A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.
History: Laws 2003, ch. 122, § 8-804.
ANNOTATIONSEffective dates. — Laws 2003, ch. 122, § 11-1106 made the act effective July 1, 2003.
Prudent administration in investigation of assets. — In a claim that trustees breached their fiduciary duties in the investigation and inventory of trust assets, evidence showed that prior to the decedent husband's death, husband hired a bookkeeper to prepare a general ledger for the living trust and that the bookkeeper spent decades ensuring that all of husband's community property and separate assets were properly transferred to and titled in the living trust and inventoried on the living trust's general ledgers, that the bookkeeper communicated regularly with husband's attorney and executive secretary to ensure that all assets were transferred to and titled in the living trust during the husband's lifetime, that the trustee's expert CPA testified that the records he reviewed reflected a professional and complete accounting of the community's assets, and that all of the assets of the living trust properly made their way into the two trusts that were created after husband's death; there was sufficient evidence to support the district court's decision that the intellectual property at issue had been properly inventoried, that wife's share of the property had been appropriately distributed, and that the trustees conducted the inventory and transfer of living trust assets as a prudent person would and in a reasonable manner, and therefore the trustees did not breach any fiduciary duties in their investigation of assets. Khalsa v. Puri, 2015-NMCA-027, cert. denied, 2015-NMCERT-001.
Prudent administration in management of assets. — Where beneficiary of survivor's trust claimed that the trustees breached their fiduciary duties in their management of intellectual property based on beneficiary's claim that she was entitled to more than half of the community property due to decedent husband's excess expenditure of community funds prior to his death, district court properly concluded that claim should be characterized as the claim of one spouse against the estate of the other spouse for alleged misappropriation of community property; there was sufficient evidence to support the district court's decision that the intellectual property at issue had been properly inventoried, that wife's share of the property had been appropriately distributed, that the trustees conducted the inventory and transfer of living trust assets as a prudent person would and in a reasonable manner, and that the trustees took reasonable actions in preserving the value of intellectual property, and therefore the trustees did not breach any fiduciary duties in their management of assets. Khalsa v. Puri, 2015-NMCA-027, cert. denied, 2015-NMCERT-001.