Is it time to offer trust services? Many credit unions are asking that question. Profit margins in trust services can be staggering once assets grow beyond some critical mass. We've learned that fact from other financial institutions. But we also know that it can take years to reach that point, and that some institutions--those with poorly-fitting business models and those who fail to execute--may never get there.

This is where credit unions have a distinct advantage over many of our competitors. We value profit, but we also understand and value service. It is why we exist. If credit unions choose to offer a service that members want, that members need, and that members use, those credit unions are successful in their mission, even before profitability arrives. We believe in the bottom line, but not to the exclusion of all other beliefs. Any credit union that considers trust can define its own objectives at the outset. Is it most interested in a model that takes the shortest path to profitability? Is profit less important than getting quality trust services out to members quickly? These are not questions with right or wrong answers. They are questions that begin to define each credit union's business model and the most appropriate means to reach its objectives successfully.

Some credit unions hesitate because they think trusts are only for the very wealthy. They are wrong. Trusts are used to manage wealth-related issues for ordinary people. Financial institutions that offer trust services often establish a minimum account size. They do that to accommodate their business models more than for any other reason. Thresholds vary, but an amount around $250,000 is common. For such households, trusts are core tools for successful estate planning. Trusts can provide an excellent means to structure, manage, and transfer assets because they can address so many related issues. Consider some examples:

-Under current law, two million dollars of a decedent's estate is excluded from federal estate tax, but all property above that level is taxed at a 45% rate. So, the $4 million estate of a married couple would be subject to a tax of $900,000 at the death of the surviving spouse. By transferring this same estate through a properly designed trust structure, the entire estate could be excluded from federal estate tax. The result? All of that tax money would now pass to the heirs. Most married couples who have estates over $2 million would find some protection from federal estate tax by use of a trust structure.

-What about members with less? The cost and effort of probate, the process of transferring assets at death, can be significant, more so in some states than others. In those states with more complicated probate, many people use trusts just to bypass the probate process and its expense.

-Those who wish to pass their estates to children and grandchildren without risk of those assets leaving "the family tree" can protect inheritances from divorces, lawsuits, and irresponsible beneficiaries. In a time when blended families have become so common, the result of multiple marriages, this kind of trust planning has become very popular.

-What about those incidents when members of modest means become disabled through accident or illness, and receive needed services through benefit programs such as Medicaid and SSI. An inheritance or settlement worth much less than the value of the benefits could render the recipient ineligible to receive them. Rather than forcing the beneficiary to renounce, a special needs trust might allow for a disabled person to receive both.

These are just a few of many instances where ordinary people would benefit from the use of trusts. Clearly, trusts are not just for the very wealthy. Many of our members already use them, and many more will and should. Where do our members go for trust services now? What are we waiting for? What can credit unions do to move in the direction of providing trust services to their members?

Each credit union should evaluate its situation and objectives to determine a business strategy. There are many options these days, including some that are new and creative. Instead of facing the risks of going it alone, collaborative models allow credit unions the choice of working with others to control expenses and maximize results. Seasoned experts can help guide credit unions through this initial process.

Cost can be a major consideration at this stage. The good news is that relative to traditional trust models where a financial institution established its own trust operation, collaborative models available to credit unions today are surprisingly affordable. And while capacity for expense will vary among credit unions, cost will not be a deterrent to most.

Once a strategy has been determined, help is available to credit unions in virtually all areas of trust, including administrative control, legal and regulatory compliance, investments, and operations. The services of a program management firm add value by providing oversight for a credit union's trust activities, recruitment and management of on-site personnel, and integration with other credit union business platforms once trust is up and running. Interaction with existing retail investment programs, for example, can help eliminate potential channel conflicts while supporting the building of both businesses.

In summary, there is a need for trust services. Our members need and want it, even those who are not exceptionally wealthy. Some have been going elsewhere to find it. But now, creative new options make it possible for credit unions to enter this business efficiently in ways that can be tailored to each specific situation. And with a new resource available to help credit unions through this process, the choice has never been easier.

So, is it time for your credit union to offer trust services? Maybe the time has come.