54.1-2326 - Who may serve as trustee of preneed trust fund. - Virginia Statutes

§ 54.1-2326. Who may serve as trustee of preneed trust fund.

A. The trustee of the preneed trust fund shall be appointed by the personowning, operating, or developing a cemetery company. If the trustee is otherthan a Virginia trust company or trust subsidiary or a federally insured bankor savings institution doing business in the Commonwealth, the trustee shallbe approved by the Board.

A trustee that is not a Virginia trust company or trust subsidiary or afederally insured bank or savings institution doing business in theCommonwealth shall apply to the Board for approval, and the Board shallapprove the trustee when the Board has become satisfied that the applicant:

1. Employs and is directed by persons who are qualified by character,experience, and financial responsibility to care for and invest the funds ofothers;

2. Will perform its duties in a proper and legal manner and that the trustfunds and interest of the public generally will not be jeopardized; and

3. Is authorized to do business in the Commonwealth and has adequatefacilities to perform its duties as trustee.

B. If the trustee is other than a Virginia trust company or trust subsidiaryor a federally insured bank or savings institution doing business in theCommonwealth, the trustee shall furnish a fidelity bond with corporate suretythereon, payable to the trust established, which shall be designated"Preneed Trust Fund for (name of cemetery company)," in a sum equal to butnot less than 100 percent of the value of the principal of the trust estateat the beginning of each calendar year, which bond shall be deposited withthe Board.

C. If the trustee is other than a Virginia trust company or trust subsidiaryor a federally insured bank or savings institution doing business in theCommonwealth, and if it appears that an officer, director or employee of thetrustee is dishonest, incompetent, or reckless in the management of a preneedtrust fund, the Board may bring an action in the appropriate court to removethe trustee and to impound the property and business of the trustee as may bereasonably necessary to protect the trust funds.

(1998, cc. 708, 721.)