organizations about revocable trusts since the summer of 2011. Earlier this year, I met with BNY Mellon, a bank which has largely withdrawn from retail banking to focus on higher net worth individuals and trust management.
I met with them at an office complex in White Plains, NY. If you didn’t know there was a bank in the building, you would never expect it. Inside was a small banking operation (deposit-taking teller, a few customer service representatives) and lots of conference rooms. The main business of the site is trust services and asset management. Aside from a minimal retail operation and their stated focus on trust services, BNYMellon wasn’t clearly different to me from the other organizations I had reviewed. The pitch was “Small, Boutique-Like Delivery, Large-Firm Resources”
Knowing I was coming to visit, they prepared a personalized brochure extolling all of the things BNYMellon could do for (to) us. A big part of this featured charts and graphs showing how brilliantly the BNYMellon investment strategists had outperformed selected –and internally manufactured –benchmarks ( “blended benchmarks”) over time. Bottom line: If they have investment management authority over your trust, you should brace yourself for a trip into the land of tactical asset allocation (“strategic architecture”) and convoluted comparisons (“blended benchmarks” contrasted to “fund composites”). The usual suspects were mentioned: alternative investments, commodities, managed futures strategies, foreign currency contracts, and smart hedge fund placements.
So, that was the overall pitch from BNYMellon, followed by the obligatory questions regarding “next steps”.
And, as of March 2013, things have changed a lot at Fidelity since my original post. I’ve added the news below.
To simplify things, I’ve summarized my earlier posts so the fee schedule information is available for all of the organizations. To keep the comparisons consistent, I selected the trust accounts which would have the organization act as the investment advisor. A few (Wells Fargo, Chase are the examples) do offer limited trust services- just trust administration but not investment management- at a lower fee, However, trust administration services alone comes with all sorts of caveats.
The organizations are listed alphabetically so BNY Mellon (my most recent review above) follows Bank of America/Merrill Lynch :

Bank of America/US Trust: 1.25% on first 2 Million, 0.90% on next 3 Million, and 0.60% on the next 5 Million.

Bank of America/Merrill Lynch: Anywhere from 0.75%-3.00% on first $500,000 depending on whether the assets are only in mutual funds or more broadly diversified. All of these accounts come with a ML “financial advisor”, whether or not you want one.

There are several different accounts available (with all sorts of additional fees which may apply). I selected the ML “Wealth Diversified Portfolio” which most closely compares to the accounts offered by the other institutions listed.

ML Wealth Diversified Portfolio: 2.05% on first Million, 1.55% on second Million, 1.20% on the next 2 Million, and 1.05% on the next 6 Million.

BNY Mellon: 1.25 % on the first $2 Million; 0.75% on the next $3 million, and 0.60% on the following $10 million.
Chase Manhattan: 0.95% on first Million; 0.70% on next 4 Million, 0.50% on next 5 Million and 0.25% on balance over $10 Million.

(Curiously, JPMorgan which now owns Chase Manhattan lists slightly higher fees in their 2008 “Trust and Custody Fee Schedule. 1.15% on first Million, 1.00% on next 2 Million; 0.80% on next 2 Million; 0.60% for next 5 Million; and 0.50% for the following 5 Million. This was the first trust fee schedule I received when we began this educational effort in the Spring of 2011. In light of the banking industry’s continuing search for fee income, I find it hard to believe trust fees would be reduced.

Fidelity: In 2010: 1.10 % for first $500,000, 0.80% for next $500,000, 0.70% for next 1 Million, and 0.40% for the next Million.
For assets above 3 million, a flat rate applies: 0.65% for 3-4 Million; 0.55% for 4-5 Million; 0.50% for 5-6 Million; 0.45% for 6-7 Million; 0.38% for 7-8 Million and 0.30% for 8 Million or more.
As of March 28 , 2013, Fidelity has new advisory fees listed on line. There is a 51-page brochure which lists adjustments to personal trust accounts (depending upon holdings) which can result in a somewhat lower "Variable Net Advisory Fee"). From my reading, it appears Fidelity reduces its Annual Gross Advisory Fee by a variable credit to reflect the amount of Fidelity assets being held in the account.

As of March 28, 2013: 1.50% for the first $500,000; 1.25% for the next $250,000; 1.10% for the next $250,000; 0.95% for the next $1 million; 0.80% for the next $1 million, and 0.55% for anything greater than $3 million.
The flat rate reductions for amounts of $3-4 million and above which were available in 2010 (as noted above) appear to have been eliminated. All of these new 2013 Annual Gross Advisory Fees can be reduced by some daily adjustment for size of assets held in Fidelity investments. It could change each day and the fee for the account is calculated each day.

HSBC: 0.50% on first $2 Million, 0.40% on next $3 million. (HSBC built a sizable presence in Southwestern Connecticut starting in 20008 but largely withdrew from this market in 2012, selling their area banking and trust operations to First Niagara.)

Peoples United Bank: 1.00% on first Million, 0.80% on second Million, 0.60% on next 3 Million, and 0.40% on next 5 Million.
Wells Fargo: 1.25% on first 2 Million, 0.80% on next 3 Million, and 0.60% on next 5 Million.


