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S.B. 47 Enrolled
LONG TITLE
General Description:
This bill makes substantial changes in Title 75, Chapter 7, Trust Administration to enact
the Utah Uniform Trust Code.
Highlighted Provisions:
This bill:
. creates the Utah Uniform Trust Code;
. provides a governing law for the administration of trusts in concert with other states
who have adopted the uniform law; and
. provides some new terms and definitions.
Monies Appropriated in this Bill:
None
Other Special Clauses:
This bill takes effect on July 1, 2004.
This bill provides a coordination clause.
Utah Code Sections Affected:
AMENDS:
7-5-7, as last amended by Chapter 196, Laws of Utah 1994
7-5-10, as last amended by Chapter 6, Laws of Utah 1982
7-5-14, as last amended by Chapter 267, Laws of Utah 1989
25-6-14, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
49-11-303, as renumbered and amended by Chapter 250, Laws of Utah 2002
59-10-103, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
75-1-201, as last amended by Chapter 49, Laws of Utah 2003
75-1-403, as last amended by Chapter 116, Laws of Utah 2000
75-2-1209, as enacted by Chapter 3, Laws of Utah 2003, Second Special Session
75-3-703, as enacted by Chapter 150, Laws of Utah 1975
75-3-913, as enacted by Chapter 150, Laws of Utah 1975
75-5-417, as last amended by Chapter 119, Laws of Utah 1995
75-7-202, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
ENACTS:
75-7-102, Utah Code Annotated 1953
75-7-103, Utah Code Annotated 1953
75-7-104, Utah Code Annotated 1953
75-7-105, Utah Code Annotated 1953
75-7-106, Utah Code Annotated 1953
75-7-108, Utah Code Annotated 1953
75-7-109, Utah Code Annotated 1953
75-7-110, Utah Code Annotated 1953
75-7-111, Utah Code Annotated 1953
75-7-112, Utah Code Annotated 1953
75-7-412, Utah Code Annotated 1953
75-7-413, Utah Code Annotated 1953
75-7-414, Utah Code Annotated 1953
75-7-415, Utah Code Annotated 1953
75-7-416, Utah Code Annotated 1953
75-7-417, Utah Code Annotated 1953
75-7-502, Utah Code Annotated 1953
75-7-503, Utah Code Annotated 1953
75-7-504, Utah Code Annotated 1953
75-7-505, Utah Code Annotated 1953
75-7-506, Utah Code Annotated 1953
75-7-507, Utah Code Annotated 1953
75-7-604, Utah Code Annotated 1953
75-7-605, Utah Code Annotated 1953
75-7-606, Utah Code Annotated 1953
75-7-607, Utah Code Annotated 1953
75-7-701, Utah Code Annotated 1953
75-7-702, Utah Code Annotated 1953
75-7-703, Utah Code Annotated 1953
75-7-704, Utah Code Annotated 1953
75-7-705, Utah Code Annotated 1953
75-7-706, Utah Code Annotated 1953
75-7-707, Utah Code Annotated 1953
75-7-708, Utah Code Annotated 1953
75-7-709, Utah Code Annotated 1953
75-7-801, Utah Code Annotated 1953
75-7-802, Utah Code Annotated 1953
75-7-803, Utah Code Annotated 1953
75-7-804, Utah Code Annotated 1953
75-7-805, Utah Code Annotated 1953
75-7-806, Utah Code Annotated 1953
75-7-807, Utah Code Annotated 1953
75-7-808, Utah Code Annotated 1953
75-7-809, Utah Code Annotated 1953
75-7-810, Utah Code Annotated 1953
75-7-811, Utah Code Annotated 1953
75-7-812, Utah Code Annotated 1953
75-7-813, Utah Code Annotated 1953
75-7-814, Utah Code Annotated 1953
75-7-815, Utah Code Annotated 1953
75-7-816, Utah Code Annotated 1953
75-7-817, Utah Code Annotated 1953
75-7-901, Utah Code Annotated 1953
75-7-902, Utah Code Annotated 1953
75-7-903, Utah Code Annotated 1953
75-7-904, Utah Code Annotated 1953
75-7-905, Utah Code Annotated 1953
75-7-906, Utah Code Annotated 1953
75-7-907, Utah Code Annotated 1953
75-7-1001, Utah Code Annotated 1953
75-7-1002, Utah Code Annotated 1953
75-7-1003, Utah Code Annotated 1953
75-7-1004, Utah Code Annotated 1953
75-7-1005, Utah Code Annotated 1953
75-7-1006, Utah Code Annotated 1953
75-7-1007, Utah Code Annotated 1953
75-7-1008, Utah Code Annotated 1953
75-7-1009, Utah Code Annotated 1953
75-7-1010, Utah Code Annotated 1953
75-7-1011, Utah Code Annotated 1953
75-7-1012, Utah Code Annotated 1953
75-7-1013, Utah Code Annotated 1953
75-7-1101, Utah Code Annotated 1953
75-7-1102, Utah Code Annotated 1953
75-7-1103, Utah Code Annotated 1953
REPEALS AND REENACTS:
75-7-101, as enacted by Chapter 150, Laws of Utah 1975
75-7-203, as last amended by Chapter 194, Laws of Utah 1977
75-7-205, as enacted by Chapter 150, Laws of Utah 1975
75-7-301, as enacted by Chapter 150, Laws of Utah 1975
75-7-302, as last amended by Chapter 93, Laws of Utah 2002
75-7-303, as last amended by Chapter 179, Laws of Utah 1992
75-7-304, as enacted by Chapter 150, Laws of Utah 1975
75-7-305, as enacted by Chapter 150, Laws of Utah 1975
75-7-401, as last amended by Chapter 39, Laws of Utah 1998
75-7-402, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
75-7-403, as last amended by Chapter 93, Laws of Utah 2002
75-7-404, as last amended by Chapter 133, Laws of Utah 1991
75-7-405, as enacted by Chapter 150, Laws of Utah 1975
75-7-406, as enacted by Chapter 150, Laws of Utah 1975
75-7-407, as enacted by Chapter 150, Laws of Utah 1975
75-7-408, as enacted by Chapter 150, Laws of Utah 1975
75-7-409, as last amended by Chapter 320, Laws of Utah 2000
75-7-410, as enacted by Chapter 196, Laws of Utah 1999
75-7-411, as enacted by Chapter 196, Laws of Utah 1999
75-7-501, as enacted by Chapter 54, Laws of Utah 1982
RENUMBERS AND AMENDS:
75-7-107, (Renumbered from 75-7-208, as last amended by Chapter 3, Laws of Utah
2003, Second Special Session)
75-7-508, (Renumbered from 75-7-308, as enacted by Chapter 227, Laws of Utah 2002)
75-7-509, (Renumbered from 75-7-309, as enacted by Chapter 227, Laws of Utah 2002)
75-7-510, (Renumbered from 75-7-310, as enacted by Chapter 227, Laws of Utah 2002)
75-7-511, (Renumbered from 75-7-311, as enacted by Chapter 227, Laws of Utah 2002)
75-7-512, (Renumbered from 75-7-312, as enacted by Chapter 227, Laws of Utah 2002)
75-7-513, (Renumbered from 75-7-313, as enacted by Chapter 227, Laws of Utah 2002)
75-7-514, (Renumbered from 75-7-314, as enacted by Chapter 227, Laws of Utah 2002)
75-7-515, (Renumbered from 75-7-315, as enacted by Chapter 227, Laws of Utah 2002)
75-7-516, (Renumbered from 75-7-316, as enacted by Chapter 227, Laws of Utah 2002)
75-7-517, (Renumbered from 75-7-317, as enacted by Chapter 227, Laws of Utah 2002)
75-7-518, (Renumbered from 75-7-318, as enacted by Chapter 227, Laws of Utah 2002)
75-7-519, (Renumbered from 75-7-319, as enacted by Chapter 227, Laws of Utah 2002)
REPEALS:
75-7-206, as enacted by Chapter 150, Laws of Utah 1975
75-7-207, as enacted by Chapter 150, Laws of Utah 1975
75-7-306, as last amended by Chapter 179, Laws of Utah 1992
75-7-307, as last amended by Chapter 30, Laws of Utah 1992
75-7-405.5, as enacted by Chapter 3, Laws of Utah 2003, Second Special Session
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 7-5-7 is amended to read:
7-5-7. Management and investment of trust funds.
(1) Funds received or held by any trust company as agent or fiduciary, whether for
investment or distribution, shall be invested or distributed as soon as practicable as authorized
under the instrument creating the account and shall not be held uninvested any longer than is
reasonably necessary.
(2) If the instrument creating an agency or fiduciary account contains provisions
authorizing the trust company, its officers, or its directors to exercise their discretion in the matter
of investments, funds held in the trust account under that instrument may be invested only in those
classes of securities which are approved by the directors of the trust company or a committee of
directors appointed for that purpose. If a trust company acts in any agency or fiduciary capacity
under appointment by a court of competent jurisdiction, it shall make and account for all
investments according to the provisions of Title 75, Utah Uniform Probate Code, unless the
underlying instrument provides otherwise.
(3) (a) Funds received or held as agent or fiduciary by any trust company which is also a
depository institution, whether for investment or distribution, may be deposited in the commercial
department or savings department of that trust company to the credit of its trust department.
Whenever the funds so deposited in a fiduciary or managing agency account exceed the amount of
federal deposit insurance applicable to that account, the trust company shall deliver to the trust
department or put under its control collateral security as outlined in Regulation 9.10 of the
Comptroller of the Currency or in Regulation 550.8 of the Office of Thrift Supervision, as
amended. However, if the instrument creating such a fiduciary or managing agency account
expressly provides that funds may be deposited to the commercial or savings department of the
trust company, then the funds may be so deposited without setting aside collateral securities as
required under this section and the deposits in the event of insolvency of any such trust company
shall be treated as other general deposits are treated. A trust company which deposits trust funds
in its commercial or savings department shall be liable for interest on the deposits only at the
rates, if any, paid by the trust company on deposits of like kind not made to the credit of its trust
department.
(b) Funds received or held as agent or fiduciary by a trust company, whether for
investment or distribution, may be deposited in an affiliated depository institution. Whenever the
funds so deposited in a fiduciary or managing agency account exceed the amount of federal
deposit insurance applicable to that account, the depository institution shall deliver to the trust
company or put under its control collateral security as outlined in Regulation 9.10 of the
Comptroller of the Currency or in Regulation 550.8 of the Office of Thrift Supervision as
amended. However, if the instrument creating the fiduciary or managing agency account expressly
permits funds to be deposited in the affiliated depository institution, the funds may be so
deposited without setting aside collateral securities as required under this section and deposits in
the event of insolvency of the depository institution shall be treated as other general deposits are
treated. A trust company which deposits trust funds in an affiliated depository institution is liable
for interest on the deposits only at the rates, if any, paid by the depository institution on deposits
of like kind.
(4) In carrying out all aspects of its trust business, a trust company shall have all the
powers, privileges, and duties as set forth in [
with respect to trustees, whether or not the trust company is acting as a trustee as defined in Title
75.
(5) Nothing in this section may alter, amend, or limit the powers of a trust company
acting in a fiduciary capacity as specified in the particular instrument or order creating the
fiduciary relationship.
Section 2. Section 7-5-10 is amended to read:
7-5-10. Lending trust funds to trust company, officer, director, or employee as
felony.
Unless expressly permitted in the instrument creating a trust account or by a person
authorized to give that permission or by a court order as permitted in Section [
75-7-802 , no trust company shall lend to itself or to any officer or director or employee of the
trust company any funds held in any trust account under the powers conferred in this chapter. Any
officer, director or employee making such a loan, or to whom such a loan is made, is guilty of a
third degree felony.
Section 3. Section 7-5-14 is amended to read:
7-5-14. Mergers, consolidations, acquisitions, transfers, or reorganizations
involving entities engaged in trust business -- Succession of rights and duties -- Petition for
appointment of another trust company.
(1) Notwithstanding any provision of law to the contrary, a trust company, depository
institution, or other corporation authorized under this chapter or under the laws of the United
States to engage in the trust business in this state may, subject to the provisions of Sections
7-1-702 , 7-1-704 , and 7-1-705 :
(a) (i) merge or consolidate with, (ii) acquire control of, acquire all or a portion of the
assets and trust business of, or assume all or any portion of the liabilities of, or (iii) transfer
control to, transfer all or a portion of its assets and trust business to, or transfer all or a portion of
its liabilities to, any other trust company, depository institution, or other corporation, which
institution is authorized under this chapter or under the laws of the United States to engage in the
trust business in this state; or
(b) reorganize.
(2) Upon final approval by the commissioner of any merger, consolidation, acquisition of
control, acquisition of assets, assumption of liabilities, or reorganization, and upon written notice
of this approval to all persons entitled to and then receiving trust accountings from the
transferring or reorganizing trust company, the resulting or acquiring trust company shall, without
court proceedings or a court order, succeed to all rights, privileges, duties, obligations, and
undertakings under all trust instruments, agency and fiduciary relationships and arrangements, and
other trust business transferred and acquired in the manner authorized by this section. However,
except as provided otherwise in the relevant trust instrument, any interested person may, not more
than 30 days after receipt of written notice of the merger, consolidation, acquisition, transfer, or
reorganization, petition any court of competent jurisdiction to appoint another or succeeding trust
company with respect to any agency or fiduciary relationship affecting that interested person, and
until another or succeeding trust company is so appointed, the acquiring or resulting trust
company is entitled to act as agent or fiduciary with respect to the agency or fiduciary
relationship. [
(3) As used in this section, a "reorganization" includes, but is not limited to:
(a) the creation by a trust company of a subsidiary corporation which is [
wholly owned by that trust company and which is organized solely for the purpose of conducting
all or any portion of the trust business of that trust company; or
(b) any merger or other combination between a trust company and:
(i) a [
(ii) a [
holding company which owns or controls that trust company.
Section 4. Section 25-6-14 is amended to read:
25-6-14. Restricting transfers of trust interests.
(1) (a) For trusts created on or after December 31, 2003, a settlor who in writing
irrevocably transfers property in trust to a trust having as trustee a company defined in Subsection
7-5-1 (1)(d) who holds some or all of the trust assets in this state in a savings account described in
Subsection 7-1-103 (29), a certificate of deposit, a brokerage account, a trust company fiduciary
account, or account or deposit located in this state that is similar to such an account may provide
that the income or principal interest of the settlor as beneficiary of the trust may not be either
voluntarily or involuntarily transferred before payment or delivery to the settlor as beneficiary by
the trustee. The provision shall be considered to be a restriction on the transfer of the settlor's
beneficial interest in the trust that is enforceable under applicable nonbankruptcy law within the
meaning of Section 541(c)(2) of the Bankruptcy Code or successor provision.
(b) This Subsection (1) applies to:
(i) any form of transfer into trust including:
(A) conveyance; or
(B) assignment; and
(ii) transfers of:
(A) personal property;
(B) interests in personal property;
(C) real property; or
(D) interests in real property.
(2) (a) Except as provided in Subsection (2)(c), if a trust has a restriction as provided in
Subsection (1)(a), a creditor or other claimant of the settlor may not satisfy a claim, or liability on
it, in either law or equity, out of the settlor's transfer or settlor's beneficial interest in the trust.
