In the view of many, the Prudent Investor Act, EPTL 11-2.3, effective Jan. 1, 1995, (PIA) was the most trailblazing advance in the New York law of trusts in more than a century. The PIA requires trustees to invest for total return, unless the governing instrument expressly provides otherwise.
This statutory duty intensified the tension that trustees already faced in satisfying their duty of impartiality to income beneficiaries and remaindermen. Income beneficiaries frequently wanted the highest current yield, traditionally obtained through a so-called “overweight” in bonds (for our purposes over 50 percent of a trust’s assets). Remaindermen wanted maximum capital appreciation, traditionally obtained through overweight in stocks.
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