Duty of Care Flashcards
What is the standard of care of a trustee?
The trustee possesses a duty to exercise the degree of care and skill as a PERSON OF ORDINARY PRUDENCE would exercise in dealing with his own property.
To determine whether a trustee adhered to his duty of care, what do courts look at?
His Conduct (not the result of such conduct)
How does an exculpatory clause pertain to a trustee?
Under the majority view, the settlor may limit the potential liability of a trustee by including an exculpatory clause in the trust instrument.
What don’t exculpatory clauses excuse?
The trustee’s acts done in bad faith.
How does the Uniform Prudent Investor Act (UPIA) pertain to a trustee’s duty of care?
The UPIA requires the trustee to exercise the degree of care and skill as an INVESTOR OF ORDINARY PRUDENCE would exercise in investing his own property (e.g., diversifying investments, avoiding risky investments and speculation)
