The question of whether you can assign multiple trustees to different asset classes within a trust is a common one, and the answer is generally yes, with careful planning and specific language within the trust document itself. While a single trustee is often appointed to manage an entire trust, many modern estate plans benefit from a “directed trustee” or “successor trustee” model, allowing for specialized expertise to be applied to various types of assets. This approach acknowledges that managing real estate, stocks, and a small business all require different skill sets and levels of attention. Approximately 65% of high-net-worth individuals now utilize multiple trustees or trust protectors to oversee complex portfolios, a number that has steadily increased over the past decade.
What are the benefits of dividing trustee responsibilities?
Dividing trustee responsibilities can offer significant advantages. For example, one trustee might be responsible for managing liquid assets like stocks and bonds, while another is tasked with overseeing real estate holdings or a family business. This allows each trustee to focus on their area of expertise, potentially maximizing returns and minimizing risks. Consider the story of old Man Hemlock, a local orchard owner who, upon his passing, left a trust with both a financial advisor and his eldest daughter as co-trustees. The advisor expertly managed the stock portfolio, while his daughter, familiar with the land and its operations, skillfully guided the continued success of the orchard. This arrangement ensured both the financial and operational aspects of the estate were handled with care and competence. “It’s not about distrust, it’s about leveraging expertise,” a common phrase used by Steve Bliss when helping clients structure their trusts.
How does this work with a directed trustee arrangement?
The key to implementing this strategy is a “directed trustee” arrangement. In this scenario, one trustee, often called the “investment trustee,” is given authority over specific asset classes, while another trustee—the “administrative trustee”—handles tasks like distributions, accounting, and tax filings. A trust document can explicitly state, “The investment trustee shall have sole discretion over the management of all publicly traded securities held within the trust, while the administrative trustee shall be responsible for all other assets and distributions as outlined herein.” It’s crucial to clearly define the scope of each trustee’s authority to avoid conflicts and ensure accountability. According to a 2022 study by the American Bar Association, trusts with clearly defined roles for multiple trustees experienced 20% fewer disputes than those without. Furthermore, establishing a process for communication and collaboration between the trustees is vital.
What went wrong when a client didn’t define trustee roles?
I remember a case involving the Peterson family. They had appointed both their son, a successful accountant, and their daughter, who managed several rental properties, as co-trustees without specifying who handled what. The son began making investment decisions regarding the rental properties, despite having no experience in real estate management. He sold a particularly valuable property at a loss, believing it was a prudent financial move. This caused significant friction with his sister and ultimately led to a costly legal battle over the trust’s administration. They lost nearly $75,000 in legal fees and the damaged family relationship was a price far greater than the monetary loss. This situation underscored the importance of meticulously defining each trustee’s role within the trust document.
How can clearly defined roles lead to success?
Fortunately, another client, the Reynolds family, learned from this example. They established a trust with their financial advisor as the investment trustee for stocks and bonds, and their eldest son, an experienced farmer, as the trustee for their farmland. The trust document explicitly stated that each trustee had exclusive authority over their assigned asset class and a clear protocol for communication and collaboration. The result was a smoothly functioning estate plan that preserved the family’s wealth and fostered a strong relationship between the siblings. The farmland continued to thrive under their son’s guidance, and the investment portfolio achieved consistent returns. The Reynolds’ example demonstrates that when multiple trustees are thoughtfully appointed and clearly defined roles are established, trusts can achieve their intended purpose and provide lasting benefits for future generations. Steve Bliss often says, “A well-structured trust isn’t about avoiding death, it’s about protecting life.”
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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:
estate planning
living trust
revocable living trust
family trust
wills
estate planning attorney near me
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: “What is the difference between a testamentary trust and a living trust?” Or “Can real estate be sold during probate?” or “Does a living trust save money on estate taxes? and even: “What happens to joint debts in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.