Delegated investment management. Prior to the Prudent Investor Rule, an agent was legally responsible for all aspects of fiduciary management, including investment management. In other words, an agent could not delegate liability for the placement of a trust`s assets, and any investment manager or other person hired as an employee in the management of the trust was a mere agent of the trust. Thus, the agent was looking for the actions of the investment manager. As mentioned above, a trust is treated as an individual for income tax purposes. The trust is considered investment income and all income held in a trust (Testamentar or Inter vivo) is taxed at the maximum tax rate (a Graduated Rate Estate (GRE) and Qualified Disability Trust (QDT) are taxed at staggered rates).1 Conclusion As a trustee, a wide range of knowledge is required in a number of different areas and therefore carries a significant risk of liability. The focus on the best practices discussed above will help a single agent reduce liability and likely produce better outcomes for recipients. Trusts can also be used for tax planning. In some cases, the tax consequences of using trusts are less important than those of other alternatives. This is why the use of trusts has become an element of tax planning for individuals and businesses. My firm manages real estate transfers in two stages.
First, the surviving spouse records an attorney`s sworn death at the county recorder`s office. Once the registered sworn insurance has been received by my office, the second step is taken, which involves the registration of a receiver transfer declaration by the survivor as an agent of common trust and revocable to the survivor as a trustee of the Survivor`s Trust. In Los Angeles County, the surviving spouse cannot receive registered documents for approximately six (6) to eight (8) weeks. This means that the transfer of ownership can take about four months. Qualified Terminable Interest Property Trust: This trust allows a person to transfer assets at different times to specific beneficiaries, their survivors. In the typical scenario, a spouse receives a lifetime income from the trust and receives children, which remains after the death of his or her spouse. Documentation. A well-known proverb is that the three most important rules of real estate are “location, location, location.” Similarly, the three main rules of the Treuhandschaft are “Documentation, Documentation, Documentation.” While directors are not expected to ensure perfect results, they must act with care, skill and impartiality. It is important that directors have rational reasons for making their decisions. The documentation is important because it supports the agent`s careful, rational, skilful and impartial decision-making, without the decisions that seemed entirely reasonable at the time of the action appear to have been unsealed in hindsight. An attorney will almost never regret documenting a decision or communication, but may regret a lack of documentation. The assets of the funds benefit from a catch-up, which can represent a considerable tax saving for the heirs who, after all, inherit the trust.