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