Florida Statute 518.11
“Investments by fiduciaries; prudent investor rule”
What it means
Florida's prudent investor rule. A fiduciary — trustee, personal representative, guardian — must invest and manage assets as a prudent investor would, considering the purposes, terms, distribution requirements, and other circumstances of the trust or estate. Decisions are judged by the fiduciary's reasonable business judgment under the facts prevailing at the time: the rule is expressly a test of conduct and not of resulting performance.
The rule carries specific duties: diversify unless the fiduciary reasonably believes not diversifying serves the beneficiaries and the purposes of the trust; review original holdings within a reasonable time and decide what to keep; and pursue a strategy balancing reasonable production of income with safety of capital.
- The standard: invest as a prudent investor would, in light of purposes, terms, distribution requirements, and circumstances.
- Expressly a test of conduct and not of resulting performance — losses alone do not prove imprudence.
- Duty to diversify, unless the fiduciary reasonably believes non-diversification serves the beneficiaries and furthers the trust's purposes.
- Duty to review original, preexisting investments within a reasonable time and decide on retention or disposition.
- Strategy must weigh reasonable production of income and safety of capital; the governing instrument may expand or restrict the rule.
- Applies to acts and omissions occurring after October 1, 1993.
How it plays out
Concentrated positions are where this statute earns its keep. Estates and trusts routinely arrive holding one asset — the family company, a founder's stock, a crypto wallet — and §518.11 puts the burden on the fiduciary to review the holding, decide, and be able to show the reasoning. Because it is a conduct test, the file matters more than the outcome: a documented decision to hold can survive a market drop, while undocumented drift can look like a breach even when nothing falls.
Questions people ask
