Yes, and doing it properly is itself part of discharging the duty rather than an admission of uncertainty. Delegation is permitted where the trustee uses reasonable care selecting the agent, defines the scope in writing, and monitors performance. What is not permitted is handing the decision over and looking away.
Part of our guide: Crypto Estate Planning.
The short version
- Prudent-investor rules generally allow delegation, subject to care in selection, scope, and monitoring.
- Documented reliance on a competent and reliable source is protective, and only if you recorded who you relied on.
- Advice and custody are different things. An adviser holding client assets triggers a separate regulatory regime.
- The instrument controls. Some documents restrict or condition delegation.
- Delegating does not transfer the duty. The trustee remains responsible for the delegation itself.
What proper delegation requires
Care in selecting. Credentials, registration status, references, and relevant experience with digital assets specifically. Someone excellent at portfolio construction may have no view at all on custody arrangements, and custody is where trust assets are most often lost.
A written scope. What the adviser is engaged to do, and what remains with the trustee. Vague engagements produce a gap where each party assumed the other was handling something.
Monitoring. Periodic review of performance and continued suitability, recorded. Delegation without review is abdication with paperwork.
Consistency with the instrument. Some instruments restrict delegation, condition it, or require beneficiary notice.
The parallel duty language for LLC managers is instructive because it is explicit that reliance is part of the job, not a retreat from it: a person may “rely in good faith upon opinions, reports, statements or other information provided by another person that the [person] reasonably believes is a competent and reliable source for the information” (W.S. 17-29-409(c)).
Advice versus custody
This is the distinction that matters most in practice, and it gets blurred.
Advice is recommendation. The trustee decides and executes, or authorizes execution.
Custody is holding assets or having the ability to move them. An investment adviser that has custody of client assets is subject to the SEC’s custody rule, which requires assets be held with a qualified custodian in accounts that are segregated or held only for clients (17 CFR 275.206(4)-2).
A trustee should know exactly which arrangement is in place. An adviser with signing authority over trust assets is a very different proposition from one who recommends and never touches the keys, and the trust’s records should say which.
Ask directly: can this adviser move assets without a further instruction from me? If the answer is yes, that is custody, and it changes both the regulatory analysis and the trustee’s monitoring obligation.
What to actually ask an adviser
Registration status and the exact registered entity. Whether they will have custody or discretionary authority. What custody arrangement they recommend and why. How they are compensated, including anything received from custodians or platforms. What happens to the trust’s position if the engagement ends. And what their view is on succession and key access, because an adviser with no view on that is advising on half the problem.
What I actually see
Trustees hire for market opinion and then discover the adviser has nothing to say about the questions that actually generate fiduciary risk: who can sign, what happens on incapacity, and whether the records would satisfy a beneficiary. Those sit closer to operations than to asset allocation, and many advisers do not cover them.
The second pattern is the undocumented engagement. Advice taken verbally, acted on, and never recorded. The protection that reliance offers depends entirely on being able to show who advised what and when, and a verbal conversation with someone no longer reachable protects nobody.
The third is scope drift. An adviser engaged to advise gradually acquires operational access because it was convenient, and nobody updated the engagement letter or the trust’s records. The trustee now has a custody arrangement they never deliberately created.
Where this goes wrong
The delegation happens and the duty is treated as gone with it.
The specific failures: an adviser selected without recorded diligence. Scope never written down, so responsibility for custody sits with nobody. No monitoring, so an engagement continues past its usefulness. Compensation arrangements never asked about, so a conflict goes unexamined. And operational access granted informally, which converts advice into custody without anyone deciding to.
The decision rule
- Confirm the instrument permits delegation, and on what conditions.
- Diligence the adviser and record it: registration, entity, experience with digital assets.
- Write the scope, naming explicitly what stays with the trustee.
- Establish whether this is advice or custody, and record the answer.
- Ask about compensation and conflicts, in writing.
- Monitor on a schedule, and record each review even when nothing changes.
- Keep the decision to delegate in the file, with the reasoning.
Where this sits
Delegation is one of the tools a trustee has for an asset class with no settled standard of practice. Trustee liability is what it helps manage. Documenting decisions is what makes the reliance protective. What “qualified custodian” means is the regime that applies if the adviser has custody.
Reliance on competent advice is part of discharging the duty. Undocumented reliance is just a conversation.
Sources
- 17 CFR 275.206(4)-2, Custody of funds or securities of clients by investment advisers (Cornell Legal Information Institute)
- Uniform Prudent Investor Act (Uniform Law Commission)
- Wyoming Uniform Trust Code, Wyo. Stat. Ann. Title 4, Chapter 10
- Wyoming Limited Liability Company Act, Wyo. Stat. Ann. § 17-29-409
- SEC, Investment Adviser Public Disclosure
- FINRA BrokerCheck
Related
- Can a trustee be liable for crypto losses?
- How should a trustee document crypto decisions?
- What is a qualified crypto custodian?
- Can a trustee sell crypto held in a trust?
- Can a trustee hold a hardware wallet?
- Crypto trust structures
Last updated: 3 August 2026.
This article is general education, not legal, tax, or investment advice. Fiduciary obligations depend on your instrument and jurisdiction. Talk to a qualified estate attorney about your own situation.
