Title 14 — Trusts, Estates and Protective Proceedings

A. Cotrustees who are unable to reach a unanimous decision may act by majority decision. B. If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust. C. A cotrustee must participate in the performance of a trustee's function unless the cotrustee is u…

A. A vacancy in a trusteeship occurs if: 1. A person designated as trustee rejects the trusteeship. 2. A person designated as trustee cannot be identified or does not exist. 3. A trustee resigns. 4. A trustee is disqualified or removed. 5. A trustee dies. 6. A guardian or conserv…

A. A trustee may resign either: 1. Unless the trust instrument provides otherwise, on at least thirty days' notice to the qualified beneficiaries, the settlor, if living, and all cotrustees. 2. With the approval of the court. B. In approving a resignation, the court may issue ord…

A. The settlor, a cotrustee or a beneficiary may request the court to remove a trustee or a trustee may be removed by the court on its own initiative. B. The court may remove a trustee if: 1. The trustee has committed a material breach of trust. 2. Lack of cooperation among cotru…

A. Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the t…

A. If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to compensation that is reasonable under the circumstances. B. If the terms of a trust specify the trustee's compensation or refer to another ascertainable source for determining that comp…

A. A trustee is entitled to be reimbursed out of the trust property, with reasonable interest, for: 1. Expenses that were properly incurred in the administration of the trust. 2. To the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly in…

On acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries and in accordance with this chapter.

A. A trustee shall administer the trust solely in the interests of the beneficiaries. B. Subject to the rights of persons dealing with or assisting the trustee as provided in section 14-11012, a sale, encumbrance or other transaction involving the investment or management of trus…

If a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing and distributing the trust property, giving due regard to the beneficiaries' respective interests.

A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.

In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust and the skills of the trustee.

A trustee who has special skills or expertise, or who is named trustee in reliance on the trustee's representation that the trustee has special skills or expertise, shall use those special skills or expertise.

A. A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill and caution in: 1. Selecting an agent. 2. Establishing the scope and terms of the delegation,…

A. While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust. B. If the trust provides that the assets in the trust are subject to the direction of the settlor or a cotrustee, beneficiary or third party, the trustee h…

A trustee shall take reasonable steps to take control of and protect the trust property.

A. A trustee shall keep adequate records of the administration of the trust. B. A trustee shall keep trust property separate from the trustee's own property. C. Except as otherwise provided in subsection D, a trustee shall cause the trust property to be designated so that the int…

A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust.

A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee and to redress a breach of trust known to the trustee to have been committed by a former trustee.

A. Unless the trust instrument provides otherwise, a trustee shall keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless the trustee determines that i…

A. Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such as absolute, sole or uncontrolled, the trustee shall exercise a discretionary power in good faith as to only beneficiaries of the trust and creditors of th…

A. A trustee, without authorization by the court, may exercise: 1. Powers conferred by the terms of the trust. 2. Except as limited by the terms of the trust: (a) All powers over the trust property that an unmarried competent owner has over individually owned property. (b) Any ot…

Without limiting the authority conferred by section 14-10815, a trustee may: 1. Collect trust property and accept or reject additions to the trust property from a settlor or any other person. 2. Acquire or sell property, for cash or on credit, at public or private sale. 3. Exchan…

A. On termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within thirty …

A. A trust instrument may provide for the appointment of a trust protector. For the purposes of this section, a person designated in the instrument with a status or title, other than that of a beneficiary, with powers similar to those specified in subsection B of this section, or…

A. Unless the terms of the trust instrument expressly provide otherwise, a trustee who has the discretion under the terms of a testamentary instrument or irrevocable inter vivos agreement to make distributions, regardless of whether a standard is provided in the trust instrument …

A person whose license as a fiduciary has been suspended or revoked pursuant to section 14-5651 may not serve as a trustee in any capacity unless the person is related to the beneficiary by blood, adoption or marriage. This prohibition does not apply if the person's license has b…

A. Except as provided in subsection B, a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule requirements of this article. B. The prudent investor rule is a default rule and may be expanded, restricte…

A. A trustee shall invest and manage trust assets as a prudent investor would by considering the purposes, terms, distribution requirements and other circumstances of the trust. In satisfying this standard the trustee shall exercise reasonable care, skill and caution. B. A truste…

A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets in order to bring the trust portfolio into compliance with the purposes, t…

Compliance with this article is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.

The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this article: 1. Investments permissible by law for investment of trust funds. 2. Legal investments. 3. Authorized …

A. A fiduciary may delegate investment and management functions that a prudent investor of comparable skills might delegate under the circumstances. B. A fiduciary is not responsible for the investment decisions or actions of the investment agent to which the investment functions…

A trustee may acquire or retain a contract of life insurance on the life of the settlor or the settlor's spouse, or both, without liability for a loss arising from the trustee's failure to: 1. Determine whether the contract is or remains a proper investment. 2. Investigate the fi…

A. This article applies to trusts existing on and created after July 20, 1996. B. As applied to trusts existing on July 20, 1996, this article governs only decisions or actions occurring after that date.

A. A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. B. Except as provided in section 14-7404, to remedy a breach of trust that has occurred or may occur, the court may: 1. Compel the trustee to perform the trustee's duties. 2. Enjoin the …

A. Except as provided in section 14-7404, a trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of either: 1. The amount required to restore the value of the trust property and trust distributions to what they would have been had the brea…

A. Except as provided in section 14-7404, a trustee is accountable to an affected beneficiary for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust. For the purposes of this subsection, profit does not include: 1. Reasonabl…

A. A trustee or a person who is nominated as a trustee is entitled to reimbursement from the trust for that person's reasonable fees, expenses and disbursement, including attorney fees and costs, that arise out of and that relate to the good faith defense or prosecution of a judi…

A. A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and inf…

A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.

If the happening of an event, including marriage, divorce, performance of educational requirements or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulti…

A. A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it either: 1. Relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of …

A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach or ratified the transaction constituting the breach, unless either: 1. The consent, release or rati…

A. Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity. B. A trustee is pe…

A. Except to the extent that personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust's acquisition of the interes…

A. A person other than a beneficiary who in good faith assists a trustee or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers, is protected from liability as if the trustee properly …

A. Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information: 1. That the trust exists and the date the trust instrument was executed. 2. The ident…

1. Convert an income trust to a total return unitrust. 2. Reconvert a total return unitrust to an income trust. 3. Change the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust, or both, if: (a) The trustee adopts a…