PR 07240.027 Mississippi
A. PR 01-225 Investment of Conserved Funds
Date: August 13, 2001
All eight States in the Atlanta Region follow slightly different interpretations of the “prudent” person (investor) rule. Each State provides some degree of discretion to fiduciaries, including representative payees, when making decisions regarding investments. Only Georgia and Kentucky specify what investments are acceptable. Alabama and Mississippi allow greater latitude regarding what investments are appropriate. The States of Florida, North Carolina, South Carolina, and Tennessee allow for every kind of investment.
In all States, no special provisions were found for parents to follow when investing funds belonging to their minor children. All fiduciaries, including the parents of minor children, are required to follow the same general rules.
Trustees are required to use reasonable care, skill, and caution with the interest of the beneficiary as the key element. There is an assumption that the trustee will be impartial with no conflict of interest.
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 as follows:
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.