(b) For the purposes of Subsection (2)(a), a creditor includes one holding or seeking to
enforce a judgment entered by a court or other body having adjudicative authority as well as one
with a right to payment, whether or not reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
(c) A restriction provided under Subsection (1) does not prevent a creditor or person
described in Subsection (2)(a) from satisfying a claim or liability out of the settlor's beneficial
interest in or transfer into trust if:
(i) the claim is a judgment, order, decree, or other legally enforceable decision or ruling
resulting from a judicial, arbitration, mediation, or administrative proceeding commenced prior to
or within three years after the trust is created;
(ii) the settlor's transfer into trust is made with actual intent to hinder, delay, or defraud
that creditor;
(iii) the trust provides that the settlor may revoke or terminate all or part of the trust
without the consent of a person who has a substantial beneficial interest in the trust and the
interest would be adversely affected by the exercise of the settlor's power to revoke or terminate
all or part of the trust;
(iv) the trust requires that all or a part of the trust's income or principal, or both must be
distributed to the settlor as beneficiary;
(v) the claim is for a payment owed by a settlor under a child support judgment or order;
(vi) the transfer is made when the settlor is insolvent or the transfer renders the settlor
insolvent;
(vii) the claim is for recovery of public assistance received by the settlor allowed under
Title 26, Chapter 19, Medical Benefits Recovery Act;
(viii) the claim is a tax or other amount owed by the settlor to any governmental entity;
(ix) the claim is by a spouse or former spouse of the settlor on account of an agreement
or order for the payment of support or alimony or for a division or distribution of property;
(x) (A) the settlor transferred assets into the trust that:
(I) were listed in a written representation of the settlor's assets given to a claimant to
induce the claimant to enter into a transaction or agreement with the settlor; or
(II) were transferred from the settlor's control in breach of any written agreement,
covenant, or security interest between the settlor and the claimant; or
(B) without limiting the claimant's right to pursue assets not held by the trust, a claimant
described in Subsection (2)(c)(x)(A) may only foreclose or execute upon an asset in the trust
listed in the written representation described in Subsection (2)(c)(x)(A)(I) or transferred in breach
of a written agreement, covenant, or security interest as provided in Subsection (2)(c)(x)(A)(II) to
the extent of the settlor's interest in that asset when it was transferred to the trust or the
equivalent value of that asset at the time of foreclosure or execution if the original asset was sold
or traded by the trust; or
(xi) the claim is a judgment, award, order, sentence, fine, penalty, or other determination
of liability of the settlor for conduct of the settlor constituting fraud, intentional infliction of harm,
or a crime.
(d) The statute of limitations for actions to satisfy a claim or liability out of the settlor's
beneficial interest in or transfer into trust under Subsections (2)(c)[
(x), and (xi) is the statute of limitations applicable to the underlying action.
(e) For the purposes of Subsection (2)(c) "revoke or terminate" does not include:
(i) a power to veto a distribution from the trust;
(ii) a testamentary special power of appointment or similar power;
(iii) the right to receive a distribution of income, principal, or both in the discretion of
another, including a trustee other than the settlor, an interest in a charitable remainder unitrust or
charitable remainder annuity trust as defined in Internal Revenue Code Section 664 or successor
provision, or a right to receive principal subject to an ascertainable standard set forth in the trust;
or
(iv) the power to appoint nonsubordinate advisers or trust protectors who can remove
and appoint trustees, who can direct, consent to or disapprove distributions, or is the power to
serve as an investment director or appoint an investment director under [
(3) The satisfaction of a claim under Subsection (2)(c) is limited to that part of the trust
or transfer to which it applies.
(4) (a) If a trust has a restriction as provided under Subsection (1), the restriction
prevents anyone, including a person listed in Subsection (2)(a), from asserting any cause of action
or claim for relief against a trustee or anyone involved in the counseling, drafting, preparation,
execution, or funding of the trust for:
(i) conspiracy to commit a fraudulent conveyance;
(ii) aiding and abetting a fraudulent conveyance; or
(iii) participating in the trust transaction.
(b) A person prevented from asserting a cause of action or claim for relief under this
Subsection (4) may assert a cause of action only against:
(i) the trust assets; or
(ii) the settlor or beneficiary to the extent allowed under Subsection 25-6-5 (1)(a).
(5) In any action brought under Subsection (2)(c), the burden to prove the matter by clear
and convincing evidence shall be upon the creditor.
(6) For purposes of this section, the transfer shall be considered to have been made on the
date the property was originally transferred in trust.
(7) The courts of this state shall have exclusive jurisdiction over any action brought under
this section.
(8) If a trust or a property transfer to a trust is voided or set aside under Subsection
(2)(c), the trust or property transfer shall be voided or set aside only to the extent necessary to
satisfy:
(a) the settlor's debt to the creditor or other person at whose instance the trust or
property transfer is voided or set aside; and
(b) the costs and attorney fees allowed by the court.
(9) If a trust or a property transfer to a trust is voided or set aside under Subsection (2)(c)
and the court is satisfied that the trustee did not act in bad faith in accepting or administering the
property that is the subject of the trust:
(a) the trustee has a first and paramount lien against the property that is the subject of the
trust in an amount equal to the entire cost properly incurred by the trustee in a defense of the
action or proceedings to void or set aside the trust or the property transfer, including attorney
fees;
(b) the trust or property transfer that is voided or set aside is subject to the proper fees,
costs, preexisting rights, claims, and interest of the trustee and any predecessor trustee if the
trustee and predecessor trustee did not act in bad faith; and
(c) any beneficiary, including the settlor, may retain a distribution made by exercising a
trust power or discretion vested in the trustee of the trust, if the power or discretion was properly
exercised before the commencement of the action or proceeding to void or set aside the trust or
property transfer.
(10) If at least one trustee is a trust company as defined in Subsection 7-5-1 (1)(d), then
individuals may also serve as cotrustees.
Section 5. Section 49-11-303 is amended to read:
49-11-303. Fund investment standard -- Prudent investor rule.
The [
the prudent [
9, Utah Uniform Prudent Investor Act.
Section 6. Section 59-10-103 is amended to read:
59-10-103. Definitions.
(1) As used in this chapter:
(a) "Adoption expenses" means:
(i) any actual medical and hospital expenses of the mother of the adopted child which are
incident to the child's birth;
(ii) any welfare agency fees or costs;
(iii) any child placement service fees or costs;
(iv) any legal fees or costs; or
(v) any other fees or costs relating to an adoption.
(b) "Adult with a disability" means an individual who:
(i) is 18 years of age or older;
(ii) is eligible for services under Title 62A, Chapter 5, Services for People with
Disabilities; and
(iii) is not enrolled in:
(A) an education program for students with disabilities that is authorized under Section
53A-15-301 ; or
(B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.
(c) (i) For purposes of Subsection 59-10-114 (2)(m), "capital gain transaction" means a
transaction that results in a:
(A) short-term capital gain; or
(B) long-term capital gain.
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may by rule define the term "transaction."
(d) "Commercial domicile" means the principal place from which the trade or business of
a Utah small business corporation is directed or managed.
(e) "Corporation" includes:
(i) associations;
(ii) joint stock companies; and
(iii) insurance companies.
(f) "Dependent child with a disability" means an individual 21 years of age or younger
who:
(i) (A) is diagnosed by a school district representative under rules adopted by the State
Board of Education as having a disability classified as:
(I) autism;
(II) deafness;
(III) preschool developmental delay;
(IV) dual sensory impairment;
(V) hearing impairment;
(VI) intellectual disability;
(VII) multidisability;
(VIII) orthopedic impairment;
(IX) other health impairment;
(X) traumatic brain injury; or
(XI) visual impairment;
(B) is not receiving residential services from:
(I) the Division of Services for People with Disabilities created under Section 62A-5-102 ;
or
(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind; and
(C) is enrolled in:
(I) an education program for students with disabilities that is authorized under Section
53A-15-301 ; or
(II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind; or
(ii) is identified under guidelines of the Department of Health as qualified for:
(A) Early Intervention; or
(B) Infant Development Services.
(g) "Employer," "employee," and "wages" are defined as provided in Section 59-10-401 .
(h) "Fiduciary" means:
(i) a guardian;
(ii) a trustee;
(iii) an executor;
(iv) an administrator;
(v) a receiver;
(vi) a conservator; or
(vii) any person acting in any fiduciary capacity for any individual.
(i) "Homesteaded land diminished from the Uintah and Ouray Reservation" means the
homesteaded land that was held to have been diminished from the Uintah and Ouray Reservation
in Hagen v. Utah, 510 U.S. 399 (1994).
(j) "Individual" means a natural person and includes aliens and minors.
(k) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate all
or part of the trust without the consent of a person who has a substantial beneficial interest in the
trust and the interest would be adversely affected by the exercise of the settlor's power to revoke
or terminate all or part of the trust.
(l) For purposes of Subsection 59-10-114 (2)(m), "long-term capital gain" is as defined in
Section 1222, Internal Revenue Code.
(m) "Nonresident individual" means an individual who is not a resident of this state.
(n) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
resident estate or trust.
(o) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
unincorporated organization:
(A) through or by means of which any business, financial operation, or venture is carried
on; and
(B) which is not, within the meaning of this chapter:
(I) a trust;
(II) an estate; or
(III) a corporation.
(ii) "Partnership" does not include any organization not included under the definition of
"partnership" in Section 761, Internal Revenue Code.
(iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
organization described in Subsection (1)(o)(i).
(p) "Qualifying stock" means stock that is:
(i) (A) common; or
(B) preferred;
(ii) as defined by the commission by rule, originally issued to:
(A) a resident or nonresident individual; or
(B) a partnership if the resident or nonresident individual making a subtraction from
federal taxable income in accordance with Subsection 59-10-114 (2)(m):
(I) was a partner when the stock was issued; and
(II) remains a partner until the last day of the taxable year for which the resident or
nonresident individual makes the subtraction from federal taxable income in accordance with
Subsection 59-10-114 (2)(m); and
(iii) issued:
(A) by a Utah small business corporation;
(B) on or after January 1, 2003; and
(C) for:
(I) money; or
(II) other property, except for stock or securities.
(q) (i) "Resident individual" means:
(A) an individual who is domiciled in this state for any period of time during the taxable
year, but only for the duration of the period during which the individual is domiciled in this state;
or
(B) an individual who is not domiciled in this state but:
(I) maintains a permanent place of abode in this state; and
(II) spends in the aggregate 183 or more days of the taxable year in this state.
(ii) For purposes of Subsection (1)(q)(i)(B), a fraction of a calendar day shall be counted
as a whole day.
(r) (i) "Resident estate" or "resident trust" [
[
[
[
[
[
[
(s) For purposes of Subsection 59-10-114 (2)(m), "short-term capital gain" is as defined in
Section 1222, Internal Revenue Code.
(t) "Taxable income" and "state taxable income" are defined as provided in Sections
59-10-111 , 59-10-112 , 59-10-116 , 59-10-201.1 , and 59-10-204 .
(u) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or trust,
whose income is subject in whole or part to the tax imposed by this chapter.
(v) "Uintah and Ouray Reservation" means the lands recognized as being included within
the Uintah and Ouray Reservation in:
(i) Hagen v. Utah, 510 U.S. 399 (1994); and
(ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).
(w) (i) "Utah small business corporation" means a corporation that:
(A) is a small business corporation as defined in Section 1244(c)(3), Internal Revenue
Code;
(B) except as provided in Subsection (1)(w)(ii), meets the requirements of Section
1244(c)(1)(C), Internal Revenue Code; and
(C) has its commercial domicile in this state.
(ii) Notwithstanding Subsection (1)(w)(i)(B), the time period described in Section
1244(c)(1)(C) and Section 1244(c)(2), Internal Revenue Code, for determining the source of a
corporation's aggregate gross receipts shall end on the last day of the taxable year for which the
resident or nonresident individual makes a subtraction from federal taxable income in accordance
with Subsection 59-10-114 (2)(m).
(x) "Ute tribal member" means a person who is enrolled as a member of the Ute Indian
Tribe of the Uintah and Ouray Reservation.
(y) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
(2) (a) Any term used in this chapter has the same meaning as when used in comparable
context in the laws of the United States relating to federal income taxes unless a different meaning
is clearly required.
(b) Any reference to the Internal Revenue Code or to the laws of the United States shall
mean the Internal Revenue Code or other provisions of the laws of the United States relating to
federal income taxes that are in effect for the taxable year.
(c) Any reference to a specific section of the Internal Revenue Code or other provision of
the laws of the United States relating to federal income taxes shall include any corresponding or
comparable provisions of the Internal Revenue Code as hereafter amended, redesignated, or
reenacted.
Section 7. Section 75-1-201 is amended to read:
75-1-201. General definitions.
Subject to additional definitions contained in the subsequent chapters that are applicable to
specific chapters, parts, or sections, and unless the context otherwise requires, in this code:
(1) "Agent" includes an attorney-in-fact under a durable or nondurable power of attorney,
an individual authorized to make decisions concerning another's health care, and an individual
authorized to make decisions for another under a natural death act.
(2) "Application" means a written request to the registrar for an order of informal probate
or appointment under Title 75, Chapter 3, Part 3, Informal Probate and Appointment
Proceedings.
(3) "Beneficiary," as it relates to trust beneficiaries, includes a person who has any present
or future interest, vested or contingent, and also includes the owner of an interest by assignment
or other transfer; as it relates to a charitable trust, includes any person entitled to enforce the
trust; as it relates to a "beneficiary of a beneficiary designation," refers to a beneficiary of an
insurance or annuity policy, of an account with POD designation, of a security registered in
beneficiary form (TOD), or of a pension, profit-sharing, retirement, or similar benefit plan, or
other nonprobate transfer at death; and, as it relates to a "beneficiary designated in a governing
instrument," includes a grantee of a deed, a devisee, a trust beneficiary, a beneficiary of a
beneficiary designation, a donee, appointee, or taker in default of a power of appointment, and a
person in whose favor a power of attorney or a power held in any individual, fiduciary, or
representative capacity is exercised.
(4) "Beneficiary designation" refers to a governing instrument naming a beneficiary of an
insurance or annuity policy, of an account with POD designation, of a security registered in
beneficiary form (TOD), or of a pension, profit-sharing, retirement, or similar benefit plan, or
other nonprobate transfer at death.
(5) "Child" includes any individual entitled to take as a child under this code by intestate
succession from the parent whose relationship is involved and excludes any person who is only a
stepchild, a foster child, a grandchild, or any more remote descendant.
(6) "Claims," in respect to estates of decedents and protected persons, includes liabilities
of the decedent or protected person, whether arising in contract, in tort, or otherwise, and
liabilities of the estate which arise at or after the death of the decedent or after the appointment of
a conservator, including funeral expenses and expenses of administration. "Claims" does not
include estate or inheritance taxes, or demands or disputes regarding title of a decedent or
protected person to specific assets alleged to be included in the estate.
(7) "Conservator" means a person who is appointed by a court to manage the estate of a
protected person.
(8) "Court" means any of the courts of record in this state having jurisdiction in matters
relating to the affairs of decedents.
(9) "Descendant" of an individual means all of his descendants of all generations, with the
relationship of parent and child at each generation being determined by the definition of child and
parent contained in this title.
(10) "Devise," when used as a noun, means a testamentary disposition of real or personal
property and, when used as a verb, means to dispose of real or personal property by will.
(11) "Devisee" means any person designated in a will to receive a devise. For the
purposes of Title 75, Chapter 3, Probate of Wills and Administration, in the case of a devise to an
existing trust or trustee, or to a trustee in trust described by will, the trust or trustee is the
devisee, and the beneficiaries are not devisees.
(12) "Disability" means cause for a protective order as described by Section 75-5-401 .
(13) "Distributee" means any person who has received property of a decedent from his
personal representative other than as a creditor or purchaser. A testamentary trustee is a
distributee only to the extent of distributed assets or increment thereto remaining in his hands. A
beneficiary of a testamentary trust to whom the trustee has distributed property received from a
personal representative is a distributee of the personal representative. For purposes of this
provision, "testamentary trustee" includes a trustee to whom assets are transferred by will, to the
extent of the devised assets.
(14) "Estate" includes the property of the decedent, trust, or other person whose affairs
are subject to this title as originally constituted and as it exists from time to time during
administration.
(15) "Exempt property" means that property of a decedent's estate which is described in
Section 75-2-403 .
(16) "Fiduciary" includes a personal representative, guardian, conservator, and trustee.
(17) "Foreign personal representative" means a personal representative of another
jurisdiction.
(18) "Formal proceedings" means proceedings conducted before a judge with notice to
interested persons.
(19) "Governing instrument" means a deed, will, trust, insurance or annuity policy,
account with POD designation, security registered in beneficiary form (TOD), pension,
profit-sharing, retirement, or similar benefit plan, instrument creating or exercising a power of
appointment or a power of attorney, or a dispositive, appointive, or nominative instrument of any
similar type.
