House Journal: Page 1328: Monday, April 23, 2001
41 exchange, retain, sell, and otherwise manage the trust
42 fund for the benefit and protection of the named
43 beneficiary.
44 3. The commissioner may by rule authorize other
45 methods of deposit upon a finding that such methods
46 provide equivalent safety of the principal and
47 interest or income and the seller lacks access to the
48 proceeds prior to performance.
49 4. This section does not prohibit moving trust
50 funds from one financial institution to another.
Page 8
1 Sec. . NEW SECTION. 523A.203 FINANCIAL
2 INSTITUTION TRUSTEE QUALIFICATION AND INVESTMENT
3 REQUIREMENTS.
4 1. A financial institution may serve as a trustee
5 if granted those powers under the laws of this state
6 or of the United States. A financial institution
7 acting as a trustee of trust funds under this chapter
8 shall invest the funds in accordance with applicable
9 law.
10 2. A financial institution acting as a trustee of
11 trust funds under this chapter has a fiduciary duty to
12 make reasonable investment decisions and to properly
13 oversee and manage the funds entrusted to it. The
14 trustee shall use the judgment and care under the
15 circumstances then prevailing that persons of
16 prudence, discretion, and intelligence exercise in the
17 management of their own affairs, not in regard to
18 speculation but in regard to the permanent disposition
19 of their funds, considering the probable income as
20 well as the probable safety of their capital. The
21 commissioner may take enforcement action against a
22 financial institution in its capacity as trustee for a
23 breach of fiduciary duty proven under this chapter.
24 3. Moneys deposited under a master trust agreement
25 may be commingled by the financial institution for
26 investment purposes if each deposit includes a
27 detailed listing of the amount deposited in trust for
28 each beneficiary and maintenance of a separate
29 accounting of each purchaser's principal, interest,
30 and income.
31 4. Subject to a master trust agreement, the seller
32 may appoint an independent investment adviser to
33 advise the financial institution about investment of
34 the trust funds.
35 5. Subject to agreement between the parties, the
36 financial institution may receive a reasonable fee
37 from the trust funds for services rendered as trustee.
38 The trust shall pay the trust operation costs and any
39 annual audit fees.
© 2001 Cornell College and
League of Women Voters of Iowa
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