Trust Management Services - Establishing a Legacy

Trusts are a great way to provide for your loved ones in the future while also providing substantial tax benefits in the present. However, they are often extremely complex in their drafting and execution. They carry many different structures than individual and retirement accounts and often have different tax rates. If they aren’t structured correctly, they can become subject to very high taxation. Heritage Investors can help you from start to finish with our trust management services. We will manage the portfolios within the trust, ensuring that they align with the wishes of the grantor in relation to the trustee.

Goal-based investing is essential to your financial future. That is why we take the approach that we do with trust management. We align the financial markets to your specific financial, tax, and risk management goals. Our team works relentlessly, researching quality investments that we believe will garner you the highest possible returns with the lowest possible costs. Managing the investments within your trust is as important as it is within your personal investment portfolio. That’s why Heritage Investors treats them with the same care and individual service. When you place your trust in our trust management services, you can rest assured that you’re in good hands.

The Trust Management Process

Heritage begins the trust management process by getting to know you, the grantor. We will have a short phone meeting, typically about one hour, to discuss your goals and to determine how feasible they are. Once we have an idea of what you want from your trust, we will quantify ways of making those goals a reality.

After our initial phone meeting, if we agree that moving forward is in each other’s best interest, we will have you fill out our profile questionnaire and request select financial information. We will send you a list of the items we need, which may include any investments, your tax returns, insurance, budget, etc. Having this information as soon as possible will allow us more time to be able to review and possibly ask you to bring additional information that might be needed. The purpose of having this information is to be able to make informed decisions in the managing of your investments within the trust and to ensure that we are getting the greatest tax benefit possible.

In order to gain access to your existing accounts, you will need to fill out an Engagement Agreement (fiduciary agreement). This paperwork is required for us to begin the process of opening your new accounts and transferring the funds to them.

Upon completion of all paperwork, the Engagement Agreement will be sent to our custodian TD Ameritrade, accounts will be opened, and funds transferred in. After the funds are deposited, you will receive login information to all online portals allowing you access to all your accounts.

Please note, the transfer of funds can take as little as three days, or as long as two months. In addition, all funds will be housed at TD Ameritrade, not Heritage Investors.

At this time, we begin reviewing the investments within your trust, ensuring that they match your risk tolerance level and align with the goals you previously identified. We will also examine the quality of the trust’s investments to see if there is room for improvement within the underlying holdings. Taking the data from your statements, we enter it into our systems to see if it can be improved. Is there a cost improvement? Can we get the same allocation at a lower cost? Is there a quality improvement? Are there higher quality, higher ranking assets we can buy in the same class?

After examining the current state of the investments, we often need to make adjustments. An adjustment means rebuilding the portfolio and buying new assets. This may potentially mean a complete overhaul of your portfolio, or we may need to make tactical moves if there are issues like tax constraints. The goal is to protect your wealth and to minimize your tax obligation.

Once we have made any necessary adjustments, we will regularly monitor and review your holdings. We utilize years of experience, expertise, and target-band rebalancing to make sure that your trust is reaching its full potential.

As part of our trust management service, we will host semi-annual review meetings to keep you up to date with any and all changes or adjustments we’ve made, as well as their results. During this review meeting, we will also discuss any changes that you might have experienced, ensuring that your current goals and our trust management strategy are still in alignment.

Heritage’s Trust Management Fee Structure

As with everything we do, clarity and transparency is a hallmark of our service… our fees are no exception. Being upfront about the fee structures is just one of the many ways we feel your trust is gained.

Here at Heritage Investors, we manage your accounts in a fee-only arrangement. This means we are not paid by commissions, sales or transaction charges, revenue sharing, kickbacks, or other compensation schemes in the management of your investment accounts. We feel this is important because it means we are paid according to your account’s growth, not by selling you services or options you don’t need in order to earn a commission.

Clients new to Heritage Investors will be assessed two different fees: Fee’s based on the total assets under management (AUM) and technology fees. The specific amounts of these fees will be clearly communicated during our initial meetings.

Estimated Trust Management Fees:

To give you an idea of what you might expect to pay, here are five blended yearly rates based on our fee schedule:

Assets Under Management Blended Fee Schedule

Actual Trust Management Fees:

The actual ongoing management fees* based upon assets are as follows:

For Example:

• $300,000 in Assets Under Management = $3,550 per year (1.20% on $250,000 + 1.10% on $50,000)
• $2,000,000 in Assets Under Management = $20,350 per year (1.20% on $250,000, + 1.10% on $350,000, + 1.0% on $900,000, + 0.9% on $500,000)

These management fees are paid pro-rata in January, April, July, and October, in advance at the beginning of each billing period and are assessed based upon the account asset value(s) on the last business day of the previous billing period. When an account is established, the management fee is charged for the remainder of the current billing period and is based upon the initial contributions. Some transaction fees are passed on to our clients and could be higher in the first year as our strategy is implemented.

* The fee schedule above is for new individual clients of Heritage Investors, LLC., who meet the minimum asset management requirement and who are assigned a Heritage Investor Advisor to assist them with discretionary investment management services. This fee schedule or institutional/401(k) management or other ancillary business areas at Heritage Investors differ from the aforementioned fees.