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Trusts • Trustee Powers & Duties
TRUSTS#036
Legal Definition
Some states have investment lists the trustee must follow in the absence of directions in the trust. Good investments include: federal government bonds, federally insured CDs, a first deed of trust, and certain publicly traded stocks. Good investments never include second deeds of trust or new businesses.
Plain English Explanation
Many trusts come with guidelines on how the trustee should invest the trust's assets. However, where the trust does not provide such guidance, many states have pre-approved lists of investments that a trustee can follow to avoid liability for making inappropriate investments.
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Related Concepts
What are the trustee's duties?
What are the trustee's powers?
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What is the duty to account?
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What is the duty to diversify?
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What is the duty to invest?
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