Feb 24, 2022
Trustee’s Duty to Diversify Trust Assets — Charles W. Ranson
Corporate trustees as well as individual trustees owe fiduciary duties to beneficiaries, and among those duties is the duty to diversify the trust portfolio.
I recently gave more insight into these policies.
“Generally, trustees have a duty to diversify a trust or the holdings of a trust — the assets of a trust, unless the trust agreement specifies that the trustee does not have a duty to do so. The diversification of a trust portfolio is measured in terms of the standards set forth now in the Prudent Investor Act and the Uniform Trust Code or individual State Probate Code. It is also enumerated with national banks through their policies and procedures.
“Failure to diversify a portfolio is considered a breach of fiduciary duty because it can cause harm and undue risk to the underlying beneficiaries.”
About Charles W. Ranson: Charles is a wealth management expert witness with decades of experience in financial services. He provides expert witness and litigation consulting services to attorneys who represent clients involved in legal disputes between financial institutions, trustees, beneficiaries, private foundations, family offices and ultrahigh net worth investors.
