Title 13, Protective Proceedings; Powers of Attorney; Trusts

(1) A person must commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor’s death in the manner prescribed by ORS 12.020 within the earlier of: (a) Three years after the settlor’s death; or (b) Four months after the trustee sends the pe…

(1) Real property of spouses married to each other that was held as tenants by the entirety and subsequently conveyed to the trustee or trustees of the joint revocable trust of the spouses or of the separate revocable trust of each spouse shall have the same immunity from the cla…

For the purposes of ORS 130.520 to 130.575, “specific distribution” means a distribution of specific property to a specific beneficiary that is required under the terms of a trust instrument. [Formerly 128.370]

(1) ORS 130.530 and 130.535 apply only to a trust, or portion of a trust: (a) That comes into existence during the settlor’s lifetime; and (b) Is a revocable trust on the occurrence of any of the events described in ORS 130.530 or 130.535. (2) ORS 130.540 to 130.575 apply only to…

Unless otherwise provided by the terms of the trust instrument, a trust is not revoked by the marriage of the settlor after the trust instrument is executed. [Formerly 128.375]

(1) Unless otherwise provided by the terms of the trust instrument, a settlor’s divorce or the annulment of the settlor’s marriage, after the trust instrument is executed: (a) Revokes all provisions of the trust in favor of the former spouse of the settlor; (b) Revokes all powers…

Unless otherwise provided by the terms of the trust instrument, a contract of sale made by a trustee to convey property that is the subject of a specific distribution is not a revocation of the specific distribution. If all or part of the property that is the subject of the contr…

Unless otherwise provided by the terms of the trust instrument: (1) A disposition of a portion of property that is subject to a specific distribution does not affect the operation of the trust upon the remaining portion of the property; and (2) If property subject to a specific d…

Unless otherwise provided by the terms of the trust instrument, when property is to be distributed under the trust to any beneficiary who is related by blood or adoption to the settlor, and the beneficiary dies leaving lineal descendants either before the settlor dies or before t…

(1) As used in this section, “pretermitted child” means a child of a settlor who, after the execution of the trust instrument, is born or adopted during the lifetime of the settlor or is in gestation at the time of the settlor’s death, who is not acknowledged or mentioned, either…

(1) Subject to this section, a specific distribution does not fail by reason of the destruction, damage, sale, condemnation or change in form of the property that is the subject of the specific distribution unless: (a) The trust instrument provides that the specific distribution …

If a specific distribution, other than a specific distribution that governs the residue of the trust estate, fails for any reason, the property that is the subject of the specific distribution becomes part of the residue and must be distributed as provided by the terms of the tru…

Property that the settlor gives during the settlor’s lifetime to a beneficiary of the trust is an advancement against the beneficiary’s share of the trust only if either the settlor makes a written statement that the property constitutes an advancement or the beneficiary makes a …

(1) If the value of an advancement made to a beneficiary under ORS 130.570 exceeds the beneficiary’s share in the trust estate, the beneficiary shall be excluded from any further share of the trust estate, but the beneficiary is not required to refund any part of the advancement.…

(1) Except as otherwise provided in subsection (3) or (4) of this section, a person designated as trustee accepts the trusteeship: (a) By substantially complying with a method of acceptance provided in the terms of the trust; or (b) If the terms of the trust do not provide a meth…

(1) A trustee shall acquire a bond to secure performance of the trustee’s duties only if a bond is required by the terms of the trust or if a court finds that a bond is needed to protect the interests of the beneficiaries. A court may waive a bond required by the terms of a trust…

(1) Cotrustees who are unable to reach a unanimous decision may act by majority decision. (2) If a vacancy occurs in a cotrusteeship, the remaining cotrustee or cotrustees may act for the trust. (3) A cotrustee must participate in the performance of a trustee’s function unless: (…

(1) A vacancy in a trusteeship occurs if: (a) A person designated as trustee rejects the trusteeship; (b) A person designated as trustee cannot be identified, cannot be located or does not exist; (c) A trustee resigns; (d) A trustee is disqualified or removed; (e) A trustee dies;…

(1) A trustee may resign: (a) After at least 30 days’ notice to the qualified beneficiaries, the settlor, if living, and all cotrustees; or (b) At any time with the approval of a court. (2) If a court approves a resignation, the court may issue orders and impose conditions reason…

