Trust Investments - Reducing The Risk

Investing trust property can be a challenging business for trustees – their obligations are many and onerous, the standards they will be measured against are high, and the consequences of failure severe. A sound understanding of basic investment duties goes a long way towards reducing the risks. Here are some general rules:

1. Invest trust property only in a manner authorized by the trust deed and the law. Historically, the range of trust investments was restricted by statute and trustees, necessarily, had to adopt a highly cautious approach. Over time, as attitudes changed and the portfolio of investment products expanded, the old rules came to be viewed as outdated. It was felt that trustees and beneficiaries were unduly prejudiced by lack of access to opportunities. Today, it is accepted practice for trustees to be given wide investment powers.