§ 36C-9-901. Prudent investor rule; applicability. - North Carolina Statutes

Article 9.

Uniform Prudent InvestorAct.

§ 36C‑9‑901. Prudent investor rule; applicability.

(a)        Except as otherwiseprovided in subsection (b) of this section, a trustee who invests and managestrust assets owes a duty to the beneficiaries of the trust to comply with theprudent investor rule set forth in this Article.

(b)        The prudentinvestor rule is a default rule and may be expanded, restricted, eliminated, orotherwise altered by the provisions of a trust that govern or directinvestments in a manner inconsistent with this Article. A trustee is not liableto a beneficiary to the extent that the trustee acted in reasonable reliance onthe terms of the trust.

(c)        The following termsor comparable language in a trust, unless otherwise limited or modified, authorizeany investment or strategy permitted under this Article: "Chapter36A", "investments in accordance with Article 15 of Chapter36A", "investments in accordance with Article 9 of Chapter 36C","investments permissible by law for investment of trust funds","legal investments", "authorized investments", "usingthe judgment and care under the circumstances then prevailing that persons ofprudence, discretion, and intelligence exercise in the management of their ownaffairs, not in regard to speculation but in regard to the permanentdisposition of their funds, considering the probable income as well as theprobable safety of their capital", "prudent man rule","prudent trustee rule", "prudent person rule", and "prudentinvestor rule". This Article also applies where a trust contains noinvestment standard.

(d)        This Article doesnot apply to:

(1)        Unless the trustprovides otherwise by specific reference to this Article:

a.         Trusts under anyfederal employee retirement income security statute or other retirement orpension trusts;

b.         Trusts that arecreated by legislative act;

c.         Trusts that arecreated by or under premarital or postmarital agreements, divorce settlements,settlements of other proceedings or disputes;

d.         Transfers under aUniform Transfers to Minors Act;

e.         Transfers under aUniform Custodial Trust Act; or

f.          Honorary trusts,trusts for pets, and trusts for cemetery lots.

(2)        Trusts imposed orrequired under another Chapter of the General Statutes or by rule in which theinvestment of the trust funds is regulated by the other Chapter or by rule,unless a provision of the other chapter or the rule provides otherwise by aspecific reference to this Article. (1999‑215, s. 1; 2001‑267, s. 7; 2005‑192,s. 2.)