USAA: Strategic Fund Advisor “Marketplace Portfolio” (no USAA funds) 1.05% on first $125,000; 0.90% on next $125,000, 0.65% on next $250,000, 0.40% on the next $500,000 and 0.25% on anything over $1,000,000.
Strategic Fund Advisor USAA Portfolio (all USAA mutual funds)
USAA Global Opportunities Portfolio (mixture of investments)
0.70% on first $125,000; 0.65% on next $125,000; 0.50% on next $250,000; 0.30% on the next $500,000 and 0.20% on anything over $1,000,000.
(USAA has an annual gross account fee of from 1.80%-1.96% reduced by a credit of from 0.91% -1.10% which largely- but not completely- reflects the USAA funds in the account)

Vanguard: Investment management fee 0.75% on first Million, 0.35% on second Million, and 0.20% on anything above 2 Million. An additional $2500 annual Trust Administration fee for applies for each sole or co-trustee registration.

Because my bride still has some affection for face-to-face contacts and a bricks and mortar presence, our "final" candidates for trust service were: JPMorgan Chase, USAA, Fidelity, and Vanguard.

To me, the clear winner was Vanguard National Trust Company which offers the most appealing mix of services and costs.

It comes with one other fairly important advantage and that is the high likelihood they will stay true to the fiduciary standard and not get into exotic investments. In my readings and conversations over the past two years, there have been situations- particularly with bank mergers- where trust investment practices have changed ( “had to adjusted to new markets and new normals”) and trust beneficiaries have experienced some surprises.

That said, any trust document has to have a number of features, not least of which is the ability of the beneficiaries to move the trust if circumstances (and “new normals”) in time clearly require it.

Hope these thoughts help my Boglehead colleagues. I really welcome any and all comments and thoughts on this posting.
Shawcroft
Retread
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Re: The Vanguard National Trust Company

Post by Retread »

shawcroft wrote:To me, the clear winner was Vanguard National Trust Company which offers the most appealing mix of services and costs.
I agree entirely with the Vanguard choice. Having spent my career in the trust business, I'm a bit shocked at the level to which fees have risen. These fee schedules, coupled with a market at an all time high, makes the fees rather difficult to swallow. Thanks for the benefit of all your research.
Bruce
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shawcroft
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Vanguard National Trust Company

Post by shawcroft »

Retread:
Thanks for your kind words. If the information I have developed over the past 2 years on these fee schedules helps folks make good decisions for themselves and their families, I am delighted. (I am NOT saying Vanguard is the only way to go. From my review, it offered - at least to me- the most appealing mix of services, products, and costs).
Alas, I now find that USAA has changed its fee schedule, as of September 24, 2013. I last looked at that site in late August and nothing had changed.
Surprise!
Let me go through the new information and post an update. In the meantime, if any of our Boglehead colleagues has one of the new USAA accounts (or was converted to it by having an account there before the change), please send along your thoughts on the changes. (the good, the bad, and the ugly).

Shawcroft
lhl12
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Re: Vanguard National Trust Company?

Post by lhl12 »

If anyone has experience with Northern Trust in this context, I would love to hear about it. I thought they were a significant player, with a fairly strong emphasis on passive, indexed funds, so I'm surprised not to have heard more about them.
shawcroft
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Vanguard National Trust Company?

Post by shawcroft »

lhl12 wrote:If anyone has experience with Northern Trust in this context, I would love to hear about it.
Ihl12:
Actually, two individuals who have posted earlier on this thread (the 26th message by statman on 5/25/11 and the 27th by JDCPAesq which followed it on 5/25/11) commented on Northern Trust. You may wish to read this posts- about halfway down on the first page of this thread- to gain their perspectives.
Prior to those messages, I had decided not to speak with Northern Trust. I have a friend from my college days out in the Chicago area whose parents were successful independent business owners. The parents selected Northern Trust to serve as successor corporate trustee for their estate. Once both parents had passed away, he and his brother (the two beneficiaries) had a thoroughly miserable experience with Northern Trust over the next several years until they were able to successfully move the trust- which Northern apparently delayed for some time. They felt it was to keep the assets under Northern investment management and extract as many fees for as long as possible.
Since others have told me about miserable experiences they have had with trust companies back here in the Northeast (JPMorgan Chase and Merrill Lynch most notably), I didn't feel the need to consider Northern.
Hope that helps
Shawcroft
lhl12
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Re: Vanguard National Trust Company?

Post by lhl12 »

Apologies - my post was unclear. I had read those two posts earlier in the thread.

What I was hoping for from someone was a clear and concise explanation of Northern's fee structure, in the same format as all the others. I think it is very helpful to see all the competitors laid out in the same way at the same point in time. I understand that some people may have had a bad experience with one provider or another (in this case Northern) but I'd still like to know the terms they offer, especially since (in the case of Northern) they are a large player who also (I think) happens to be a heavy user of index funds.
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Re: Vanguard National Trust Company?

