Poarch Band of Creek Indians Tribal Code
[Includes amendments and additions dated through 2004]
§ 27 TRIBAL UNIFORM PRUDENT INVESTOR ACT
[Initials on original document.]
§ 27-1 Short Title
This Act may be cited as the "Tribal Uniform Prudent Investor Act"
§ 27-2 Statement of Purpose
The Tribal Uniform Prudent Investor Act provides a standard of caution and discretion to be used by the Poarch Band of Creek Indians and their vehicles of investment. Investments shall be made with judgment and care under circumstances then prevailing which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for the investment, considering the probable safety of their capital as well as the probable income to be derived.
§ 27-3 Definitions
In this Act:
APPRECIATION - The value that certain assets accrue over time.
ASSETS - Something someone owns which has value
BENEFICIARIES - One that receives a benefit.
CAPITAL - Money that can be invested by an individual or organization in order to make a profit.
COMPLIANCE - Acquiescence to a wish request or demand.
DEFLATION - A reduction in the general level of prices sustained over several months.
DISPOSITION - Distribution or arrangement.
IMPARTIAL - (Impartiality) not biased.
INFLATION - A general increase in price over time.
INTANGIBLE - Non-material assets.
INVESTMENT PORTFOLIO - A group of investments which may fit together in some way to achieve various goals and or reduce risk.
LIABLE - Legally responsible or obligated.
LIQUIDITY - The ability to convert an asset to cash quickly at its market value.
PRUDENT - Using good judgment and common sense in handling practical matters.
PROVISION - A sum set aside in the accounts of an organization in an anticipation of a future expense.
SEVERABLE - To divide or separate.
TANGIBLE - Material assets.
TRIBAL COUNCIL - Poarch Band of Creek Indians governing body.
TRIBE - Poarch Band of Creek Indians a Federally Recognized Tribe.
TRUSTEE - Poarch Band of Creek Indians Tribal Council
Except as otherwise provided in subsection 5(b), a trustee who invests
and manages trust assets owes a duty to the beneficiaries of the trust
to comply with the prudent investor rule set forth in this Act.
The prudent investor rule, a default rule, may be expanded, restricted,
eliminated, or otherwise altered by the provisions of a trust. A trustee
is not liable to a beneficiary to the extent that the trustee acted
in reasonable reliance on the provisions of the trust.
§ 27-4 Prudent Investor Rule
A trustee shall invest and manage trust assets as a prudent investor
would, by considering the purposes, terms, distribution requirements,
and other circumstances of the trust. In satisfying this standard, the
trustee shall exercise reasonable care, skill, and caution.
§ 27-5 Standard of Care, Portfolio Strategy; Risk and Return Objectives
(b) A trustee's investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust. Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to the trust or its beneficiaries:
(A) General economic conditions;(c) Trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
(B) The possible effect of inflation or deflation;
(C) The expected tax consequences of investment decisions or strategies;
(D) The role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
(E)The expected total return from income and the appreciation of capital;
(F) Other resources of the beneficiaries;
(G) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(H) An asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
(d) A trustee may invest in any kind of property or type of investment consistent with the standards of this Act.
(e) A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.
§ 27-6 Diversification
A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.
§ 27-7 Duties at Inception of Trusteeship
Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirements of this Act.
§ 27-8 - Loyalty
A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.
§ 27-9 Impartiality
As tribal trusts have multiple beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.
§ 27-10 Investment Costs
In investing and managing trust assets, a trustee may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the trust, and the skills of the trustee.
§ 27-11 Reviewing Compliance
Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.
A trustee may delegate investment and management functions that a prudent
trustee of comparable skills could properly delegate under the circumstances.
The trustee shall exercise reasonable care, skill, and caution in:
§ 27-12 Delegation of Management and Investment Functions
(1) Selecting an agent;(b) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
(2) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust;
(3) Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(c) A trustee who complies with the requirements of subsection (a) is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d) By accepting the delegation of a trust function from the trustee of a trust that is subject to the laws of this Tribe, an agent submits to the jurisdiction of the courts of this Tribe.
§ 27-13 The Language Invoking Standard of Act
The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this Act: investments permissible by law for investment of trust funds; legal investments; authorized investments; using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their fluids, considering the probable income as well as the probable safety of their capital; prudent man rule; prudent trustee rule; prudent person rule; and prudent investor rule.
§ 27-14 Application to Existing Trusts
This Act applies to trusts existing on and created after its effective date. As applied to trusts existing on its effective date, this Act governs only decisions or actions occurring after that date.
§ 27-15 Uniformity of Application and Construction
This Act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this Act among the tribes enacting it.
§ 27-16 Severability
If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect the other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
§ 27-17 Effective Date
This Act takes effect on the 15th day of December in the year 2003.