Help for Trustees

Jan 2, 2013

Being the Trustee of a Trust that has beneficiaries other than yourself is more difficult than most people think it will be. Most people tend to think that they can invest the Trust assets in safe mutual funds or bonds and that everything will work out. However, there are legal standards that suggest in most cases a Trustee cannot do that.

Most states have adopted some version of the Uniform Prudent Investor Act which dictates how a fiduciary, such as a Trustee, must make investments. The fiduciary must carefully analyze the income level, income need, objectives and risk tolerance of the beneficiaries and develop an investment strategy that diversifies the assets to meet those needs. It is not an easy thing for non-professionals to do.

The Uniform Prudent Investor Act does allow Trustees to delegate investment decisions to professionals. This allows Trustees to have less risk for personal liability if something goes wrong. Many attorneys specialize in Trust administration. Schedule an appointment with one of them if you are a Trustee to make sure that you are doing what you need to do to properly invest Trust assets.

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