Post by Retread »

lhl12 wrote:If anyone has experience with Northern Trust in this context, I would love to hear about it. I thought they were a significant player, with a fairly strong emphasis on passive, indexed funds, so I'm surprised not to have heard more about them.
Former senior executive of Northern Trust. Look elsewhere.
Bruce
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prudent
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Re: Vanguard National Trust Company?

Post by prudent »

A close friend used Northern Trust and after he passed, his daughter had a frustrating time dealing with distributions. It was not just one glitch. More than once she has an experience where they would say they sent a check, two weeks later no check, another call, "we'll look into that", 2-3 weeks later a check shows up. Difficult to get through to whoever was empowered to actually do something. One time the distribution was needed urgently but there was no sense of urgency on the NT end. Eventually she moved everything over to a high-priced advisor who was local, just to be able to see someone face-to-face.
shawcroft
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The Vanguard National Trust Company

Post by shawcroft »

lhl12 wrote:Apologies - my post was unclear. I had read those two posts earlier in the thread.

What I was hoping for from someone was a clear and concise explanation of Northern's fee structure, in the same format as all the others. I think it is very helpful to see all the competitors laid out in the same way at the same point in time. I understand that some people may have had a bad experience with one provider or another (in this case Northern) but I'd still like to know the terms they offer, especially since (in the case of Northern) they are a large player who also (I think) happens to be a heavy user of index funds.
Ihl12:
I think Retread has offered some very sage advice. Perhaps there is someone else on the Forum who has dealt with Northern and can give you a general idea of the fee structure. As I mentioned, I have not contacted Northern Trust about their offerings and fees.
This has been a long-lived and impressive series of messages. Quite a lot has been discussed and some very valuable personal experiences have been disclosed. Its been very helpful to me (us).
Shawcroft
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The Vanguard National Trust Company?

Post by shawcroft »

To my Boglehead colleagues interested in trust management services:

As promised, here is the updated information about USAA.

Let me clearly state at the start that I have been a member of USAA since 1973. I have great respect for the organization. However, it appears investment management is not as strong an offering as is its insurance and banking services.

The recent changes in the USAA investment management program are more bewildering to me that its previous offerings. For example, the March 31, 2011 description of its wrap-fee program comprised 19 pages. In contrast, the explanation of the newly revised wrap-fee program effective September 24, 2103 now runs 32 pages. It took me about two hours to wade through it and I still am uncertain about some of it. In essence, they discourage use of non-USAA mutual funds and penalize the account (by higher account wrap fees and what appears to be institutional obfuscation) if you don't wish to select USAA funds.

Here goes:

USAA: Former program which was effective March 31, 2011:
Strategic Fund Advisor “Marketplace Portfolio” (no USAA funds) 1.05% on first $125,000; 0.90% on next $125,000, 0.65% on next $250,000, 0.40% on the next $500,000 and 0.25% on anything over $1,000,000.
Strategic Fund Advisor USAA Portfolio (all USAA mutual funds)
USAA Global Opportunities Portfolio (mixture of investments)
0.70% on first $125,000; 0.65% on next $125,000; 0.50% on next $250,000; 0.30% on the next $500,000 and 0.20% on anything over $1,000,000.
(USAA has an annual gross account fee of from 1.80%-1.96% reduced by a credit of from 0.91% -1.10% which largely- but not completely- reflects the USAA funds in the account

USAA: Current program effective September 24, 2013
The Strategic Fund Advisors portfolios and the Global Opportunities Portfolio have been replaced by 6 model portfolios (apparently structured to address portfolio risk): 100% fixed income; conservative; moderately conservative; moderate; moderately aggressive, and aggressive.
USAA retains the somewhat wacky “gross program fee – minus minimum credit- equals maximum annual net program fee”
The 100% fixed income has the following annual costs:
under $500,000: 1.60% minus minimum 1.10% credit= 0.50%
$500,000-$1 million: 1.50% - minimum 1.10% credit = 0.40%
$1 million-$2 million: 1.40%- minus minimum 1.10% credit= 0.30%
$2 million-$10 million: 1.30%- minus minimum 1.10% credit= 0.20%

For any combination of equity/fixed income account assets (other than 100% fixed income), the following annual costs apply :
Under $125,000: 2.20%- minimum 1.10% credit= 1.10%
$125,000-$250,000: 2.10%- minimum 1.10%credit= 1.00%
$250,001-$500,000: 1.95%- minimum 1.10% credit= 0.85%
$500,001-$1 million: 1.85% - minimum 1.10% credit= 0.75%
$1 million-$2 Million: 1.75% - minimum 1.10% credit= 0.65%
$2 million-$10 million: 1.60%- minimum 1.10% credit= 0.50%
fees are negotiable for accounts over $10 million

Buried down deep in the USAA information is a disclaimer that they will take into consideration any requests made for inclusion (or exclusion) of specific mutual funds but the portfolio manager makes the final determination. Also, unless you establish a Custom Program Account with them, once they get control of the assets, they will implement their strategic asset allocation and “ ..sales of securities for initial funding purposes are not tax-managed (e.g., we will not work with you to sell securities over a period of time) and you may therefore recognize a taxable gain, loss or wash sale when your shares are sold”

OK, fair enough warning of a likely nuclear explosion within your portfolio if you use USAA investment management services.

