P.R. Laws tit. 32, § 3353m
With regards to trusts, the prudent investor rule sets forth that:
(a) General rule.—
(1) Except as otherwise provided in subsection (b) of this section, a trustee who invests and manages trust property owes a duty to the trust’s beneficiaries to comply with the prudent investor rule set forth herein.
(2) The prudent investor rule may be expanded, restricted, eliminated, or otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the trust.
(b) Standard of care; portfolio strategy; risk and return objectives.—
(1) 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.
(2) A trustee’s investment and management decisions regarding individual assets shall not be evaluated in isolation, but in the context of the trust portfolio and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
(3) 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:
(A) The general economic conditions;
(B) the possible effect of inflation or deflation;
(C) the expected tax consequences of investment decisions or strategies;
(D) 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 personal property, and real property;
(E) the expected total return from income and the appreciation of capital;
(F) other resources of the beneficiaries;
(G) needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(H) An asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
(4) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
(5) A trustee may invest in any kind of property or type of investment that is consistent with the standards of this chapter.
(6) A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that he/she has special skills or expertise, has a duty to use those special skills or expertise.
(c) 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.
(d) Compliance with the prudent investor rule 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.
History —Aug. 31, 2012, No. 219, § 47.