Texas Codes

Tex. Prop. Code § 117.004 (2026)

Standard Of Care; Portfolio Strategy; Risk And Return Objectives

✓ current as of May 2026

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Sec. 117.004. STANDARD OF CARE; PORTFOLIO STRATEGY; RISK AND RETURN OBJECTIVES. (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 shall consider in investing and managing trust assets are such of the following as 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 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) Except as otherwise provided by and subject to this subtitle, 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.

Added by Acts 2003, 78th Leg., ch. 1103, Sec. 1, eff. Jan. 1, 2004.

Notes of Decisions

Cited in 7 cases (3 in the last 5 years), 2007–2024 · leading case: Occidental Petroleum v. Wells Fargo, 117 F.4th 628 (5th Cir. 2024).

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Occidental Petroleum v. Wells Fargo, 117 F.4th 628 (5th Cir. 2024). “” Tex. Prop. Code Ann. § 117.004 (a). Initially, Anadarko managed the investment of the Trust’s funds, and Wells Fargo had “no discretionary control over, nor any other discretion regarding, the investment or reinvestment of any asset of the Trust.”

Myrick v. Moody Nat'l Bank, 336 S.W.3d 795 (Tex. App. 2011). “Tex. Prop.Code Ann. § 117.004 (West 2007).”

in Re Daniel W. Warren, Beneficiary of the Daniel Steven Weiner 1996 Trust (Tex. App. 2015). · cites it 2× “By knowingly, intentionally, and with bad faith failing to invest Daniel’s Trust funds from April 9, 2009 to September 11, 2012 in violation of the duty to prudently invest the Trust assets under Texas Property Code § 117.004 and the duty of loyalty under Texas Property Code §…”

Occidental Petroleum Corp. v. Wells Fargo Bank, N.A. (S.D. Tex. 2022). “5); TEX. PROP. CODE § 117.004(a);  “manage, sell, … and otherwise deal with all real and personal property held by the Trustee on such terms and conditions as the Trustee shall decide,” (Docket Entry No.”

James E. White, IV, Individually & as Beneficiary of the Jane White Trust; Marti White Wright, Individually & as a Beneficiary of the Jane White Trust; & Clinton Wesley White, Individually & as a Beneficiary of the Jane White Trust, by & Through His Next Friend, James E. White, IV & James White, III, Individually & as Tr. of the Jane White Trust v. Edward McMinn White, Individually & as Tr. of the Edward McMinn White Trust, & Beauregard Brite White, Individually & as Tr. of the Beauregard Brite White Trust & Susan Combs, Temp. Interim Tr. of the White Div. Trusts (Tex. App. 2024). “” Texas Property Code Ann. § 117.004(a). Among other things, the Act provides that “[a] trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without 6 Mac…”

Brad Lane v. Sharon Birline Young, Bridgette & William Wright & Rita Johnson (Tex. App. 2007). “Laws 3269 , 3356-57 (amended 1985, 1991, 2003) (current version at Tex. Prop. Code Ann. § 113.056 (Vernon Supp.”

Untitled Texas Attorney Gen. Opinion (Tex. Att'y Gen. 2015). “" TEX. PROP. CODE ANN.§ 117.004(a) (West 2014) (describing the general The Honorable Marco A.”

— Tex. Prop. Code § 117.004(a) — 4 cases

in Re Daniel W. Warren, Beneficiary of the Daniel Steven Weiner 1996 Trust (Tex. App. 2015). “By knowingly, intentionally, and with bad faith failing to invest Daniel’s Trust funds from April 9, 2009 to September 11, 2012 in violation of the duty to prudently invest the Trust assets under Texas Property Code § 117.004 and the duty of loyalty under Texas Property Code §…”

Untitled Texas Attorney Gen. Opinion (Tex. Att'y Gen. 2015). “" TEX. PROP. CODE ANN.§ 117.004(a) (West 2014) (describing the general The Honorable Marco A.”

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