30 West Patrick Street Ste. 100 Frederick, Maryland 21701


older couple sitting together on a bench

Who is Family Heritage Trust Company?

The Family Heritage Trust Company provides trust and investment services and has been qualified to do business in Maryland since 2007. It is locally managed by a group of legal, accounting, and investment professionals from Maryland and Pennsylvania. The Family Heritage Trust Company is a trust service office of Midwest Trust Company, a Kansas non-depository trust company regulated and examined by the Office of the State Banking Commissioner of Kansas. Our primary focus is individuals and their families, their professional advisors, and endowment/foundation funds.

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What does Family Heritage Trust Do?

Our mission is to provide clients with a broad range of competent and professional fiduciary management services. These services include investment management, account administration, accounting, security safekeeping, bill paying, tax planning, performance measurements, and fund collection and disbursement. As a trust company, we are held to the highest standards of professional conduct and are subject to comprehensive regulatory oversight. Dual controls guide the management of client funds, and we have a legal obligation to oversee investment portfolios to ensure assets are managed according to client objectives and needs.

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What is an "Independent" Trust Company?

The selection of a trustee is a critical decision to make in the financial and estate planning process, yet the decision is made frequently out of convenience or tradition. Often overlooked is the professional competence of a trustee to represent the stated interests of a trust and to exercise all of the required fiduciary duties that must be performed economically and without bias. In the past, national and regional bank holding companies and family and friends have managed trusts. However, the emergence of independent trust companies has challenged the traditional sources of trust administration and investment services for the following reasons:

  • An independent trust company has the autonomy and ability to exercise decisions and manage trust in light of the governing document for all beneficiaries without the conflict of corporate interests often associated with large banks. This is, in essence, what a corporate, independent trustee should be.
  • An independent trust company has a specific business focus and is staffed with experienced professionals who are dedicated to building and sustaining a close, personal relationship with their clients, their family members, and their professional advisors. Independent trust companies believe in partnerships.
  • An independent trust company exercises the wishes and direction of a grantor and works closely with that grantor’s attorney, accountant, or other appointed professional to help prepare a trust document that is absolutely aligned with the grantor’s intentions and financial situation.
  • An independent trust company will avoid “cookie-cutter” solutions and offer a high degree of customization of administrative services to meet a clients’ special needs. They take their responsibilities seriously and routinely exercise their authority on behalf of their client’s best interests.

A client can save money with an independent trust company. Many of the professional services an individual would have to hire can be performed by knowledgeable trust professionals who can address many of the questions a person would have in creating a trust document. An attorney is certainly required to draft the trust documents, but up-front discussions with a professional trustee can save time and expense and benefit the trust creation process before an attorney completes the final document.

Security and asset safety are another reason to consider a professional trustee. Independent trust companies are held to the highest standards of conduct and are subject to comprehensive regulatory oversight. Additionally, client assets are not co-mingled with the capital of the trust company. Dual controls guide the management and distribution of client funds, and a trustee has a legal obligation to oversee the investment portfolio to ensure assets are managed according to client objectives and needs.

Finally, an independent trust company is an organization of individuals. An organization that, by its very definition and mission, is to oversee and ensure the client’s wealth is managed and administered as intended. An independent trust company provides continuity from one generation to the next. Most independent trust companies are staffed by professionals who have already demonstrated competence in the fiduciary management business, and this experience is a tangible benefit that cannot be ignored. Furthermore, the management of independent trust companies typically has a financial commitment to the company, and this vested financial interest ensures stability.

The appointment of a professional trustee is a decision to be made carefully and with thought. The pros and cons of employing a family member or a major bank that offers trust services as a part of their menu of services are to be weighed against the benefits and clear purpose that independent trust companies offer. When confronted with this decision, ask yourself who is best positioned to represent your intentions and interests as the routine function of their daily business. An independent trust company is an objective and professional partner to achieve your wealth preservation and peace of mind.

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What is a Trust?

A trust is a two-party agreement in which the owner of the property or other assets (called the donor, grantor, or settlor) transfers the ownership to someone else (the trustee) for the benefit of one or more third parties (the beneficiaries, who are not typically considered parties to the agreement). As a financial tool, a trust provides for professional asset management in accordance with the needs and objectives of the trust beneficiaries. There are numerous trust vehicles available.

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What is Probate?

Technically, the term applies to the state legal procedure required for a decedent who died as a resident of that state. The purpose includes (i) determination that a certain document is in fact, the Last Will and Testament of the decedent; (ii) that it is strictly followed in the distribution of estate assets; (iii) that certain costs and taxes are paid, and in certain states (iv) that real estate is properly included and distributed of only those assets of the decedent that are owned by her or him individually and for which there is no other inherent distribution mechanism or arrangement at death. For example, property that passes by beneficiary designation (such as life insurance and survivorship) are “non-probate” assets. Over many years however, the term probate has come to refer loosely to the entire process of settling an estate, from assembling and valuing all of the assets (probate as well as non-probate), through the determination and payment of debts, expenses, and taxes, to the distribution of the estate according to the terms of the will.

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What are the meanings of the most common trust terms?

  • Corpus. The principal of the trust; may also be called the trust fund, trust estate, or trust property, as distinguished from the income earned by the principal.
  • Estate Tax. A tax on the transfer of property at death is typically paid from the assets in the estate. The federal government and some states levy estate taxes.
  • Fiduciary. The trustee of a trust, the personal representative of an estate, or the conservator of the assets of a “protected person”.
  • Grantor. The person who creates and funds a trust; may also be called a donor, settlor, or creator.
  • Inheritance Tax. A tax on property received from someone who has died; an inheritance tax is owed by the recipient as a legal matter but is usually paid by the estate. Most states levy an inheritance tax.
  • Inter Vivos Trust. A trust created while the grantor is still alive, which may be either revocable or irrevocable. Also known as a living trust.
  • Irrevocable Trust. An inter vivos trust that cannot be changed or canceled by its creator.
  • Prudent Investor Act. A statutory standard of conduct for fiduciaries to comply with regarding the management of assets held in a trust.
  • Revocable Trust. An inter vivos trust that may be changed or canceled at the wish of the grantor. Revocable trusts are frequently called “living trusts” when the grantor is also the primary beneficiary. These types of trusts typically do not carry estate tax benefits.
  • Sprinkling trust. Sometimes called a spray or discretionary trust, empowers the trustees to distribute assets and income as needed, often unevenly.
  • Testamentary Trust. A trust is created under an individual’s Will.
  • Trustee/s. The person or persons charged with carrying out the wishes of the trust’s creator. Holds legal title to the trust assets and must use them only for the benefit of the beneficiaries.
  • Unified Credit. The dollar-for-dollar credit against the estate tax. The unified credit increases periodically until the year 2010, at which time congressional action will be needed to continue the estate tax break.

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