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First Substitute S.B. 47
This document includes House Committee Amendments incorporated into the bill on Tue, Feb 24, 2004 at 2:34 PM by kholt. --> This document includes House Committee Amendments (CORRECTED) incorporated into the bill on Fri, Feb 27, 2004 at 5:12 PM by chopkin. -->
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6 LONG TITLE
7 General Description:
8 This bill makes substantial changes in Title 75, Chapter 7, Trust Administration to
9 enact the Utah Uniform Trust Code.
10 Highlighted Provisions:
11 This bill:
12 . creates the Utah Uniform Trust Code;
13 . provides a governing law for the administration of trusts in concert with other states
14 who have adopted the uniform law; and
15 . provides some new terms and definitions.
16 Monies Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 This bill provides a coordination clause.
20 Utah Code Sections Affected:
21 AMENDS:
22 7-5-7, as last amended by Chapter 196, Laws of Utah 1994
23 7-5-10, as last amended by Chapter 6, Laws of Utah 1982
24 7-5-14, as last amended by Chapter 267, Laws of Utah 1989
25 25-6-14, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
26
27 59-10-103, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
28 75-1-201, as last amended by Chapter 49, Laws of Utah 2003
29 75-1-403, as last amended by Chapter 116, Laws of Utah 2000
30 75-2-1209, as enacted by Chapter 3, Laws of Utah 2003, Second Special Session
31 75-3-703, as enacted by Chapter 150, Laws of Utah 1975
32 75-3-913, as enacted by Chapter 150, Laws of Utah 1975
33 75-5-417, as last amended by Chapter 119, Laws of Utah 1995
34 75-7-202, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
35 ENACTS:
36 75-7-102, Utah Code Annotated 1953
37 75-7-103, Utah Code Annotated 1953
38 75-7-104, Utah Code Annotated 1953
39 75-7-105, Utah Code Annotated 1953
40 75-7-106, Utah Code Annotated 1953
41 75-7-108, Utah Code Annotated 1953
42 75-7-109, Utah Code Annotated 1953
43 75-7-110, Utah Code Annotated 1953
44 75-7-111, Utah Code Annotated 1953
45 75-7-112, Utah Code Annotated 1953
46 75-7-113, Utah Code Annotated 1953
47 75-7-412, Utah Code Annotated 1953
48 75-7-413, Utah Code Annotated 1953
49 75-7-414, Utah Code Annotated 1953
50 75-7-415, Utah Code Annotated 1953
51 75-7-416, Utah Code Annotated 1953
52 75-7-417, Utah Code Annotated 1953
53 75-7-502, Utah Code Annotated 1953
54 75-7-503, Utah Code Annotated 1953
55 75-7-504, Utah Code Annotated 1953
56 75-7-505, Utah Code Annotated 1953
57
58 75-7-507, Utah Code Annotated 1953
59 75-7-604, Utah Code Annotated 1953
60 75-7-605, Utah Code Annotated 1953
61 75-7-606, Utah Code Annotated 1953
62 75-7-607, Utah Code Annotated 1953
63 75-7-701, Utah Code Annotated 1953
64 75-7-702, Utah Code Annotated 1953
65 75-7-703, Utah Code Annotated 1953
66 75-7-704, Utah Code Annotated 1953
67 75-7-705, Utah Code Annotated 1953
68 75-7-706, Utah Code Annotated 1953
69 75-7-707, Utah Code Annotated 1953
70 75-7-708, Utah Code Annotated 1953
71 75-7-709, Utah Code Annotated 1953
72 75-7-801, Utah Code Annotated 1953
73 75-7-802, Utah Code Annotated 1953
74 75-7-803, Utah Code Annotated 1953
75 75-7-804, Utah Code Annotated 1953
76 75-7-805, Utah Code Annotated 1953
77 75-7-806, Utah Code Annotated 1953
78 75-7-807, Utah Code Annotated 1953
79 75-7-808, Utah Code Annotated 1953
80 75-7-809, Utah Code Annotated 1953
81 75-7-810, Utah Code Annotated 1953
82 75-7-811, Utah Code Annotated 1953
83 75-7-812, Utah Code Annotated 1953
84 75-7-813, Utah Code Annotated 1953
85 75-7-814, Utah Code Annotated 1953
86 75-7-815, Utah Code Annotated 1953
87 75-7-816, Utah Code Annotated 1953
88
89 75-7-901, Utah Code Annotated 1953
90 75-7-902, Utah Code Annotated 1953
91 75-7-903, Utah Code Annotated 1953
92 75-7-904, Utah Code Annotated 1953
93 75-7-905, Utah Code Annotated 1953
94 75-7-906, Utah Code Annotated 1953
95 75-7-907, Utah Code Annotated 1953
96 75-7-1001, Utah Code Annotated 1953
97 75-7-1002, Utah Code Annotated 1953
98 75-7-1003, Utah Code Annotated 1953
99 75-7-1004, Utah Code Annotated 1953
100 75-7-1005, Utah Code Annotated 1953
101 75-7-1006, Utah Code Annotated 1953
102 75-7-1007, Utah Code Annotated 1953
103 75-7-1008, Utah Code Annotated 1953
104 75-7-1009, Utah Code Annotated 1953
105 75-7-1010, Utah Code Annotated 1953
106 75-7-1011, Utah Code Annotated 1953
107 75-7-1012, Utah Code Annotated 1953
108 75-7-1013, Utah Code Annotated 1953
109 75-7-1101, Utah Code Annotated 1953
110 75-7-1102, Utah Code Annotated 1953
111 75-7-1103, Utah Code Annotated 1953
112 REPEALS AND REENACTS:
113 75-7-101, as enacted by Chapter 150, Laws of Utah 1975
114 75-7-203, as last amended by Chapter 194, Laws of Utah 1977
115 75-7-205, as enacted by Chapter 150, Laws of Utah 1975
116 75-7-301, as enacted by Chapter 150, Laws of Utah 1975
117 75-7-302, as last amended by Chapter 93, Laws of Utah 2002
118 75-7-303, as last amended by Chapter 179, Laws of Utah 1992
119
120 75-7-305, as enacted by Chapter 150, Laws of Utah 1975
121 75-7-401, as last amended by Chapter 39, Laws of Utah 1998
122 75-7-402, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
123 75-7-403, as last amended by Chapter 93, Laws of Utah 2002
124 75-7-404, as last amended by Chapter 133, Laws of Utah 1991
125 75-7-405, as enacted by Chapter 150, Laws of Utah 1975
126 75-7-406, as enacted by Chapter 150, Laws of Utah 1975
127 75-7-407, as enacted by Chapter 150, Laws of Utah 1975
128 75-7-408, as enacted by Chapter 150, Laws of Utah 1975
129 75-7-409, as last amended by Chapter 320, Laws of Utah 2000
130 75-7-410, as enacted by Chapter 196, Laws of Utah 1999
131 75-7-411, as enacted by Chapter 196, Laws of Utah 1999
132 75-7-501, as enacted by Chapter 54, Laws of Utah 1982
133 RENUMBERS AND AMENDS:
134 75-7-107, (Renumbered from 75-7-208, as last amended by Chapter 3, Laws of Utah
135 2003, Second Special Session)
136 75-7-508, (Renumbered from 75-7-308, as enacted by Chapter 227, Laws of Utah 2002)
137 75-7-509, (Renumbered from 75-7-309, as enacted by Chapter 227, Laws of Utah 2002)
138 75-7-510, (Renumbered from 75-7-310, as enacted by Chapter 227, Laws of Utah 2002)
139 75-7-511, (Renumbered from 75-7-311, as enacted by Chapter 227, Laws of Utah 2002)
140 75-7-512, (Renumbered from 75-7-312, as enacted by Chapter 227, Laws of Utah 2002)
141 75-7-513, (Renumbered from 75-7-313, as enacted by Chapter 227, Laws of Utah 2002)
142 75-7-514, (Renumbered from 75-7-314, as enacted by Chapter 227, Laws of Utah 2002)
143 75-7-515, (Renumbered from 75-7-315, as enacted by Chapter 227, Laws of Utah 2002)
144 75-7-516, (Renumbered from 75-7-316, as enacted by Chapter 227, Laws of Utah 2002)
145 75-7-517, (Renumbered from 75-7-317, as enacted by Chapter 227, Laws of Utah 2002)
146 75-7-518, (Renumbered from 75-7-318, as enacted by Chapter 227, Laws of Utah 2002)
147 75-7-519, (Renumbered from 75-7-319, as enacted by Chapter 227, Laws of Utah 2002)
148 REPEALS:
149 75-7-206, as enacted by Chapter 150, Laws of Utah 1975
150
151 75-7-306, as last amended by Chapter 179, Laws of Utah 1992
152 75-7-307, as last amended by Chapter 30, Laws of Utah 1992
153 75-7-405.5, as enacted by Chapter 3, Laws of Utah 2003, Second Special Session
154
155 Be it enacted by the Legislature of the state of Utah:
156 Section 1. Section 7-5-7 is amended to read:
157 7-5-7. Management and investment of trust funds.
158 (1) Funds received or held by any trust company as agent or fiduciary, whether for
159 investment or distribution, shall be invested or distributed as soon as practicable as authorized
160 under the instrument creating the account and shall not be held uninvested any longer than is
161 reasonably necessary.
162 (2) If the instrument creating an agency or fiduciary account contains provisions
163 authorizing the trust company, its officers, or its directors to exercise their discretion in the
164 matter of investments, funds held in the trust account under that instrument may be invested
165 only in those classes of securities which are approved by the directors of the trust company or a
166 committee of directors appointed for that purpose. If a trust company acts in any agency or
167 fiduciary capacity under appointment by a court of competent jurisdiction, it shall make and
168 account for all investments according to the provisions of Title 75, Utah Uniform Probate
169 Code, unless the underlying instrument provides otherwise.
170 (3) (a) Funds received or held as agent or fiduciary by any trust company which is also
171 a depository institution, whether for investment or distribution, may be deposited in the
172 commercial department or savings department of that trust company to the credit of its trust
173 department. Whenever the funds so deposited in a fiduciary or managing agency account
174 exceed the amount of federal deposit insurance applicable to that account, the trust company
175 shall deliver to the trust department or put under its control collateral security as outlined in
176 Regulation 9.10 of the Comptroller of the Currency or in Regulation 550.8 of the Office of
177 Thrift Supervision, as amended. However, if the instrument creating such a fiduciary or
178 managing agency account expressly provides that funds may be deposited to the commercial or
179 savings department of the trust company, then the funds may be so deposited without setting
180 aside collateral securities as required under this section and the deposits in the event of
181
182 trust company which deposits trust funds in its commercial or savings department shall be
183 liable for interest on the deposits only at the rates, if any, paid by the trust company on deposits
184 of like kind not made to the credit of its trust department.
185 (b) Funds received or held as agent or fiduciary by a trust company, whether for
186 investment or distribution, may be deposited in an affiliated depository institution. Whenever
187 the funds so deposited in a fiduciary or managing agency account exceed the amount of federal
188 deposit insurance applicable to that account, the depository institution shall deliver to the trust
189 company or put under its control collateral security as outlined in Regulation 9.10 of the
190 Comptroller of the Currency or in Regulation 550.8 of the Office of Thrift Supervision as
191 amended. However, if the instrument creating the fiduciary or managing agency account
192 expressly permits funds to be deposited in the affiliated depository institution, the funds may be
193 so deposited without setting aside collateral securities as required under this section and
194 deposits in the event of insolvency of the depository institution shall be treated as other general
195 deposits are treated. A trust company which deposits trust funds in an affiliated depository
196 institution is liable for interest on the deposits only at the rates, if any, paid by the depository
197 institution on deposits of like kind.
198 (4) In carrying out all aspects of its trust business, a trust company shall have all the
199 powers, privileges, and duties as set forth in [
200 75-7-814 with respect to trustees, whether or not the trust company is acting as a trustee as
201 defined in Title 75.
202 (5) Nothing in this section may alter, amend, or limit the powers of a trust company
203 acting in a fiduciary capacity as specified in the particular instrument or order creating the
204 fiduciary relationship.
205 Section 2. Section 7-5-10 is amended to read:
206 7-5-10. Lending trust funds to trust company, officer, director, or employee as
207 felony.
208 Unless expressly permitted in the instrument creating a trust account or by a person
209 authorized to give that permission or by a court order as permitted in Section [
210 75-7-802 , no trust company shall lend to itself or to any officer or director or employee of the
211 trust company any funds held in any trust account under the powers conferred in this chapter.
212
213 guilty of a third degree felony.
214 Section 3. Section 7-5-14 is amended to read:
215 7-5-14. Mergers, consolidations, acquisitions, transfers, or reorganizations
216 involving entities engaged in trust business -- Succession of rights and duties -- Petition
217 for appointment of another trust company.
218 (1) Notwithstanding any provision of law to the contrary, a trust company, depository
219 institution, or other corporation authorized under this chapter or under the laws of the United
220 States to engage in the trust business in this state may, subject to the provisions of Sections
221 7-1-702 , 7-1-704 , and 7-1-705 :
222 (a) (i) merge or consolidate with, (ii) acquire control of, acquire all or a portion of the
223 assets and trust business of, or assume all or any portion of the liabilities of, or (iii) transfer
224 control to, transfer all or a portion of its assets and trust business to, or transfer all or a portion
225 of its liabilities to, any other trust company, depository institution, or other corporation, which
226 institution is authorized under this chapter or under the laws of the United States to engage in
227 the trust business in this state; or
228 (b) reorganize.
229 (2) Upon final approval by the commissioner of any merger, consolidation, acquisition
230 of control, acquisition of assets, assumption of liabilities, or reorganization, and upon written
231 notice of this approval to all persons entitled to and then receiving trust accountings from the
232 transferring or reorganizing trust company, the resulting or acquiring trust company shall,
233 without court proceedings or a court order, succeed to all rights, privileges, duties, obligations,
234 and undertakings under all trust instruments, agency and fiduciary relationships and
235 arrangements, and other trust business transferred and acquired in the manner authorized by
236 this section. However, except as provided otherwise in the relevant trust instrument, any
237 interested person may, not more than 30 days after receipt of written notice of the merger,
238 consolidation, acquisition, transfer, or reorganization, petition any court of competent
239 jurisdiction to appoint another or succeeding trust company with respect to any agency or
240 fiduciary relationship affecting that interested person, and until another or succeeding trust
241 company is so appointed, the acquiring or resulting trust company is entitled to act as agent or
242 fiduciary with respect to the agency or fiduciary relationship. [
243
244
245 (3) As used in this section, a "reorganization" includes, but is not limited to:
246 (a) the creation by a trust company of a subsidiary corporation which is
247 [
248 purpose of conducting all or any portion of the trust business of that trust company; or
249 (b) any merger or other combination between a trust company and:
250 (i) a [
251 (ii) a [
252 institution holding company which owns or controls that trust company.
253 Section 4. Section 25-6-14 is amended to read:
254 25-6-14. Restricting transfers of trust interests.
255 (1) (a) For trusts created on or after December 31, 2003, a settlor who in writing
256 irrevocably transfers property in trust to a trust having as trustee a company defined in
257 Subsection 7-5-1 (1)(d) who holds some or all of the trust assets in this state in a savings
258 account described in Subsection 7-1-103 (29), a certificate of deposit, a brokerage account, a
259 trust company fiduciary account, or account or deposit located in this state that is similar to
260 such an account may provide that the income or principal interest of the settlor as beneficiary
261 of the trust may not be either voluntarily or involuntarily transferred before payment or delivery
262 to the settlor as beneficiary by the trustee. The provision shall be considered to be a restriction
263 on the transfer of the settlor's beneficial interest in the trust that is enforceable under applicable
264 nonbankruptcy law within the meaning of Section 541(c)(2) of the Bankruptcy Code or
265 successor provision.
266 (b) This Subsection (1) applies to:
267 (i) any form of transfer into trust including:
268 (A) conveyance; or
269 (B) assignment; and
270 (ii) transfers of:
271 (A) personal property;
272 (B) interests in personal property;
273 (C) real property; or
House Committee Amendments 2-24-2004 kh/ecm
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(D) interests in real property.274
275 (2) (a) Except as provided in Subsection (2)(c), if a trust has a restriction as provided in
276 Subsection (1)(a), a creditor or other claimant of the settlor may not satisfy a claim, or liability
277 on it, in either law or equity, out of the settlor's transfer or settlor's beneficial interest in the
278 trust.
279 (b) For the purposes of Subsection (2)(a), a creditor includes one holding or seeking to
280 enforce a judgment entered by a court or other body having adjudicative authority as well as
281 one with a right to payment, whether or not reduced to judgment, liquidated, unliquidated,
282 fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or
283 unsecured.
284 (c) A restriction provided under Subsection (1) does not prevent a creditor or person
285 described in Subsection (2)(a) from satisfying a claim or liability out of the settlor's beneficial
286 interest in or transfer into trust if:
287 (i) the claim is a judgment, order, decree, or other legally enforceable decision or ruling
288 resulting from a judicial, arbitration, mediation, or administrative proceeding commenced prior
289 to or within three years after the trust is created;
290 (ii) the settlor's transfer into trust is made with actual intent to hinder, delay, or defraud
291 that creditor;
292 (iii) the trust provides that the settlor may revoke or terminate all or part of the trust
293 without the consent of a person who has a substantial beneficial interest in the trust and the
294 interest would be adversely affected by the exercise of the settlor's power to revoke or
295 terminate all or part of the trust;
296 (iv) the trust requires that all or a part of the trust's income or principal, or both must be
297 distributed to the settlor as beneficiary;
298 (v) the claim is for a payment owed by a settlor under a child support judgment or
299 order;
300 (vi) the transfer H IS MADE WHEN THE SETTLOR IS INSOLVENT OR h renders the settlor
300a insolvent;
301 (vii) the claim is for recovery of public assistance received by the settlor allowed under
302 Title 26, Chapter 19, Medical Benefits Recovery Act;
303 (viii) the claim is a tax or other amount owed by the settlor to any governmental entity;
304 (ix) the claim is by a spouse or former spouse of the settlor on account of an agreement
House Committee Amendments 2-24-2004 kh/ecm
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or order for the payment of support or alimony or for a division or distribution of property;305
306 (x) (A) the settlor transferred assets into the trust that:
307 (I) were listed in a written representation of the settlor's assets given to a claimant to
308 induce the claimant to enter into a transaction or agreement with the settlor; or
309 (II) were transferred from the settlor's control in breach of any written agreement,
310 covenant, or security interest between the settlor and the claimant; or
311 (B) without limiting the claimant's right to pursue assets not held by the trust, a
312 claimant described in Subsection (2)(c)(x)(A) may only foreclose or execute upon an asset in
313 the trust listed in the written representation described in Subsection (2)(c)(x)(A)(I) or
314 transferred in breach of a written agreement, covenant, or security interest as provided in
315 Subsection (2)(c)(x)(A)(II) to the extent of the settlor's interest in that asset when it was
316 transferred to the trust or the equivalent value of that asset at the time of foreclosure or
317 execution if the original asset was sold or traded by the trust; or
318 (xi) the claim is a judgment, award, order, sentence, fine, penalty, or other
319 determination of liability of the settlor for conduct of the settlor constituting fraud, intentional
320 infliction of harm, or a crime.
