Virginia Code 6.2-1089: Funds awaiting investment or distribution
A. Funds and assets held in a fiduciary capacity by an association awaiting investment or distribution shall not be held uninvested or undistributed any longer than is reasonable for the proper management of the trust account.
Terms Used In Virginia Code 6.2-1089
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: has the meaning assigned to it in § 6. See Virginia Code 6.2-1081
- Commissioner: means the Commissioner of Financial Institutions. See Virginia Code 6.2-100
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fiduciary: means the status resulting from an association's undertaking to act alone, through an affiliate, or jointly with others, primarily for the benefit of another, and includes an association's acting as trustee, executor, administrator, committee, guardian, conservator, receiver, managing agent, registrar of stocks and bonds, escrow, transfer, or paying agent, trustee of employee pension, welfare and profit sharing trusts, and in any other similar capacity. See Virginia Code 6.2-1081
- Fiduciary: A trustee, executor, or administrator.
- Governing instrument: means the written document or documents pursuant to which an association undertakes to act in a fiduciary capacity, and includes a will, codicil, deed of trust, trust deed, and other similar instruments. See Virginia Code 6.2-1081
- Lien: A claim against real or personal property in satisfaction of a debt.
- Trust account: means the account established pursuant to a trust, estate, or other fiduciary relationship that has been established with an association. See Virginia Code 6.2-1081
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trust department: means that group or groups of officers and employees of an association, or of an affiliate of an association, to whom are assigned the performance of fiduciary services by the association. See Virginia Code 6.2-1081
- United States: includes the 50 states, the District of Columbia the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands and the United States Virgin Islands. See Virginia Code 1-255
B. Funds and assets held in trust by an association, including managing agency accounts, awaiting investment or distribution, unless prohibited by the governing instrument, may be deposited in other departments of the association, provided that the association shall first set aside under the sole control of the trust department, as collateral security:
1. Direct obligations of the United States, or other obligations fully guaranteed by the United States as to principal and interest;
2. Readily marketable securities of the classes in which fiduciaries are authorized or permitted to invest trust funds, as set forth in § 64.2-1502; or
3. Other readily marketable securities as may be authorized by the Commissioner.
Such collateral securities, or securities substituted therefor as collateral, shall at all times be at least equal in face value to the amount of trust funds so deposited, but such security shall not be required to the extent that the funds so deposited are insured by the Federal Deposit Insurance Corporation or other federal insurance agency. The requirements of this subsection are met when qualifying assets of the association are pledged in such manner as to fully secure all trust account funds deposited by the trust department of the association in another department of the association.
C. Any funds held by an association as fiduciary awaiting investment or distribution and deposited in other departments of the association shall be made productive.
D. In the event of the failure or liquidation of an association, the owners of the funds held in trust and deposited in another department of the association shall have a first lien on the securities set apart as collateral for such funds, in addition to any other claim that such owners may have against the association.
1984, c. 303, § 6.1-195.86; 1990, c. 3; 1992, c. 810; 2010, c. 794.