(20) "Guardian" means a person who has qualified as a guardian of a minor or
incapacitated person pursuant to testamentary or court appointment, or by written instrument as
provided in Section 75-5-202.5 , but excludes one who is merely a guardian ad litem.
(21) "Heirs," except as controlled by Section 75-2-711 , means persons, including the
surviving spouse and state, who are entitled under the statutes of intestate succession to the
property of a decedent.
(22) "Incapacitated person" means any person who is impaired by reason of mental
illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication,
or other cause, except minority, to the extent of lacking sufficient understanding or capacity to
make or communicate responsible decisions.
(23) "Informal proceedings" mean those conducted without notice to interested persons
by an officer of the court acting as a registrar for probate of a will or appointment of a personal
representative.
(24) "Interested person" includes heirs, devisees, children, spouses, creditors,
beneficiaries, and any others having a property right in or claim against a trust estate or the estate
of a decedent, ward, or protected person. It also includes persons having priority for appointment
as personal representative [
trust, if living, or the settlor's legal representative, if any, if the settlor is living but incapacitated.
The meaning as it relates to particular persons may vary from time to time and shall be determined
according to the particular purposes of, and matter involved in, any proceeding.
(25) "Issue" of a person means descendant as defined in Subsection (9).
(26) "Joint tenants with the right of survivorship" and "community property with the right
of survivorship" includes coowners of property held under circumstances that entitle one or more
to the whole of the property on the death of the other or others, but excludes forms of
coownership registration in which the underlying ownership of each party is in proportion to that
party's contribution.
(27) "Lease" includes an oil, gas, or other mineral lease.
(28) "Letters" includes letters testamentary, letters of guardianship, letters of
administration, and letters of conservatorship.
(29) "Minor" means a person who is under 18 years of age.
(30) "Mortgage" means any conveyance, agreement, or arrangement in which property is
used as security.
(31) "Nonresident decedent" means a decedent who was domiciled in another jurisdiction
at the time of his death.
(32) "Organization" includes a corporation, limited liability company, business trust,
estate, trust, partnership, joint venture, association, government or governmental subdivision or
agency, or any other legal or commercial entity.
(33) "Parent" includes any person entitled to take, or who would be entitled to take if the
child died without a will, as a parent under this code by intestate succession from the child whose
relationship is in question and excludes any person who is only a stepparent, foster parent, or
grandparent.
(34) "Payor" means a trustee, insurer, business entity, employer, government,
governmental agency or subdivision, or any other person authorized or obligated by law or a
governing instrument to make payments.
(35) "Person" means an individual or an organization.
(36) (a) "Personal representative" includes executor, administrator, successor personal
representative, special administrator, and persons who perform substantially the same function
under the law governing their status.
(b) "General personal representative" excludes special administrator.
(37) "Petition" means a written request to the court for an order after notice.
(38) "Proceeding" includes action at law and suit in equity.
(39) "Property" includes both real and personal property or any interest therein and means
anything that may be the subject of ownership.
(40) "Protected person" means a person for whom a conservator has been appointed. A
"minor protected person" means a minor for whom a conservator has been appointed because of
minority.
(41) "Protective proceeding" means a proceeding described in Section 75-5-401 .
(42) "Registrar" refers to the official of the court designated to perform the functions of
registrar as provided in Section 75-1-307 .
(43) "Security" includes any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest, or participation in an oil, gas, or mining title or lease or in
payments out of production under such a title or lease, collateral trust certificate, transferable
share, voting trust certificate, and, in general, any interest or instrument commonly known as a
security, or any certificate of interest or participation, any temporary or interim certificate, receipt,
or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of the
foregoing.
(44) "Settlement," in reference to a decedent's estate, includes the full process of
administration, distribution, and closing.
(45) "Special administrator" means a personal representative as described in Sections
75-3-614 through 75-3-618 .
(46) "State" means a state of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, [
of the United States, or a Native American tribe or band recognized by federal law or formally
acknowledged by a state.
(47) "Successor personal representative" means a personal representative, other than a
special administrator, who is appointed to succeed a previously appointed personal representative.
(48) "Successors" means persons, other than creditors, who are entitled to property of a
decedent under the decedent's will or this title.
(49) "Supervised administration" refers to the proceedings described in Title 75, Chapter
3, Part 5, Supervised Administration.
(50) "Survive," except for purposes of Part 3 of Article VI, Uniform TOD Security
Registration Act, means that an individual has neither predeceased an event, including the death of
another individual, nor is considered to have predeceased an event under Section 75-2-104 or
75-2-702 . The term includes its derivatives, such as "survives," "survived," "survivor," and
"surviving."
(51) "Testacy proceeding" means a proceeding to establish a will or determine intestacy.
(52) "Testator" includes an individual of either sex.
(53) "Trust" includes any express trust, private or charitable, with additions thereto,
wherever and however created. The term also includes a trust created or determined by judgment
or decree under which the trust is to be administered in the manner of an express trust. The term
excludes other constructive trusts, and it excludes resulting trusts, conservatorships, personal
representatives, trust accounts as defined in Title 75, Chapter 6, Nonprobate Transfers, custodial
arrangements pursuant to any Uniform Transfers To Minors Act, business trusts providing for
certificates to be issued to beneficiaries, common trust funds, voting trusts, preneed funeral plans
under Title 58, Chapter 9, Funeral Services Licensing Act, security arrangements, liquidation
trusts, and trusts for the primary purpose of paying debts, dividends, interest, salaries, wages,
profits, pensions, or employee benefits of any kind, and any arrangement under which a person is
nominee or escrowee for another.
(54) "Trustee" includes an original, additional, [
whether or not appointed or confirmed by the court.
(55) "Ward" means a person for whom a guardian has been appointed. A "minor ward" is
a minor for whom a guardian has been appointed solely because of minority.
(56) "Will" includes codicil and any testamentary instrument which merely appoints an
executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits
the right of an individual or class to succeed to property of the decedent passing by intestate
succession.
Section 8. Section 75-1-403 is amended to read:
75-1-403. Pleadings -- When parties bound by others -- Notice.
In formal proceedings involving inter vivos or testamentary trusts, including proceedings
to modify or terminate a trust, estates of decedents, minors, protected persons, or incapacitated
persons, and in judicially supervised settlements, the following apply:
(1) Interests to be affected shall be described in pleadings which give reasonable
information to owners by name or class, by reference to the instrument creating the interests, or in
any other appropriate manner.
[
[
[
[
[
[
[
[
[
[
[
[
person. Notice may be given both to a person and to another who may bind him.
[
[
[
[
Section 9. Section 75-2-1209 is amended to read:
75-2-1209. Real estate conveyed to a trust under the Statutory Rule Against
Perpetuities.
On or after the effective date, when title to real property is granted to the trustee of a trust
governed by Title 75, Chapter 2, Part 12, [
terms of the trust, provisions regarding the appointment of successor trustees, and the names and
addresses of successor trustees must be disclosed in accordance with Section [
75-7-816 .
Section 10. Section 75-3-703 is amended to read:
75-3-703. General duties -- Relation and liability to persons interested in estate --
Standing to sue.
(1) A personal representative is a fiduciary who shall observe the standard of care
applicable to trustees as described by Section [
under a duty to settle and distribute the estate of the decedent in accordance with the terms of any
probated and effective will and this code and as expeditiously and efficiently as is consistent with
the best interests of the estate. He shall use the authority conferred upon him by this code, the
terms of the will, if any, and any order in proceedings to which he is party for the best interests of
successors to the estate.
(2) A personal representative shall not be surcharged for acts of administration or
distribution if the conduct in question was authorized at the time. Subject to other obligations of
administration, an informally probated will is authority to administer and distribute the estate
according to its terms. An order of appointment of a personal representative, whether issued in
informal or formal proceedings, is authority to distribute apparently intestate assets to the heirs of
the decedent if, at the time of distribution, the personal representative is not aware of a pending
testacy proceeding, a proceeding to vacate an order entered in an earlier testacy proceeding, a
formal proceeding questioning his appointment or fitness to continue, or a supervised
administration proceeding. Nothing in this section affects the duty of the personal representative
to administer and distribute the estate in accordance with the rights of claimants, the surviving
spouse, any minor and dependent children, and any pretermitted child of the decedent as described
elsewhere in this code.
(3) Except as to proceedings which do not survive the death of the decedent, a personal
representative of a decedent domiciled in this state at his death has the same standing to sue and
be sued in the courts of this state and courts of any other jurisdiction as his decedent had
immediately prior to death.
Section 11. Section 75-3-913 is amended to read:
75-3-913. Distributions to trustee.
(1) Before distributing to a trustee, the personal representative may require that the trust
be registered if the state in which it is to be administered provides for registration and that the
trustee inform the qualified beneficiaries as provided in Section [
(2) If the trust instrument does not excuse the trustee from giving bond, the personal
representative may petition the appropriate court to require that the trustee post bond if he
apprehends that distribution might jeopardize the interests of persons who are not able to protect
themselves; and he may withhold distribution until the court has acted.
(3) No inference of negligence on the part of the personal representative shall be drawn
from his failure to exercise the authority conferred by Subsections (1) and (2).
Section 12. Section 75-5-417 is amended to read:
75-5-417. General duty of conservator.
(1) A conservator shall act as a fiduciary and shall observe the standards of care as set
forth in Section [
(2) The conservator shall, for all estates in excess of $50,000, excluding the residence
owned by the ward, send a report with a full accounting to the court on an annual basis. For
estates less than $50,000, excluding the residence owned by the ward, the conservator shall fill
out an informal annual report and mail the report to the court. The report shall include the
following: a statement of assets at the beginning and end of the reporting year, income received
during the year, disbursements for the support of the ward, and other expenses incurred by the
estate. The court may require additional information. The forms for both the informal report for
estates under $50,000, excluding the residence owned by the ward, and the full accounting report
for larger estates shall be approved by the judicial council. This annual report shall be examined
and approved by the court.
(3) Corporate fiduciaries are not required to fully petition the court, but shall submit their
internal report annually to the court. The report shall be examined and approved by the court.
(4) (a) [
receiving written notice of the failure to file and after a grace period of two months have elapsed,
a conservator or corporate fiduciary: [
(i) makes a substantial misstatement on filings of any required annual reports; [
(ii) is guilty of gross impropriety in handling the property of the ward; or [
(iii) willfully fails to file the report required by this section[
(b) The court may also order restitution of funds misappropriated from the estate of a
ward.
(c) The penalty shall be paid by the conservator or corporate fiduciary and may not be
paid by the estate.
(5) These provisions and penalties governing annual reports do not apply if the
conservator is the parent of the ward.
Section 13. Section 75-7-101 is repealed and reenacted to read:
75-7-101. Title.
This chapter is known as the "Utah Uniform Trust Code."
Section 14. Section 75-7-102 is enacted to read:
75-7-102. Scope.
This chapter applies to trusts as defined in Section 75-1-201 .
Section 15. Section 75-7-103 is enacted to read:
75-7-103. Definitions.
(1) In this chapter:
(a) "Action," with respect to an act of a trustee, includes a failure to act.
(b) "Beneficiary" means a person that:
(i) has a present or future beneficial interest in a trust, vested or contingent; or
(ii) in a capacity other than that of trustee, holds a power of appointment over trust
property.
(c) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose
described in Subsection 75-7-405 (1).
(d) "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance
relating to protection of the environment.
(e) "Interests of the beneficiaries" means the beneficial interests provided in the terms of
the trust.
(f) "Jurisdiction," with respect to a geographic area, includes a state or country.
(g) "Power of withdrawal" means a presently exercisable general power of appointment
other than a power exercisable only upon consent of the trustee or a person holding an adverse
interest.
(h) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's
qualification is determined:
(i) is a current distributee or permissible distributee of trust income or principal; or
(ii) would be a distributee or permissible distributee of trust income or principal if the
trust terminated on that date.
(i) "Resident estate" or "resident trust"means:
(i) an estate of a decedent who at death was domiciled in this state;
(ii) a trust, or a portion of a trust, consisting of property transferred by will of a decedent
who at his death was domiciled in this state; or
(iii) a trust administered in this state.
(j) "Revocable," as applied to a trust, means revocable by the settlor without the consent
of the trustee or a person holding an adverse interest.
(k) "Settlor" means a person, including a testator, who creates, or contributes property
to, a trust. If more than one person creates or contributes property to a trust, each person is a
settlor of the portion of the trust property attributable to that person's contribution except to the
extent another person has the power to revoke or withdraw that portion.
(l) "Spendthrift provision" means a term of a trust which restrains both voluntary and
involuntary transfer or encumbrance of a beneficiary's interest.
(m) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's
provisions as expressed in the trust instrument or as may be established by other evidence that
would be admissible in a judicial proceeding.
(n) "Trust instrument" means an instrument executed by the settlor that contains terms of
the trust, including any amendments thereto.
(2) Terms not specifically defined in this section have the meanings provided in Section
75-1-201 .
Section 16. Section 75-7-104 is enacted to read:
75-7-104. Knowledge.
(1) Subject to Subsection (2), a person has knowledge of a fact if the person:
(a) has actual knowledge of it;
(b) has received a notice or notification of it; or
(c) from all the facts and circumstances known to the person at the time in question, has
reason to know it.
(2) An organization that conducts activities through employees has notice or knowledge
of a fact involving a trust only from the time the information was received by an employee having
responsibility to act for the trust, or would have been brought to the employee's attention if the
organization had exercised reasonable diligence. An organization exercises reasonable diligence if
it maintains reasonable routines for communicating significant information to the employee having
responsibility to act for the trust and there is reasonable compliance with the routines. Reasonable
diligence does not require an employee of the organization to communicate information unless the
communication is part of the individual's regular duties or the individual knows a matter involving
the trust would be materially affected by the information.
Section 17. Section 75-7-105 is enacted to read:
75-7-105. Default and mandatory rules.
(1) Except as otherwise provided in the terms of the trust, this chapter governs the duties
and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.
(2) Except as specifically provided in this chapter, the terms of a trust prevail over any
provision of this chapter except:
(a) the requirements for creating a trust;
(b) the duty of a trustee to act in good faith and in accordance with the purposes of the
trust;
(c) the requirement that a trust and its terms be for the benefit of its beneficiaries;
(d) the power of the court to modify or terminate a trust under Sections 75-7-410
through 75-7-416 ;
(e) the effect of a spendthrift provision, Section 26-6-14 , and the rights of certain
creditors and assignees to reach a trust as provided in Part 5, Creditor's Claims-Spendthrift and
Discretionary Trusts;
(f) the power of the court under Section 75-7-702 to require, dispense with, or modify or
terminate a bond;
(g) the effect of an exculpatory term under Section 75-7-1008 ;
(h) the rights under Sections 75-7-1010 through 75-7-1013 of a person other than a
trustee or beneficiary;
(i) periods of limitation for commencing a judicial proceeding; and
(j) the subject-matter jurisdiction of the court and venue for commencing a proceeding as
provided in Sections 75-7-203 and 75-7-205 .
Section 18. Section 75-7-106 is enacted to read:
75-7-106. Common law of trusts -- Principles of equity.
The common law of trusts and principles of equity supplement this chapter, except to the
extent modified by this chapter or laws of this state.
Section 19. Section 75-7-107 , which is renumbered from Section 75-7-208 is renumbered
and amended to read:
[
(1) For purposes of this section:
(a) "Foreign trust" means a trust that is created in another state or country and valid in the
state or country in which the trust is created.
(b) "State law provision" means a provision that the laws of a named state govern the
validity, construction, and administration of a trust.
(2) If a trust has a state law provision specifying this state, the validity, construction, and
administration of the trust are to be governed by the laws of this state if any administration of the
trust is done in this state.
(3) For all trusts created on or after December 31, 2003, if a trust does not have a state
law provision, the validity, construction, and administration of the trust are to be governed by the
laws of this state if the trust is administered in this state.
(4) A trust shall be considered to be administered in this state if:
(a) the trust states that this state is the place of administration, and any administration of
the trust is done in this state; or
(b) the place of business where the fiduciary transacts a major portion of its
administration of the trust is in this state.
[
following provisions are effective and enforceable under the laws of this state:
(a) a provision in the trust that restricts the transfer of trust assets in a manner similar to
Section 25-6-14 ;
(b) a provision that allows the trust to be perpetual; or
(c) a provision that is not expressly prohibited by the law of this state.
