Title 59 — Trusts

A person seeking to challenge the validity of a trust instrument or amendment may institute a proceeding under this chapter for a declaratory judgment of invalidity.

A settlor who is not a plaintiff, a beneficiary named in the trust, and a settlor's present intestate successors must be included as parties to the proceeding. For the purposes of this chapter, a beneficiary named in the trust and the settlor's present intestate successors are de…

A proceeding under this chapter may not be commenced later than the earliest of the following: 1. One hundred twenty days after the date the trustee notified the individual contesting the trust of the trust's existence or amendment. The notice must include the trustee's name and …

If the court finds the settlor has executed the trust instrument and had the requisite capacity, the court shall declare the trust to be valid. An adjudication that a trust is valid is binding on the parties. If the court finds a trust or amendment to be invalid, the challenged t…

1. The trustee may proceed to distribute the trust property in accordance with the terms of the trust. This distribution may be made without liability unless the trustee has actual knowledge of a pending proceeding to contest the validity of the trust, or is notified by a potenti…

The provisions of this chapter relating to power of attorney are subject to other provisions of law.

For purposes of this chapter, unless the context otherwise requires: 1. "Appointed trust" means an irrevocable trust which receives principal from an invaded trust under this chapter, including a trust created by the settlor of the invaded trust, under the terms of the invaded tr…

An exercise of a power of appointment is not void if the exercise is: 1. More extensive than was authorized, but is valid to the extent authorized by the instrument creating its power; or 2. Less extensive than authorized by the instrument creating the power, unless the donor has…

1. An authorized trustee with unlimited discretion to invade trust principal may appoint part or all of the principal to a trustee of an appointed trust for, and only for the benefit of, one, more than one, or all of the current beneficiaries of the invaded trust, to the exclusio…

1. An authorized trustee with the power to invade trust principal but without unlimited discretion may appoint part or all of the principal of the trust to a trustee of an appointed trust, provided that the current beneficiaries of the appointed trust must be the same as the curr…

An exercise of the power to invade trust principal under this chapter is considered to be the exercise of a special power of appointment.

The appointed trust to which an authorized trustee appoints the assets of the invaded trust may have a term that is longer than the term set forth in the invaded trust, including, a term measured by the lifetime of a current beneficiary.

If an authorized trustee has unlimited discretion to invade the principal of a trust, and the same trustee or another trustee has the power to invade principal under the trust instrument and the power is not subject to unlimited discretion, then the authorized trustee having unli…

An authorized trustee may exercise the power to appoint in favor of an appointed trust under sections 59-6.1-04 and 59-16.1-05 whether or not there is a current need to invade principal under the terms of the invaded trust.

An authorized trustee exercising the power under this chapter has a fiduciary duty to exercise the power in the best interests of one or more proper objects of the exercise of the power and as a prudent person would exercise the power under the prevailing circumstances.

Unless the authorized trustee provides otherwise: 1. The appointment of all the assets comprising the principal of the invaded trust to an appointed trust must include subsequently discovered assets of the invaded trust and undistributed principal of the invaded trust acquired af…

1. The exercise of the power to appoint to an appointed trust under sections 59-16.1-04 and 59-16.1-05 must be evidenced by a written instrument that is signed, dated, and acknowledged by the authorized trustee. The exercise of the power is effective sixty days after the date of …

This section does not abridge the right of a trustee to appoint property in further trust that arises under the terms of the governing instrument of a trust or under any other provision of law or under common law, or as directed by a court having jurisdiction over the trust.

This chapter does not create a duty to exercise a power to invade principal and inference of impropriety may not be made as a result of an authorized trustee not exercising the power conferred under sections 59-16.1-04 and 59-16.1-05.

A power authorized under sections 59-16.1-04 and 59-16.1-05 may be exercised subject to the provisions of section 59-16.1-10, unless expressly prohibited by the terms of the governing instrument or by the provisions of section 59-16.1-10, but a general prohibition of the amendmen…

An authorized trustee may exercise a power authorized by this chapter to appoint a trust that is a supplemental needs trust that conforms to chapter 59-08. However, an authorized trustee may not exercise a power authorized by this chapter to effect the following: 1. To reduce, li…

For the purposes of this section, unless a court otherwise directs: 1. An authorized trustee may not exercise a power authorized under sections 59-16.1-04 and 59-16.1-05 to change the provisions regarding the determination of the compensation of a trustee. The commissions or othe…

The provisions of this chapter relating to power of attorney are subject to other provisions of law.

