Section 3: Investment and management decisions

279 words·~1 min read·/ma/part-ii/title-ii/chapter-203c/3

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Section 3.

(a)A trustee shall invest and manage trust assets as a prudent investor would, considering the purposes, terms, and other circumstances of the trust, including those set forth in subsection (c). 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 considered in the context of the trust portfolio as a part of an overall investment strategy 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 or strategies;

(4)the role that each investment or course of action plays within the overall trust portfolio;

(5)the expected total return from income and the appreciation of capital;

(6)other resources of the beneficiaries;

(7)needs for liquidity, regularity of income, and preservation or appreciation of capital; and

(8)an asset's special relationship or special value, if any, to the purposes of the trust or to one of the beneficiaries.

(d)A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.

(e)A trustee may invest in any kind of property or type of investment consistent with the standards of this chapter.

(f)A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has such special skills or expertise, shall have a duty to use such special skills or expertise.