The Practical Planner Podcast

Episode: Corporate Trustees with Special Guest, Christopher Holtby
Date: December 3, 2025
Hosts: Thomas Kopelman (B), Anne Rhodes (A)
Guest: Christopher Holtby (C), Trust Company Executive

Episode Overview

This episode dives deep into the sometimes-overlooked world of corporate trustees: When and why should advisors and their clients use a corporate trustee instead of an individual? What strategic benefits do the best trust jurisdictions actually provide? And how do practical considerations like taxes, asset protection, and family dynamics shape trustee decisions? Special guest Christopher Holtby brings decades of trust company experience to a candid conversation, empowering advisors with actionable takeaways for more effective estate planning collaboration.

Key Discussion Points & Insights

What Do Trustees Actually Do?

• Christopher Holtby breaks it down (01:22):
  • Trustees (corporate or individual) perform four core duties:
    1. Manage money
    2. Distribute money
    3. File tax returns
    4. Handle other administrative matters
  • Many advisors prefer corporate trustees who focus on distributions, taxes, and administration—leaving investment management to the financial advisor.
  • The core responsibility is ensuring fiduciary compliance: “So it's all about who gets the money, when, why, where and how. And that's called a discretionary discussion.” (C, 01:49)

When Should Clients Consider a Corporate Trustee?

• Typical triggers (02:57–05:10):
  • Blended families
  • Potential for a beneficiary to squander wealth (e.g., sudden wealth situations)
  • Lack of a trustworthy/knowledgeable individual in one’s circle
  • “Once you get over $10 million, that's when you see corporate trustees being used more and more often.” (C, 03:41)
  • Tax and asset protection needs grow with wealth—for complex tax planning, an independent, non-family trustee may be necessary to avoid adverse consequences.

Trust Jurisdictions: Why They Matter

• State law governs trust advantages (13:10):
  • The “Magic Seven” states: Alaska, Nevada, Wyoming, South Dakota, Tennessee, Delaware, New Hampshire—chosen for favorable trust laws, tax benefits, and trust longevity.
  • “They allow the separation between the trustee doing the boring work and the advisor being able to manage the money. They...don't have state income tax or state capital gains tax. Trusts last forever.” (C, 13:14)
  • Innovation “W” effect: Nevada and South Dakota lead due to legislator-mandated trust task forces constantly updating statutes (C, 13:50–16:53).
  • Wyoming Exception: If you have “a family with $400 million in one asset...best state...is Wyoming” due to lower regulatory requirements for private trust companies (C, 14:56).
  • South Dakota’s unique privacy: “It’s the only state...where if you go to court to make a change [to a trust] it's never recorded ever. And it's in the state constitution…” (C, 18:01)

Selecting a Trust Company: Criteria and Pitfalls

• Key considerations (07:44–09:13):
  • Independent vs. institution/custodian-based trust companies
  • Portability: advisors want flexibility if they change custodians
  • Time and attention: how many trusts per trust officer? Personalized guidance or “rushed, saying no too quickly” service?
  • Fees are typically similar—focus on service approach, not price alone.
  • “The only thing a trust company has to offer is time.” (C, 08:09)

Individual vs. Corporate (or Professional) Trustees

• Family, friends, and professional individuals (09:13–12:01):
  • Friends/family are often chosen for lower net worths, but issues arise due to relocation, incapacity, lack of legal/financial sophistication, or family conflict.
  • Neutral individual professionals can serve in contentious family settings.
  • For ultra-high-net-worth clients, corporate trustees become essential for asset protection, tax reasons, and jurisdictional strategies.
  • Attorneys and advisors should collaborate on trustee selection, considering both technical capability and long-term family governance.

Directed vs. Delegated Trusts (25:24)

• Key difference:
  • Delegated Trust: Trustee delegates investment management; shares fiduciary liability—often costs 20–30% more.
  • Directed Trust: Trust document directs the trustee whom to use for investments; the trustee has no liability for investment decisions beyond the grantor’s instructions.
  • “So that's the difference between directed and delegated.” (C, 25:24)
• Co-trustee models: Increasingly popular, allowing families to blend professional and personal oversight and build beneficial habits for future generations.

Family Dynamics & Planning for Longevity

• Advisors must help clients think beyond wealth thresholds (29:37):
  • Situations include sibling rivalry, an heir facing special challenges, single high-net-worths, or lack of suitable family trustees.
  • A plan, rather than a rigid budget, provides a sustainable framework for distributions and longevity. “If you stay away from a budget, but you focus on the plan...then you've got that really long-term benefit cooking.” (C, 31:11)

Practical Advisor Takeaways (32:18–33:36)

• Review top clients’ successor trustees.
  • If a friend or family member is named, build a relationship or consider advocating for a professional trustee who keeps you involved.
  • If a competing corporate trustee has a named role, encourage a switch to trustee models that won't sideline the advisor.
• Advisors can and should manage investments for trusts requiring corporate trustees—make this known to centers of influence.
• “Don't get hung up on one of the seven states...Focus on the why. Why this trust company? Why do they exist? How do they think?” (C, 33:13)

Notable Quotes & Memorable Moments

• On practical trustee duties:
  “A trustee, whether it's an individual or corporate trustee, can only do four things, manage money, distribute money, tax returns and other administrative issues.” (C, 01:22)

• On using a plan, not a budget:
  “I don't want to do a budget. I don't even know beneficiaries wants to do a budget...My wife gives me a plan...I can do a plan.” (C, 21:03)

• On jurisdictional privacy (South Dakota):
  “South Dakota is the only state in the country that if you go to court to make a change, it's never recorded ever. And it's in the state constitution, not trust, statute, state constitution.” (C, 18:01)

• On custom trust building:
  “A trust document is almost like a Legos. You can pull in and out different parts of the Lego and it can be adapted.” (C, 28:26)

• On institutional vs. independent trustees:
  “It's never fees because everyone's going to be pretty close. So it's really is how does the advisor not get embarrassed?” (C, 08:36)

• On selecting co-trustees and building “muscle”:
  “It's about developing this...reflexive muscle so that this family, every single one of the second, third generation, are used to working with professionals in this space.” (A, 27:43)

Timestamps for Key Segments

• [01:22] – What trustees actually do
• [03:06] – Net-worth thresholds and when to use corporate trustees
• [04:02] – Tax law triggers and independent trustees
• [13:10] – “Magic Seven” trust states and evolving state law
• [14:56] – Wyoming’s unique role for single-asset, family offices
• [18:01] – South Dakota’s privacy advantage
• [21:03] – “Plan vs. budget” in distributions
• [25:24] – Difference between directed and delegated trusts
• [27:43] – Building family stewardship and professional habits
• [32:18] – Advisor action items for protecting relationships and assets

Tone & Style

The conversation is candid, practical, and collaborative—offering both concrete estate planning tactics and context-clarifying stories. The speakers are warm, knowledgeable, and focused on providing actionable advice for real-world client situations.

Summary Takeaways

• Choosing between an individual and corporate trustee is about more than net worth—it involves family structure, tax complexity, asset protection, and long-term stewardship.
• The best trust structures balance professional trustee oversight with advisor involvement, using state law and co-trustee models to optimize outcomes.
• Advisors should proactively audit successor trustees for their top clients, stay engaged even when a corporate trustee is involved, and focus on value and philosophical alignment, not just fees or state location.