Trustees have what looks on the surface to be a simple job. However, it actually turns out to be quite difficult when you begin to understand the legal requirements that Trustees must operate. Unfortunately, for non-professional Trustees, the law operates under the assumption that the Trustee is a seasoned investor and the law makes Trustees personally liable for any mistakes.
In almost every state, some variation of the Uniform Prudent Investor Act has been adopted. It has been in Ohio. This Act embraces modern portfolio theory, which is a complex method of deciding what the best investment strategy is given the needs and objectives of the investor. In a Trust, the investor is not the Trustee. Instead, the Trustee acts as a fiduciary for the Trust beneficiaries. This means that the Trustee must invest assets according to what modern portfolio theory would suggest is appropriate given the needs and objectives of the beneficiaries.
With that in mind, it is easy to see why being a Trustee is complicated and not as simple as it initially might sound. Fortunately, Trustees can delegate investment decisions. Many attorneys offer Trust Administration services that can help. Schedule an appointment with one if you are a Trustee in need of assistance.
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