7 Risk Mitigation Strategies for Trustees

Having served as an expert consultant / witness in trust litigation matters since 2013, I have observed seven risk mitigation” strategies that a prudent trustee will adopt.  

Strategy #1 – Compliance Library:   

  1. CPC §16040: The trustee shall administer the trust with reasonable care, skill, and caution under the circumstances that a prudent person acting in a like capacity would use for a trust of like character with like aims to accomplish the purposes of the trust as determined from the trust instrument.  

  2. Governance 101: 

    • Policy = Statutory duty (This is your job description)

    • Procedure = Workflow to prove the policy was followed

    • Practice = Memo/writing that demonstrates the procedure was followed

    • Compliance Library: Vault into which all memos/work product are filed

    • Compliance Calendar: Defining frequency of governance activity

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