I recently worked on a piece of trust litigation where the deceased Grantor of a Trust restricted the ability of the Trustee to sell a leveraged asset that comprised > 95% of the Trust’s assets. Regardless of the Grantor’s intentions, he did the Trustee no favors resulting, of course, in a lawsuit by one of the income beneficiaries. Still, the Trustee had a duty to manage the asset in a way that complied with the Uniform Prudent Investor Act despite the restrictions. This one was a lawsuit waiting to happen from day one.
Here is a good Barron’s article dealing with how a Trustee can manage concentrations of assets in a Trust, or how a Grantor can give the Trustee more flexibility.