The Missouri legislature has passed a bill to authorize county commissioners to diversify their cemetery trusts.  Prior to the passage of House Bill No. 51 Missouri’s counties were restricted in how they could invest cemetery care funds.  Essentially, a Missouri county could invest care funds only in government bonds.  But, since the mortgage bond crisis of 2008, government bonds have had very low returns.  With county revenues also declining, commissioners have pressed for the authority to diversify cemetery care trusts.

HB No. 51, read in conjunction with R.S. Mo. Section 214.170, would allow Missouri counties to invest in equity securities and pay out 95% of the net income.  (5% of the income would have to go into a reserve to cover future losses.)  The law governing such trusts does not define income, and so a County would seem authorized by the Uniform Trust Code to have their care fund trust instrument define capital gains as income.

Cemeteries owned and operated by corporations already have the authority to diversify their endowed care trusts.  However, the 2010 amendments to Chapter 214 limit care fund distributions to interest and dividend income or a fixed distribution not to exceed 5%.   With the current investment market, cemetery corporations may think that they too would like authorities similar to HB No. 51.