If you have worked hard all of your life and make prudent investments, then you are hopefully fortunate enough to have a moderate to large sized estate that you will eventually pass down to loved ones. Many people choose to include a trust in their estate plan for a variety of reasons, including the ability to retain a certain degree of control over assets even after death. In order to fine tune that control, make sure that you prepare and include an investment policy statement with your trust documents.
An investment policy statement, or IPS, is a written document that sets forth what your investment philosophy and financial goals are for the trust assets. Think of it as a roadmap for the trustee. While your trust terms will decide how the trust funds are to be distributed, your IPS gives your trustee a better idea of who you are as an investor. For example, if you are a risk taker then your ISP would encourage investing in risky, but potentially profitable, investments. On the other hand, if you are a cautious investor, then your IPS would instruct the trustee to stick to conservative, safe, investments. You can even provide a specific goal in your IPS such as growing the trust assets to a specific dollar amount by the year 2030. Don’t miss out on this opportunity to guide your trustee even after you are no longer here to do so in person.
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- Leaving Assets Can Be Tricky – Part 3 - August 13, 2020