Bottom line to me:
I would be very reluctant to use USAA for trust or investment management services. Caveat Emptor!
Shawcroft
Mikejenny
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Re: Vanguard National Trust Company?

Post by Mikejenny »

lhl12 wrote:If anyone has experience with Northern Trust in this context, I would love to hear about it. I thought they were a significant player, with a fairly strong emphasis on passive, indexed funds, so I'm surprised not to have heard more about them.
Ihl12: I looked around the internet. Northern Trust wants a minimum of $20,000 per year to manage $5 million of assets in a trust. They will work on less assets but the minimum fee remains the same. I couldn't find anything online which describes their active or passive investment strategies with the assets.
Mike
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Re: Vanguard National Trust Company?

Post by Retread »

Mikejenny wrote:
lhl12 wrote:If anyone has experience with Northern Trust in this context, I would love to hear about it. I thought they were a significant player, with a fairly strong emphasis on passive, indexed funds, so I'm surprised not to have heard more about them.
Ihl12: I looked around the internet. Northern Trust wants a minimum of $20,000 per year to manage $5 million of assets in a trust. They will work on less assets but the minimum fee remains the same. I couldn't find anything online which describes their active or passive investment strategies with the assets.
Mike
You're not going to find their investment approach online. I'm not surprised at the minimum fee. Over the years I was with The Northern, and in my observations of them since, I've seen their minimum fee steadily increase. There are often extras on top of the quoted fee. It is not necessarily all inclusive. They will argue that their officers have a limited number of accounts and therefore you receive close personal attention. Ask an officer how many accounts he has and he will reply in terms of "family relationships". You can be sure he has too many accounts and too many family relationships.
Bruce
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smackboy1
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Re: Vanguard National Trust Company?

Post by smackboy1 »

I don't know if Vanguard National Trust Company is a good corporate trustee now, or if it will be in the future. I don't know if Pennsylvania, where VNTC is based, is the best jurisdiction for a trustee now, or in the future. The same goes for Northern, Wilmington, BNY Mellon, Deutche Bank or any other corporate trustee.

Me personally, in my estate plan I may name a few preferred corporate trustees, but I'm not going to waste a lot of time if the company won't become trustee for years or decades in the future. Thing can change. I would allow for flexibility to do what is best after I am dead. There are many reasons a trustee needs to be changed to a different company and/or different jurisdiction e.g. taxes, unfavorable trust laws, liability protection, costs, poor service, etc.. Trusts can be created with features like:
- Moving the trust: this is usually the same as changing to a trustee in a different jurisdiction. The trust assets don't necessarily have to physically move.
- Choice of law: there are many jurisdictions with favorable trust laws and a judiciary experienced in such matters. Delaware comes to mind. As long as the trust allows it, changing to a trustee in a different jurisdiction will usually change the applied law.
- Decanting: sometimes when the above doesn't work, it maybe necessary to create another trust and move the assets over to the new trust. For example it may make sense to split trust assets into a separate trust each for 2 sibling beneficiaries. Or maybe the original trust language is so restrictive and anachronistic as to warrant a change e.g. to extend the life of a trust beyond the rule against perpetuities.
- Directed trust: in recent years there's been trusts where traditional duties of a trustee are split up. The corporate trustee retains administrative duties, but the investment duties reside with another entity. This allows trusts to hold things like closely held family businesses. A Boglehead advantage is that a family may like the idea of a corporate trustee for most trust responsibilities, except for investment decision making. The corporate trustee fees are reduced to reflect the reduced responsibility and liability.
- Protector/Appointer/Committees/Special Purpose Entity - How to ensure all these special trust powers are used correctly and not abused? There should be people or group of people with specific authority over trust decisions. Things like removing/adding a trustee, decanting, adding/removing beneficiaries, choosing an investment advisor, making distributions, making investments or loans, etc.. This could be a person or a group of people or even an entity with it's own by laws set up for such a special purpose.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
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Re: Vanguard National Trust Company?

Post by Coyote22 »

I currently have named my former employer, a major bank, as co-trustee. They gave me a bit of a deal on the fee but it is still high. And they would almost certainly move assets to their higher cost funds. This thread has helped me refocus on whether a move to Vanguard National Trust Company is appropriate. My concern with Vanguard has been that they do not have a local office. This seems like a difficult business to set up and administer well over the phone. Anyone have experience that would help on that issue?
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Re: Vanguard National Trust Company?

Post by bsteiner »

Coyote22 wrote:I currently have named my former employer, a major bank, as co-trustee. They gave me a bit of a deal on the fee but it is still high. And they would almost certainly move assets to their higher cost funds. This thread has helped me refocus on whether a move to Vanguard National Trust Company is appropriate. My concern with Vanguard has been that they do not have a local office. This seems like a difficult business to set up and administer well over the phone. Anyone have experience that would help on that issue?
Where a conventional corporate trustee invests in their own mutual funds (which they may do if they don't think they can otherwise appropriately diversify the amount allocated to that asset class), they'll credit their management fee at the mutual fund level against their trustee's commission (fee). It's not perfect, since there are other expenses in a mutual fund besides the management fee, and sometimes the management fee is more than the trustee's commission (so that the offset merely reduces the trustee's commission on that asset to zero), but it substantially mitigates the issue of additional fees.
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Re: Vanguard National Trust Company?

