The fiduciary as Trustee has the responsibility of carrying out the terms of the trust as set forth in a trust document.

Trustee duties reflect a legally mandated standard of care, including:

diversifying trust assets;

executing prudent investment decisions;

timely and accurate reporting to beneficiaries;

filing income tax returns for a trust;

making distributions from/funding a trust in accordance with trust terms;

marshalling, protecting, and preserving trust assets.

Every California trustee, co-trustee, and successor trustee (spouses, family members, friends, attorneys, CPAs, bank/corporate trustees) is accountable to the Uniform Prudent Investor Act (UPIA), defined in California Probate Code, §16045. The Uniform Prudent Investor Act (UPIA), which was adopted in 1992 by the American Law Institute’s Third Restatement of the Law of Trusts (“Restatement of Trust 3d”), and in 1995 by the State of California, dictates that fiduciaries utilize modern portfolio theory to guide investment decisions and requires risk versus return analysis on a holistic level in relation to the entire portfolio. Therefore, a fiduciary’s performance is measured on the performance of the total return of the portfolio, versus the performance of a singular investment.

• Failure to follow the UPIA is a breach of trust under which a trustee can be removed and held liable for damages.
• Trustees, as fiduciaries, can be held personally liable under the Act for losses incurred in managing trust assets—even if acting in the best interest of the trust/client.
• The principles of the UPIA are applicable to all fiduciary investment management: family trusts; charitable investing; UPMIFA; ERISA; UMPERSA.