MORNBFI Vol. 1 - Planters Development Bank

§ 4409Q.909.12.31(1) the purpose or intention of the trust;(2) the nature and value of the propertyor sum of money that comprise the trust;(3) the trustee’s investment powers;(4) the name(s) of the beneficiaries; and(5) the terms and conditions underwhich the income and/or principal of thetrust is to be paid or to be disposed of duringthe lifetime and ultimately, upon the deathof the trustor or upon the occurrence of aspecified event(s).A living trust may either be revocableor irrevocable.b. Minimum criteria. In line with suchdefinition, transactions considered as livingtrust accounts should meet the followingminimum criteria:(1) Minimum entry amount andmaintaining balance shall at least beP100,000: Provided, That living trustaccounts with balances of up to P500,000shall only be invested in deposits andgovernment securities;(2) Living trust accounts shall bemaintained for a minimum period of six (6)months. The termination of the living trustagreement, for any cause, within theminimum holding period shall render thetrustor ineligible from opening a new livingtrust account within a period of one (1) yearfrom termination date;(3) Reversion of any part of the principalto the trustor, except in cases providedunder the dispositive portion, shall beallowed only upon termination of the livingtrust agreement: Provided, That in no casecan there be a complete or substantialreversion of the principal pursuant to thedispositive portion within the minimumholding period nor can the principal fallbelow P100,000;(4) Any living trust account that does notmeet the requirement on the minimum entryand minimum maintaining balance or is notinvested in qualified outlets shall be consideredas other fiduciary accounts subject toapplicable reserve and other requirements;(5) Pre-printed living trust agreementsmay be allowed for expediency: ProvidedThat the sections for the trust purpose andthe dispositive provision are left blank andshall only be filled-up upon the client’ssigning thereof. The purpose shallcategorically state the real intention of thetrustor, which may include, but need notbe limited to:(a) providing his/her and beneficiary/(ies) present and/or future financial support;(b) protecting his/her beneficiary/(ies)against his/her inexperience in businessmatters;(c) preventing him/her from makingimprudent expenditures;(d) prevent the beneficiary/(ies) fromliving beyond their means in case of outrightdisposition of assets in their favor;(e) protecting the beneficiary/(ies)against unforeseen contingencies such asincompetency, incapacity, physicaldisability or similar misfortune; and(f) setting aside and segregatingparticular assets, proceeds or payments foradministration and distribution pursuant toa court decree or by agreement.The dispositive provision should clearlyand specifically define the terms andconditions under which the principaland/or income shall be distributed in orderto accomplish such purpose/(s), by takinginto consideration the frequency ofredemption; the respective interests of eachbeneficiary; and to whom the proceeds shallbe payable. Redemption of funds shallstrictly be in accordance with the said termsand conditions; and(6) A living trust account may beopened jointly under one (1) living trustagreement by related individuals up to thesecond degree of consanguinity or affinity:Provided, That the requirements under Item“5” above are fully complied with. Unrelatedindividuals or those beyond the seconddegree of consanguinity or affinity maylikewise open a joint living trust accountManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart IV - Page 18a