321 (d) The statute of limitations for actions to satisfy a claim or liability out of the settlor's
322 beneficial interest in or transfer into trust under Subsections (2)(c) H [
322a (ix),
323 (x), and (xi) is the statute of limitations applicable to the underlying action.
324 (e) For the purposes of Subsection (2)(c) "revoke or terminate" does not include:
325 (i) a power to veto a distribution from the trust;
326 (ii) a testamentary special power of appointment or similar power;
327 (iii) the right to receive a distribution of income, principal, or both in the discretion of
328 another, including a trustee other than the settlor, an interest in a charitable remainder unitrust
329 or charitable remainder annuity trust as defined in Internal Revenue Code Section 664 or
330 successor provision, or a right to receive principal subject to an ascertainable standard set forth
331 in the trust; or
332 (iv) the power to appoint nonsubordinate advisers or trust protectors who can remove
333 and appoint trustees, who can direct, consent to or disapprove distributions, or is the power to
334 serve as an investment director or appoint an investment director under [
335
336
337 or transfer to which it applies.
338 (4) (a) If a trust has a restriction as provided under Subsection (1), the restriction
339 prevents anyone, including a person listed in Subsection (2)(a), from asserting any cause of
340 action or claim for relief against a trustee or anyone involved in the counseling, drafting,
341 preparation, execution, or funding of the trust for:
342 (i) conspiracy to commit a fraudulent conveyance;
343 (ii) aiding and abetting a fraudulent conveyance; or
344 (iii) participating in the trust transaction.
345 (b) A person prevented from asserting a cause of action or claim for relief under this
346 Subsection (4) may assert a cause of action only against:
347 (i) the trust assets; or
348 (ii) the settlor or beneficiary to the extent allowed under Subsection 25-6-5 (1)(a).
349 (5) In any action brought under Subsection (2)(c), the burden to prove the matter by
350 clear and convincing evidence shall be upon the creditor.
351 (6) For purposes of this section, the transfer shall be considered to have been made on
352 the date the property was originally transferred in trust.
353 (7) The courts of this state shall have exclusive jurisdiction over any action brought
354 under this section.
355 (8) If a trust or a property transfer to a trust is voided or set aside under Subsection
356 (2)(c), the trust or property transfer shall be voided or set aside only to the extent necessary to
357 satisfy:
358 (a) the settlor's debt to the creditor or other person at whose instance the trust or
359 property transfer is voided or set aside; and
360 (b) the costs and attorney fees allowed by the court.
361 (9) If a trust or a property transfer to a trust is voided or set aside under Subsection
362 (2)(c) and the court is satisfied that the trustee did not act in bad faith in accepting or
363 administering the property that is the subject of the trust:
364 (a) the trustee has a first and paramount lien against the property that is the subject of
365 the trust in an amount equal to the entire cost properly incurred by the trustee in a defense of
366 the action or proceedings to void or set aside the trust or the property transfer, including
367
368 (b) the trust or property transfer that is voided or set aside is subject to the proper fees,
369 costs, preexisting rights, claims, and interest of the trustee and any predecessor trustee if the
370 trustee and predecessor trustee did not act in bad faith; and
371 (c) any beneficiary, including the settlor, may retain a distribution made by exercising a
372 trust power or discretion vested in the trustee of the trust, if the power or discretion was
373 properly exercised before the commencement of the action or proceeding to void or set aside
374 the trust or property transfer.
375 (10) If at least one trustee is a trust company as defined in Subsection 7-5-1 (1)(d), then
376 individuals may also serve as cotrustees.
377 Section 5. Section 49-11-303 is amended to read:
378 49-11-303. Fund investment standard -- Prudent investor rule.
379 The [
380 the prudent [
381 Part 9, Utah Uniform Prudent Investor Act.
382 Section 6. Section 59-10-103 is amended to read:
383 59-10-103. Definitions.
384 (1) As used in this chapter:
385 (a) "Adoption expenses" means:
386 (i) any actual medical and hospital expenses of the mother of the adopted child which
387 are incident to the child's birth;
388 (ii) any welfare agency fees or costs;
389 (iii) any child placement service fees or costs;
390 (iv) any legal fees or costs; or
391 (v) any other fees or costs relating to an adoption.
392 (b) "Adult with a disability" means an individual who:
393 (i) is 18 years of age or older;
394 (ii) is eligible for services under Title 62A, Chapter 5, Services for People with
395 Disabilities; and
396 (iii) is not enrolled in:
397 (A) an education program for students with disabilities that is authorized under Section
398
399 (B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.
400 (c) (i) For purposes of Subsection 59-10-114 (2)(m), "capital gain transaction" means a
401 transaction that results in a:
402 (A) short-term capital gain; or
403 (B) long-term capital gain.
404 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
405 the commission may by rule define the term "transaction."
406 (d) "Commercial domicile" means the principal place from which the trade or business
407 of a Utah small business corporation is directed or managed.
408 (e) "Corporation" includes:
409 (i) associations;
410 (ii) joint stock companies; and
411 (iii) insurance companies.
412 (f) "Dependent child with a disability" means an individual 21 years of age or younger
413 who:
414 (i) (A) is diagnosed by a school district representative under rules adopted by the State
415 Board of Education as having a disability classified as:
416 (I) autism;
417 (II) deafness;
418 (III) preschool developmental delay;
419 (IV) dual sensory impairment;
420 (V) hearing impairment;
421 (VI) intellectual disability;
422 (VII) multidisability;
423 (VIII) orthopedic impairment;
424 (IX) other health impairment;
425 (X) traumatic brain injury; or
426 (XI) visual impairment;
427 (B) is not receiving residential services from:
428 (I) the Division of Services for People with Disabilities created under Section
429
430 (II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
431 and
432 (C) is enrolled in:
433 (I) an education program for students with disabilities that is authorized under Section
434 53A-15-301 ; or
435 (II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
436 or
437 (ii) is identified under guidelines of the Department of Health as qualified for:
438 (A) Early Intervention; or
439 (B) Infant Development Services.
440 (g) "Employer," "employee," and "wages" are defined as provided in Section
441 59-10-401 .
442 (h) "Fiduciary" means:
443 (i) a guardian;
444 (ii) a trustee;
445 (iii) an executor;
446 (iv) an administrator;
447 (v) a receiver;
448 (vi) a conservator; or
449 (vii) any person acting in any fiduciary capacity for any individual.
450 (i) "Homesteaded land diminished from the Uintah and Ouray Reservation" means the
451 homesteaded land that was held to have been diminished from the Uintah and Ouray
452 Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
453 (j) "Individual" means a natural person and includes aliens and minors.
454 (k) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate
455 all or part of the trust without the consent of a person who has a substantial beneficial interest
456 in the trust and the interest would be adversely affected by the exercise of the settlor's power to
457 revoke or terminate all or part of the trust.
458 (l) For purposes of Subsection 59-10-114 (2)(m), "long-term capital gain" is as defined
459 in Section 1222, Internal Revenue Code.
460
461 (n) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
462 resident estate or trust.
463 (o) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
464 unincorporated organization:
465 (A) through or by means of which any business, financial operation, or venture is
466 carried on; and
467 (B) which is not, within the meaning of this chapter:
468 (I) a trust;
469 (II) an estate; or
470 (III) a corporation.
471 (ii) "Partnership" does not include any organization not included under the definition of
472 "partnership" in Section 761, Internal Revenue Code.
473 (iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
474 organization described in Subsection (1)(o)(i).
475 (p) "Qualifying stock" means stock that is:
476 (i) (A) common; or
477 (B) preferred;
478 (ii) as defined by the commission by rule, originally issued to:
479 (A) a resident or nonresident individual; or
480 (B) a partnership if the resident or nonresident individual making a subtraction from
481 federal taxable income in accordance with Subsection 59-10-114 (2)(m):
482 (I) was a partner when the stock was issued; and
483 (II) remains a partner until the last day of the taxable year for which the resident or
484 nonresident individual makes the subtraction from federal taxable income in accordance with
485 Subsection 59-10-114 (2)(m); and
486 (iii) issued:
487 (A) by a Utah small business corporation;
488 (B) on or after January 1, 2003; and
489 (C) for:
490 (I) money; or
491
492 (q) (i) "Resident individual" means:
493 (A) an individual who is domiciled in this state for any period of time during the
494 taxable year, but only for the duration of the period during which the individual is domiciled in
495 this state; or
496 (B) an individual who is not domiciled in this state but:
497 (I) maintains a permanent place of abode in this state; and
498 (II) spends in the aggregate 183 or more days of the taxable year in this state.
499 (ii) For purposes of Subsection (1)(q)(i)(B), a fraction of a calendar day shall be
500 counted as a whole day.
501 (r) (i) "Resident estate" or "resident trust" [
502 [
503 [
504
505 [
506 [
507 [
508
509 [
510
511 (s) For purposes of Subsection 59-10-114 (2)(m), "short-term capital gain" is as defined
512 in Section 1222, Internal Revenue Code.
513 (t) "Taxable income" and "state taxable income" are defined as provided in Sections
514 59-10-111 , 59-10-112 , 59-10-116 , 59-10-201.1 , and 59-10-204 .
515 (u) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or trust,
516 whose income is subject in whole or part to the tax imposed by this chapter.
517 (v) "Uintah and Ouray Reservation" means the lands recognized as being included
518 within the Uintah and Ouray Reservation in:
519 (i) Hagen v. Utah, 510 U.S. 399 (1994); and
520 (ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
521 (w) (i) "Utah small business corporation" means a corporation that:
522
523 Code;
524 (B) except as provided in Subsection (1)(w)(ii), meets the requirements of Section
525 1244(c)(1)(C), Internal Revenue Code; and
526 (C) has its commercial domicile in this state.
527 (ii) Notwithstanding Subsection (1)(w)(i)(B), the time period described in Section
528 1244(c)(1)(C) and Section 1244(c)(2), Internal Revenue Code, for determining the source of a
529 corporation's aggregate gross receipts shall end on the last day of the taxable year for which the
530 resident or nonresident individual makes a subtraction from federal taxable income in
531 accordance with Subsection 59-10-114 (2)(m).
532 (x) "Ute tribal member" means a person who is enrolled as a member of the Ute Indian
533 Tribe of the Uintah and Ouray Reservation.
534 (y) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
535 (2) (a) Any term used in this chapter has the same meaning as when used in
536 comparable context in the laws of the United States relating to federal income taxes unless a
537 different meaning is clearly required.
538 (b) Any reference to the Internal Revenue Code or to the laws of the United States shall
539 mean the Internal Revenue Code or other provisions of the laws of the United States relating to
540 federal income taxes that are in effect for the taxable year.
541 (c) Any reference to a specific section of the Internal Revenue Code or other provision
542 of the laws of the United States relating to federal income taxes shall include any
543 corresponding or comparable provisions of the Internal Revenue Code as hereafter amended,
544 redesignated, or reenacted.
545 Section 7. Section 75-1-201 is amended to read:
546 75-1-201. General definitions.
547 Subject to additional definitions contained in the subsequent chapters that are
548 applicable to specific chapters, parts, or sections, and unless the context otherwise requires, in
549 this code:
550 (1) "Agent" includes an attorney-in-fact under a durable or nondurable power of
551 attorney, an individual authorized to make decisions concerning another's health care, and an
552 individual authorized to make decisions for another under a natural death act.
553
554 probate or appointment under Title 75, Chapter 3, Part 3, Informal Probate and Appointment
555 Proceedings.
556 (3) "Beneficiary," as it relates to trust beneficiaries, includes a person who has any
557 present or future interest, vested or contingent, and also includes the owner of an interest by
558 assignment or other transfer; as it relates to a charitable trust, includes any person entitled to
559 enforce the trust; as it relates to a "beneficiary of a beneficiary designation," refers to a
560 beneficiary of an insurance or annuity policy, of an account with POD designation, of a security
561 registered in beneficiary form (TOD), or of a pension, profit-sharing, retirement, or similar
562 benefit plan, or other nonprobate transfer at death; and, as it relates to a "beneficiary designated
563 in a governing instrument," includes a grantee of a deed, a devisee, a trust beneficiary, a
564 beneficiary of a beneficiary designation, a donee, appointee, or taker in default of a power of
565 appointment, and a person in whose favor a power of attorney or a power held in any
566 individual, fiduciary, or representative capacity is exercised.
567 (4) "Beneficiary designation" refers to a governing instrument naming a beneficiary of
568 an insurance or annuity policy, of an account with POD designation, of a security registered in
569 beneficiary form (TOD), or of a pension, profit-sharing, retirement, or similar benefit plan, or
570 other nonprobate transfer at death.
571 (5) "Child" includes any individual entitled to take as a child under this code by
572 intestate succession from the parent whose relationship is involved and excludes any person
573 who is only a stepchild, a foster child, a grandchild, or any more remote descendant.
574 (6) "Claims," in respect to estates of decedents and protected persons, includes
575 liabilities of the decedent or protected person, whether arising in contract, in tort, or otherwise,
576 and liabilities of the estate which arise at or after the death of the decedent or after the
577 appointment of a conservator, including funeral expenses and expenses of administration.
578 "Claims" does not include estate or inheritance taxes, or demands or disputes regarding title of
579 a decedent or protected person to specific assets alleged to be included in the estate.
580 (7) "Conservator" means a person who is appointed by a court to manage the estate of a
581 protected person.
582 (8) "Court" means any of the courts of record in this state having jurisdiction in matters
583 relating to the affairs of decedents.
584
585 the relationship of parent and child at each generation being determined by the definition of
586 child and parent contained in this title.
587 (10) "Devise," when used as a noun, means a testamentary disposition of real or
588 personal property and, when used as a verb, means to dispose of real or personal property by
589 will.
590 (11) "Devisee" means any person designated in a will to receive a devise. For the
591 purposes of Title 75, Chapter 3, Probate of Wills and Administration, in the case of a devise to
592 an existing trust or trustee, or to a trustee in trust described by will, the trust or trustee is the
593 devisee, and the beneficiaries are not devisees.
594 (12) "Disability" means cause for a protective order as described by Section 75-5-401 .
595 (13) "Distributee" means any person who has received property of a decedent from his
596 personal representative other than as a creditor or purchaser. A testamentary trustee is a
597 distributee only to the extent of distributed assets or increment thereto remaining in his hands.
598 A beneficiary of a testamentary trust to whom the trustee has distributed property received from
599 a personal representative is a distributee of the personal representative. For purposes of this
600 provision, "testamentary trustee" includes a trustee to whom assets are transferred by will, to
601 the extent of the devised assets.
602 (14) "Estate" includes the property of the decedent, trust, or other person whose affairs
603 are subject to this title as originally constituted and as it exists from time to time during
604 administration.
605 (15) "Exempt property" means that property of a decedent's estate which is described in
606 Section 75-2-403 .
607 (16) "Fiduciary" includes a personal representative, guardian, conservator, and trustee.
608 (17) "Foreign personal representative" means a personal representative of another
609 jurisdiction.
610 (18) "Formal proceedings" means proceedings conducted before a judge with notice to
611 interested persons.
612 (19) "Governing instrument" means a deed, will, trust, insurance or annuity policy,
613 account with POD designation, security registered in beneficiary form (TOD), pension,
614 profit-sharing, retirement, or similar benefit plan, instrument creating or exercising a power of
615
616 any similar type.
617 (20) "Guardian" means a person who has qualified as a guardian of a minor or
618 incapacitated person pursuant to testamentary or court appointment, or by written instrument as
619 provided in Section 75-5-202.5 , but excludes one who is merely a guardian ad litem.
620 (21) "Heirs," except as controlled by Section 75-2-711 , means persons, including the
621 surviving spouse and state, who are entitled under the statutes of intestate succession to the
622 property of a decedent.
623 (22) "Incapacitated person" means any person who is impaired by reason of mental
624 illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic
625 intoxication, or other cause, except minority, to the extent of lacking sufficient understanding
626 or capacity to make or communicate responsible decisions.
627 (23) "Informal proceedings" mean those conducted without notice to interested persons
628 by an officer of the court acting as a registrar for probate of a will or appointment of a personal
629 representative.
630 (24) "Interested person" includes heirs, devisees, children, spouses, creditors,
631 beneficiaries, and any others having a property right in or claim against a trust estate or the
632 estate of a decedent, ward, or protected person. It also includes persons having priority for
633 appointment as personal representative [
634 a settlor of a trust, if living, or the settlor's legal representative, if any, if the settlor is living but
635 incapacitated. The meaning as it relates to particular persons may vary from time to time and
636 shall be determined according to the particular purposes of, and matter involved in, any
637 proceeding.
638 (25) "Issue" of a person means descendant as defined in Subsection (9).
639 (26) "Joint tenants with the right of survivorship" and "community property with the
640 right of survivorship" includes coowners of property held under circumstances that entitle one
641 or more to the whole of the property on the death of the other or others, but excludes forms of
642 coownership registration in which the underlying ownership of each party is in proportion to
643 that party's contribution.
644 (27) "Lease" includes an oil, gas, or other mineral lease.
645 (28) "Letters" includes letters testamentary, letters of guardianship, letters of
646
647 (29) "Minor" means a person who is under 18 years of age.
648 (30) "Mortgage" means any conveyance, agreement, or arrangement in which property
649 is used as security.
650 (31) "Nonresident decedent" means a decedent who was domiciled in another
651 jurisdiction at the time of his death.
652 (32) "Organization" includes a corporation, limited liability company, business trust,
653 estate, trust, partnership, joint venture, association, government or governmental subdivision or
654 agency, or any other legal or commercial entity.
655 (33) "Parent" includes any person entitled to take, or who would be entitled to take if
656 the child died without a will, as a parent under this code by intestate succession from the child
657 whose relationship is in question and excludes any person who is only a stepparent, foster
658 parent, or grandparent.
