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A trust is a frequently used estate-planning or asset protection instrument. Whether you plan to create a trust or are a trust beneficiary, you should be familiar with the law that governs how the trustee invests the money in the trust.

A person who creates a trust may state how s/he wants the trust invested right in the trust itself. Most trusts, however, do not contain specific investment direction because the kinds of and returns from investments change over time. If the trust is silent in that regard, there is a statute that governs the trustee known as The Prudent Investor Law.

Every trust is unique. A grandmother may create a trust to benefit her grandchildren when they reach the age of majority. A couple of retirement age may put all of their assets in a trust to provide income to them for the rest of their lives. The Prudent Investor Law requires the trustee to invest and manage trust assets as a prudent investor would by considering the purposes of the trust, the terms of the trust, the distribution requirements under the trust and other factors relevant to each particular trust. Thus, the trustee who manages the investments in the trust of the retired couple who have no income other than that produced by the trust, is required to invest very differently from the trustee who invests for the minor children in the grandmother's trust who will get no distributions for many years.

Among other things, the trustee is required to diversify the assets in the trust, make conscious decisions about the asset allocation in light of the particular circumstances of each trust and to avoid unjustified fees and transaction costs. The trustee must also monitor the investments and reallocate the trust assets when investments are inconsistent with the investment strategy. Thus, if for example it has been determined that in view of the life expectancy and income needs of the retired couple the trust should be invested 40% in stocks and 60% in bonds, and a bull market results in the stock increasing in value to 80% of the portfolio, the trustee would be required to return the investments back to 40-60. This protects the beneficiaries. In the case of the retired couple, if the trustee failed to reduce the stock position from 80% back to 40% and there was a significant stock market correction, the couple might not have enough money left in the trust to support them for the remainder of their lives.

A trustee may delegate the investment function to someone with special investment skills and expertise. When doing so, the trustee is required to inform the investment manager of the unique circumstances of the trust and to periodically review and monitor the investment performance. The investment manager has the same investment responsibilities as the trustee and is held to the same standards as the trustee.

The amount of trust litigation in our courts against trustee Banks and individual trustees is a testament to the fact that it is not unusual for a trustee to act inconsistent with the dictates of the Prudent Investor Law. When creating your trust, select your trustee wisely. By asking the right questions you can find out if policies and procedures are in place to insure adherence to the law. Beneficiaries -- meet with your trustee periodically to satisfy yourself that your trustee is acting consistently with the requirements of the Prudent Investor Law and make your trustee aware of any significant life changes so that if necessary, investment strategy can be altered. Do not assume that the trustee will do things automatically.

You will surely benefit from being informed and involved.

The author, Betsy Sweetser, is a partner in the Princeton based law firm of Pellettieri, Rabstein & Altman, She specializes in trust litigation and can be reached at 609 520-0900. Or visit http://www.pralaw.com

Divorce can be a painful experience. Even if you're the one who started the proceedings it's still a tough emotional time to get through. divorce mediators can help both people negotiate a good agreement, with less stress than is normally associated with divorce settlements.

Remember Mediation won't save the marriage. It's not going to try to get you back together. A mediation is a neutral third party method to help you put the past behind you and assists you in negotiating a fair settlement.

Also, divorce mediators are not an arbitrators. A mediator can't make decisions for you, that much is up to you. The mediator is there to help control the situation and understand that in many cases emotions can be raw.

Using divorce mediators can save you time and money. Working through a lawyer is time consuming and expensive. Using mediation and working out your settlement has many advantages.

First, a mediation is designed to gather background information regarding the situation and determine any problems. Then both parties should give the mediator financial information such as; Superannuation, real estate owned both in joint names and single names, retirement funds, investments, car, boats, etc. also any outstanding debts such as mortgages, loans, credit cards. This can be done together or separately.

With this stage completed the mediator needs to know about placement for children, visitation for the non custodial parent, and any alimony and child support. Also the division of property as in who gets the family home, who gets the holiday cottage, the division of other debits and the income of each party.

When all the information is on the table the mediation helps the parties negotiate a fair agreement. At this stage there will be tradeoffs, such as "you can have the boat but I want the SUV".

Many times these scenarios aren't acceptable so they are changed and negotiated until an agreement is reached that suits both parties. The Mediation, while not making decisions for the parties often gives them ideas on to how to balance things and come to a compromise.

Once both parties are satisfied and preliminary agreement it's drawn up for your lawyer to look over. Once all revisions have been made to the satisfaction of both parties then a formal agreement is signed and is binding. Your lawyer will be able to advise you on the laws of each state regarding these documents.

Using a Mediation can make a nasty divorce into one with provisions more amicable to each party. It also can make it easier for you and your spouse and any children.

For more information on all aspects of divorce, including how to effectively represent yourself, visit, Great Divorce Advice