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Second Substitute S.B. 47

Representative Greg J. Curtis proposes the following substitute bill:


             1     
UNIFORM TRUST CODE

             2     
2004 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Lyle W. Hillyard

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill makes substantial changes in Title 75, Chapter 7, Trust Administration to
             9      enact the Utah Uniform Trust Code.
             10      Highlighted Provisions:
             11          This bill:
             12          .    creates the Utah Uniform Trust Code;
             13          .    provides a governing law for the administration of trusts in concert with other states
             14      who have adopted the uniform law; and
             15          .    provides some new terms and definitions.
             16      Monies Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          This bill takes effect on July 1, 2004.
             20          This bill provides a coordination clause.
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          7-5-7, as last amended by Chapter 196, Laws of Utah 1994
             24          7-5-10, as last amended by Chapter 6, Laws of Utah 1982
             25          7-5-14, as last amended by Chapter 267, Laws of Utah 1989



             26          25-6-14, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
             27          49-11-303, as renumbered and amended by Chapter 250, Laws of Utah 2002
             28          59-10-103, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
             29          75-1-201, as last amended by Chapter 49, Laws of Utah 2003
             30          75-1-403, as last amended by Chapter 116, Laws of Utah 2000
             31          75-2-1209, as enacted by Chapter 3, Laws of Utah 2003, Second Special Session
             32          75-3-703, as enacted by Chapter 150, Laws of Utah 1975
             33          75-3-913, as enacted by Chapter 150, Laws of Utah 1975
             34          75-5-417, as last amended by Chapter 119, Laws of Utah 1995
             35          75-7-202, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
             36      ENACTS:
             37          75-7-102, Utah Code Annotated 1953
             38          75-7-103, Utah Code Annotated 1953
             39          75-7-104, Utah Code Annotated 1953
             40          75-7-105, Utah Code Annotated 1953
             41          75-7-106, Utah Code Annotated 1953
             42          75-7-108, Utah Code Annotated 1953
             43          75-7-109, Utah Code Annotated 1953
             44          75-7-110, Utah Code Annotated 1953
             45          75-7-111, Utah Code Annotated 1953
             46          75-7-112, Utah Code Annotated 1953
             47          75-7-412, Utah Code Annotated 1953
             48          75-7-413, Utah Code Annotated 1953
             49          75-7-414, Utah Code Annotated 1953
             50          75-7-415, Utah Code Annotated 1953
             51          75-7-416, Utah Code Annotated 1953
             52          75-7-417, Utah Code Annotated 1953
             53          75-7-502, Utah Code Annotated 1953
             54          75-7-503, Utah Code Annotated 1953
             55          75-7-504, Utah Code Annotated 1953
             56          75-7-505, Utah Code Annotated 1953



             57          75-7-506, Utah Code Annotated 1953
             58          75-7-507, Utah Code Annotated 1953
             59          75-7-604, Utah Code Annotated 1953
             60          75-7-605, Utah Code Annotated 1953
             61          75-7-606, Utah Code Annotated 1953
             62          75-7-607, Utah Code Annotated 1953
             63          75-7-701, Utah Code Annotated 1953
             64          75-7-702, Utah Code Annotated 1953
             65          75-7-703, Utah Code Annotated 1953
             66          75-7-704, Utah Code Annotated 1953
             67          75-7-705, Utah Code Annotated 1953
             68          75-7-706, Utah Code Annotated 1953
             69          75-7-707, Utah Code Annotated 1953
             70          75-7-708, Utah Code Annotated 1953
             71          75-7-709, Utah Code Annotated 1953
             72          75-7-801, Utah Code Annotated 1953
             73          75-7-802, Utah Code Annotated 1953
             74          75-7-803, Utah Code Annotated 1953
             75          75-7-804, Utah Code Annotated 1953
             76          75-7-805, Utah Code Annotated 1953
             77          75-7-806, Utah Code Annotated 1953
             78          75-7-807, Utah Code Annotated 1953
             79          75-7-808, Utah Code Annotated 1953
             80          75-7-809, Utah Code Annotated 1953
             81          75-7-810, Utah Code Annotated 1953
             82          75-7-811, Utah Code Annotated 1953
             83          75-7-812, Utah Code Annotated 1953
             84          75-7-813, Utah Code Annotated 1953
             85          75-7-814, Utah Code Annotated 1953
             86          75-7-815, Utah Code Annotated 1953
             87          75-7-816, Utah Code Annotated 1953


