The concepts of a “trust” and a “trustee” have existed in the English law since at least since the twelfth century. They refer to a relationship between a fiduciary tasked with managing funds or property for the benefit of another – i.e. a beneficiary – based on a set of rules of principles, such as those spelled out in a trust agreement. And anytime the trustee is faced with the fiduciary responsibility for tasks other than the outright distribution of all trust assets and income, their responsibility for overseeing financial planning and investment management of trust assets for the benefit of trust beneficiaries – potentially numerous individuals and charities, with different needs and time horizons, varying risk tolerances, liquidity needs, income requirements, let alone family dynamics – can become complex.
A trustee or fiduciary may face a number of legal and factual constraints on her ability to carry out her duties to the beneficiaries effectively. As an initial matter, the constraints can be spelled out in a trust agreement or a declaration of trust itself. Such constraints can be manifested as distribution patterns (e.g., outright distribution v. staggered distributions v. milestone distributions) or in the nature of the property to be distributed (e.g., “in kind” distribution of securities v. cash proceeds from the sale of securities). In addition, the trustee and his or her investment manager may face legal constraints, such as taxes or the limitations imposed by the California Uniform Principal and Income Act.
And of course, the trustee may face the constraints of family dynamics, and the ever-changing life circumstances of one or more members of a family. Fortunately, a trustee typically has the right to hire a professional advisor. We serve individual fiduciaries (e.g., a spouse or family member tasked with the duties of serving as “trustee”) and licensed independent fiduciaries, and provide situational evidenced-based financial planning and investment management.