Chapter 203E

Section 506. Overdue distribution (a) In this section, ''mandatory distribution'' shall mean a distribution of income or principal which the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. ''Mandat…

Section 507. Personal obligations of trustee Trust property shall not be subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt.

Section 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. (b) If a revocable trust is created or funded by more than 1 settlor: (1) to the extent the trust co…

Section 603. Settlor's powers; powers of withdrawal (a) While a trust is revocable and the settlor has capacity to revoke the trust, rights of the beneficiaries shall be subject to the control of the settlor and the duties of the trustee shall be owed exclusively to the settlor. …

Section 604. Limitation on action contesting validity of revocable trust; distribution of trust property (a) A person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor's death within the earlier of: (1) 1 year after the settlo…

Section 701. Accepting or declining trusteeship (a) Except as otherwise provided in subsection (c), a person designated as trustee shall accept the trusteeship: (1) by substantially complying with a method of acceptance provided in the terms of the trust; or (2) if the terms of t…

Section 702. Duty to provide bond In the case of a testamentary trust, a trustee shall furnish a bond for the performance of the trustee's fiduciary duties and a surety shall be required unless waived by the terms of the trust or found by the probate and family court department o…

Section 703. Co-trustees (a) Co-trustees who are unable to reach a unanimous decision may act by majority decision. (b) If a vacancy occurs in a co-trusteeship, the remaining co-trustees may act for the trust. (c) A co-trustee shall participate in the performance of a trustee's f…

Section 704. Vacancy in trusteeship; appointment of successor (a) A vacancy in a trusteeship shall occur 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…

Section 705. Resignation of trustee (a) A trustee may resign: (1) upon at least 30 days' notice to: (i) the settlor and all co-trustees of the trust, in the case of a revocable trust, and (ii) the qualified beneficiaries and all co-trustees of the trust, in the case of any other …

Section 706. Removal of trustee (a) The settlor, a co-trustee 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 serious breach of trust;…

Section 707. Delivery of property by former trustee A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the co-trustee, successor trustee or other person entitled to it.

Section 708. Compensation of trustee (a) If the terms of a trust do not specify the trustee's compensation, a trustee shall be entitled to compensation that is reasonable under the circumstances. (b) If the terms of a trust specify the trustee's compensation, the trustee shall be…

Section 709. Reimbursement of expenses (a) A trustee shall be entitled to be reimbursed out of the trust property, with interest as appropriate, for: (1) expenses that were properly incurred in the administration of the trust; and (2) expenses that were not properly incurred in t…

Section 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 chapter.

Section 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 1012, a sale, encumbrance or other transaction involving the inve…

Section 803. Impartiality If a trust has 2 or more beneficiaries, the trustee shall act impartially in investing, managing and distributing the trust property, giving due regard to the beneficiaries' respective interests.

Section 804. Prudent administration A trustee shall administer the trust as a prudent person would, considering the purposes, terms and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.

Section 805. Costs of administration In administering a trust, the trustee may incur only costs that are appropriate and reasonable in relation to the trust property, the purposes of the trust and the skills of the trustee.

Section 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 such special skills or expertise, shall have a duty to use such special skills or expertise.

Section 807. Delegation by trustee (a) A trustee may delegate duties and powers if it is prudent to do so. The trustee shall exercise reasonable care, skill and caution in: (1) selecting an agent; (2) establishing the scope and terms of the delegation, consistent with the purpose…

Section 808. Powers to direct (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 terms of a trust confer upon a person, other than the settlor of a revocable trust, power to direct certain actio…

Section 809. Control and protection of trust property A trustee shall take reasonable steps to take control of and protect the trust property.

Section 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) A trustee may invest as a whole, the property of 2 o…

Section 811. Enforcement and defense of claims A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust.

Section 812. Collecting trust property 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.

Section 813. Duty to inform and report (a) A trustee shall keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust. Unless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary's request f…

Section 814. Discretionary powers; tax savings (a) Notwithstanding the broad discretion granted to a trustee in the terms of the trust, including the use of such terms as ''absolute'', ''sole'' or ''uncontrolled'', the trustee shall exercise a discretionary power in good faith an…

Section 815. General powers of trustee (a) A trustee, without authorization by the court, may exercise: (1) powers conferred by the terms of the trust; or (2) except as limited by the terms of the trust: (i) all powers over the trust property which an unmarried competent owner ha…

Section 816. Specific powers of trustee Without limiting the authority conferred by section 815, 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,…

Section 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 shall terminate if the beneficiary does no…