436.435. Compliance of contracts entered into prior to effective date--investment of trust property and assets--loans against assets prohibited. - Missouri Statutes

Compliance of contracts entered into prior to effectivedate--investment of trust property and assets--loans againstassets prohibited.

436.435. 1. To the extent that any provisions in this chapter whichcome into effect on August 28, 2009, apply to trusts governed under thischapter which are in existence on August 28, 2009, such trusts shall be incompliance with this chapter no later than July 1, 2010.

2. All property held in a preneed trust, including principal andundistributed income, shall be invested and reinvested by the trustee thereofand shall only be invested and reinvested in investments which have reasonablepotential for growth or producing income. Funds in, or belonging to, apreneed trust shall not be invested in any term life insurance product.

3. A trustee shall invest and manage trust assets as a prudent investorwould, by considering the purposes, terms, distribution requirements, andother circumstances of the trust. In satisfying this standard, the trusteeshall exercise reasonable care, skill, and caution. A trustee who has specialskills or expertise, or is named trustee in reliance upon the trustee'srepresentation that the trustee has special skills or expertise, has a duty touse those special skills or expertise when investing and managing trustassets.

4. A trustee shall diversify the investments of the trust unless thetrustee reasonably determines that, because of special circumstances, thepurpose of the trust is better served without diversification.

5. In investing and managing trust assets, a trustee shall consider thefollowing as are relevant to the trust:

(1) General economic conditions;

(2) The possible effect of inflation or deflation;

(3) The expected tax consequences of investment decisions or strategies;

(4) The role that each investment or course of action plays within theoverall trust portfolio;

(5) The expected total return from income and the appreciation ofcapital;

(6) Needs for liquidity, regularity of income, and preservation orappreciation of capital.

6. No seller, provider, or preneed agent shall procure or accept a loanagainst any investment or asset of or belonging to a preneed trust. As ofAugust 29, 2009, no preneed seller, provider, or agent shall use any existingpreneed contract as collateral or security pledged for a loan or take preneedfunds of any existing preneed contract as a loan or for any purpose other thanas authorized by this chapter.

(L. 2009 S.B. 1)