1996 Ottawa ON Civil Section Documents - Prudent Investors the 1970 ULC rule

Modify the wording of the 1970 ULC Rule along the lines of the Manitoba provision by deleting the reference to the degree of judgement and care that would be exercised by a prudent person acting as a trustee of another's property, and replace it with a reference to such a person "administering the property of others." 3. [...] By contrast, the economist's notion of risk includes an assessment of the probability of both gains and losses.32 In economic terms, risk is the degree of variability of expected returns.33 The greater the chance that the actual return will be less than the expected return, the greater the risk. [...] The trustee is to accumulate the income from the capital until then, but has the discretion to make payments from the income for the benefit of the grandchild in the meantime. [...] A trustee is not liable for a loss to the trust arising from the investment of trust property if the conduct of the trustee that led to the loss conformed to a plan or strategy for the investment of the trust property, comprising reasonable assessments of risk and return, that a prudent investor could adopt under comparable circumstances. [...] The probable condition of the market with respect to the value of the investment at the termination of the trust, especially if at the termination of the trust the investment must be converted into money for the purpose of distribution.