Absolutely, as the grantor of a trust, you possess significant control over its terms, including the ability to specifically restrict certain investments, this is a crucial aspect of tailoring a trust to reflect your values and financial goals, particularly when working with an estate planning attorney like Steve Bliss in Wildomar.
What investments should I exclude from my trust?
Determining which investments to prohibit requires careful consideration of your personal beliefs and risk tolerance. Many clients, for instance, wish to exclude investments in companies involved in activities they morally oppose—such as tobacco, firearms, or fossil fuels. According to a 2023 study by Morgan Stanley, approximately 85% of investors now express interest in sustainable investing, indicating a growing demand for aligning investments with personal values. Prohibiting these investments isn’t simply about ethics, it’s about ensuring the trust’s management aligns with your overall philosophy, protecting the legacy you intend to create. Steve Bliss often guides clients through this process, helping them articulate these preferences clearly within the trust document. This can be achieved through specific language outlining prohibited sectors or companies, giving the trustee clear direction.
How does a trustee navigate prohibited investment clauses?
The trustee has a fiduciary duty to act in the best interests of the beneficiaries, but this duty must be balanced with the grantor’s expressed restrictions. A well-drafted trust will provide clear guidance on how to handle situations where a potentially prohibited investment might otherwise be beneficial. For example, the trust might allow the trustee to seek approval from a designated protector or court before making such an investment. “It’s about finding that sweet spot between respecting your values and ensuring the trust continues to grow and provide for your loved ones,” Steve Bliss explains to many of his clients. The trustee also has a duty to diversify, and overly restrictive clauses can hinder this goal, so finding a balanced approach is essential. As of 2022, approximately 33% of all trusts had some sort of socially responsible investment clause.
I remember a case a few years back, a client, Mrs. Eleanor Vance, a passionate environmentalist, created a trust for her grandchildren. She explicitly prohibited any investment in fossil fuels. Her chosen trustee, however, saw a significant potential return in a new oil exploration venture and, interpreting the clause narrowly, decided to proceed, believing the long-term benefits outweighed her preference. This caused immense distress within the family, and a lengthy legal battle ensued, costing the trust substantial funds and damaging relationships. The courts ultimately sided with the family, emphasizing the importance of upholding the grantor’s clearly stated intentions, but the process was painful and avoidable.
What happens if a trustee violates the investment restrictions?
Violation of investment restrictions can lead to serious consequences for the trustee. Beneficiaries can pursue legal action to remove the trustee and recover any losses resulting from the improper investments. This can include not only the financial losses but also legal fees and other costs associated with the litigation. The trustee could also be held personally liable for any damages caused by their breach of fiduciary duty. Fortunately, a proactive approach can prevent such situations. I worked with Mr. and Mrs. Abernathy who wanted to ensure their trust reflected their commitment to ethical investing. We drafted a comprehensive clause, not only prohibiting specific industries but also outlining a process for the trustee to consult with a designated financial advisor specializing in socially responsible investing. The trustee, bound by these clear guidelines, invested in a diversified portfolio of renewable energy and sustainable agriculture companies, achieving solid returns while aligning with the Abernathy’s values. This demonstrates that with careful planning and expert guidance, you can ensure your trust truly reflects your vision for the future.
Ultimately, the ability to prohibit certain investments within a trust is a powerful tool for ensuring your wealth is managed in accordance with your values and principles. Working with an experienced estate planning attorney like Steve Bliss can help you navigate these complexities and create a trust that reflects your unique circumstances and goals.
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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:
- living trust
- revocable living trust
- estate planning attorney near me
- family trust
- wills and trusts
- wills
- estate planning
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: “How do I start planning my estate?” Or “Can probate be avoided with a trust?” or “Can I be the trustee of my own living trust? and even: “Will bankruptcy wipe out medical bills?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.