Chapter 5809: OHIO UNIFORM PRUDENT INVESTOR ACT

5809.01 Trustee duty to comply with act.

(A)

(1) As used in the Revised Code, the "Ohio Uniform Prudent Investor Act" means sections 5809.01 to 5809.08 , 5808.03 , 5808.05 , and 5808.06 , division (A) of section 5808.02 , and division (B) of section 5808.07 of the Revised Code, and those sections may be cited as the "Ohio Uniform Prudent Investor Act."

(2) As used in the Ohio Uniform Prudent Investor Act, "trustee" means a trustee under any testamentary, inter vivos, or other trust.

(B) Except as provided in division (C) or (D) of this section, a trustee who invests and manages trust assets under the Ohio Uniform Prudent Investor Act owes a duty to the beneficiaries of the trust to comply with the Ohio Uniform Prudent Investor Act.

(C) The Ohio Uniform Prudent Investor Act may be expanded, restricted, eliminated, or otherwise altered, without express reference by the instrument creating a trust to the Ohio Uniform Prudent Investor Act or any section of the Revised Code that is part of that act.

(D) A trustee is not liable to a beneficiary of a trust to the extent the trustee acted in reasonable reliance on the provisions of the trust.

Effective Date: 01-01-2007

5809.02 Standard of care - portfolio strategy - risk and return objectives.

(A) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this requirement, the trustee shall exercise reasonable care, skill, and caution.

(B) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.

(C) A trustee's investment and management decisions respecting individual trust assets shall not be evaluated in isolation but in the context of the trust portfolio as a whole and as part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

(D) Among circumstances that a trustee shall consider in investing and managing trust assets are the following as are relevant to the trust or its beneficiaries:

(1) The general economic conditions;

(2) The possible effect of inflation or deflation;

(3) The expected tax consequences of investment decisions or strategies;

(4) 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;

(5) The expected total return from income and appreciation of capital;

(6) Other resources of the beneficiaries;

(7) Needs for liquidity, regularity of income, and preservation or appreciation of capital;

(8) An asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.

Effective Date: 01-01-2007

5809.03 Investment authority - diversification.

(A) A trustee may invest in any kind of property or type of investment provided that the investment is consistent with the requirements and standards of the Ohio Uniform Prudent Investor Act.

(B) A trustee shall diversify the investments of a trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

Effective Date: 01-01-2007

5809.031 Duties of a trustee with respect to the acquisition, retention, or ownership of a life insurance policy.

(A) Notwithstanding any other provision of the Ohio Uniform Prudent Investor Act, unless otherwise provided by the terms of the trust, the duties of a trustee with respect to the acquisition, retention, or ownership of a life insurance policy as a trust asset do not include any of the following duties:

(1) To determine whether the policy is or remains a proper investment;

(2) To diversify the investment in the policy relative to any other life insurance policies or to any other trust assets;

(3) To exercise or not to exercise any option, right, or privilege available under the policy, including the payment of premiums unless there is sufficient cash or there are other readily marketable trust assets from which to pay the premiums or there are other trust assets that were designated by the settlor or any other person transferring those assets to the trust to be used for that purpose, regardless of whether that exercise or nonexercise results in the lapse or termination of the policy;

(4) To investigate the financial strength or changes in the financial strength of the life insurance company maintaining the policy;

(5) To inquire about changes in the health or financial condition of the insured or insureds under the policy.

(B) The trustee, the attorney who drafted a trust, or any person who was consulted with regard to the creation of a trust, in the absence of fraud, is not liable to the beneficiaries of the trust or to any other person for any loss arising from the absence of the duties specified in divisions (A)(1) to (5) of this section.

(C) Unless otherwise provided by the terms of the trust, this section applies to a trust established before, on, or after March 22, 2012, and to a life insurance policy acquired, retained, or owned by a trustee before, on, or after March 22, 2012.

Amended by 129th General AssemblyFile No.169, HB 247, §1, eff. 3/22/2013.

Added by 129th General AssemblyFile No.65, SB 117, §1, eff. 3/22/2012.

5809.04 Duties at inception of trusteeship.

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of trust assets in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and in order to comply with the requirements and standards of the Ohio Uniform Prudent Investor Act.

Effective Date: 01-01-2007

5809.05 Reviewing compliance.

Compliance with the Ohio Uniform Prudent Investor Act shall be determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.

Effective Date: 01-01-2007

5809.06 Delegation of investment and management functions.

(A) A trustee may delegate investment and management functions of a trust that a prudent trustee having comparable skills could properly delegate under the circumstances. A trustee that exercises its delegation authority under this division shall comply with the requirements of division (A) of section 5808.07 of the Revised Code.

(B) In performing investment or management functions of a trust that are delegated to an agent, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

(C) A trustee who delegates a function to an agent in compliance with division (A) of this section is not liable to the beneficiaries of the trust or to the trust for the decisions or actions of the agent to whom the function was delegated.

(D) By accepting the delegation of investment or management functions of a trust that is subject to the laws of this state, an agent submits to the jurisdiction of this state.

Effective Date: 01-01-2007

5809.07 Language invoking standard of act.

The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted by the Ohio Uniform Prudent Investor Act: "investments permissible by law for investment of trust funds"; "legal investments"; "authorized investments"; "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"; "prudent man rule"; "prudent trustee rule"; "prudent person rule"; and "prudent investor rule."

Effective Date: 01-01-2007

5809.08 Application and construction.

(A) The Ohio Uniform Prudent Investor Act shall be applied and construed to effectuate the general purpose to make uniform the law with respect to the subject of these sections among the states enacting it.

(B) The Ohio Uniform Prudent Investor Act applies to trusts existing on or created after March 22, 1999. As applied to trusts existing on March 22, 1999, the Ohio Uniform Prudent Investor Act governs only decisions or actions occurring after March 22, 1999.

(C) The temporary investment of cash or funds pursuant to section 5815.26 or 2109.372 of the Revised Code shall be considered a prudent investment in compliance with the Ohio Uniform Prudent Investor Act.

Effective Date: 01-01-2007