The Washington times., 1928-02-02
TRUST SERVICE
GREAT SAVER
BY RICHARD HATTON

millions Of dollars which otherwise
would have been lost or dissipated.
It would be quite impossible to
compute the vast amount that
has been wisely handled by trust
companies OF this country to the
end that estate have increased
in value, or to estimate the nuTn'
Der of those who have been left
cash or other property and have
not made themselves paupers
through unwise investment. Al q
protective agency in the case OF
estates, the trust companies and
the trust departments of banks
have amply proved the wisdom OF
their existence and the worthiness
| Of their service.
Recently there has come into
| being a broader field for tru
| service through the cooperation OF
| life insurance underwriters n d
/ trust companies. This field is found
| in the life insurance trust and
| IL is OF interest to quote few
| facts regarding this form OF In
surfing the wise handling of es-
| tafes from an article published in
! Trust Companies Magazine by
| Judge III. l.. Standeven, who says:
THE first record we have OF
a life insurance trust was that
executed january q, 1877, by
the Provident Trust Company OF
Philadelphia. And while there
have been insurance trusts execl1t-
ed at intervals since that time,
| it is only in the last few years,
| through the efforts Of the Amer
| lean Bankers Association to pro-
| vide q plan whereby the banks
| and trust companies could CO.
operate with the insurance COM
panies in the protection Of life
| insurance after it is paid out. that
| the life insurance trust has be-
come q vital and forceful factor
in the scheme Of things today.
Life Insurance Data
Interesting data regarding the
tremendous amount of money paid
to beneficiaries of life insurance
and the horrifying percentage inn
mediately lost through lnwise in
vestment is given by Judge stand
even as follows:
THE fundamental facts concern
ing life insurance trusts and the
4 statistics regarding the dissipation
of life insurance money which leo
to the realization OF the necessity OF
a provision for safeguarding these
funds. are more or less well known
The combined assets OF the life in
surance companies OF the United
States and Canada for 1925 amount
Ito about IL billion dollars-there
i are 90 rlflIion policies in force
4 totaIinR about ~ billion dollars In
protection; more than half of our
| vast population now carry life In
surance: the premium income for
1925 was practically $4,000 900 900;
about 50 900, 900 is distributed to
beneficiaries in the United states
every working day in the year.
I'VE are also told that 81 per
cent of all the property left by per
sons in the United States when they
pass on consists of life insurance.
We are further told that go per
cent of this money is paid in lump
sums direct to the beneficiary, and
that in seven years 80 per cent oil
all estates OF 1000 or over is en-
tirely consumed or dlss1pated.
These conditions result in the fact
that there are more than 3,OOO,OOU
widows living today in the United
States, and that one-third OF them
are over IS years of age. Ninety
per cent of this latter class are
wholly or partially dependent upon
charity DR. the generosity or others
and 80 per cent of the 100000
widows are compelled to earn thsiH
own living.
Not Original Intent
OBVIOUSLY it We not the intent
of the person buying the insurance
that his widow or his children
should have monetary assistance
! only seven years after his death
He bought the insurance happy IN
the belief that it would protect and
insure his family against want after
ha left them. That Is where the
trust company steps in with Tne
twin service to life insurance
namely: Trust administration.
THE basic facts behind the neces'
sitv and dasira bility of setting up
; a life insurance trust to meet the
needs of a family and provide an
income which will replace the earn
ing mower of the head of the family
are found in the statistics pre-
viously mentioned, namely: The
early consumption and disslpa ton
of insurance money paid out in
lump sums says the writer. and
continues: Life insurance creates
estates, trust service conserves and
distributes them. Life insurance
furnishes the money and trust ser
vice provides the money manage
ment."
Regarding the interest paid by
trust companies to beneficiaries OF
voluntary trusts, L. H. Roseberry
chairman of the committee on re-
search of the trust company divi'
sion of the American Bankers Assoc
citation, Is responsible for the fol-
lowing figures: Northeastern sec
ton. $3.50 per cent; Southeastern
section, 5.814 per cent; Northern
Central section, 5.419 per cent
Southern Central section, $3.50 per
cent: Northwestern section, 1851
per cent; Southwestern section,
6.079 per cent.
= an1I tr,,1& oPPinara and inS1Ira nce