Michigan Laws 700.1503 – Portfolio strategy; risk and return objectives
Current as of: 2023 | Check for updates
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(1) A fiduciary‘s investment and management decisions with respect to individual assets shall be evaluated not in isolation, but rather in the context of the fiduciary estate portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fiduciary estate.
(2) Among circumstances that a fiduciary must consider in investing and managing fiduciary assets are all of the following that are relevant to the fiduciary estate or its beneficiaries:
Terms Used In Michigan Laws 700.1503
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Estate: includes the property of the decedent, trust, or other person whose affairs are subject to this act as the property is originally constituted and as it exists throughout administration. See Michigan Laws 700.1104
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: includes , but is not limited to, a personal representative, funeral representative, guardian, conservator, trustee, plenary guardian, partial guardian, and successor fiduciary. See Michigan Laws 700.1104
- Michigan prudent investor rule: means the fiduciary investment and management rule prescribed by part 5 of this article. See Michigan Laws 700.1106
- Personal property: All property that is not real property.
- Portfolio: means all property of every kind and character held by a fiduciary on behalf of a fiduciary estate. See Michigan Laws 700.1501
- Property: means anything that may be the subject of ownership, and includes both real and personal property or an interest in real or personal property. See Michigan Laws 700.1106
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(a) General economic conditions.
(b) The possible effect of inflation or deflation.
(c) The expected tax consequences of an investment decision or strategy.
(d) The role that each investment or course of action plays within the overall portfolio, which may include financial assets, interests in closely-held enterprises, tangible and intangible personal property, and real property.
(e) The expected total return from income and the appreciation of capital.
(f) Other resources of the beneficiaries.
(g) The need for liquidity, regularity of income, and preservation or appreciation of capital.
(h) An asset’s special relationship or special value, if any, to the purposes of the fiduciary estate or to 1 or more of the beneficiaries.
(3) A fiduciary shall make a reasonable effort to verify facts relevant to the investment and management of fiduciary assets.
(4) A fiduciary may invest in any kind of property or type of investment consistent with the standards of the Michigan prudent investor rule. A particular investment is not inherently prudent or imprudent.
(5) A fiduciary who has special skill or expertise, or is named fiduciary in reliance upon the fiduciary’s representation that the fiduciary has special skill or expertise, has a duty to use that special skill or expertise.