Tips From the Pros: When Diversification By a Trustee May Not be NecessaryTips From the Pros: When Diversification By a Trustee May Not be Necessary

Diversification in investing trust assets has been a default expectation for as long as most anyone in the trust administration business can remember. Even an investment novice understands that diversification reduces risk of loss. An individual investing for himself may choose to invest a disproportionately large amount of his net worth in a single asset or asset class. If the gamble fails, only the individual suffers. The individual owes no duties to anyone. A trustee, however, doesn’t have such latitude. A trustee of a trust owes many duties to its beneficiaries, one of the most important of which is the duty to invest trust property prudently.

The UPIA

The Uniform Prudent Investor Act (UPIA), promulgated by the National Conference of C...