             88          75-7-817, Utah Code Annotated 1953
             89          75-7-901, Utah Code Annotated 1953
             90          75-7-902, Utah Code Annotated 1953
             91          75-7-903, Utah Code Annotated 1953
             92          75-7-904, Utah Code Annotated 1953
             93          75-7-905, Utah Code Annotated 1953
             94          75-7-906, Utah Code Annotated 1953
             95          75-7-907, Utah Code Annotated 1953
             96          75-7-1001, Utah Code Annotated 1953
             97          75-7-1002, Utah Code Annotated 1953
             98          75-7-1003, Utah Code Annotated 1953
             99          75-7-1004, Utah Code Annotated 1953
             100          75-7-1005, Utah Code Annotated 1953
             101          75-7-1006, Utah Code Annotated 1953
             102          75-7-1007, Utah Code Annotated 1953
             103          75-7-1008, Utah Code Annotated 1953
             104          75-7-1009, Utah Code Annotated 1953
             105          75-7-1010, Utah Code Annotated 1953
             106          75-7-1011, Utah Code Annotated 1953
             107          75-7-1012, Utah Code Annotated 1953
             108          75-7-1013, Utah Code Annotated 1953
             109          75-7-1101, Utah Code Annotated 1953
             110          75-7-1102, Utah Code Annotated 1953
             111          75-7-1103, Utah Code Annotated 1953
             112      REPEALS AND REENACTS:
             113          75-7-101, as enacted by Chapter 150, Laws of Utah 1975
             114          75-7-203, as last amended by Chapter 194, Laws of Utah 1977
             115          75-7-205, as enacted by Chapter 150, Laws of Utah 1975
             116          75-7-301, as enacted by Chapter 150, Laws of Utah 1975
             117          75-7-302, as last amended by Chapter 93, Laws of Utah 2002
             118          75-7-303, as last amended by Chapter 179, Laws of Utah 1992


             119          75-7-304, as enacted by Chapter 150, Laws of Utah 1975
             120          75-7-305, as enacted by Chapter 150, Laws of Utah 1975
             121          75-7-401, as last amended by Chapter 39, Laws of Utah 1998
             122          75-7-402, as last amended by Chapter 3, Laws of Utah 2003, Second Special Session
             123          75-7-403, as last amended by Chapter 93, Laws of Utah 2002
             124          75-7-404, as last amended by Chapter 133, Laws of Utah 1991
             125          75-7-405, as enacted by Chapter 150, Laws of Utah 1975
             126          75-7-406, as enacted by Chapter 150, Laws of Utah 1975
             127          75-7-407, as enacted by Chapter 150, Laws of Utah 1975
             128          75-7-408, as enacted by Chapter 150, Laws of Utah 1975
             129          75-7-409, as last amended by Chapter 320, Laws of Utah 2000
             130          75-7-410, as enacted by Chapter 196, Laws of Utah 1999
             131          75-7-411, as enacted by Chapter 196, Laws of Utah 1999
             132          75-7-501, as enacted by Chapter 54, Laws of Utah 1982
             133      RENUMBERS AND AMENDS:
             134          75-7-107, (Renumbered from 75-7-208, as last amended by Chapter 3, Laws of Utah
             135      2003, Second Special Session)
             136          75-7-508, (Renumbered from 75-7-308, as enacted by Chapter 227, Laws of Utah 2002)
             137          75-7-509, (Renumbered from 75-7-309, as enacted by Chapter 227, Laws of Utah 2002)
             138          75-7-510, (Renumbered from 75-7-310, as enacted by Chapter 227, Laws of Utah 2002)
             139          75-7-511, (Renumbered from 75-7-311, as enacted by Chapter 227, Laws of Utah 2002)
             140          75-7-512, (Renumbered from 75-7-312, as enacted by Chapter 227, Laws of Utah 2002)
             141          75-7-513, (Renumbered from 75-7-313, as enacted by Chapter 227, Laws of Utah 2002)
             142          75-7-514, (Renumbered from 75-7-314, as enacted by Chapter 227, Laws of Utah 2002)
             143          75-7-515, (Renumbered from 75-7-315, as enacted by Chapter 227, Laws of Utah 2002)
             144          75-7-516, (Renumbered from 75-7-316, as enacted by Chapter 227, Laws of Utah 2002)
             145          75-7-517, (Renumbered from 75-7-317, as enacted by Chapter 227, Laws of Utah 2002)
             146          75-7-518, (Renumbered from 75-7-318, as enacted by Chapter 227, Laws of Utah 2002)
             147          75-7-519, (Renumbered from 75-7-319, as enacted by Chapter 227, Laws of Utah 2002)
             148      REPEALS:
             149          75-7-206, as enacted by Chapter 150, Laws of Utah 1975


             150          75-7-207, as enacted by Chapter 150, Laws of Utah 1975
             151          75-7-306, as last amended by Chapter 179, Laws of Utah 1992
             152          75-7-307, as last amended by Chapter 30, Laws of Utah 1992
             153          75-7-405.5, as enacted by Chapter 3, Laws of Utah 2003, Second Special Session
             154     
             155      Be it enacted by the Legislature of the state of Utah:
             156          Section 1. Section 7-5-7 is amended to read:
             157           7-5-7. Management and investment of trust funds.
             158          (1) Funds received or held by any trust company as agent or fiduciary, whether for
             159      investment or distribution, shall be invested or distributed as soon as practicable as authorized
             160      under the instrument creating the account and shall not be held uninvested any longer than is
             161      reasonably necessary.
             162          (2) If the instrument creating an agency or fiduciary account contains provisions
             163      authorizing the trust company, its officers, or its directors to exercise their discretion in the
             164      matter of investments, funds held in the trust account under that instrument may be invested
             165      only in those classes of securities which are approved by the directors of the trust company or a
             166      committee of directors appointed for that purpose. If a trust company acts in any agency or
             167      fiduciary capacity under appointment by a court of competent jurisdiction, it shall make and
             168      account for all investments according to the provisions of Title 75, Utah Uniform Probate
             169      Code, unless the underlying instrument provides otherwise.
             170          (3) (a) Funds received or held as agent or fiduciary by any trust company which is also
             171      a depository institution, whether for investment or distribution, may be deposited in the
             172      commercial department or savings department of that trust company to the credit of its trust
             173      department. Whenever the funds so deposited in a fiduciary or managing agency account
             174      exceed the amount of federal deposit insurance applicable to that account, the trust company
             175      shall deliver to the trust department or put under its control collateral security as outlined in
             176      Regulation 9.10 of the Comptroller of the Currency or in Regulation 550.8 of the Office of
             177      Thrift Supervision, as amended. However, if the instrument creating such a fiduciary or
             178      managing agency account expressly provides that funds may be deposited to the commercial or
             179      savings department of the trust company, then the funds may be so deposited without setting
             180      aside collateral securities as required under this section and the deposits in the event of


             181      insolvency of any such trust company shall be treated as other general deposits are treated. A
             182      trust company which deposits trust funds in its commercial or savings department shall be
             183      liable for interest on the deposits only at the rates, if any, paid by the trust company on deposits
             184      of like kind not made to the credit of its trust department.
             185          (b) Funds received or held as agent or fiduciary by a trust company, whether for
             186      investment or distribution, may be deposited in an affiliated depository institution. Whenever
             187      the funds so deposited in a fiduciary or managing agency account exceed the amount of federal
             188      deposit insurance applicable to that account, the depository institution shall deliver to the trust
             189      company or put under its control collateral security as outlined in Regulation 9.10 of the
             190      Comptroller of the Currency or in Regulation 550.8 of the Office of Thrift Supervision as
             191      amended. However, if the instrument creating the fiduciary or managing agency account
             192      expressly permits funds to be deposited in the affiliated depository institution, the funds may be
             193      so deposited without setting aside collateral securities as required under this section and
             194      deposits in the event of insolvency of the depository institution shall be treated as other general
             195      deposits are treated. A trust company which deposits trust funds in an affiliated depository
             196      institution is liable for interest on the deposits only at the rates, if any, paid by the depository
             197      institution on deposits of like kind.
             198          (4) In carrying out all aspects of its trust business, a trust company shall have all the
             199      powers, privileges, and duties as set forth in [Section 75-7-402 ] Sections 75-7-813 and
             200      75-7-814 with respect to trustees, whether or not the trust company is acting as a trustee as
             201      defined in Title 75.
             202          (5) Nothing in this section may alter, amend, or limit the powers of a trust company
             203      acting in a fiduciary capacity as specified in the particular instrument or order creating the
             204      fiduciary relationship.
             205          Section 2. Section 7-5-10 is amended to read:
             206           7-5-10. Lending trust funds to trust company, officer, director, or employee as
             207      felony.
             208          Unless expressly permitted in the instrument creating a trust account or by a person
             209      authorized to give that permission or by a court order as permitted in Section [ 75-7-404 ]
             210      75-7-802 , no trust company shall lend to itself or to any officer or director or employee of the
             211      trust company any funds held in any trust account under the powers conferred in this chapter.


             212      Any officer, director or employee making such a loan, or to whom such a loan is made, is
             213      guilty of a third degree felony.
             214          Section 3. Section 7-5-14 is amended to read:
             215           7-5-14. Mergers, consolidations, acquisitions, transfers, or reorganizations
             216      involving entities engaged in trust business -- Succession of rights and duties -- Petition
             217      for appointment of another trust company.
             218          (1) Notwithstanding any provision of law to the contrary, a trust company, depository
             219      institution, or other corporation authorized under this chapter or under the laws of the United
             220      States to engage in the trust business in this state may, subject to the provisions of Sections
             221      7-1-702 , 7-1-704 , and 7-1-705 :
             222          (a) (i) merge or consolidate with, (ii) acquire control of, acquire all or a portion of the
             223      assets and trust business of, or assume all or any portion of the liabilities of, or (iii) transfer
             224      control to, transfer all or a portion of its assets and trust business to, or transfer all or a portion
             225      of its liabilities to, any other trust company, depository institution, or other corporation, which
             226      institution is authorized under this chapter or under the laws of the United States to engage in
             227      the trust business in this state; or
             228          (b) reorganize.
             229          (2) Upon final approval by the commissioner of any merger, consolidation, acquisition
             230      of control, acquisition of assets, assumption of liabilities, or reorganization, and upon written
             231      notice of this approval to all persons entitled to and then receiving trust accountings from the
             232      transferring or reorganizing trust company, the resulting or acquiring trust company shall,
             233      without court proceedings or a court order, succeed to all rights, privileges, duties, obligations,
             234      and undertakings under all trust instruments, agency and fiduciary relationships and
             235      arrangements, and other trust business transferred and acquired in the manner authorized by
             236      this section. However, except as provided otherwise in the relevant trust instrument, any
             237      interested person may, not more than 30 days after receipt of written notice of the merger,
             238      consolidation, acquisition, transfer, or reorganization, petition any court of competent
             239      jurisdiction to appoint another or succeeding trust company with respect to any agency or
             240      fiduciary relationship affecting that interested person, and until another or succeeding trust
             241      company is so appointed, the acquiring or resulting trust company is entitled to act as agent or
             242      fiduciary with respect to the agency or fiduciary relationship. [No merger, consolidation,


             243      acquisition, assumption, or reorganization pursuant to this section shall be deemed to be a
             244      transfer which is prohibited by Section 75-7-403 .]
             245          (3) As used in this section, a "reorganization" includes, but is not limited to:
             246          (a) the creation by a trust company of a subsidiary corporation which is
             247      [wholly-owned] wholly owned by that trust company and which is organized solely for the
             248      purpose of conducting all or any portion of the trust business of that trust company; or
             249          (b) any merger or other combination between a trust company and:
             250          (i) a [wholly-owned] wholly owned trust company subsidiary of that trust company; or
             251          (ii) a [wholly-owned] wholly owned trust company subsidiary of the depository
             252      institution holding company which owns or controls that trust company.
             253          Section 4. Section 25-6-14 is amended to read:
             254           25-6-14. Restricting transfers of trust interests.
             255          (1) (a) For trusts created on or after December 31, 2003, a settlor who in writing
             256      irrevocably transfers property in trust to a trust having as trustee a company defined in
             257      Subsection 7-5-1 (1)(d) who holds some or all of the trust assets in this state in a savings
             258      account described in Subsection 7-1-103 (29), a certificate of deposit, a brokerage account, a
             259      trust company fiduciary account, or account or deposit located in this state that is similar to
             260      such an account may provide that the income or principal interest of the settlor as beneficiary
             261      of the trust may not be either voluntarily or involuntarily transferred before payment or delivery
             262      to the settlor as beneficiary by the trustee. The provision shall be considered to be a restriction
             263      on the transfer of the settlor's beneficial interest in the trust that is enforceable under applicable
             264      nonbankruptcy law within the meaning of Section 541(c)(2) of the Bankruptcy Code or
             265      successor provision.
             266          (b) This Subsection (1) applies to:
             267          (i) any form of transfer into trust including:
             268          (A) conveyance; or
             269          (B) assignment; and
             270          (ii) transfers of:
             271          (A) personal property;
             272          (B) interests in personal property;
             273          (C) real property; or


             274          (D) interests in real property.
             275          (2) (a) Except as provided in Subsection (2)(c), if a trust has a restriction as provided in
             276      Subsection (1)(a), a creditor or other claimant of the settlor may not satisfy a claim, or liability
             277      on it, in either law or equity, out of the settlor's transfer or settlor's beneficial interest in the
             278      trust.
             279          (b) For the purposes of Subsection (2)(a), a creditor includes one holding or seeking to
             280      enforce a judgment entered by a court or other body having adjudicative authority as well as
             281      one with a right to payment, whether or not reduced to judgment, liquidated, unliquidated,
             282      fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or
             283      unsecured.
             284          (c) A restriction provided under Subsection (1) does not prevent a creditor or person
             285      described in Subsection (2)(a) from satisfying a claim or liability out of the settlor's beneficial
             286      interest in or transfer into trust if:
             287          (i) the claim is a judgment, order, decree, or other legally enforceable decision or ruling
             288      resulting from a judicial, arbitration, mediation, or administrative proceeding commenced prior
             289      to or within three years after the trust is created;
             290          (ii) the settlor's transfer into trust is made with actual intent to hinder, delay, or defraud
             291      that creditor;
             292          (iii) the trust provides that the settlor may revoke or terminate all or part of the trust
             293      without the consent of a person who has a substantial beneficial interest in the trust and the
             294      interest would be adversely affected by the exercise of the settlor's power to revoke or
             295      terminate all or part of the trust;
             296          (iv) the trust requires that all or a part of the trust's income or principal, or both must be
             297      distributed to the settlor as beneficiary;
             298          (v) the claim is for a payment owed by a settlor under a child support judgment or
             299      order;
             300          (vi) the transfer is made when the settlor is insolvent or the transfer renders the settlor
             301      insolvent;
             302          (vii) the claim is for recovery of public assistance received by the settlor allowed under
             303      Title 26, Chapter 19, Medical Benefits Recovery Act;
             304          (viii) the claim is a tax or other amount owed by the settlor to any governmental entity;


             305          (ix) the claim is by a spouse or former spouse of the settlor on account of an agreement
             306      or order for the payment of support or alimony or for a division or distribution of property;
             307          (x) (A) the settlor transferred assets into the trust that:
             308          (I) were listed in a written representation of the settlor's assets given to a claimant to
             309      induce the claimant to enter into a transaction or agreement with the settlor; or
             310          (II) were transferred from the settlor's control in breach of any written agreement,
             311      covenant, or security interest between the settlor and the claimant; or
             312          (B) without limiting the claimant's right to pursue assets not held by the trust, a
             313      claimant described in Subsection (2)(c)(x)(A) may only foreclose or execute upon an asset in
             314      the trust listed in the written representation described in Subsection (2)(c)(x)(A)(I) or
             315      transferred in breach of a written agreement, covenant, or security interest as provided in
             316      Subsection (2)(c)(x)(A)(II) to the extent of the settlor's interest in that asset when it was
             317      transferred to the trust or the equivalent value of that asset at the time of foreclosure or
             318      execution if the original asset was sold or traded by the trust; or
             319          (xi) the claim is a judgment, award, order, sentence, fine, penalty, or other
             320      determination of liability of the settlor for conduct of the settlor constituting fraud, intentional
             321      infliction of harm, or a crime.
             322          (d) The statute of limitations for actions to satisfy a claim or liability out of the settlor's
             323      beneficial interest in or transfer into trust under Subsections (2)(c)[(i),](ii), (v), (vii), (viii), (ix),
             324      (x), and (xi) is the statute of limitations applicable to the underlying action.
             325          (e) For the purposes of Subsection (2)(c) "revoke or terminate" does not include:
             326          (i) a power to veto a distribution from the trust;
             327          (ii) a testamentary special power of appointment or similar power;
             328          (iii) the right to receive a distribution of income, principal, or both in the discretion of
             329      another, including a trustee other than the settlor, an interest in a charitable remainder unitrust
             330      or charitable remainder annuity trust as defined in Internal Revenue Code Section 664 or
             331      successor provision, or a right to receive principal subject to an ascertainable standard set forth
             332      in the trust; or
             333          (iv) the power to appoint nonsubordinate advisers or trust protectors who can remove
             334      and appoint trustees, who can direct, consent to or disapprove distributions, or is the power to
             335      serve as an investment director or appoint an investment director under [Subsections


             336      75-7-302 (13) and (14)] Section 75-7-906 .
             337          (3) The satisfaction of a claim under Subsection (2)(c) is limited to that part of the trust
             338      or transfer to which it applies.
             339          (4) (a) If a trust has a restriction as provided under Subsection (1), the restriction
             340      prevents anyone, including a person listed in Subsection (2)(a), from asserting any cause of
             341      action or claim for relief against a trustee or anyone involved in the counseling, drafting,
             342      preparation, execution, or funding of the trust for:
             343          (i) conspiracy to commit a fraudulent conveyance;
             344          (ii) aiding and abetting a fraudulent conveyance; or
             345          (iii) participating in the trust transaction.
             346          (b) A person prevented from asserting a cause of action or claim for relief under this
             347      Subsection (4) may assert a cause of action only against:
             348          (i) the trust assets; or
             349          (ii) the settlor or beneficiary to the extent allowed under Subsection 25-6-5 (1)(a).
             350          (5) In any action brought under Subsection (2)(c), the burden to prove the matter by
             351      clear and convincing evidence shall be upon the creditor.
             352          (6) For purposes of this section, the transfer shall be considered to have been made on
             353      the date the property was originally transferred in trust.
             354          (7) The courts of this state shall have exclusive jurisdiction over any action brought
             355      under this section.
             356          (8) If a trust or a property transfer to a trust is voided or set aside under Subsection
             357      (2)(c), the trust or property transfer shall be voided or set aside only to the extent necessary to
             358      satisfy:
             359          (a) the settlor's debt to the creditor or other person at whose instance the trust or
             360      property transfer is voided or set aside; and
             361          (b) the costs and attorney fees allowed by the court.
             362          (9) If a trust or a property transfer to a trust is voided or set aside under Subsection
             363      (2)(c) and the court is satisfied that the trustee did not act in bad faith in accepting or
             364      administering the property that is the subject of the trust:
             365          (a) the trustee has a first and paramount lien against the property that is the subject of
             366      the trust in an amount equal to the entire cost properly incurred by the trustee in a defense of


             367      the action or proceedings to void or set aside the trust or the property transfer, including
             368      attorney fees;
             369          (b) the trust or property transfer that is voided or set aside is subject to the proper fees,
             370      costs, preexisting rights, claims, and interest of the trustee and any predecessor trustee if the
             371      trustee and predecessor trustee did not act in bad faith; and
             372          (c) any beneficiary, including the settlor, may retain a distribution made by exercising a
             373      trust power or discretion vested in the trustee of the trust, if the power or discretion was
             374      properly exercised before the commencement of the action or proceeding to void or set aside
             375      the trust or property transfer.
             376          (10) If at least one trustee is a trust company as defined in Subsection 7-5-1 (1)(d), then
             377      individuals may also serve as cotrustees.
             378          Section 5. Section 49-11-303 is amended to read:
             379           49-11-303. Fund investment standard -- Prudent investor rule.
             380          The [Utah State Retirement Investment Fund] fund shall be invested in accordance with
             381      the prudent [investor] man rule [under Section 75-7-302 ] established in Title 75, Chapter 7,
             382      Part 9, Utah Uniform Prudent Investor Act.
             383          Section 6. Section 59-10-103 is amended to read:
             384           59-10-103. Definitions.
             385          (1) As used in this chapter:
             386          (a) "Adoption expenses" means:
             387          (i) any actual medical and hospital expenses of the mother of the adopted child which
             388      are incident to the child's birth;
             389          (ii) any welfare agency fees or costs;
             390          (iii) any child placement service fees or costs;
             391          (iv) any legal fees or costs; or
             392          (v) any other fees or costs relating to an adoption.
             393          (b) "Adult with a disability" means an individual who:
             394          (i) is 18 years of age or older;
             395          (ii) is eligible for services under Title 62A, Chapter 5, Services for People with
             396      Disabilities; and
             397          (iii) is not enrolled in:


             398          (A) an education program for students with disabilities that is authorized under Section
             399      53A-15-301 ; or
             400          (B) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind.
             401          (c) (i) For purposes of Subsection 59-10-114 (2)(m), "capital gain transaction" means a
             402      transaction that results in a:
             403          (A) short-term capital gain; or
             404          (B) long-term capital gain.
             405          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             406      the commission may by rule define the term "transaction."
             407          (d) "Commercial domicile" means the principal place from which the trade or business
             408      of a Utah small business corporation is directed or managed.
             409          (e) "Corporation" includes:
             410          (i) associations;
             411          (ii) joint stock companies; and
             412          (iii) insurance companies.
             413          (f) "Dependent child with a disability" means an individual 21 years of age or younger
             414      who:
             415          (i) (A) is diagnosed by a school district representative under rules adopted by the State
             416      Board of Education as having a disability classified as:
             417          (I) autism;
             418          (II) deafness;
             419          (III) preschool developmental delay;
             420          (IV) dual sensory impairment;
             421          (V) hearing impairment;
             422          (VI) intellectual disability;
             423          (VII) multidisability;
             424          (VIII) orthopedic impairment;
             425          (IX) other health impairment;
             426          (X) traumatic brain injury; or
             427          (XI) visual impairment;
             428          (B) is not receiving residential services from:


             429          (I) the Division of Services for People with Disabilities created under Section
             430      62A-5-102 ; or
             431          (II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
             432      and
             433          (C) is enrolled in:
             434          (I) an education program for students with disabilities that is authorized under Section
             435      53A-15-301 ; or
             436          (II) a school established under Title 53A, Chapter 25, Schools for the Deaf and Blind;
             437      or
             438          (ii) is identified under guidelines of the Department of Health as qualified for:
             439          (A) Early Intervention; or
             440          (B) Infant Development Services.
             441          (g) "Employer," "employee," and "wages" are defined as provided in Section
             442      59-10-401 .
             443          (h) "Fiduciary" means:
             444          (i) a guardian;
             445          (ii) a trustee;
             446          (iii) an executor;
             447          (iv) an administrator;
             448          (v) a receiver;
             449          (vi) a conservator; or
             450          (vii) any person acting in any fiduciary capacity for any individual.
             451          (i) "Homesteaded land diminished from the Uintah and Ouray Reservation" means the
             452      homesteaded land that was held to have been diminished from the Uintah and Ouray
             453      Reservation in Hagen v. Utah, 510 U.S. 399 (1994).
             454          (j) "Individual" means a natural person and includes aliens and minors.
             455          (k) "Irrevocable trust" means a trust in which the settlor may not revoke or terminate
             456      all or part of the trust without the consent of a person who has a substantial beneficial interest
             457      in the trust and the interest would be adversely affected by the exercise of the settlor's power to
             458      revoke or terminate all or part of the trust.
             459          (l) For purposes of Subsection 59-10-114 (2)(m), "long-term capital gain" is as defined


             460      in Section 1222, Internal Revenue Code.
             461          (m) "Nonresident individual" means an individual who is not a resident of this state.
             462          (n) "Nonresident trust" or "nonresident estate" means a trust or estate which is not a
             463      resident estate or trust.
             464          (o) (i) "Partnership" includes a syndicate, group, pool, joint venture, or other
             465      unincorporated organization:
             466          (A) through or by means of which any business, financial operation, or venture is
             467      carried on; and
             468          (B) which is not, within the meaning of this chapter:
             469          (I) a trust;
             470          (II) an estate; or
             471          (III) a corporation.
             472          (ii) "Partnership" does not include any organization not included under the definition of
             473      "partnership" in Section 761, Internal Revenue Code.
             474          (iii) "Partner" includes a member in a syndicate, group, pool, joint venture, or
             475      organization described in Subsection (1)(o)(i).
             476          (p) "Qualifying stock" means stock that is:
             477          (i) (A) common; or
             478          (B) preferred;
             479          (ii) as defined by the commission by rule, originally issued to:
             480          (A) a resident or nonresident individual; or
             481          (B) a partnership if the resident or nonresident individual making a subtraction from
             482      federal taxable income in accordance with Subsection 59-10-114 (2)(m):
             483          (I) was a partner when the stock was issued; and
             484          (II) remains a partner until the last day of the taxable year for which the resident or
             485      nonresident individual makes the subtraction from federal taxable income in accordance with
             486      Subsection 59-10-114 (2)(m); and
             487          (iii) issued:
             488          (A) by a Utah small business corporation;
             489          (B) on or after January 1, 2003; and
             490          (C) for:


