If your trust company goes bust, are your trust funds in danger?
According to a WSJ article entitled Trusts Require Attention During Market Turmoil, there's no need to worry if you open the paper one day and read your trust company's going down in a ball of flames.
The good news is that trust assets managed by a corporate fiduciary such as Merrill Lynch & Co. don't go on the company's balance sheet. So, if the company is acquired, in the case of Merrill Lynch -- or files for bankruptcy protection, as in the case of Lehman Brothers Holdings Inc. -- trust assets the company manages aren't in danger.
Bruce Stone, a trust expert and shareholder at Goldman Felcoski & Stone PA, a law firm in Coral Gables, Fla., said, "Nobody is going to take your trust assets and liquidate them to pay off a bankruptcy, because the bankrupt entity doesn't own your trust assets."
Feeling better?
Blogging credit:
Credit goes to the Death & Taxes Blog for bringing the linked-to article to my attention in the blog post entitled Trusts, Corporate Fiduciaries, and the Bailout.
