Prudent Man Rule | Definition | What is the Prudent Man Rule?

Prudent Man Rule

Prudent Man Rule | Definition

A common law standard applied to the investment of trust funds. Briefly stated: "All that can be required of a trustee in the investment of trust funds is that he conduct himself faithfully and exercise sound discretion. He is to observe how men of prudence, discretion, and intelligence manage 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 the capital to be invested."

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