What kind of investments are allowed in a trust?
In Oregon, a trust is a legal agreement between a person who creates the trust, known as the grantor, and a trustee, who manages and administers the trust. The trust holds assets and investments on behalf of the grantor or designated beneficiaries. Investment options in a trust often depend on the trust agreement and state laws. Generally, a trust can invest in any asset allowed by state law, including real estate, stocks, bonds, and mutual funds. Some trusts may also have specific clauses that allow for more specialized investments, such as options, futures, annuities, and non-traditional investments. At the same time, state law restricts certain types of investments that may be deemed too speculative or that could violate other legal regulations. For example, Oregon restricts any investments by a trust in the form of gambling or illegal activities. Trusts may also be subject to the Oregon Prudent Investor Act, which requires the trustee to manage trust investments in the same manner as a person of reasonable prudence, meaning they must diversify investments and actively manage them with the goal of preserving trust assets in mind. In conclusion, in Oregon, trusts can generally invest in stocks, bonds, mutual funds, real estate, and other similar assets, subject to the restrictions of state laws and the Prudent Investor Act. Special clauses in the trust agreement may also allow for a wider range of investments.
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