58-24a02. Standard of care; portfolio strategy; risk and return objectives; trustee following written directions complies with standard of care.
58-24a02
58-24a02. Standard of care; portfolio strategy; riskand return objectives; trustee following written directions complies withstandard of care.(a) A fiduciary shall invest and manage trust assets as aprudentinvestor would, by considering the purposes, terms, distribution requirementsand other circumstances of the trust. In satisfying this standard, thefiduciaryshall exercise reasonable care, skill and caution.
(b) A fiduciary's investment and management decisions respecting individualassets must be evaluated not in isolation but in the context of the trustportfolio as a whole and as a part of an overall investment strategy havingrisk and return objectives reasonably suited to the trust.
(c) Among circumstances that a fiduciary shall consider in investing andmanaging trust assets are such of the following as are relevant to the trust orits beneficiaries: (1) General economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences of investment decisions or strategies;
(4) the role that each investment or course of action plays within theoverall trust portfolio, which may include financial assets, interests inclosely held enterprises, tangible and intangible personal property and realproperty;
(5) the expected total return from income and the appreciation of capital;
(6) other resources of the beneficiarieswho are eligibleto receive discretionary payments of trust income or principal assets;
(7) needs for liquidity, regularity of income and preservation orappreciation of capital; and
(8) an asset's special relationship or special value, if any, to thepurposes of the trust or to one or more of the beneficiaries.
(d) A fiduciary shall make a reasonable effort to verify facts relevant totheinvestment and management of trust assets.
(e) A fiduciary may invest in any kind of property or type of investmentconsistent with the standards of this act.
(f) A fiduciary who has special skills or expertise or is placed in afiduciary capacity inreliance upon the fiduciary's representation that thefiduciary has special skillsor expertise, has a duty to use those special skills or expertise.
(g) In acquiring, investing, reinvesting, exchanging, retaining, sellingand managing property of a trust which is revocable or amendable, a trusteefollowing written directions regarding the property of the trust that arereceived by the trustee from the person or persons then having the power torevoke or amend the trust or from the person or persons other than the trustee,to whom the grantor delegates the right to give such written directions to thetrustee shall be deemed to have complied with the standards provided insubsections (a) through (d). The trustee is authorized to follow such writtendirections regardless of any fiduciary obligations to which the directingparty may also be subject.
History: L. 2000, ch. 80, § 2; L. 2001, ch. 75, § 10;July 1.