Prudent investor must exercise reasonable skill, care and caution, must consider the purposes of the trust, terms, distribution requirements in making investments.

Some factors to consider:

  • tax consequences
  • beneficiary's expenses
  • special relation of assets to the trust (real property)
  • evaluate each investment at time investment was made
  • trustee has duty to diversify
Makes job harder since the trustee has to do more research, know more; but waive of the future.

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