SCS HB 239 -- MANAGEMENT OF TRUSTS AND FUNDS

This bill changes the laws regarding the management of trusts and
funds.  In its main provisions, the bill:

(1)  Allows the University of Missouri Board of Curators to use
up to 2% annually of the total market value of the university's
endowment to support internal endowment administration and
development functions;

(2)  Allows certain banks, trust companies, savings and loan
associations, and savings banks to transfer by assignment some or
all of its fiduciary obligations consisting of irrevocable life
insurance trusts to the Missouri trust office of an out-of-state
bank with trust powers or an out-of-state trust company;

(3)  Establishes guidelines for the management, investment, and
expenditures of endowment funds held by charitable institutions
and other entities holding funds for charitable purposes.
Subject to the intent and any specific limitation of a donor, the
investment manager must manage and invest the fund in good faith
with the care an ordinary, prudent person in a like position
would take.  Delegation of fund management to an external agent
must also be made in good faith.  The assets of the fund must be
diversified unless the institution determines that because of
special circumstances the funds are better served without
diversification.  The assets can be pooled together with other
institutional funds for the purposes of management and
investment.  Other criteria for investment decisions are
specified in the bill;

(4)  Specifies a procedure for the modification of a donor
restriction in certain instances.  If a restriction is on a fund
with less than $50,000, it may be modified in a manner consistent
with the charitable purpose of the gift after 10 years upon
notification to the Attorney General and a 60-day waiting period
without court approval.  Courts may modify the purpose of a fund
or any restrictions if they are unlawful, impracticable,
impossible to achieve, or wasteful.  The Attorney General may
intervene to provide an opinion on the proposed modification;

(5)  Authorizes a trustee of a trust that became irrevocable on
or before September 25, 1985, to distribute trust income and
principal to qualified remainder beneficiaries in certain
specified circumstances.  A "qualified remainder beneficiary" is
a descendant of a permissible distributee who will be eligible to
receive trust income upon the death of a permissible distributee
or the termination of a trust.  Permissible distributees must be
notified of any distribution of trust income to a qualified
remainder beneficiary 60 days prior to any transfer.  Trustees in
certain specified counties may publish creditor notices in a
local newspaper; and

(6)  Requires personal representatives of an estate to invest the
estate's funds in accordance with the Missouri Prudent Investor
Act unless otherwise specified by a will.  Instruments guaranteed
as to principal and interest by the United States and accounts
insured by the Federal Deposit Insurance Corporation (FDIC) are
considered prudent investments.  Delegation of account management
responsibilities to an agent requires a written acknowledgment by
the agent that they are acting as an investment fiduciary on the
account.  Conservators of an estate must also follow these rules
unless they obtain court approval.  Conservators will no longer
be able to sell or exchange assets worth less than $1,000 without
court approval.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:24 am