Trust Investment Provisions Which Have Worked Well

Abstract

The quality of the investment of trust funds, after all, depends in no small degree upon the investment provisions of the will or trust agreement under which the trust is being administered. The law gives testators and settlors the right largely to write their own ticket with respect to the trust investments. Testators and settlors, by means of wise investment provisions, can make it possible for the trustee to do its best job in the investment of trust funds and, on the other hand, by means of unwise investment provisions, can make it impossible for the trustee to do a first-class job. For example, the trustee simply cannot render its best service if, by the investment provisions of the will or trust agreement under which it is acting, it is directed to retain investments which, it knows, it should dispose of or is directed to dispose of investments which, it knows, it should retain. But the trustee can have no reason or excuse for not rendering the best trust investment service it knows how to render if by the terms of the will or trust agreement it is authorized to acquire, retain, and dispose of trust investments in the exercise of its best judgment. Accordingly, any consideration of the law of trust investments should embrace a consideration of how the testator or settlor can best legislate in respect to trust investments by the investment provisions that he has written into his will or trust agreement. In the preparation of a lecture which I delivered during the school year I937-38 to the upper classmen of nineteen American law schools, including Duke University, I made a factual study of the investment provisions of wills and trust agreements which, in the experience of men who have had to administer trusts under them, have worked well and a factual study of other provisions which, in their experience, have not worked well but, instead, have given trouble. In this lecture' I made little or no