Trust company

A trust company is a corporation that acts as a fiduciary, trustee or agent of trusts and agencies. A professional trust company may be independently owned or owned by, for example, a bank or a law firm, and which specializes in being a trustee of various kinds of trusts.

The "trust" name refers to the ability to act as a trustee – someone who administers financial assets on behalf of another. The assets are typically held in the form of a trust, a legal instrument that spells out who the beneficiaries are and what the money can be spent for.

A trustee will manage investments, keep records, manage assets, prepare court accounting, pay bills (depending on the nature of the trust), medical expenses, charitable gifts, inheritances or other distributions of income and principal.

A trust company can be named as an executor or personal representative in a last will and testament. The responsibilities of an executor in settling the estate of a deceased person include collecting debts, settling claims for debt and taxes, accounting for assets to the courts and distributing wealth to beneficiaries.

Estate planning is usually also offered to allow clients to structure their affairs so as to minimize inheritance taxes and probate costs. In the United States, one of the primary profit centers for a trust company is commissions earned from selling various types of insurance products designed to minimize the estate tax charged to a person.

A trust officer may provide guardian and conservator services, acting as guardian of a minor's property until adulthood or as conservator of the estate of an adult unable to handle his or her own finances.

Some trust companies are formed not merely for the benefit of a minor or an individual trustee, but for the preservation of nature or historic sites.

A trust department provides investment management, including securities market advice, investment strategy and portfolio management, management of real estate and safekeeping of valuables.