SS/SCS/HB 239 -This act modifies several provision related to the management of funds. UNIVERSITY OF MISSOURI ENDOWMENT
(Section 172.290)
This section specifies that the curators of the University of Missouri may use no more than two percent of the total market value of the university's endowment to support internal endowment administration and development functions.
IRREVOCABLE LIFE INSURANCE TRUSTS
(Sections 362.333, 369.162)
Banks, trust companies, savings and loan associations, and savings banks with authorized trust authority may transfer by assignment, for consideration or no consideration, some or all of its fiduciary obligations consisting only 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.
These sections are identical to SB 277 (2009) and similar to HB 1617 (2008).
UNIFORM PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT
(Sections 402.130, 402.132, 402.134, 402.136, 402.138, 402.140, 402.142, 402.144, 402.146, 402.148).
This section repeals the Uniform Management of Institutional Funds Act and enacts the Uniform Prudent Management of Institutional Funds Act. This act modifies the guidelines for management, investment, and expenditures of endowment funds of charitable institutions. It requires institutions, which include charitable organizations, governmental entities holding funds exclusively for charitable purposes, and certain trusts, to follow specific standards and consider general economic conditions, the effects of inflation or deflation, tax consequences, the role each investment plays in the overall investment portfolio, the expected total return, other resources of the institution, the needs of the institution, and an asset's special relationship to the charitable purpose of the institution in managing and investing institutional funds. It requires institutions to diversify the investments of institutional funds, rebalance their portfolio after receiving property, and make investment decisions in the context of the institutional fund's whole portfolio.
When delegating the management and investment of an institutional fund to an external agent, the institution is required to act in good faith with the care that an ordinarily prudent person in a like position would exercise in similar circumstances in selecting the agent, establishing the scope and terms of the delegation, and periodically reviewing the agent's actions. The agent has a duty of reasonable care and is subject to the jurisdiction of the courts of Missouri.
The act specifies that courts are authorized to modify restrictions imposed by donors when the restriction becomes unlawful, impracticable, impossible to achieve, or wasteful. The attorney general shall have an opportunity to be heard on the modification. If a donor's restriction is on a fund with a value of less than fifty thousand dollars and more than ten years have lapsed since the fund was established, the institution may notify the attorney general, wait sixty days, and then modify the donor restriction in a manner consistent with the charitable purposes expressed in the gift, without court approval.
These sections are similar to HB 1055 (2009).
CERTAIN IRREVOCABLE TRUSTS
(Sections 456.4-418, 456.5-505)
This act authorizes trustees of irrevocable trusts that became irrevocable on or before September 25, 1985 to distribute trust income and principal to qualified remainder beneficiaries under certain circumstances, including a lack of distributions from the trust for a ten-year period. This act also specifies those counties in which a trustee may publish notice to creditors in a local newspaper.
These sections are similar to SCS/SB 166 (2009) and HB 2273 (2008).
INVESTMENTS BY PERSONAL REPRESENTATIVES AND CONSERVATORS (Sections 472.335, 473.333, 475.130, and 475.190)
These sections modify laws regarding investments made by personal representatives and conservators of estates.
The power of the court to approve investments made by personal representatives of estates without court authorization is removed.
Unless restricted by a person's will, the personal representative of an estate is required to invest the liquid assets of the estate in accordance with Missouri's prudent investor act, except that investments in obligations guaranteed as to principal and interest by the United States and investments in interest bearing accounts and certificates of deposit insured by the FDIC are considered prudent investments. If the personal representative of the estate delegates investment and management functions, the agent must acknowledge in writing that they are acting as an investment fiduciary on the account.
These sections eliminates the conservator's statutory authority to sell or exchange investment securities of the estate that are worth less than $1,000 without court approval. However, without court approval, the conservator is required to invest the liquid assets of the estate in accordance with Missouri's prudent investor act, except that investments in obligations guaranteed as to principal and interest by the United States and investments in interest bearing accounts and certificates of deposit insured by the FDIC are considered prudent investments. If the conservator of the estate delegates investment and management functions, the agent must acknowledge in writing that they are acting as an investment fiduciary on the account.
EMILY KALMER