The question of aligning investments with the UN Sustainable Development Goals (SDGs) is gaining traction as investors increasingly seek to integrate environmental, social, and governance (ESG) factors into their portfolios, and as estate planning attorneys like Ted Cook in San Diego, help clients express these values through their legacies; this isn’t just a trend, but a fundamental shift in how wealth is managed and transferred.
What are the benefits of Impact Investing?
Impact investing, focused on generating positive, measurable social and environmental impact alongside financial returns, is becoming a powerful force. Roughly $870 billion was invested globally in impact investments as of 2022, and this number is projected to continue growing rapidly. For estate planning, this means clients are increasingly interested in directing their wealth toward causes they care about, ensuring their legacies reflect their values. Ted Cook frequently advises clients on incorporating these ethical considerations into their trust documents, allowing for charitable remainder trusts or direct investments in SDG-aligned ventures. These investments aren’t simply altruistic; they can also offer diversification benefits and potentially outperform traditional investments in the long run, according to several studies by organizations like the Global Impact Investing Network (GIIN).
How do Trusts Facilitate Ethical Investing?
Trusts are exceptionally well-suited for facilitating ethical investing, providing a legal framework to ensure long-term adherence to investment principles. A well-drafted trust document can explicitly state the client’s desire for SDG alignment, outlining specific investment criteria or prohibited sectors. This goes beyond simple negative screening (avoiding fossil fuels, for example) and allows for proactive investment in solutions addressing global challenges, like renewable energy, sustainable agriculture, or affordable housing. Ted Cook emphasizes the importance of clearly defining these parameters in the trust agreement to avoid ambiguity and ensure the trustee understands and can fulfill the client’s wishes. For example, a client might specify that at least 20% of the trust portfolio be allocated to companies actively working towards SDG 6 (Clean Water and Sanitation).
What happened when a client’s wishes weren’t clearly defined?
Old Man Tiber, a retired shipbuilder, had a deep love for the ocean and wanted his estate to support marine conservation. He verbally expressed this to his attorney, but it wasn’t properly codified in his trust document. After his passing, the trustee, unfamiliar with his passion, invested heavily in a commercial fishing company, inadvertently contributing to the very problems Old Man Tiber had hoped to alleviate. His daughter, heartbroken, had to navigate a costly legal battle to redirect the investments, proving a clear oversight in the initial estate planning. It was a painful lesson about the power of precise wording and the crucial role of an experienced estate planning attorney.
How did clear instructions prevent a similar issue for the Peterson Family?
The Peterson family, deeply committed to sustainable farming, worked closely with Ted Cook to create a trust that prioritized investments in regenerative agriculture. The trust document explicitly outlined their commitment to the UN SDGs, specifically SDG 2 (Zero Hunger) and SDG 15 (Life on Land). It also included a ‘values clause’ mandating the trustee to conduct thorough ESG due diligence on all potential investments. Years later, when a promising agricultural tech company aligned with their values came along, the trustee, guided by the clear instructions in the trust, confidently invested a significant portion of the portfolio. This led to both financial returns and a tangible positive impact on sustainable food production, solidifying the Peterson family’s legacy of environmental stewardship. Ted Cook often shares this story as an example of how proactive estate planning can translate values into lasting change.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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| Ocean Beach estate planning attorney | Ocean Beach estate planning attorney | Sunset Cliffs estate planning attorney |
| Ocean Beach estate planning lawyer | Ocean Beach estate planning lawyer | Sunset Cliffs estate planning lawyer |
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