Investment decisions of a trustee in a competition of trust

Once a fiduciary has accepted a guardianship, the fiduciary duties of the fiduciary begin. To this end, Section 736.0801, Florida Statutes, provides that upon acceptance, “the trustee shall administer the trust in good faith, consistent with its terms and purposes and in the interests of the beneficiaries” and Section 736.0802(1), Florida Statutes, requires a trustee to “administer the trust solely for the benefit of the beneficiaries”. Where a trust has two or more beneficiaries, the trustee has a duty to deal impartially with the beneficiaries in administering the trust “with due regard to the respective interests of the beneficiaries”.

Additionally, Section 518.11(1) of the Florida statutes, known as the Florida Prudent Investor Rule, requires a trustee to prudently invest the trust taking into account the “purposes, terms, distribution requirements and other circumstances of the trust”. Juxtaposed with the fiduciary’s duty of impartiality, Florida’s Prudent Investor Rule requires that the fiduciary “pursue an investment strategy that considers both reasonable production of income and safety of capital, consistent with the duty of impartiality of the trustee and the objectives of the trust…”.

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