(dissenting)— Although Baker Boyer National Bank failed to assign error to finding of fact 5 in its opening brief, as required by RAP 10.3(g), it did so in its reply brief. Since the briefs of both parties deal with the matters contained in this finding, there is no prejudice to any party by considering the merits of the assignment of error. Therefore, I respectfully dissent.
Finding of fact 5 states:
The liquid assets and intangibles in each trust consisted of cash and various securities. During the period of trust administration, the bank invested basically in tax *688exempt securities, the intent and purpose of which was to increase the income yield to Garver. The basis for purchasing tax exempt municipal bonds was apparently Garver's counsel's word or his broker Shield's word. The specific investments placed or held in trust were made either by Garver or by the bank. The bank went beyond the bounds of reasonable judgment in concentrating investments almost exclusively in municipal bonds. Although this Court has concluded that the remainder interest in the farm lands could not be considered equity investments by the trustee, if it were the trustee did not at any time make any considered conscious balancing of risks and advantages in weighing the amount invested in farm land equity against the amount invested in fixed income securities.
In my view the court erred when it found "[t]he bank went beyond the bounds of reasonable judgment in concentrating investments almost exclusively in municipal bonds." In making this finding, the court eliminated consideration of farmland which it found was distributed to the trusts from the estates of Leonard R. Garver and Hazel Garver. This land was the primary asset of a total estate valued for federal tax audit purposes at over $860,000. The decedents' son, Richard, received a life estate in the land and the remainder to his sons, Russell and Gregory, to vest when they attained age 25. Tax-exempt bonds valued at $194,500 were also distributed to the trusts. In deciding the question of whether the trust estate was prudently diversified, the court excluded the land from its consideration. In doing so, I believe the court erred. Restatement (Second) of Trusts § 227, comment o, at 535 (1959).9
It is evident the Bank was in the delicate position of balancing the conflicting interests of the life tenant, who needed tax-exempt income, and the remaindermen, who wanted the principal to appreciate in value. If the Bank is *689prohibited from considering the land in balancing the beneficiaries' interests, then it is impossible for the Bank to satisfy the best interests of the beneficiaries as they are in direct conflict. As a consequence, any action detrimental to either interest could be argued imprudent by the other party.
Here, the record shows that Richard's income as a life tenant placed him in a tax bracket where he needed tax-exempt income to avoid higher taxes. On the other hand, the remaindermen would eventually receive the farmland that could appreciate in value keeping pace with inflation, and bonds that would pay off at their face value about the time of expiration of Richard's life expectancy. In fact, some of the farmland by the time of trial had already appreciated from $200 per acre to $800 (finding of fact 7). According to its trust officers, the Bank, in balancing the conflicting interests of the beneficiaries, decided the remaindermen had a diversified portfolio of bonds and valuable land and concluded the bonds should be retained to satisfy the life estate's need for tax-exempt income. Further, any sale of the bonds would have been at a loss to the estate and whether a reinvestment would have recouped the loss is speculative. To form a contrary opinion is to be governed by hindsight which, without more, is insufficient to establish abuse of discretion by the Bank. Baldus v. Bank of Cal., 12 Wn. App. 621, 530 P.2d 1350, review denied, 85 Wn.2d 1011 (1975). In fact, the bonds were sold, pursuant to court order and at the beneficiaries' request, at a substantial loss. Considering all of these circumstances, I conclude the Bank acted prudently in dealing with these conflicting interests. My conclusion coincides with the total-asset approach adopted in RCW 11.100.060 for measuring whether a trustee prudently managed trust property.
The court also found the Bank did not "make any considered conscious balancing of risks and advantages in weighing the amount invested in farm land equity against the amount invested in fixed income securities." The testi*690mony of the trust officers supports a finding to the contrary. Even if the court's finding is correct, the underlying question is whether the fact of diversification between the land and the tax-exempt bonds was prudent. Whether there was a conscious balancing evidenced in the record is immaterial where prudent diversification exists in fact. As I have indicated, the farmland should have been considered an equity investment that would pace inflation and counterbalance the bonds that produced tax-exempt income. Since this portion of the court's finding was interlineated at the time of entry, it must have influenced the court's conclusions of law and to that extent it was error.
Further, the findings were based primarily on the testimony of Mr. Nelson, a full-service investment broker from Seattle, who rejected consideration of the farmland in rendering his expert opinion as to whether the Bank properly diversified the trust estate. Since I have concluded all of the assets of the trust, including the farmland, should have been considered in making this determination, his testimony should be disregarded. The only remaining expert testimony is that of Mr. Brockhouse, Vice-President Trust Counsel for Seattle-First National Bank, Seattle, who testified the farmland should have been considered and Baker Boyer National Bank had prudently diversified the trust estate. His testimony supports my conclusion and governs the diversification issue.
For these reasons, I would reverse the damage award based on imprudent trust investment and adjust the award of attorney fees accordingly.
Reconsideration denied June 12, 1986.
Review denied by Supreme Court September 2,1986.
Comment o states that among the matters a trustee should consider in selecting a given investment are: "(6) the aggregate value of the trust estate and the nature of the other investments; ... (8) the other assets of the beneficiary or beneficiaries including earning capacity". This principle has been incorporated into RCW 11.100.020.