Title 30, Guardians And Trustees

[§554D-416] Modification to achieve settlor's tax objectives. To achieve the settlor's tax objectives, the court may modify the terms of a trust in a manner that is not contrary to the settlor's probable intention. The court may provide that the modification has retroactive effec…

[§554D-417] Combination and division of trusts. After notice to the qualified beneficiaries, a trustee may combine two or more trusts into a single trust or divide a trust into two or more separate trusts, if the result does not impair rights of any beneficiary or adversely affec…

PART V. CREDITOR'S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS [§554D-501] Rights of beneficiary's creditor or assignee. To the extent a beneficiary's interest is not subject to a spendthrift provision, the court may authorize a creditor or assignee of the beneficiary to reach t…

[§554D-502] Spendthrift provision. (a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary's interest. (b) A term of a trust providing that the interest of a beneficiary is held subject to a "spendthrift trust", or words …

[§554D-503] Exceptions to spendthrift provision. (a) A spendthrift provision is unenforceable against: (b) A claimant against which a spendthrift provision cannot be enforced may obtain from a court an order attaching present or future distributions to or for the benefit of the b…

[§554D-504] Discretionary trusts; effect of standard. (a) Except as otherwise provided in subsection (b), regardless of whether a trust contains a spendthrift provision, a creditor of a beneficiary shall not compel a distribution that is subject to the trustee's discretion, even …

[§554D-505] Creditor's claim against settlor. (a) Regardless of whether the terms of a trust contain a spendthrift provision, the following rules shall apply: (b) For purposes of this section: (c) This section shall not apply to trusts created under chapter 554G. [L 2021, c 32, p…

[§554D-506] Overdue distribution. (a) Regardless of whether a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not …

[§554D-507] Personal obligations of trustee. Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt. [L 2021, c 32, pt of §2]

PART VI. REVOCABLE TRUSTS [§554D-601] Capacity of settlor of revocable trust. The capacity required to create or add property to a revocable trust is the same as that required to make a will. Unless otherwise altered by the terms of the trust pursuant to section 554D-602(c), the …

[§554D-602] Revocation or amendment of revocable trust. (a) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection shall not apply to a trust created under an instrument executed before January 1, 20…

[§554D-603] Settlor's powers; powers of withdrawal. (a) While the settlor of a revocable trust is alive, rights of the beneficiaries are subject to the control of the settlor, the duties of the trustee are owed exclusively to the settlor, and beneficiaries other than the settlor …

[§554D-604] Limitation on action contesting validity of revocable trust; distribution of trust property. (a) A person may commence a judicial proceeding after the settlor's death to contest the validity of a trust that was revocable at the settlor's death within the earlier of: (…

PART VII. OFFICE OF TRUSTEE [§554D-701] Accepting or declining trusteeship. (a) Except as otherwise provided in subsection (c), a person designated as trustee accepts the trusteeship: (b) A person designated as trustee who has not yet accepted the trusteeship may reject the trust…

[§554D-702] Trustee's bond. (a) A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the re…

[§554D-703] Cotrustees. (a) Cotrustees who are unable to reach a unanimous decision after consultation among all the cotrustees may act by majority decision. (b) If a vacancy occurs in a cotrusteeship, the remaining cotrustee or cotrustees may act for the trust. (c) Subject to th…

[§554D-704] Vacancy in trusteeship; appointment of successor. (a) A vacancy in a trusteeship occurs if: (b) If one or more cotrustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship shall be filled if the trust has no remaining trustee.…

[§554D-705] Resignation of trustee. (a) A trustee may resign: (b) In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property. (c) Any liability of a resigning trustee or of any sureties on the trustee…

[§554D-706] Removal of trustee. (a) For an irrevocable trust, a cotrustee or a qualified beneficiary, or in the case of a charitable trust, the attorney general, may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative. In the case…

[§554D-707] Delivery of property by former trustee. (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 …

[§554D-708] Compensation of trustee. (a) A trustee's compensation shall be as set forth in sections 607-18 and 607-20, as appropriate. (b) On petition of an interested person, after notice to all interested persons, the court may review the propriety of employment of any person b…

[§554D-709] Reimbursement of expenses. (a) A trustee or designated trustee who acts in good faith is entitled to reimbursement out of the trust property, with interest as appropriate, for: (b) An advance by the trustee or designated trustee of money for the protection of the trus…

PART VIII. DUTIES AND POWERS OF TRUSTEE [§554D-801] Duty to administer trust. Upon 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 chap…

[§554D-802] Duty of loyalty. (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 554D-1012, a sale, encumbrance, or other transaction involving the…

[§554D-803] Impartiality. 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. [L 2021, c 32, pt of §2]

[§554D-804] Prudent administration. 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, skil…

[§554D-805] Costs of administration. 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. [L 2021, c 32, pt of §2]

[§554D-806] Trustee's skills. A trustee who has special skills or expertise or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise shall use those special skills or expertise. [L 2021, c 32, pt of §2]

[§554D-807] Delegation by trustee. (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: (b) In performing a delegated function, …

[§554D-808] Powers to direct. (a) While a trust is revocable and the settlor has capacity, the trustee may follow a written direction of the settlor that is contrary to the terms of the trust. (b) The terms of a trust may confer upon a trustee or other person a power to direct th…

[§554D-809] Control and protection of trust property. A trustee shall take reasonable steps to take control of and protect the trust property. [L 2021, c 32, pt of §2]

[§554D-810] Recordkeeping and identification of 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 tr…

[§554D-811] Enforcement and defense of claims. (a) A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust. (b) A trustee may abandon or assign to one or more of the beneficiaries of the trust any claim that it believes is not p…

[§554D-812] Collecting trust property. (a) 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 or other person, u…

[§554D-813] Duty to inform and report. (a) During the lifetime of the settlor of a revocable trust, regardless of whether the settlor has capacity to revoke the trust, the trustee's duties under this section are owed exclusively to the settlor. If the settlor lacks capacity to re…

[§554D-814] Discretionary powers; tax savings. (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 an…

[§554D-815] General powers of trustee. (a) A trustee, without authorization by the court, may exercise: (b) The exercise of a power is subject to the fiduciary duties prescribed by this part. [L 2021, c 32, pt of §2]

[§554D-816] Specific powers of trustee. Without limiting the authority conferred by section 554D-815, a trustee may:

[§554D-817] Distribution upon termination. (a) Upon 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 not…

PART IX. UNIFORM PRUDENT INVESTOR ACT [§554D-901] Prudent investor rule. (a) Except as otherwise 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 set forth in this par…

[§554D-902] Standard of care; portfolio strategy; risk and return objectives. (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 sta…

[§554D-903] Diversification. A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances or directives of the trust, the purposes of the trust are better served without diversifying. [L 2021, c 32, pt of §…

[§554D-904] Duties at inception of trusteeship. 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 to bring the trust portfol…

[§554D-905] Reviewing compliance. Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight. [L 2021, c 32, pt of §2]

[§554D-906] Language invoking standard of part. 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 part: "authorized investments"; "investments permissible by la…