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Asked by Shane 2Wavyy on Jun 14, 2024

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Joe Smith has just died.Three months ago,when he knew that his death was impending,Joe established a spendthrift trust for the protection of his 16-year old son Bobby.The trust property consists mainly of $500,000 in investment securities.The trustee is Jack Purdy,a CPA.The trust agreement does not discuss the trust's termination.Can Jack invest trust assets differently than Joe invested them? For example,can he sell trust securities and buy others? Why or why not? Must Jack hire an investment professional to make trust investments?

Spendthrift Trust

A trust designed to provide a beneficiary with income while protecting the trust assets from being claimed by creditors or the beneficiary's poor spending habits.

Trust Assets

Assets that are held and managed by a trust for the benefit of the trust's beneficiaries.

Investment Professional

an individual or organization specialized in advising clients on where and how to invest their money to achieve financial growth.

  • Identify the various categories of trusts and their intended functions, encompassing express, spendthrift, and resulting trusts.
  • Conduct an in-depth evaluation of estate planning strategies and legal measures, adapting to the changing legal landscape, including alterations to legislation or the emergence of alternatives to wills.
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Ashley NelsonJun 16, 2024
Final Answer :
Jack must use a reasonable degree of skill,judgment,and care in the exercise of his trust duties.In the investment context,this usually means that the trustee should invest as would a prudent man in the conduct of his own investments.It follows that Jack can buy and sell securities for the trust.What is more,he cannot delegate these duties to anyone else,for they are considered discretionary rather than merely ministerial.

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