FAQs: Answers to Frequently Asked Questions

Peak Trust Company is for estate planners looking for a professional trustee, who want reliable and accessible expertise
to help them with their client’s complex trust plans.

Peak Trust Company offers the experience and sophistication to help you quickly and accurately establish trusts, backed
by easy-to-use ongoing trust administration.

Unlike traditional banks and trust companies, at Peak Trust Company, your trust is our core business.

We provide a highly customized delivery process tailored to your specific needs and an unbundled service structure;
providing everything you need but only what you want.

Peak Trust Company sets itself apart from other providers by offering superior quality and service.

1. At Peak Trust Company you get direct access to and prompt responses from decision makers empowered to provide
   the outcomes you need. There’s no red tape, unnecessary compliance hurdles, or unexpected delays.
2. Peak Trust Company delivers with ease and certainty. We are easy to work with, we have the best new account
   opening process and there are no unnecessary compliance hurdles. Our easy ongoing trust administration and
   tailored personalized service gives you everything you need. When you call in, you’ll get directly to someone on
   your dedicated team who is familiar with your account and situation.
3. Unlike traditional banks and trust companies, at Peak Trust Company, serving your trust needs is our focus. Peak
   Trust Company was involved in the creation of the first modern trust legislation that laid the foundation for
   today’s sophisticated trust planning techniques; no one has worked with these techniques longer than we have.

The trustee is responsible for faithfully discharging duties outlined in the trust document. The terms of a trust are
set by the grantor in the trust document when the trust is established.

Trustees can be responsible for any combination of managing trust assets, making distributions, maintaining trust
records, hiring legal counsel and other professional services on behalf of the trust, arranging for the completion of
trust tax returns, paying trust bills, coordinating care of an incapacitated or disabled beneficiary and more.

Trustees are held to the highest legal standard of care to administer the trusts in their care for the best interests of
the beneficiaries in accordance with the grantor’s intent. The terms of the trust determine any specific duties that a
trustee has in addition to any general duties required by local, state, or federal law. The trustee or trustees take on
the responsibility for all decisions and management aspects of the trust in accordance with the terms of the trust and
the grantor’s intent, for the benefit of the beneficiaries.

Using a professional trustee in a preferential trust jurisdiction, enables grantors and beneficiaries located anywhere
to take advantage of the best trust laws in the state of the trustee.

Individuals named as trustee that are friends or family members may find themselves in difficult positions when the role
of family member, co-beneficiary, and/or trustee presents a conflict of interest.
A fiduciary position carries with it many requirements including the duty of loyalty and the duty to report to
beneficiaries.

Many individual trustees do not realize the full extent of the responsibilities of being a trustee and
may inadvertently open themselves to a significant amount of liability by unintentionally failing to perform all their
fiduciary obligations.

Individual trustees are not subject to any regulatory or audit oversight, whereas corporate trustees are periodically
examined by independent auditors and regulated by either state or federal banking regulators. Professional trustees are
also subject to liability insurance and bonding requirements.

• See all services offered
  • • Trustee Services
      • Traditional full trustee services (fully managed)
      • Directed trustee services (non-managed)
      • Bifurcated/Trifurcated trustee services
      • Delegated trustee services
    • Self-Directed IRA and Custodial Services
      • Custodial services for self-directed IRAs (Individual Retirement Accounts)
      • Custodial services for LLCs and LPs
      • Custodial services for non-traditional assets
      • Bill pay for custodial accounts
    • Irrevocable Life Insurance Trust and LLC Administration
      • Private placement life insurance policy administration
      • Irrevocable Life Insurance Trust (ILIT) administration
      • LLC administration for life insurance
    • Trusteed IRA
    • Donor-Advised Fund
    • Personal Representative Services
    • Private Foundation Services
    • Family Legacy Planning

We can administer trusts that hold a wide range of asset types, including non-traditional assets. We can administer
trusts with almost any type of asset.

We can hold many non-traditional assets in trust and LLC accounts, including closely held business interests, real
estate, and life insurance.

Generally speaking, some assets like real estate may need to be placed inside of an LLC or LP prior to placing in trust.

All trust assets need to be titled in the name of the trust (e.g., Peak Trust Company, Trustee of the Jane Doe Family
Trust).  That includes brokerage accounts checking accounts, LLC Memberships, etc.

Any asset that needs to be in the trust isn’t “in the trust” until it is titled to the trust (or the LLC/LP).

Real property will often need to be transferred into an LLC/LP of which the trust is the member. Any property held by an
LLC/LP will need to be titled to the name of the LLC/LP.

Placing assets in a corporate structure, such as an LLC or LP, then placing that asset (the LLC) inside a trust is a
common scenario and Peak Trust Company’s team of experts are well-versed in how to work with this type of asset. The
state in which the LLC or LP is established oftentimes charges a nominal initial filing fee and annual fee.

Sometimes trust assets are best held inside of a corporate structure, such as an LLC or LP inside of the trust. A few
examples of when this may be appropriate are:

• When the trust asset is real property that is outside the trust jurisdiction (Alaska or Nevada).
• Real estate is often best held in an LLC for additional protection.
• When the asset needs to be physically held in the state
• When the trust document does not provide for separation of trustee duties and an outside manager is to invest
  and manage trust assets.
• When a client wants greater investment control without acting as a fiduciary.
• When the client may want the entity valued for discount purposes.

