Treasury And

Trust Operation

Nature of Trust

Creator of Trust

• Trustor

• Grantor

• Donor

• Testator

Trustee Beneficiary

Bank’s Trust Department

Legal Estate Administration, Guardianship, and Administering Trust

This division would handle matters of legal import, manage and administer

properties under trust, act as executor of last wills and testaments, or administer

estates.

Agency Services

This division handles agency services such as that of safekeeping,

custodianship and escrows.

Accounting Division

This division takes care of recording and analyzing all trust transaction.

Asset Management Division

This division manages outstanding and

foreclosed accounts of both institutional and

individual clients.

Fund Management or Investment Division

This division is in charge of coming up

with products and services offered to its

diverse clientele.

Trust Activities of Banks

To act as trustee for a corporation’s assets under mortgages/ bond issue

In a corporate mortgage, the trustee is charged with

the responsibility of protecting the

mortgagees’ or bondholders’ interest.

To act as transfer agent or registrar of stocks and bonds

The transfer of ownership of stocks and bonds

necessitates an accurate record to protect the

interest of the owners.

To act as guardian of a minor’s interest

When the property of a minor, through a will or through court order, is left in the

hands of bank trustees, it sees to it that such interest are safeguarded and are

properly managed.

To act as executor of last wills and testaments

When the trustor leaves a will, banks

assist in the execution of the last will and testaments.

To act as administrator of estates

Sometimes, the owner of the property or the court

appoint a trustees to take over the management and

administration of his estate.

To act as depository for escrow deposits, valuables, or other securities

In some transactions, one party may require the

other party to deposit in escrow property or cash

to insure the performance of an obligation.

To act as assignee, receiver, or depository

In case of corporation or individual businesses which are

on the brink of bankruptcy or are being mismanaged, it may

be necessary for a third party to take over management to insure

the interest of the creditors.

To act as an advisor

The trust department provides expert advice

to institutions and individuals in

investment decisions.

Kind of Trust

Individual Trust

Are those which would pertain to trust functions where the welfare and

interest of the individual is safeguarded.

Voluntary or Living Trust

Under this set-up, the owner transfers the title of the

property to a trustee and gives instructions on how to

dispose of the income or how to reinvest the funds.

Testamentary Trust

When an individual appoints a trustee

through a will.

Insurance Trust

This services is rendered whenever the trust

department of the bank is appointed as trustee under insurance trust

agreements.

Employee Benefit Trust

This involves the creation and design of a plan to

provide economic security and benefits to

employees.

Example:

• Fixed Benefit• Variable Benefits• Profit-sharing Fund• Stock Bonus Fund

Investment Management Services

Banks manage investment portfolios. It allows clients’

assets to grow in a disciplined manner according to their goals, time frame and

comfort level.

Collateral Trust

In this case, the title of the collaterals placed behind a mortgage is transferred to a trustee for the interest

of the bondholders.

Sinking Fund Trust

The trustee is usually assigned to enforce the provisions for a sinking

fund connected with bond financing.

Why Banks Make Better Trustees?

Why Banks Make Better Trustees?

Advantages of Agency Services

Regulations of Trust Companies

Section 79

Authority to Engage

in Trust Business

Section 80

Conduct of

Trust Business

Section 81

Registration of Article of Incorporation and

By-Law of a Trust Entity

Section 82

Minimum Capitalization

Section 83

Power of a Trust Entity

Section 84

Depositor for the Faithful Performance

of Trust Duties

Section 85

Bond of Certain Persons for the

Faithful Performance of Duties

Section 86

Exemption of The Trust Entity from Bond

Requirement

Section 87

Separation of Trust Business from General

Business

Section 88

Investment Limitations of a Trust Entity

Section 89

Real Estate Acquired by a Trust Entity

Section 90

Investment of

Non-Trust Funds

Section 91

Sections

and

Penalties

Section 92

Exemptions of Trust Assets from Claims

Section 93

Establishment of Branches of a Trust

Entity