State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_53 > GS_53-163_1

§ 53‑163.1.  Funds heldby a corporation exercising fiduciary powers awaiting investment ordistribution.

(a)        Funds held in afiduciary capacity by a bank, trust company, savings and loan association, orother corporation authorized to exercise the powers of a fiduciary, awaitinginvestment or distribution shall not be held uninvested or undistributed anylonger than is reasonable for the proper management of the account. Acorporation acting in a fiduciary capacity has complied with this requirementif such funds awaiting investment or distribution in excess of one thousanddollars ($1,000) are invested or distributed within 30 days of receipt oraccumulation thereof.

(b)        Funds held in afiduciary capacity by a bank, awaiting investment or distribution may, unlessprohibited by the instrument creating the fiduciary relationship, be depositedin the commercial or savings or other department of the bank, provided that itshall first set aside under control of the trust department as collateralsecurity, such securities as may be found listed in G.S. 142‑34 as beingeligible for the investment of the sinking funds of the State of North Carolinaequal in market value of such deposited funds, or readily marketable commercialbonds having not less than a recognized "A" rating equal to onehundred and twenty‑five percent (125%) of the funds so deposited.

The securities so deposited orsecurities substituted therefor as collateral in the trust department by thecommercial or savings or other department (as well as the deposit of cash inthe commercial or savings or other department by the trust department) shall beheld pursuant to the provisions of G.S. 53‑43(6).

If such funds are deposited ina bank insured under the provisions of the Federal Deposit Insurance Corporation,the above collateral security will be required only for that portion ofuninvested balances of each trust which are not fully insured under theprovisions of that corporation.

(c)        Funds held in afiduciary capacity by a corporate fiduciary awaiting investment or distributionmay, unless prohibited by the instrument creating the fiduciary relationship,be invested in short‑term, trust‑quality investment vehicles,through the medium of a collective investment fund or otherwise.

(d)        In addition to anyother compensation to which it may be entitled under G.S. 28A‑23‑3,34‑12, 35A‑1269, or under any other authority, a corporation actingin a fiduciary capacity shall be allowed to charge a fee for the temporaryinvestment of funds held awaiting investment or distribution, which fee may becalculated upon the amount of such funds actually invested and upon the incomeproduced thereby. The fee authorized by this subsection shall not exceed twelvepercent (12%) of the income produced by such investment. A corporation actingin a fiduciary capacity has complied with its duty to disclose fees andpractices in connection with the investment of fiduciary funds awaitinginvestment or distribution if the corporation's periodic statements set forththe method of computing such fees. (1939, c. 197, s. 4; 1963, c. 243, ss. 1, 2; 1977, c.502, s. 2; 1989, c. 443; 2004‑139, s. 5; 2005‑192, s. 1.)