2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 523I - IOWA CEMETERY ACT
523I.810 - CARE FUNDS.

        523I.810  CARE FUNDS.
         1.  A trustee of a care fund shall use the judgment and care under
      the circumstances then prevailing that persons of prudence,
      discretion, and intelligence exercise in the management of their own
      affairs, not in regard to speculation but in regard to the permanent
      disposition of their funds, considering the probable income as well
      as the probable safety of their capital.  The trustee of a care fund
      has a fiduciary duty to make reasonable investment decisions and to
      properly oversee and manage the funds entrusted to the care fund.
         a.  A financial institution may serve as a trustee if granted
      those powers under the laws of this state or of the United States.  A
      financial institution acting as a trustee of a care fund under this
      chapter shall invest the funds in accordance with applicable law.
         b.  A financial institution acting as a trustee of a care fund
      under this chapter has a fiduciary duty to make reasonable investment
      decisions and to properly oversee and manage the funds entrusted to
      the financial institution.  The commissioner may take enforcement
      action against a financial institution in its capacity as trustee for
      a breach of fiduciary duty under this chapter.
         c.  Care fund moneys may be deposited pursuant to a master
      trust agreement, if each care fund is treated as a separate
      beneficiary of the trust and each care fund is separable.  The master
      trust shall maintain a separate accounting of principal and income
      for each care fund.  Moneys deposited under a master trust agreement
      may be commingled by the financial institution for investment
      purposes.
         d.  Subject to a master trust agreement, the cemetery may
      appoint an independent investment advisor to advise the financial
      institution about investment of the care fund.
         e.  Subject to an agreement between the cemetery and the
      financial institution, the financial institution may receive a
      reasonable fee from the care fund for services rendered as trustee.
         f.  If the amount of a care fund exceeds two hundred thousand
      dollars, the cemetery or any officer, director, agent, employee, or
      affiliate of the cemetery shall not serve as trustee unless the
      cemetery is a cemetery owned or operated by a governmental
      subdivision of this state.  A financial institution holding care
      funds shall not do any of the following:
         (1)  Be owned, under the control of, or affiliated with the
      cemetery.
         (2)  Use any funds required to be held in trust under this chapter
      to purchase an interest in a contract or agreement to which the
      cemetery is a party.
         (3)  Otherwise invest care funds, directly or indirectly, in the
      cemetery's business operations.
         2.  All moneys required to be deposited in the care fund shall be
      deposited in the name of the trustee, as trustee, under the terms of
      a trust agreement and the trustee may invest, reinvest, exchange,
      retain, sell, and otherwise manage the care fund trust for the
      benefit and protection of the cemetery.
         3.  This section does not prohibit a cemetery from moving care
      funds from one financial institution to another.
         4.  A care fund may receive and hold as part of the care fund or
      as an incident to the care fund any property contributed to the care
      fund.
         5.  A contribution to a care fund is considered to be for
      charitable purposes if the care financed by the care fund is for the
      following purposes:
         a.  The discharge of a duty due from the cemetery to persons
      interred and to be interred in the cemetery.
         b.  The benefit and protection of the public by preserving and
      keeping the cemetery in a dignified condition so that the cemetery
      does not become a nuisance or a place of disorder, reproach, and
      desolation in the community in which the cemetery is located.
         6.  A contribution to a care fund is not invalid because of the
      following:
         a.  Indefiniteness or uncertainty as to the person designated
      as a beneficiary in the instrument establishing the care fund.
         b.  A violation of the law against perpetuities or the law
      against the suspension of the power of alienation of title to or use
      of property.
         7.  A care fund shall pay the fund's operation costs and any
      annual audit fees.  The principal of a care fund is intended to
      remain available perpetually as a funding source for care of the
      cemetery.  The principal of a care fund shall not be reduced
      voluntarily and shall remain inviolable, except as provided in this
      section.  The trustee or trustees of a care fund shall maintain the
      principal of the care fund separate from all operating funds of the
      cemetery.
         8.  In establishing a care fund, the cemetery may adopt plans for
      the care of the cemetery and installed memorials and memorialization.

         9.  A cemetery may, by resolution adopted by a vote of at least
      two-thirds of the members of its board at any authorized meeting of
      the board, authorize the withdrawal and use of not more than twenty
      percent of the principal of the care fund to acquire additional land
      for cemetery purposes, to repair a mausoleum or other building or
      structure intended for cemetery purposes, to build, improve, or
      repair roads and walkways in the cemetery, or to purchase
      recordkeeping software used to maintain ownership records or
      interment records.  The resolution shall establish a reasonable
      repayment schedule, not to exceed five years, and provide for
      interest in an amount comparable to the care fund's current rate of
      return on its investments.  However, the care fund shall not be
      diminished below an amount equal to the greater of twenty-five
      thousand dollars or five thousand dollars per acre of land in the
      cemetery.  The resolution, and either a bond or proof of insurance to
      guarantee replenishment of the care fund, shall be filed with the
      commissioner thirty days prior to the withdrawal of funds.  

         2005 Acts, ch 128, §65; 2007 Acts, ch 175, §48
         Referred to in § 523I.102