Diversification in investing trust assets has been a default expectation for as long as most anyone in the trust administration business can remember. Even an investment novice understands that diversification reduces risk of loss. An individual investing for himself may choose to invest a disproportionately large amount of his net worth in a single asset or asset class. If the gamble fails, only the individual suffers. The individual owes no duties to anyone. A trustee, however, doesn’t have
Tips From the Pros: When Diversification By a Trustee May Not be Necessary
Charles A. Redd discusses cases in which trust instrument language may enable or even compel a trustee not to diversify.