The Uniform Prudent Investor Act permits delegating investment functions to a qualified agent with reasonable care in selection, establishing the scope, and periodic monitoring. Proper delegation shifts liability to the agent.
Failure to monitor retains trustee liability.
Alternative Names:
Trustee Delegation|Investment Delegation
Why it Matters?
Delegation shifts liability only where selection, scoping, and monitoring were all performed with reasonable care, which means a trustee who hired an adviser and never reviewed performance retains responsibility for resulting losses. Documented periodic reviews of the agent's performance against the stated policy are the protective record. Agents accepting delegation also submit to the jurisdiction of the trust's courts under the uniform act.
Frequently Confused with
Related terms
Frequently asked questions
When does delegation shift liability?
What is the protective record?
