IOWA UNIFORM PRUDENT INVESTOR ACT
2019 Iowa Code
Title XV – JUDICIAL BRANCH AND JUDICIAL PROCEDURES
Chapter 633A – IOWA TRUST CODE
Section 633A.4301 – Uniform Prudent Investor Act
633A.4301 Short title.
This part may be cited as the “Uniform Prudent Investor Act”.
99 Acts, ch 125, §61, 109 C2001, §633.4301 2005 Acts, ch 38, §54, 55 CS2005, §633A.4301
633A.4302 Standard of care — portfolio strategy — risk and return objectives.
1. A trustee shall invest and manage trust property 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.
2. 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.
3. A trustee shall consider all of the following circumstances, to the extent relevant to the trust or its beneficiaries in investing and managing trust property: a. General economic conditions. b. The possible effect of inflation or deflation. c. The expected tax consequences of investment decisions or strategies. d. 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. e. The expected total return from income and the appreciation of capital. f. Other resources of the beneficiaries. g. Needs for liquidity, regularity of income, and preservation or appreciation of capital. h. An asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
4. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust property.
5. A trustee may invest in any kind of property or type of investment consistent with the standards of this part.
99 Acts, ch 125, §62, 109 C2001, §633.4302 2005 Acts, ch 38, §54, 55 CS2005, §633A.4302 Referred to in §523A.203, 633.123
A trustee shall diversify the investments of the trust unless the trustee reasonably determines that the purposes of the trust are better served without diversifying.
99 Acts, ch 125, §63, 109 C2001, §633.4303 2005 Acts, ch 38, §54 CS2005, §633A.4303
633A.4304 Duties at inception of trusteeship.
Within a reasonable time after accepting a trusteeship or receiving trust property, a trustee shall review the trust property and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirements of this part.
99 Acts, ch 125, §64, 109 C2001, §633.4304 2005 Acts, ch 38, §54, 55 CS2005, §633A.4304
A trustee shall invest and manage the trust property solely in the interest of the beneficiaries.
99 Acts, ch 125, §65, 109 C2001, §633.4305 2005 Acts, ch 38, §54 CS2005, §633A.4305
If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust property, taking into account any differing interests of the beneficiaries.
99 Acts, ch 125, §66, 109 C2001, §633.4306 2005 Acts, ch 38, §54 CS2005, §633A.4306
633A.4307 Investment costs.
In investing and managing trust property, a trustee may only incur costs that are appropriate and reasonable in relation to the property, the purposes of the trust, and the skills of the trustee.
99 Acts, ch 125, §67, 109 C2001, §633.4307 2005 Acts, ch 38, §54 CS2005, §633A.4307
633A.4308 Reviewing compliance.
Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee’s decision or action and not by hindsight.
99 Acts, ch 125, §68, 109 C2001, §633.4308 2005 Acts, ch 38, §54 CS2005, §633A.4308
633A.4309 Language invoking prudent investor rule.
The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this trust code: 1. Investments permissible by law for investment of trust funds. 2. Legal investments. 3. Authorized investments. 4. Using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital. 5. Prudent man rule. 6. Prudent trustee rule. 7. Prudent person rule. 8. Prudent investor rule.
99 Acts, ch 125, §70, 109 C2001, §633.4309 2005 Acts, ch 38, §54 CS2005, §633A.4309