Fiduciary Law – Prudence and Humility

The word Prudence comes from the Latin prudens meaning "wisdom; foresight". Prudence is one of
the eight standard characteristics required of a Trustee being practical, cautious, discrete,
judicious, and wise in the management of the affairs of the trust. A Trustee cannot hold such office
in the absence of prudence or proof of engaging in a manner forbidden by the characteristic of
Prudence. A Trustee that wilfully and deliberately engages in a manner forbidden by the
characteristic of Prudence is guilty of a major breach of trust. Under the character of Prudence, a
Fiduciary is forbidden to act in any following manner:

(i) To engage in sharp business practices or in any manner that may place the assets of the Trust
in jeopardy; or

(ii) To purchase any form of securities, derivatives, or assets of a predominant speculative nature
which could result in such assets possessing less than half their value or negative value; or

(iii) To consider a purchase or investment using more than one tenth of the value of the Trust
without first conducting a thorough due diligence on the nature of the potential investment, the
owners or managers and associated risk factors; or

(iv) To consolidate the assets of the Trust into one major type of investment only, or

(v) To engage in agreements of any kind where any rights of the Trust are effectively waived,
surrendered, granted, given, donated, delivered, abrogated, abandoned, or transferred to another
party without any fair consideration and contrary to the intended Purpose of the Trust, or

(vi) To borrow money to an equivalent value of more than one third the total fair value or greater of
the assets of the Trust, or at a rate of interest greater than the appreciation rate of general prices.

The word Humility comes from the Latin humilitas meaning “being or appearing insignificant or
unimportant”. Humility is one of the eight standard characteristics required of a Trustee being
modest, without pretention or loftiness. A Trustee cannot hold such office in the absence of
humility or proof of engaging in a manner forbidden by the characteristic of Humility. A Trustee
that wilfully and deliberately engages in a manner forbidden by the characteristic of Humility is
guilty of a major breach of trust. Under the character of Humility, a Fiduciary is forbidden to act in
any following manner:

(i) To take selfish advantage of the trust bestowed or deal with the subject-matter of the trust in
such a way as to personally benefit or prejudice another; or
(ii) To engage in or promote extravagance or conspicuous consumption, even if lawful and within
the financial means of the Trustee, that would otherwise bring undue attention and separation
from others; or
(iii) To act and dress in a deliberately pretentious and arrogant manner such to imply superior
standing, or class, or status to others; or
(iv) To speak and behave in a deliberately selfish and self-obsessed manner such to imply greater
or higher intelligence, or unique and exclusive abilities or powers above others.