                                 CODE OF VIRGINIA

STANDARD OF CARE; PORTFOLIO STRATEGY; RISK AND RETURN OBJECTIVES (§ 64.2-782)

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&#8217;s investment and management decisions respecting individual
assets shall 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 strategies;

   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 of capital;

   6. Other resources of the beneficiaries;

   7. Needs for liquidity, regularity of income, and preservation or appreciation
   of capital; and

   8. An asset&#8217;s special relationship or special value, if any, to the
   purposes of the trust or to one or more of the beneficiaries.

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&#8217;s representation that the trustee has special
skills or expertise, has a duty to use those special skills or expertise.

G. A trustee may hold any policies of life insurance acquired by gift or
pursuant to an express permission or direction in the governing instrument
including an authority granted by subdivision B 19 of &#xA7; 64.2-105 with no
duty or need to (i) determine whether any such policy is or remains a proper
investment, (ii) dispose of such policy in order to diversify the investments of
the trust, or (iii) exercise policy options under any such contract not
essential to the continuation of the life insurance provided by such contract.
However, apart from these specific authorities, this subsection is not intended
and shall not be construed to affect the application of the standard of judgment
and care as set forth in this section. This subsection shall apply to all
trusts, regardless of when established.

HISTORY: 1999, c. 772, § 26-45.4; 2012, c. 614.