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24Section
4. 881.01 of the statutes is repealed and recreated to read:
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25881.01 Uniform prudent investor act.
(1) Definition. In this section:
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1(a) "Beneficiary," with respect to a guardianship of the estate, means a ward
2for whom a guardian of the estate has been appointed and, with respect to a
3conservator, means a person for whose estate a conservator has been appointed.
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(b) "Fiduciary" means personal representative, trustee, conservator, or
5guardian of the estate.
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6(2) Prudent investor rule. (a) Except as provided in s. 112.10 and except as
7otherwise provided in par. (b), a fiduciary who invests and manages assets owes a
8duty to the beneficiaries to comply with the prudent investor rule set forth in this
9section.
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(b) The prudent investor rule, a default rule, may be expanded, restricted,
11eliminated, or otherwise altered by the provisions of a will, trust, or court order. A
12fiduciary is not liable to a beneficiary to the extent that the fiduciary acted in
13reasonable reliance on the provisions of the will, trust, or court order.
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14(3) Standard of care; portfolio strategy; risk and return objectives. (a) A
15fiduciary shall invest and manage assets as a prudent investor would, by considering
16the purposes, terms, distribution requirements, and other circumstances of the
17estate, trust, conservatorship, or guardianship. In satisfying this standard, the
18fiduciary shall exercise reasonable care, skill, and caution.
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(b) A fiduciary's investment and management decisions about individual assets
20shall be evaluated, not in isolation but in the context of the portfolio as a whole and
21as a part of an overall investment strategy having risk and return objectives
22reasonably suited to the estate, trust, conservatorship, or guardianship.
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(c) Among circumstances that a fiduciary shall consider in investing and
24managing assets are those of the following that are relevant to the estate, trust,
25conservatorship, or guardianship or its beneficiaries:
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11. General economic conditions.
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2. The possible effect of inflation or deflation.
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3. The expected tax consequences of investment decisions or strategies.
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4. The role that each investment or course of action plays within the overall
5portfolio, which may include financial assets, interests in closely held enterprises,
6tangible and intangible personal property, and real property.
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5. The expected total return from income and the appreciation of capital.
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6. Other resources of the beneficiaries.
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7. Needs for liquidity, regularity of income, and preservation or appreciation
10of capital.
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8. An asset's special relationship or special value to the purposes of the estate,
12trust, conservatorship, or guardianship or to one or more of the beneficiaries.
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(d) A fiduciary shall make a reasonable effort to verify facts relevant to the
14investment and management of assets.
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(e) A fiduciary may invest in any kind of property or type of investment
16consistent with the standards of this section.
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(f) A fiduciary who has special skills or expertise, or who is named fiduciary in
18reliance upon the fiduciary's representation that the fiduciary has special skills or
19expertise, has a duty to use those special skills or expertise.
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20(4) Diversification. A fiduciary shall diversify investments unless the
21fiduciary reasonably determines that, because of special circumstances, the
22purposes of the estate, trust, conservatorship, or guardianship are better served
23without diversifying.
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24(5) Duties at inception. Within a reasonable time after accepting a fiduciary
25appointment or receiving assets, a fiduciary shall review the assets and make and
1implement decisions concerning the retention and disposition of assets, in order to
2bring the portfolio into compliance with the purposes, terms, distribution
3requirements, and other circumstances of the estate, trust, conservatorship, or
4guardianship and with the requirements of this section.
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5(6) Loyalty. A fiduciary shall invest and manage the assets solely in the
6interest of the beneficiaries.
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7(7) Impartiality. If an estate, trust, conservatorship, or guardianship has 2 or
8more beneficiaries, the fiduciary shall act impartially in investing and managing the
9assets, taking into account the differences between the interests of the beneficiaries.
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10(8) Investment costs. In investing and managing assets, a fiduciary may incur
11only costs that are appropriate and reasonable in relation to the assets, the purposes
12of the estate, trust, conservatorship, or guardianship, and the skills of the fiduciary.
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13(9) Reviewing compliance. Compliance with the prudent investor rule is
14determined in light of the facts and circumstances existing at the time of a fiduciary's
15decision or action and not by hindsight.
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16(10) Delegation of investment and management functions. (a) A fiduciary
17may delegate investment and management functions that a prudent fiduciary of
18similar skills could properly delegate under the circumstances. The fiduciary shall
19exercise reasonable care, skill, and caution in all of the following:
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1. Selecting an agent.
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2. Establishing the scope and terms of the delegation, consistent with the
22purposes and terms of the estate, trust, conservatorship, or guardianship.
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3. Periodically reviewing the agent's actions to monitor the agent's performance
24and compliance with the terms of the delegation.
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1(b) In performing a delegated function, an agent owes a duty to the estate, trust,
2conservatorship, or guardianship to exercise reasonable care to comply with the
3terms of the delegation.
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(c) A fiduciary who complies with the requirements of par. (a) is not liable to
5the beneficiaries or to the estate, trust, conservatorship, or guardianship for the
6decisions or actions of the agent to whom a function was delegated.
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(d) By accepting the delegation of a function from the fiduciary of an estate,
8trust, conservatorship, or guardianship that is subject to the law of this state, an
9agent submits to the jurisdiction of the courts of this state.
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10(11) Phrases invoking standard of this section. The following phrases or
11similar phrases in a will, trust, or court order, unless otherwise limited or modified,
12authorize any investment or strategy permitted under this section: "investments
13permissible by law for investment of trust funds"; "legal investments"; "authorized
14investments"; "using the judgment and care under the circumstances then
15prevailing that persons of prudence, discretion, and intelligence exercise in the
16management of their own affairs, not in regard to speculation but in regard to the
17permanent disposition of their funds, considering the probable income as well as the
18probable safety of their capital"; "prudent man rule"; "prudent trustee rule";
19"prudent person rule"; and "prudent investor rule."
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20(12) Application to existing estates, trusts, conservatorships, and
21guardianships. This section applies to estates, trusts, conservatorships, and
22guardianships of the estate existing on, or created on or after, the effective date of
23this subsection .... [revisor inserts date]. As applied to estates, trusts,
24conservatorships, and guardianships of the estate existing on the effective date of
1this subsection .... [revisor inserts date], this section governs only decisions or actions
2occurring after that date.
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3(13) Uniformity of application and construction. This section shall be
4applied and construed to effectuate its general purpose to make uniform the law with
5respect to the subject of this section among the states that have enacted this uniform
6legislation.
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7Section
5. 881.02 of the statutes is amended to read:
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8881.02 Construction; court orders; written instruments. Nothing
9contained in this chapter shall be construed as authorizing any departure from, or
10variation of, the express terms or limitations set forth in any will, agreement, court
11order
, or other instrument creating or defining the fiduciary's duties and powers
, but
12the terms "legal investment" or "authorized investment" or words of similar import,
13as used in any such instrument, shall be taken to mean any investment which is
14permitted by the terms of this chapter.
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15Section
6. 881.06 of the statutes is amended to read:
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16881.06 Law governing existing instruments. This Subject to s. 881.01 (12),
17this chapter shall govern fiduciaries, including personal representatives, guardians
18of the estate, conservators, and trustees acting under wills, agreements, court
19orders
, and other instruments now existing or hereafter made.