The Rules for Investing California Trust Assets: Nine Helpful Tips

For many beneficiaries of California trusts, there is concern over how well a trustee is investing the trust’s assets. The trust instrument, as well as California trust laws, dictates certain guidelines that a trustee must follow when investing the assets of a trust. If you suspect that the trustee of a trust is poorly investing California trust assets, contact an experienced California trust attorney for guidance.

Especially relevant is the California probate law which imposes the Uniform Prudent Investor Act on trustees managing trusts within the state. The following is a list of nine helpful tips that explain what this law means with regard to a trust’s investments:

The trustee

• Must aim to minimize risk by diversifying investments and evaluating the performance of the entire investment portfolio.
• Must balance risks and returns.
• May invest in nearly any type of asset.
• Must utilize an overall investment strategy for the assets as a whole.
• May hire investment advisors and managers.
• Must continuously monitor and review the performance of the investments.
• Should gather information about an investment, assess the needs of the beneficiary, and develop a plan accordingly.
• Can invest in risky investments, but the level of risk must be “appropriate under all of the circumstances.”
• Should consider all of the following factors when making investment decisions:
  • General economic conditions
  • Effects of inflation or deflation
  • Tax consequences
  • Resources of the beneficiaries
  • Need for liquidity, income, and preservation of capital

For more information about the duties of a trust with regard to investing trust assets, contact an experienced California trust litigation attorney today. Call the Grossman Law Firm at (888) 443-6590.