ATLANTA -- What started out with strong promise and an idea has slowed down a bit. Trust services continued to eke along for the industry, but there were a few launches this year.
One pending alliance that could move estate planning along was the September merger plan announcement between MEMBERS Trust Co. and Members Trust Company of Colorado. Together, the new trust firm has $322 million in assets. Both firms expect approval to come in 2007. Pending approval, it is estimated that it could take six months to roll the two entities into one. MEMBERS Trust also partnered with EasCorp to create a trust office in the New England region. Under the agreement, EasCorp's CUSO, 1909 Financial Advisors, LLC, will establish staff and manage a trust agency office to provide services within the region. The arrangement enables credit unions to implement trust services under a cooperative alliance with 1909 and share the start-up costs. The CUSO will use MEMBERS Trust, a subsidiary of CUNA Mutual Group, for back-office services, such as record keeping and reporting, development plans and fiduciary services.
Meanwhile, Credit Union Financial Network partnered with AST Trust Co. to bring trust services to eight Arizona credit unions. State Employees' Credit Union in North Carolina began discussions with Campbell University's Master of Trust and Investment Management program located in the Southeastern Trust School to see if they might be open to expanding courses to credit unions nationwide through off-campus sites or an online program. The school's program has helped three of SECU's managers to earn master's degrees in such areas as estate and trust administration.
Alaska USA Trust continued its nearly 10 years of success. The trust company founded by Alaska USA Federal Credit Union has more than $6 billion in assets under administration and $50 million under management through more than 500 clients, the majority of which are credit unions. In June, Wescom Credit Union launched Wescom Trust Services, which will help members establish a trust, serve as a trustee, provide wealth management services and have ongoing education seminars and online information. In May, the Delaware Credit Union League officially closed shop on its DELCU Financial Services, which housed a partnership with INA Trust, fsb to offer trust services to the state's credit unions. That partnership ended prior to the CUSO's demise.
One of the first entities to bring trust services to credit unions back in the late 1990s, Sentry Trust Co. was acquired by $3.3 billion Community Banks, Inc.'s subsidiary, CommunityBanks, in September, its second acquisition. Community Banks, Inc. also announced its plans to buy BUCS Financial Corp. BUCS is the former BUCS FCU, which served employees of CareFirst/BlueCross/BlueShield. It converted into a mutual savings bank in 1998 and became one of the earliest credit union-to-bank charters in the nation.
On a different twist on trust accounts, the Washington State Supreme Court ruled that credit unions can remain on a list of financial institutions where attorneys house interest on lawyer's trust accounts or IOLTAs. The Washington State Bar Association had previously objected to credit unions being on the list because it determined trust accounts must be insured and NCUA only insured attorney trust accounts holding client funds belonging to credit union members, the association believed that NCUA would not insure accounts that held noncredit union member funds even though the trust accounts belonged to a credit union member, for example, the attorney. A small but growing number of credit unions currently offer IOLTAs.
Meanwhile, credit unions continue to hear about the trillions of dollars that will transfer generations over the next 50 years, which could be an area to watch, experts have said. Generally, the "sweet spot" for credit unions and estate planning is between $1 million and $10 million, with most managing assets on the lower end of that range. --firstname.lastname@example.org