Unlike a directed trust, a delegated trust is one where the trust instrument names a single trustee with authority over both investment, distribution, and administrative decisions. When serving as trustee of a delegated trust, the trustee is responsible for appointing a non-trustee investment advisor to manage the investment of trust assets. The trustee retains control over distribution activities and will perform all necessary distribution duties.

Delegated trusts are generally existing trust documents that do not contain indemnification or bifurcation language that allows for the separation of responsibility, but where the beneficiaries still want a non-trustee advisor to manage the trust assets. With a delegated trust, Peak delegates the management of trust assets to an investment advisor. Such delegation is a fiduciary duty undertaken by Peak and thus it must proactively monitor the advisor’s performance according to the requirements of the trust and relative to industry standards. In a delegated trust scenario, Peak’s liability is tied to its appropriate selection and oversight of the advisor. In addition, all delegated trusts are invested pursuant to the provisions of the trust document as well as an agreed upon Investment Policy Statement with Peak as trustee and the investment advisor.

Note: The information provided here is for general educational and informational purposes only. It is not legal advice and should not be interpreted as such. For a thorough understanding of these topics relevant to your specific circumstances, we recommend consulting a qualified estate planning attorney. Peak Trust Company cannot provide legal advice; however, we can serve as an informational resource and provide referrals to highly skilled attorneys who can offer legal and tax guidance tailored to your specific needs.