South Dakota § 55-5-7 - Prudent investor rule.
Full text of South Dakota South Dakota Codified Laws § 55-5-7 — Prudent investor rule., with citation guidance and answers to common questions.
§ 55-5-7. Prudent investor rule.
No specific investment or course of action is, taken alone, prudent or imprudent. The trustee may invest in every kind of property and type of investment, subject to this chapter. The prudent investor rule is a test of conduct and not of resulting performance. The prudent investor rule may be expanded, restricted, eliminated, or otherwise altered by the terms of the trust instrument or court order. Unless expanded, restricted, eliminated, or otherwise altered by the terms of the trust instrument or a court order, the trustee's investment decisions and actions shall be judged in terms of the trustee's reasonable judgment regarding the anticipated effect on the trust portfolio as a whole under the facts and circumstances prevailing at the time of the decision or action. No trustee is liable to a beneficiary to the extent that the trustee acted in reliance on the provisions of the trust instrument or court order.
Source: SL 1995, ch 271, § 7; SL 2009, ch 252, § 30; SL 2010, ch 232, § 13.
Source: official South Dakota text · Last verified 2026-08-27
Frequently Asked Questions About South Dakota § 55-5-7
What does South Dakota Codified Laws § 55-5-7 cover?
Section 55-5-7 ("Prudent investor rule.") is part of the South Dakota Codified Laws, the codified statutory law of South Dakota. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite South Dakota § 55-5-7?
A common citation format is "South Dakota Codified Laws § 55-5-7" (South Dakota). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of South Dakota law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the South Dakota official source linked on this page or consult a licensed South Dakota attorney.
How does South Dakota § 55-5-7 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in South Dakota can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in South Dakota.