A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 40-8-110, RELATING TO CARE AND MAINTENANCE TRUST FUNDS FOR PERPETUAL CARE CEMETERIES, SO AS TO AUTHORIZE A TOTAL RETURN UNITRUST METHOD OF DISTRIBUTION AND TO ESTABLISH GRADUATED MINIMUM DISTRIBUTION PERCENTAGES BASED ON THE FAIR MARKET VALUE OF THE TRUST FUND.

 

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

 

SECTION 1.  Section 40-8-110 of the S.C. Code is amended by adding:

 

    (M)(1) Notwithstanding another provision of law, a care and maintenance trust fund established pursuant to this section may be administered using a total return unitrust method as provided in this subsection.

       (2) For purposes of this subsection, "unitrust method" means a method of determining the annual amount that may be distributed from the trust fund for care and maintenance based upon a fixed percentage of the net fair market value of the trust fund, determined annually, without regard to whether the distribution is derived from income or principal.

       (3) A trustee that elects to administer a care and maintenance trust fund using the unitrust method shall distribute annually for care and maintenance an amount no less than:

           (a) three percent of the net fair market value of the trust fund if the trust fund value is at least one million dollars but less than two million dollars;

           (b) four percent of the net fair market value of the trust fund if the trust fund value is at least two million dollars but less than five million dollars; and

           (c) five percent of the net fair market value of the trust fund if the trust fund value is five million dollars or greater.

       (4) The net fair market value of the trust fund must be determined in good faith by the trustee based on the average fair market value of the trust fund assets for the preceding three calendar years. If the trust fund has been in existence for fewer than three years, the average must be based on the period of its existence.

       (5) A distribution made in accordance with this subsection is deemed to satisfy the requirement that net income of the care and maintenance trust fund be used for care and maintenance purposes as required by this section.

       (6) A trustee electing to use the unitrust method shall adopt a written policy governing valuation and distributions and shall maintain records sufficient to demonstrate compliance with this section.

       (7) The trustee shall report annually to the department the fair market value of the trust fund and the amount distributed pursuant to this subsection in the form required by the department.

       (8) Nothing in this subsection relieves a trustee of its fiduciary duties under applicable law, including the duty to act as a prudent investor pursuant to Title 62.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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