Post by shawcroft »

smackboy1 wrote:I don't know if Vanguard National Trust Company is a good corporate trustee now, or if it will be in the future. I don't know if Pennsylvania, where VNTC is based, is the best jurisdiction for a trustee now, or in the future. The same goes for Northern, Wilmington, BNY Mellon, Deutche Bank or any other corporate trustee.
Smackboy:
I agree with your overall thoughts. An organization providing good service now may stay that way in the future. At least that was my experience about 7 years ago. A trust officer at a well-regarded local bank started a “low pressure approach” with us. We had a few general meetings- with increasing details being discussed- over several months.

Then, surprise, a big bank acquired them.

About three months later, the sales pitch returned with a vengeance. The next meeting was a full-court press with the original trust officer, joined by several big bank pros- all business: what do you have, how much is it, where is it, in whose name, how much insurance, and so on.
And the trust investment strategies offered by the local bank had disappeared- internal funds operated by the new bank were pushed unless you wanted the more costly “open architecture” account.
I extricated myself after vaguely agreeing to some “next steps” and told them to forget it a few days later. They didn’t take no for an answer and called us several times over the next year to “re-invigorate the relationship”

It was about that time that I began searching for more information and that led me, in time, to the Boglehead Forum- and this discussion.

As you can surmise from my earlier posts, I thought there would be significant differences between trust services offered by financial organizations. Having spoken with about ten of them, they all seem to have about the same investment and diversification concepts in mind. It seems to be this: some US equities, some International equities, some individual bonds, maybe some foreign bonds, a dash of commodities, a dollop of foreign currencies, a smidgen of private equity, and perhaps a pinch of some really wild leveraged debris (yet to be determined but clearly on the horizon).
I could understand about half of what most of them were proposing- and that was after I had read all of the stuff they gave me several times.

Being a Boglehead, costs came to my mind as a possible means to differentiate them. With that in mind, Vanguard is the lowest overall, Merrill Lynch seems to be the highest. Most of the rest bump around a base 1% annual fee for assets under management. As others have noted, there may well be extra fees for “special services”. Knowing the costs being charged by each organization helped me sort out things.

We came to our decision almost by a process of elimination.
Simply stated……
1). Other than Vanguard, we couldn’t understand many of the types of investments or strategies these trust companies would use for our trust assets. If we couldn’t understand it, we felt our beneficiaries would be completely lost. So, we had to go with an organization which offered trust services and investments we could understand – and our beneficiaries could understand as well.
2). Vanguard is very likely to maintain adherence to a fiduciary standard and highly unlikely to change its investment offerings.
3). There are LOTS of folks looking at and commenting about Vanguard and its offerings every day (such as the Bogleheads). We –or our heirs- should have some early warnings based on this "monitoring" if bad things are on the horizon
4). It is highly unlikely Vanguard would be involved in a convulsive merger which would turn its trust services – and its investment offerings-upside down.
5). Overall, Vanguard Trust Company still offers to us the most appealing mix of services and costs.

Is this perfect? No, but I am reminded that one should not make the perfect plan the enemy of a good plan. We expect that we may need to make some amendments over time to the trust and we have language in the trust documents which permits moving the trust to another organization if we- (or our heirs) find it necessary.
That's pretty much how things came to pass for us. I hope this discussion has helped some others who are also exploring these things.
Shawcroft .
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Re: Vanguard National Trust Company?

Post by letsgobobby »

Bumping this old thread for any updates or new thoughts.

I am thinking of naming VNTC as the co-trustee to our trusts. Primary reason is that our guardians, beneficiaries, and assets will be scattered across several states so there seems to be no advantage to choosing a hyperlocal trustee (which locale?). After that I want an uncompromised fiduciary and confidence its corporate structure will endure.

How detailed need my trust documents be to guide VNTC with regards to the investment management portion? I have received good guidance regarding other aspects of the trust. Can I state, "a low cost, passively managed, broadly diversified, tax efficient portfolio with a small and value tilt and 1/3 fixed income, please?"

I'll plan to meet by phone with Vanguard shortly but want to be prepared with the proper questions.
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Re: Vanguard National Trust Company?

Post by RNJ »

letsgobobby wrote:Bumping this old thread for any updates or new thoughts.

I am thinking of naming VNTC as the co-trustee to our trusts. Primary reason is that our guardians, beneficiaries, and assets will be scattered across several states so there seems to be no advantage to choosing a hyperlocal trustee (which locale?). After that I want an uncompromised fiduciary and confidence its corporate structure will endure.

How detailed need my trust documents be to guide VNTC with regards to the investment management portion? I have received good guidance regarding other aspects of the trust. Can I state, "a low cost, passively managed, broadly diversified, tax efficient portfolio with a small and value tilt and 1/3 fixed income, please?"

