What kind of investments are allowed in a trust?

In Alaska, a trust is an estate planning tool that can be used to provide for future needs. It is a legal arrangement in which a person or organization (called the “trustee”) holds and manages assets for the benefit of someone else (the “beneficiary”). Trusts are often used to manage assets that will be distributed after the death of the person who set up the trust (the “grantor”). The types of investments that can be held in a trust in Alaska depend on the specific provisions of the trust agreement. Generally speaking, trusts may hold a variety of financial investments, such as stocks, bonds, and mutual funds. Other common investments that may be allowed in a trust include real estate, annuities, certificates of deposit, and life insurance policies. Trusts can also hold certain personal and tangible property, such as artwork, jewelry, and automobiles. The trust agreement will also specify whether the trustee can add to or sell investments held in the trust. Trustees are obligated to exercise the same degree of care that a prudent investor would use in managing a similar portfolio. As such, trustees are expected to invest trust assets in reasonable and diversified investments that are suited for the beneficiaries. In Alaska, if a trust holds investments that are not in the best interest of the beneficiaries, the trustee may be held liable for failure to comply with the trust agreement. As such, it is important for trustees to ensure that the investments held in the trust are appropriate and beneficial for the beneficiaries.

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