659 (34) "Payor" means a trustee, insurer, business entity, employer, government,
660 governmental agency or subdivision, or any other person authorized or obligated by law or a
661 governing instrument to make payments.
662 (35) "Person" means an individual or an organization.
663 (36) (a) "Personal representative" includes executor, administrator, successor personal
664 representative, special administrator, and persons who perform substantially the same function
665 under the law governing their status.
666 (b) "General personal representative" excludes special administrator.
667 (37) "Petition" means a written request to the court for an order after notice.
668 (38) "Proceeding" includes action at law and suit in equity.
669 (39) "Property" includes both real and personal property or any interest therein and
670 means anything that may be the subject of ownership.
671 (40) "Protected person" means a person for whom a conservator has been appointed. A
672 "minor protected person" means a minor for whom a conservator has been appointed because
673 of minority.
674 (41) "Protective proceeding" means a proceeding described in Section 75-5-401 .
675 (42) "Registrar" refers to the official of the court designated to perform the functions of
676 registrar as provided in Section 75-1-307 .
677
678 indebtedness, certificate of interest, or participation in an oil, gas, or mining title or lease or in
679 payments out of production under such a title or lease, collateral trust certificate, transferable
680 share, voting trust certificate, and, in general, any interest or instrument commonly known as a
681 security, or any certificate of interest or participation, any temporary or interim certificate,
682 receipt, or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of
683 the foregoing.
684 (44) "Settlement," in reference to a decedent's estate, includes the full process of
685 administration, distribution, and closing.
686 (45) "Special administrator" means a personal representative as described in Sections
687 75-3-614 through 75-3-618 .
688 (46) "State" means a state of the United States, the District of Columbia, the
689 Commonwealth of Puerto Rico, [
690 jurisdiction of the United States, or a Native American tribe or band recognized by federal law
691 or formally acknowledged by a state.
692 (47) "Successor personal representative" means a personal representative, other than a
693 special administrator, who is appointed to succeed a previously appointed personal
694 representative.
695 (48) "Successors" means persons, other than creditors, who are entitled to property of a
696 decedent under the decedent's will or this title.
697 (49) "Supervised administration" refers to the proceedings described in Title 75,
698 Chapter 3, Part 5, Supervised Administration.
699 (50) "Survive," except for purposes of Part 3 of Article VI, Uniform TOD Security
700 Registration Act, means that an individual has neither predeceased an event, including the
701 death of another individual, nor is considered to have predeceased an event under Section
702 75-2-104 or 75-2-702 . The term includes its derivatives, such as "survives," "survived,"
703 "survivor," and "surviving."
704 (51) "Testacy proceeding" means a proceeding to establish a will or determine
705 intestacy.
706 (52) "Testator" includes an individual of either sex.
707 (53) "Trust" includes any express trust, private or charitable, with additions thereto,
708
709 judgment or decree under which the trust is to be administered in the manner of an express
710 trust. The term excludes other constructive trusts, and it excludes resulting trusts,
711 conservatorships, personal representatives, trust accounts as defined in Title 75, Chapter 6,
712 Nonprobate Transfers, custodial arrangements pursuant to any Uniform Transfers To Minors
713 Act, business trusts providing for certificates to be issued to beneficiaries, common trust funds,
714 voting trusts, preneed funeral plans under Title 58, Chapter 9, Funeral Services Licensing Act,
715 security arrangements, liquidation trusts, and trusts for the primary purpose of paying debts,
716 dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind, and any
717 arrangement under which a person is nominee or escrowee for another.
718 (54) "Trustee" includes an original, additional, [
719 cotrustee, whether or not appointed or confirmed by the court.
720 (55) "Ward" means a person for whom a guardian has been appointed. A "minor ward"
721 is a minor for whom a guardian has been appointed solely because of minority.
722 (56) "Will" includes codicil and any testamentary instrument which merely appoints an
723 executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits
724 the right of an individual or class to succeed to property of the decedent passing by intestate
725 succession.
726 Section 8. Section 75-1-403 is amended to read:
727 75-1-403. Pleadings -- When parties bound by others -- Notice.
728 In formal proceedings involving inter vivos or testamentary trusts, including
729 proceedings to modify or terminate a trust, estates of decedents, minors, protected persons, or
730 incapacitated persons, and in judicially supervised settlements, the following apply:
731 (1) Interests to be affected shall be described in pleadings which give reasonable
732 information to owners by name or class, by reference to the instrument creating the interests, or
733 in any other appropriate manner.
734 [
735 [
736
737
738
739
740
741 [
742 [
743
744 [
745 [
746 [
747
748 [
749
750 [
751
752
753
754
755 [
756 [
757 person. Notice may be given both to a person and to another who may bind him.
758 [
759
760
761 [
762
763
764
765 [
766
767
768
769 [
770
771
772
773 Section 9. Section 75-2-1209 is amended to read:
774 75-2-1209. Real estate conveyed to a trust under the Statutory Rule Against
775 Perpetuities.
776 On or after the effective date, when title to real property is granted to the trustee of a
777 trust governed by Title 75, Chapter 2, Part 12, [
778 the terms of the trust, provisions regarding the appointment of successor trustees, and the
779 names and addresses of successor trustees must be disclosed in accordance with Section
780 [
781 Section 10. Section 75-3-703 is amended to read:
782 75-3-703. General duties -- Relation and liability to persons interested in estate --
783 Standing to sue.
784 (1) A personal representative is a fiduciary who shall observe the standard of care
785 applicable to trustees as described by Section [
786 under a duty to settle and distribute the estate of the decedent in accordance with the terms of
787 any probated and effective will and this code and as expeditiously and efficiently as is
788 consistent with the best interests of the estate. He shall use the authority conferred upon him by
789 this code, the terms of the will, if any, and any order in proceedings to which he is party for the
790 best interests of successors to the estate.
791 (2) A personal representative shall not be surcharged for acts of administration or
792 distribution if the conduct in question was authorized at the time. Subject to other obligations
793 of administration, an informally probated will is authority to administer and distribute the
794 estate according to its terms. An order of appointment of a personal representative, whether
795 issued in informal or formal proceedings, is authority to distribute apparently intestate assets to
796 the heirs of the decedent if, at the time of distribution, the personal representative is not aware
797 of a pending testacy proceeding, a proceeding to vacate an order entered in an earlier testacy
798 proceeding, a formal proceeding questioning his appointment or fitness to continue, or a
799 supervised administration proceeding. Nothing in this section affects the duty of the personal
800 representative to administer and distribute the estate in accordance with the rights of claimants,
House Committee Amendments 2-24-2004 kh/ecm
801
the surviving spouse, any minor and dependent children, and any pretermitted child of the801
802 decedent as described elsewhere in this code.
803 (3) Except as to proceedings which do not survive the death of the decedent, a personal
804 representative of a decedent domiciled in this state at his death has the same standing to sue
805 and be sued in the courts of this state and courts of any other jurisdiction as his decedent had
806 immediately prior to death.
807 Section 11. Section 75-3-913 is amended to read:
808 75-3-913. Distributions to trustee.
809 (1) Before distributing to a trustee, the personal representative may require that the trust
810 be registered if the state in which it is to be administered provides for registration and that the
811 trustee inform the H QUALIFIED h beneficiaries as provided in Section [
812 (2) If the trust instrument does not excuse the trustee from giving bond, the personal
813 representative may petition the appropriate court to require that the trustee post bond if he
814 apprehends that distribution might jeopardize the interests of persons who are not able to
815 protect themselves; and he may withhold distribution until the court has acted.
816 (3) No inference of negligence on the part of the personal representative shall be drawn
817 from his failure to exercise the authority conferred by Subsections (1) and (2).
818 Section 12. Section 75-5-417 is amended to read:
819 75-5-417. General duty of conservator.
820 (1) A conservator shall act as a fiduciary and shall observe the standards of care as set
821 forth in Section [
822 (2) The conservator shall, for all estates in excess of $50,000, excluding the residence
823 owned by the ward, send a report with a full accounting to the court on an annual basis. For
824 estates less than $50,000, excluding the residence owned by the ward, the conservator shall fill
825 out an informal annual report and mail the report to the court. The report shall include the
826 following: a statement of assets at the beginning and end of the reporting year, income received
827 during the year, disbursements for the support of the ward, and other expenses incurred by the
828 estate. The court may require additional information. The forms for both the informal report
829 for estates under $50,000, excluding the residence owned by the ward, and the full accounting
830 report for larger estates shall be approved by the judicial council. This annual report shall be
831 examined and approved by the court.
832
833 their internal report annually to the court. The report shall be examined and approved by the
834 court.
835 (4) (a) [
836 receiving written notice of the failure to file and after a grace period of two months have
837 elapsed, a conservator or corporate fiduciary: [
838 (i) makes a substantial misstatement on filings of any required annual reports; [
839 (ii) is guilty of gross impropriety in handling the property of the ward; or [
840 (iii) willfully fails to file the report required by this section[
841
842
843 (b) The court may also order restitution of funds misappropriated from the estate of a
844 ward.
845 (c) The penalty shall be paid by the conservator or corporate fiduciary and may not be
846 paid by the estate.
847 (5) These provisions and penalties governing annual reports do not apply if the
848 conservator is the parent of the ward.
849 Section 13. Section 75-7-101 is repealed and reenacted to read:
850
851
852 75-7-101. Title.
853 This chapter is known as the "Utah Uniform Trust Code."
854 Section 14. Section 75-7-102 is enacted to read:
855 75-7-102. Scope.
856 This chapter applies to trusts as defined in Section 75-1-201 .
857 Section 15. Section 75-7-103 is enacted to read:
858 75-7-103. Definitions.
859 (1) In this chapter:
860 (a) "Action," with respect to an act of a trustee, includes a failure to act.
861 (b) "Beneficiary" means a person that:
862 (i) has a present or future beneficial interest in a trust, vested or contingent; or
House Committee Amendments 2-24-2004 kh/ecm
863
(ii) in a capacity other than that of trustee, holds a power of appointment over trust863
864 property.
865 (c) "Charitable trust" means a trust, or portion of a trust, created for a charitable
866 purpose described in Subsection 75-7-405 (1).
867 (d) "Environmental law" means a federal, state, or local law, rule, regulation, or
868 ordinance relating to protection of the environment.
869 (e) "Interests of the beneficiaries" means the beneficial interests provided in the terms
870 of the trust.
871 (f) "Jurisdiction," with respect to a geographic area, includes a state or country.
872 (g) "Power of withdrawal" means a presently exercisable general power of appointment
873 other than a power exercisable only upon consent of the trustee or a person holding an adverse
874 interest.
875 (h) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's
876 qualification is determined:
877 (i) is a H CURRENT h distributee or permissible distributee of trust income or principal; or
878 (ii) would be a distributee or permissible distributee of trust income or principal if the
879 trust terminated on that date.
880 (i) "Resident estate" or "resident trust"means:
881 (i) an estate of a decedent who at death was domiciled in this state;
882 (ii) a trust, or a portion of a trust, consisting of property transferred by will of a
883 decedent who at his death was domiciled in this state; or
884 (iii) a trust administered in this state.
885 (j) "Revocable," as applied to a trust, means revocable by the settlor without the
886 consent of the trustee or a person holding an adverse interest.
887 (k) "Settlor" means a person, including a testator, who creates, or contributes property
888 to, a trust. If more than one person creates or contributes property to a trust, each person is a
889 settlor of the portion of the trust property attributable to that person's contribution except to the
890 extent another person has the power to revoke or withdraw that portion.
891 (l) "Spendthrift provision" means a term of a trust which restrains both voluntary and
892 involuntary transfer or encumbrance of a beneficiary's interest.
893 (m) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's
House Committee Amendments 2-24-2004 kh/ecm
894
provisions as expressed in the trust instrument or as may be established by other evidence that894
895 would be admissible in a judicial proceeding.
896 (n) "Trust instrument" means an instrument executed by the settlor that contains terms
897 of the trust, including any amendments thereto.
898 (2) Terms not specifically defined in this section have the meanings provided in
899 Section 75-1-201 .
900 Section 16. Section 75-7-104 is enacted to read:
901 75-7-104. Knowledge.
902 (1) Subject to Subsection (2), a person has knowledge of a fact if the person:
903 (a) has actual knowledge of it;
904 (b) has received a notice or notification of it; or
905 (c) from all the facts and circumstances known to the person at the time in question,
906 has reason to know it.
907 (2) An organization that conducts activities through employees has notice or
908 knowledge of a fact involving a trust only from the time the information was received by an
909 employee having responsibility to act for the trust, or would have been brought to the
910 employee's attention if the organization had exercised reasonable diligence. An organization
911 exercises reasonable diligence if it maintains reasonable routines for communicating significant
912 information to the employee having responsibility to act for the trust and there is reasonable
913 compliance with the routines. Reasonable diligence does not require an employee of the
914 organization to communicate information unless the communication is part of the individual's
915 regular duties or the individual knows a matter involving the trust would be materially affected
916 by the information.
917 Section 17. Section 75-7-105 is enacted to read:
918 75-7-105. Default and mandatory rules.
919 (1) Except as otherwise provided in the terms of the trust, this chapter governs the
920 duties and powers of a trustee, relations among trustees, and the rights and interests of a
921 beneficiary.
922 (2) H [
922a prevail over any provision of this chapter except:
923 (a) the requirements for creating a trust;
924 (b) the duty of a trustee to act in good faith and in accordance with the purposes of the
House Committee Amendments 2-24-2004 kh/ecm
925
trust;925
926 (c) the requirement that a trust and its terms be for the benefit of its beneficiaries;
927 (d) the power of the court to modify or terminate a trust under Sections 75-7-410
928 through 75-7-416 ;
929 (e) the effect of a spendthrift provision H , SECTION 26-6-14, h and the rights of certain
929a creditors and assignees
930 to reach a trust as provided in Part 5, Creditor's Claims-Spendthrift and Discretionary Trusts;
931 (f) the power of the court under Section 75-7-702 to require, dispense with, or modify
932 or terminate a bond;
933 H [
934 compensation specified in the terms of the trust which is unreasonably low or high;
935 (h)
936 H [
937 trustee or beneficiary;
938 H [
939 H [
940 necessary in the interests of justice;
941 H [
941a proceeding
942 as provided in Sections 75-7-203 and 75-7-205 .
943 Section 18. Section 75-7-106 is enacted to read:
944 75-7-106. Common law of trusts -- Principles of equity.
945 The common law of trusts and principles of equity supplement this chapter, except to
946 the extent modified by this chapter or laws of this state.
947 Section 19. Section 75-7-107 , which is renumbered from Section 75-7-208 is
948 renumbered and amended to read:
949 [
950 (1) For purposes of this section:
951 (a) "Foreign trust" means a trust that is created in another state or country and valid in
952 the state or country in which the trust is created.
953 (b) "State law provision" means a provision that the laws of a named state govern the
954 validity, construction, and administration of a trust.
955 (2) If a trust has a state law provision specifying this state, the validity, construction,
956
957 of the trust is done in this state.
958 (3) For all trusts created on or after December 31, 2003, if a trust does not have a state
959 law provision, the validity, construction, and administration of the trust are to be governed by
960 the laws of this state if the trust is administered in this state.
961 (4) A trust shall be considered to be administered in this state if:
962 (a) the trust states that this state is the place of administration, and any administration
963 of the trust is done in this state; or
964 (b) the place of business where the fiduciary transacts a major portion of its
965 administration of the trust is in this state.
966 [
967 following provisions are effective and enforceable under the laws of this state:
968 (a) a provision in the trust that restricts the transfer of trust assets in a manner similar
969 to Section 25-6-14 ;
970 (b) a provision that allows the trust to be perpetual; or
971 (c) a provision that is not expressly prohibited by the law of this state.
972 [
973 not the trust complied with the laws of this state at the time of the trust's creation or after the
974 trust's creation.
975 [
976 this state if it meets the requirements of Subsection [
977 Section 20. Section 75-7-108 is enacted to read:
978 75-7-108. Principal place of administration.
979 (1) Without precluding other means for establishing a sufficient connection with the
980 designated jurisdiction, terms of a trust designating the principal place of administration are
981 valid and controlling if:
982 (a) a trustee's principal place of business is located in or a trustee is a resident of the
983 designated jurisdiction; or
984 (b) all or part of the administration occurs in the designated jurisdiction.
985 (2) A trustee is under a continuing duty to administer the trust at a place appropriate to
986 its purposes, its administration, and the interests of the beneficiaries.
987
988 the trustee, in furtherance of the duty prescribed by Subsection (2), may transfer the trust's
989 principal place of administration to another state or to a jurisdiction outside of the United
990 States.
991 (4) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's
992 principal place of administration not less than 60 days before initiating the transfer. The notice
993 of proposed transfer must include:
994 (a) the name of the jurisdiction to which the principal place of administration is to be
995 transferred;
996 (b) the address and telephone number at the new location at which the trustee can be
997 contacted;
998 (c) an explanation of the reasons for the proposed transfer;
999 (d) the date on which the proposed transfer is anticipated to occur; and
1000 (e) the date, not less than 60 days after the giving of the notice, by which the qualified
1001 beneficiary must notify the trustee of an objection to the proposed transfer.
1002 (5) The authority of a trustee under this section to transfer a trust's principal place of
1003 administration terminates if a qualified beneficiary notifies the trustee of an objection to the
1004 proposed transfer on or before the date specified in the notice.
1005 (6) In connection with a transfer of the trust's principal place of administration, the
1006 trustee may transfer some or all of the trust property to a successor trustee designated in the
1007 terms of the trust or appointed pursuant to Section 75-7-704 .
1008 Section 21. Section 75-7-109 is enacted to read:
1009 75-7-109. Methods and waiver of notice.
1010 (1) Notice to a person under this chapter or the sending of a document to a person
1011 under this chapter must be accomplished in a manner reasonably suitable under the
1012 circumstances and likely to result in receipt of the notice or document. Permissible methods of
1013 notice or for sending a document include first-class mail, personal delivery, delivery to the
1014 person's last known place of residence or place of business, or a properly directed electronic
1015 message.
1016 (2) Notice under this chapter or the sending of a document under this chapter may be
1017 waived by the person to be notified or sent the document.
House Committee Amendments 2-24-2004 kh/ecm
1018
(3) Notice of a judicial proceeding must be given as provided in the applicable rules of1018
1019 civil procedure.
