1. 1. 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.
2. 2. A trustee's investment and management decisions respecting individual assets and courses of action must 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.

3. 3. When investing and managing trust assets, a trustee shall consider the following as are relevant to the trust or its beneficiaries:

   1. (1) General economic conditions;
   2. (2) The possible effect of inflation or deflation;
   3. (3) The expected tax consequences of investment decisions or strategies;
   4. (4) The role that each investment or course of action plays within the overall trust portfolio;
   5. (5) The expected total return from income and the appreciation of capital;
   6. (6) Other resources of the beneficiaries known to the trustee;
   7. (7) Needs for liquidity, regularity of income, and preservation or appreciation of capital;
   8. (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; and
   9. (9) The size of the portfolio, nature and estimated duration of the fiduciary relationship and distribution requirements under the governing instrument.
4. 4. A trustee shall make a reasonable effort to ascertain facts relevant to the investment and management of trust assets.
5. 5. A trustee may invest in any kind of property or type of investment consistent with the standards of this act*.
6. 6. 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 when investing and managing trust assets.

(L. 1996 H.B. 1432, A.L. 2004 H.B. 1511)

Transferred 2004; formerly 456.902

*"This act" (H.B. 1432, 1996) contained numerous sections. Consult Disposition of Sections table for a definitive listing.