In April 2018, the Alabama Family Trust selected Warren Averett Asset Management to provide professional money management and investment services. The current minimum initial contribution required to establish an individual trust is $1,500 which includes a $750 set up fee.
Each beneficiary’s trust fund is placed in a sub-account in order to facilitate combining the assets for each sub-account. Only cash deposits are accepted. The cash assets from all sub accounts are “pooled” together and are invested and managed by Warren Averett . Pooling the funds reduces administrative fees and increases the principal for investment purposes. Beneficiaries of the trust receive earnings based on their share of the principal.
A financial record is maintained for each sub-account that reflects all activity in the account. Quarterly financial statements are sent to the co-trustee or advocate or can be accessed through the internet.
Warren Averett provides investment options with varying levels of risk. The responsibilities of the Co-Trustee include selecting one investment option for the investment of the assets for the trust. The Finance Committee of the Board of Trustees provides oversight, and the Board votes on approval of the Alabama Family Trust Investment Policy.
The Investment Options Agreement provides specifics of the various investment options.
An Investment Objective and Risk Tolerance Questionnaire has been provided only as a tool to assist in the investment strategy decision. As indicated in the Questionnaire, neither BancorpSouth nor The Alabama Family Trust assumes any liability for investment decisions made by Co-Trustees based on the results of the Investment Objective and Risk Tolerance Questionnaire Total Score.
A Schedule of Trustee Fees and Costs has been provided. Alabama Family Trust, a nonprofit organization, works to keep fees and costs at a very reasonable and comparable rate. An annual maintenance cost is charged each October for any trust that has been in force for six months or more and has a market value of greater than $3,000 on September 30th. In addition to annual tax return preparation costs charged to the trust, there is a 0.4% quarterly investment administrative fees charged but only to the extent of income earned in that quarter.
The earnings of the trust for each beneficiary are taxable. For third-party (Complex) and first-party (Grantor) trusts, the Alabama Family Trust as Trustee prepares a Federal Form 1041 and Alabama Form 41 under an EIN number that is assigned to each trust. Alabama Family Trust also prepares and supplies summary federal and Alabama tax documents for the trust earnings to the Co-Trustee. It is the administrative policy of Alabama Family Trust to prepare and file these tax returns for any year that a trust is in existence. Please keep in mind that Alabama Family Trust has the same tax filing deadlines as the life beneficiary has as an individual filer. An amended filing for a beneficiary may result if individual income tax returns are filed before receiving a summary federal and Alabama tax documents from Alabama Family Trust. As with past practices, Alabama Family Trust normally is able to provide summary federal and Alabama tax documents to the co-trustee before April 1st of each year.
Closing A Trust
Trusts with a minimum threshold balance of $395 will be closed and tax return preparation fees withheld for the current year. Upon death of a life beneficiary, a trust will be closed only upon receipt by Alabama Family Trust of a death certificate and an Affidavit from Alabama Medicaid as to any balance owed. Trust closings are subject to a closing fee of $350. Applicable amounts due related to quarterly investment administrative fees, tax return preparation costs, the Alabama Family Trust Charitable Trust, and the Alabama Medicaid Affidavit will be withheld.
Related Document Downloads
Investment-Options-Agreement-1 – updated April 2018