What is the requirement for investments in Special Care Trusts?

The requirement for investments in Special Care Trusts focuses on ensuring the financial security of the trust's assets while adhering to the legal and regulatory frameworks governing such trusts. The correct answer highlights that investments made within Special Care Trusts must be secure and authorized, which means they should be carefully selected to minimize risks and align with the objectives set forth by the trust.

By emphasizing security, the investments must protect the interests of beneficiaries, ensuring that funds are preserved to provide care and support as intended. Trusts often have specific guidelines regarding what constitutes an authorized investment, allowing them to operate within a framework that prioritizes both safety and compliance with legal standards. This requirement helps prevent the risks associated with speculative or volatile investments that could jeopardize the funds necessary for special care needs.

The other options, while important considerations in investment strategies, do not capture the essential focus on security and authorization required for Special Care Trusts. Liquid assets, diversification, and limiting investments to government-backed securities may be prudent practices, but they do not encapsulate the core requirement that investments must be both secure and authorized within the legal context of Special Care Trusts.