Sec. 45a-541b. Standard of care. Portfolio strategy. Risk and return objectives.
Sec. 45a-541b. Standard of care. Portfolio strategy. Risk and return objectives. (a) A trustee shall invest and manage trust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements and other circumstances of
the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and
caution.
(b) A trustee's investment and management decisions respecting individual assets
shall be evaluated not in isolation, but in the context of the trust portfolio as a whole
and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing
trust assets are such of the following as are relevant to the trust or its beneficiaries: (1)
General economic conditions; (2) the possible effect of inflation or deflation; (3) the
expected tax consequences of investment decisions, strategies and distributions; (4) the
role that each investment or course of action plays within the overall trust portfolio,
which may include financial assets, interests in closely held enterprises, tangible and
intangible personal property and real property; (5) the expected total return from income
and the appreciation of capital; (6) related trusts and other income and resources of the
beneficiaries; (7) needs for liquidity, for regularity of income and for preservation or
appreciation of capital; (8) an asset's special relationship or special value, if any, to the
purposes of the trust or to one or more of the beneficiaries; (9) the size of the portfolio;
and (10) the nature and estimated duration of the trust.
(d) A trustee shall take reasonable steps to verify facts relevant to the investment
and management of trust assets.
(e) Subject to the standard of sections 45a-541 to 45a-541l, inclusive, a trustee may
invest in any kind of property or type of investment.
(f) A trustee who has special skills or expertise, or is named trustee in reliance upon
the trustee's representation that the trustee has special skills or expertise, has a duty to
use those special skills or expertise.
(P.A. 97-140, S. 3.)