1020 H [
1021 75-7-110. Others treated as qualified beneficiaries.
1022 (1) Whenever notice to qualified beneficiaries of a trust is required under this chapter,
1023 the trustee must also give notice to any other beneficiary who has sent the trustee a request for
1024 notice unless otherwise directed by the settlor in the terms of the trust.
1025 (2) A charitable organization expressly entitled to receive benefits under the terms of a
1026 charitable trust or a person appointed to enforce a trust created for the care of an animal or
1027 another noncharitable purpose as provided in Section 75-7-408 or 75-7-409 has the rights of a
1028 qualified beneficiary under this chapter.
1029 (3) The attorney general has the rights of a qualified beneficiary with respect to a
1030 charitable trust having its principal place of administration in this state. ] h
1031 Section H [
1032 75-7-111. Nonjudicial settlement agreements.
1033 (1) For purposes of this section, "interested persons" means persons whose consent
1034 would be required in order to achieve a binding settlement were the settlement to be approved
1035 by the court.
1036 (2) Except as otherwise provided in Subsection (3), interested persons may enter into a
1037 binding nonjudicial settlement agreement with respect to any matter involving a trust.
1038 (3) A nonjudicial settlement agreement is valid only to the extent it does not violate a
1039 material purpose of the trust and includes terms and conditions that could be properly approved
1040 by the court under this chapter or other applicable law.
1041 (4) Matters that may be resolved by a nonjudicial settlement agreement include:
1042 (a) the interpretation or construction of the terms of the trust;
1043 (b) the approval of a trustee's report or accounting;
1044 (c) direction to a trustee to refrain from performing a particular act or the grant to a
1045 trustee of any necessary or desirable power;
1046 (d) the resignation or appointment of a trustee and the determination of a trustee's
1047 compensation;
1048 (e) transfer of a trust's principal place of administration; and
1049
1050 (5) Any interested person may request the court to approve a nonjudicial settlement
1051 agreement, to determine whether the representation as provided in Part 3 was adequate, and to
1052 determine whether the agreement contains terms and conditions the court could have properly
1053 approved.
1054 Section 24. Section 75-7-112 is enacted to read:
1055 75-7-112. Rules of construction.
1056 The rules of construction that apply to the interpretation of and disposition of property
1057 by will or other governing instrument, as defined in Section 75-1-201 , also apply as appropriate
1058 to the interpretation of the terms of a trust and the disposition of the trust property.
1059 Section 25. Section 75-7-113 is enacted to read:
1060 75-7-113. Penalty provisions.
1061 A provision in a trust instrument purporting to penalize a beneficiary by charging the
1062 beneficiary's interest in the trust, or to penalize the beneficiary in another manner, for
1063 instituting a proceeding to challenge the acts of the trustee or other fiduciary of a trust, or for
1064 instituting other proceedings relating to the trust is unenforceable if probable cause exists for
1065 instituting the proceedings.
1066 Section 26. Section 75-7-202 is amended to read:
1067 75-7-202. Effect of administration in this state -- Consent to jurisdiction.
1068 (1) The trustee submits personally to the jurisdiction of the courts of this state
1069 regarding any matter involving the trust if the trustee acts as trustee of a trust administered in
1070 this state.
1071 (2) To the extent of the beneficial interests in a trust administered in this state, the
1072 beneficiaries of the trust are subject to the jurisdiction of the courts of this state regarding any
1073 matter involving the trust. By accepting a distribution from such a trust, the recipient submits
1074 personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
1075 (3) By accepting the delegation of a trust function from the trustee of a trust
1076 administered in this state, the agent submits to the jurisdiction of the courts of this state
1077 regarding any matter involving the trust.
1078 (4) Unless otherwise designated in the trust instrument, a trust is administered in this
1079 state if it meets the requirements of Subsection [
1080
1081 75-7-203. Subject matter jurisdiction.
1082 (1) The district court has exclusive jurisdiction of proceedings in this state brought by a
1083 trustee or beneficiary concerning the administration of a trust.
1084 (2) The district court has concurrent jurisdiction with other courts of this state of other
1085 proceedings involving a trust.
1086 (3) This section does not preclude judicial or nonjudicial alternative dispute resolution.
1087 Section 28. Section 75-7-205 is repealed and reenacted to read:
1088 75-7-205. Venue.
1089 (1) Except as otherwise provided in Subsection (2), venue for a judicial proceeding
1090 involving a trust is in the county in which the trust's principal place of administration is or will
1091 be located and, if the trust is created by will and the estate is not yet closed, in the county in
1092 which the decedent's estate is being administered.
1093 (2) If a trust has no trustee, venue for a judicial proceeding for the appointment of a
1094 trustee is in any county of this state in which a beneficiary resides, in any county in which any
1095 trust property is located, and if the trust is created by will, in the county in which the decedent's
1096 estate was or is being administered.
1097 Section 29. Section 75-7-301 is repealed and reenacted to read:
1098
1099 75-7-301. Basic effect.
1100 (1) Notice to a person who may represent and bind another person under this part has
1101 the same effect as if notice were given directly to the other person.
1102 (2) The consent of a person who may represent and bind another person under this part
1103 is binding on the person represented unless the person represented objects to the representation
1104 before the consent would otherwise have become effective.
1105 (3) Except as otherwise provided in Sections 75-7-411 and 25-6-14 , a person who
1106 under this part may represent a settlor who lacks capacity may receive notice and give a
1107 binding consent on the settlor's behalf.
1108 Section 30. Section 75-7-302 is repealed and reenacted to read:
1109 75-7-302. Representation by holder of general testamentary power of
1110 appointment.
1111
1112 testamentary power of appointment and the persons represented with respect to the particular
1113 question or dispute, the holder may represent and bind persons whose interests, as permissible
1114 appointees, takers in default, or otherwise, are subject to the power.
1115 Section 31. Section 75-7-303 is repealed and reenacted to read:
1116 75-7-303. Representation by fiduciaries and parents.
1117 To the extent there is no conflict of interest between the representative and the person
1118 represented or among those being represented with respect to a particular question or dispute:
1119 (1) a conservator may represent and bind the protected person whose estate the
1120 conservator controls;
1121 (2) a guardian may represent and bind the ward if a conservator of the ward's estate has
1122 not been appointed;
1123 (3) an agent having authority to act with respect to the particular question or dispute
1124 may represent and bind the principal;
1125 (4) a trustee may represent and bind the beneficiaries of the trust;
1126 (5) a personal representative of a decedent's estate may represent and bind persons
1127 interested in the estate; and
1128 (6) a parent may represent and bind the parent's minor or unborn child if a conservator
1129 or guardian for the child has not been appointed.
1130 Section 32. Section 75-7-304 is repealed and reenacted to read:
1131 75-7-304. Representation by person having substantially identical interest.
1132 Unless otherwise represented, a minor, incapacitated, or unborn individual, or a person
1133 whose identity or location is unknown and not reasonably ascertainable, may be represented by
1134 and bound by another having a substantially identical interest with respect to the particular
1135 question or dispute, but only to the extent there is no conflict of interest between the
1136 representative and the person represented.
1137 Section 33. Section 75-7-305 is repealed and reenacted to read:
1138 75-7-305. Appointment of guardian ad litem or other representative.
1139 (1) If the court determines that an interest is not represented under this part, or that the
1140 otherwise available representation might be inadequate, the court may appoint a guardian ad
1141 litem or other representative to receive notice, give consent, and otherwise represent, bind, and
1142
1143 whose identity or location is unknown. A guardian ad litem or other representative may be
1144 appointed to represent several persons or interests.
1145 (2) A guardian ad litem or other representative may act on behalf of the individual
1146 represented with respect to any matter arising under this chapter, whether or not a judicial
1147 proceeding concerning the trust is pending.
1148 (3) In making decisions, a guardian ad litem or other representative may consider
1149 general benefit accruing to the living members of the individual's family.
1150 Section 34. Section 75-7-401 is repealed and reenacted to read:
1151
1152 75-7-401. Methods of creating trust.
1153 A trust may be created by:
1154 (1) transfer of property to another person as trustee during the settlor's lifetime or by
1155 will or other disposition taking effect upon the settlor's death;
1156 (2) declaration by the owner of property that the owner holds identifiable property as
1157 trustee; or
1158 (3) exercise of a power of appointment in favor of a trustee.
1159 Section 35. Section 75-7-402 is repealed and reenacted to read:
1160 75-7-402. Requirements for creation.
1161 (1) A trust is created only if:
1162 (a) the settlor has capacity to create a trust, which standard of capacity shall be the
1163 same as for a person to create a will;
1164 (b) the settlor indicates an intention to create the trust or a statute, judgment, or decree
1165 authorizes the creation of a trust;
1166 (c) the trust has a definite beneficiary or is:
1167 (i) a charitable trust;
1168 (ii) a trust for the care of an animal, as provided in Section 75-2-1001 ; or
1169 (iii) a trust for a noncharitable purpose, as provided in Section 75-2-1001 ;
1170 (d) the trustee has duties to perform; and
1171 (e) the same person is not the sole trustee and sole beneficiary.
1172 (2) A beneficiary is definite if the beneficiary can be ascertained now or in the future,
1173
1174 (3) A power in a trustee to select a beneficiary from an indefinite class is valid. If the
1175 power is not exercised within a reasonable time, the power fails and the property subject to the
1176 power passes to the persons who would have taken the property had the power not been
1177 conferred.
1178 Section 36. Section 75-7-403 is repealed and reenacted to read:
1179 75-7-403. Trusts created in other jurisdictions.
1180 A trust not created by will is validly created if its creation complies with the law of the
1181 jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which,
1182 at the time of creation:
1183 (1) the settlor was domiciled, had a place of abode, or was a national;
1184 (2) a trustee was domiciled or had a place of business; or
1185 (3) any trust property was located.
1186 Section 37. Section 75-7-404 is repealed and reenacted to read:
1187 75-7-404. Trust purposes.
1188 A trust may be created only to the extent its purposes are lawful, not contrary to public
1189 policy, and possible to achieve. A trust and its terms must be for the benefit of its
1190 beneficiaries.
1191 Section 38. Section 75-7-405 is repealed and reenacted to read:
1192 75-7-405. Charitable purposes -- Enforcement.
1193 (1) A charitable trust may be created for the relief of poverty, the advancement of
1194 education or religion, the promotion of health, governmental or municipal purposes, or other
1195 purposes the achievement of which is beneficial to the community.
1196 (2) If the terms of a charitable trust do not indicate a particular charitable purpose or
1197 beneficiary, the trustee, if authorized by the terms of the trust, or if not, the court may select
1198 one or more charitable purposes or beneficiaries. The selection must be consistent with the
1199 settlor's intention to the extent it can be ascertained.
1200 (3) The settlor of a charitable trust, among others, may maintain a proceeding to
1201 enforce the trust.
1202 Section 39. Section 75-7-406 is repealed and reenacted to read:
1203 75-7-406. Creation of trust induced by fraud, duress, or undue influence.
1204
1205 influence.
1206 Section 40. Section 75-7-407 is repealed and reenacted to read:
1207 75-7-407. Evidence of oral trust.
1208 Except as required by a statute other than this chapter, a trust need not be evidenced by
1209 a trust instrument, but the creation of an oral trust and its terms may be established only by
1210 clear and convincing evidence.
1211 Section 41. Section 75-7-408 is repealed and reenacted to read:
1212 75-7-408. Trust for care of animal.
1213 A trust may be created to provide for the care of a pet or animal as provided in Section
1214 75-2-1001 .
1215 Section 42. Section 75-7-409 is repealed and reenacted to read:
1216 75-7-409. Noncharitable trust without ascertainable beneficiary.
1217 A trust may be created for a noncharitable purpose without a definite or definitely
1218 ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by
1219 the trustee as provided in Section 75-2-1001 .
1220 Section 43. Section 75-7-410 is repealed and reenacted to read:
1221 75-7-410. Modification or termination of trust -- Proceedings for approval or
1222 disapproval.
1223 (1) In addition to the methods of termination prescribed by Sections 75-7-411 through
1224 75-7-414 , a trust terminates to the extent the trust is revoked or expires pursuant to its terms,
1225 no purpose of the trust remains to be achieved, or the purposes of the trust have become
1226 unlawful, contrary to public policy, or impossible to achieve.
1227 (2) A proceeding to approve or disapprove a proposed modification or termination
1228 under Sections 75-7-411 through 75-7-416 , or trust combination or division under Section
1229 75-7-417 , may be commenced by a trustee or qualified beneficiary, and a proceeding to
1230 approve or disapprove a proposed modification or termination under Section 75-7-411 may be
1231 commenced by the settlor. The settlor of a charitable trust may maintain a proceeding to
1232 modify the trust under Section 75-7-413 .
1233 Section 44. Section 75-7-411 is repealed and reenacted to read:
1234 75-7-411. Modification or termination of noncharitable irrevocable trust by
1235
1236 (1) A noncharitable, irrevocable trust may be modified or terminated upon consent of
1237 the settlor and all beneficiaries, even if the modification or termination is inconsistent with a
1238 material purpose of the trust. A settlor's power to consent to a trust's termination may be
1239 exercised by an agent under a power of attorney only to the extent expressly authorized by the
1240 power of attorney or the terms of the trust, by the settlor's conservator with the approval of the
1241 court supervising the conservatorship if an agent is not so authorized, or by the settlor's
1242 guardian with the approval of the court supervising the guardianship if an agent is not so
1243 authorized and a conservator has not been appointed.
1244 (2) A noncharitable, irrevocable trust may be terminated upon consent of all of the
1245 beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any
1246 material purpose of the trust. A noncharitable, irrevocable trust may be modified upon consent
1247 of all of the beneficiaries if the court concludes that modification is not inconsistent with a
1248 material purpose of the trust.
1249 (3) A spendthrift provision in the terms of the trust is not presumed to constitute a
1250 material purpose of the trust.
1251 (4) Upon termination of a trust under Subsection (1) or (2), the trustee shall distribute
1252 the trust property as agreed by the beneficiaries.
1253 (5) If not all of the beneficiaries consent to a proposed modification or termination of
1254 the trust under Subsection (1) or (2), the modification or termination may be approved by the
1255 court if the court is satisfied that:
1256 (a) if all of the beneficiaries had consented, the trust could have been modified or
1257 terminated under this section; and
1258 (b) the interests of a beneficiary who does not consent will be adequately protected.
1259 Section 45. Section 75-7-412 is enacted to read:
1260 75-7-412. Modification or termination because of unanticipated circumstances or
1261 inability to administer trust effectively.
1262 (1) The court may modify the administrative or dispositive terms of a trust or terminate
1263 the trust if, because of circumstances not anticipated by the settlor, modification or termination
1264 will further the purposes of the trust. To the extent practicable, the modification must be made
1265 in accordance with the settlor's probable intention.
1266
1267 on its existing terms would be impracticable or wasteful or impair the trust's administration.
1268 (3) Upon termination of a trust under this section, the trustee shall distribute the trust
1269 property as directed by the court or otherwise in a manner consistent with the purposes of the
1270 trust.
1271 Section 46. Section 75-7-413 is enacted to read:
1272 75-7-413. Cy pres.
1273 (1) Except as otherwise provided in Subsection (2), if a particular charitable purpose
1274 becomes unlawful, impracticable, impossible to achieve, or wasteful:
1275 (a) the trust does not fail, in whole or in part;
1276 (b) the trust property does not revert to the settlor or the settlor's successors in interest;
1277 and
1278 (c) the court may apply cy pres to modify or terminate the trust by directing that the
1279 trust property be applied or distributed, in whole or in part, in a manner consistent with the
1280 settlor's charitable purposes.
1281 (2) A provision in the terms of a charitable trust that would result in distribution of the
1282 trust property to a noncharitable beneficiary prevails over the power of the court under
1283 Subsection (1) to apply cy pres to modify or terminate the trust only if, when the provision
1284 takes effect:
1285 (a) the trust property is to revert to the settlor and the settlor is still living; or
1286 (b) fewer than 21 years have elapsed since the date of the trust's creation.
1287 Section 47. Section 75-7-414 is enacted to read:
1288 75-7-414. Modification or termination of uneconomic trust.
1289 (1) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust
1290 property having a total value less than $100,000, may terminate the trust if the trustee
1291 concludes that the value of the trust property is insufficient to justify the cost of administration.
1292 (2) The court may modify or terminate a trust or remove the trustee and appoint a
1293 different trustee if it determines that the value of the trust property is insufficient to justify the
1294 cost of administration.
1295 (3) Upon termination of a trust under this section, the trustee shall distribute the trust
1296 property in a manner consistent with the purposes of the trust.
House Committee Amendments 2-24-2004 kh/ecm
1297
(4) This section does not apply to an easement for conservation or preservation.1297
1298 Section 48. Section 75-7-415 is enacted to read:
1299 75-7-415. Reformation to correct mistakes.
1300 The court may reform the terms of a trust, even if unambiguous, to conform the terms
1301 to the settlor's intention if it is proved by clear and convincing evidence that both the settlor's
1302 intent and the terms of the trust were affected by a mistake of fact or law, whether in
1303 expression or inducement.
1304 Section 49. Section 75-7-416 is enacted to read:
1305 75-7-416. Modification to achieve settlor's tax objectives.
1306 To achieve the settlor's tax objectives, the court may modify the terms of a trust in order
1307 to achieve the settlor's tax objectives. The court may provide that the modification has
1308 retroactive effect.
1309 Section 50. Section 75-7-417 is enacted to read:
1310 75-7-417. Combination and division of trusts.
1311 After notice to the qualified beneficiaries, a trustee may combine two or more trusts
1312 into a single trust or divide a trust into two or more separate trusts, if the result does not impair
1313 rights of any beneficiary or adversely affect achievement of the purposes of the trust.
1314 Section 51. Section 75-7-501 is repealed and reenacted to read:
1315
1316 75-7-501. Rights of beneficiary's creditor or assignee.
1317 To the extent a beneficiary's interest is not protected by a spendthrift provision H OR
1317a SECTION 26-6-14 h , the
1318 court may authorize a creditor or assignee of the beneficiary to reach the beneficiary's interest
1319 by attachment of present or future distributions to or for the benefit of the beneficiary or other
1320 means. The court may limit the award to relief as is appropriate under the circumstances.
1321 Section 52. Section 75-7-502 is enacted to read:
1322 75-7-502. Spendthrift provisions for beneficiaries other than the settlor.
