Probate Fiduciary Roles Are Not “Trust Business” Under S.C. Code § 34-21-10

Introduction

In SC Board of Financial Instituions v. CDM Corp, Inc. (S.C. July 15, 2026), the Supreme Court of South Carolina resolved a statutory-interpretation dispute over the scope of “trust business” in S.C. Code Ann. § 34-21-10 (2020). The Respondent, the South Carolina Board of Financial Institutions (the “Board”), sought a declaration and injunction asserting that CDM Corporation, Inc. and Guardian Fiduciary Services, LLC (the “Petitioners”) were conducting an unauthorized “trust business” because they served in probate-adjacent fiduciary roles—personal representative, conservator, guardian, and attorney in fact—without Board approval and payment of significant fees.

The Petitioners conceded that CDM’s past service as a trustee of a trust constituted “trust business,” but argued that their probate fiduciary services do not. The trial court largely agreed (enjoining trustee activity without approval, but rejecting the Board’s attempt to bring probate fiduciary roles within § 34-21-10). The court of appeals reversed, holding that “trust business” necessarily encompassed a broad range of fiduciary services. The Supreme Court granted certiorari and reversed the court of appeals.

Summary of the Opinion

The Supreme Court held that serving as a personal representative, guardian, conservator, or attorney in fact does not constitute conducting a “trust business” within the meaning of § 34-21-10. The Court emphasized that the Banking Code’s “trust business” regime is aimed at banks and trust companies administering trust funds (including “common trust funds”), while South Carolina’s Probate and Trust Codes separately regulate probate fiduciaries and expressly distinguish trusts from conservatorships and estate administration.

The Court also rejected reliance on nonbinding materials (a nationwide compact and a Board policy statement) purporting to define “trust business,” concluding they “do not have the force of law” and therefore do not aid interpretation of § 34-21-10.

Analysis

Precedents Cited

Davis v. S.C. Dep't of Corrs.

The Court relied on Davis v. S.C. Dep't of Corrs., 444 S.C. 138, 149, 906 S.E.2d 569, 575 (2024), to frame the standard of review: because the dispute is purely one of statutory interpretation, the Supreme Court reviews the meaning of § 34-21-10 de novo, “afresh,” without deference to lower courts. This mattered because the court of appeals had expanded “trust business” to cover probate fiduciary services; Davis reinforced that the Supreme Court owed no interpretive deference to that expansion.

S.C. Energy Users Comm. v. S.C. Pub. Serv. Comm'n

The Court applied S.C. Energy Users Comm. v. S.C. Pub. Serv. Comm'n, 388 S.C. 486, 492, 697 S.E.2d 587, 590 (2010), for the interpretive method applicable to undefined statutory terms: an undefined term is given its “usual and customary meaning,” but the court must also consider the term’s meaning “in conjunction with the purpose of the whole statute and the policy of the law.” This approach drove the Court’s contextual analysis across:

  • Title 34’s Banking Code structure and the Board’s limited supervisory remit;
  • Article 3’s special rules for “common trust funds;” and
  • the Probate Code and Trust Code’s express definitional choices excluding probate fiduciary roles from “trust.”

S.C. Bd. of Fin. Insts. v. CDM Corp., Op. No. 2025-UP-169 (S.C. Ct. App. filed May 28, 2025)

While not treated as a “precedent” guiding the Supreme Court (it was the decision under review), the court of appeals opinion is central to understanding what the Supreme Court rejected. The court of appeals concluded that “trust business” necessarily encompassed fiduciary services beyond trusteeship, including personal representatives, conservators, guardians, and agents. The Supreme Court reversed that interpretive move as inconsistent with the statutory context and cross-code definitions.

Legal Reasoning

1) The Board’s authority is limited and context matters

The Court began by emphasizing that the legislature granted the Board a defined supervisory role principally over “banks and building and loan associations.” The Board did not claim Petitioners were banks or building and loan associations, but argued § 34-21-10 nonetheless pulled probate fiduciaries into the Board’s regulatory orbit as “trust businesses.” The Court treated that as a major interpretive step requiring clear statutory grounding.

2) Article 3 definitions do not convert every fiduciary into a “trust institution”

The Board’s core textual argument leaned on the Article 3 definitions:

  • “Trust Institution” includes certain financial institutions and trust companies, authorized to conduct trust business or act in a fiduciary capacity, and subject to specified supervision. § 34-21-210(1).
  • “fiduciary” “means a trust institution” acting for another’s benefit, and “includes trustee, executor, administrator, guardian of estates, committee... and managing agent.” § 34-21-210(2).

The Supreme Court rejected the Board’s syllogism (“guardian/conservator/personal representative” → “fiduciary” → “trust institution” → “trust business”). The Court focused on how § 34-21-210(1) is structured: to be a “trust institution” the actor must be a qualifying financial institution/trust company and be under certain supervision. Article 3 is not describing the universe of all fiduciaries; it is describing fiduciary capacities in which a regulated financial institution may act.

