Connecticut General Statutes 45a-541b – 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 other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.
Terms Used In Connecticut General Statutes 45a-541b
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Personal property: All property that is not real property.
- Property: means anything that may be the subject of ownership, whether real or personal and whether legal or equitable, or any interest therein. See Connecticut General Statutes 45a-499c
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional and successor trustee and a cotrustee. See Connecticut General Statutes 45a-499c
(b) A trustee’s investment and management decisions respecting individual assets shall be evaluated not in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to 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, strategies and distributions; (4) the role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property and real property; (5) the expected total return from income and the appreciation of capital; (6) related trusts and other income and resources of the beneficiaries; (7) needs for liquidity, for regularity of income and for preservation or appreciation of capital; (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; (9) the size of the portfolio; and (10) the nature and estimated duration of the trust.
(d) A trustee shall take reasonable steps to verify facts relevant to the investment and management of trust assets.
(e) Subject to the standard of sections 45a-541 to 45a-541l, inclusive, a trustee may invest in any kind of property or type of investment.
(f) A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.