Trusts

Many of our customers choose trust arrangements because of the unique advantages they offer. No, you’re not required to create a trust. If you prefer, you can put our professionals to work on a less formal basis. All it takes is a simple letter of instructions, designating us to act as your investment agent.

With a trust you can not only draw on our broad investment capabilities, but also arrange to have us perform any number of special services, now or in the future. These personalized services could range from making payments of estimated taxes while you’re traveling abroad to providing full personal financial management in the event you suffer an incapacitating illness. You can also name one or more beneficiaries to receive the assets of your trust at your death. These distributions avoid probate. Or, you can have your trust continue beyond your lifetime, serving as a source of continuing income and support for your spouse, a child or others whom you designate.

Not at all. To put a Cumberland Security Bank trust advisor to work as your trustee, you take two simple steps. You bring us the money and/or securities you wish to place in trust, and you give us your written instructions in the form of a trust agreement. The agreement, drawn up by your attorney, is signed by you (as creator of the trust) and by Cumberland Security Bank (as trustee). That’s all there is to it.

Certainly. Our trust customers control their trusts in three ways:

1. The trust agreement specifies that they may make withdrawals (or additions) at any time.
2. They reserve the right to cancel the trust.
3. They reserve the right to give us new or different instructions by amending the trust agreement.

No. Our fees are competitive with those charged by investment advisory firms (for services that may not include custodianship of securities, record keeping and other conveniences) or by mutual funds.

If you think of millions of dollars when you hear the word “trust,” you’re the victim of a widespread misconception. Today’s trust institutions have developed ways to handle even relatively small trusts efficiently. In any case, we don’t think in terms of fixed minimums. Instead we ask ourselves, “Is a trust the best way to meet this person’s financial management needs?” One of our trust advisors will be happy to sit down with you to determine if a trust is right for you.

That depends on your goals – current income, long-term growth to offset inflation, or some balance of the two -and on ever-changing investment conditions. Historically, diversified portfolios of good quality stocks have produced a total annual return (dividends plus growth in principal value) averaging around 10%. Bonds have produced somewhat lower returns overall, but they offer a higher level of current income than stocks. As your trustee, our goal is to provide reasonably consistent returns over the years. We emphasize careful asset allocation, the selection of quality investments and constant vigilance.

Primarily, trust funds are invested in stocks, bonds or other income-producing assets. These trust investments are not bank deposits. Securities and other assets administered by a bank as trustee are held separate from the bank’s own assets, under strict audit controls, and cannot be reached by the bank’s creditors. As a result, the need for FDIC insurance is generally limited to uninvested trust cash, such as income awaiting distribution. In general, the owner of a revocable trust account is insured up to $250,000 for each unique beneficiary.

That’s easy. Our trust advisors will be glad to assemble further information for you, analyze your investment requirements and answer questions not covered here. Just give us a call at (606) 678-9164.