Trust Investments (Prudent Investor)
Trusts · Lesson 10
Trust Investments (Prudent Investor)
這一課問的是：受託人之投資決策是否符合審慎投資者規則？
ActorActObjectStandardConsequence
Issue · what this lesson is really about
Has the trustee complied with the prudent investor rule in investment decisions?
這一課問的是：受託人之投資決策是否符合審慎投資者規則？
Trigger words & phrases that should flag this issue:
investportfolioprudentdiversificationmodern portfolio
Core Terminology · 7 must-know
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Uniform Prudent Investor Act
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UPIA: modern standard.
統一審慎投資者法。
portfolio theory
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Investments evaluated as portfolio, not individually.
投資組合理論。
modern portfolio
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Risk and return assessed at portfolio level.
現代投資組合。
diversification
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Required unless circumstances justify.
分散。
delegation
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Trustee may delegate investment functions.
委派。
total return
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Trustee may invest for total return.
總回報。
special skills
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Trustee with special skills held to higher standard.
特殊技能。
Rule Sentence · the workhorse
Under the Uniform Prudent Investor Act, a trustee must invest as a prudent investor would, considering the entire investment portfolio's risk and return; diversification is required unless circumstances clearly favor otherwise, and prudent delegation is permitted.
Sentence Anatomy · 5 roles, 5 colors
Every rule sentence breaks into five visual roles.
Actor 行為人trustee受託人
Act 行為investing trust property投資信託財產
Object 對象portfolio投資組合
Standard 法律標準UPIA prudent investorUPIA 審慎投資者
Consequence 後果trustee compliant or in breach符合或違反
Casebook Snapshot · a real American case
Restatement (Third) Trusts (Prudent Investor Rule)
Holding. A trustee invests as a prudent investor would, evaluating the portfolio as a whole, considering modern portfolio theory; investments are judged in context of the entire portfolio, not individually.
Why it matters. Modernized standard — investments must work together as a portfolio, considering risk-return at aggregate level.
現代標準：以投資組合整體判斷，非個別判斷。
Common Mistakes · what trips students
✗ UPIA 評估 individual investments。
✓ Portfolio-level evaluation.
投資組合層面。
✗ trustee 不可委派 investments。
✓ UPIA permits prudent delegation.
UPIA 容許審慎委派。
Mini IRAC · build the Application
Issue. Did the trustee breach the prudent investor rule by investing 70% of the trust in growth stocks when the trust's purpose is income for an elderly beneficiary?
Rule. Under UPIA, the trustee must invest considering the trust's purposes, terms, and circumstances; portfolios must match the beneficiary's needs and the trust's distribution requirements.
Application (model). The trust's stated purpose is income for an elderly beneficiary; the trustee invested 70% in growth stocks providing minimal current income. Because UPIA requires alignment of investment strategy with trust purpose and beneficiary needs, the fact that the trustee invested in growth stocks rather than income-producing assets contrary to the trust's income-focused purpose for an elderly beneficiary means the trustee failed to align investments with the trust's purpose.
Pick the right element for each blank:
g1.
g2.
Conclusion. Therefore, the trustee breached the prudent investor rule.
MBE Check · multiple choice
Trustee invests 100% of the trust corpus in a single Tesla stock, which doubles in value. Did the trustee comply with UPIA?
Practice Drill · tap to build the rule
Drop the chips here in correct order:
Tap chips to add → tap chips in the target to remove: