Frequently Asked Questions

As an independent trust company that does not invest assets as a fiduciary, 100% of our client relationships require us to work closely with the client’s wealth advisory team. Our goal is to develop an open line of communication between Magnolia and the wealth advisory team to ensure that family goals are met. Each client has a dedicated trust officer and a supporting client service team, assigned based on several factors (technical requirements, personality fit, etc.).

Magnolia is an independent administrative trustee, and we do not provide investment management services internally. We focus on building partnerships that support independent investment advisors and help establish investment programs that integrate the requirements of fiduciary prudence, duty, care and loyalty that accompany serving in a fiduciary capacity. There are two primary types of trusts we support as trustee:

• Discretionary Trusts — Magnolia is responsible for selecting the Investment Manager. We coordinate with the clients and the Investment Manager to establish an investment policy/program and an appropriate asset allocation framework, and review the trust instrument to ensure its relevant provisions are implemented in the investment program.
• Directed Trusts — the Investment Advisor is formally appointed within the trust document. Magnolia coordinates directly with the Investment Advisor to obtain the investment policy/program for the trust.

Under both, Magnolia supports the investment function during periodic reviews with the client (as needed) and periodically reviews the trust’s allocation, holdings, and performance in the context of the established objective and suitability.

Magnolia is a Tennessee-chartered public trust company with trust powers in TN, GA, SC, NC, AL and TX. We are also willing to pursue reciprocity in any state where it makes business sense to do so, and we welcome the opportunity to discuss this further.

We believe we are set apart by the way we value our clients, our people and our community. Magnolia was founded on and fosters an advisor-friendly culture of serving clients. Our most successful relationships are those where we collaborate and coordinate with the client’s other advisors — investment, legal, tax, estate planning, financial planning and fiduciary — to deliver a more efficient and effective result. We do not offer investment management services, which allows us to work effectively with families who have a pre-existing investment management relationship. Unlike many other providers, we strive to take an active approach as trustee: while our core service is fiduciary administration, the experience and expertise of our advisors often provides opportunities to add value as a member of the advisory team beyond basic administrative functions.

As a trust company dedicated to high-touch, personalized service, we place significant value on responsiveness — we expect client inquiries to be acknowledged within twenty-four hours and answered in a timely manner. Our clients have a dedicated client service team with multiple contacts within Magnolia, and our CEO periodically confirms client satisfaction and is available for any discussions.

Communication cadence is determined by client need and desire, as well as by the advisory team serving the trust clients. Typically there is very frequent interaction at the start of the relationship, followed by regular communication and meetings as needed (but at least annually). Magnolia is flexible to join or support client and family meetings or calls as needed.

Magnolia coordinates with each client to identify an acceptable meeting frequency. The most common is quarterly, but our meetings range from weekly check-ins to annual reviews. We also coordinate with appointed investment advisors to review and establish investment objectives (return objectives, time horizon, cash-flow requirements, tax considerations, and other issues around the investment program), usually quarterly, semi-annually or annually.

Magnolia provides account statements on a routine basis. Our reporting protocol is flexible and can be customized to fit the client’s needs as well as the advisory partner’s needs. Typically clients receive statements quarterly, semi-annually or annually, in paper or electronic format. A client portal is also available for historical statements, activity, and holdings.

Our Chief Trust Officer, Rhett Zeigler, is an attorney with over twenty years of experience in both private practice and fiduciary services prior to joining Magnolia. We work with many attorneys in the metro Atlanta area, as well as in the states where we have trust powers, and are happy to make introductions where appropriate.

Many of our trusts own private or non-traditional assets and need the services of a corporate fiduciary (trust administration, accounting and recordkeeping, fiduciary planning, etc.). Tennessee statutes provide flexibility for families to appoint different roles to administer trusts — including trust protectors, trust distribution advisors, trust investment advisors, and administrative trustees. Magnolia can help develop a trust structure that supports administration while assisting in achieving the family’s planning objectives.

Yes — we currently administer several trusts that use an SPE as a distribution and/or investment advisor. We believe this structure can provide significant flexibility in achieving family trust planning goals. Where SPEs are used, we assist with any required registrations and work with the SPE to document any direction given.

We have experience administering many different types of trusts, including:

• Revocable Living Trusts
• Marital and Credit Shelter Trusts
• Irrevocable Grantor Trusts (IDGT, SLAT, etc.)
• Charitable Trusts
• Tennessee Asset Protection Trusts (TIST)
• Tennessee Community Property Trusts
• Grantor-Retained Annuity Trusts (GRAT)
• Generation-Skipping and Dynasty Trusts
• Beneficiary Defective Irrevocable Trusts (BDIT)
• Irrevocable Life Insurance Trusts (ILIT)
• Tennessee Incomplete-Gift Non-Grantor Trusts (TING)

Understand the family and the question. We start by seeking a full, thorough understanding of the family’s questions around any trust ambiguities.

Research and review internally. Magnolia has a tenured staff with decades of fiduciary experience (JD, CPA, CFP and CFA designations within the firm). We review provisions and state statutes for guidance as a first step; often state statutes clarify ambiguity within a trust instrument.