[
the trust complied with the laws of this state at the time of the trust's creation or after the trust's
creation.
[
state if it meets the requirements of Subsection [
Section 20. Section 75-7-108 is enacted to read:
75-7-108. Principal place of administration.
(1) Without precluding other means for establishing a sufficient connection with the
designated jurisdiction, terms of a trust designating the principal place of administration are valid
and controlling if:
(a) a trustee's principal place of business is located in or a trustee is a resident of the
designated jurisdiction; or
(b) all or part of the administration occurs in the designated jurisdiction.
(2) A trustee is under a continuing duty to administer the trust at a place appropriate to
its purposes, its administration, and the interests of the beneficiaries.
(3) Without precluding the right of the court to order, approve, or disapprove a transfer,
the trustee, in furtherance of the duty prescribed by Subsection (2), may transfer the trust's
principal place of administration to another state or to a jurisdiction outside of the United States.
(4) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's
principal place of administration not less than 60 days before initiating the transfer. The notice of
proposed transfer must include:
(a) the name of the jurisdiction to which the principal place of administration is to be
transferred;
(b) the address and telephone number at the new location at which the trustee can be
contacted;
(c) an explanation of the reasons for the proposed transfer;
(d) the date on which the proposed transfer is anticipated to occur; and
(e) the date, not less than 60 days after the giving of the notice, by which the qualified
beneficiary must notify the trustee of an objection to the proposed transfer.
(5) The authority of a trustee under this section to transfer a trust's principal place of
administration terminates if a qualified beneficiary notifies the trustee of an objection to the
proposed transfer on or before the date specified in the notice.
(6) In connection with a transfer of the trust's principal place of administration, the trustee
may transfer some or all of the trust property to a successor trustee designated in the terms of the
trust or appointed pursuant to Section 75-7-704 .
Section 21. Section 75-7-109 is enacted to read:
75-7-109. Methods and waiver of notice.
(1) Notice to a person under this chapter or the sending of a document to a person under
this chapter must be accomplished in a manner reasonably suitable under the circumstances and
likely to result in receipt of the notice or document. Permissible methods of notice or for sending
a document include first-class mail, personal delivery, delivery to the person's last known place of
residence or place of business, or a properly directed electronic message.
(2) Notice under this chapter or the sending of a document under this chapter may be
waived by the person to be notified or sent the document.
(3) Notice of a judicial proceeding must be given as provided in the applicable rules of
civil procedure.
Section 22. Section 75-7-110 is enacted to read:
75-7-110. Nonjudicial settlement agreements.
(1) For purposes of this section, "interested persons" means persons whose consent
would be required in order to achieve a binding settlement were the settlement to be approved by
the court.
(2) Except as otherwise provided in Subsection (3), interested persons may enter into a
binding nonjudicial settlement agreement with respect to any matter involving a trust.
(3) A nonjudicial settlement agreement is valid only to the extent it does not violate a
material purpose of the trust and includes terms and conditions that could be properly approved
by the court under this chapter or other applicable law.
(4) Matters that may be resolved by a nonjudicial settlement agreement include:
(a) the interpretation or construction of the terms of the trust;
(b) the approval of a trustee's report or accounting;
(c) direction to a trustee to refrain from performing a particular act or the grant to a
trustee of any necessary or desirable power;
(d) the resignation or appointment of a trustee and the determination of a trustee's
compensation;
(e) transfer of a trust's principal place of administration; and
(f) liability of a trustee for an action relating to the trust.
(5) Any interested person may request the court to approve a nonjudicial settlement
agreement, to determine whether the representation as provided in Part 3, Representation, was
adequate, and to determine whether the agreement contains terms and conditions the court could
have properly approved.
Section 23. Section 75-7-111 is enacted to read:
75-7-111. Rules of construction.
The rules of construction that apply to the interpretation of and disposition of property by
will or other governing instrument, as defined in Section 75-1-201 , also apply as appropriate to
the interpretation of the terms of a trust and the disposition of the trust property.
Section 24. Section 75-7-112 is enacted to read:
75-7-112. Penalty provisions.
A provision in a trust instrument purporting to penalize a beneficiary by charging the
beneficiary's interest in the trust, or to penalize the beneficiary in another manner, for instituting a
proceeding to challenge the acts of the trustee or other fiduciary of a trust, or for instituting other
proceedings relating to the trust is unenforceable if probable cause exists for instituting the
proceedings.
Section 25. Section 75-7-202 is amended to read:
75-7-202. Effect of administration in this state -- Consent to jurisdiction.
(1) The trustee submits personally to the jurisdiction of the courts of this state regarding
any matter involving the trust if the trustee acts as trustee of a trust administered in this state.
(2) To the extent of the beneficial interests in a trust administered in this state, the
beneficiaries of the trust are subject to the jurisdiction of the courts of this state regarding any
matter involving the trust. By accepting a distribution from such a trust, the recipient submits
personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
(3) By accepting the delegation of a trust function from the trustee of a trust administered
in this state, the agent submits to the jurisdiction of the courts of this state regarding any matter
involving the trust.
(4) Unless otherwise designated in the trust instrument, a trust is administered in this state
if it meets the requirements of Subsection [
Section 26. Section 75-7-203 is repealed and reenacted to read:
75-7-203. Subject matter jurisdiction.
(1) The district court has exclusive jurisdiction of proceedings in this state brought by a
trustee or beneficiary concerning the administration of a trust.
(2) The district court has concurrent jurisdiction with other courts of this state of other
proceedings involving a trust.
(3) This section does not preclude judicial or nonjudicial alternative dispute resolution.
Section 27. Section 75-7-205 is repealed and reenacted to read:
75-7-205. Venue.
(1) Except as otherwise provided in Subsection (2), venue for a judicial proceeding
involving a trust is in the county in which the trust's principal place of administration is or will be
located and, if the trust is created by will and the estate is not yet closed, in the county in which
the decedent's estate is being administered.
(2) If a trust has no trustee, venue for a judicial proceeding for the appointment of a
trustee is in any county of this state in which a beneficiary resides, in any county in which any
trust property is located, and if the trust is created by will, in the county in which the decedent's
estate was or is being administered.
Section 28. Section 75-7-301 is repealed and reenacted to read:
75-7-301. Basic effect.
(1) Notice to a person who may represent and bind another person under this part has the
same effect as if notice were given directly to the other person.
(2) The consent of a person who may represent and bind another person under this part is
binding on the person represented unless the person represented objects to the representation
before the consent would otherwise have become effective.
(3) Except as otherwise provided in Sections 75-7-411 and 25-6-14 , a person who under
this part may represent a settlor who lacks capacity may receive notice and give a binding consent
on the settlor's behalf.
Section 29. Section 75-7-302 is repealed and reenacted to read:
75-7-302. Representation by holder of general testamentary power of appointment.
To the extent there is no conflict of interest between the holder of a general testamentary
power of appointment and the persons represented with respect to the particular question or
dispute, the holder may represent and bind persons whose interests, as permissible appointees,
takers in default, or otherwise, are subject to the power.
Section 30. Section 75-7-303 is repealed and reenacted to read:
75-7-303. Representation by fiduciaries and parents.
To the extent there is no conflict of interest between the representative and the person
represented or among those being represented with respect to a particular question or dispute:
(1) a conservator may represent and bind the protected person whose estate the
conservator controls;
(2) a guardian may represent and bind the ward if a conservator of the ward's estate has
not been appointed;
(3) an agent having authority to act with respect to the particular question or dispute may
represent and bind the principal;
(4) a trustee may represent and bind the beneficiaries of the trust;
(5) a personal representative of a decedent's estate may represent and bind persons
interested in the estate; and
(6) a parent may represent and bind the parent's minor or unborn child if a conservator or
guardian for the child has not been appointed.
Section 31. Section 75-7-304 is repealed and reenacted to read:
75-7-304. Representation by person having substantially identical interest.
Unless otherwise represented, a minor, incapacitated, or unborn individual, or a person
whose identity or location is unknown and not reasonably ascertainable, may be represented by
and bound by another having a substantially identical interest with respect to the particular
question or dispute, but only to the extent there is no conflict of interest between the
representative and the person represented.
Section 32. Section 75-7-305 is repealed and reenacted to read:
75-7-305. Appointment of guardian ad litem or other representative.
(1) If the court determines that an interest is not represented under this part, or that the
otherwise available representation might be inadequate, the court may appoint a guardian ad litem
or other representative to receive notice, give consent, and otherwise represent, bind, and act on
behalf of a minor, incapacitated or protected person, or unborn individual, or a person whose
identity or location is unknown. A guardian ad litem or other representative may be appointed to
represent several persons or interests.
(2) A guardian ad litem or other representative may act on behalf of the individual
represented with respect to any matter arising under this chapter, whether or not a judicial
proceeding concerning the trust is pending.
(3) In making decisions, a guardian ad litem or other representative may consider general
benefit accruing to the living members of the individual's family.
Section 33. Section 75-7-401 is repealed and reenacted to read:
75-7-401. Methods of creating trust.
A trust may be created by:
(1) transfer of property to another person as trustee during the settlor's lifetime or by will
or other disposition taking effect upon the settlor's death;
(2) declaration by the owner of property that the owner holds identifiable property as
trustee; or
(3) exercise of a power of appointment in favor of a trustee.
Section 34. Section 75-7-402 is repealed and reenacted to read:
75-7-402. Requirements for creation.
(1) A trust is created only if:
(a) the settlor has capacity to create a trust, which standard of capacity shall be the same
as for a person to create a will;
(b) the settlor indicates an intention to create the trust or a statute, judgment, or decree
authorizes the creation of a trust;
(c) the trust has a definite beneficiary or is:
(i) a charitable trust;
(ii) a trust for the care of an animal, as provided in Section 75-2-1001 ; or
(iii) a trust for a noncharitable purpose, as provided in Section 75-2-1001 ;
(d) the trustee has duties to perform; and
(e) the same person is not the sole trustee and sole beneficiary.
(2) A beneficiary is definite if the beneficiary can be ascertained now or in the future,
subject to any applicable rule against perpetuities.
(3) A power in a trustee to select a beneficiary from an indefinite class is valid. If the
power is not exercised within a reasonable time, the power fails and the property subject to the
power passes to the persons who would have taken the property had the power not been
conferred.
Section 35. Section 75-7-403 is repealed and reenacted to read:
75-7-403. Trusts created in other jurisdictions.
A trust not created by will is validly created if its creation complies with the law of the
jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which, at
the time of creation:
(1) the settlor was domiciled, had a place of abode, or was a national;
(2) a trustee was domiciled or had a place of business; or
(3) any trust property was located.
Section 36. Section 75-7-404 is repealed and reenacted to read:
75-7-404. Trust purposes.
A trust may be created only to the extent its purposes are lawful, not contrary to public
policy, and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries.
Section 37. Section 75-7-405 is repealed and reenacted to read:
75-7-405. Charitable purposes -- Enforcement.
(1) A charitable trust may be created for the relief of poverty, the advancement of
education or religion, the promotion of health, governmental or municipal purposes, or other
purposes the achievement of which is beneficial to the community.
(2) If the terms of a charitable trust do not indicate a particular charitable purpose or
beneficiary, the trustee, if authorized by the terms of the trust, or if not, the court may select one
or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's
intention to the extent it can be ascertained.
(3) The settlor of a charitable trust, among others, may maintain a proceeding to enforce
the trust.
Section 38. Section 75-7-406 is repealed and reenacted to read:
75-7-406. Creation of trust induced by fraud, duress, or undue influence.
A trust is void to the extent its creation was induced by fraud, duress, or undue influence.
Section 39. Section 75-7-407 is repealed and reenacted to read:
75-7-407. Evidence of oral trust.
Except as required by a statute other than this chapter, a trust need not be evidenced by a
trust instrument, but the creation of an oral trust and its terms may be established only by clear
and convincing evidence.
Section 40. Section 75-7-408 is repealed and reenacted to read:
75-7-408. Trust for care of animal.
A trust may be created to provide for the care of a pet or animal as provided in Section
75-2-1001 .
Section 41. Section 75-7-409 is repealed and reenacted to read:
75-7-409. Noncharitable trust without ascertainable beneficiary.
A trust may be created for a noncharitable purpose without a definite or definitely
ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the
trustee as provided in Section 75-2-1001 .
Section 42. Section 75-7-410 is repealed and reenacted to read:
75-7-410. Modification or termination of trust -- Proceedings for approval or
disapproval.
(1) In addition to the methods of termination prescribed by Sections 75-7-411 through
75-7-414 , a trust terminates to the extent the trust is revoked or expires pursuant to its terms, no
purpose of the trust remains to be achieved, or the purposes of the trust have become unlawful,
contrary to public policy, or impossible to achieve.
(2) A proceeding to approve or disapprove a proposed modification or termination under
Sections 75-7-411 through 75-7-416 , or trust combination or division under Section 75-7-417 ,
may be commenced by a trustee or qualified beneficiary, and a proceeding to approve or
disapprove a proposed modification or termination under Section 75-7-411 may be commenced
by the settlor. The settlor of a charitable trust may maintain a proceeding to modify the trust
under Section 75-7-413 .
Section 43. Section 75-7-411 is repealed and reenacted to read:
75-7-411. Modification or termination of noncharitable irrevocable trust by
consent.
(1) A noncharitable, irrevocable trust may be modified or terminated upon consent of the
settlor and all beneficiaries, even if the modification or termination is inconsistent with a material
purpose of the trust. A settlor's power to consent to a trust's termination may be exercised by an
agent under a power of attorney only to the extent expressly authorized by the power of attorney
or the terms of the trust, by the settlor's conservator with the approval of the court supervising the
conservatorship if an agent is not so authorized, or by the settlor's guardian with the approval of
the court supervising the guardianship if an agent is not so authorized and a conservator has not
been appointed.
(2) A noncharitable, irrevocable trust may be terminated upon consent of all of the
beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any
material purpose of the trust. A noncharitable, irrevocable trust may be modified upon consent of
all of the beneficiaries if the court concludes that modification is not inconsistent with a material
purpose of the trust.
(3) A spendthrift provision in the terms of the trust is not presumed to constitute a
material purpose of the trust.
(4) Upon termination of a trust under Subsection (1) or (2), the trustee shall distribute the
trust property as agreed by the beneficiaries.
(5) If not all of the beneficiaries consent to a proposed modification or termination of the
trust under Subsection (1) or (2), the modification or termination may be approved by the court if
the court is satisfied that:
(a) if all of the beneficiaries had consented, the trust could have been modified or
terminated under this section; and
(b) the interests of a beneficiary who does not consent will be adequately protected.
Section 44. Section 75-7-412 is enacted to read:
75-7-412. Modification or termination because of unanticipated circumstances or
inability to administer trust effectively.
(1) The court may modify the administrative or dispositive terms of a trust or terminate
the trust if, because of circumstances not anticipated by the settlor, modification or termination
will further the purposes of the trust. To the extent practicable, the modification must be made in
accordance with the settlor's probable intention.
(2) The court may modify the administrative terms of a trust if continuation of the trust
on its existing terms would be impracticable or wasteful or impair the trust's administration.
(3) Upon termination of a trust under this section, the trustee shall distribute the trust
property as directed by the court or otherwise in a manner consistent with the purposes of the
trust.
Section 45. Section 75-7-413 is enacted to read:
75-7-413. Cy pres.
(1) Except as otherwise provided in Subsection (2), if a particular charitable purpose
becomes unlawful, impracticable, impossible to achieve, or wasteful:
(a) the trust does not fail, in whole or in part;
(b) the trust property does not revert to the settlor or the settlor's successors in interest;
and
(c) the court may apply cy pres to modify or terminate the trust by directing that the trust
property be applied or distributed, in whole or in part, in a manner consistent with the settlor's
charitable purposes.
(2) A provision in the terms of a charitable trust that would result in distribution of the
trust property to a noncharitable beneficiary prevails over the power of the court under
Subsection (1) to apply cy pres to modify or terminate the trust only if, when the provision takes
effect:
(a) the trust property is to revert to the settlor and the settlor is still living; or
(b) fewer than 21 years have elapsed since the date of the trust's creation.
