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.
Summary
H5637 amends South Carolina law governing care and maintenance trust funds for perpetual care cemeteries. The bill authorizes trustees to administer these trust funds using a total return unitrust approach, meaning annual distributions may be calculated as a fixed percentage of the trust’s net fair market value rather than being limited to income alone. The bill defines the unitrust method and allows distributions to be made from either income or principal so long as the required percentage is met.
The bill establishes graduated minimum distribution rates based on the size of the trust fund: 3% for funds valued at least $1 million but less than $2 million, 4% for funds valued at least $2 million but less than $5 million, and 5% for funds valued at $5 million or more. Valuation must be done in good faith using the average fair market value over the prior three calendar years, or over the life of the fund if it is newer. Trustees must adopt written policies, keep compliance records, and file annual reports with the department, while still remaining subject to fiduciary duties and prudent investor standards.
Impact
The bill would amend Section 40-8-110 of the South Carolina Code to give cemetery care and maintenance trust funds a new distribution option and to set minimum payout requirements tied to fund size. It changes how perpetual care funds may be managed by allowing total return unitrust distributions to satisfy the statutory requirement that trust income be used for cemetery care and maintenance. The measure also adds administrative obligations for trustees, including valuation procedures, written policies, recordkeeping, and annual reporting to the department, while preserving existing fiduciary duties under Title 62.
Sentiment
Based on the bill text and the absence of recorded committee debate or votes in the provided materials, the overall sentiment appears neutral to favorable toward modernizing trust administration for cemetery perpetual care funds. The bill is structured as a technical and administrative update rather than a controversial policy change, suggesting support for giving trustees more flexibility in managing long-term care funds. No opposing views are documented in the available context.
Contention
No specific contention is reflected in the provided transcripts or voting history, but the main policy issue inherent in the bill is the balance between flexibility and oversight. Supporters would likely favor the unitrust method because it can provide more predictable and potentially sustainable distributions for cemetery maintenance, while any concerns would likely focus on whether allowing distributions from principal could reduce long-term preservation of trust assets. The graduated payout percentages, reporting requirements, and continued fiduciary duties appear designed to address those concerns.