[§554C-2]  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)  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. [L 1997, c 26, pt of §1]