North Carolina § 32-71 - Investment; prudent person rule.

§ 32-71. Investment; prudent person rule.

In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for the benefit of another, a fiduciary shall observe the standard of judgment and care under the circumstances then prevailing, which an ordinarily prudent person of discretion and intelligence, who is a fiduciary of the property of others, would observe as such fiduciary; and if the fiduciary has special skills or is named a fiduciary on the basis of representations of special skills or expertise, he is under a duty to use those skills. This subsection and subsection (b) of this section do not apply to trusts governed by Article 9 of Chapter 36C of the General Statutes. Within the limitations of the foregoing standard, a fiduciary is authorized to acquire and retain every kind of property and every kind of investment, including specifically, but without in any way limiting the generality of the foregoing, bonds, debentures, and other corporate or governmental obligations; stocks, preferred or common; real estate mortgages; shares in building and loan associations or savings and loan associations; annual premium or single premium life, endowment, or annuity contracts; and securities of any management type investment company or investment trust registered under the Federal Investment Company Act of 1940, as from time to time amended. , (d) Repealed by Session Laws 2007-106, s. 43, effective October 1, 2007. History (1870-1, c. 197; Code, s. 1594; 1885, c. 389; 1889, c. 470; Rev., ss. 1792, 1793; 1917, c. 6, s. 9; c. 67, s. 1; c. 152, s. 7; c. 191, s. 1; c. 269, s. 5; C.S., ss. 4018, 4018(a), 4019; Ex. Sess. 1921, c. 63; 1931, c. 257; 1933, c. 549, s. 1; 1935, c. 449; 1937, c. 14; 1943, c. 96; c. 473, ss. 1-3; 1945, c. 713; 1953, c. 620; 1959, c. 364, s. 2; c. 1015, s. 2; 1969, c. 861; 1971, c. 528, s. 34; c. 864, s. 17; 1973, c. 239, s. 1; 1975, cc. 40, 319; 1977, c. 502, s. 2; 1995, c. 153, s. 1; 1999-215, s. 2; 2005-192, s. 1; 2006-259, s. 13(o); 2007-106, s. 43.) Cross References. - As to deposit of trust funds, see G.S. 32-8 et seq. Editor's Note. - This section was formerly codified as G.S. 36A-2. It was recodified as G.S. 32-71 by the Revisor of Statutes as the result of Session Laws 2005-192, s. 1, effective January 1, 2006. Session Laws 2007-106, s. 55, provides: "The Revisor of Statutes shall cause to be printed all explanatory comments of the drafters of this act, or revisions to existing explanatory comments of the drafters of this act, as the Revisor may deem appropriate." Effect of Amendments. - Session Laws 2006-259, s. 13(o), effective October 1, 2006, substituted "Article 9 of Chapter 36C of the General Statutes" for "Article 15 of this Chapter" in subsections (a) and (c). See Editor's note for applicability. Session Laws 2007-106, s. 43, effective October 1, 2007, deleted subsections (c) and (d) regarding duties of a trustee under a contract of life insurance and notice provisions therefore. See Editor's note for applicability. Legal Periodicals. - For survey of 1977 law on wills, trusts and estates, see 56 N.C.L. Rev. 1152 (1978). For article, "Legal Aspects of Changing University Investment Strategies," see 58 N.C.L. Rev. 189 (1980). For article, "A Proposal for a Simple and Socially Effective Rule Against Perpetuities," see 66 N.C.L. Rev. 545 (1988).