Articles for Individual Trustees
UPIA §2(b) – Duty to Monitor Risk and Return
The preamble to the Uniform Prudent Investor Act notes, “The tradeoff in all investing between risk and return is identified as the fiduciary’s central consideration.” For most trustees determining the return that was produced by the assets held in trust is a fairly straightforward exercise.
Prudent Delegation Standard of Care: Registered Investment Advisor v. Registered Representative
In the same way a trustee owes duties of care and loyalty to the beneficiaries of a trust, the investment managers also owe a particular standard of care to the trust itself. A prudent trustee will determine what standard of care is owed by the money managers to whom...
UPIA §7 re Duty to Pay Only Fair Fees
“Wasting beneficiaries’ money is imprudent. In devising and implementing strategies for the investment and management of trust assets, trustees are obligated to minimize costs” (National Conference of Commissioners on Uniform State Laws). Duty to Pay Only Fair...
Johnny Depp v. TMG: What are a business manager’s duties of care?
The Question: What standard of care and what attendant duties does a business manager owe to their client? The Answer: It depends on what roles and services the business manager fulfills for their client. A good argument can be made that the business manager owes a...
Reconciling the Duty to Diversify
When is the trust capital adequately diversified? Is owning five single family houses in Long Beach, California diversified? Is owning one index mutual fund that holds over 1,000 securities diversified? And what is the trustee to do if the asset that originally funded the trust was NOT diversified?
UPIA §2(c)(6) re Other Resources of the Beneficiary
The Conundrum: Question: Should the investment policy and distribution rate from a trust be informed by assets held by the beneficiary that are outside the trustee’s responsibility or control? Predictably the answer is… it depends. However, in most cases it is fair...
UPIA §2(b) re Duty to Balance Risk and Return
The preamble to the Uniform Prudent Investor Act notes, “The tradeoff in all investing between risk and return is identified as the fiduciary’s central consideration.” For most trustees determining the return that was produced by the assets held in trust is a...
UPIA §9 re Prudent Delegation of Investment Duties
Many trustees implicitly trust the investment manager to whom investment duties have been delegated. They trust that the manager’s strategy is reasonable. They trust that the return the manager produced was appropriate given the level of risk that was taken. They...
UPIA §7 re Duty to Pay Only Fair Fees
Section 7 of the Uniform Prudent Investor Act states, “In investing and managing trust assets, a trustee may only incur costs that are appropriate and reasonable…
