The Practical Planner Podcast: "Corporate Trustees with Special Guest, Christopher Holtby"

Date: December 3, 2025
Hosts: Thomas Kopelman & Anne Rhodes
Guest: Christopher Holtby – Trust Company Executive

Episode Overview

This episode deep-dives into the practical considerations, benefits, and potential pitfalls of selecting a corporate trustee versus individual trustees in estate planning. The hosts and their guest, Christopher Holtby, focus on how advisors can better guide clients through trust and trustee selection, highlighting tax implications, state law nuances, client psychology, and family dynamics.

Key Discussion Points and Insights

1. What is a Corporate Trustee and Why Hire One?

• Definition & Functions:

  • Corporate trustees, as opposed to individual ones, professionally handle trust administration without managing the underlying investments (00:45).
  • Core trustee duties: “A trustee... can only do four things. Match money, distribute money, tax returns and other administrative issues.” (C, 01:22)

• Advisor Collaboration:

  • Good corporate trustees work collaboratively, reading the trust documents, making discretionary decisions, and incorporating advisor input (01:50).
  • “So it's done in a collaborative way. So the beneficiary or the client's advisor sees sort of one thought leader without it being confusing and... like a plate of spaghetti.” (C, 01:59)

2. When Should Clients Use a Corporate Trustee?

• Situational Factors:

  • Used more with blended families, sudden wealth, lack of trustworthy relatives, or as trust sizes increase (02:58).
  • “Ann has seen this sort of 2 to 10 is that gray zone where now you're deciding, do I want my cousin... let alone know how taxes work...” (C, 03:20)

• Wealth Thresholds:

  • Under $2-3 million: typically friends or family.
  • $2-10 million: “gray zone”—question of sophistication and reliability.
  • Over $10 million: “that's when you see corporate trustees being used more and more often.” (C, 03:37)
  • Tax planning becomes critical at higher levels ($10 million+), often requiring an independent trustee for compliance (A, 03:52).

3. Tax Considerations & Trustee Responsibilities

• Corporate Trustees & Taxes:
  • Typically responsible for tracking, reporting, and coordinating with external CPAs for taxes, especially for larger trusts (B, 06:11; C, 06:34).
  • For the very largest trusts ($15M-$30M+), clients may engage personal CPAs to coordinate complex needs.

4. Choosing a Trust Company: Key Criteria

• Choice of Institutional vs. Independent:

  • Advisors can pick custodian trust companies (e.g., Schwab, Fidelity) or independent trust companies (C, 07:44).
  • Portability, customization, and level of dedicated service are crucial since “the only thing a trust company has to offer is time.” (C, 08:18)

• State Law Matters:

  • Seven primary states are favorable: Alaska, Nevada, Wyoming, South Dakota, Tennessee, Delaware, New Hampshire—the “magic seven” (C, 13:10).
  • Particularly, Nevada and South Dakota have robust legislative processes updating trust laws, giving them a “thought leadership position” (C, 13:49, 16:53).

• Wyoming’s Unique Private Trust Company Feature:

  • Lower regulatory capital requirements make Wyoming especially suitable for ultra-high-net-worth clients with closely held family assets (C, 15:40).

5. Privacy and Public Disclosure in Trust Jurisdictions

• South Dakota’s Anonymity:
  • Changes made in South Dakota trust courts are never public record—enshrined in the state constitution, providing unmatched privacy for high-profile families (C, 18:05).
  • “So if you have families who... like to keep things sort of on the down low and they make a change to a trust, South Dakota is the only state that never records it, ever.” (C, 18:05)
  • Example: The Murdoch family’s Nevada proceedings were exposed, which could’ve been avoided in South Dakota (A, 18:52).

6. Client Psychology & Family Dynamics in Trustee Selection

• Why Clients Choose Friends or Family:

  • Familiarity, comfort, and perceived control often lead to choosing people they know, even friends (B, 19:55).

• Concerns About Corporate Trustees:

  • Clients worry about loss of control, needing “permission” from unknown parties—advisors must help bridge trust and transparency (B, 20:29).