I'll plan to meet by phone with Vanguard shortly but want to be prepared with the proper questions.
My wife and I just went through a major estate planning overhaul, including the establishment of a series of trusts for each other and our young children. VNTC was a major piece of the discussion. After several discussions with their representatives, we decided not to use them. Ultimately, we felt that we did not want a corporate trustee making decisions about distributions. We also were somewhat concerned about long-term institutional risk (i.e., that the nature of Vanguard, etc., may change).

What we opted for was having lengthy discussions with our trustees (3 for the children's trusts) about our philosophy and wishes with respect to investments, our desire to have the funds invested with Vanguard. We also wrote a detailed letter reiterating these desires. This letter is, of course, non-binding, but it spells out our desire for the funds to be invested in passive, low-cost vehicles, at a fixed allocation, and with an eye on overall costs and management fees. Finally, the trust documents spell out in all but name where we want the trusts managed.

Our trustees were completely on board. One, I found, is a fairly active participant on this forum. PM me if you want to discuss further. Good luck!
countdown
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Re: Vanguard National Trust Company?

Post by countdown »

So much good information here, I've bookmarked it. Thanks to all of the estate and trust professionals for sharing their knowledge and experience.
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Re: Vanguard National Trust Company?

Post by afan »

When we did our estate planning the attorney, an expert in trusts and estates who had been recommended by the biggest bank trust department in town, was very firm that we should NOT name a corporate trustees in our documents. Choose trustees based on faith in their personal judgement. If they want to hire a bank, fund firm, or someone else to manage the investments, then they can do so. If they are unhappy with the service or performance, they can change firms without any concerns about the estate documents. Our attorney said that naming a corporate entity as trustee ( as opposed to letting a trustee hire them for administration or investment management) is a last resort when there are no people who could be given the job.

The more I worry about costs and the more I firmly I recognize that no one can be relied upon to beat the market, the less interest I have in paying for investment management. If we were to die now, our heirs might need help with settling the estate and filing tax returns, but the investment management is simple and easy. Fortunately we seem to have dodged the risk of spendthrifts, so no need for someone to protect them from themselves. It would be hard for Vanguard's services to be worth the cost, but even harder for anyone else to worth an even higher price.
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
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Re: Vanguard National Trust Company?

Post by countdown »

A fan: I agree with your estate and trust attorney for average estates.
I am trustee of a family member's estate.
If I need help, I will seek it.
But the information in this thread is indeed valuable.

This is not my field of law, but I have seen many elderly people's estates 'bled dry' by excessive bank trustee fees, and it's near impossible to get rid of them.
Absent an extremely large estate, I would personally prefer to name an individual trustee who may then use their judgment and discretion to bring in professional help.
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Re: Vanguard National Trust Company?

Post by letsgobobby »

The biggest problem is that any trustee we would pick will be decades older than our children. That means inevitably we will have to think about incapacity or death of the trustee, in addition to the usual quirks/foibles of human nature. The appeal of a corporate trustee is the corporate structure itself, which provides for successors and has a lifespan much greater than any single person.

Also when you are talking about young children, you don't yet know what level of protection from themselves they will need. When my parents set up our trusts (sister and I), we were already in our 30s, both doctors, responsible/level-headed people, etc. They knew exactly what they needed to provide, and what they didn't. We don't have that in our favor, yet.

I agree that $2500 + 0.2-0.7% + mutual fund expenses isn't ideal, but it's far from the end of the world. There isn't another youngish person in our lives who I feel is qualified to make appropriate investment decisions and who wouldn't have a conflict of interest.
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Re: Vanguard National Trust Company?

Post by afan »

There isn't another youngish person in our lives who I feel is qualified to make appropriate investment decisions and who wouldn't have a conflict of interest.
In that case you are stuck, but remember that this is not a permanent situation. As time goes by your children will grow up and you will find out whether they need a responsible adult supervising their actions once they are adults themselves. Right now our sucessors trustees are our generation, but by the time this really becomes an issue (with the expected deaths of us, and our series of sucessors) our kids should be well able to manage on their own. If that were not a reasonable expectation, then some corporate trustee would be necessary. I would still want someone else in charge of hiring and replacing the corporate entity, even if that person would not otherwise serve as a trustee him/herself.
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
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Re: Vanguard National Trust Company?

Post by at »

Regarding the "directed trust" option, if we've a fixed asset allocation such as 50% Vanguard TSM and 50% Vanguard TBM rebalanced yearly, won't that make the need for an investment advisor unnecessary?

Also, there're many non-banks trust companies with monstrous AUM, aren't they also good options? Any reasons not to use them since their costs are more competitive?
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Re: Vanguard National Trust Company?

Post by hoppy08520 »

deleted...
Last edited by hoppy08520 on Fri Sep 05, 2014 3:51 pm, edited 2 times in total.
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Re: Vanguard National Trust Company?

Post by lhl12 »

hoppy08520 wrote: Summary: Vanguard National Trust Company cannot be defined in a testamentary trust as the desired trust.

