Absolutely, a trustee not only *can* hire professionals to manage trust assets, but often has a fiduciary duty to do so if they lack the expertise to do so effectively. Managing trust assets can be complex, involving investments, real estate, business interests, and various legal and tax considerations. A trustee is held to a high standard of care, meaning they must act with prudence, skill, and diligence – qualities that might necessitate bringing in outside help. Failing to do so could expose the trustee to personal liability for any losses incurred due to mismanagement.
What are the benefits of hiring a financial advisor for a trust?
Employing a financial advisor or wealth manager offers numerous benefits. Approximately 68% of high-net-worth individuals utilize financial advisors to manage their portfolios, demonstrating the widespread recognition of their value. These professionals possess specialized knowledge in investment strategies, asset allocation, and risk management, helping to optimize trust assets for growth and income. They can also handle the administrative burden of managing investments, including rebalancing portfolios, collecting dividends, and preparing tax reports. Moreover, a financial advisor can provide an objective perspective, minimizing emotional decision-making that could jeopardize the trust’s financial health. They can assist with everything from stocks and bonds to real estate and private equity, ensuring a diversified and well-managed portfolio.
How much does it cost to hire a trustee or financial advisor?
The cost of hiring professionals varies significantly depending on the complexity of the trust and the scope of services required. Trustees often charge an annual fee, typically calculated as a percentage of the trust’s assets – often around 1% to 3% annually, but this can fluctuate. Financial advisors may charge a flat fee, an hourly rate, or a percentage of assets under management, ranging from 0.5% to 2% annually. It’s essential to understand the fee structure upfront and compare quotes from multiple professionals. Remember, while cost is a factor, the most important consideration is the professional’s expertise and ability to effectively manage the trust’s assets. In many cases, the fees paid for professional assistance are justified by the increased returns and reduced risk that result from proper management. “A penny saved is a penny earned,” but a professionally managed trust can *earn* far more than any savings.
What happens if a trustee makes a bad investment?
I recall a situation with a client, Mr. Harrison, whose wife had recently passed away, leaving him as the trustee of a sizable trust. He was a retired teacher with limited investment experience. He attempted to manage the trust assets himself, believing he could save on fees. He invested a significant portion of the trust in a speculative tech stock based on a friend’s tip. Unfortunately, the stock plummeted, resulting in a substantial loss. He was distraught and facing potential legal action from the beneficiaries. Without proper professional guidance, good intentions can quickly lead to disaster. A trustee is legally responsible for prudent investment decisions, and losses due to negligence or recklessness can lead to personal liability. Approximately 30% of trust litigation stems from alleged breaches of fiduciary duty related to investment decisions.
Can proper trust planning prevent these issues?
Fortunately, Mr. Harrison came to us after realizing his mistake. We advised him to engage a qualified financial advisor to assess the trust’s portfolio and develop a diversified investment strategy. We also helped him document the situation and communicate with the beneficiaries, explaining the loss and the steps being taken to mitigate further risk. We then worked with him to restructure the trust, incorporating provisions for professional investment management and establishing clear guidelines for future investment decisions. The beneficiaries, while initially upset, appreciated the transparency and proactive approach. The trust, with professional guidance, gradually recovered its losses and ultimately fulfilled its purpose. It’s a testament to the importance of proactive trust planning and seeking expert advice. In essence, a well-structured trust, guided by experienced professionals, isn’t just about preserving wealth—it’s about securing a legacy.
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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:
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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 “Can I get reimbursed for funeral expenses from the estate?” or “What happens to my trust after I die? and even: “Will my employer find out I filed for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.