Asked by Hudson Nyaki on May 09, 2024
Verified
In most states, a trustee's investment decisions are usually governed by:
A) the prudent person rule.
B) judiciary determination.
C) the beneficiary's intent.
D) The Uniform Principal and Income Act.
Prudent Person Rule
A legal principle requiring that a person in charge of others' assets manage those assets with the care, diligence, and judgment that a prudent person would under similar circumstances.
Uniform Principal and Income Act
A statutory framework adopted by some states to standardize how income and principal from trusts and estates are allocated.
- Recognize the tax consequences and obligations associated with estates and trusts.
Verified Answer
DM
Danielle MeeksMay 15, 2024
Final Answer :
A
Explanation :
The prudent person rule is a legal principle that requires trustees to exercise the same level of care and diligence in managing trust assets that a prudent person would exercise in managing their own assets. This rule guides investment decisions made by a trustee and is the standard used to evaluate whether a trustee has breached their fiduciary duties.
Learning Objectives
- Recognize the tax consequences and obligations associated with estates and trusts.