H*4619(Rat #0594, Act #0449)  General Bill, By T.E. Huff, Sharpe, R. Smith, 
C.H. Stone, Wilkins and Young-Brickell
 A Bill to amend Section 62-7-302, as amended, Code of Laws of South Carolina,
 1976, relating to a trustee's standard of care, so as to further provide for
 the duties of a trustee with respect to acquiring or retaining a contract of
 insurance upon the life of the trustor or upon the lives of the trustor and
 his spouse, children, or parents, and by adding Section 62-1-109 so as to
 clarify the duties or obligations of an attorney for a person serving as
 fiduciary.-amended title

   01/26/94  House  Introduced and read first time HJ-26
   01/26/94  House  Referred to Committee on Judiciary HJ-26
   04/21/94  House  Committee report: Favorable with amendment
                     Judiciary HJ-5
   05/05/94  House  Amended HJ-50
   05/05/94  House  Read second time HJ-50
   05/05/94  House  Unanimous consent for third reading on next
                     legislative day HJ-50
   05/06/94  House  Read third time and sent to Senate HJ-2
   05/09/94  Senate Introduced and read first time SJ-5
   05/09/94  Senate Referred to Committee on Judiciary SJ-5
   05/19/94  Senate Recalled from Committee on Judiciary SJ-35
   05/19/94  Senate Read second time SJ-35
   05/19/94  Senate Ordered to third reading with notice of
                     amendments SJ-35
   05/25/94  Senate Amended SJ-21
   05/25/94  Senate Read third time and returned to House with
                     amendments SJ-21
   06/01/94  House  Concurred in Senate amendment and enrolled HJ-274
   06/02/94         Ratified R 594
   06/16/94         Signed By Governor
   06/16/94         Effective date 06/16/94
   06/23/94         Copies available

AN ACT TO AMEND SECTION 62-7-302, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO A TRUSTEE'S STANDARD OF CARE, SO AS TO FURTHER PROVIDE FOR THE DUTIES OF A TRUSTEE WITH RESPECT TO ACQUIRING OR RETAINING A CONTRACT OF INSURANCE UPON THE LIFE OF THE TRUSTOR OR UPON THE LIVES OF THE TRUSTOR AND HIS SPOUSE, CHILDREN, OR PARENTS, AND BY ADDING SECTION 62-1-109 SO AS TO CLARIFY THE DUTIES OR OBLIGATIONS OF AN ATTORNEY FOR A PERSON SERVING AS FIDUCIARY.

Be it enacted by the General Assembly of the State of South Carolina:

Trustee's duties with respect to a contract of life insurance

SECTION 1. Section 62-7-302 of the 1976 Code, as last amended by Act 158 of 1991, is further amended by adding a new subsection (e) to read:

"(e) Notwithstanding subsections (a) through (d), the duties of a trustee with respect to acquiring or retaining a contract of insurance upon the life of the trustor, or upon the lives of the trustor and the trustor's spouse, children, or parents do not include a duty to:

(i) determine whether any such contract is or remains a proper investment;

(ii) exercise policy options available under any such contract; or

(iii) diversify any such contract.

The trustee is not liable to the beneficiaries under the instrument or to any other party for any loss arising from the absence of this duty upon the trustee. Except as specifically provided in the trust instrument, the provisions of this subsection apply to any trust established before or after the effective date of this subsection and to any life insurance policy acquired by the trustee before or after the effective date of this subsection."

Attorney's duties for a person serving as a fiduciary

SECTION 2. The 1976 Code is amended by adding:

"Section 62-1-109. Unless expressly provided otherwise in a written employment agreement, the creation of an attorney-client relationship between a lawyer and a person serving as a fiduciary shall not impose upon the lawyer any duties or obligations to other persons interested in the estate, trust estate, or other fiduciary property, even though fiduciary funds may be used to compensate the lawyer for legal services rendered to the fiduciary. This section is intended to be declaratory of the common law and governs relationships in existence between lawyers and persons serving as fiduciaries as well as such relationships hereafter created."

Time effective

SECTION 3. This act takes effect upon approval by the Governor.

Approved the 16th day of June, 1994.