Details: My spouse and I are in the process of setting up a last will and testament with LegalZoom, and we are including directions to have a testamentary trust for our minor children.

In a consultation with a lawyer at LegalZoom, I asked if we could somehow direct that VNTC wind up being the testamentary trust. The lawyer told us that she had been working with VNTC on various trusts and that there is no way that you can do this with VNTC. You can do this only with a living trust.

I'm posting this knowing that many Bogleheads like Vanguard and would be predisposed to have VNTC be their trust, but it looks as if you cannot do this as a testamentary trust.

As a workaround of sorts, my designated trustee (a close family member), under a provision in the "Trustee Powers" section of the will, "#5. Employ and pay reasonable fee to counsel, accountants, financial advisors, and any other professionals deemed necessary or advisable for the proper administration of the trust", could probably turn most of this over to Vanguard Personal Advisory Services. I plan to talk to VPAS to see about the feasibility of this. I would want my co-trustee to do this as I wouldn't want to burden her with knowing how to invest things, etc.
This is a surprising result. It seems very odd to me that Vanguard would go to the trouble of setting up a Trust Company but not have that company be eligible to accept testamentary trusts. Have others had the same experience with VNTC? If so, what is the precise reason why VNTC cannot accept testamentary trusts but other corporate trustees can?
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Re: Vanguard National Trust Company?

Post by hoppy08520 »

lhl12 wrote:This is a surprising result. It seems very odd to me that Vanguard would go to the trouble of setting up a Trust Company but not have that company be eligible to accept testamentary trusts. Have others had the same experience with VNTC? If so, what is the precise reason why VNTC cannot accept testamentary trusts but other corporate trustees can?
Well, isn't this interesting.

I just spoke to someone at VNTC and she said quite emphatically that VNTC does in fact take on testamentary trusts. To do this, in our will we would name VNTC as a trustee or co-trustee of the testamentary trust.

I'm sorry for putting that misleading information out there.

I don't understand why the estate attorney I spoke to said that VNTC won't do that. It wasn't just an offhand comment or a misunderstanding. I pressed her on this and she went on about how she was unable to make this happen and had actual experiences with this. Or maybe this is related to the fact that VNTC won't deal with real estate assets or tangible assets, only financial assets.

The VNTC person I spoke to said that there are ten provisions that VNTC requires in a testamentary trust to take it on. I'm wondering if the attorney I spoke to was dealing with testamentary trusts that were already in place which did not comply with what VNTC requires, and that's what led her to say that. I just don't know.

I'm beginning to think that I need to get an attorney to get this will and testamentary trust set up right as well as making sure the beneficiary designations are done right. I'm just not sure the LegalZoom boilerplate can do it.
Last edited by hoppy08520 on Sat Sep 06, 2014 4:41 pm, edited 2 times in total.
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Re: Vanguard National Trust Company?

Post by magnus »

I'm beginning to think that I need to get an attorney to get this will and testamentary trust set up right as well as making sure the beneficiary designations are done right. I'm just not sure the LegalZoom boilerplate can do it.
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I think you are getting the right idea, otherwise it's like doing brain surgery with a "Brain Surgery for Dummies Book". Having an attorney do it for you, in the long run, will be the best investment you will make.
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Re: Vanguard National Trust Company?

Post by Gill »

I believe the confusion arose because Vanguard will not act as personal representative.
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Re: Vanguard National Trust Company?

Post by TF Hutch »

As trustee of my fathers estate, and beneficiary of my grandfathers estate my experience with BNY/Mellon were not good. Excessive fees, little to no help from principals and being stonewalled by underlings was my experience.
Hutch | A fool and his funds are soon parted! - Thomas Tusser (English Farmer and Writer. 1524-1580)
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Re: Vanguard National Trust Company?

Post by dr_g »

Just discovered this very thoughtful thread. Thanks all!

I'm in the process of having a trust drafted and am evaluating trust companies as candidates for a successor co-trustee (a child will be the other trustee).

I was getting ready to choose a trustee so that I could set it and forget it. After discussions with trust departments and having read this forum, however, it's now apparent that the corporate side of the trust arrangement will be sitting idle and not draining fees until my demise. Given the changing trust environment and the lack of penalties for changing corporate trustees, I will now choose my "best guess"
corporate trustee (leaning towards Vanguard or Fidelity) and re-evaluate every 5 years or so. I intend to include whatever language is required by the chosen trustee, but also but also leave the language as neutral as possible to facilitate a possible trustee switch. Fee dynamics, changes in business models and evolution in investment philosophy described here over the last few years are enlightening and make sense, so flexibilty is seems essential, especially since all the trust companies made it clear to me that the fees charged would be those in effect when they assume their responsibility as successor trustee.

A couple of detailed comments:
1. I understand that Fidelity charges a flat 0.2% for administration in addition to their asset management services described earlier. In addition, though, those services come in two levels, depending on your need for tax efficiency.

