What must be followed regarding trust funds in preneed contracts?

In Missouri, trust funds associated with preneed contracts must adhere to prudent investor standards. These standards require that funds be managed in a way that prioritizes the long-term preservation and growth of the principal, while also balancing the risk associated with investments. This means a diversified portfolio is ideal, and investments should align with the goals of maintaining the trust's value over time and fulfilling the future services promised in preneed contracts.

By following prudent investor standards, the financial management of the trust funds remains responsible and aligns with the fiduciary duties owed to the consumers. This approach mitigates excessive risk and safeguards the funds, ensuring that they will be available when needed to cover funeral services, thus providing peace of mind for families who have made these arrangements in advance.

In contrast, random investment strategies would lack the necessary oversight and careful planning required to protect the funds. High-risk stocks and solely investing in government bonds could lead to either unsustainable volatility or insufficient growth, respectively, neither of which would serve the best interest of the consumers relying on those funds for future funeral services.