Employee Spotlight: Catching Up with Kevin McNee
Written By: Daniel Gleich
Meet Kevin McNee, Director of Trust Services at Madison Trust. Kevin joined Madison Trust Company in November 2022 and he helps clients and their financial teams reach their goals.
We asked Kevin a few questions to learn more about him and what it takes to be the Director of Trust Services at Madison Trust Company.
1. What does a typical day in the life of the Director of Trust Services look like?
My day-to-day responsibilities include managing the wider Directed Trust franchise, which encompasses Madison Trust’s outward-facing business development activities to our ongoing client service responsibilities.
I am also fortunate to represent the face of Madison Trust. I travel to conferences and events, and generate thought leadership in regard to Directed Trusts. In particular, I focus on working with financial advisors.
2. How did you decide to work in the financial services industry?
My original career was as a baseball player, but I did have a general interest in financial markets. In school, I became interested in stocks and joined an investments club in college, so deciding to work in the finance industry was a natural progression for me. My career has taken me from the role of serving as an independent financial advisor, to leading sales teams, to being responsible for solving problems within the wealth management industry.
3. Why did you take this opportunity at Madison Trust?
With a career in financial services, I tend to identify with the views and challenges faced by financial advisors. I recognize that in estate planning, there are both tremendous opportunities and threats to financial advisors today.
When I joined Madison Trust, which already had established a reputation of superior client service, I was brought on with the intention to solve the challenges around the financial advisor market. It was a welcome opportunity that really appealed to me. Solutions are at the heart of what we do.
4. What flexibility can Directed Trusts provide?
There is modeled flexibility with Directed Trusts. Depending on what your relationship is with your client, we can typically meet the needs within your current team structure. For instance, if you are not working directly with an end client’s attorney, we can generally have someone fill that role. We can also meet the needs of a CPA if you do not have a CPA team in place.
Directed Trusts can provide flexibility in terms of who you work with. Many trust companies do not work with foreign grantor trusts or foreign assets. Madison Trust can work with foreign grantor trusts on the Directed Trust side, which is a unique service to have in addition to being able to hold most alternative assets.
With a Directed Trust, you gain extra protection. Each Directed Trust utilizes an LLC structure within the trust, thus providing clients and advisors with additional protection. Financial advisors can serve in a trust protected role. On the back end, Madison Trust can work with many of the major custodians, which allows clients to keep oversight on publicly traded assets.
Lastly, South Dakota ranks as the number one state for decanting. Decanting is taking an old trust and moving it into a new trust. There is a clearly defined path to doing this in South Dakota, and because of that, it offers business development opportunities where an investor can leverage Madison Trust to achieve their financial goals.
5. South Dakota has favorable laws for trusts. What are the benefits of South Dakota?
South Dakota is a leading asset jurisdiction. The FDIC reports that there are more than four trillion dollars worth of assets residing in The Mount Rushmore State. South Dakota has a solid foundation behind the laws. With that, fiduciary protections are a major benefit of a Directed Trust structure. Another benefit is that the roles and responsibilities are clearly defined, under codified South Dakota Law.
South Dakota is a pure, no tax state. South Dakota also has the strongest levels of asset protection; often why people look for trust solutions. Regarding Privacy: Everything is sealed under South Dakota law, serving as a major benefit in terms of creditor protection. Lastly, what if your trust never had to end? South Dakota offers Dynasty Trusts and multi-generational planning. There is no better state for generational wealth transfer than South Dakota.
6. Which trust strategies have sparked your interest?
I have the chance to engage with people with unique life circumstances. One case study that interests me is a person from the Northeast - the millionaire next door. A strategy I saw recently that helped a family was preserving access to their trusts. There is a clause known as the piece-of-mind clause. Commonly known as a SLAT, or spousal lifetime access trust, each spouse is named the beneficiary of the other spouse’s trust.
Domestic Asset Protection Trusts, or DAPTs, is a technique only available in a limited number of states, which helps to shield assets from creditors. While the primary goal is to shield wealth from litigation, this strategy also provides a more efficient way to pass on wealth.
Typically, this means upon the death of a spouse, one would receive a fractional step up on asset values. South Dakota has a unique statute which allows one to opt into community property law and therefore receive a 100% step-up. By putting the closely held business into a DAPT they also will significantly increase the size of their asset base, while benefiting from South Dakota’s tax benefits far into the future. In many cases, investors are looking for asset protection or charitable solutions. This offers an immense planning opportunity for advisors and is a reason we see wealthy individuals who are curious about exploring Directed Trusts.
7. Outside of work, which hobbies do you pursue?
Everyone in the office knows that one of my biggest hobbies is coaching travel baseball. During the weekends I coach a team of ten-year-olds. I get to leverage my passion and experience in baseball. This also gives me time to spend directly with the kids to help them develop their skills and grow their strengths.
Just like building any team or business, it is rewarding to witness growth over time. Right now, I have a dynamic team and an excellent franchise at Madison Trust. I am happy to spend some time on the ballfields of the US ABL on the weekends and wish for many home runs all around.