Placing your assets in a Revocable Living Trust is a great way to protect and preserve them for your loved ones after you pass away. However, you need to make sure that you take the appropriate steps to preserve the assets in the trust while you are still alive. If you have appointed yourself as the trustee, you will need to make sure that any money in the trust is invested wisely.

In today’s economy, investing wisely is not what it used to be. High-yield savings accounts used to be a great way to preserve some money and maybe make a little interest. It was never a way to get a huge return, but it was a good vehicle to make sure that some money was left if other investments went sour. However, today the annual inflation rate is 2.9% after taxes. With banks offering savings accounts around 1%, placing your trust’s money in a savings account actually loses money. You need to educate yourself about how to prudently invest a portfolio. Learn some basics concepts to protect yourself. Do not violate the golden rule of investing which is “Don’t put all your eggs in what basket” — You need to diversify. But the real trouble then begins because, how do you accomplish diversification? Finally, after you do this you must then rebalance from time to time to manage risk.

Speak with an experienced attorney about ways to preserve your trust’s assets. Many estate attorneys offer trust administration services and you can appoint the attorney as the trustee. This is a great way to let a professional help you in making sure that your assets are still there when your family needs them. You can also ask the attorney how to make sure a trustee is prudently inviting assets and not violating their fiduciary duty leading to personal liability for their acts or omissions.

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Thanks again.

Dennis D. Duffy

Duffy Law Office, PLLC