District of Columbia Official Code 2001 Edition.

Division III. Decedents' Estates and Fiduciary Relations.

Title 19. Descent, Distribution, and Trusts.

Chapter 13. Uniform Trust Code.

Subchapter IX. Uniform Prudent Investor Act.

§ 19-1309.01. Prudent investor rule.

Current through October 23, 2012

(a) Except as provided in subsection (b) of this section, a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule as set forth in sections 19-1309.02 through 19-1309.09.

(b) The prudent investor rule is a default rule that may be expanded, restricted, eliminated, or otherwise altered by provisions of the trust. A trustee is not liable to a beneficiary to the extent that the trustee acted in reasonable reliance on provisions of the trust.

                
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(Mar. 10, 2004, D.C. Law 15-104, § 2(b), 51 DCR 208.)

HISTORICAL AND STATUTORY NOTES

Prior Codifications

2001 Ed., § 28-4701.

1981 Ed., § 28-4701.

Legislative History of Laws

For Law 15-104, see notes following § 19-1301.01.

Uniform Law

This section is based upon § 1 of the Uniform Prudent Investor Act. See 7B Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.

§ 19-1309.02. Standard of care; portfolio strategy; risk and return objectives.

Current through October 23, 2012 Back to Top

(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 must 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 the circumstances relevant to the trust or its beneficiaries that a trustee shall consider in investing and managing the trust assets are the following:

(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, 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) Other resources of the beneficiaries;

(7) Needs for liquidity, for regularity of income, and for 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 or more of the beneficiaries.

(d) A trustee shall take reasonable steps to verify facts relevant to the investment and management of trust assets.

(e) Subject to the standards of this subchapter, a trustee may invest in any kind of property or type of investment.

                
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(Mar. 10, 2004, D.C. Law 15-104, § 2(b), 51 DCR 208.)

HISTORICAL AND STATUTORY NOTES

Prior Codifications

2001 Ed., § 28-4702.

1981 Ed., § 28-4702.

Legislative History of Laws

For Law 15-104, see notes following § 19-1301.01.

Uniform Law

This section is based upon § 2 of the Uniform Prudent Investor Act. See 7B Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.

§ 19-1309.03. Diversification.

Current through October 23, 2012 Back to Top

A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

                
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(Mar. 10, 2004, D.C. Law 15-104, § 2(b), 51 DCR 208.)

HISTORICAL AND STATUTORY NOTES

Prior Codifications

2001 Ed., § 28-4703.

1981 Ed., § 28-4703.

Legislative History of Laws

For Law 15-104, see notes following § 19-1301.01.

Uniform Law

This section is based upon § 3 of the Uniform Prudent Investor Act. See 7B Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.

§ 19-1309.04. Duties at inception of trusteeship.

Current through October 23, 2012 Back to Top

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirements of this subchapter.

                
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(Mar. 10, 2004, D.C. Law 15-104, § 2(b), 51 DCR 208.)

HISTORICAL AND STATUTORY NOTES

Prior Codifications

2001 Ed., § 28-4704.

1981 Ed., § 28-4704.

Legislative History of Laws

For Law 15-104, see notes following § 19-1301.01.

Uniform Law

This section is based upon § 4 of the Uniform Prudent Investor Act. See 7B Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.

§ 19-1309.05. Reviewing compliance.

Current through October 23, 2012 Back to Top

The prudent investor rule expresses a standard of conduct, not a particular outcome. Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee's decision or action.

                
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(Mar. 10, 2004, D.C. Law 15-104, § 2(b), 51 DCR 208.)

HISTORICAL AND STATUTORY NOTES

Legislative History of Laws

For Law 15-104, see notes following § 19-1301.01.

§ 19-1309.06. Language invoking standard of subchapter.

Current through October 23, 2012 Back to Top

The following terms or comparable language in a trust instrument, unless otherwise limited or modified by the instrument, authorizes any investment or strategy permitted under this subchapter: "investments permissible by law for investment of trust funds", "legal investments", "authorized investments", "using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital", "prudent man rule", "prudent trustee rule", "prudent person rule", and "prudent investor rule".

                
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(Mar. 10, 2004, D.C. Law 15-104, § 2(b), 51 DCR 208.)

HISTORICAL AND STATUTORY NOTES

Legislative History of Laws

For Law 15-104, see notes following § 19-1301.01.

