Tennessee Code Annotated
Tenn. Code Ann. § 35-14-104 (2024)
Standard of care - Portfolio strategy - Risk and return objectives
✓ Justia copy: laws through about 2024 (2025 and 2026 sessions missing)
- (a) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
- (b) A trustee's investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
- (c) Among circumstances that a trustee may consider in investing and managing trust assets the following are relevant to the trust or its beneficiaries:
- (1) General economic conditions;
- (2) The possible effect of inflation or deflation;
- (3) The expected tax consequences of investment decisions or strategies;
- (4) The role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
- (5) The expected total return from income and the appreciation of capital;
- (6) Other resources of the beneficiaries;
- (7) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
- (8) An asset's special relationship or special value, if any, to the purposes of the trust or to one (1) or more of the beneficiaries.
- (d) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
- (e) In addition to the permissible investments listed in §§ 35-3-102 - 35-3-111, a trustee may invest in any kind of property or type of investment consistent with the standards of this chapter.
- (f) A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.
- (g) The powers granted by this section to trustees, guardians and other fiduciaries shall be in addition to the powers existing under other provisions of this code authorizing investments by fiduciaries.
Acts 2002, ch. 696, § 4.
Notes of Decisions
Cited in 1
case, 2016–2016 · leading case: John D. Glass v. Suntrust Bank, 523 S.W.3d 61 (Tenn. Ct. App. 2016).
John D. Glass v. Suntrust Bank, 523 S.W.3d 61 (Tenn. Ct. App. 2016). “” Tenn.Code Ann. § 35-14-104(b). Even though Plaintiff focuses only on the Sun-Trust and First Tennessee stockholdings, we must bear in mind that the trust owned more than just these two stocks.”
Tenn. Code Ann. § 35-14-104(b): 1 case
John D. Glass v. Suntrust Bank, 523 S.W.3d 61 (Tenn. Ct. App. 2016). “” Tenn.Code Ann. § 35-14-104(b). Even though Plaintiff focuses only on the Sun-Trust and First Tennessee stockholdings, we must bear in mind that the trust owned more than just these two stocks.”
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