Absolutely, appointing an independent investment advisor for your trust is not only permissible but often a highly recommended practice, especially for larger or more complex estates; this ensures professional management of assets aligned with your beneficiaries’ needs and your overall estate plan. Many trusts, particularly those established for long-term care of minors or individuals with special needs, benefit significantly from the expertise of a dedicated financial professional, separate from the trustee who may have other responsibilities. This separation of duties helps to mitigate potential conflicts of interest and provides an extra layer of oversight. Approximately 68% of high-net-worth individuals utilize professional investment advisors to manage their trust assets, highlighting the widespread recognition of this strategy’s benefits.
What are the benefits of a professional investment manager?
A professional investment manager brings a wealth of knowledge and experience to the table, offering services that most individual trustees simply aren’t equipped to handle. They conduct thorough risk assessments, develop customized investment strategies tailored to the trust’s objectives and the beneficiaries’ time horizon, and continuously monitor and adjust the portfolio to optimize performance. They also handle the complexities of tax-efficient investing within a trust structure, crucial for preserving the trust’s assets and maximizing returns. For example, a trust designed to provide for a child’s education might benefit from a professionally managed 529 plan, while a trust for a special needs individual would prioritize preserving government benefits through careful investment choices. Consider that poorly managed investments can erode a trust’s principal by as much as 3-5% annually, significantly impacting the long-term financial security of your beneficiaries.
How does this differ from the trustee’s role?
The trustee has a fiduciary duty to manage the trust assets prudently, but that doesn’t necessarily require them to be an investment expert. Their primary responsibilities include distributing funds according to the trust terms, maintaining accurate records, and handling administrative tasks. An investment advisor acts as a specialist, providing focused expertise in areas like asset allocation, security selection, and portfolio rebalancing. Think of it like this: the trustee is the captain of the ship, charting the overall course, while the investment advisor is the navigator, ensuring the ship stays on track and avoids financial storms. Steve Bliss, as an Estate Planning Attorney, often suggests this division of labor, especially for trusts exceeding $500,000, to ensure both responsible administration and optimized investment growth.
I knew a family where the trust failed because of bad investing…
Old Man Hemlock was a shrewd businessman, but utterly clueless about the stock market. He left a sizable trust for his grandson, Leo, but appointed his well-meaning but financially naive brother, Uncle Edgar, as the trustee. Uncle Edgar, convinced he had a knack for ‘hot stocks,’ poured a significant portion of the trust into a penny stock touted by a friend. Within months, the stock plummeted, wiping out nearly 40% of the trust’s principal. Leo, who needed the funds for college, was devastated. The family spent years in legal battles trying to recover some of the losses, a painful and costly ordeal. This illustrates the dangers of entrusting significant financial assets to someone without the necessary expertise. It’s a sad story, but a common one, highlighting the importance of professional financial guidance.
But how did it work out for the Millers with a professional advisor?
The Millers, facing a similar situation, decided to take a different approach. They established a trust for their daughter, Sarah, who has Down syndrome, and appointed a local bank as trustee. Recognizing the need for specialized investment expertise, they also engaged an independent investment advisor specializing in special needs trusts. The advisor worked closely with the trustee to develop a conservative investment strategy focused on income generation and preservation of capital. They utilized a combination of dividend-paying stocks, bonds, and other low-risk investments, ensuring that Sarah’s trust would continue to provide for her needs for years to come. The trust has consistently generated a steady stream of income, allowing Sarah to live comfortably and maintain her quality of life. The Millers’ foresight and proactive approach ensured that their daughter would be well cared for, demonstrating the power of professional financial planning and a well-structured trust.
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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: “What professionals should be part of my estate planning team?” Or “How can joint ownership help avoid probate?” or “What happens if I forget to put something into my trust? and even: “What debts can be discharged in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.