The Research On Trustee's Duty Of Prudent Investment

As a method of property management,trust's important advantage is that it can make the best of trustee's professional knowledge and realize the aim to maintain and increase the value of estate.But because of the human nature of avoiding disadvantages,trustee as well as other managers of property may work inefficiently or damage the interest of beneficiary for his own interest.Therefore trustee shall burden the obligation of prudent investment.So how to judge if the trustee has fulfilled this obligation is the core part of this paper.In addition to the introduction and conclusion,the text is divided into the following 5 chapters:The topic of chapter one is the standard for trustee's obligation of prudent investment.The standard can be divided into subjective standard,objective standard and standard of subjectivity and objectivity.The first two are defective,so the third one which has remedied the defects shall be the best standard for trustee's obligation of prudent investment.Chapter two,chapter three and chapter four mainly discuss about specific requirements for trustee's obligation of prudent investment.Chapter two is the obligation of following the purposes of trust.It requires that the trustee shall give priority to the purposes of trust rather than trustor's orders.And the trustee shall make a change to the terms of the trust documents if they go against the purpose.Chapter three is the obligation of collecting and analyzing the information about investment.The trustee shall not only collect and analyze the information but also make decisions on the information.And the trustee shall consistently focus on the information and take actions when it changes.Chapter four is the obligation of diversifying the investments.The trustee shall diversify the investment unless the purposes of the trust are better served without diversifying,diversifying is impossible,the terms of the trust documents exempt this obligation,taxes are too high for diversifying or there are special circumstances on trustee's identity.Chapter five is mainly about the improvement for trustee's obligation of prudent investment.The main problem of the obligation is it exists ambiguity and simplicity in the standard and the requirements are not particular.Therefore it is necessary to take the standard of subjectivity and objectivity and detail the requirements of trustee's obligation of prudent investment.