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CHAPTER 44. ADMINISTRATION OF ESTATES AND TRUSTS.
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ARTICLE 6C. UNIFORM PRUDENT INVESTOR ACT.
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§44-6C-1. Prudent investor rule.
(a) Except as otherwise provided in subsection (b) of this
section, a trustee who invests and manages trust assets owes a duty
to the beneficiaries of the trust to comply with the prudent
investor rule set forth in this article.
(b) The prudent investor rule, a default rule, may be
expanded, restricted, eliminated or otherwise altered by the
provisions of a trust instrument. A trustee is not liable to a
beneficiary to the extent that the trustee acted in reasonable
reliance on the provisions of the trust instrument.
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§44-6C-2. Standard of care; portfolio strategy; risk and return
(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 standard, the trustee shall exercise reasonable
care, skill and caution.
(b) 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.
(c) Among circumstances that a trustee shall consider in
investing and managing trust assets are such of the following as
are relevant to the trust or its beneficiaries:
(1) General economic conditions;
(2) The possible effect of inflation or deflation;
(3) The expected tax consequences of investment decisions or
(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 the appreciation
(6) Other resources of the beneficiaries;
(7) Needs for liquidity, regularity of income and preservation
or appreciation of capital; and
(8) An asset's special relationship or special value, if any,
to the purposes of the trust or to one or more of the
(d) A trustee shall make a reasonable effort to verify facts
relevant to the investment and management of trust assets.
(e) A trustee may invest in any kind of property or type of
investment consistent with the standards of this article.
(f) A trustee who has special skills or expertise, or is named
trustee in reliance upon the trustee's representation that the
trustee has special skills or expertise, has a duty to use those
special skills or expertise.
(g)(1) Unless otherwise directed by the terms of the trust
instrument, the duties of a trustee of an irrevocable life
insurance trust with respect to acquiring or retaining a contract
of insurance upon the life of the grantor, or the lives of the
grantor and the grantor's spouse, do not include a duty:
(A) To determine whether the contract is or remains a proper
(B) To exercise policy options available under the contract in
the event the policy lapses or is terminated due to failure to pay
(C) To diversify the contract.
(2) A trustee is not liable to the beneficiaries of the trust
or to any other party for any loss arising from the absence of
those duties upon the trustee.
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A trustee shall diversify the investments of the trust unless
the trustee reasonably determines that, because of special
circumstances, the purposes of the trust are better served without
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§44-6C-4. 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 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
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A trustee shall invest and manage the trust assets solely in
the interest of the beneficiaries.
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If a trust has two or more beneficiaries, the trustee shall
act impartially in investing and managing the trust assets, taking
into account any differing interests of the beneficiaries.
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§44-6C-7. Investment costs.
In investing and managing trust assets, a trustee may only
incur costs that are appropriate and reasonable in relation to the
assets, the purposes of the trust and the skills of the trustee.
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§44-6C-8. 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.
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§44-6C-9. Delegation of investment and management functions.
(a) A trustee may delegate investment and management functions
that a prudent trustee of comparable skills could properly delegate
under the circumstances. The trustee shall exercise reasonable
care, skill and caution in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation,
consistent with the purposes and terms of the trust; and
(3) Periodically reviewing the agent's actions in order to
monitor the agent's performance and compliance with the terms of
(b) In performing a delegated function, an agent owes a duty
to the trust to exercise reasonable care to comply with the terms
of the delegation.
(c) A trustee who complies with the requirements of subsection
(a) of this section is not liable to the beneficiaries or to the
trust for the decisions or actions of the agent to whom the
function was delegated.
(d) By accepting the delegation of a trust function from the
trustee of a trust that is subject to the law of this state, an
agent submits to the jurisdiction of the courts of this state
(e) The delegating trustee is not responsible for the
decisions, actions or inactions of the trustee to whom those duties
and powers have been delegated if the delegating trustee has
exercised reasonable care, skill and caution in establishing the scope and specific terms of the delegation and in reviewing
periodically the performance of the trustee to whom the duties and
powers have been delegated and the trustee's compliance with the
scope and specific terms of the delegation.
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§44-6C-10. Language invoking standard of article.
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 article: "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".
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§44-6C-11. Application to existing trusts.
This article applies to trusts existing on and created after
its effective date. As applied to trusts existing on its effective
date, this article governs only decisions or actions occurring
after that date.
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§44-6C-12. Uniformity of application and construction
This article shall be applied and construed to effectuate its
general purpose to make uniform the law with respect to the subject
of this article among the states enacting it.
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§44-6C-13. Short title.
This article may be cited as the "West Virginia Uniform
Prudent Investor Act".
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If any provision of this article or its application to any
person or circumstance is held invalid, the invalidity does not
affect other provisions or applications of this article which can
be given effect without the invalid provision or application, and
to this end the provisions of this article are severable.
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§44-6C-15. Effective date.
This article takes effect on the first day of July, one
thousand nine hundred ninety-six.