Effective - 28 Aug 2020, 2 histories
362.1070. Capital account, minimum assets — rental of real or personal property — investment of funds — bonds and securities, purchase of — permissible acts of fiduciary — duty of loyalty. — 1. The assets forming the minimum capital account of a family trust company shall:
(1) Consist of cash, United States Treasury obligations, or any combination thereof; and
(2) Have an aggregate market value of at least one hundred percent of the company's required capital account, as specified under subsection 1 of section 362.1035. If the aggregate market value of one hundred percent of the company's capital account is, at any time, less than the amount required under subsection 1 of section 362.1035, the company shall have five business days to bring such capital account into compliance with subsection 1 of section 362.1035.
2. A family trust company may purchase or rent real or personal property for use in conducting business and other activities of the company.
3. Notwithstanding any other provision of law, a family trust company may invest funds for its own account, other than those required or allowed under subsection 1 or 2 of this section, in any type or character of equity securities, debt securities, or other assets.
4. Notwithstanding any other provision of law, a family trust company may, while acting as a fiduciary, purchase directly from underwriters or broker-dealers or purchase in the secondary market:
(1) Bonds or other securities underwritten or brokered by:
(a) The family trust company;
(b) A family affiliate; or
(c) A syndicate, including the family trust company or a family affiliate; and
(2) Securities of investment companies for which the family trust company acts as an advisor, custodian, distributor, manager, registrar, shareholder servicing agent, sponsor, or transfer agent. For purposes of this section, investment companies shall be deemed to include mutual funds, closed-end funds, or unit-investment trusts as defined under the Investment Company Act of 1940, P.L. 76-768, as amended.
5. The authority granted under subsection 4 of this section may be exercised only if:
(1) The investment is not expressly prohibited by the instrument, judgment, decree, or order that establishes the fiduciary relationship;
(2) The family trust company procures in writing the consent of all cofiduciaries with discretionary investment powers to the investment, if any; and
(3) The family trust company discloses its intent to exercise the authority granted under subsection 4 of this section in writing to all family members for whom the investment is to be made, which shall occur before the first exercise of such authority, and each such disclosure states:
(a) Any interest the family trust company has or reasonably expects to have in the underwriting or distribution of the bonds or securities;
(b) Any fee or other compensation received or reasonably expected to be received by the family trust company as a result of the transaction or services provided to an investment company; and
(c) Any relationship between the family trust company and an investment company.
6. Subsections 4 and 5 of this section shall not affect the degree of prudence required of fiduciaries under the laws of this state. However, a purchase of bonds or securities under this section shall be presumed unaffected by a conflict between the fiduciary's personal and fiduciary interests if such purchase:
(1) Is negotiated at a fair price;
(2) If the family member served by the family trust company is a trust, is in accordance with:
(a) The interest of the qualified beneficiaries of the trust for which the purchase is made; and
(b) The purposes of the trust; and
(3) Otherwise complies with:
(a) The Missouri prudent investor act, sections 469.900 to 469.913, unless such compliance is waived in a manner as provided by law; and
(b) The terms of the instrument, judgment, decree, or order establishing the fiduciary relationship.
7. Notwithstanding subsections 1 to 6 of this section, no family trust company shall, while acting as a fiduciary, purchase a bond or security issued by the family trust company, its parent, or a subsidiary company of either unless:
(1) The family trust company is expressly authorized to do so by:
(a) A court order;
(b) The terms of the instrument, judgment, decree, or order establishing the fiduciary relationship; or
(c) If the fiduciary relationship was established by a trust instrument, the written consent of the settlor or of every adult qualified beneficiary of the trust created under that instrument for which such purchase is made; and
(2) The purchase of the security is at a fair price and complies with the Missouri prudent investor act, sections 469.900 to 469.913, unless compliance is waived in a manner as provided by law, and with the terms of the instrument, judgment, decree, or order establishing the fiduciary relationship.
8. Except as otherwise expressly limited by this section, a family trust company is authorized, without limiting any powers otherwise conferred on fiduciaries by law, to do any of the following actions while acting as a fiduciary, and such actions shall be presumed to be unaffected by a conflict between the fiduciary's personal and fiduciary interests:
(1) Make an equity investment in a closely held entity that may or may not be marketable and that is directly or indirectly owned or controlled by one or more family members;
(2) Place a security transaction using a broker who is a family member;
(3) Enter into an agreement with a family member who is the settlor or a qualified beneficiary of a trust with respect to the appointment of the family trust company as a fiduciary of the trust or with respect to the compensation of the family trust company for service as a fiduciary;
(4) Transact business with a family member;
(5) Transact business with or invest in any asset of another trust, estate, guardianship, or conservatorship for which the family trust company is a fiduciary or in which a family member has an interest;
(6) Deposit trust assets in a financial institution that is owned, controlled, or operated by one or more family members;
(7) Purchase, sell, hold, own, or invest in a security, bond, real property, personal property, stock, or other asset of a family member; and
(8) With or without adequate security, lend moneys to or borrow moneys from a family member or a trust, estate, or guardianship for which the family trust company serves as a fiduciary.
9. If not inconsistent with and subject to the terms of subsections 4 to 8 of this section, the duty of loyalty under section 456.8-802 applies to a family trust company when the family trust company serves as trustee of a trust whose administration is subject to chapter 456.
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(L. 2017 H.B. 292, A.L. 2020 S.B. 599)