You asked us to research, for the eight states in the Atlanta Region, the laws concerning
a representative payee's responsibilities for conserving and investing benefit payments.
The specific questions concern the types of investments considered appropriate; whether
parent-payees are permitted to invest differently than other types of payees; and
what rules are followed by trustees. Our responses to the questions, by state, are
What types of investments are considered appropriate under the "prudent man" rule?
The Mississippi Code provides no specific listing of acceptable investments, so each
investment would have to be evaluated under the "prudent man" rule set forth in section
91-9-103(c). Mississippi defines the term "prudent man" as:
a trustee whose exercise of trust powers is reasonable and equitable in view of the
interests of income or principal beneficiaries, or both, and in view of the manner
in which men of ordinary prudence, diligence, discretion, and judgment would act in
the management of their own affairs.
Miss. Code Ann. § 91-9-103 (c) (1994).
Under state law, are parent-payees permitted to invest the funds belonging to their
minor children differently than other types of payees?
We found no special provisions for parents of minor children.
What are the rules followed by trustees regarding the investment of funds with which
they are entrusted?
The powers of a trustee are outlined, in part, as follows:
(1) From time of creation of the trust until final distribution of the assets of the
trust, a trustee has the power to perform, without court authorization, every act
which a prudent man would perform for the purposes of the trust, including . . .
(e) To invest and reinvest trust assets in accordance with the provisions of
the trust or as provided by law;
(f) To deposit trust funds in a bank, including a bank operated by the trustee
. . .
Miss. Code Ann. § 91-9-107 (1994).
Each of the states within the Atlanta Region provides significant discretion to fiduciaries
making decisions regarding investments. Although each state may have a slightly different
definition of "prudent" man or person, only Georgia and Kentucky specifically delineate
what investments are acceptable, Alabama and Mississippi allow great latitude in what
investments are appropriate, and Florida, Georgia, North Carolina, South Carolina,
and Tennessee allow for investment of every kind and in every kind of property.