1323 (1) A spendthrift provision for a beneficiary other than the settlor is valid only if it
1324 restrains both voluntary and involuntary transfer of a beneficiary's interest, even if the
1325 beneficiary is the trustee or cotrustee of the trust.
1326 (2) A term of a trust providing that the interest of a beneficiary other than the settlor is
1327 held subject to a "spendthrift trust," or words of similar import, is sufficient to restrain both
1328
1329 (3) A beneficiary may not transfer an interest in a trust in violation of a valid
1330 spendthrift provision and, except as otherwise provided in this part, a creditor or assignee of
1331 the beneficiary may not reach the interest or a distribution by the trustee before its receipt by
1332 the beneficiary.
1333 Section 53. Section 75-7-503 is enacted to read:
1334 75-7-503. Exceptions to spendthrift provision.
1335 (1) In this section, "child" includes any person for whom an order or judgment for child
1336 support has been entered in this or another state.
1337 (2) Even if a trust contains a spendthrift provision, a beneficiary's child who has a
1338 judgment or court order against the beneficiary for support or maintenance, or a judgment
1339 creditor who has provided services for the protection of a beneficiary's interest in the trust, may
1340 obtain from a court an order attaching present or future distributions to or for the benefit of the
1341 beneficiary.
1342 (3) A spendthrift provision is unenforceable against a claim of this state or the United
1343 States to the extent a statute of this state or federal law so provides.
1344 Section 54. Section 75-7-504 is enacted to read:
1345 75-7-504. Discretionary trusts -- Effect of standard.
1346 (1) In this section, "child" includes any person for whom an order or judgment for child
1347 support has been entered in this or another state.
1348 (2) Except as otherwise provided in Subsection (3), whether or not a trust contains a
1349 spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to
1350 the trustee's discretion, even if:
1351 (a) the discretion is expressed in the form of a standard of distribution; or
1352 (b) the trustee has abused the discretion.
1353 (3) To the extent a trustee has not complied with a standard of distribution or has
1354 abused a discretion:
1355 (a) a distribution may be ordered by the court to satisfy a judgment or court order
1356 against the beneficiary for support or maintenance of the beneficiary's child, spouse, or former
1357 spouse; and
1358 (b) the court shall direct the trustee to pay to the child, spouse, or former spouse such
1359
1360 have been required to distribute to or for the benefit of the beneficiary had the trustee complied
1361 with the standard or not abused the discretion.
1362 (4) This section does not limit the right of a beneficiary to maintain a judicial
1363 proceeding against a trustee for an abuse of discretion or failure to comply with a standard for
1364 distribution.
1365 Section 55. Section 75-7-505 is enacted to read:
1366 75-7-505. Creditor's claim against settlor.
1367 (1) Whether or not the terms of a trust contain a spendthrift provision, the following
1368 rules apply:
1369 (a) During the lifetime of the settlor, the property of a revocable trust is subject to the
1370 claims of the settlor's creditors. If a trust has more than one settlor, the amount the creditor or
1371 assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of
1372 the trust attributable to that settlor's contribution.
1373 (b) With respect to an irrevocable trust other than an irrevocable trust that meets the
1374 requirements of Section 25-6-14 , a creditor or assignee of the settlor may reach the maximum
1375 amount that can be distributed to or for the settlor's benefit. If the trust has more than one
1376 settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the
1377 settlor's interest in the portion of the trust attributable to that settlor's contribution.
1378 (c) After the death of a settlor, and subject to the settlor's right to direct the source from
1379 which liabilities will be paid, the property of a trust that was revocable at the settlor's death, but
1380 not property received by the trust as a result of the death of the settlor which is otherwise
1381 exempt from the claims of the settlor's creditors, is subject to claims of the settlor's creditors,
1382 costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal
1383 of remains, and statutory allowances to a surviving spouse and children to the extent the
1384 settlor's probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.
1385 (2) For purposes of this section:
1386 (a) during the period the power may be exercised, the holder of a power of withdrawal
1387 is treated in the same manner as the settlor of a revocable trust to the extent of the property
1388 subject to the power; and
1389 (b) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of
1390
1391 exceeds the greater of the amount specified in Subsection 2041(b)(2), 2514(e), or Section
1392 2503(b) of the Internal Revenue Code of 1986, in each case as in effect on May 1,2004.
1393 Section 56. Section 75-7-506 is enacted to read:
1394 75-7-506. Overdue distribution.
1395 Whether or not a trust contains a spendthrift provision, a creditor or assignee of a
1396 beneficiary may reach a mandatory distribution of income or principal, including a distribution
1397 upon termination of the trust, if the trustee has not made the distribution to the beneficiary
1398 within a reasonable time after the required distribution date.
1399 Section 57. Section 75-7-507 is enacted to read:
1400 75-7-507. Personal obligations of trustee.
1401 Trust property is not subject to personal obligations of the trustee, even if the trustee
1402 becomes insolvent or bankrupt.
1403 Section 58. Section 75-7-508 , which is renumbered from Section 75-7-308 is
1404 renumbered and amended to read:
1405 [
1406 (1) A trustee for an inter vivos revocable trust, upon the death of the settlor, may
1407 publish a notice to creditors once a week for three successive weeks in a newspaper of general
1408 circulation in the county where the settlor resided at the time of death, providing the trustee's
1409 name and address and notifying creditors of the deceased settlor to present their claims within
1410 three months after the date of the first publication of the notice or be forever barred.
1411 (2) A trustee may give written notice by mail or other delivery to any known creditor of
1412 the deceased settlor, notifying the creditor to present his claim within 90 days from the
1413 published notice if given as provided in Subsection (1) or within 60 days from the mailing or
1414 other delivery of the notice, whichever is later, or be forever barred. Written notice shall be the
1415 notice described in Subsection (1) or a similar notice.
1416 (3) The trustee shall not be liable to any creditor or to any successor of the deceased
1417 settlor for giving or failing to give notice under this section.
1418 Section 59. Section 75-7-509 , which is renumbered from Section 75-7-309 is
1419 renumbered and amended to read:
1420 [
1421
1422 settlor, including claims of the state and any subdivision of it, whether due or to become due,
1423 absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal
1424 basis, if not barred earlier by other statute of limitations, are barred against the deceased
1425 settlor's estate, the trustee, the trust estate, and the beneficiaries of the deceased settlor's trust,
1426 unless presented within the earlier of the following:
1427 (a) one year after the settlor's death; or
1428 (b) the time provided by Subsection [
1429 given actual notice, and where notice is published, within the time provided in Subsection
1430 [
1431 (2) In all events, claims barred by the nonclaim statute at the deceased settlor's
1432 domicile are also barred in this state.
1433 (3) All claims against a deceased settlor's estate or trust estate which arise at or after
1434 the death of the settlor, including claims of the state and any of its subdivisions, whether due or
1435 to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or
1436 other legal basis are barred against the deceased settlor's estate, the trustee, the trust estate, and
1437 the beneficiaries of the deceased settlor, unless presented as follows:
1438 (a) a claim based on a contract with the trustee within three months after performance
1439 by the trustee is due; or
1440 (b) any other claim within the later of three months after it arises, or the time specified
1441 in Subsection (1).
1442 (4) Nothing in this section affects or prevents:
1443 (a) any proceeding to enforce any mortgage, pledge, or other lien upon property of the
1444 deceased settlor's estate or the trust estate;
1445 (b) to the limits of the insurance protection only, any proceeding to establish liability of
1446 the deceased settlor or the trustee for which he is protected by liability insurance; or
1447 (c) collection of compensation for services rendered and reimbursement for expenses
1448 advanced by the trustee or by the attorney or accountant for the trustee of the trust estate.
1449 Section 60. Section 75-7-510 , which is renumbered from Section 75-7-310 is
1450 renumbered and amended to read:
1451 [
1452
1453 presented as follows:
1454 (a) The claimant may deliver or mail to the trustee, or the trustee's attorney of record, a
1455 written statement of the claim indicating its basis, the name and address of the claimant, and
1456 the amount claimed. The claim is considered presented upon the receipt of the written
1457 statement of claim by the trustee or the trustee's attorney of record. If a claim is not yet due, the
1458 date when it will become due shall be stated. If the claim is contingent or unliquidated, the
1459 nature of the uncertainty shall be stated. If the claim is secured, the security shall be described.
1460 Failure to describe correctly the security, the nature of any uncertainty, and the due date of a
1461 claim not yet due does not invalidate the presentation made.
1462 (b) The claimant may commence a proceeding against the trustee in any court where
1463 the trustee may be subjected to jurisdiction to obtain payment of the claim against the deceased
1464 settlor's estate or the trust estate, but the commencement of the proceeding must occur within
1465 the time limited for presenting the claim. No presentation of claim is required in regard to
1466 matters claimed in proceedings against the deceased settlor which were pending at the time of
1467 the deceased settlor's death.
1468 (2) If a claim is presented under Subsection (1)(a), no proceeding thereon may be
1469 commenced more than 60 days after the trustee has mailed a notice of disallowance; but, in the
1470 case of a claim which is not presently due or which is contingent or unliquidated, the trustee
1471 may consent to an extension of the 60-day period, or to avoid injustice, the court, on petition,
1472 may order an extension of the 60-day period, but in no event may the extension run beyond the
1473 applicable statute of limitations.
1474 Section 61. Section 75-7-511 , which is renumbered from Section 75-7-311 is
1475 renumbered and amended to read:
1476 [
1477 (1) If the applicable assets of the deceased settlor's estate or trust estate are insufficient
1478 to pay all claims in full, the trustee shall make payment in the following order:
1479 (a) reasonable funeral expenses;
1480 (b) costs and expenses of administration;
1481 (c) debts and taxes with preference under federal law;
1482 (d) reasonable and necessary medical and hospital expenses of the last illness of the
1483
1484 Section 26-19-13.5 applies;
1485 (e) debts and taxes with preference under other laws of this state; and
1486 (f) all other claims.
1487 (2) No preference shall be given in the payment of any claim over any other claim of
1488 the same class, and a claim due and payable shall not be entitled to a preference over claims not
1489 due.
1490 Section 62. Section 75-7-512 , which is renumbered from Section 75-7-312 is
1491 renumbered and amended to read:
1492 [
1493 (1) As to claims presented in the manner described in Section [
1494 within the time limit prescribed in Section [
1495 to any claimant stating that the claim has been allowed or disallowed. If, after allowing or
1496 disallowing a claim, the trustee changes the decision concerning the claim, the trustee shall
1497 notify the claimant. The trustee may not change a disallowance of a claim after the time for the
1498 claimant to file a petition for allowance or to commence a proceeding on the claim has expired
1499 and the claim has been barred. If the notice of disallowance warns the claimant of the
1500 impending bar, a claim which is disallowed in whole or in part by the trustee is barred so far as
1501 not allowed, unless the claimant seeks a court-ordered allowance by filing a petition for
1502 allowance in the court or by commencing a proceeding against the trustee not later than 60 days
1503 after the mailing of the notice of disallowance or partial allowance. If the trustee fails to mail
1504 notice to a claimant of action on the claim within 60 days after the time for original
1505 presentation of the claim has expired, this failure has the effect of a notice of allowance.
1506 (2) Upon the petition of the trustee or a claimant in a proceeding for this purpose, the
1507 court may order any claim presented to the trustee or trustee's attorney in a timely manner and
1508 not barred by Subsection (1) to be allowed in whole or in part. Notice of this proceeding shall
1509 be given to the claimant, the trustee, and those other persons interested in the trust estate as the
1510 court may direct by order at the time the proceeding is commenced.
1511 (3) A judgment in a proceeding in another court against the trustee to enforce a claim
1512 against a deceased settlor's estate is a court-ordered allowance of the claim.
1513 (4) Unless otherwise provided in any judgment in another court entered against a
1514
1515 after the deceased settlor's date of death unless based on a contract making a provision for
1516 interest, in which case they bear interest in accordance with that provision.
1517 Section 63. Section 75-7-513 , which is renumbered from Section 75-7-313 is
1518 renumbered and amended to read:
1519 [
1520 (1) Upon the expiration of the earliest of the time limitations provided in Section
1521 [
1522 against the deceased settlor's estate in the order of priority prescribed, for claims already
1523 presented which have not yet been allowed or whose allowance has been appealed, and for
1524 unbarred claims which may yet be presented, including costs and expenses of administration.
1525 By petition to the court in a proceeding for that purpose, a claimant whose claim has been
1526 allowed but not paid as provided in this section may secure an order directing the trustee to pay
1527 the claim to the extent that funds of the deceased settlor's estate or trust estate are available for
1528 the payment.
1529 (2) The trustee at any time may pay any just claim that has not been barred, with or
1530 without formal presentation, but he shall be personally liable to any other claimant whose claim
1531 is allowed and who is injured by the payment if:
1532 (a) the payment was made before the expiration of the time limit stated in Subsection
1533 (1) and the trustee failed to require the payee to give adequate security for the refund of any of
1534 the payment necessary to pay other claimants; or
1535 (b) the payment was made, due to the negligence or willful fault of the trustee, in a way
1536 that deprived the injured claimant of his priority.
1537 Section 64. Section 75-7-514 , which is renumbered from Section 75-7-314 is
1538 renumbered and amended to read:
1539 [
1540 Payment of a secured claim shall be upon the basis of the amount allowed if the creditor
1541 surrenders his security; but otherwise payment shall be based upon one of the following:
1542 (1) if the creditor exhausts his security before receiving payment, unless precluded by
1543 another provision of the law, upon the amount of the claim allowed less the fair value of the
1544 security; or
1545
1546 upon the amount of the claim allowed less the value of the security determined by converting it
1547 into money according to the terms of the agreement pursuant to which the security was
1548 delivered to the creditor, or by the creditor and trustee by agreement, arbitration, compromise,
1549 or litigation.
1550 Section 65. Section 75-7-515 , which is renumbered from Section 75-7-315 is
1551 renumbered and amended to read:
1552 [
1553 (1) If a claim which will become due at a future time or a contingent or unliquidated
1554 claim becomes due or certain before the distribution of the trust estate, and if the claim has
1555 been allowed or established by a proceeding, it shall be paid in the same manner as presently
1556 due and absolute claims of the same class.
1557 (2) In other cases the trustee, or, on petition of the trustee or the claimant in a special
1558 proceeding for that purpose, the court, may provide for payment as follows:
1559 (a) if the claimant consents, he may be paid the present or agreed value of the claim,
1560 taking any uncertainty into account; or
1561 (b) arrangement for future payment, or possible payment, on the happening of the
1562 contingency or on liquidation may be made by creating a trust, giving a mortgage, obtaining a
1563 bond or security from a beneficiary, or otherwise.
1564 Section 66. Section 75-7-516 , which is renumbered from Section 75-7-316 is
1565 renumbered and amended to read:
1566 [
1567 (1) In allowing a claim, the trustee may deduct any counterclaim which the deceased
1568 settlor's estate has against the claimant. In determining a claim against a deceased settlor's
1569 estate, a court shall reduce the amount allowed by the amount of any counterclaims and, if the
1570 counterclaims exceed the claim, render a judgment against the claimant in the amount of the
1571 excess.
1572 (2) A counterclaim, liquidated or unliquidated, may arise from a transaction other than
1573 that upon which the claim is based.
1574 (3) A counterclaim may give rise to relief exceeding in amount or different in kind
1575 from that sought in the claim.
1576
1577 renumbered and amended to read:
1578 [
1579 (1) No execution may issue upon nor may any levy be made against any property of the
1580 deceased settlor's estate under any judgment against a deceased settlor or a trustee.
1581 (2) This section may not be construed to prevent the enforcement of mortgages,
1582 pledges, or liens upon real or personal property in an appropriate proceeding.
1583 Section 68. Section 75-7-518 , which is renumbered from Section 75-7-318 is
1584 renumbered and amended to read:
1585 [
1586 When a claim against a deceased settlor's estate has been presented in any manner, the
1587 trustee may, if it appears in the best interest of the deceased settlor's estate, compromise the
1588 claim, whether due or not due, absolute or contingent, liquidated or unliquidated.
1589 Section 69. Section 75-7-519 , which is renumbered from Section 75-7-319 is
1590 renumbered and amended to read:
1591 [
1592 (1) If any assets of the deceased settlor's estate are encumbered by mortgage, pledge,
1593 lien, or other security interest, the trustee may pay the encumbrance or any part thereof, renew
1594 or extend any obligation secured by the encumbrance, or convey or transfer the assets to the
1595 creditor in satisfaction of his lien, in whole or in part, whether or not the holder of the
1596 encumbrance has presented a claim, if it appears to be in the best interest of the deceased
1597 settlor's estate.
1598 (2) Payment of an encumbrance does not increase the share of the beneficiary entitled
1599 to the encumbered assets unless the beneficiary is entitled to exoneration or unless the terms of
1600 the deceased settlor's trust, under which the beneficiary is entitled to the encumbered assets,
1601 provides otherwise.
1602 Section 70. Section 75-7-604 is enacted to read:
1603
1604 75-7-604. Capacity of settlor of revocable trust.
1605 The capacity required to create, amend, revoke, or add property to a revocable trust, or
1606 to direct the actions of the trustee of a revocable trust, is the same as that required to make a
1607
1608 Section 71. Section 75-7-605 is enacted to read:
1609 75-7-605. Revocation or amendment of revocable trust.
1610 (1) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor
1611 may revoke or amend the trust. This Subsection (1) does not apply to a trust created under an
1612 instrument executed before May 1, 2004.
1613 (2) If a revocable trust is created or funded by more than one settlor:
1614 (a) to the extent the trust consists of community property, the trust may be revoked by
1615 either spouse acting alone but may be amended only by joint action of both spouses; and
1616 (b) to the extent the trust consists of property other than community property, each
1617 settlor may revoke or amend the trust with regard to the portion of the trust property
1618 attributable to that settlor's contribution.
1619 (3) The settlor may revoke or amend a revocable trust:
1620 (a) by substantially complying with a method provided in the terms of the trust; or
1621 (b) if the terms of the trust do not provide a method or the method provided in the
1622 terms is not expressly made exclusive, by:
1623 (i) executing a later will or codicil that expressly refers to the trust or specifically
1624 devises property that would otherwise have passed according to the terms of the trust; or
1625 (ii) any other method manifesting clear and convincing evidence of the settlor's intent.
1626 (4) Upon revocation of a revocable trust, the trustee shall deliver the trust property as
1627 the settlor directs.
1628 (5) A settlor's powers with respect to revocation, amendment, or distribution of trust
1629 property may be exercised by an agent under a power of attorney only to the extent expressly
1630 authorized by the terms of the trust or the power.
