Payees may invest conserved benefits in accordance with State laws governing the investment
of trust estates by trustees. Since most States apply the “prudent investor” standards
to fiduciary investments, it is necessary to determine whether the investment under
consideration meets this standard. Under the prudent investor standard, there is an
assumption that the trustee will be impartial with no conflict of interest. Trustees
may invest in every kind of property and type of investment subject to the prudent
In most cases, no specific types of investments are required or restricted. No specific
investment or course of action is, taken alone, prudent or imprudent. Trustees should
diversify investments unless it is in the best interest of the beneficiary not to
diversify. Investments must be evaluated in the context of all investments made for
the beneficiary as a whole.
NOTE: See PR 07240.000 ff. State Laws on Investment of Conserved Funds for the Regional Chief Counsel opinions
which include specific information on the laws and requirements for each State. In
most cases, the Syllabus (which precedes each State opinion) summarizes whether or
not the State has adopted the UPIA within its State laws. The Syllabus also highlights
when State laws require or prohibit any specific type of property or investment. If
the Syllabus does not provide the information needed, review the complete State opinion which follows.
FOs may also find the trust department of a local bank or a probate court officer
a good source to consult for information as to the acceptability of specific investments
under the “prudent investor” rule. Information obtained by the FO will be recorded
on a report of contact.
If the FO/PC is unable to determine whether an investment meets the prudent investor
standard described above, the case must be referred to regional programs staff for
consultation with the regional attorney to determine whether the investment is proper
under State law.