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How Trust Companies Work

Updated: Jun 17

Although trusts often have an individual assigned as the trustee, a trust company can also act in the same capacity. A trust company does not own the assets its customers assign to its management, but it may assume some legal obligation to take care of assets on behalf of other parties. A trust company or trust department is usually a division or an associated company of a commercial bank. Trusts and similar arrangements managed for eventual transfer are managed for profit, which it may take out of the assets annually or upon transfer to the beneficial third party.

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