Section 46. Section 75-7-414 is enacted to read:
75-7-414. Modification or termination of uneconomic trust.
(1) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust
property having a total value less than $100,000, may terminate the trust if the trustee concludes
that the value of the trust property is insufficient to justify the cost of administration.
(2) The court may modify or terminate a trust or remove the trustee and appoint a
different trustee if it determines that the value of the trust property is insufficient to justify the cost
of administration.
(3) Upon termination of a trust under this section, the trustee shall distribute the trust
property in a manner consistent with the purposes of the trust.
(4) This section does not apply to an easement for conservation or preservation.
Section 47. Section 75-7-415 is enacted to read:
75-7-415. Reformation to correct mistakes.
The court may reform the terms of a trust, even if unambiguous, to conform the terms to
the settlor's intention if it is proved by clear and convincing evidence that both the settlor's intent
and the terms of the trust were affected by a mistake of fact or law, whether in expression or
inducement.
Section 48. Section 75-7-416 is enacted to read:
75-7-416. Modification to achieve settlor's tax objectives.
To achieve the settlor's tax objectives, the court may modify the terms of a trust in order
to achieve the settlor's tax objectives. The court may provide that the modification has retroactive
effect.
Section 49. Section 75-7-417 is enacted to read:
75-7-417. Combination and division of trusts.
After notice to the qualified beneficiaries, a trustee may combine two or more trusts into a
single trust or divide a trust into two or more separate trusts, if the result does not impair rights of
any beneficiary or adversely affect achievement of the purposes of the trust.
Section 50. Section 75-7-501 is repealed and reenacted to read:
75-7-501. Rights of beneficiary's creditor or assignee.
To the extent a beneficiary's interest is not protected by a spendthrift provision or Section
26-6-14 , the court may authorize a creditor or assignee of the beneficiary to reach the
beneficiary's interest by attachment of present or future distributions to or for the benefit of the
beneficiary or other means. The court may limit the award to relief as is appropriate under the
circumstances.
Section 51. Section 75-7-502 is enacted to read:
75-7-502. Spendthrift provisions for beneficiaries other than the settlor.
(1) A spendthrift provision for a beneficiary other than the settlor is valid only if it
restrains both voluntary and involuntary transfer of a beneficiary's interest, even if the beneficiary
is the trustee or cotrustee of the trust.
(2) A term of a trust providing that the interest of a beneficiary other than the settlor is
held subject to a "spendthrift trust," or words of similar import, is sufficient to restrain both
voluntary and involuntary transfer of the beneficiary's interest.
(3) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift
provision and, except as otherwise provided in this part, a creditor or assignee of the beneficiary
may not reach the interest or a distribution by the trustee before its receipt by the beneficiary.
Section 52. Section 75-7-503 is enacted to read:
75-7-503. Exceptions to spendthrift provision.
(1) In this section, "child" includes any person for whom an order or judgment for child
support has been entered in this or another state.
(2) Even if a trust contains a spendthrift provision, a beneficiary's child who has a
judgment or court order against the beneficiary for support or maintenance, or a judgment
creditor who has provided services for the protection of a beneficiary's interest in the trust, may
obtain from a court an order attaching present or future distributions to or for the benefit of the
beneficiary.
(3) A spendthrift provision is unenforceable against a claim of this state or the United
States to the extent a statute of this state or federal law so provides.
Section 53. Section 75-7-504 is enacted to read:
75-7-504. Discretionary trusts -- Effect of standard.
(1) In this section, "child" includes any person for whom an order or judgment for child
support has been entered in this or another state.
(2) Except as otherwise provided in Subsection (3), whether or not a trust contains a
spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to
the trustee's discretion, even if:
(a) the discretion is expressed in the form of a standard of distribution; or
(b) the trustee has abused the discretion.
(3) To the extent a trustee has not complied with a standard of distribution or has abused
a discretion:
(a) a distribution may be ordered by the court to satisfy a judgment or court order against
the beneficiary for support or maintenance of the beneficiary's child, spouse, or former spouse;
and
(b) the court shall direct the trustee to pay to the child, spouse, or former spouse such
amount as is equitable under the circumstances but not more than the amount the trustee would
have been required to distribute to or for the benefit of the beneficiary had the trustee complied
with the standard or not abused the discretion.
(4) This section does not limit the right of a beneficiary to maintain a judicial proceeding
against a trustee for an abuse of discretion or failure to comply with a standard for distribution.
Section 54. Section 75-7-505 is enacted to read:
75-7-505. Creditor's claim against settlor.
(1) Whether or not the terms of a trust contain a spendthrift provision, the following rules
apply:
(a) During the lifetime of the settlor, the property of a revocable trust is subject to the
claims of the settlor's creditors. If a trust has more than one settlor, the amount the creditor or
assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the
trust attributable to that settlor's contribution.
(b) With respect to an irrevocable trust other than an irrevocable trust that meets the
requirements of Section 25-6-14 , a creditor or assignee of the settlor may reach the maximum
amount that can be distributed to or for the settlor's benefit. If the trust has more than one settlor,
the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's
interest in the portion of the trust attributable to that settlor's contribution.
(c) After the death of a settlor, and subject to the settlor's right to direct the source from
which liabilities will be paid, the property of a trust that was revocable at the settlor's death, but
not property received by the trust as a result of the death of the settlor which is otherwise exempt
from the claims of the settlor's creditors, is subject to claims of the settlor's creditors, costs of
administration of the settlor's estate, the expenses of the settlor's funeral and disposal of remains,
and statutory allowances to a surviving spouse and children to the extent the settlor's probate
estate is inadequate to satisfy those claims, costs, expenses, and allowances.
(2) For purposes of this section:
(a) during the period the power may be exercised, the holder of a power of withdrawal is
treated in the same manner as the settlor of a revocable trust to the extent of the property subject
to the power; and
(b) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of
the trust only to the extent the value of the property affected by the lapse, release, or waiver
exceeds the greater of the amount specified in Subsection 2041(b)(2), 2514(e), or Section
2503(b) of the Internal Revenue Code of 1986, in each case as in effect on May 1, 2004.
Section 55. Section 75-7-506 is enacted to read:
75-7-506. Overdue distribution.
Whether or not a trust contains a spendthrift provision, a creditor or assignee of a
beneficiary may reach a mandatory distribution of income or principal, including a distribution
upon termination of the trust, if the trustee has not made the distribution to the beneficiary within
a reasonable time after the required distribution date.
Section 56. Section 75-7-507 is enacted to read:
75-7-507. Personal obligations of trustee.
Trust property is not subject to personal obligations of the trustee, even if the trustee
becomes insolvent or bankrupt.
Section 57. Section 75-7-508 , which is renumbered from Section 75-7-308 is renumbered
and amended to read:
[
(1) A trustee for an inter vivos revocable trust, upon the death of the settlor, may publish
a notice to creditors once a week for three successive weeks in a newspaper of general circulation
in the county where the settlor resided at the time of death, providing the trustee's name and
address and notifying creditors of the deceased settlor to present their claims within three months
after the date of the first publication of the notice or be forever barred.
(2) A trustee may give written notice by mail or other delivery to any known creditor of
the deceased settlor, notifying the creditor to present his claim within 90 days from the published
notice if given as provided in Subsection (1) or within 60 days from the mailing or other delivery
of the notice, whichever is later, or be forever barred. Written notice shall be the notice described
in Subsection (1) or a similar notice.
(3) The trustee shall not be liable to any creditor or to any successor of the deceased
settlor for giving or failing to give notice under this section.
Section 58. Section 75-7-509 , which is renumbered from Section 75-7-309 is renumbered
and amended to read:
[
(1) All claims against a deceased settlor which arose before the death of the deceased
settlor, including claims of the state and any subdivision of it, whether due or to become due,
absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal basis,
if not barred earlier by other statute of limitations, are barred against the deceased settlor's estate,
the trustee, the trust estate, and the beneficiaries of the deceased settlor's trust, unless presented
within the earlier of the following:
(a) one year after the settlor's death; or
(b) the time provided by Subsection [
actual notice, and where notice is published, within the time provided in Subsection [
75-7-508 (1) for all claims barred by publication.
(2) In all events, claims barred by the nonclaim statute at the deceased settlor's domicile
are also barred in this state.
(3) All claims against a deceased settlor's estate or trust estate which arise at or after the
death of the settlor, including claims of the state and any of its subdivisions, whether due or to
become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or
other legal basis are barred against the deceased settlor's estate, the trustee, the trust estate, and
the beneficiaries of the deceased settlor, unless presented as follows:
(a) a claim based on a contract with the trustee within three months after performance by
the trustee is due; or
(b) any other claim within the later of three months after it arises, or the time specified in
Subsection (1).
(4) Nothing in this section affects or prevents:
(a) any proceeding to enforce any mortgage, pledge, or other lien upon property of the
deceased settlor's estate or the trust estate;
(b) to the limits of the insurance protection only, any proceeding to establish liability of
the deceased settlor or the trustee for which he is protected by liability insurance; or
(c) collection of compensation for services rendered and reimbursement for expenses
advanced by the trustee or by the attorney or accountant for the trustee of the trust estate.
Section 59. Section 75-7-510 , which is renumbered from Section 75-7-310 is renumbered
and amended to read:
[
(1) Claims against a deceased settlor's estate or inter vivos revocable trust shall be
presented as follows:
(a) The claimant may deliver or mail to the trustee, or the trustee's attorney of record, a
written statement of the claim indicating its basis, the name and address of the claimant, and the
amount claimed. The claim is considered presented upon the receipt of the written statement of
claim by the trustee or the trustee's attorney of record. If a claim is not yet due, the date when it
will become due shall be stated. If the claim is contingent or unliquidated, the nature of the
uncertainty shall be stated. If the claim is secured, the security shall be described. Failure to
describe correctly the security, the nature of any uncertainty, and the due date of a claim not yet
due does not invalidate the presentation made.
(b) The claimant may commence a proceeding against the trustee in any court where the
trustee may be subjected to jurisdiction to obtain payment of the claim against the deceased
settlor's estate or the trust estate, but the commencement of the proceeding must occur within the
time limited for presenting the claim. No presentation of claim is required in regard to matters
claimed in proceedings against the deceased settlor which were pending at the time of the
deceased settlor's death.
(2) If a claim is presented under Subsection (1)(a), no proceeding thereon may be
commenced more than 60 days after the trustee has mailed a notice of disallowance; but, in the
case of a claim which is not presently due or which is contingent or unliquidated, the trustee may
consent to an extension of the 60-day period, or to avoid injustice, the court, on petition, may
order an extension of the 60-day period, but in no event may the extension run beyond the
applicable statute of limitations.
Section 60. Section 75-7-511 , which is renumbered from Section 75-7-311 is renumbered
and amended to read:
[
(1) If the applicable assets of the deceased settlor's estate or trust estate are insufficient to
pay all claims in full, the trustee shall make payment in the following order:
(a) reasonable funeral expenses;
(b) costs and expenses of administration;
(c) debts and taxes with preference under federal law;
(d) reasonable and necessary medical and hospital expenses of the last illness of the
deceased settlor, including compensation of persons attending him, and medical assistance if
Section 26-19-13.5 applies;
(e) debts and taxes with preference under other laws of this state; and
(f) all other claims.
(2) No preference shall be given in the payment of any claim over any other claim of the
same class, and a claim due and payable shall not be entitled to a preference over claims not due.
Section 61. Section 75-7-512 , which is renumbered from Section 75-7-312 is renumbered
and amended to read:
[
(1) As to claims presented in the manner described in Section [
within the time limit prescribed in Section [
any claimant stating that the claim has been allowed or disallowed. If, after allowing or
disallowing a claim, the trustee changes the decision concerning the claim, the trustee shall notify
the claimant. The trustee may not change a disallowance of a claim after the time for the claimant
to file a petition for allowance or to commence a proceeding on the claim has expired and the
claim has been barred. If the notice of disallowance warns the claimant of the impending bar, a
claim which is disallowed in whole or in part by the trustee is barred so far as not allowed, unless
the claimant seeks a court-ordered allowance by filing a petition for allowance in the court or by
commencing a proceeding against the trustee not later than 60 days after the mailing of the notice
of disallowance or partial allowance. If the trustee fails to mail notice to a claimant of action on
the claim within 60 days after the time for original presentation of the claim has expired, this
failure has the effect of a notice of allowance.
(2) Upon the petition of the trustee or a claimant in a proceeding for this purpose, the
court may order any claim presented to the trustee or trustee's attorney in a timely manner and not
barred by Subsection (1) to be allowed in whole or in part. Notice of this proceeding shall be
given to the claimant, the trustee, and those other persons interested in the trust estate as the
court may direct by order at the time the proceeding is commenced.
(3) A judgment in a proceeding in another court against the trustee to enforce a claim
against a deceased settlor's estate is a court-ordered allowance of the claim.
(4) Unless otherwise provided in any judgment in another court entered against a trustee,
allowed claims bear interest at the legal rate for the period commencing six months after the
deceased settlor's date of death unless based on a contract making a provision for interest, in
which case they bear interest in accordance with that provision.
Section 62. Section 75-7-513 , which is renumbered from Section 75-7-313 is renumbered
and amended to read:
[
(1) Upon the expiration of the earliest of the time limitations provided in Section
[
against the deceased settlor's estate in the order of priority prescribed, for claims already
presented which have not yet been allowed or whose allowance has been appealed, and for
unbarred claims which may yet be presented, including costs and expenses of administration. By
petition to the court in a proceeding for that purpose, a claimant whose claim has been allowed
but not paid as provided in this section may secure an order directing the trustee to pay the claim
to the extent that funds of the deceased settlor's estate or trust estate are available for the
payment.
(2) The trustee at any time may pay any just claim that has not been barred, with or
without formal presentation, but he shall be personally liable to any other claimant whose claim is
allowed and who is injured by the payment if:
(a) the payment was made before the expiration of the time limit stated in Subsection (1)
and the trustee failed to require the payee to give adequate security for the refund of any of the
payment necessary to pay other claimants; or
(b) the payment was made, due to the negligence or willful fault of the trustee, in a way
that deprived the injured claimant of his priority.
Section 63. Section 75-7-514 , which is renumbered from Section 75-7-314 is renumbered
and amended to read:
[
Payment of a secured claim shall be upon the basis of the amount allowed if the creditor
surrenders his security; but otherwise payment shall be based upon one of the following:
(1) if the creditor exhausts his security before receiving payment, unless precluded by
another provision of the law, upon the amount of the claim allowed less the fair value of the
security; or
(2) if the creditor does not have the right to exhaust his security or has not done so, upon
the amount of the claim allowed less the value of the security determined by converting it into
money according to the terms of the agreement pursuant to which the security was delivered to
the creditor, or by the creditor and trustee by agreement, arbitration, compromise, or litigation.
Section 64. Section 75-7-515 , which is renumbered from Section 75-7-315 is renumbered
and amended to read:
[
(1) If a claim which will become due at a future time or a contingent or unliquidated claim
becomes due or certain before the distribution of the trust estate, and if the claim has been
allowed or established by a proceeding, it shall be paid in the same manner as presently due and
absolute claims of the same class.
(2) In other cases the trustee, or, on petition of the trustee or the claimant in a special
proceeding for that purpose, the court, may provide for payment as follows:
(a) if the claimant consents, he may be paid the present or agreed value of the claim,
taking any uncertainty into account; or
(b) arrangement for future payment, or possible payment, on the happening of the
contingency or on liquidation may be made by creating a trust, giving a mortgage, obtaining a
bond or security from a beneficiary, or otherwise.
Section 65. Section 75-7-516 , which is renumbered from Section 75-7-316 is renumbered
and amended to read:
[
(1) In allowing a claim, the trustee may deduct any counterclaim which the deceased
settlor's estate has against the claimant. In determining a claim against a deceased settlor's estate,
a court shall reduce the amount allowed by the amount of any counterclaims and, if the
counterclaims exceed the claim, render a judgment against the claimant in the amount of the
excess.
(2) A counterclaim, liquidated or unliquidated, may arise from a transaction other than
that upon which the claim is based.
