A look at Vanguard Trust Services

Vanguard Trust Services is a key component of our Flagship Select Wealth Management offer. Ryan Gager explains how Trust Services offers support ranging from administrative duties to asset protection. He also explains how we can help fulfill legacy wishes and minimize taxes.

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TRANSCRIPT

Gary Gamma: Now I’d like to point out that today’s webcast is the second of four sessions devoted to the six pillars of the Flagship Select Wealth Management offer. Ryan, can you tell the audience a little bit about the role that Trust Services plays in that offer.

Ryan Gager: I’d be glad to. Hopefully the audience can see that the six pillars on the screen right now and, I’ll admit, I’m probably a little bit biased, but I do love the Trust Services pillar. I think it’s not only a key component to the Flagship Select offer but also to our Advice offer in the Personal Advisor Services.

And I think there’s a real obvious and simple reason for that. It’s important and key to those offers for Vanguard, simply because it’s important to our clients. I think the three of us see all the time when we talk to clients, I certainly saw when I was in practice as an attorney, and I think we see from the response to this webcast that clients care about this topic.

We know that clients find Trust Services to be a useful tool in their wealth and estate plan. Now, clients have different reasons why they are interested in trust, why they find it to be useful. For some clients, it’s because trusts help make it easier for them to administer their assets, whether as an alternative to probate after their death or an alternative to guardianship while they’re still alive but no longer have the ability to manage their assets, or even just for inexperienced money managers. Sometimes after a spouse who has always run the finances before has passed away and the surviving spouse is left to manage things, if they’re not used to managing assets, trusts can be the vehicle to help them do that.

For other clients, it’s not about administration, but it’s about asset protection. Whether we’re talking about concerns for beneficiaries who might be spendthrifts, don’t know how to use and spend money, or concerns over divorcing spouses that could cause problems for someone, or even just having beneficiaries that are in high-risk professions that could be targets for lawsuits, trusts can be a way to provide some asset protection for those beneficiaries.

And then still for other clients, it’s really about influencing the future. It’s a way to carry on your legacy after you’ve passed on. And that legacy can take different forms. Some clients are really interested in making sure that their children, grandchildren, and future generations have money to go to college, so education’s really important to them. They want something in place to make sure that that legacy of education carries on.

And still for others, it’s about fulfilling charitable pledges and making sure that happens, so trusts are very flexible to meet those types of goals.

And then finally for some clients, it’s about saving tax dollars. There’s a number of techniques that clients can use with a trust to make sure they minimize the taxes that are paid. So when you think about those different goals that trusts help clients accomplish, it’s no surprise that it’s important to them and, therefore, it’s important to Vanguard.

Gary Gamma: James in Iowa says interested in learning what trust services Vanguard has.

Erin Zavislak: Absolutely. I think Alisa really touched base on one of the key points earlier where we can serve as a current trustee, either on our own or in conjunction with a trusted professional or family member. I really personally, I enjoy that arrangement because it allows me to have, I would say, a warm-up period with the family and the beneficiaries. And I benefit from that, working alongside an individual in a co-trustee relationship. Ryan, would you like to expand a little bit about-

Ryan Gager: Yeah, absolutely. So, first of all, James, thank you for the question, right. I love to get this question. I’m a little bit biased, as I’ve said, getting to lead our Trust Department here at Vanguard. But we provide a full service corporate trustee offer at Vanguard, and what does that mean, right?

As Erin said, that means we can be a sole trustee, we can be a co-trustee with someone else. But, essentially, we’re able to provide investment management for the trust through our Personal Advisor Services platform. And we’re also able to discharge all the administrative duties of the trust. We’re talking paying the taxes, keeping the principal and income accounting, interpreting the trust instrument, making sure beneficiary distributions are made, really everything that needs to be done complying with state law which is, I think, a lot of value for our clients.

For other clients, they may not need those full trustee services. They may feel comfortable discharging all the other things that we look to the Erins of the world to do and who do it so well. But they may feel like they can do that, but they still need a little bit of help with the investment management. And in those cases, we can provide investment management for the trustee, where an individual trustee engages Vanguard again through our Personal Advisor Services platform to help them make the investments for the trust, which I think is important.

And then, finally, a lot of clients get peace of mind by naming Vanguard as successor trustee. They may not be ready for a corporate fiduciary right now. They may be handling all the duties themselves, but sometime in the future after they’re no longer able to do that, they want the comfort of knowing that a company like Vanguard with its reputation and committing to always put the client first, they want to know that that is a backstop for their plan, that Vanguard will be able to step in and take care of whatever needs to be done at that time.

Important information

All investing is subject to risk, including possible loss of principal.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.

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