Spokane professional trust and estate management  firm Northwest Trustee & Management Services has seen its revenues climb 35 percent in the last two years, and it expects that strong growth rate to continue, says Greg Bowman, trust investment and development officer at the firm. 

Northwest Trustee, which has 14 employees and is located in 4,000 square feet of leased space on the third floor of the North Spokane Financial Center, at 7307 N. Division, recently celebrated its 25th anniversary. Stephen Trefts, president and founder of Northwest Trustee, launched the firm in 1989. 

“We started with zero, so everything is up since then,” Trefts says.

Northwest Trustee offers a range of trust and estate management services, including settling estates, guardianship of estates, and agency agreements, in which the beneficiary specifies certain duties for the firm to handle, such as filing tax returns or paying expenses.  

A trust, Bowman says, can be generally defined as a legal entity that holds assets for individuals or charitable organizations. A trustee, he says, is entrusted with the management of the assets for the named beneficiary. 

Bowman, who is Trefts’ son-in-law, says that at any one time the firm is serving around 300 trust beneficiaries. The firm mostly handles trusts in excess of $500,000, he says, although it does take on some smaller clients as well.

“We have a market specialty in handling modest-sized trusts,” Bowman says. “The majority of our accounts are under $5 million.” 

Bowman says that the company’s regional presence has grown in the last few years. He also says the firm sees potential for more growth both regionally and in the Spokane market. The firm defines “regional” as Washington, Oregon, and Idaho, he says. 

“My goal is to ensure that our reputation is upheld as we grow,” he says. 

Trefts says the firm is looking to expand regionally to a greater extent. 

“As far as the growth process, we took over a third more office space six months ago and hired more staff,” Trefts says. 

The firm doesn’t do any external advertising, Bowman says, and receives almost all its clients through referrals, mostly from financial advisers and attorneys.  

Bowman also says that most of the firm’s accounts include securities of some type.

“Seventy-five percent of our assets are regular investments—cash, real estate, equity funds, etc.,” he says. “Most of our accounts have equities.”

Trefts says that the firm doesn’t have one specific kind of trust that it sees more often than others. 

“It’s hard to say,” he says. “We have quite a few revocable living trusts that become irrevocable when the person becomes incapacitated … we also have a lot of charitable trusts ....”

A revocable living trust is a legal document created by an individual to hold and own their assets to the benefit of the beneficiary.  Revocable living trusts can cover three stages of an individual’s life: when they are well, when they become incapacitated, and when they die.  Meanwhile, charitable trusts are mainly used when a person wants to leave money to a charitable organization after death. 

Trefts says that Northwest Trustee is sometimes awarded power of attorney over medical decisions for a client. 

“We’ve been called frequently to make end-of-life decisions for people,” he says. “We talk to the doctors, social workers, the family if they’re around, and psychologists, then make the appropriate end-of-life decision that the client would want.”

Bowman says that as long as the firm remains strictly a fiduciary, it’ll take on any kind of trust, including educational trusts, such as college funds.

“We do all kinds of trusts, but that’s all we do,” he says.  

Trefts says that the firm serves clients all across the United States, but the bulk of its clients currently are located in the Northwest. Most of Northwest Trustee’s clients have some form of incapacity or need help managing their affairs, he says. In many cases, they are elderly people who may have estates and need help with day-to-day care. 

“They essentially ask us to be backup managers,” Trefts says. “We’re not only managing their money; we’re managing their lives. We help them set up in-home living, caregiving, monitor their medical supervision, and interface with nursing homes.”

Northwest Trustee also can manage the care and maintenance of the client’s home, Trefts says, while reporting to the incapacitated person’s responsible party. 

“That could be the Superior Court. It could be their children, attorney, accountant, or other guardian,” he says. “We always have these people we’re reporting to.”

The firm also works with people who have won large settlements in court cases and need assistance managing the funds, Trefts says. It also manages inheritance trusts, especially in cases where one beneficiary might be involved in legal trouble or substance abuse.

“We use discretion to make sure the problem child is cared for,” he says. “We have many people who have trouble with the law, and mom and dad have set up trusts for them.”

In addition to being an attorney, Trefts also is a certified professional guardian, he says. Sometimes, he says, the firm gets called in to manage the estates of people who haven’t done any estate planning.

Bowman, who is a certified personal accountant and has been with Northwest Trustee for about two years, says the firm also works with clients who have philanthropic desires, and manages charitable trusts and family foundations for them. 

“We love doing that, and thankfully it’s a part of our business,” Bowman says. 

Trefts says that Northwest Trustee’s fees vary widely by the type of trust, the type of management needed, and the value of assets. 

“For irrevocable life insurance trusts, it could be a few hundred (dollars) a year,” he says. 

For revocable trusts, when the firm comes in because the client is incapacitated, it charges a two-part fee, Trefts says. The first part is an asset management fee, usually about 0.80 of a percent of the trust. Trefts says the percentage declines as the trust gets bigger. For example, for some large, multimillion dollar trusts, the percentage could be as low as 0.25 of a percent, he says. 

The second part is an hourly fee for the employee’s time spent working on that trust, Trefts says. 

Bowman says the firm’s fees also depend on how much work is required for the trust.  

“If people have very modest needs, it’s not a burdensome fee,” he says. 

In addition to being a certified personal accountant, Bowman has an extensive background in asset management, he says. He previously worked for New York City-based professional services firm Deloitte Touche Tohmatsu Ltd., and traveled around the world assisting nonprofit organizations with financial sustainability. That experience helps Northwest Trustee manage complex assets, he says. 

For example, the firm manages a trust in southern Idaho that includes a mobile home park, Bowman says. 

“We had to fire the property manager and hire new property managers,” he says. 

Other examples of complex assets include residential real estate, development land, limited-liability corporations, and tenant farms.

Trefts says, “When we’re managing a farm, we have to manage the tenant and interface with government programs.”

The firm used to manage several Kentucky bluegrass farms in Eastern Washington, Trefts says, but had to switch to another crop due to controversy over field-burning practices. 

“The method of harvesting (involves) burning the fields,” he says. “It was a huge controversy in Spokane because of the smoke … we had to change crops, but we still have Kentucky bluegrass in Idaho. There are a lot of complexities with farm management.”

Some of the firm’s more unusual complex assets have included run-down gas stations, bowling alleys, restaurants, and oil leases, Bowman says. 

 Trefts says that, when Northwest Trustee lands a new client, it tries to retain the original financial adviser or attorney.

“We always use the client’s attorney,” he says. “We do not run a law practice here—we’re focused on fiduciary work. We also retain the investment adviser to the client … the client usually has a long-term relationship with them. So they continue to be involved and get their normal fees.”

Bowman says Northwest Trustee also works closely with its clients when making decisions.

“When making tough decisions, we would rather over-communicate than under-communicate,” he says. “It can really help calm people down when making tough, discretionary decisions.”

The firm also gets involved with trusts that are in litigation or dispute, Trefts says. 

“Often a mother or father has made a child the trustee, but this is the wrong kid—they’re stealing or embezzling,” he says. “Then the other kids get wind of it and hire attorneys. We’re hired to be peacemakers. We work with the family and the court system to make it right.”

Trefts says that Northwest Trustee’s objectivity is an asset in these types of situations.

“We bring that objective, third-party view to highly emotional situations, and I think society has a need for that,” he says.