1631 (6) A conservator of the settlor or, if no conservator has been appointed, a guardian of
1632 the settlor may exercise a settlor's powers with respect to revocation, amendment, or
1633 distribution of trust property only with the approval of the court supervising the
1634 conservatorship or guardianship.
1635 (7) A trustee who does not know that a trust has been revoked or amended is not liable
1636 to the settlor or settlor's successors in interest for distributions made and other actions taken on
1637 the assumption that the trust had not been amended or revoked.
1638
1639 75-7-606. Settlor's powers -- Powers of withdrawal.
1640 (1) While a trust is revocable and the settlor has capacity to revoke the trust, rights of
1641 the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively
1642 to, the settlor.
1643 (2) If a revocable trust has more than one settlor, the duties of the trustee are owed to
1644 all of the settlors having capacity to revoke the trust.
1645 (3) During the period the power may be exercised, the holder of a power of withdrawal
1646 has the rights of a settlor of a revocable trust under this section to the extent of the property
1647 subject to the power.
1648 Section 73. Section 75-7-607 is enacted to read:
1649 75-7-607. Limitation on action contesting validity of revocable trust --
1650 Distribution of trust property.
1651 (1) A person shall commence a judicial proceeding to contest the validity of a trust that
1652 was revocable at the settlor's death within the earlier of:
1653 (a) three years after the settlor's death; or
1654 (b) 90 days after the trustee sent the person a copy of the trust instrument and a notice
1655 informing the person of the trust's existence, of the trustee's name and address, and of the time
1656 allowed for commencing a proceeding.
1657 (2) Upon the death of the settlor of a trust that was revocable at the settlor's death, the
1658 trustee may proceed to distribute the trust property in accordance with the terms of the trust.
1659 The trustee is not subject to liability for doing so unless:
1660 (a) the trustee knows of a pending judicial proceeding contesting the validity of the
1661 trust; or
1662 (b) a potential contestant has notified the trustee of a possible judicial proceeding to
1663 contest the trust and a judicial proceeding is commenced within 60 days after the contestant
1664 sent the notification.
1665 (3) With respect to a potential contest, the trustee is only liable for actions taken two or
1666 more business days after the trustee has actual receipt of written notice from a potential
1667 contestant. The written notice shall include the name of the settlor or of the trust, the name of
1668 the potential contestant, and a description of the basis for the potential contest. The written
1669
1670 registered or certified mail, return receipt requested, or served upon the trustee in the same
1671 manner as a summons in a civil action. Any other form or service of notice is not sufficient to
1672 impose liability on the trustee for actions taken pursuant to the terms of the trust.
1673 (4) A beneficiary of a trust that is determined to have been invalid is liable to return
1674 any distribution received.
1675 Section 74. Section 75-7-701 is enacted to read:
1676
1677 75-7-701. Accepting or declining trusteeship.
1678 (1) Except as otherwise provided in Subsection (3), a person designated as trustee
1679 accepts the trusteeship:
1680 (a) by substantially complying with a method of acceptance provided in the terms of
1681 the trust; or
1682 (b) if the terms of the trust do not provide a method or the method provided in the
1683 terms is not expressly made exclusive, by accepting delivery of the trust property, exercising
1684 powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
1685 (2) A person designated as trustee who has not yet accepted the trusteeship may reject
1686 the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable
1687 time after knowing of the designation is considered to have rejected the trusteeship.
1688 (3) A person designated as trustee, without accepting the trusteeship, may:
1689 (a) act to preserve the trust property if, within a reasonable time after acting, the person
1690 sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to a
1691 qualified beneficiary; and
1692 (b) inspect or investigate trust property to determine potential liability under
1693 environmental or other law or for any other purpose.
1694 Section 75. Section 75-7-702 is enacted to read:
1695 75-7-702. Trustee's bond.
1696 (1) A trustee shall give bond to secure performance of the trustee's duties only if the
1697 court finds that a bond is needed to protect the interests of the beneficiaries or is required by
1698 the terms of the trust and the court has not dispensed with the requirement.
1699 (2) The court may specify the amount of a bond, its liabilities, and whether sureties are
1700
1701 (3) A regulated financial service institution qualified to do trust business in this state
1702 need not give bond, unless required by the terms of the trust. The cost of any bond shall be
1703 borne by the trust.
1704 (4) Unless otherwise directed by the court, the cost of the bond is charged to the trust.
1705 Section 76. Section 75-7-703 is enacted to read:
1706 75-7-703. Cotrustees.
1707 (1) Cotrustees who are unable to reach a unanimous decision may act by majority
1708 decision.
1709 (2) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the
1710 trust.
1711 (3) A cotrustee must participate in the performance of a trustee's function unless the
1712 cotrustee is unavailable to perform the function because of absence, illness, disqualification
1713 under other law, or other temporary incapacity, or the cotrustee has properly delegated the
1714 performance of the function to another trustee.
1715 (4) If a cotrustee is unavailable to perform duties because of absence, illness,
1716 disqualification under other law, or other temporary incapacity, or if a cotrustee fails or refuses
1717 to act after reasonable notice, and prompt action is necessary to achieve the purposes of the
1718 trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the
1719 remaining cotrustees may act for the trust.
1720 (5) A trustee may not delegate to a cotrustee the performance of a function the settlor
1721 intended the trustees to perform jointly as determined from the terms of the trust. If one of the
1722 cotrustees is a regulated financial service institution qualified to do trust business in this state
1723 and the remaining cotrustees are individuals, a delegation by the individual cotrustees to the
1724 regulated financial service institution of the performance of trust investment functions shall be
1725 presumed to be in accordance with the settlor's intent unless the terms of the trust specifically
1726 provide otherwise. Unless a delegation was irrevocable, a trustee may revoke a delegation
1727 previously made.
1728 (6) Except as otherwise provided in Subsection (7), a trustee who does not join in an
1729 action of another trustee is not liable for the action.
1730 (7) Each trustee shall exercise reasonable care to:
1731
1732 (b) compel a cotrustee to redress a serious breach of trust.
1733 (8) A dissenting trustee who joins in an action at the direction of the majority of the
1734 trustees and who notified any cotrustee of the dissent at or before the time of the action is not
1735 liable for the action unless the action is a serious breach of trust.
1736 Section 77. Section 75-7-704 is enacted to read:
1737 75-7-704. Vacancy in trusteeship -- Appointment of successor.
1738 (1) A vacancy in a trusteeship occurs if:
1739 (a) a person designated as trustee rejects the trusteeship;
1740 (b) a person designated as trustee cannot be identified or does not exist;
1741 (c) a trustee resigns;
1742 (d) a trustee is disqualified or removed;
1743 (e) a trustee dies; or
1744 (f) a guardian or conservator is appointed for an individual serving as trustee, unless
1745 otherwise provided in the trust.
1746 (2) If one or more cotrustees remain in office, a vacancy in a trusteeship need not be
1747 filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.
1748 (3) A vacancy in a trusteeship required to be filled must be filled in the following order
1749 of priority:
1750 (a) by a person designated in the terms of the trust to act as successor trustee;
1751 (b) by a person appointed by unanimous agreement of the qualified beneficiaries; or
1752 (c) by a person appointed by the court.
1753 (4) A vacancy in a trusteeship of a charitable trust that is required to be filled must be
1754 filled in the following order of priority:
1755 (a) by a person designated in the terms of the trust to act as successor trustee;
1756 (b) by a person selected by the charitable organizations expressly designated to receive
1757 distributions under the terms of the trust if the attorney general concurs in the selection; or
1758 (c) by a person appointed by the court.
1759 (5) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court
1760 may appoint an additional trustee or special fiduciary whenever the court considers the
1761 appointment necessary for the administration of the trust.
1762
1763 75-7-705. Resignation of trustee.
1764 (1) A trustee may resign:
1765 (a) upon at least 30 days' notice to the qualified beneficiaries, the settlor, if living, and
1766 all cotrustees; or
1767 (b) with the approval of the court.
1768 (2) In approving a resignation, the court may issue orders and impose conditions
1769 reasonably necessary for the protection of the trust property.
1770 (3) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or
1771 omissions of the trustee is not discharged or affected by the trustee's resignation.
1772 Section 79. Section 75-7-706 is enacted to read:
1773 75-7-706. Removal of trustee.
1774 (1) The settlor, a cotrustee, or a qualified beneficiary may request the court to remove a
1775 trustee, or a trustee may be removed by the court on its own initiative.
1776 (2) The court may remove a trustee if:
1777 (a) the trustee has committed a serious breach of trust;
1778 (b) lack of cooperation among cotrustees substantially impairs the administration of the
1779 trust;
1780 (c) because of unfitness, unwillingness, or persistent failure of the trustee to administer
1781 the trust effectively, the court determines that removal of the trustee best serves the interests of
1782 the beneficiaries; or
1783 (d) there has been a substantial change of circumstances or removal is requested by all
1784 of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests
1785 of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a
1786 suitable cotrustee or successor trustee is available.
1787 (3) Pending a final decision on a request to remove a trustee, or in lieu of or in addition
1788 to removing a trustee, the court may order appropriate relief under Subsection 75-7-1001 (2)
1789 necessary to protect the trust property or the interests of the beneficiaries.
1790 Section 80. Section 75-7-707 is enacted to read:
1791 75-7-707. Delivery of property by former trustee.
1792 (1) Unless a cotrustee remains in office or the court otherwise orders, and until the trust
House Committee Amendments 2-24-2004 kh/ecm
1793
property is delivered to a successor trustee or other person entitled to it, a trustee who has1793
1794 resigned or been removed has the duties of a trustee and the powers necessary to protect the
1795 trust property.
1796 (2) A trustee who has resigned or been removed shall proceed expeditiously to deliver
1797 the trust property within the trustee's possession to the cotrustee, successor trustee, or other
1798 person entitled to it.
1799 Section 81. Section 75-7-708 is enacted to read:
1800 75-7-708. Compensation of trustee.
1801 H [
1802 to compensation that is reasonable under the circumstances.
1803 H [
1804 compensated as specified, but the court may allow more or less compensation if:
1805 (a) the duties of the trustee are substantially different from those contemplated when
1806 the trust was created; or
1807 (b) the compensation specified by the terms of the trust would be unreasonably low or
1808 high.
1809 Section 82. Section 75-7-709 is enacted to read:
1810 75-7-709. Reimbursement of expenses.
1811 (1) A trustee is entitled to be reimbursed out of the trust property, with interest as
1812 appropriate, for:
1813 (a) expenses that were properly incurred in the administration of the trust; and
1814 (b) to the extent necessary to prevent unjust enrichment of the trust, expenses that were
1815 not properly incurred in the administration of the trust.
1816 (2) An advance by the trustee of money for the protection of the trust gives rise to a
1817 lien against trust property to secure reimbursement with reasonable interest.
1818 Section 83. Section 75-7-801 is enacted to read:
1819
1820 75-7-801. Duty to administer trust.
1821 Upon acceptance of a trusteeship, the trustee shall administer the trust expeditiously
1822 and in good faith, in accordance with its terms and purposes and the interests of the
1823 beneficiaries, and in accordance with this chapter.
1824
1825 75-7-802. Duty of loyalty.
1826 (1) A trustee shall administer the trust solely in the interests of the beneficiaries.
1827 (2) Subject to the rights of persons dealing with or assisting the trustee as provided in
1828 Section 75-7-1012 , a sale, encumbrance, or other transaction involving the investment or
1829 management of trust property entered into by the trustee for the trustee's own personal account
1830 or which is otherwise affected by a conflict between the trustee's fiduciary and personal
1831 interests is voidable by a beneficiary affected by the transaction unless:
1832 (a) the transaction was authorized by the terms of the trust;
1833 (b) the transaction was approved by the court;
1834 (c) the beneficiary did not commence a judicial proceeding within the time allowed by
1835 Section 75-7-1005 ;
1836 (d) the beneficiary consented to the trustee's conduct, ratified the transaction, or
1837 released the trustee in compliance with Section 75-7-1009 ; or
1838 (e) the transaction involves a contract entered into or claim acquired by the trustee
1839 before the person became or contemplated becoming trustee.
1840 (3) A sale, encumbrance, or other transaction involving the investment or management
1841 of trust property is presumed to be affected by a conflict between personal and fiduciary
1842 interests if it is entered into by the trustee with:
1843 (a) the trustee's spouse;
1844 (b) the trustee's descendants, siblings, parents, or their spouses;
1845 (c) an agent of the trustee, including but not limited to an attorney, accountant, or
1846 financial advisor; or
1847 (d) a corporation or other person or enterprise in which the trustee, or a person that
1848 owns a significant interest in the trustee, has an interest that might affect the trustee's best
1849 judgment.
1850 (4) A transaction between a trustee and a beneficiary that does not concern trust
1851 property but that occurs during the existence of the trust or while the trustee retains significant
1852 influence over the beneficiary and from which the trustee obtains an advantage is voidable by
1853 the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.
1854 (5) A transaction not concerning trust property in which the trustee engages in the
House Committee Amendments 2-24-2004 kh/ecm
1855
trustee's individual capacity involves a conflict between personal and fiduciary interests if the1855
1856 transaction concerns an opportunity properly belonging to the trust.
1857 (6) An investment by a trustee in securities of an investment company or investment
1858 trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is
1859 not presumed to be affected by a conflict between personal and fiduciary interests if the
1860 investment complies with the prudent investor rule of Section 75-7-901 . The trustee may be
1861 compensated by the investment company or investment trust for providing those services out of
1862 fees charged to the trust H [
1863 Section 75-7-811 to receive a copy of the trustee's annual report, disclosing the existence of the
1864 compensation, the reasons for the compensation, and how the amount was calculated
1865 (7) In voting shares of stock or in exercising powers of control over similar interests in
1866 other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the
1867 trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or
1868 appoint directors or other managers who will manage the corporation or enterprise in the best
1869 interests of the beneficiaries.
1870 (8) This section does not preclude the following transactions H [
1871 beneficiaries
1872 (a) an agreement between a trustee and a beneficiary relating to the appointment or
1873 compensation of the trustee;
1874 (b) payment of reasonable compensation to the trustee;
1875 (c) a transaction between a trust and another trust, decedent's estate, conservatorship, or
1876 guardianship of which the trustee is a fiduciary or in which a beneficiary has an interest;
1877 (d) a deposit of trust money in a regulated financial service institution operated by the
1878 trustee; or
1879 (e) an advance by the trustee of money for the protection of the trust H ;
1879a (f) COLLECT, HOLD, AND RETAIN TRUST ASSETS RECEIVED FROM A TRUSTOR UNTIL, IN
1879b THE JUDGMENT OF THE TRUSTEE, DISPOSITION OF THE ASSETS SHOULD BE MADE. THE
1879c ASSETS MAY BE RETAINED EVEN THOUGH THEY INCLUDE AN ASSET IN WHICH THE TRUSTEE IS
1879d PERSONALLY INTERESTED;
1879e (g) ACQUIRE AN UNDIVIDED INTEREST IN A TRUST ASSET IN WHICH THE TRUSTEE, IN ANY
1879f TRUST CAPACITY, HOLDS AN UNDIVIDED INTEREST;
1879g (h) BORROW MONEY TO BE REPAID FROM TRUST ASSETS OR OTHERWISE;
1879h (i) ADVANCE MONEY TO BE REPAID FROM TRUST ASSETS OR OTHERWISE; OR
1879i (j) EMPLOY PERSONS, INCLUDING ATTORNEYS, AUDITORS, INVESTMENT ADVISERS, OR
1879j AGENTS, EVEN IF THEY ARE ASSOCIATED WITH THE TRUSTEE, TO ADVISE OR ASSIST THE
1879k TRUSTEE IN THE PERFORMANCE OF HIS ADMINISTRATIVE DUTIES; OR h
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1879l
H
(ii) ACT WITHOUT INDEPENDENT INVESTIGATION UPON THEIR RECOMMENDATIONS; AND1879l
1879m (iii) INSTEAD OF ACTING PERSONALLY, EMPLOY ONE OR MORE AGENTS TO PERFORM
1879n ANY ACT OF ADMINISTRATION, WHETHER OR NOT DISCRETIONARY;
1879o (k) IF A GOVERNING INSTRUMENT OR ORDER REQUIRES OR AUTHORIZES INVESTMENT IN
1879p UNITED STATES GOVERNMENT OBLIGATIONS, A TRUSTEE MAY INVEST IN THOSE OBLIGATIONS,
1879q EITHER DIRECTLY OR IN THE FORM OF SECURITIES OR OTHER INTERESTS, IN ANY OPEN-END OR
1879r CLOSED-END MANAGEMENT TYPE INVESTMENT COMPANY OR INVESTMENT TRUST REGISTERED
1879s UNDER THE PROVISIONS OF THE INVESTMENT COMPANY ACT OF 1940, 15 U.S.C. SECTIONS 80a-1
1879t THROUGH 80a-64 IF:
1879u (i) THE PORTFOLIO OF THE INVESTMENT COMPANY OR INVESTMENT TRUST IS LIMITED TO
1879v UNITED STATES GOVERNMENT OBLIGATIONS, AND REPURCHASE AGREEMENTS ARE FULLY
1879w COLLATERALIZED BY UNITED STATES GOVERNMENT OBLIGATIONS; AND
1879x (ii) THE INVESTMENT COMPANY OR INVESTMENT TRUST TAKES DELIVERY OF THE
1879y COLLATERAL FOR ANY REPURCHASE AGREEMENT EITHER DIRECTLY OR THROUGH AN
1879z AUTHORIZED CUSTODIAN h .
1880 (9) The court may appoint a special fiduciary to make a decision with respect to any
1881 proposed transaction that might violate this section if entered into by the trustee.
1882 Section 85. Section 75-7-803 is enacted to read:
1883 75-7-803. Impartiality.
1884 If a trust has two or more beneficiaries, the trustee shall act impartially in investing,
1885 managing, and distributing the trust property, giving due regard to the beneficiaries' respective
1886
1887 Section 86. Section 75-7-804 is enacted to read:
1888 75-7-804. Prudent administration.
1889 A trustee shall administer the trust as a prudent person would, by considering the
1890 purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying
1891 this standard, the trustee shall exercise reasonable care, skill, and caution.
1892 Section 87. Section 75-7-805 is enacted to read:
1893 75-7-805. Costs of administration.
1894 In administering a trust, the trustee may incur only costs that are reasonable in relation
1895 to the trust property, the purposes of the trust, and the skills of the trustee.
