Prudent investor rule

Prudent investor rule

Definition

A rule, taken from the Restatement (Third) of Trusts and the Uniform Prudent Investor Act (UPIA), providing that a trustee has a duty to invest the trust’s assets as a prudent person would invest them. Under this rule, the trustee must personally perform the responsibilities of the trusteeship, except as a prudent person might delegate those responsibilities to others. For example, the rule authorizes trustees to delegate essential investment functions.

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