Seek appropriate legal guidance. After internal review and analysis, Magnolia may seek appropriate legal guidance – this may mean reviewing the instrument in question with the drafting attorney, family’s current counsel, or counsel for the trust. We are also happy to provide trust summaries, illustrations and flowcharts to support the client team.

We rely on the client’s attorney to draft a new trust; however, we are also happy to review the document and provide insight and language, depending on Magnolia’s role and assignment.

Administrative services include:

• Maintaining trust records and providing physical or electronic access to appropriate parties;
• Tracking receipts and disbursements and applying them to income and principal as appropriate;
• Providing cash processing services for the trust;
• Paying bills as directed by an authorized party;
• Downloading and reconciling custodian transactions for reporting purposes;
• Ensuring all qualified beneficiaries receive required accountings and statements;
• Ensuring timely filing of all required returns;
• Providing copies of tax forms (K-1s, grantor letters, etc.) distributed as required.

As a trustee, Magnolia takes on a fiduciary responsibility to ensure the terms of a trust are carried out in an objective and independent manner. These responsibilities span daily, weekly, monthly, quarterly and annual activities, including:

• Meeting with the grantor, beneficiaries and family to review trust activity and performance;
• Accounting for trust receipts and disbursements, and for note receivable/payable principal and income as needed;
• Distributing trust assets as directed or allowed under the trust document;
• Providing periodic trust activity and balance reporting and maintaining trust accounting records;
• Coordinating valuations on assets without readily available market values;
• Ensuring tax filings are completed;
• Coordinating with other professional advisors to identify planning opportunities;
• Maintaining a thorough understanding of applicable fiduciary and tax laws;
• Addressing beneficiary-specific issues, including education on trust-related topics.

We can serve as trustee in a directed or discretionary manner, and Magnolia can also serve as an executor as needed.

Magnolia first meets with the investment advisor to understand the service framework in place, as well as the investment strategy and objective for the trust portfolio. The investment advisor traditionally directs the objective and strategy of the trust, and Magnolia helps coordinate the documentation of that direction as part of our fiduciary services. We can coordinate and participate directly in investment reviews if desired, or simply receive a copy for the trust’s records — tailored to each client team’s established service program. We prefer to be a “trusted partner” on the advisory team, while recognizing that communication dynamics differ from one investment program to another.

Our philosophy is to make distributions in accordance with the terms of the trust document, taking into account the needs of the beneficiary, with consideration given to the grantor’s intent through directive language or correspondence provided by the grantor. We work with beneficiaries to develop a distribution program — listening, understanding and documenting the full nature of any request and determining whether it is appropriate given the trust’s distribution language. Our services around a distribution request include:

• Reviewing the trust’s dispositive provisions as they relate to the requesting beneficiary;
• Considering the investment and tax ramifications of disbursements to ensure efficiency;
• Counseling and coordinating with beneficiaries to fully understand the request and the distribution process;
• Reviewing all supporting documentation and recommendations internally through our fiduciary governance channel so any final decision is documented appropriately.

We make distributions daily and average a 1–2 business-day turnaround for routine requests. Larger requests may require additional time.

When we serve alongside a named investment or distribution advisor, our duties as directed trustee include any trustee responsibility for which we are not specifically relieved from performing. Our fiduciary responsibility therefore begins with determining the capacity in which Magnolia is appointed to serve within each trust instrument.

Operational support and monitoring. Magnolia has integrated technology to establish electronic connectivity to most custodial platforms. This lets us “shadow post” and receive regular feeds, basis and balancing information so we can integrate required investment information into trust accountings electronically. Where assets or systems aren’t compatible with electronic delivery, we perform manual reconciliation with full transparency. The investment manager performs all services (such as trading) on their own platform.

Investment report monitoring. Magnolia coordinates directly with investment managers to obtain periodic statements and performance reviews.

As a fiduciary handling sensitive information, confidentiality and data security are high priorities and we devote considerable resources to them:

• Employees are subject to confidentiality and non-disclosure agreements and undergo annual training and testing on information confidentiality and security;
• As a regulated fiduciary, we are examined routinely — internally through independent IT audit and externally through the TDFI (Tennessee Department of Financial Institutions);
• Our IT program includes routine oversight of systems support and access (electronic and physical), environment risk assessment and security testing, with both internal and external expertise;
• Our vendor management program includes routine performance assessments and annual reviews of each vendor (trust accounting, operational support, CRM, network environment), with each vendor’s independent audit reviewed annually and the Board reviewing each vendor annually;
• Client systems and financial data are housed in a secure, contained environment with limited, reviewed access.

Magnolia’s fees for services as trustee are charged based on a percentage of the trust assets in accordance with our published fee schedule. The average basis-point charge varies based on the overall value of the trusts being administered and the nature of the trustee duties undertaken (e.g., directed or discretionary). All fees are documented through an engagement letter at the inception of the relationship, and service offerings and fees are reviewed periodically to ensure consistent value.

We would be pleased to discuss specific scenarios so we can provide an informed indication of a proposed trustee fee. Fees begin once Magnolia’s appointment is accepted and we are actively serving as trustee. For advisory firms that list Magnolia as their primary trustee partner, we are happy to consider a competitive group rate.