If the trust document provides for the separation of duties, Peak Trust Company can serve in conjunction with another
party. Peak Trust Company often serves as trustee for directed trusts in a limited role with another party (such as an
outside advisor) responsible for investment of assets. If the trust document does not provide for separation of trustee
duties, Peak Trust Company will not generally serve as trustee in a traditional delegated structure, however, Peak Trust
Company may be able to help find a solution, such as by placing the assets to be managed by an outside advisor into an
LLC inside of the trust. Peak Trust Company may be able to serve as trustee in this circumstance.

A trust officer must review the trust documents and other associated documents, prior to proposing fees and accepting a
new trust. Once the trust document has been reviewed, the trust officer will communicate with the client or attorney on
whether we can accept, and if so, what fees would apply. After acceptance of the quoted fees, and receipt of all
necessary Peak Trust Company documents (NAOF, etc.) and trust document (adequate indemnification, understanding of
intent, etc.), Peak Trust Company will execute the trust document and assume the appropriate role. Peak Trust Company
will work with the client or advisor to transfer trust assets into Peak Trust Company custody as applicable.

Requests for discretionary distributions must be made in writing (email is sufficient). The request doesn’t need to
long, but should include any and all supporting documentation and most importantly, rationale for why the distribution
should be considered. Essentially, the request should describe why the distribution makes sense, in accordance with the
terms of the trust.

If it is a “grantor trust” for income tax purposes, the beneficiary will not have any tax liability.

If a “non-grantor trust,” the beneficiary may be taxed on distributions from the trust.

The tax liability for distributions will be calculated based on the beneficiary’s state of residence. A beneficiary will
receive a K1 for any year in which they receive trust distributions. The K1 will show the calculations for what must be
included on the beneficiary’s personal tax return. State tax will apply based on the beneficiary’s state of residence.

Trust taxation is a complicated matter and should be discussed with a seasoned tax advisor for the correct answer for
each individual situation.

The trust document will outline what is required to invest trust assets, who is responsible, and any applicable
restrictions.

For a directed trust, the party with investment authority must give Peak Trust Company investment direction in writing
for any trust assets.

If Peak Trust Company has investment authority, Peak Trust Company will make investment decisions based on the terms of
the trust document and facts and circumstances of the relationship, e.g., type of assets, beneficiary needs, etc.

Both Alaska and Nevada have similar statutes, both being top trust jurisdictions. The choice of one over the other comes
down to what a grantor is trying to accomplish with the trust and the preferences of the client and the attorney.

Alaska statutes (AS 13.36.035) require an Alaska trust to:

• Have at least one trustee residing or located in Alaska
• Have the trust records physically held in Alaska
• Have portion of the trust administration performed in Alaska
• Have a portion of the trust assets physically held in Alaska
• Be registered with the Alaska courts

Nevada statutes (NRS 166.015) require a Nevada trust to:

• Have at least one trustee residing or located in Nevada

• Total of $8 billion assets under administration (non-managed)
• Total $350 million of assets under management (actively managed assets)

Peak Trust Company, formerly the Alaska Trust Company, began operations in 1997 after the passage of the Alaska Trust
Act which was the first legislation to allow for several new age sophisticated planning techniques. The founders of Peak
Trust Company were heavily involved in the creation and passing of the Alaska Trust Act. Peak Trust Company was the
first professional trustee to administer trusts under modern sophisticated trust laws. No other trust company has the
length or depth of specialized knowledge in modern sophisticated trust administration as Peak Trust Company.

An independent trust company is one that is not affiliated with a bank or an RIA (registered investment advisor).
Independent trust companies typically only provide fiduciary services (including trusteeship), not retail banking
services such as depository services or lending. Unlike big banks, at Peak Trust Company, trust administration is our
core business, not merely a value-add to support other core business lines, such as private banking or money management.
This empowers us to offer our services with ease, sophistication and without unnecessary red tape that is a common theme
in working with bigger banking institutions. Being an independent trust company with trust services as our core focus
allows us to preserve a close and personalized nature of business with all the clients and advisors with which we work.
Further, unlike a depository institution, an independent trust company’s capital is separate from its clients, no funds
are commingled. Client assets are never exposed to creditors of the independent trust company. At a depository
institution, the client’s assets become capital of the bank and are exposed to the bank’s creditors. This is the reason
for FDIC insurance which provides coverage up to $250,000 per account for depository institutions. However, if Peak
Trust Company, as an independent trust company, were to go out of business, the trust (or other account) would be whole
and intact, albeit trusts would require a new trustee.

Peak Trust Company is a highly-regulated financial institution with offices in Alaska and Nevada and undergoes at least
three independent examinations each year, in addition to financial audits. These examinations test and evaluate our
policies, procedures and dual controls all of which are designed to protect client assets and adhere to best practices.
Further, unlike a depository institution, an independent trust company holds its capital separate from its client’s
assets, no funds are commingled. Client assets are never exposed to creditors of the independent trust company. The
company books and records are managed in a separate accounting system from fiduciary assets.