The Inflation Reduction Act infused $80 billion dollars into the Internal Revenue Service, likely resulting in a significant increase in regulatory oversight. This increase in tax scrutiny should cause investors to consider their estate distribution plan to ensure minimum tax liability. Has the trust industry seen a change in the number of accounts or assets in the past few years as a result of the increase in oversight?

According to Spectrem Group’s new report, Comprehensive Bank Trust Update, which is a consolidation of information from FDIC surveys of member trust institutions. Every institution that has fiduciary or related assets must file this information every year in December. This report found that for the first time since 2009 the number of personal trust accounts has increased. The 11-year decline began in 2010, when the number of personal trust accounts dropped from 789,950 in 2009 to 746,916 in 2010.

Ever since that time there has been a steady decrease in the number personal trust account, down to a low in 2020 of only 432,902 accounts, representing an over 40 percent reduction in the number of personal trust accounts during that 11-year window of time. Just because the number of personal trust accounts have been declining does not mean that the amount of assets held within these trusts have been declining.

There has been an increase in the total assets held within personal trust accounts over the past three years. The first increase was from 2018 to 2019, when personal trust assets went from a total of 931.2 billion to 1,048.0 billion. The total amount of assets held within personal trusts increased for the following two years, with a current total value of assets held within personal trusts of 1,279.5 billion dollars.
Financial firms should have discussions with their clients about examining their current trust accounts and ensuring that trusts are developed if their current estate plans are lacking that protection.