Absolutely, you can restrict investment in specific industries through your trust, and it’s a surprisingly common request among clients seeking to align their financial legacies with their values.
What are “Socially Responsible Investing” (SRI) restrictions?
Many individuals don’t want their assets supporting industries they find objectionable – be it firearms, tobacco, fossil fuels, or private prisons. These preferences fall under the umbrella of Socially Responsible Investing (SRI), or more recently, Environmental, Social, and Governance (ESG) investing. A trust document can specifically prohibit or limit investments in those areas. According to a 2023 study by Morgan Stanley, interest in sustainable investing grew to $30.3 trillion, showcasing a significant demand for aligning investments with personal values. Steve Bliss, as an Estate Planning Attorney in Wildomar, frequently works with clients to craft these restrictions, ensuring the trust’s investment strategy reflects their ethical beliefs. This can be achieved through specific clauses outlining prohibited sectors, or positive screening for companies with strong ESG ratings.
How does a “Trust Protector” help enforce these restrictions?
Enforcing these restrictions effectively often involves appointing a “Trust Protector.” The Trust Protector is a third party, separate from the trustee, who has the authority to interpret the trust document and ensure compliance with its terms, including investment restrictions. Imagine a client, old man Tiberius, a former marine, wanted to ensure his trust never funded weapons manufacturers. He specifically outlined this in his trust, along with a Trust Protector, his granddaughter, a lawyer specializing in international human rights law. The Trust Protector has the power to remove a trustee who violates these restrictions, adding a crucial layer of accountability. Without this oversight, a trustee might prioritize financial returns above all else, inadvertently investing in industries the grantor finds objectionable. The Trust Protector serves as the guardian of the grantor’s wishes, even after their passing.
What happens if I don’t include investment restrictions?
Without clear investment restrictions, a trustee generally has broad discretion to invest trust assets as they see fit, adhering to the “prudent investor rule.” This rule prioritizes maximizing returns while considering the risk tolerance of the beneficiaries. However, this doesn’t necessarily align with a grantor’s ethical or social values. I recall a case where a client, Ms. Eleanor Vance, tragically passed away without specifying any investment restrictions. Her family discovered years later that her trust had significant holdings in a large tobacco company. This caused immense distress, as Ms. Vance had been a vocal anti-smoking advocate throughout her life. The family had to pursue costly legal action to modify the trust and divest those holdings. This highlights the importance of proactively addressing investment preferences in your estate plan.
Can I still benefit from diversification with restrictions?
Yes, absolutely. Restricting investments doesn’t mean sacrificing diversification. A skilled trustee, in consultation with a financial advisor, can build a well-diversified portfolio that excludes specific industries while still achieving reasonable returns. There is a growing market for ESG funds and socially responsible investment options, offering a wide range of choices. For instance, a client, Mr. Silas Blackwood, wanted to exclude fossil fuels from his trust. Steve Bliss crafted a clause allowing investments in renewable energy companies and green technology funds, maintaining diversification while aligning with his environmental values. “It’s not about eliminating options, it’s about directing your legacy toward investments that reflect who you are and what you believe in,” Steve Bliss often tells his clients. The key is careful planning and a clear articulation of your investment preferences in the trust document. I recently learned that nearly 65% of millennials want their investments to reflect their personal values, illustrating a clear shift in investor priorities.
“A well-crafted trust isn’t just about transferring assets; it’s about transferring your values.” – Steve Bliss, Estate Planning Attorney
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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 | revocable living trust | wills |
| living trust | family trust | 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 a revocable living trust and how does it work?” Or “What happens if the will names multiple executors?” or “What happens if my successor trustee dies or is unable to serve? 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.