By: Barry G. Allen-President & CEO
Many banks, especially the large banks, no longer desire to serve as the trustee of “small trusts.” These banks have different definitions of “small trusts.” Sometimes a larger bank becomes the trustee of a “small trust” as a result of a merger or acquisition of a smaller bank. The primary reason a bank may no longer desire to serve as trustee of a “small trust” is it no longer is cost effective for the bank or the beneficiary of the trust. As a result, it is in the best interests both of the bank and the beneficiary to find a successor trustee that can manage it cost effectively. The successor trustee must be approved by the district court.
The KBF is available to serve as the successor trustee of such “small trusts” if the beneficiary is a Baptist organization or a charitable organization with Christian purposes as determined by the KBF board.
There have been several instances in the past, and we expect in the future, where the bank trustee and the beneficiary(s) have petitioned the district court to name the KBF as the successor trustee, and the KBF has accepted gladly this fiduciary responsibility. In addition to our positive investment performance, the KBF applies a Christian-based social screening policy to all individually-owned securities, and our costs are below the market.
If your church or other charitable organization with which you are affiliated is the beneficiary of a trust for which the costs are consuming a disproportionate amount of the distributable earnings, please give us a call. It is possible the trustee would be happy to know there is an alternative like the KBF.
If your church or other charitable organization is contacted by a bank to inform you of its intent to resign as the trustee due to the “small” size of the trust for which the organization is the beneficiary, please make sure the bank knows about the KBF as an alternative to be the successor trustee.
Every dollar the KBF can save in trustee expenses is a dollar more for kingdom advancement. So, keep your eyes and ears open for opportunities for the KBF to be the successor trustee of “small trusts,” and let me know when you discover one. Grace and peace!
For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.