Increasingly, individuals are recognizing the power of their financial resources to influence positive change, and this extends to how trusts are managed and invested; a trust can absolutely limit the environmental impact of its investments, and it’s becoming a crucial consideration for many estate planners and beneficiaries.
What is Sustainable and Responsible Investing (SRI)?
Sustainable and Responsible Investing (SRI), also known as impact investing, is an investment strategy that seeks to generate financial return while also considering environmental, social, and governance (ESG) factors; according to the Forum for Sustainable and Responsible Investment, ESG assets under management reached $17.1 trillion in 2020, demonstrating a significant and growing trend. A trust can adopt various SRI approaches, including negative screening—excluding investments in companies with detrimental environmental practices, such as fossil fuels or deforestation—and positive screening, prioritizing investments in companies with strong environmental performance and innovation. For example, a trust might exclude investments in companies heavily involved in coal mining and instead invest in renewable energy projects or companies developing sustainable technologies. This requires careful consideration of the trust’s investment policy statement to align with the beneficiary’s values and long-term goals, ensuring legal compliance and fiduciary duties are met.
How Do Environmental, Social, and Governance (ESG) Factors Impact Investment Returns?
There’s a common misconception that incorporating ESG factors into investment decisions necessarily lowers returns; however, numerous studies suggest the opposite may be true. Companies with strong ESG practices often exhibit better risk management, innovation, and long-term sustainability, which can lead to improved financial performance. A 2015 study by the University of Oxford found that companies with high ESG ratings outperformed those with low ratings by an average of 3.6% per year. Furthermore, investors are increasingly demanding sustainable investments, driving up demand and potentially increasing the value of ESG-focused companies. A trust can benefit from these trends by strategically allocating assets to companies that demonstrate a commitment to environmental responsibility, reducing risk and potentially enhancing returns, and ensuring the trust’s investments reflect the values of its beneficiaries.
What Happened When Old Man Tiber’s Will Didn’t Account for His Values?
Old Man Tiber, a lifelong conservationist, had amassed a substantial fortune that he intended to leave to his grandchildren to support their education. However, his will and trust documents were drafted decades prior, before ESG investing was common. After his passing, the trustee, following the literal instructions of the trust, invested heavily in a conglomerate involved in logging old-growth forests—a practice Tiber vehemently opposed. His grandchildren, deeply distressed by this contradiction, contested the trustee’s actions. The ensuing legal battle was costly and emotionally draining, revealing that even with good intentions, a lack of foresight in estate planning can lead to outcomes that contradict the grantor’s values. The situation underscored the importance of explicitly incorporating ethical and environmental considerations into trust documents, even if they weren’t prevalent at the time the documents were created.
How Did the Miller Family Trust Secure a Greener Future?
The Miller family, concerned about climate change, worked with Steve Bliss to create a trust that prioritized sustainable investing. The trust’s investment policy statement specifically outlined ESG criteria, favoring companies with low carbon footprints, responsible resource management, and a commitment to renewable energy. Steve Bliss guided them through the process of incorporating these values into the trust agreement, ensuring it aligned with legal requirements and fiduciary duties. Over time, the trust not only generated competitive returns but also funded several environmental conservation projects. The Miller family’s proactive approach demonstrated that a trust can be a powerful tool for aligning financial goals with environmental values, creating a legacy of both financial security and positive impact. It also provided peace of mind, knowing their wealth was being used to support causes they deeply cared about—a testament to thoughtful estate planning and its potential for positive change.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
banckruptcy attorney
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “How does a living will differ from a regular will?” Or “What happens to jointly owned property during probate?” or “What should I do with my original trust documents? and even: “Is bankruptcy a good idea for small business owners?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.