You’re the Trustee, now what?

Investment Management for Trusts

Investment management for a trust requires careful consideration every step of the way. As a trustee, you have a number of things to do when it comes to investing properly for the trust.

The main of the item to remember is that everything must be done through the lens of what is best for the beneficiaries and in accordance with the terms of the trust. The trustee(s) are ultimately the decision makers.

-Create an Investment Policy Statement. This will include a risk tolerance and outline any specific investment details the trust wants the investment adviser to abide by. It will also sets the goals for the trust’s investments.

-Select and monitor investments. Investments should be selected to try to achieve the returns needed while keeping risk in check. Due to the sometimes highly taxable nature of certain types of trusts, the tax efficiency of investments should be considered as well.

-Payout proceeds according to the terms of the trust. Some trusts are made to payout income to beneficiaries, some are not, it depends on the type of trust and the terms there of.

While not part of our services, trustees should make sure they file all applicable tax returns for the trust, maintain bank and investment records, make sure any property or business interests are taken care of or managers are hired to do so, and discuss decisions with any additional co-trustees. Documentation surrounding large decisions might be a good idea in case a successor trustee has to step into the trustee role. Consultation with an attorney is imperative.

Trusts can be a tool to accomplish a wide range of objectives, depending on the type of trust and the terms of the trust. We suggest coordinating with an attorney for the particulars.