What is the difference between the Prudent Man Rule and the Prudent Investor Rule?
Under the Prudent Man Rule each investment is considered and judged on its individual merits and must be of the highest investment quality with little or no risk to the preservation of principal. Under the Prudent Investor Rule no category or type of investment is deemed inherently imprudent. Instead suitability to the overall portfolio’s goals and objectives is considered to be the determining factor. However, while the Trustees have greater flexibility in portfolio management, speculation or outright risk taking is not sanctioned by the Rule. [Please note if the language of a particular will or trust instrument specifies the investment standard to be the Prudent Man Rule, the Trustees may not change the standard for that specific trust fund without first obtaining permission from the Probate Court.] • Can the Trustees of Trust Funds simply vote to adopt the Prudent Investor Rule after August 25, 2008? • The Trustees should decide whether or not a change in the investment standard bas