• Christopher’s Approach:

  • Focuses on “plans” over “budgets” to accommodate long-term flexibility while maintaining structure (C, 21:01).
  • Personal quote: “My wife gives me a plan of what we can spend for the next five years. I can do a plan.” (C, 21:08)
  • Emphasizes the importance of impartiality and consistency; individual trustees may rubber-stamp everything, risking family rifts and loss of asset protection (C, 22:14; A, 22:42).

7. Directed vs. Delegated Trusts & Co-Trustee Structures

• Definitions:

  • Delegated Trust: Investment decisions delegated to advisor—trustee shares liability, typically higher fees (C, 25:18).
  • Directed Trust: Trust document specifically designates investment advisor—trustee has no oversight duty over investments, separate liability (C, 25:32).

• Co-Trustees and Family Involvement:

  • Trusts can be “sliced and diced” with varying roles; co-trustee setups provide flexibility, tax efficiency, continuity, and family buy-in (A, 26:24—28:36).
  • Lego analogy: “A trust document is almost like a Legos. You can pull in and out different parts... and it can be adapted.” (C, 28:26)

8. Practical Takeaways for Advisors

• Key Action Items:
  • Review your top 5-10 clients: Make sure their successor trustee is appropriately selected for long-term stability (C, 32:19).
  • Work collaboratively with trustees—planning investments and distributions is well within advisors’ purview (A, 31:33).
  • Communicate with centers of influence: let them know advisors can manage money even when a corporate trustee is required (C, 32:40).
  • “Don’t get hung up on one of the seven states... focus on the why.” (C, 32:55).

Notable Quotes & Memorable Moments

• Christopher Holtby (on trustee duties):
  – “A trustee... can only do four things. Match money, distribute money, tax returns and other administrative issues.” (01:22)

• Anne Rhodes (on the $10M trust threshold):
  – “That $10 million line is really where you start thinking taxes as well, and estate taxes.” (03:52)

• Christopher Holtby (on the importance of process):
  – “So it's done in a collaborative way. So the beneficiary or the client's advisor sees sort of one thought leader...” (01:59) – “A trust document is almost like a Legos. You can pull in and out different parts...” (28:26)

• On privacy:
  – “South Dakota is the only state that never records [trust modifications], ever. And it's at the constitution level...” (C, 18:05) – “[If the Murdochs] had a South Dakota trust, a South Dakota trustee, maybe they could have avoided a lot of the grief from showing up in the media because nothing's recorded.” (A, 18:52)

• On family dynamics:
  – “How impartial are they in the long run?... it becomes hard for that person to say no potentially.” (A, 22:58) – “If you have a friend... his definition of prudent... is going to be very different than if the best friend is a art teacher. Both great candidates... but what's their definition of prudent?” (C, 22:21)

• Advisor takeaway:
  – “Review your top five clients and make sure who is named as the successor trustee... Tell every center of influence that they can manage money when a corporate trustee is required...” (C, 32:19)

Important Timestamps

• Introduction & Christopher’s Background: 00:09 – 01:00
• What Corporate Trustees Do: 01:22 – 02:58
• When to Move from Individual to Corporate Trustee: 02:58 – 05:09
• Tax Implications: 05:09 – 07:02
• How to Pick a Trust Company: 07:02 – 13:10
• State Law and Privacy Features: 13:10 – 19:47
• Family Dynamics and Trustee Selection: 19:55 – 25:18
• Directed vs. Delegated Trusts: 25:18 – 26:24
• Co-Trustees and Customization: 26:24 – 28:36
• Takeaways for Advisors: 31:33 – 33:36

Final Thoughts

The episode empowers advisors with a nuanced understanding of how to guide clients through selecting the right trustee for their estate planning, weighing technical, tax, psychological, and family considerations. It demystifies the perceived complexity around corporate trustees, underlines the importance of sound planning and state law selection, and highlights the ongoing, collaborative role advisors can play in the life of a trust.