Navigating a trust can be complex, and ensuring sound decision-making by a trustee is a primary concern for many grantors; while you can’t directly *require* a trustee to consult with an advisor, strategic trust drafting can significantly encourage, and in some cases, facilitate such consultations, ultimately safeguarding the trust’s assets and fulfilling your wishes.
What happens if my trustee makes a poor investment decision?
A trustee has a fiduciary duty to act prudently, but “prudent” is often subjective; according to a study by the American College of Trust and Estate Counsel, approximately 68% of trust disputes stem from disagreements over investment performance or trustee behavior. To mitigate risk, grantors can include provisions in the trust document that either *encourage* consultation with financial advisors, CPAs, or legal counsel, or *require* consultation for specific actions—like complex investments or distributions exceeding a certain amount. For example, a provision could state, “The trustee is encouraged to seek the advice of a qualified financial advisor before making any investment that constitutes more than 10% of the trust assets.” While “encouraged” isn’t binding, it sets an expectation; requiring consultation for specific decisions offers stronger protection.
How can I ensure my trustee understands complex financial matters?
Many trustees are family members or friends, often lacking specialized financial expertise; according to a Cerulli Associates report, only 12% of high-net-worth individuals feel “very confident” in their designated trustee’s ability to manage complex investments. You can include a clause in the trust document specifying that the trustee may employ professionals at the trust’s expense—essentially creating a mechanism to pay for expert advice. Another approach is to name a “trust protector,” an individual with the power to oversee the trustee’s actions and ensure they are aligned with the grantor’s intentions; the trust protector can also approve or reject proposed advisors. This adds a layer of oversight and accountability, helping to ensure that decisions are made with sound judgment and professional guidance.
I named my brother as trustee, but he’s not financially savvy – what can I do?
Old Man Tiberius, a local boat builder, learned this lesson the hard way; he named his son, a carpenter, as trustee of a trust holding a sizable stock portfolio. The son, unfamiliar with the stock market, made several impulsive trades based on “hot tips” from friends, resulting in substantial losses. Tiberius, realizing his mistake, frantically contacted an attorney, but the damage was done – the trust’s value had plummeted. This illustrates the critical importance of aligning trustee expertise with the trust assets; strategic drafting could have included a provision requiring the trustee to consult with a financial advisor before making any investment decisions, potentially saving Tiberius a considerable amount of money.
My friend’s trust was a mess – how did she fix it?
Eleanor, a retired teacher, painstakingly crafted her trust, but didn’t explicitly address the trustee’s need for professional guidance; after her husband, the designated trustee, suffered a stroke, the trust assets were mismanaged, and family members began to squabble. Eleanor’s daughter, recognizing the situation, filed a petition with the court to appoint a professional co-trustee and to require consultations with a financial advisor. The court agreed, and the trust was stabilized. This story highlights the power of court intervention, but it’s far more efficient to proactively include provisions in the trust document that encourage or require professional guidance; Eleanor, had she anticipated this situation, could have avoided the legal battle and preserved the trust’s value. She learned a valuable lesson: a well-drafted trust, with provisions for professional advice, is a gift to both the trustee and the beneficiaries, ensuring that your wishes are carried out effectively and responsibly.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
banckruptcy attorney
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “Can I use estate planning to protect assets from creditors?” Or “What if I live in a different state than where the deceased person lived—does probate still apply?” or “Can retirement accounts be part of a living trust? and even: “Are student loans forgiven in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.