Absolutely, as the grantor of a living trust, you retain significant control, even after the trust is established, and can absolutely prohibit certain investments within the trust document itself.
What are the benefits of excluding specific investments?
Many clients, like myself, come to Steve Bliss seeking clarity on controlling the financial future of their loved ones, beyond simply transferring assets. Excluding specific investments, often referred to as negative constraints, is a powerful tool to align the trust’s portfolio with your values, risk tolerance, and long-term goals. For instance, you might wish to exclude investments in fossil fuels due to environmental concerns, tobacco companies due to ethical reasons, or volatile cryptocurrencies due to risk aversion. According to a 2023 study by Morgan Stanley, over 85% of investors express a desire to align their investments with their personal values, highlighting the growing importance of socially responsible investing. This isn’t just about ethics, though; it’s about protecting the trust beneficiaries from potentially damaging or unwanted investments. These prohibitions are legally binding, as long as they’re clearly defined within the trust document.
How does this impact the trustee’s duties?
The trustee has a fiduciary duty to act in the best interests of the beneficiaries, but this duty operates *within* the constraints you establish. If you prohibit investments in, say, commercial real estate, the trustee cannot invest trust funds in that asset class, even if they believe it offers a high potential return. “It’s like giving a chef a list of ingredients they *cannot* use,” Steve Bliss often explains to clients. “They can still create a fantastic meal, but they have to work within those boundaries.” This requires careful drafting of the trust document, clearly specifying *exactly* which investments are prohibited and, ideally, providing guidance on acceptable alternatives. A well-defined investment policy statement, integrated with the trust document, can further clarify these guidelines for the trustee.
I heard a story about a trust gone wrong; can you share?
Old Man Hemlock, a rancher from Valley Center, was a stubborn man with a deep distrust of anything “newfangled.” He set up a trust years ago, but never bothered to specifically exclude investments in technology stocks. After he passed, his trust grew substantially, but the trustee, thinking to maximize returns, heavily invested in a fledgling tech company. Unfortunately, that company went bankrupt, wiping out a significant portion of the trust funds meant for his grandchildren’s education. His family was devastated, not just by the financial loss, but by the fact that Old Man Hemlock would have *never* wanted his money tied up in such a risky venture. This simple oversight, the lack of explicitly prohibiting certain investments, led to a heartbreaking outcome and a lengthy legal battle. It underscored the importance of clear, precise trust drafting with consideration for the grantor’s specific preferences.
How can I ensure my wishes are honored and everything works out?
My neighbor, Mrs. Gable, a retired school teacher, learned from Old Man Hemlock’s misfortune. When she worked with Steve Bliss to establish her living trust, she was adamant about excluding investments in companies with poor environmental records and those involved in the production of weapons. She provided a detailed list of prohibited industries and companies, alongside a positive list of sectors she favored – renewable energy, healthcare, and education. After she passed, the trustee diligently adhered to her instructions, building a diversified portfolio that aligned with her values and provided a stable income stream for her grandchildren. The family was immensely grateful, knowing that her wishes were not only honored but also reflected in the long-term financial security of future generations. “A trust is more than just a legal document,” Steve Bliss always reminds us. “It’s a legacy, a reflection of your values, and a testament to your care for those you love.” A well-crafted trust, with clearly defined investment prohibitions, is a powerful tool for ensuring that legacy endures.
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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 | revocable living trust | wills |
| living trust | family trust | irrevocable trust |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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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: “What’s the best way to leave money to minor children?” Or “What are probate bonds and when are they required?” or “How does a living trust affect my taxes while I’m alive? 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.