Refs & Annos

Jurisdiction

Laws

Effective Date

Statutory Citation

Alabama	2006, c. 216	1-1-2007	Code 1975, §§ 19-3B-901 to 19-3B-906.
Alaska	1998, c. 43	5-23-1998	AS §§ 13.36.225 to 13.36.290.
Arizona	2008, c. 247	1-1-2009	A.R.S. §§ 14-10901 to 14-10909.
Arkansas	2001, Act 151	2-8-2001	A.C.A. §§ 24-2-610 to 24-2-619.
California	1995, c. 63	1-1-1996	West's Ann. Cal. Probate Code, §§ 16045 to 16054.
Colorado	1995, S.B. 95-121	7-1-1995	West's C.R.S.A. §§ 15-1.1-101 to 15-1.1-115.
Connecticut	1997, P.A. 97-140	6-13-1997[FN*]	C.G.S.A. §§ 45a-541 to 45a-541l.
District of Columbia	2004, c. 15-104	3-10-2004	D.C. Official Code, 2001 Ed. §§ 19-1309.01 to 19-1309.06.
Florida	1993, c. 93-257	10-1-1993	West's F.S.A. §§ 518.11, 518.112.
Hawaii	1997, c. 26	4-14-1997	H.R.S. §§ 554C-1 to 554C-12.
Idaho	1997, c. 14	7-1-1997	I.C. §§ 68-501 to 68-514.
Illinois	1992, P.A. 87-715	1-1-1992	S.H.A. 760 ILCS 5/5, 5/5.1.
Indiana	1999, P.L. 137-1999	7-1-1999	West's A.I.C. §§ 30-4-3.5-1 to 30-4-3.5-13.
Iowa	1999, H.F. 663	7-1-2000	I.C.A. §§ 633A.4301 to 633A.4309.
Kansas	2000, c. 80	7-1-2000	K.S.A. 58-24a01 to 58-24a19.
Maine	2004, c. 618	7-1-2005	18-B M.R.S.A. §§ 901 to 908.
Massachusetts	1998, c. 398	12-4-1998[FN*]	M.G.L.A. c. 203C, §§ 1 to 11.
Michigan	1998, P.A. 386	4-1-2000	M.C.L.A. §§ 700.1501 to 700.1512.
Minnesota	1996, c. 314	1-1-1997	M.S.A. §§ 501B.151, 501B.152.
Mississippi	2006, c. 474	7-1-2006	Code 1972, §§ 91-9-601 to 91-9-627.
Missouri	2004, H.B. No. 1511	1-1-2005	V.A.M.S. §§ 469.900 to 469.913.
Montana	2003, c. 484	10-1-2003	M.C.A. 72-34-601 to 72-34-610.
Nebraska	2003, LB 130	1-1-2005	R.R.S. 1943, §§ 30-3883 to 30-3889.
Nevada	2003, c. 355	10-1-2003	NRS 164.705 to 164.775.
New Hampshire	2004, c. 130	10-1-2004	RSA 564-B:9-901 to 564-B:9-907.
New Jersey	1997, c. 26	3-7-1997	N.J.S.A. 3B:20-11.1 to 3B:20-11.12.
New Mexico	1995, c. 210	7-1-1995	NMSA 1978, §§ 45-7-601 to 45-7-612.
New York	1994, c. 609	1-1-1995	McKinney's EPTL 11-2.3.
North Carolina	2005, c. 192	1-1-2006	G.S. §§ 36C-9-901 to 36C-9-907.
North Dakota	2007, c. 549	8-1-2007	NDCC 59-17-01 to 59-17-06.
Ohio	2006, H.B. 416	1-1-2007	R.C. §§ 5809.01 to 5809.08.
Oklahoma	1995, c. 351	11-1-1995	60 Okl.St.Ann. §§ 175.60 to 175.72.
Oregon	2005, c. 348	6-29-2005 [FN*]	ORS 130.750 to 130.775.
Pennsylvania	1999, c. 1999-28	6-25-1999[FN*]	20 Pa. C.S.A. §§ 7201 to 7214.
Rhode Island	1996, c. 276	8-6-1996[FN*]	Gen. Laws 1956, §§ 18-15-1 to 18-15-13.
South Carolina	2005, c. 66	1-1-2006	Code 1976, § 62-7-933.
Tennessee	2002, c. 696	7-1-2002	T.C.A. §§ 35-14-101 to 35-14-114.
Texas	2003, c. 1103	1-1-2004	V.T.C.A. Property Code §§ 117.001 to 117.012.
Utah	2004, c. 89	7-1-2004	U.C.A. 1953, 75-7-901 to 75-7-907.
Vermont	1998, P.A. 67	7-1-1998	9 V.S.A. §§ 4651 to 4662.
Virgin Islands	2004, No. 6678	8-12-2004 [FN*]	9 V.I.C. §§ 701 to 714.
Virginia	1999, c. 772	1-1-2000	Code 1950, § 26-45.3 to 26-45.14.
Washington	1995, S.S.B. 5333	7-23-1995	West's RCWA 11.100.010 to 11.100.140.
West Virginia	1996, S.B. 294	7-1-1996	Code, 44-6C-1 to 44-6C-15.
Wisconsin	2004, c. 283	4-30-2004	W.S.A. 881.01.
Wyoming	2003, c. 124	7-1-2003	Wyo.Stat.Ann. §§ 4-10-901 to 4-10-913.

[FN*] Date of approval.