(1) The settlor, a cotrustee or a beneficiary may request that a court remove a trustee, or a trustee may be removed by a court on its own motion. (2) A court may remove a trustee if the court finds: (a) The trustee has committed a serious breach of trust; (b) Lack of cooperation…

(1) Unless a cotrustee remains in office or the court otherwise orders, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property until the trust property is delivered to a successor trustee or other person who i…

(1) 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. (2) If the terms of a trust specify the trustee’s compensation, the trustee is entitled to be compensated as specified, but the…

(1) A trustee is entitled to be reimbursed out of the trust property, with reasonable interest if appropriate, for: (a) Expenses that were properly incurred in the administration of the trust; and (b) To the extent necessary to prevent unjust enrichment of the trust, expenses tha…

(1) 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. (2) A trustee is not required to object to a modification, reformatio…

(1) A trustee shall administer the trust solely in the interests of the beneficiaries. (2) Subject to the rights of persons dealing with or assisting the trustee as provided in ORS 130.855, a sale, encumbrance or other transaction involving the investment or management of trust p…

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. [2005 c.348 §61]

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. [2005 c.348 §62]

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. [2005 c.348 §63]

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 in administering the trust. [2005 c.348 §64]

(1) 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: (a) Selecting an agent; (b) Establishing the scope and terms of the delegati…

(1) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust. (2) If the terms of a trust confer upon a person other than the settlor of a revocable trust power to direct certain actions of the trustee, the trustee s…

A trustee shall take reasonable steps to take control of and protect the trust property. [2005 c.348 §67]

(1) A trustee shall keep adequate records of the administration of the trust. (2) A trustee shall keep trust property separate from the trustee’s own property. (3) Except as otherwise provided in subsection (4) of this section, a trustee shall cause the trust property to be desig…

A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust. [2005 c.348 §69]

A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee, and to remedy a breach of trust known to the trustee to have been committed by a former trustee. [2005 c.348 §70]

(1) 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 those beneficiaries to protect their interests. If reasonable under the circumstances, a trustee may respond to a re…

(1) A trustee shall exercise a discretionary power in good faith and in a manner that is in accordance with the terms and purposes of the trust and the interests of the beneficiaries. The duty imposed by this subsection is not affected by the grant of discretion in the terms of t…

(1) A trustee, without authorization by the court, may exercise powers conferred by the terms of the trust and, except as limited by the terms of the trust: (a) All powers over the trust property that an unmarried financially capable owner has over individually owned property; (b…

Without limiting the authority conferred by ORS 130.720, a trustee may do any of the following: (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 pr…

(1) The interests of a beneficiary under a testamentary trust vest upon the death of the testator, and the interests of a beneficiary under a revocable or irrevocable trust vest when the trust becomes irrevocable, and not later, unless the will or trust clearly indicates a contra…

(1) Prior to a proposed action to be taken by a trustee regarding the administration of a trust, the trustee may send the beneficiaries a written notice of the proposed action informing the beneficiaries of the proposed action. (2) The right of a beneficiary receiving a notice of…

(1) A trust instrument may appoint a person to act as an adviser for the purpose of directing or approving decisions made by the trustee, including decisions related to distribution of trust assets and to the purchase, sale or exchange of trust investments. The appointment must b…

(1) Except as otherwise provided in subsection (2) of this section, 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 ORS 130.755. (2) The prudent investor rule is a default rule that…

(1) 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. (2) A tr…

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. [2005 c.348 §79]

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 requirement…

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. [2005 c.348 §81]

Unless otherwise limited or modified, the following terms or comparable language in the provisions of a trust authorize any investment or strategy permitted under ORS 130.750 to 130.775: “investments permissible by law for investment of trust funds,” “legal investments,” “authori…

(1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. A breach of trust may occur by reason of an action or by reason of a failure to act. (2) To remedy a breach of trust that has occurred or to prevent a breach of trust, the court may: (a…

(1) A trustee who commits a breach of trust is liable to the beneficiaries affected for the greatest of: (a) The amount of damages caused by the breach; (b) The amount required to restore the value of the trust property and trust distributions to what they would have been had the…