1896 Section 88. Section 75-7-806 is enacted to read:
1897 75-7-806. Trustee's skills.
1898 A trustee who is named trustee in reliance upon the trustee's representation that the
1899 trustee has special skills or expertise, shall use those special skills or expertise.
1900 Section 89. Section 75-7-807 is enacted to read:
1901 75-7-807. Control and protection of trust property.
1902 A trustee shall take reasonable steps to take control of and protect the trust property.
1903 Section 90. Section 75-7-808 is enacted to read:
1904 75-7-808. Recordkeeping and identification of trust property.
1905 (1) A trustee shall keep adequate records of the administration of the trust.
1906 (2) A trustee shall keep trust property separate from the trustee's own property.
1907 (3) Except as otherwise provided in Subsection (4), a trustee shall cause the trust
1908 property to be designated so that the interest of the trust, to the extent feasible, appears in
1909 records maintained by a party other than a trustee or beneficiary.
1910 (4) If the trustee maintains records clearly indicating the respective interests, a trustee
1911 may invest as a whole the property of two or more separate trusts.
1912 Section 91. Section 75-7-809 is enacted to read:
1913 75-7-809. Enforcement and defense of claims.
1914 A trustee shall take reasonable steps to enforce claims of the trust and to defend claims
1915 against the trust.
1916 Section 92. Section 75-7-810 is enacted to read:
House Committee Amendments 2-24-2004 kh/ecm
1917
75-7-810. Collecting trust property.1917
1918 A trustee shall take reasonable steps to compel a former trustee or other person to
1919 deliver trust property to the trustee, and to redress a breach of trust known to the trustee to have
1920 been committed by a former trustee, unless the terms of the trust provide otherwise.
1921 Section 93. Section 75-7-811 is enacted to read:
1922 75-7-811. Duty to inform and report.
1923 (1) Except to the extent the terms of the trust provide otherwise, a trustee shall keep the
1924 qualified beneficiaries of the trust reasonably informed about the administration of the trust and
1925 of the material facts necessary for them to protect their interests. Unless unreasonable under
1926 the circumstances, and unless otherwise provided by the terms of the trust a trustee shall
1927 promptly respond to a qualified beneficiary's request for information related to the
1928 administration of the trust.
1929 (2) Except to the extent the terms of the trust provide otherwise, a trustee:
1930 (a) upon request of a qualified beneficiary, shall promptly furnish to the beneficiary a
1931 copy of the portions of the trust instrument which describe or affect the beneficiary's interest;
1932 (b) within 60 days after accepting a trusteeship, shall notify the qualified beneficiaries
1933 of the acceptance and of the trustee's name, address, and telephone number;
1934 (c) within 60 days after the date the trustee acquires knowledge of the creation of an
1935 irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has
1936 become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified
1937 beneficiaries of the trust's existence, of the identity of the settlor or settlors, of the right to
1938 request a copy of the trust instrument, and of the right to a trustee's report as provided in
1939 Subsection (3); and
1940 (d) shall notify the qualified beneficiaries in advance of any change in the method or
1941 rate of the trustee's compensation.
1942 (3) A trustee shall send to the H [
1943 principal, and, except to the extent the terms of the trust provide otherwise, to other
1944 beneficiaries who request it, at least annually and at the termination of the trust, a report of the
1945 trust property, liabilities, receipts, and disbursements, including the amount of the trustee's
1946 compensation or a fee schedule or other writing showing how the trustee's compensation was
1947 determined, a listing of the trust assets and, if feasible, their respective market values. Upon a
House Committee Amendments 2-24-2004 kh/ecm
1948
vacancy in a trusteeship, unless a cotrustee remains in office, a report must be sent to the1948
1949 qualified beneficiaries by the former trustee, unless the terms of the trust provide otherwise. A
1950 personal representative, conservator, or guardian may send the qualified beneficiaries a report
1951 on behalf of a deceased or incapacitated trustee.
1952 (4) A H QUALIFIED h beneficiary may waive the right to a trustee's report or other
1952a information
1953 otherwise required to be furnished under this section. A beneficiary, with respect to future
1954 reports and other information, may withdraw a waiver previously given.
1955 Section 94. Section 75-7-812 is enacted to read:
1956 75-7-812. Discretionary powers -- Tax savings.
1957 (1) Notwithstanding the breadth of discretion granted to a trustee in the terms of the
1958 trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the trustee shall
1959 exercise a discretionary power in good faith and in accordance with the terms and purposes of
1960 the trust and the interests of the beneficiaries.
1961 (2) Subject to Subsection (4), and unless the terms of the trust expressly indicate that a
1962 rule in this section does not apply:
1963 (a) a person other than a settlor who is a beneficiary and trustee of a trust that confers
1964 on the trustee a power to make discretionary distributions to or for the trustee's personal benefit
1965 may exercise the power only in accordance with an ascertainable standard relating to the
1966 trustee's individual health, education, support, or maintenance within the meaning of
1967 Subsection 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code of 1986, as in effect on
1968 May 1, 2004; and
1969 (b) a trustee may not exercise a power to make discretionary distributions to satisfy a
1970 legal obligation of support that the trustee personally owes another person.
1971 (3) A power whose exercise is limited or prohibited by Subsection (2) may be
1972 exercised by a majority of the remaining trustees whose exercise of the power is not so limited
1973 or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a
1974 special fiduciary with authority to exercise the power.
1975 (4) Subsection (2) does not apply to:
1976 (a) a power held by the settlor's spouse who is the trustee of a trust for which a marital
1977 deduction, as defined in Subsection 2056(b)(5) or 2523(e) of the Internal Revenue Code of
1978 1986, as in effect on May 1, 2004, was previously allowed;
1979
1980 or
1981 (c) a trust if contributions to the trust qualify for the annual exclusion under Subsection
1982 2503(c) of the Internal Revenue Code of 1986, as in effect on May 1, 2004.
1983 Section 95. Section 75-7-813 is enacted to read:
1984 75-7-813. General powers of trustee.
1985 (1) A trustee, without authorization by the court, may exercise:
1986 (a) powers conferred by the terms of the trust; or
1987 (b) except as limited by the terms of the trust:
1988 (i) all powers over the trust property which an unmarried competent owner has over
1989 individually owned property;
1990 (ii) any other powers appropriate to achieve the proper investment, management, and
1991 distribution of the trust property; and
1992 (iii) any other powers conferred by this chapter.
1993 (2) The exercise of a power is subject to the fiduciary duties prescribed by this part.
1994 Section 96. Section 75-7-814 is enacted to read:
1995 75-7-814. Specific powers of trustee.
1996 Without limiting the authority conferred by Section 75-7-813 , a trustee may:
1997 (1) collect trust property and accept or reject additions to the trust property from a
1998 settlor or any other person;
1999 (2) acquire or sell property, for cash or on credit, at public or private sale;
2000 (3) exchange, partition, or otherwise change the character of trust property;
2001 (4) deposit trust money in an account in a regulated financial service institution;
2002 (5) borrow money, with or without security from any financial institution, including a
2003 financial institution that is serving as a trustee or one of its affiliates, and mortgage or pledge
2004 trust property for a period within or extending beyond the duration of the trust;
2005 (6) with respect to an interest in a proprietorship, partnership, limited liability
2006 company, business trust, corporation, or other form of business or enterprise, continue the
2007 business or other enterprise and take any action that may be taken by shareholders, members, or
2008 property owners, including merging, dissolving, or otherwise changing the form of business
2009 organization or contributing additional capital;
2010
2011 including the right to:
2012 (a) vote, or give proxies to vote, with or without power of substitution, or enter into or
2013 continue a voting trust agreement;
2014 (b) hold a security in the name of a nominee or in other form without disclosure of the
2015 trust so that title may pass by delivery;
2016 (c) pay calls, assessments, and other sums chargeable or accruing against the securities,
2017 and sell or exercise stock subscription or conversion rights; and
2018 (d) deposit the securities with a depositary or other regulated financial service
2019 institution;
2020 (8) with respect to an interest in real property, construct, or make ordinary or
2021 extraordinary repairs to, alterations to, or improvements in, buildings or other structures,
2022 demolish improvements, raze existing or erect new party walls or buildings, subdivide or
2023 develop land, dedicate land to public use or grant public or private easements, and make or
2024 vacate plats and adjust boundaries;
2025 (9) enter into a lease for any purpose as lessor or lessee, including a lease or other
2026 arrangement for exploration and removal of natural resources, with or without the option to
2027 purchase or renew, for a period within or extending beyond the duration of the trust;
2028 (10) grant an option involving a sale, lease, or other disposition of trust property or
2029 acquire an option for the acquisition of property, including an option exercisable beyond the
2030 duration of the trust, and exercise an option so acquired;
2031 (11) insure the property of the trust against damage or loss and insure the trustee, the
2032 trustee's agents, and beneficiaries against liability arising from the administration of the trust;
2033 (12) abandon or decline to administer property of no value or of insufficient value to
2034 justify its collection or continued administration;
2035 (13) with respect to possible liability for violation of environmental law:
2036 (a) inspect or investigate property the trustee holds or has been asked to hold, or
2037 property owned or operated by an organization in which the trustee holds or has been asked to
2038 hold an interest, for the purpose of determining the application of environmental law with
2039 respect to the property;
2040 (b) take action to prevent, abate, or otherwise remedy any actual or potential violation
2041
2042 taken before or after the assertion of a claim or the initiation of governmental enforcement;
2043 (c) decline to accept property into trust or disclaim any power with respect to property
2044 that is or may be burdened with liability for violation of environmental law;
2045 (d) compromise claims against the trust which may be asserted for an alleged violation
2046 of environmental law; and
2047 (e) pay the expense of any inspection, review, abatement, or remedial action to comply
2048 with environmental law;
2049 (14) pay or contest any claim, settle a claim by or against the trust, and release, in
2050 whole or in part, a claim belonging to the trust;
2051 (15) pay taxes, assessments, compensation of the trustee and of employees and agents
2052 of the trust, and other expenses incurred in the administration of the trust;
2053 (16) exercise elections with respect to federal, state, and local taxes;
2054 (17) select a mode of payment under any employee benefit or retirement plan, annuity,
2055 or life insurance payable to the trustee, exercise rights thereunder, including exercise of the
2056 right to indemnification for expenses and against liabilities, and take appropriate action to
2057 collect the proceeds;
2058 (18) make loans out of trust property, including loans to a beneficiary on terms and
2059 conditions the trustee considers to be fair and reasonable under the circumstances, and the
2060 trustee has a lien on future distributions for repayment of those loans;
2061 (19) pledge trust property to guarantee loans made by others to the beneficiary;
2062 (20) appoint a trustee to act in another jurisdiction with respect to trust property located
2063 in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the
2064 appointing trustee, require that the appointed trustee furnish security, and remove any trustee so
2065 appointed;
2066 (21) pay an amount distributable to a beneficiary who is under a legal disability or who
2067 the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or
2068 applying it for the beneficiary's benefit, or by:
2069 (a) paying it to the beneficiary's conservator or, if the beneficiary does not have a
2070 conservator, the beneficiary's guardian;
2071 (b) paying it to the beneficiary's custodian under Title 75, Chapter 5a, Uniform
House Committee Amendments 2-24-2004 kh/ecm
2072
Transfers to Minors Act;2072
2073 (c) if the trustee does not know of a conservator, guardian, custodian, or custodial
2074 trustee, paying it to an adult relative or other person having legal or physical care or custody of
2075 the beneficiary, to be expended on the beneficiary's behalf; or
2076 (d) managing it as a separate fund on the beneficiary's behalf, subject to the
2077 beneficiary's continuing right to withdraw the distribution;
2078 (22) on distribution of trust property or the division or termination of a trust, make
2079 distributions in divided or undivided interests, allocate particular assets in proportionate or
2080 disproportionate shares, value the trust property for those purposes, and adjust for resulting
2081 differences in valuation;
2082 (23) resolve a dispute concerning the interpretation of the trust or its administration by
2083 mediation, arbitration, or other procedure for alternative dispute resolution;
2084 (24) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to
2085 protect trust property and the trustee in the performance of the trustee's duties;
2086 (25) sign and deliver contracts and other instruments that are useful to achieve or
2087 facilitate the exercise of the trustee's powers; H [
2088 (26) on termination of the trust, exercise the powers appropriate to finalize the
2089 administration of the trust and distribute the trust property to the persons entitled to it H ; AND
2089a (27) (a) DELEGATE INVESTMENT AND MANAGEMENT FUNCTIONS THAT A PRUDENT
2089b TRUSTEE OF COMPARABLE SKILLS COULD PROPERLY DELEGATE UNDER THE CIRCUMSTANCES.
2089c THE TRUSTEE SHALL EXERCISE REASONABLE CARE, SKILL, AND CAUTION IN:
2089d (i) SELECTING THE AGENT;
2089e (ii) ESTABLISHING THE SCOPE AND TERMS OF THE DELEGATION CONSISTENT WITH THE
2089f PURPOSES OF THE TRUST; AND
2089g (iii) PERIODICALLY REVIEWING THE AGENT'S ACTIONS TO MONITOR THE AGENT'S
2089h PERFORMANCE AND COMPLIANCE WITH THE TERMS OF THE DELEGATION.
2089i (b) IN PERFORMING A DELEGATED FUNCTION, AN AGENT HAS A DUTY TO THE TRUST TO
2089j EXERCISE REASONABLE CARE TO COMPLY WITH THE TERMS OF THE DELEGATION.
2089k (c) A TRUSTEE WHO COMPLIES WITH THE REQUIREMENTS OF THIS SUBSECTION (27)(a) IS
2089l NOT LIABLE TO THE BENEFICIARIES OR TO THE TRUST FOR THE DECISIONS OR ACTIONS OF THE
2089m AGENT TO WHOM THE FUNCTION WAS DELEGATED h .
2090 Section 97. Section 75-7-815 is enacted to read:
2091 75-7-815. Distribution upon termination.
2092 (1) Upon termination or partial termination of a trust, the trustee may send to the
2093 beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed
2094 distribution terminates if the beneficiary does not notify the trustee of an objection within 30
House Committee Amendments 2-24-2004 kh/ecm
2095
days after the proposal was sent but only if the proposal informed the beneficiary of the right to2095
2096 object and of the time allowed for objection.
2097 (2) Upon the occurrence of an event terminating or partially terminating a trust, the
2098 trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it,
2099 subject to the right of the trustee to retain a reasonable reserve for the payment of debts,
2100 expenses, and taxes.
2101 (3) A release by a beneficiary of a trustee from liability for breach of trust is invalid to
2102 the extent:
2103
2104 (b) the beneficiary, at the time of the release, did not know or had no reason to know of
2105 the beneficiary's rights or of the material facts relating to the breach.
2106 Section 98. Section 75-7-816 is enacted to read:
2107 75-7-816. Recitals when title to real property is in trust -- Failure.
2108 (1) When title to real property is granted to a person as trustee, the terms of the trust
2109 may be given either:
2110 (a) in the deed of transfer; or
2111 (b) in an instrument signed by the grantor and recorded in the same office as the grant
2112 to the trustee.
2113 (2) If the terms of the trust are not made public as required in Subsection (1), a
2114 conveyance from the trustee is absolute in favor of purchasers for value who take the property
2115 without notice of the terms of the trust.
2116 (3) The terms of the trust recited in the deed of transfer or the instrument recorded
2117 under Subsection (1)(b) shall include:
2118 (a) the name of the trustee;
2119 (b) the address of the trustee; and
2120 (c) the name and date of the trust.
2121 (4) Any real property titled in a trust which has a restriction on transfer described in
2122 Section 25-6-14 shall include in the title the words "asset protection trust".
2123 Section 99. Section 75-7-817 is enacted to read:
2124 75-7-817. Marital deduction formulas -- Trusts.
2125 (1) For estates of decedents dying after December 31, 1981, where a decedent's trust
2126 executed before September 13, 1981, contains a formula expressly providing that the
2127 decedent's spouse is to receive the maximum amount of property qualifying for the marital
2128 deduction allowable by federal law, this formula shall be construed as referring to the unlimited
2129 marital deduction allowable by federal law as amended by Section 403(a) of the Economic
2130 Recovery Tax Act of 1981.
2131 (2) The intention of a trustor as expressed in the trust shall control the legal effect of
2132 any dispositions made by it for purposes of construing Subsection (1), and the rule of
2133 construction of Subsection (1) shall apply unless a contrary intention is indicated by the trust.
House Committee Amendments 2-24-2004 kh/ecm
2134
Section 100.
Section
75-7-901
is enacted to read:2134
2135
2136 75-7-901. Prudent investor rule.
2137 (1) Except as otherwise provided in Subsection (2), a trustee who invests and manages
2138 trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule
2139 set forth in this chapter. H IF A TRUSTEE IS NAMED ON THE BASIS OF A TRUSTEE'S
2139a REPRESENTATIONS OF SPECIAL SKILLS OR EXPERTISE, THE TRUSTEE HAS A DUTY TO USE
2139b THOSE SPECIAL SKILLS OR EXPERTISE. h
2140 (2) The prudent investor rule is a default rule and may be expanded, restricted,
2141 eliminated, or otherwise altered by the provisions of a trust. A trustee is not liable to a
2142 beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the
2143 trust.
2144 Section 101. Section 75-7-902 is enacted to read:
2145 75-7-902. Standard of care -- Portfolio strategy -- Risk and return objectives.
2146 (1) A trustee shall invest and manage trust assets as a prudent investor would, by
2147 considering the purposes, terms, distribution requirements, and other circumstances of the trust.
2148 In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
2149 (2) A trustee's investment and management decisions respecting individual assets must
2150 be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of
2151 an overall investment strategy having risk and return objectives reasonably suited to the trust.
2152 (3) Among circumstances that a trustee shall consider in investing and managing trust
2153 assets are the following which may be relevant to the trust or its beneficiaries:
2154 (a) general economic conditions;
2155 (b) the possible effect of inflation or deflation;
2156 (c) the expected tax consequences of investment decisions or strategies;
2157 (d) the role that each investment or course of action plays within the overall trust
2158 portfolio, which may include financial assets, interests in closely held enterprises, tangible and
2159 intangible personal property, and real property;
2160 (e) the expected total return from income and the appreciation of capital;
2161 (f) other resources of the beneficiaries;
2162 (g) needs for liquidity, regularity of income, and preservation or appreciation of capital;
2163 and
2164 (h) an asset's special relationship or special value, if any, to the purposes of the trust or
2165
2166 (4) A trustee shall make a reasonable effort to verify facts relevant to the investment
2167 and management of trust assets.