For purposes of this chapter, unless the context otherwise requires: 1. "Directing party" means an investment trust advisor, distribution trust advisor, or trust protector as provided in this chapter. 2. "Distribution trust advisor" means one or more persons given authority by th…

1. An investment trust advisor may be designated in the governing instrument of a trust. The powers of an investment trust advisor may be exercised or not exercised in the sole and absolute discretion of the investment trust advisor, and are binding on all other persons, includin…

1. A distribution trust advisor may be designated in the governing instrument of a trust. The powers of a distribution trust advisor may be exercised or not exercised in the sole and absolute discretion of the distribution trust advisor, and are binding on all other persons, incl…

1. A trust protector may be designated in the governing instrument of a trust. 2. The powers of a trust protector may be exercised or not exercised in the sole and absolute discretion of the trust protector, and are binding on all other persons, including a beneficiary, an invest…

1. A directing party is a fiduciary of the trust subject to the same duties and standards applicable to a trustee of a trust as provided by applicable law unless the governing instrument provides otherwise. However, the governing instrument may not relieve or exonerate a directin…

1. The excluded fiduciary shall act in accordance with the governing instrument and comply with the directing party's exercise of the powers granted to the directing party by the governing instrument. 2. Unless otherwise provided in the governing instrument, an excluded fiduciary…

This chapter applies to: 1. Existing and future trusts that appoint or provide for a directing party including a party granted power or authority effectively comparable in substance to that of a directing party as provided in this chapter; or 2. An existing or future trusts that:…

For purposes of this chapter, unless the context otherwise requires: 1. "Disinterested person" means a person who is not a related or subordinate party, as defined in section 672(c) of the Internal Revenue Code [26 U.S.C. 1, et seq.], with respect to the person then acting as tru…

A trustee, other than an interested trustee, or if two or more persons are acting as trustee, a majority of the trustees who are not an interested trustee, and without the approval of a court, may convert an income trust to a total return unitrust, reconvert a total return unitru…

If there is not a trustee of the trust other than an interested trustee, the interested trustee, or if two or more persons are acting as trustee and are interested trustees, a majority of those interested trustees, without the approval of a court, may take such action as provided…

If a trustee desires to convert an income trust to a total return unitrust, reconvert a total return unitrust to an income trust, or change the percentage used to calculate the unitrust amount and the method used to determine the fair market value of the trust, but does not have …

The fair market value of the trust must be determined at least annually, using the valuation date, or dates, or averages of valuation dates as are deemed appropriate. Assets for which a fair market value cannot be readily ascertained must be valued using valuation methods that ar…

The unitrust amount is determined as follows: 1. For the first three accounting periods of the trust, the unitrust amount for a current valuation year of the trust may not be less than three percent, or more than five percent, by the election of the trustee, the disinterested per…

Following the conversion of an income trust to a total return unitrust, the trustee: 1. Shall treat the unitrust amount as net income of the trust for purposes of determining the amount available, from time to time, for distributions from the trust; 2. May allocate to trust incom…

The trustee, in administering a total return unitrust, may determine: 1. The effective date of the conversion; 2. The timing of distributions; 3. Whether distributions are to be made in cash, in kind, or partly in cash and partly in kind; 4. Which assets are to be excluded in det…

Conversion to a total return unitrust under this chapter does not affect any other provisions of the governing instrument, if any, regarding distributions of principal. 59-16.3-10. Spouse may compel reconversion to income trust for certain trusts - Written instrument required. In…

This chapter must be construed as pertaining to the administration of a trust and must be available to a trust that is administered in the state under state law unless: 1. The governing instrument reflects an intention that the current beneficiary or beneficiaries are to receive …

A trustee or disinterested person who in good faith takes or fails to take any action under this chapter is not liable to any person affected by that action or inaction, regardless of whether the person received written notice as provided in this chapter and regardless of whether…

This chapter does not create a duty to take action under this chapter, and a trustee is not liable for not considering whether to take action or for choosing not to take action.

This chapter does not apply to a charitable remainder unitrust as defined by section 664(d) of the Internal Revenue Code.