(3) A counterclaim may give rise to relief exceeding in amount or different in kind from
that sought in the claim.
Section 66. Section 75-7-517 , which is renumbered from Section 75-7-317 is renumbered
and amended to read:
[
(1) No execution may issue upon nor may any levy be made against any property of the
deceased settlor's estate under any judgment against a deceased settlor or a trustee.
(2) This section may not be construed to prevent the enforcement of mortgages, pledges,
or liens upon real or personal property in an appropriate proceeding.
Section 67. Section 75-7-518 , which is renumbered from Section 75-7-318 is renumbered
and amended to read:
[
When a claim against a deceased settlor's estate has been presented in any manner, the
trustee may, if it appears in the best interest of the deceased settlor's estate, compromise the
claim, whether due or not due, absolute or contingent, liquidated or unliquidated.
Section 68. Section 75-7-519 , which is renumbered from Section 75-7-319 is renumbered
and amended to read:
[
(1) If any assets of the deceased settlor's estate are encumbered by mortgage, pledge, lien,
or other security interest, the trustee may pay the encumbrance or any part thereof, renew or
extend any obligation secured by the encumbrance, or convey or transfer the assets to the creditor
in satisfaction of his lien, in whole or in part, whether or not the holder of the encumbrance has
presented a claim, if it appears to be in the best interest of the deceased settlor's estate.
(2) Payment of an encumbrance does not increase the share of the beneficiary entitled to
the encumbered assets unless the beneficiary is entitled to exoneration or unless the terms of the
deceased settlor's trust, under which the beneficiary is entitled to the encumbered assets, provides
otherwise.
Section 69. Section 75-7-604 is enacted to read:
75-7-604. Capacity of settlor of revocable trust.
The capacity required to create, amend, revoke, or add property to a revocable trust, or to
direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
Section 70. Section 75-7-605 is enacted to read:
75-7-605. Revocation or amendment of revocable trust.
(1) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor
may revoke or amend the trust. This Subsection (1) does not apply to a trust created under an
instrument executed before May 1, 2004.
(2) If a revocable trust is created or funded by more than one settlor:
(a) to the extent the trust consists of community property, the trust may be revoked by
either spouse acting alone but may be amended only by joint action of both spouses; and
(b) to the extent the trust consists of property other than community property, each
settlor may revoke or amend the trust with regard to the portion of the trust property attributable
to that settlor's contribution.
(3) The settlor may revoke or amend a revocable trust:
(a) by substantially complying with a method provided in the terms of the trust; or
(b) if the terms of the trust do not provide a method or the method provided in the terms
is not expressly made exclusive, by:
(i) executing a later will or codicil that expressly refers to the trust or specifically devises
property that would otherwise have passed according to the terms of the trust; or
(ii) any other method manifesting clear and convincing evidence of the settlor's intent.
(4) Upon revocation of a revocable trust, the trustee shall deliver the trust property as the
settlor directs.
(5) A settlor's powers with respect to revocation, amendment, or distribution of trust
property may be exercised by an agent under a power of attorney only to the extent expressly
authorized by the terms of the trust or the power.
(6) A conservator of the settlor or, if no conservator has been appointed, a guardian of
the settlor may exercise a settlor's powers with respect to revocation, amendment, or distribution
of trust property only with the approval of the court supervising the conservatorship or
guardianship.
(7) A trustee who does not know that a trust has been revoked or amended is not liable to
the settlor or settlor's successors in interest for distributions made and other actions taken on the
assumption that the trust had not been amended or revoked.
Section 71. Section 75-7-606 is enacted to read:
75-7-606. Settlor's powers -- Powers of withdrawal.
(1) While a trust is revocable and the settlor has capacity to revoke the trust, rights of the
beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to,
the settlor.
(2) If a revocable trust has more than one settlor, the duties of the trustee are owed to all
of the settlors having capacity to revoke the trust.
(3) During the period the power may be exercised, the holder of a power of withdrawal
has the rights of a settlor of a revocable trust under this section to the extent of the property
subject to the power.
Section 72. Section 75-7-607 is enacted to read:
75-7-607. Limitation on action contesting validity of revocable trust -- Distribution
of trust property.
(1) A person shall commence a judicial proceeding to contest the validity of a trust that
was revocable at the settlor's death within the earlier of:
(a) three years after the settlor's death; or
(b) 90 days after the trustee sent the person a copy of the trust instrument and a notice
informing the person of the trust's existence, of the trustee's name and address, and of the time
allowed for commencing a proceeding.
(2) Upon the death of the settlor of a trust that was revocable at the settlor's death, the
trustee may proceed to distribute the trust property in accordance with the terms of the trust. The
trustee is not subject to liability for doing so unless:
(a) the trustee knows of a pending judicial proceeding contesting the validity of the trust;
or
(b) a potential contestant has notified the trustee of a possible judicial proceeding to
contest the trust and a judicial proceeding is commenced within 60 days after the contestant sent
the notification.
(3) With respect to a potential contest, the trustee is only liable for actions taken two or
more business days after the trustee has actual receipt of written notice from a potential
contestant. The written notice shall include the name of the settlor or of the trust, the name of the
potential contestant, and a description of the basis for the potential contest. The written notice
shall be mailed to the trustee at the principal place of administration of the trust by registered or
certified mail, return receipt requested, or served upon the trustee in the same manner as a
summons in a civil action. Any other form or service of notice is not sufficient to impose liability
on the trustee for actions taken pursuant to the terms of the trust.
(4) A beneficiary of a trust that is determined to have been invalid is liable to return any
distribution received.
Section 73. Section 75-7-701 is enacted to read:
75-7-701. Accepting or declining trusteeship.
(1) Except as otherwise provided in Subsection (3), a person designated as trustee
accepts the trusteeship:
(a) by substantially complying with a method of acceptance provided in the terms of the
trust; or
(b) if the terms of the trust do not provide a method or the method provided in the terms
is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or
performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
(2) A person designated as trustee who has not yet accepted the trusteeship may reject
the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable
time after knowing of the designation is considered to have rejected the trusteeship.
(3) A person designated as trustee, without accepting the trusteeship, may:
(a) act to preserve the trust property if, within a reasonable time after acting, the person
sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to a
qualified beneficiary; and
(b) inspect or investigate trust property to determine potential liability under
environmental or other law or for any other purpose.
Section 74. Section 75-7-702 is enacted to read:
75-7-702. Trustee's bond.
(1) A trustee shall give bond to secure performance of the trustee's duties only if the court
finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms
of the trust and the court has not dispensed with the requirement.
(2) The court may specify the amount of a bond, its liabilities, and whether sureties are
necessary. The court may modify or terminate a bond at any time.
(3) A regulated financial service institution qualified to do trust business in this state need
not give bond, unless required by the terms of the trust. The cost of any bond shall be borne by
the trust.
(4) Unless otherwise directed by the court, the cost of the bond is charged to the trust.
Section 75. Section 75-7-703 is enacted to read:
75-7-703. Cotrustees.
(1) Cotrustees who are unable to reach a unanimous decision may act by majority
decision.
(2) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.
(3) A cotrustee must participate in the performance of a trustee's function unless the
cotrustee is unavailable to perform the function because of absence, illness, disqualification under
other law, or other temporary incapacity, or the cotrustee has properly delegated the performance
of the function to another trustee.
(4) If a cotrustee is unavailable to perform duties because of absence, illness,
disqualification under other law, or other temporary incapacity, or if a cotrustee fails or refuses to
act after reasonable notice, and prompt action is necessary to achieve the purposes of the trust or
to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining
cotrustees may act for the trust.
(5) A trustee may not delegate to a cotrustee the performance of a function the settlor
intended the trustees to perform jointly as determined from the terms of the trust. If one of the
cotrustees is a regulated financial service institution qualified to do trust business in this state and
the remaining cotrustees are individuals, a delegation by the individual cotrustees to the regulated
financial service institution of the performance of trust investment functions shall be presumed to
be in accordance with the settlor's intent unless the terms of the trust specifically provide
otherwise. Unless a delegation was irrevocable, a trustee may revoke a delegation previously
made.
(6) Except as otherwise provided in Subsection (7), a trustee who does not join in an
action of another trustee is not liable for the action.
(7) Each trustee shall exercise reasonable care to:
(a) prevent a cotrustee from committing a serious breach of trust; and
(b) compel a cotrustee to redress a serious breach of trust.
(8) A dissenting trustee who joins in an action at the direction of the majority of the
trustees and who notified any cotrustee of the dissent at or before the time of the action is not
liable for the action unless the action is a serious breach of trust.
Section 76. Section 75-7-704 is enacted to read:
75-7-704. Vacancy in trusteeship -- Appointment of successor.
(1) A vacancy in a trusteeship occurs if:
(a) a person designated as trustee rejects the trusteeship;
(b) a person designated as trustee cannot be identified or does not exist;
(c) a trustee resigns;
(d) a trustee is disqualified or removed;
(e) a trustee dies; or
(f) a guardian or conservator is appointed for an individual serving as trustee, unless
otherwise provided in the trust.
(2) If one or more cotrustees remain in office, a vacancy in a trusteeship need not be
filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.
(3) A vacancy in a trusteeship required to be filled must be filled in the following order of
priority:
(a) by a person designated in the terms of the trust to act as successor trustee;
(b) by a person appointed by unanimous agreement of the qualified beneficiaries; or
(c) by a person appointed by the court.
(4) A vacancy in a trusteeship of a charitable trust that is required to be filled must be
filled in the following order of priority:
(a) by a person designated in the terms of the trust to act as successor trustee;
(b) by a person selected by the charitable organizations expressly designated to receive
distributions under the terms of the trust if the attorney general concurs in the selection; or
(c) by a person appointed by the court.
(5) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court
may appoint an additional trustee or special fiduciary whenever the court considers the
appointment necessary for the administration of the trust.
Section 77. Section 75-7-705 is enacted to read:
75-7-705. Resignation of trustee.
(1) A trustee may resign:
(a) upon at least 30 days' notice to the qualified beneficiaries, the settlor, if living, and all
cotrustees; or
(b) with the approval of the court.
(2) In approving a resignation, the court may issue orders and impose conditions
reasonably necessary for the protection of the trust property.
(3) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or
omissions of the trustee is not discharged or affected by the trustee's resignation.
Section 78. Section 75-7-706 is enacted to read:
75-7-706. Removal of trustee.
(1) The settlor, a cotrustee, or a qualified beneficiary may request the court to remove a
trustee, or a trustee may be removed by the court on its own initiative.
(2) The court may remove a trustee if:
(a) the trustee has committed a serious breach of trust;
(b) lack of cooperation among cotrustees substantially impairs the administration of the
trust;
(c) because of unfitness, unwillingness, or persistent failure of the trustee to administer
the trust effectively, the court determines that removal of the trustee best serves the interests of
the beneficiaries; or
(d) there has been a substantial change of circumstances or removal is requested by all of
the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all
of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable
cotrustee or successor trustee is available.
(3) Pending a final decision on a request to remove a trustee, or in lieu of or in addition to
removing a trustee, the court may order appropriate relief under Subsection 75-7-1001 (2)
necessary to protect the trust property or the interests of the beneficiaries.
Section 79. Section 75-7-707 is enacted to read:
75-7-707. Delivery of property by former trustee.
(1) Unless a cotrustee remains in office or the court otherwise orders, and until the trust
property is delivered to a successor trustee or other person entitled to it, a trustee who has
resigned or been removed has the duties of a trustee and the powers necessary to protect the trust
property.
(2) A trustee who has resigned or been removed shall proceed expeditiously to deliver the
trust property within the trustee's possession to the cotrustee, successor trustee, or other person
entitled to it.
Section 80. Section 75-7-708 is enacted to read:
75-7-708. Compensation of trustee.
If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to
compensation that is reasonable under the circumstances.
Section 81. Section 75-7-709 is enacted to read:
75-7-709. Reimbursement of expenses.
(1) A trustee is entitled to be reimbursed out of the trust property, with interest as
appropriate, for:
(a) expenses that were properly incurred in the administration of the trust; and
(b) to the extent necessary to prevent unjust enrichment of the trust, expenses that were
not properly incurred in the administration of the trust.
(2) An advance by the trustee of money for the protection of the trust gives rise to a lien
against trust property to secure reimbursement with reasonable interest.
Section 82. Section 75-7-801 is enacted to read:
75-7-801. Duty to administer trust.
Upon acceptance of a trusteeship, the trustee shall administer the trust expeditiously and in
good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in
accordance with this chapter.
Section 83. Section 75-7-802 is enacted to read:
75-7-802. Duty of loyalty.
(1) A trustee shall administer the trust solely in the interests of the beneficiaries.
(2) Subject to the rights of persons dealing with or assisting the trustee as provided in
Section 75-7-1012 , a sale, encumbrance, or other transaction involving the investment or
management of trust property entered into by the trustee for the trustee's own personal account or
which is otherwise affected by a conflict between the trustee's fiduciary and personal interests is
voidable by a beneficiary affected by the transaction unless:
(a) the transaction was authorized by the terms of the trust;
(b) the transaction was approved by the court;
(c) the beneficiary did not commence a judicial proceeding within the time allowed by
Section 75-7-1005 ;
(d) the beneficiary consented to the trustee's conduct, ratified the transaction, or released
the trustee in compliance with Section 75-7-1009 ; or
(e) the transaction involves a contract entered into or claim acquired by the trustee before
the person became or contemplated becoming trustee.
(3) A sale, encumbrance, or other transaction involving the investment or management of
trust property is presumed to be affected by a conflict between personal and fiduciary interests if it
is entered into by the trustee with:
(a) the trustee's spouse;
(b) the trustee's descendants, siblings, parents, or their spouses;
(c) an agent of the trustee, including but not limited to an attorney, accountant, or
financial advisor; or
(d) a corporation or other person or enterprise in which the trustee, or a person that owns
a significant interest in the trustee, has an interest that might affect the trustee's best judgment.
(4) A transaction between a trustee and a beneficiary that does not concern trust property
but that occurs during the existence of the trust or while the trustee retains significant influence
over the beneficiary and from which the trustee obtains an advantage is voidable by the beneficiary
unless the trustee establishes that the transaction was fair to the beneficiary.
(5) A transaction not concerning trust property in which the trustee engages in the
trustee's individual capacity involves a conflict between personal and fiduciary interests if the
transaction concerns an opportunity properly belonging to the trust.
(6) An investment by a trustee in securities of an investment company or investment trust
to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not
presumed to be affected by a conflict between personal and fiduciary interests if the investment
complies with the prudent investor rule of Section 75-7-901 . The trustee may be compensated by
the investment company or investment trust for providing those services out of fees charged to
the trust.
(7) In voting shares of stock or in exercising powers of control over similar interests in
other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust
is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint
directors or other managers who will manage the corporation or enterprise in the best interests of
the beneficiaries.
(8) This section does not preclude the following actions by the trustee:
(a) an agreement between the trustee and a beneficiary relating to the appointment or
compensation of the trustee;
(b) payment of reasonable compensation to the trustee;
(c) a transaction between a trust and another trust, decedent's estate, conservatorship, or
guardianship of which the trustee is a fiduciary or in which a beneficiary has an interest;
(d) a deposit of trust money in a regulated financial service institution operated by the
trustee;
(e) an advance by the trustee of money for the protection of the trust;
(f) collecting, holding, and retaining trust assets received from a trustor until, in the
judgment of the trustee, disposition of the assets should be made, even though the assets include
an asset in which the trustee is personally interested;
(g) acquiring an undivided interest in a trust asset in which the trustee, in any trust
capacity, holds an undivided interest;
(h) borrowing money to be repaid from the trust assets or otherwise;
(i) advancing money to be repaid from the assets or otherwise;
(j) employing persons, including attorneys, auditors, investment advisers, or agents, even
if they are associated with the trustee:
(i) to advise or assist the trustee in the performance of the trustee's administrative duties
or perform any act of administration, whether or not discretionary; or
(ii) to act without independent investigation upon their recommendations;
(k) if a governing instrument or order requires or authorizes investment in United States
government obligations, investing in those obligations, either directly or in the form of securities
or other interests, in any open-end or closed-end management type investment company or
investment trust registered under the provisions of the Investment Company Act of 1940, 15
U.S.C. Sections 80a-1 through 80a-64 if:
(i) the portfolio of the investment company or investment trust is limited to United States
government obligations, and repurchase agreements are fully collateralized by United States
government obligations; and
(ii) the investment company or investment trust takes delivery of the collateral for any
repurchase agreement either directly or through an authorized custodian.
