1. Investments by fiduciaries. When investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing property for the benefit of another, a fiduciary shall exercise the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use to attain the purposes of the account. This standard requires that when making investment decisions, a fiduciary shall consider the role that the investment plays within the account's portfolio of assets and may consider the general economic conditions, the anticipated tax consequences of the investment, the anticipated duration of the account, and the needs of all beneficiaries of the account.
The propriety of an investment decision is to be determined by what the fiduciary knew or should have known at the time of the decision about the inherent nature and expected performance of the investment, the attributes of the account portfolio, the general economy, and the needs and objectives of the beneficiaries of the account as they existed at the time of the investment decision.
2. Actions pursuant to governing instrument. A fiduciary acting under a governing instrument is not liable to anyone whose interests arise from the instrument for the fiduciary's good faith reliance on the express provisions of the instrument. In the absence of an express provision to the contrary in the governing instrument, a fiduciary shall not be deemed to have breached the person's fiduciary duties for continuing to hold property received into an account at the account's inception or subsequently added to the account or acquired pursuant to proper authority if the fiduciary, in good faith and with reasonable prudence, considers that retention is in the best interest of the trust or estate or in furtherance of the goals of the governing instrument.
If a fiduciary is expressly directed or permitted by a will, agreement, court order, or other instrument creating or defining the fiduciary's duties and powers, to invest in United States govern- ment obligations, the fiduciary may, in the absence of an express prohibition in the instrument, invest in and hold such obligations either directly or in the form of interests in an investment company or investment trust registered under the Investment Company Act of 1940, 15 U.S.C. § 80a, the portfolio of which is limited to United States government obligations and to repurchase agreements fully collateralized by United States government obligations, if the investment company or investment trust takes delivery of the collateral either di- rectly or through an authorized custodian.
Notwithstanding any other provision of law, a bank or trust company acting as a fiduciary, in addition to other investments authorized by law for the investment of funds by a fiduciary or by the instrument governing the fiduciary and in the exercise of its investment discretion or at the direction of another person authorized to direct investment of funds held by the fiduciary, may invest and reinvest in the securities of an open-end or closed-end management investment company or investment trust registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq. Investment under this paragraph is allowed so long as the portfolio of the investment company or investment trust consists substantially of investments not otherwise prohibited by this section or by the governing instrument.
A bank or trust company acting as a fiduciary is not precluded from investing or reinvesting in the securities of an open-end or closed-end management investment trust registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq. merely because the bank or trust company or an affiliate of the bank or trust company provides services such as investment advisor, custodian, transfer agent, registrar, sponsor, distributor, or manager to the investment company or investment trust and receives a reasonable fee for the services.
3. Powers of court to authorize investment. Nothing contained in this section shall be construed as restricting the power of the court, after such notice as the court may prescribe, to permit a fiduciary to deviate from the terms of any will, agreement, or other instrument relating to the acquisition, investment, reinvestment, exchange, retention, sale or management of fiduciary property.
4. Scope of application. The provisions of this section shall govern all fiduciaries acting under the jurisdiction of the court whether the wills, agreements or other instruments under which they are acting now exist, or are hereafter made.
[C31, 35, § 12644-c14; C39, § 12644.14; C46, 50, 54, 58, 62, § 672.14; C66, 71, 73, 75, 77, 79, 81, § 633.123]
85 Acts, ch 190, § 5; 86 Acts, ch 1032, § 1; 91 Acts, ch 36, § 3, 4; 92 Acts, ch 1012, § 1
Referred to in § 262.14, 412.4, 633.348, 633.646, 633.649
Iowa General Assembly
Search: Iowa Code 1995
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