§ 18-15-2 - Standard of care – Portfolio strategy – Risk and return objectives. - Rhode Island Statutes

SECTION 18-15-2

   § 18-15-2  Standard of care –Portfolio strategy – Risk and return objectives. – (a) A trustee shall invest and manage trust assets as a prudent investor would,by considering the purposes, terms, distribution requirements, and othercircumstances of the trust. In satisfying this standard, the trustee shallexercise reasonable care, skill, and caution.

   (b) A trustee's investment and management decisionsrespecting individual assets must be evaluated not in isolation but in thecontext of the trust portfolio as a whole and as part of an overall investmentstrategy having risk and return objectives reasonably suited to the trust.

   (c) Among circumstances that a trustee shall consider ininvesting and managing trust assets are any of the following that are relevantto 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 orstrategies;

   (4) The role that each investment or course of action playswithin the overall trust portfolio, which may include financial assets,interests in closely held enterprises, tangible and intangible personalproperty, and real property;

   (5) The expected total return from income and theappreciation of capital;

   (6) Other resources of the beneficiaries;

   (7) Needs for liquidity, regularity of income, andpreservation 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 make a reasonable effort to verify factsrelevant to the investment and management of trust assets.

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

   (f) A trustee who has special skills or expertise, or isnamed trustee in reliance upon the trustee's representation that the trusteehas special skills or expertise, has a duty to use those special skills orexpertise.