(9) The court may appoint a special fiduciary to make a decision with respect to any
proposed transaction that might violate this section if entered into by the trustee.
Section 84. Section 75-7-803 is enacted to read:
75-7-803. Impartiality.
If a trust has two or more beneficiaries, the trustee shall act impartially in investing,
managing, and distributing the trust property, giving due regard to the beneficiaries' respective
interests.
Section 85. Section 75-7-804 is enacted to read:
75-7-804. Prudent administration.
A trustee shall administer the trust as a prudent person would, by considering the
purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying
this standard, the trustee shall exercise reasonable care, skill, and caution.
Section 86. Section 75-7-805 is enacted to read:
75-7-805. Costs of administration.
In administering a trust, the trustee may incur only costs that are reasonable in relation to
the trust property, the purposes of the trust, and the skills of the trustee.
Section 87. Section 75-7-806 is enacted to read:
75-7-806. Trustee's skills.
A trustee who is named trustee in reliance upon the trustee's representation that the trustee
has special skills or expertise, shall use those special skills or expertise.
Section 88. Section 75-7-807 is enacted to read:
75-7-807. Control and protection of trust property.
A trustee shall take reasonable steps to take control of and protect the trust property.
Section 89. Section 75-7-808 is enacted to read:
75-7-808. Recordkeeping and identification of trust property.
(1) A trustee shall keep adequate records of the administration of the trust.
(2) A trustee shall keep trust property separate from the trustee's own property.
(3) Except as otherwise provided in Subsection (4), a trustee shall cause the trust
property to be designated so that the interest of the trust, to the extent feasible, appears in records
maintained by a party other than a trustee or beneficiary.
(4) If the trustee maintains records clearly indicating the respective interests, a trustee
may invest as a whole the property of two or more separate trusts.
Section 90. Section 75-7-809 is enacted to read:
75-7-809. Enforcement and defense of claims.
A trustee shall take reasonable steps to enforce claims of the trust and to defend claims
against the trust.
Section 91. Section 75-7-810 is enacted to read:
75-7-810. Collecting trust property.
A trustee shall take reasonable steps to compel a former trustee or other person to deliver
trust property to the trustee, and to redress a breach of trust known to the trustee to have been
committed by a former trustee, unless the terms of the trust provide otherwise.
Section 92. Section 75-7-811 is enacted to read:
75-7-811. Duty to inform and report.
(1) Except to the extent the terms of the trust provide otherwise, a trustee shall keep the
qualified beneficiaries of the trust reasonably informed about the administration of the trust and of
the material facts necessary for them to protect their interests. Unless unreasonable under the
circumstances, and unless otherwise provided by the terms of the trust a trustee shall promptly
respond to a qualified beneficiary's request for information related to the administration of the
trust.
(2) Except to the extent the terms of the trust provide otherwise, a trustee:
(a) upon request of a qualified beneficiary, shall promptly furnish to the beneficiary a copy
of the portions of the trust instrument which describe or affect the beneficiary's interest;
(b) within 60 days after accepting a trusteeship, shall notify the qualified beneficiaries of
the acceptance and of the trustee's name, address, and telephone number;
(c) within 60 days after the date the trustee acquires knowledge of the creation of an
irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has
become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified
beneficiaries of the trust's existence, of the identity of the settlor or settlors, of the right to request
a copy of the trust instrument, and of the right to a trustee's report as provided in Subsection (3);
and
(d) shall notify the qualified beneficiaries in advance of any change in the method or rate
of the trustee's compensation.
(3) A trustee shall send to the qualified beneficiaries who request it, at least annually and
at the termination of the trust, a report of the trust property, liabilities, receipts, and
disbursements, including the amount of the trustee's compensation or a fee schedule or other
writing showing how the trustee's compensation was determined, a listing of the trust assets and,
if feasible, their respective market values. Upon a vacancy in a trusteeship, unless a cotrustee
remains in office, a report must be sent to the qualified beneficiaries by the former trustee, unless
the terms of the trust provide otherwise. A personal representative, conservator, or guardian may
send the qualified beneficiaries a report on behalf of a deceased or incapacitated trustee.
(4) A qualified beneficiary may waive the right to a trustee's report or other information
otherwise required to be furnished under this section. A beneficiary, with respect to future
reports and other information, may withdraw a waiver previously given.
Section 93. Section 75-7-812 is enacted to read:
75-7-812. Discretionary powers -- Tax savings.
(1) Notwithstanding the breadth of discretion granted to a trustee in the terms of the
trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the trustee shall
exercise a discretionary power in good faith and in accordance with the terms and purposes of the
trust and the interests of the beneficiaries.
(2) Subject to Subsection (4), and unless the terms of the trust expressly indicate that a
rule in this section does not apply:
(a) a person other than a settlor who is a beneficiary and trustee of a trust that confers on
the trustee a power to make discretionary distributions to or for the trustee's personal benefit may
exercise the power only in accordance with an ascertainable standard relating to the trustee's
individual health, education, support, or maintenance within the meaning of Subsection
2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code of 1986, as in effect on May 1, 2004;
and
(b) a trustee may not exercise a power to make discretionary distributions to satisfy a
legal obligation of support that the trustee personally owes another person.
(3) A power whose exercise is limited or prohibited by Subsection (2) may be exercised
by a majority of the remaining trustees whose exercise of the power is not so limited or
prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a special
fiduciary with authority to exercise the power.
(4) Subsection (2) does not apply to:
(a) a power held by the settlor's spouse who is the trustee of a trust for which a marital
deduction, as defined in Subsection 2056(b)(5) or 2523(e) of the Internal Revenue Code of 1986,
as in effect on May 1, 2004, was previously allowed;
(b) any trust during any period that the trust may be revoked or amended by its settlor; or
(c) a trust if contributions to the trust qualify for the annual exclusion under Subsection
2503(c) of the Internal Revenue Code of 1986, as in effect on May 1, 2004.
Section 94. Section 75-7-813 is enacted to read:
75-7-813. General powers of trustee.
(1) A trustee, without authorization by the court, may exercise:
(a) powers conferred by the terms of the trust; or
(b) except as limited by the terms of the trust:
(i) all powers over the trust property which an unmarried competent owner has over
individually owned property;
(ii) any other powers appropriate to achieve the proper investment, management, and
distribution of the trust property; and
(iii) any other powers conferred by this chapter.
(2) The exercise of a power is subject to the fiduciary duties prescribed by this part.
Section 95. Section 75-7-814 is enacted to read:
75-7-814. Specific powers of trustee.
(1) Without limiting the authority conferred by Section 75-7-813 , a trustee may:
(a) collect trust property and accept or reject additions to the trust property from a settlor
or any other person;
(b) acquire or sell property, for cash or on credit, at public or private sale;
(c) exchange, partition, or otherwise change the character of trust property;
(d) deposit trust money in an account in a regulated financial service institution;
(e) borrow money, with or without security from any financial institution, including a
financial institution that is serving as a trustee or one of its affiliates, and mortgage or pledge trust
property for a period within or extending beyond the duration of the trust;
(f) with respect to an interest in a proprietorship, partnership, limited liability company,
business trust, corporation, or other form of business or enterprise, continue the business or other
enterprise and take any action that may be taken by shareholders, members, or property owners,
including merging, dissolving, or otherwise changing the form of business organization or
contributing additional capital;
(g) with respect to stocks or other securities, exercise the rights of an absolute owner,
including the right to:
(i) vote, or give proxies to vote, with or without power of substitution, or enter into or
continue a voting trust agreement;
(ii) hold a security in the name of a nominee or in other form without disclosure of the
trust so that title may pass by delivery;
(iii) pay calls, assessments, and other sums chargeable or accruing against the securities,
and sell or exercise stock subscription or conversion rights; and
(iv) deposit the securities with a depositary or other regulated financial service institution;
(h) with respect to an interest in real property, construct, or make ordinary or
extraordinary repairs to, alterations to, or improvements in, buildings or other structures,
demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop
land, dedicate land to public use or grant public or private easements, and make or vacate plats
and adjust boundaries;
(i) enter into a lease for any purpose as lessor or lessee, including a lease or other
arrangement for exploration and removal of natural resources, with or without the option to
purchase or renew, for a period within or extending beyond the duration of the trust;
(j) grant an option involving a sale, lease, or other disposition of trust property or acquire
an option for the acquisition of property, including an option exercisable beyond the duration of
the trust, and exercise an option so acquired;
(k) insure the property of the trust against damage or loss and insure the trustee, the
trustee's agents, and beneficiaries against liability arising from the administration of the trust;
(l) abandon or decline to administer property of no value or of insufficient value to justify
its collection or continued administration;
(m) with respect to possible liability for violation of environmental law:
(i) inspect or investigate property the trustee holds or has been asked to hold, or property
owned or operated by an organization in which the trustee holds or has been asked to hold an
interest, for the purpose of determining the application of environmental law with respect to the
property;
(ii) take action to prevent, abate, or otherwise remedy any actual or potential violation of
any environmental law affecting property held directly or indirectly by the trustee, whether taken
before or after the assertion of a claim or the initiation of governmental enforcement;
(iii) decline to accept property into trust or disclaim any power with respect to property
that is or may be burdened with liability for violation of environmental law;
(iv) compromise claims against the trust which may be asserted for an alleged violation of
environmental law; and
(v) pay the expense of any inspection, review, abatement, or remedial action to comply
with environmental law;
(n) pay or contest any claim, settle a claim by or against the trust, and release, in whole or
in part, a claim belonging to the trust;
(o) pay taxes, assessments, compensation of the trustee and of employees and agents of
the trust, and other expenses incurred in the administration of the trust;
(p) exercise elections with respect to federal, state, and local taxes;
(q) select a mode of payment under any employee benefit or retirement plan, annuity, or
life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to
indemnification for expenses and against liabilities, and take appropriate action to collect the
proceeds;
(r) make loans out of trust property, including loans to a beneficiary on terms and
conditions the trustee considers to be fair and reasonable under the circumstances, and the trustee
has a lien on future distributions for repayment of those loans;
(s) pledge trust property to guarantee loans made by others to the beneficiary;
(t) appoint a trustee to act in another jurisdiction with respect to trust property located in
the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the
appointing trustee, require that the appointed trustee furnish security, and remove any trustee so
appointed;
(u) pay an amount distributable to a beneficiary who is under a legal disability or who the
trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or applying it
for the beneficiary's benefit, or by:
(i) paying it to the beneficiary's conservator or, if the beneficiary does not have a
conservator, the beneficiary's guardian;
(ii) paying it to the beneficiary's custodian under Title 75, Chapter 5a, Uniform Transfers
to Minors Act;
(iii) if the trustee does not know of a conservator, guardian, custodian, or custodial
trustee, paying it to an adult relative or other person having legal or physical care or custody of
the beneficiary, to be expended on the beneficiary's behalf; or
(iv) managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's
continuing right to withdraw the distribution;
(v) on distribution of trust property or the division or termination of a trust, make
distributions in divided or undivided interests, allocate particular assets in proportionate or
disproportionate shares, value the trust property for those purposes, and adjust for resulting
differences in valuation;
(w) resolve a dispute concerning the interpretation of the trust or its administration by
mediation, arbitration, or other procedure for alternative dispute resolution;
(x) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to
protect trust property and the trustee in the performance of the trustee's duties;
(y) sign and deliver contracts and other instruments that are useful to achieve or facilitate
the exercise of the trustee's powers; and
(z) on termination of the trust, exercise the powers appropriate to finalize the
administration of the trust and distribute the trust property to the persons entitled to it.
(2) A trustee may delegate investment and management functions that a prudent trustee
of comparable skills could properly delegate under the circumstances.
(a) The trustee shall exercise reasonable care, skill, and caution in:
(i) selecting the agent;
(ii) establishing the scope and terms of the delegation consistent with the purposes of the
trust; and
(iii) periodically reviewing the agent's actions to monitor the agent's performance and
compliance with the terms of the delegation.
(b) In performing a delegated function, an agent has a duty to the trust to exercise
reasonable care to comply with the terms of the delegation.
(c) A trustee who complies with the requirements of this Subsection (2) is not liable to
the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was
delegated.
Section 96. Section 75-7-815 is enacted to read:
75-7-815. Distribution upon termination.
(1) Upon termination or partial termination of a trust, the trustee may send to the
beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed
distribution terminates if the beneficiary does not notify the trustee of an objection within 30 days
after the proposal was sent but only if the proposal informed the beneficiary of the right to object
and of the time allowed for objection.
(2) Upon the occurrence of an event terminating or partially terminating a trust, the
trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it,
subject to the right of the trustee to retain a reasonable reserve for the payment of debts,
expenses, and taxes.
(3) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the
extent:
(a) it was induced by improper conduct of the trustee; or
(b) the beneficiary, at the time of the release, did not know or had no reason to know of
the beneficiary's rights or of the material facts relating to the breach.
Section 97. Section 75-7-816 is enacted to read:
75-7-816. Recitals when title to real property is in trust -- Failure.
(1) When title to real property is granted to a person as trustee, the terms of the trust may
be given either:
(a) in the deed of transfer; or
(b) in an instrument signed by the grantor and recorded in the same office as the grant to
the trustee.
(2) If the terms of the trust are not made public as required in Subsection (1), a
conveyance from the trustee is absolute in favor of purchasers for value who take the property
without notice of the terms of the trust.
(3) The terms of the trust recited in the deed of transfer or the instrument recorded under
Subsection (1)(b) shall include:
(a) the name of the trustee;
(b) the address of the trustee; and
(c) the name and date of the trust.
(4) Any real property titled in a trust which has a restriction on transfer described in
Section 25-6-14 shall include in the title the words "asset protection trust".
Section 98. Section 75-7-817 is enacted to read:
75-7-817. Marital deduction formulas -- Trusts.
(1) For estates of decedents dying after December 31, 1981, where a decedent's trust
executed before September 13, 1981, contains a formula expressly providing that the decedent's
spouse is to receive the maximum amount of property qualifying for the marital deduction
allowable by federal law, this formula shall be construed as referring to the unlimited marital
deduction allowable by federal law as amended by Section 403(a) of the Economic Recovery Tax
Act of 1981.
(2) The intention of a trustor as expressed in the trust shall control the legal effect of any
dispositions made by it for purposes of construing Subsection (1), and the rule of construction of
Subsection (1) shall apply unless a contrary intention is indicated by the trust.
Section 99. Section 75-7-901 is enacted to read:
75-7-901. Prudent investor rule.
(1) Except as otherwise provided in Subsection (2), a trustee who invests and manages
trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule
set forth in this chapter. If a trustee is named on the basis of a trustee's representations of special
skills or expertise, the trustee has a duty to use those special skills or expertise.
(2) The prudent investor rule is a default rule and may be expanded, restricted, eliminated,
or otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to the
extent that the trustee acted in reasonable reliance on the provisions of the trust.
Section 100. Section 75-7-902 is enacted to read:
75-7-902. Standard of care -- Portfolio strategy -- Risk and return objectives.
(1) A trustee shall invest and manage trust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements, and other circumstances of the trust.
In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
(2) A trustee's investment and management decisions respecting individual assets must be
evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an
overall investment strategy having risk and return objectives reasonably suited to the trust.
(3) Among circumstances that a trustee shall consider in investing and managing trust
assets are the following which may be relevant to the trust or its beneficiaries:
(a) general economic conditions;
(b) the possible effect of inflation or deflation;
(c) the expected tax consequences of investment decisions or strategies;
(d) the role that each investment or course of action plays within the overall trust
portfolio, which may include financial assets, interests in closely held enterprises, tangible and
intangible personal property, and real property;
(e) the expected total return from income and the appreciation of capital;
(f) other resources of the beneficiaries;
(g) needs for liquidity, regularity of income, and preservation or appreciation of capital;
and
(h) an asset's special relationship or special value, if any, to the purposes of the trust or to
one or more of the beneficiaries.