2. In my case, the revocable trust will be split into three irrevocable subtrusts upon my death to maximize the "stretch" benefits for qualified assets. In Vanguard's case, the fixed administration fee would be tripled, whereas Fidelity and two other smaller Trust organizations indicated they would aggragate both the administrative fees and asset management tiers for related accounts. For smaller estates, the additional $5,000 in administrative fees can be significant.

I look forward to additional thoughts and updates.
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Re: Vanguard National Trust Company?

Post by bsteiner »

dr_g wrote:... In my case, the revocable trust will be split into three irrevocable subtrusts upon my death to maximize the "stretch" benefits for qualified assets. ...
How does dividing a trust affect the stretch?
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Re: Vanguard National Trust Company?

Post by dr_g »

In a single trust, the age of the oldest child must be used to calculate the RMD. In multiple "pass-through" trusts, the age of each beneficiary may be used.
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Re: Vanguard National Trust Company?

Post by bsteiner »

dr_g wrote:In a single trust, the age of the oldest child must be used to calculate the RMD. In multiple "pass-through" trusts, the age of each beneficiary may be used.
That assumes that the IRA is payable to the separate trusts.

Also, most likely, if a child dies without leaving any issue, and without exercising his/her power of appointment, the balance of his/her trust will go to the other children, or will be added to the other children's trusts. In that case, the stretch for each trust will be limited to (at most) the oldest child's life expectancy.

There's an exception for a conduit trust, in which all of the distributions from the IRA have to be paid out on a current basis. However, conduit trusts rarely if ever make any sense, so we can ignore them for purposes of this discussion.
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Re: Vanguard National Trust Company?

Post by dr_g »

http://www.forbes.com/sites/deborahljac ... d-to-know/

The link above descibes this issue, including a quote by Mr. Steiner.

My view is this:
The separate stretch horizons provide values to my estate, hence multiple trusts.
Since the RMD will probably not match the intended distributions, an accumulation type of trust may be more appropriate in spite of the unfavorable tax consequences.
Regardless if the trust is conduit or pass-through, the main goal is to maximize the stretch, particularly for Roth assets.
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Vanguard National Trust Company

Post by shawcroft »

Eric wrote:BTW, you may find this site to be of interest. Among other things, it indicates that Vanguard's trust company had about $700 million under management in "personal trust and agency accounts" as of 12/31/2010. (The trust company's total assets under management are much higher, as it also holds funds under employee benefit plans and other arrangements. But that's a different kind of role.) There were a total of 540 managed personal trust and agency accounts. So it looks like the average account size is about $1.3 million. (Assuming I'm reading all this right -- please do your own due diligence and confirm with Vanguard if it's important to you.)

The number of accounts seems small, but the trust company began operations only about a decade ago so there hasn't been a lot of time for testamentary appointments to take effect.
I was reviewing this long-lived thread to see if any new comments had been added- and came across Eric's post. From the link in his message, it now appears VNTC ( as of 9/30/2014) has about $1.725 Billion in managed assets for 885 accounts - up a Billion dollars from 12/31/2010 and suggesting an average account size of $1,950,000 ( if my math is OK) -an increase from the average account size of $1.3 million Eric mentioned in his earlier post.
In view of this growth in the Trust Company assets, is there (are there) any recent experience(s) with the Vanguard National Trust Company that Bogleheads can report?
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Re: Vanguard National Trust Company?

Post by Cyclesafe »

I don't know if this is helpful or not, but we just had a "review" with our Flagship rep, CPF, VNTC, and Vanguard's estate planning department. Our issues were that our RL trust was 10 years old, made in another state, and we had a few thoughts about changing the terms of the trust after our demise.

VNTC told us that Vanguard would refuse the trust unless it was expected to continue after our deaths. Apparently, the trust as written to distribute assets immediately upon both deaths was no longer acceptable to them. Somehow it "slipped" by. Oh well, better to know now. They recommended that we see an estate planning attorney in our new state to address the issues above.

Last week we had a meeting with the attorney and after being willingly qualified as having a potential estate of sufficient size, the attorney told us that it was "unheard of" for a co-trustee to limit their involvement solely to non-real estate financial matters. She instead recommended a local trust company who "might" work with Vanguard on the financial stuff, but would then handle everything else. To restate our trust, she quoted something between $8 and 12k. My wife, who has been getting free legal advice from me, blew the meet by laughing in the attorney's face.

So we're back to Square One.

The plan now is for me to restate the will and construct a scheme acceptable to Vanguard where the trust after our demise will provide funds for long-term care and education for named persons with the remainder going to charity. This will allow us to assert our values on our relations while ensuring VNTC's involvement. If I keep it simple, nobody gets hurt. We have no children and the beneficiaries mentioned will be very surprised by our largesse. A private professional fiduciary co-trustee (along with VNTC) will be needed to handle the messy managed care bits as no relative will do this for us.
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Re: Vanguard National Trust Company?

Post by NMJack »

(new to the forum)

I realize this is an old thread, but the info is very useful. As an update, it looks like Fidelity's fees have dropped significantly.

https://fiws.fidelity.com/app/literatur ... 910899.pdf

I'm very interested in the "agent for trustee" service as opposed to the full blown "administrative trustee" (i.e. Fidelity acting as full trustee).
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