The question of whether you can assign investment oversight to a third party is a common one, especially as estates grow in complexity and individuals seek professional guidance to manage their wealth for future generations; the simple answer is yes, but it requires careful consideration and adherence to legal standards, specifically within the framework of a trust or other estate planning document.
What are the benefits of a trust protector?
Appointing a trust protector, or granting investment powers to a third party, offers numerous benefits. It allows for professional management of assets, potentially leading to greater returns and reduced risk. According to a study by Cerulli Associates, professionally managed accounts consistently outperform self-directed investments by an average of 3-5% annually. This oversight is particularly crucial for complex investment portfolios, including real estate, private equity, or businesses. A trust protector can also provide objectivity and ensure that investment decisions align with the grantor’s (the person creating the trust) original intentions and the beneficiaries’ needs. Further, a third party can adapt to changing market conditions and tax laws, something that a static trust document may not account for.
What legal considerations should I be aware of?
Legally, assigning investment oversight requires precise wording in the trust document. The document must explicitly grant the third party the authority to make investment decisions, defining the scope of that authority – whether it’s full discretion or limited to certain asset classes or strategies. It’s vital to outline the standard of care the third party must adhere to, typically a “prudent investor” standard. This means they must act with the care, skill, prudence, and diligence that a prudent person acting in a like capacity would use. Furthermore, the trust document should detail how the third party will be compensated, whether through fees, commissions, or a percentage of assets under management. Failure to clearly define these terms can lead to disputes and legal challenges. A poorly drafted provision could be deemed a violation of the grantor’s intent, creating problems for both the trustee and the beneficiaries.
I remember old man Hemlock’s mistake…
Old Man Hemlock, a neighbor of mine, always prided himself on handling everything himself. He created a trust for his grandchildren but didn’t specify *who* could manage the investments. When he passed, his family fought for months over who had the authority to make decisions, resulting in legal fees eating away at the inheritance. The trust assets sat idle during a crucial market upturn, and ultimately, the grandchildren received significantly less than they could have. It was a painful lesson about the importance of clear delegation and proper planning. The family was so distraught, they were unable to enjoy the inheritance as it was meant to be enjoyed.
How did we get things back on track with the Carters?
The Carters came to me after the loss of their mother, who had a similar issue. Her trust allowed *a* trustee to manage investments, but didn’t specify if they could delegate to a professional investment advisor. After reviewing the document, we determined it was possible, but required a formal amendment outlining the scope of the advisor’s authority and the trustee’s continued oversight responsibility. We worked with their chosen advisor, ensuring they met the “prudent investor” standard and documenting the delegation process thoroughly. The result was a streamlined investment strategy, increased returns, and peace of mind for the Carter family. They were able to fully enjoy the benefits of their mother’s planning, and even grow the principal for future generations.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar 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 Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
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
estate planning attorney near me
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “Do I need to plan differently if I’m part of a blended family?” Or “Can family members be held responsible for the deceased’s debts?” or “Who should I name as the trustee of my living trust? and even: “What is the role of a credit counselor in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.