(4) A trustee shall make a reasonable effort to verify facts relevant to the investment and
management of trust assets.
(5) A trustee may invest in any kind of property or type of investment consistent with the
standards of this chapter.
Section 101. Section 75-7-903 is enacted to read:
75-7-903. Diversification.
A trustee shall diversify the investments of the trust unless the trustee reasonably
determines that, because of special circumstances, the purposes of the trust are better served
without diversifying.
Section 102. Section 75-7-904 is enacted to read:
75-7-904. Duties at inception of trusteeship.
Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee
shall review the trust assets and make and implement decisions concerning the retention and
disposition of assets, in order to bring the trust portfolio into compliance with the purposes,
terms, distribution requirements, and other circumstances of the trust, and with the requirements
of this chapter.
Section 103. Section 75-7-905 is enacted to read:
75-7-905. Reviewing compliance.
Compliance with the prudent investor rule is determined in light of the facts and
circumstances existing at the time of a trustee's decision or action and not by hindsight. This
section does not require a specific outcome in investing.
Section 104. Section 75-7-906 is enacted to read:
75-7-906. Investment direction.
(1) For purposes of this section, "investment direction" means a direction that is binding
on the trustee, except for an investment direction given by a settlor as described in Subsection (2)
to do any of the following with respect to an investment:
(a) retention;
(b) purchase;
(c) sale;
(d) exchange;
(e) tender; or
(f) any other transaction affecting ownership in the investment.
(2) (a) During the time period that a trust is revocable, the trustee may follow any
investment direction of the settlor, including an investment direction that:
(i) is manifestly contrary to the terms of the trust; or
(ii) seriously breaches a fiduciary duty to the beneficiaries.
(b) The trustee is not liable for any loss resulting from following an investment direction
described in Subsection (2)(a).
(3) If the terms of a trust authorize a person to give investment direction to the trustee,
the person authorized to give investment direction:
(a) is presumptively a fiduciary only with respect to an investment direction that the
person gives to the trustee;
(b) is required to act in good faith with regard to:
(i) the purposes of the trust; and
(ii) the interests of the beneficiaries; and
(c) is liable for any loss that results from breach of the fiduciary duty only with respect to
an investment direction that the person gives to the trustee.
(4) Except in cases of willful misconduct or gross negligence, a trustee is not liable for
any loss that results from following an investment direction if:
(a) the terms of a trust authorizes a person to give the investment direction to the trustee;
and
(b) the trustee acts in accordance with the investment direction given by a person
described in Subsection (4)(a).
(5) If the terms of a trust require another person's approval or consent to an investment
decision of the trustee:
(a) the person from whom approval or consent is required:
(i) is presumptively a fiduciary;
(ii) is required to act in good faith with regard to:
(A) the purposes of the trust; and
(B) the interests of the beneficiaries; and
(iii) is liable for any loss that results from breach of the fiduciary duty; and
(b) except in cases of willful misconduct or gross negligence, the trustee is not liable for
any loss resulting from any act not taken as a result of the person's failure to respond to a request
for approval or consent.
Section 105. Section 75-7-907 is enacted to read:
75-7-907. Language invoking standard of chapter.
The following terms or comparable language in the provisions of a trust, unless otherwise
limited or modified, authorizes any investment or strategy permitted under this chapter:
"investments permissible by law for investment of trust funds," "legal investments," "authorized
investments," "using the judgment and care under the circumstances then prevailing that persons
of prudence, discretion, and intelligence exercise in the management of their own affairs, not in
regard to speculation but in regard to the permanent disposition of their funds, considering the
probable income as well as the probable safety of their capital," "prudent man rule," "prudent
trustee rule," "prudent person rule," and "prudent investor rule."
Section 106. Section 75-7-1001 is enacted to read:
75-7-1001. Remedies for breach of trust.
(1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(2) To remedy a breach of trust that has occurred or may occur, the court may:
(a) compel the trustee to perform the trustee's duties;
(b) enjoin the trustee from committing a breach of trust;
(c) compel the trustee to redress a breach of trust by paying money, restoring property, or
other means;
(d) order a trustee to account;
(e) appoint a special fiduciary to take possession of the trust property and administer the
trust;
(f) suspend the trustee;
(g) remove the trustee as provided in Section 75-7-706 ;
(h) reduce or deny compensation to the trustee;
(i) subject to Section 75-7-1012 , void an act of the trustee, impose a lien or a
constructive trust on trust property, or trace trust property wrongfully disposed of and recover
the property or its proceeds; or
(j) order any other appropriate relief.
Section 107. Section 75-7-1002 is enacted to read:
75-7-1002. Damages for breach of trust.
(1) A trustee who commits a breach of trust is liable to the beneficiaries affected for the
greater of:
(a) the amount required to restore the value of the trust property and trust distributions to
what they would have been had the breach not occurred; or
(b) the profit the trustee made by reason of the breach.
(2) Except as otherwise provided in this Subsection (2), if more than one trustee is liable
to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee
or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault
than another trustee or if the trustee committed the breach of trust in bad faith or with reckless
indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who
received a benefit from the breach of trust is not entitled to contribution from another trustee to
the extent of the benefit received.
Section 108. Section 75-7-1003 is enacted to read:
75-7-1003. Damages in absence of breach.
(1) A trustee is accountable to an affected beneficiary for any profit made by the trustee
arising from the administration of the trust, even absent a breach of trust.
(2) Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or
depreciation in the value of trust property or for not having made a profit.
Section 109. Section 75-7-1004 is enacted to read:
75-7-1004. Attorney's fees and costs.
(1) In a judicial proceeding involving the administration of a trust, the court may, as
justice and equity may require, award costs and expenses, including reasonable attorney's fees, to
any party, to be paid by another party or from the trust that is the subject of the controversy.
(2) If a trustee defends or prosecutes any proceeding in good faith, whether successful or
not, the trustee is entitled to receive from the trust the necessary expenses and disbursements,
including reasonable attorney's fees, incurred.
Section 110. Section 75-7-1005 is enacted to read:
75-7-1005. Limitation of action against trustee.
(1) A beneficiary may not commence a proceeding against a trustee for breach of trust
more than six months after the date that the beneficiary or a person who may represent and bind
the beneficiary was sent a report that adequately disclosed the existence of a potential claim for
breach of trust and informed the beneficiary of the time allowed for commencing a proceeding.
(2) A report adequately discloses the existence of a potential claim for breach of trust if it
provides sufficient information so that the beneficiary or representative knows of the potential
claim or should have inquired into its existence.
(3) If Subsection (1) does not apply, a judicial proceeding by a beneficiary against a
trustee for breach of trust must be commenced within one year after the first to occur of:
(a) the removal, resignation, or death of the trustee;
(b) the termination of the beneficiary's interest in the trust; or
(c) the termination of the trust.
(4) This section does not preclude an action to recover for fraud or misrepresentation
related to the report.
Section 111. Section 75-7-1006 is enacted to read:
75-7-1006. Reliance on trust instrument.
A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust
instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from
the reliance.
Section 112. Section 75-7-1007 is enacted to read:
75-7-1007. Event affecting administration or distribution.
If the happening of an event, including marriage, divorce, performance of educational
requirements, or death, affects the administration or distribution of a trust, a trustee is not liable
for a loss resulting from the trustee's lack of knowledge or lack of notice.
Section 113. Section 75-7-1008 is enacted to read:
75-7-1008. Exculpation of trustee.
A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the
extent that it:
(1) relieves the trustee of liability for breach of trust committed in bad faith or with
reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
(2) was inserted by the trustee or fiduciary without disclosure of its existence and
contents.
Section 114. Section 75-7-1009 is enacted to read:
75-7-1009. Beneficiary's consent, release, or ratification.
A trustee is not liable to a beneficiary for breach of trust if the beneficiary, while having
capacity, consented to the conduct constituting the breach, released the trustee from liability for
the breach, or ratified the transaction constituting the breach, unless at the time of the consent,
release, or ratification, the beneficiary did not know of the beneficiary's rights or of the material
facts relating to the breach.
Section 115. Section 75-7-1010 is enacted to read:
75-7-1010. Limitation on personal liability of trustee.
(1) Except as otherwise provided in the contract, a trustee is not personally liable on a
contract properly entered into in the trustee's fiduciary capacity in the course of administering the
trust if the trustee in the contract disclosed the fiduciary capacity.
(2) A trustee is personally liable for torts committed in the course of administering a trust,
or for obligations arising from ownership or control of trust property, including liability for
violation of environmental law, only if the trustee is personally at fault.
(3) A claim based on a contract entered into by a trustee in the trustee's fiduciary
capacity, on an obligation arising from ownership or control of trust property, or on a tort
committed in the course of administering a trust, may be asserted in a judicial proceeding against
the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for the
claim.
(4) The question of liability as between the trust estate and the trustee individually may be
determined in a proceeding for accounting, surcharge, or indemnification or other appropriate
proceeding.
(5) Whenever an instrument creating a trust reserves to the settlor, or vests in an advisory
or investment committee, or in any other person or persons, including one or more cotrustees to
the exclusion of the trustee or to the exclusion of one or more of several trustees, authority to
direct the making or retention of any investment, the excluded trustee or trustees shall not be
liable, either individually or as a fiduciary, for any loss resulting from the making or retention of
any investment pursuant to such direction.
(6) In the absence of actual knowledge or information which would cause a reasonable
trustee to inquire further, no trustee shall be liable for failure to take necessary steps to compel the
redress of any breach of trust or fiduciary duty by any predecessor personal representative,
trustee, or other fiduciary. The provisions of this section shall not be construed to limit the
fiduciary liability of any trustee for his own acts or omissions with respect to the trust estate.
Section 116. Section 75-7-1011 is enacted to read:
75-7-1011. Interest as general partner.
(1) Except as otherwise provided in Subsection (3) or unless personal liability is imposed
in the contract, a trustee who holds an interest as a general partner in a general or limited
partnership is not personally liable on a contract entered into by the partnership after the trust's
acquisition of the interest if the fiduciary capacity was disclosed in the contract or in a statement
previously filed pursuant to Title 48, Chapter 2a, Utah Revised Uniform Limited Partnership Act.
(2) Except as otherwise provided in Subsection (3), a trustee who holds an interest as a
general partner is not personally liable for torts committed by the partnership or for obligations
arising from ownership or control of the interest unless the trustee is personally at fault.
(3) The immunity provided by this section does not apply if an interest in the partnership
is held by the trustee in a capacity other than that of trustee or is held by the trustee's spouse or
one or more of the trustee's descendants, siblings, or parents, or the spouse of any of them.
(4) If the trustee of a revocable trust holds an interest as a general partner, the settlor is
personally liable for contracts and other obligations of the partnership as if the settlor were a
general partner.
Section 117. Section 75-7-1012 is enacted to read:
75-7-1012. Protection of person dealing with trustee.
(1) A person other than a beneficiary who in good faith assists a trustee, or who in good
faith and for value deals with a trustee, without knowledge that the trustee is exceeding or
improperly exercising the trustee's powers is protected from liability as if the trustee properly
exercised the power.
(2) A person other than a beneficiary who in good faith deals with a trustee is not
required to inquire into the extent of the trustee's powers or the propriety of their exercise.
(3) A person who in good faith delivers assets to a trustee need not ensure their proper
application.
(4) A person other than a beneficiary who in good faith assists a former trustee, or who in
good faith and for value deals with a former trustee, without knowledge that the trusteeship has
terminated is protected from liability as if the former trustee were still a trustee.
(5) Comparable protective provisions of other laws relating to commercial transactions or
transfer of securities by fiduciaries prevail over the protection provided by this section.
Section 118. Section 75-7-1013 is enacted to read:
75-7-1013. Certification of trust.
(1) Instead of furnishing a copy of the trust instrument to a person other than a
beneficiary, the trustee may furnish to the person a certification of trust containing the following
information:
(a) that the trust exists and the date the trust instrument was executed;
(b) the identity of the settlor;
(c) the identity and address of the currently acting trustee;
(d) the powers of the trustee in the pending transaction;
(e) the revocability or irrevocability of the trust and the identity of any person holding a
power to revoke the trust;
(f) the authority of cotrustees to sign or otherwise authenticate and whether all or less
than all are required in order to exercise powers of the trustee; and
(g) the name in which title to trust property may be taken.
(2) A certification of trust may be signed or otherwise authenticated by any trustee.
(3) A certification of trust must state that the trust has not been revoked, modified, or
amended in any manner that would cause the representations contained in the certification of trust
to be incorrect.
(4) A certification of trust need not contain the dispositive terms of a trust.
(5) A recipient of a certification of trust may require the trustee to furnish copies of those
excerpts from the original trust instrument and later amendments which designate the trustee and
confer upon the trustee the power to act in the pending transaction.
(6) A person who acts in reliance upon a certification of trust without knowledge that the
representations contained in it are incorrect is not liable to any person for acting and may assume
without inquiry the existence of the facts contained in the certification. Knowledge of the terms
of the trust may not be inferred solely from the fact that a copy of all or part of the trust
instrument is held by the person relying upon the certification.
(7) A person who in good faith enters into a transaction in reliance upon a certification of
trust may enforce the transaction against the trust property as if the representations contained in
the certification were correct.
(8) A person making a demand for the trust instrument in addition to a certification of
trust or excerpts is liable for costs, expenses, attorney fees, and damages if the court determines
that the person did not act in good faith in demanding the trust instrument.
(9) This section does not limit the right of a person to obtain a copy of the trust
instrument in a judicial proceeding concerning the trust.
Section 119. Section 75-7-1101 is enacted to read:
75-7-1101. Uniformity of application and construction.
In applying and construing this chapter, consideration must be given to the need to
promote uniformity of the law with respect to its subject matter among states that enact it.
Section 120. Section 75-7-1102 is enacted to read:
75-7-1102. Electronic records and signatures.
The provisions of this chapter governing the legal effect, validity, or enforceability of
electronic records or electronic signatures, and of contracts formed or performed with the use of
such records or signatures, conform to the requirements of Section 102 of the Electronic
Signatures in Global and National Commerce Act (15 U.S.C. §7002) and supersede, modify, and
limit the requirements of the Electronic Signatures in Global and National Commerce Act.
Section 121. Section 75-7-1103 is enacted to read:
75-7-1103. Application to existing relationships.
(1) Except as otherwise provided, this chapter applies to:
(a) all trusts created before, on, or after July 1, 2004;
(b) all judicial proceedings concerning trusts commenced on or after July 1, 2004; and
(c) judicial proceedings concerning trusts commenced before July 1, 2004 unless the
court finds that application of a particular provision of this chapter would substantially interfere
with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in
which case the particular provision of this chapter does not apply and the superseded section will
apply.
(2) Any rule of construction or presumption provided in this chapter applies to trust
instruments executed before July 1, 2004 unless there is a clear indication of a contrary intent in
the terms of the trust.
(3) An act done before July 1, 2004 is not affected by this chapter.
(4) If a right is acquired, extinguished, or barred upon the expiration of a prescribed
period that has commenced to run under any other statute before July 1, 2004, that statute
continues to apply to the right even if it has been repealed or superseded.
Section 122. Repealer.
This bill repeals:
Section 75-7-206, Proceedings for review of employment of agents and review of
compensation of trustee and employees of trust.
Section 75-7-207, Trust proceedings -- Initiation by notice -- Necessary parties.
Section 75-7-306, Personal liability of trustee to third parties.
Section 75-7-307, Limitations on proceedings against trustees after final account.
Section 75-7-405.5, Vacancy in trusteeship -- Appointment of successor.
Section 123. Effective date.
This bill takes effect on July 1, 2004.
Section 124. Coordinating S.B. 47 with S.B. 30.
If this S.B. 47 and S.B. 30, Medical Benefits Recovery Act Amendments, both pass it is
the intent of the Legislature that cross-references in S.B. 30 to Sections 75-7-308 and 75-7-309
be changed to 75-7-508 and 75-7-509 , respectively.
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