Hiring An Expert Witness For Trust Investments

Law Blog

There are a number of reason for which one might hire an expert witness in regards to investments within a trust. First and foremost is for their expert opinion in objectively being able to analyze the potential suitability of an investment, given the objective and purpose of the trust in which it is suggested it be held.  For example, if the trust in question is designed to hold assets in conservatorship for a disabled beneficiary, it would be implied there would exist a low risk tolerance for investments. This holds true in that those overseeing the investments possess a fiduciary responsibility to act in their client's best interest, not their own. Accordingly, a high risk or illiquid investment such as a hedge fund, or Real Estate Investment Trust (REIT) would not be suitable. 

The other most common purpose for hiring a trust investments expert witness within a trust would be due to some type of civil litigation involving the trust.  Usually this relates to similar situations involving the suitability, or risk tolerance, of an investment within a trust, but ... after the fact. In these scenarios the expert witness can provide their opinion and analysis of whether or not they feel the investment meets a fiduciary standard (in regards to its suitability, given the purpose of the trust).  

The term "expert witness" comes from Section 702 of the Federal Rules of Evidence, and dictates that a qualified expert witness is "someone who has knowledge, skill, education, experience, or training in a specialized field."  The purpose of the expert witness is to apply their knowledge and expertise in either helping the party (or parties) trying a case to understand specific, germane information or evidence, or; in providing testimony using common accepted practices and methods in their field of expertise.  In essence what this means is the person called an a expert witness will have substantial training, experience, and/or certifications in their field of expertise (or a combination of all) - beyond that a common person, or even someone within their field (in general).  For example, an entry-level bank teller with no other experience or training would not fall within the requisite criteria for an expert witness regarding investment matters, and therefore could not be designated as such.  However, a person with advanced degrees in finance, one or more professional certifications in financial planning and analysis, and years of experience would absolutely fall within the diagnostic criteria of an "expert witness."

The cost of hiring an expert witness can vary.  Such factors as the scope and duration of their duties usually play significant factors in influencing rates, however it's not uncommon for this to range from $100 or $200 an hour on the low-end of the spectrum, to $1,000 (or more) an hour on the high-end.  Regardless of the cost, hiring a competent and qualified expert witness can pay dividends in the long run, and is more than worth it.   


28 July 2020

Dealing with Estate Planning When You're Single

Too many single people assume they don't need to plan their estate. My brother fell into this category, and his unexpected passing left our entire family struggling to deal with his home, belongings, and financial accounts. It took nearly three years for the courts to set up a deal because he left no paperwork detailing how he wanted his estate divided. The situation immediately convinced me to work on my own estate, even though I'm still in my early 30's and don't have children or a spouse to worry about. Since it's a little harder to pick beneficiaries and estate managers when you're single, I collected the resources I used for making my own decisions and decided to publish them here on my blog. Use these resources before talking to an estate planning attorney so you're prepared for making hard decisions.