Trusts - Trust Services
Marin County, San Francisco North Bay, Ca. USA

level. Fiduciary tax law is both federal (see the Internal Revenue Code) and state.

Trustees may be competent individuals or state or federally chartered corporations with trust powers (usually banks). Typically bank trustees will have integrated their fiduciary organization into their investment management or private banking groups.

It is not unusual for an individual to serve as trustee alongside a bank trustee: they are typically called "co-trustees." Both individual and corporate trustees may charge fees for their services, although individual trustees typically serve gratis when part of the settlor's family or the settlor him/herself. The term "co-trustee" may and typically will fool either the bank trust officer or the individual co-trustee into thinking their roles are identical. Both should read the document carefully. If the roles are not further defined in the document, then their roles are legally the same. As a practical matter however, the corporate trustee will nearly always do the custody work and keep the books. But many documents will give the individual co-trustee powers that differ from the corporate trustees. For example, the individual co-trustee's rights and duties may be limited to dealing with discretionary distributions of principal and income, sale of a personal residence held in the trust, or sale of a heartstring asset.

Note: in the context of bank trust organizations, references to the "co-trustee" are nearly always to the individual trustee.

Ever fewer American banks serve as trustee, as litigation costs rise. For most banks trust services are not profitable. For large and effective trust organizations a trust organization properly integrated into a private banking and investment division can be quite profitable.

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