The Minute Trust – The Protection of Capital

The Minute Trust – The Protection of Capital

Philippe

Philippe Bouchard

Director, Trust Administration and Wealth Engineering

philippe.bouchard@bluebridge.ca

Protecting the capital is a priority for many investors at all times, but perhaps more so during periods of economic uncertainty. When there are significant fluctuations in the financial markets, many investors will decrease their exposure to riskier investments accordingly, opting instead for financial products that offer lower, but more predictable, returns.

The financial portfolio held in a trust is even more concerned with market developments because one of the trustee’s main objectives is to manage and protect capital for the purpose of gradually distributing it over the medium or long term.

The investment horizon, the age of the beneficiaries and their intent or not to request distributions from the trustee are important elements that the trustee must consider as part of how it, or the portfolio manager it appoints, manages the assets. At all times, the trustee must manage the assets in a prudent, diligent, and reasonable way. In light of this duty, it may have to curb the demands of beneficiaries from time to time in order to ensure the sound and prudent management of the financial portfolio and discourage being overweight on investments that are too volatile. The trustee must safeguard the best interests of all beneficiaries and not just follow the recommendations or wishes of only one.

In this context, choosing a trustee who is financially responsible and at ease with financial markets is especially important for wealthy families hoping to place assets in a trust to pass them on to the next generations.

Blue Bridge Trust Company Inc. and its team of Trust Officers are supported by several in-house  financial services professionals who can advise the trustee on the international macro-economic context and market developments. Easy access to this advice is essential for the trustee to achieve its objectives regarding sound, prudent management and the protection and growth of their clients’ capital.

If you have any questions, please don’t hesitate to contact a member of Blue Bridge’s team.