Trust company

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Trust company

An organization that acts as a fiduciary and administers trusts.

Trust Company

A company, usually a division of a bank or brokerage, that acts as a trustee. In this relationship, one party, known as the trustor, gives to the trustee the right to hold and invest assets or property on behalf of a third party, known as the beneficiary. Most trusts exist to provide for the financial future of a minor child or mentally incompetent person, or may benefit charitable organizations. Many trusts are exempt from taxation on money given to the beneficiary, but trust companies may charge a fee in order to administer the assets. See also: Trust.
References in periodicals archive ?
Fidelity s ability to now custody all asset classes for banks and trust companies is supported by an integrated platform and interface that offers firms increased efficiency and risk management benefits.
In order to ensure the offering was designed to serve the needs of a wide range of institutions, Fidelity worked closely with bank and trust companies to incorporate their input and feedback.
First, regulated trust companies don't encompass all of the trust business in the state.
When Crosby Advisors moved its offices to Salem, it prompted a 2010 Wall Street Journal article that called the Granite State "a kind of mini-Switzerland for wealthy Northeast families." And the Boston Herald reported that such family trust companies are "cropping up like tax-free liquor stores in southern New Hampshire."
Even the assets listed by those trust companies might not capture all of the wealth involved because a chunk of the assets are insurance policies, according to Matthew McKenzie, president of Thomas Brady & Associates, which writes such estate-planning policies.
The Legislature passed a set of laws that allows nondepository trust companies flexibility in developing products and services within a well-managed regulatory framework."
However, unlike nondepository trust companies, family fiduciary service companies serve only family members.
Since the New Trust Modernization and Competitiveness Act recognizes a difference between trust companies that are acting as full-fledged banks and those that are merely serving families, it allows for reduced administrative and accounting burdens on family fiduciary service companies.