SB 370, HCA 1 -- TRUSTS AND ESTATES

CO-SPONSORS:  Caskey, Goode (Smith)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Civil and
Administrative Law by a vote of 11 to 0.

This bill revises the law governing principal and income in the
administration of trusts.  The bill:

(1)  Redefines the standards and processes used to determine
which parts of a trust constitute principal and which constitute
income from that principal, as well as trustees' obligations in
administering those trusts;

(2)  Allows trustees discretion in adjusting the trust
portfolio, to do what is fair and reasonable to all
beneficiaries, absent clear intent in the trust to the contrary,
in accordance with the Prudent Investor Act;

(3)  Adopts and sets the "unitrust amount" (the default
mechanism used to determine how much of a portfolio to count as
income) at 3%;

(4)  Repeals the rule against perpetuities as it applies to
trusts, under certain conditions; and

(5)  Reduces the statute of limitations, from 5 years to 2
years, for claims of breach of trust resulting from a trustee's
allocation of income and principal.

HCA 1 -- Tolls the statute of limitations for breach of a
trustee's duty of impartiality in certain cases.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that the bill is a result of the
work of the Missouri Bar's Probate Law Committee, which adapted
the bill's language from the Uniform Principal and Income Act
being enacted throughout the country.

Testifying for the bill was Senator Caskey.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
Last Updated November 26, 2001 at 11:47 am