2168 (5) A trustee may invest in any kind of property or type of investment consistent with
2169 the standards of this chapter.
2170 Section 102. Section 75-7-903 is enacted to read:
2171 75-7-903. Diversification.
2172 A trustee shall diversify the investments of the trust unless the trustee reasonably
2173 determines that, because of special circumstances, the purposes of the trust are better served
2174 without diversifying.
2175 Section 103. Section 75-7-904 is enacted to read:
2176 75-7-904. Duties at inception of trusteeship.
2177 Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee
2178 shall review the trust assets and make and implement decisions concerning the retention and
2179 disposition of assets, in order to bring the trust portfolio into compliance with the purposes,
2180 terms, distribution requirements, and other circumstances of the trust, and with the
2181 requirements of this chapter.
2182 Section 104. Section 75-7-905 is enacted to read:
2183 75-7-905. Reviewing compliance.
2184 Compliance with the prudent investor rule is determined in light of the facts and
2185 circumstances existing at the time of a trustee's decision or action and not by hindsight. This
2186 section does not require a specific outcome in investing.
2187 Section 105. Section 75-7-906 is enacted to read:
2188 75-7-906. Investment direction.
2189 (1) For purposes of this section, "investment direction" means a direction that is
2190 binding on the trustee, except for an investment direction given by a settlor as described in
2191 Subsection (2) to do any of the following with respect to an investment:
2192 (a) retention;
2193 (b) purchase;
2194 (c) sale;
2195 (d) exchange;
2196
2197 (f) any other transaction affecting ownership in the investment.
2198 (2) (a) During the time period that a trust is revocable, the trustee may follow any
2199 investment direction of the settlor, including an investment direction that:
2200 (i) is manifestly contrary to the terms of the trust; or
2201 (ii) seriously breaches a fiduciary duty to the beneficiaries.
2202 (b) The trustee is not liable for any loss resulting from following an investment
2203 direction described in Subsection (2)(a).
2204 (3) If the terms of a trust authorize a person to give investment direction to the trustee,
2205 the person authorized to give investment direction:
2206 (a) is presumptively a fiduciary only with respect to an investment direction that the
2207 person gives to the trustee;
2208 (b) is required to act in good faith with regard to:
2209 (i) the purposes of the trust; and
2210 (ii) the interests of the beneficiaries; and
2211 (c) is liable for any loss that results from breach of the fiduciary duty only with respect
2212 to an investment direction that the person gives to the trustee.
2213 (4) Except in cases of willful misconduct or gross negligence, a trustee is not liable for
2214 any loss that results from following an investment direction if:
2215 (a) the terms of a trust authorizes a person to give the investment direction to the
2216 trustee; and
2217 (b) the trustee acts in accordance with the investment direction given by a person
2218 described in Subsection (4)(a).
2219 (5) If the terms of a trust require another person's approval or consent to an investment
2220 decision of the trustee:
2221 (a) the person from whom approval or consent is required:
2222 (i) is presumptively a fiduciary;
2223 (ii) is required to act in good faith with regard to:
2224 (A) the purposes of the trust; and
2225 (B) the interests of the beneficiaries; and
2226 (iii) is liable for any loss that results from breach of the fiduciary duty; and
2227
2228 for any loss resulting from any act not taken as a result of the person's failure to respond to a
2229 request for approval or consent.
2230 Section 106. Section 75-7-907 is enacted to read:
2231 75-7-907. Language invoking standard of chapter.
2232 The following terms or comparable language in the provisions of a trust, unless
2233 otherwise limited or modified, authorizes any investment or strategy permitted under this
2234 chapter: "investments permissible by law for investment of trust funds," "legal investments,"
2235 "authorized investments," "using the judgment and care under the circumstances then
2236 prevailing that persons of prudence, discretion, and intelligence exercise in the management of
2237 their own affairs, not in regard to speculation but in regard to the permanent disposition of their
2238 funds, considering the probable income as well as the probable safety of their capital," "prudent
2239 man rule," "prudent trustee rule," "prudent person rule," and "prudent investor rule."
2240 Section 107. Section 75-7-1001 is enacted to read:
2241
2242 75-7-1001. Remedies for breach of trust.
2243 (1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of
2244 trust.
2245 (2) To remedy a breach of trust that has occurred or may occur, the court may:
2246 (a) compel the trustee to perform the trustee's duties;
2247 (b) enjoin the trustee from committing a breach of trust;
2248 (c) compel the trustee to redress a breach of trust by paying money, restoring property,
2249 or other means;
2250 (d) order a trustee to account;
2251 (e) appoint a special fiduciary to take possession of the trust property and administer
2252 the trust;
2253 (f) suspend the trustee;
2254 (g) remove the trustee as provided in Section 75-7-706 ;
2255 (h) reduce or deny compensation to the trustee;
2256 (i) subject to Section 75-7-1012 , void an act of the trustee, impose a lien or a
2257 constructive trust on trust property, or trace trust property wrongfully disposed of and recover
House Committee Amendments 2-24-2004 kh/ecm
2258
the property or its proceeds; or2258
2259 (j) order any other appropriate relief.
2260 Section 108. Section 75-7-1002 is enacted to read:
2261 75-7-1002. Damages for breach of trust.
2262 (1) A trustee who commits a breach of trust is liable to the beneficiaries affected for the
2263 greater of:
2264 (a) the amount required to restore the value of the trust property and trust distributions
2265 to what they would have been had the breach not occurred; or
2266 (b) the profit the trustee made by reason of the breach.
2267 (2) Except as otherwise provided in this Subsection (2), if more than one trustee is
2268 liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the
2269 other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially
2270 more at fault than another trustee or if the trustee committed the breach of trust in bad faith or
2271 with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A
2272 trustee who received a benefit from the breach of trust is not entitled to contribution from
2273 another trustee to the extent of the benefit received.
2274 Section 109. Section 75-7-1003 is enacted to read:
2275 75-7-1003. Damages in absence of breach.
2276 (1) A trustee is accountable to an affected beneficiary for any profit made by the trustee
2277 arising from the administration of the trust, even absent a breach of trust.
2278 (2) Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or
2279 depreciation in the value of trust property or for not having made a profit.
2280 Section 110. Section 75-7-1004 is enacted to read:
2281 75-7-1004. Attorney's fees and costs.
2282 H (1) h In a judicial proceeding involving the administration of a trust, the court may, as
2282a justice
2283 and equity may require, award costs and expenses, including reasonable attorney's fees, to any
2284 party, to be paid by another party or from the trust that is the subject of the controversy.
2284a H (2) IF A TRUSTEE DEFENDS OR PROSECUTES ANY PROCEEDING IN GOOD FAITH,
2284b WHETHER SUCCESSFUL OR NOT, THE TRUSTEE IS ENTITLED TO RECEIVE FROM THE TRUST THE
2284c NECESSARY EXPENSES AND DISBURSEMENTS, INCLUDING REASONABLE ATTORNEY'S FEES
2284d INCURRED. h
2285 Section 111. Section 75-7-1005 is enacted to read:
2286 75-7-1005. Limitation of action against trustee.
2287 (1) A beneficiary may not commence a proceeding against a trustee for breach of trust
2288 more than six months after the date that the beneficiary or a person who may represent and
- 75 -
Corrected - House Committee Amendments 2-24-2004 kh/ecm
2289
bind the beneficiary was sent a report that adequately disclosed the existence of a potential2289
2290 claim for breach of trust and informed the beneficiary of the time allowed for commencing a
2291 proceeding.
2292 (2) A report adequately discloses the existence of a potential claim for breach of trust if
2293 it provides sufficient information so that the beneficiary or representative knows of the
2294 potential claim or should have inquired into its existence.
2295 (3) If Subsection (1) does not apply, a judicial proceeding by a beneficiary against a
2296 trustee for breach of trust must be commenced within one year after the first to occur of:
2297 (a) the removal, resignation, or death of the trustee;
2298 (b) the termination of the beneficiary's interest in the trust; or
2299 (c) the termination of the trust.
2300 (4) This section does not preclude an action to recover for fraud or misrepresentation
2301 related to the report.
2302 Section 112. Section 75-7-1006 is enacted to read:
2303 75-7-1006. Reliance on trust instrument.
2304 A trustee who acts in reasonable reliance on the terms of the trust as expressed in the
2305 trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach
2306 resulted from the reliance.
2307 Section 113. Section 75-7-1007 is enacted to read:
2308 75-7-1007. Event affecting administration or distribution.
2309 If the happening of an event, including marriage, divorce, performance of educational
2310 requirements, or death, affects the administration or distribution of a trust, a trustee is not liable
2311 for a loss resulting from the trustee's lack of knowledge or lack of notice.
2312 Section 114. Section 75-7-1008 is enacted to read:
2313 75-7-1008. Exculpation of trustee.
2314 H [
2315 to the extent that it:
2316 H [
2317 reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
2318 H [
2318a
2319 relationship to the settlor
2319a EXISTENCE AND CONTENTS h .
House Committee Amendments 2-24-2004 kh/ecm
2320
H [2320
2321 abuse of a fiduciary or confidential relationship unless the settlor is or was represented by
2322 independent counsel or the trustee proves that the exculpatory term is fair under the
2323 circumstances and that its existence and contents were adequately communicated to the settlor.
2324 Section 115. Section 75-7-1009 is enacted to read:
2325 75-7-1009. Beneficiary's consent, release, or ratification.
2326 A trustee is not liable to a beneficiary for breach of trust if the beneficiary, while having
2327 capacity, consented to the conduct constituting the breach, released the trustee from liability for
2328 the breach, or ratified the transaction constituting the breach, unless H [
2329 (1) the consent, release, or ratification of the beneficiary was induced by improper
2330 conduct of the trustee;
2331 (2)
2332 the beneficiary's rights or of the material facts relating to the breach H [
2333 (3) the beneficiary was not represented by independent counsel
2334 Section 116. Section 75-7-1010 is enacted to read:
2335 75-7-1010. Limitation on personal liability of trustee.
2336 (1) Except as otherwise provided in the contract, a trustee is not personally liable on a
2337 contract properly entered into in the trustee's fiduciary capacity in the course of administering
2338 the trust if the trustee in the contract disclosed the fiduciary capacity.
2339 (2) A trustee is personally liable for torts committed in the course of administering a
2340 trust, or for obligations arising from ownership or control of trust property, including liability
2341 for violation of environmental law, only if the trustee is personally at fault.
2342 (3) A claim based on a contract entered into by a trustee in the trustee's fiduciary
2343 capacity, on an obligation arising from ownership or control of trust property, or on a tort
2344 committed in the course of administering a trust, may be asserted in a judicial proceeding
2345 against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally
2346 liable for the claim.
2347 (4) The question of liability as between the trust estate and the trustee individually may
2348 be determined in a proceeding for accounting, surcharge, or indemnification or other
2349 appropriate proceeding.
2350 (5) Whenever an instrument creating a trust reserves to the settlor, or vests in an
2351
2352 cotrustees to the exclusion of the trustee or to the exclusion of one or more of several trustees,
2353 authority to direct the making or retention of any investment, the excluded trustee or trustees
2354 shall not be liable, either individually or as a fiduciary, for any loss resulting from the making
2355 or retention of any investment pursuant to such direction.
2356 (6) In the absence of actual knowledge or information which would cause a reasonable
2357 trustee to inquire further, no trustee shall be liable for failure to take necessary steps to compel
2358 the redress of any breach of trust or fiduciary duty by any predecessor personal representative,
2359 trustee, or other fiduciary. The provisions of this section shall not be construed to limit the
2360 fiduciary liability of any trustee for his own acts or omissions with respect to the trust estate.
2361 Section 117. Section 75-7-1011 is enacted to read:
2362 75-7-1011. Interest as general partner.
2363 (1) Except as otherwise provided in Subsection (3) or unless personal liability is
2364 imposed in the contract, a trustee who holds an interest as a general partner in a general or
2365 limited partnership is not personally liable on a contract entered into by the partnership after
2366 the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in
2367 a statement previously filed pursuant to Title 48, Chapter 2a, Utah Revised Uniform Limited
2368 Partnership Act.
2369 (2) Except as otherwise provided in Subsection (3), a trustee who holds an interest as a
2370 general partner is not personally liable for torts committed by the partnership or for obligations
2371 arising from ownership or control of the interest unless the trustee is personally at fault.
2372 (3) The immunity provided by this section does not apply if an interest in the
2373 partnership is held by the trustee in a capacity other than that of trustee or is held by the
2374 trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or the spouse
2375 of any of them.
2376 (4) If the trustee of a revocable trust holds an interest as a general partner, the settlor is
2377 personally liable for contracts and other obligations of the partnership as if the settlor were a
2378 general partner.
2379 Section 118. Section 75-7-1012 is enacted to read:
2380 75-7-1012. Protection of person dealing with trustee.
2381 (1) A person other than a beneficiary who in good faith assists a trustee, or who in
2382
2383 improperly exercising the trustee's powers is protected from liability as if the trustee properly
2384 exercised the power.
2385 (2) A person other than a beneficiary who in good faith deals with a trustee is not
2386 required to inquire into the extent of the trustee's powers or the propriety of their exercise.
2387 (3) A person who in good faith delivers assets to a trustee need not ensure their proper
2388 application.
2389 (4) A person other than a beneficiary who in good faith assists a former trustee, or who
2390 in good faith and for value deals with a former trustee, without knowledge that the trusteeship
2391 has terminated is protected from liability as if the former trustee were still a trustee.
2392 (5) Comparable protective provisions of other laws relating to commercial transactions
2393 or transfer of securities by fiduciaries prevail over the protection provided by this section.
2394 Section 119. Section 75-7-1013 is enacted to read:
2395 75-7-1013. Certification of trust.
2396 (1) Instead of furnishing a copy of the trust instrument to a person other than a
2397 beneficiary, the trustee may furnish to the person a certification of trust containing the
2398 following information:
2399 (a) that the trust exists and the date the trust instrument was executed;
2400 (b) the identity of the settlor;
2401 (c) the identity and address of the currently acting trustee;
2402 (d) the powers of the trustee in the pending transaction;
2403 (e) the revocability or irrevocability of the trust and the identity of any person holding a
2404 power to revoke the trust;
2405 (f) the authority of cotrustees to sign or otherwise authenticate and whether all or less
2406 than all are required in order to exercise powers of the trustee; and
2407 (g) the name in which title to trust property may be taken.
2408 (2) A certification of trust may be signed or otherwise authenticated by any trustee.
2409 (3) A certification of trust must state that the trust has not been revoked, modified, or
2410 amended in any manner that would cause the representations contained in the certification of
2411 trust to be incorrect.
2412 (4) A certification of trust need not contain the dispositive terms of a trust.
2413
2414 those excerpts from the original trust instrument and later amendments which designate the
2415 trustee and confer upon the trustee the power to act in the pending transaction.
2416 (6) A person who acts in reliance upon a certification of trust without knowledge that
2417 the representations contained in it are incorrect is not liable to any person for acting and may
2418 assume without inquiry the existence of the facts contained in the certification. Knowledge of
2419 the terms of the trust may not be inferred solely from the fact that a copy of all or part of the
2420 trust instrument is held by the person relying upon the certification.
2421 (7) A person who in good faith enters into a transaction in reliance upon a certification
2422 of trust may enforce the transaction against the trust property as if the representations contained
2423 in the certification were correct.
2424 (8) A person making a demand for the trust instrument in addition to a certification of
2425 trust or excerpts is liable for costs, expenses, attorney fees, and damages if the court determines
2426 that the person did not act in good faith in demanding the trust instrument.
2427 (9) This section does not limit the right of a person to obtain a copy of the trust
2428 instrument in a judicial proceeding concerning the trust.
2429 Section 120. Section 75-7-1101 is enacted to read:
2430
2431 75-7-1101. Uniformity of application and construction.
2432 In applying and construing this chapter, consideration must be given to the need to
2433 promote uniformity of the law with respect to its subject matter among states that enact it.
2434 Section 121. Section 75-7-1102 is enacted to read:
2435 75-7-1102. Electronic records and signatures.
2436 The provisions of this chapter governing the legal effect, validity, or enforceability of
2437 electronic records or electronic signatures, and of contracts formed or performed with the use
2438 of such records or signatures, conform to the requirements of Section 102 of the Electronic
2439 Signatures in Global and National Commerce Act (15 U.S.C. §7002) and supersede, modify,
2440 and limit the requirements of the Electronic Signatures in Global and National Commerce Act.
2441 Section 122. Section 75-7-1103 is enacted to read:
2442 75-7-1103. Application to existing relationships.
2443 (1) Except as otherwise provided, this chapter applies to:
House Committee Amendments 2-24-2004 kh/ecm
2444
(a) all trusts created before, on, or after H [2444
2445 (b) all judicial proceedings concerning trusts commenced on or after H [
2445a 2004; and
2446 (c) judicial proceedings concerning trusts commenced before H [
2446a unless the
2447 court finds that application of a particular provision of this chapter would substantially interfere
2448 with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in
2449 which case the particular provision of this chapter does not apply and the superseded section
2450 will apply.
2451 (2) Any rule of construction or presumption provided in this chapter applies to trust
2452 instruments executed before H [
2452a intent
2453 in the terms of the trust.
2454 (3) An act done before H [
2455 (4) If a right is acquired, extinguished, or barred upon the expiration of a prescribed
2456 period that has commenced to run under any other statute before H [
2456a statute
2457 continues to apply to the right even if it has been repealed or superseded.
2458 Section 123. Repealer.
2459 This bill repeals:
2460 Section 75-7-206, Proceedings for review of employment of agents and review of
2461 compensation of trustee and employees of trust.
2462 Section 75-7-207, Trust proceedings -- Initiation by notice -- Necessary parties.
2463 Section 75-7-306, Personal liability of trustee to third parties.
2464 Section 75-7-307, Limitations on proceedings against trustees after final account.
2465 Section 75-7-405.5, Vacancy in trusteeship -- Appointment of successor.
2466 Section 124. Coordinating S.B. 47 with S.B. 30.
2467 If this S.B. 47 and S.B. 30, Medical Benefits Recovery Act Amendments, both pass it is
2468 the intent of the Legislature that cross-references in S.B. 30 to Sections 75-7-308 and 75-7-309
2469 be changed to 75-7-508 and 75-7-509 , respectively.
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