6 Advantages Of An Advisor Directed Trust

advantages advisor direct trust estate management

There are many different kinds of trusts that you could employ to grow and protect your estate. If you are looking for a customizable option, then a directed trust may be exactly what you need. Here are 6 advantages of a directed trust that you should be aware of as you consider if it is the right fit for you.

1. Provides for Specialized Management

The key feature of an advisor directed trust is that it allows you to choose a different specialist or advisor for each management role within your trust. Essentially, you are dividing up the role of the trustee.

For example, you can choose one person to manage the administrative duties of your trust and another to manage investments. This ability lets you take advantage of having multiple specialists working to optimize the effectiveness of your trust.

2. Allows for a Trust Protector

Designating a trust protector allows you to change the trust over time to protect your wealth as your estate changes. He can also provide oversight of your advisors’ decisions and ensure that your trust continues to be appropriately managed after your death.

A trust protector, in most cases, will only intervene in cases of poor management or if other risks to your trust exist that require an amendment to be made to the trust. Additionally, a trust protector is pivotal if there is a disagreement on terms in your trust, or an interpretation of terms in your trust is needed.

3. Adapts To Changing Complexity

A directed trust is designed to have each of your advisors focus on maximizing a specific area of your trust. This can encourage better adjustments to your trust over time if the status or complexity of your estate changes over the years.  

Adaptability within directed trusts is increased when you employ a trust protector. In this capacity, a trust protector can remove and hire advisors as the needs of your trust change. The trust protector can even terminate the trust if it is in your best interests.

4. Encourages High-Quality Management

The different areas of your directed trust can be managed with more agility and attention because there are multiple professionals focused on a single aspect instead of one trustee juggling various priorities. By having this high level of control and specialized knowledge focused on the success of your trust, you can maintain a high degree of quality management for the long term.

5. Supports Specific Wealth Outcomes

If you have the desired outcome for the long-term wealth of your estate, a directed trust can help you strategically plan to achieve that outcome. Over time, your choices in quality advisors who understand your goals can help you fully realize your wealth potential.

6. Long Term Solutions For Estate Planning And Wealth Management

Directed trusts allow you the freedom to create a trust that protects your wealth based on your vision. If you foresee complicated changes in your estate and want to control the type of management your trust will have over time, it may be worthwhile to explore directed trusts as a long-term solution for your wealth management.