Is there a requirement that trust portfolios must include a generous percentage of stocks to achieve capital growth for remainder beneficiaries?

• A. Yes, always.
• B. Only if the trust instrument requires.
• C. No; there is no fixed asset-type requirement; diversification and total return matter.
• D. No, stocks are forbidden in such trusts.

Answer: (C)

Diversification and total return guide how trust assets are invested rather than sticking to a fixed stock percentage. Trustees have a fiduciary duty to invest prudently, considering the trust’s goals, the time horizon until remainder beneficiaries receive the assets, and the need to balance growth with risk. There is no universal rule that you must keep a generous portion of stocks to achieve capital growth for remainder beneficiaries. Some trusts may emphasize higher equity exposure, especially for long horizons, while others may require a more conservative mix or even restrict certain asset classes. The key is to pursue a reasonable total return that aligns with the trust’s objectives and risk tolerance, not to hit a specific allocation to stocks. In practice, stocks can be part of a well-diversified portfolio because they offer growth potential over time, but they are not mandatory.