The CRT Trustee Six-PackThe CRT Trustee Six-Pack
Investing guidelines to build your fiduciary fitness.
Trusteeship of split-interest trusts such as charitable remainder trusts (CRTs) can be complicated due to beneficiaries’ competing interests. The income beneficiary may seek to maximize a stable, tax-efficient income stream during their life, while the charity’s interest is in the long-term growth to maximize the remainder. In our experience managing CRT investments, we’ve identified six investment-related strategies that can help mitigate fiduciary risk:
Diversify concentrated single stock;
Bias toward equities early;
Glide toward bonds late;
Use taxable bonds instead of municipal bonds;
Avoid illiquid investments; and
Write an Investment Policy Statement (IPS) and distribute it to all stakeholders.
Fiduciary Duty
The trustee of a CRT has significant fiduciary responsibilities, outlined in a variety of sources that will apply depending on the specific structure of the CRT and relevant jurisdiction. Many jurisdictions require trustees to conform to the Uniform Prudent Investor A...
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