Mark 12:31 / Prudent Man Rule
As part of continuing my education in the field of accounting, I am taking a class called Estate and Gift Taxation. In the class, we learn about trusts. One thing of fascination to me is the Prudent Man Rule.
To give context, there are 3 parties to a trust: a grantor, trustee, and beneficiary. A grantor gives assets to the trust. The trustee invests and safeguards the assets inside the trust, and distributes the assets to the beneficiaries at the end of the trust term; the trustee must always act in the best interest of the beneficiaries - no matter what.The beneficiaries receive the trust assets at the end of the trust term.
Prudent Man Rule. A rule which requires a trustee, as a fiduciary, to act in the same manner that a prudent person would act if the prudent person were acting for his own benefit.
This sounds so reminiscent of a passage in the Bible that is replicated in all cultures and religions:
And one of the scribes came up and heard them disputing with one another, and seeing that he answered them well, asked him, “Which commandment is the most important of all?” Jesus answered, “The most important is, ‘Hear, O Israel: The Lord is our God, the Lord is One. And you shall love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength.’ The second is this: ‘You shall love your neighbor as yourself.’ There is no other commandment greater than these.” Mark 12:28-31.
Jesus cited this directly from God’s 10 Commandments in the Old Testament during the days when Moses was leading the Jews:
You shall not take vengeance or bear a grudge against the sons of your own people, but you shall love your neighbor as yourself: I am the LORD. Leviticus 19:18.
It is evident that the Prudent Man Rule got its roots from the Bible, directly from the lips of the Living God Almighty. The Prudent Man Rule commands the trustee to act in respect to the beneficiaries as if they were himself. In other words, do unto others as you would have them do unto you, or love your neighbor as yourself.
