Satisfaction of prudent investor standard; evaluation of decisions; consideration of circumstances; verification of facts; types of investments; special skills or expertise of trustee.

NRS

164.745

Satisfaction of prudent investor standard; evaluation of decisions; consideration of circumstances; verification of facts; types of investments; special skills or expertise of trustee.

1. A trustee shall invest and manage trust property as a prudent investor would, considering the terms, purposes, requirements for distribution, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.

2. A trustee’s decisions concerning investment and management as applied to individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as part of an overall strategy of investment having objectives for risk and return reasonably suited to the trust.

3. Among circumstances that a trustee shall consider in investing and managing trust property are such of the following as are relevant to the trust or its beneficiaries:

(a) General economic conditions;

(b) The possible effect of inflation or deflation;

(c) The expected tax consequences of decisions or strategies;

(d) The role that each investment or course of action plays within the overall trust portfolio;

(e) The expected total return from income and the appreciation of capital;

(f) Other resources of the beneficiaries;

(g) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and

(h) An asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.

4. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust property.

5. A trustee may invest in any kind of property or type of investment consistent with the standards of NRS 164.700 to 164.775 , inclusive, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property.

6. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that he or she has special skills or expertise, has a duty to use those special skills or expertise.

(Added to NRS by 2003, 1967 )