The Court reinforced this by explaining Article 3’s subject matter: “common trust funds,” i.e., pooled investments maintained by a trust institution for collective investment of monies it holds as fiduciary. See § 34-21-210(3) and § 34-21-220(1). Petitioners are not financial institutions and are not investing fiduciary monies via common trust funds. Accordingly, reading Article 3’s “fiduciary” definition as sweeping in all probate fiduciaries would unmoor those definitions from their purpose.

The Court distilled this point memorably: “Being a fiduciary does not a trust company make.”

3) The Probate and Trust Codes expressly distinguish “trusts” from probate fiduciary roles

The Court then cross-checked meaning against probate law—the actual setting of Petitioners’ work. The Probate Code’s definition of “Trust” is explicit: it includes express trusts, but it “excludes” conservatorships, personal representatives, and “common trust funds,” among other arrangements. § 62-1-201(49) (Supp. 2025). The Trust Code incorporates the same definition. § 62-7-102 (2022).

This definitional choice mattered for two reasons:

  1. It made it implausible that the legislature meant “trust business” in § 34-21-10 to cover probate fiduciary roles that the Probate/Trust Codes affirmatively treat as not trusts.
  2. It harmonized Title 34 and Title 62: the Trust Code is aimed at express trusts (often estate-planning/donative), while common trust funds are left to Title 34’s specialized banking regulation—supporting the Court’s view that § 34-21-10 targets corporate trusteeship and institutional trust administration, not probate fiduciary appointments generally.

4) The “natural person or national banking association” proviso did not broaden “trust business”

The court of appeals drew significance from § 34-21-10’s proviso that “nothing contained in this section shall prevent a natural person or a national banking association having its principal place of business in this State from qualifying and acting as trustee, executor, administrator, guardian, committee or in any other fiduciary capacity.”

The Supreme Court did not accept that this proviso transforms probate fiduciary roles into “trust business.” Instead, the Court’s broader analysis implies the proviso functions as a non-interference clause: § 34-21-10 should not be construed to bar those actors from serving in fiduciary roles that other bodies of law (probate law, federal banking law) permit—particularly given the substantial application and supervisory fees tied to Board approval.

5) Adequate regulation exists in probate court

Responding to policy concerns (that anyone handling others’ money should be vetted by the Board), the Court underscored the Probate Code’s controls: bonding, accountings, court supervision, contempt power, and civil/criminal liability. In short, the legislature already provided a tailored oversight mechanism for probate fiduciaries—through probate courts—separate from the Board’s banking-focused supervision.

Impact

  • Clarifies the boundary between banking regulation and probate supervision: Corporate entities providing probate fiduciary services (personal representative, conservator, guardian, attorney in fact) are not thereby operating a “trust business” under § 34-21-10.
  • Limits the Board’s reach: The Board cannot use Title 34’s “trust business” authorization and fee structure to regulate non-financial, probate-centered fiduciary service providers merely because they act in fiduciary roles.
  • Preserves § 34-21-10’s corporate-trustee function: Companies acting as trustees of trusts (as Petitioners conceded CDM once did) remain within the statute’s core concern—corporate entry into trusteeship/trust administration.
  • Promotes cross-code harmony: Future disputes in South Carolina that invoke undefined terms in one title (e.g., banking) will likely use this opinion’s methodology—reading statutes in context and in concert with related codes (here, Titles 34 and 62).
  • Practical consequences for the fiduciary-services market: The decision reduces regulatory uncertainty and avoids imposing banking-style application/supervisory fees on probate fiduciary businesses that do not engage in institutional trust-fund administration.

Complex Concepts Simplified

  • “Trust business” (§ 34-21-10): In this decision, the Court treats “trust business” as focused on corporate trusteeship and institutional trust administration (the kind performed by banks/trust companies), not every situation where someone owes fiduciary duties.
  • Fiduciary: A person/entity with a legal duty to act primarily for another’s benefit (e.g., a guardian managing an incapacitated person’s affairs). Many roles are fiduciary, but not all fiduciaries are engaged in “trust business.”
  • Trustee vs. personal representative/conservator/guardian:
    • Trustee: Manages assets held in a trust for beneficiaries under trust terms.
    • Personal representative: Administers a decedent’s probate estate under court supervision.
    • Conservator/guardian: Manages property and/or personal decisions for a protected person under probate court authority.
    The Probate/Trust Codes explicitly treat these as distinct legal arrangements; the Court relied on those distinctions.
  • Common trust fund (Title 34, Article 3): A pooled investment fund maintained by a regulated trust institution to invest funds it holds as fiduciary. Article 3’s definitions and rules are keyed to this banking/institutional context.
  • Certiorari: The Supreme Court’s discretionary review of a lower appellate court’s decision.

Conclusion

The Supreme Court of South Carolina established a clear interpretive rule: corporate probate fiduciary services are not “trust business” under § 34-21-10. By grounding meaning in statutory context (Title 34’s banking focus and common trust fund regulation) and by harmonizing Titles 34 and 62 (where “trust” expressly excludes conservatorships and estate administration), the Court curtailed an attempted expansion of the Board’s regulatory authority and reaffirmed probate courts as the primary regulators of probate fiduciaries. The decision will serve as a central reference point for future South Carolina disputes over the boundary between banking regulation of trust institutions and the probate system’s governance of fiduciary appointments.