             491          (I) money; or
             492          (II) other property, except for stock or securities.
             493          (q) (i) "Resident individual" means:
             494          (A) an individual who is domiciled in this state for any period of time during the
             495      taxable year, but only for the duration of the period during which the individual is domiciled in
             496      this state; or
             497          (B) an individual who is not domiciled in this state but:
             498          (I) maintains a permanent place of abode in this state; and
             499          (II) spends in the aggregate 183 or more days of the taxable year in this state.
             500          (ii) For purposes of Subsection (1)(q)(i)(B), a fraction of a calendar day shall be
             501      counted as a whole day.
             502          (r) (i) "Resident estate" or "resident trust" [means:] is as defined in Section 75-7-103 .
             503          [(A) an estate of a decedent who at death was domiciled in this state;]
             504          [(B) a trust, or a portion of a trust, consisting of property transferred by will of a
             505      decedent who at his death was domiciled in this state; or]
             506          [(C) a trust administered in this state.]
             507          [(ii) A trust shall be considered to be administered in this state if:]
             508          [(A) the place of business where the fiduciary transacts a major portion of its
             509      administration of the trust is in this state; or]
             510          [(B) the trust states that this state is the place of administration, and any administration
             511      of the trust is done in this state.]
             512          (s) For purposes of Subsection 59-10-114 (2)(m), "short-term capital gain" is as defined
             513      in Section 1222, Internal Revenue Code.
             514          (t) "Taxable income" and "state taxable income" are defined as provided in Sections
             515      59-10-111 , 59-10-112 , 59-10-116 , 59-10-201.1 , and 59-10-204 .
             516          (u) "Taxpayer" means any individual, estate, or trust or beneficiary of an estate or trust,
             517      whose income is subject in whole or part to the tax imposed by this chapter.
             518          (v) "Uintah and Ouray Reservation" means the lands recognized as being included
             519      within the Uintah and Ouray Reservation in:
             520          (i) Hagen v. Utah, 510 U.S. 399 (1994); and
             521          (ii) Ute Indian Tribe v. Utah, 114 F.3d 1513 (10th Cir. 1997).


             522          (w) (i) "Utah small business corporation" means a corporation that:
             523          (A) is a small business corporation as defined in Section 1244(c)(3), Internal Revenue
             524      Code;
             525          (B) except as provided in Subsection (1)(w)(ii), meets the requirements of Section
             526      1244(c)(1)(C), Internal Revenue Code; and
             527          (C) has its commercial domicile in this state.
             528          (ii) Notwithstanding Subsection (1)(w)(i)(B), the time period described in Section
             529      1244(c)(1)(C) and Section 1244(c)(2), Internal Revenue Code, for determining the source of a
             530      corporation's aggregate gross receipts shall end on the last day of the taxable year for which the
             531      resident or nonresident individual makes a subtraction from federal taxable income in
             532      accordance with Subsection 59-10-114 (2)(m).
             533          (x) "Ute tribal member" means a person who is enrolled as a member of the Ute Indian
             534      Tribe of the Uintah and Ouray Reservation.
             535          (y) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray Reservation.
             536          (2) (a) Any term used in this chapter has the same meaning as when used in
             537      comparable context in the laws of the United States relating to federal income taxes unless a
             538      different meaning is clearly required.
             539          (b) Any reference to the Internal Revenue Code or to the laws of the United States shall
             540      mean the Internal Revenue Code or other provisions of the laws of the United States relating to
             541      federal income taxes that are in effect for the taxable year.
             542          (c) Any reference to a specific section of the Internal Revenue Code or other provision
             543      of the laws of the United States relating to federal income taxes shall include any
             544      corresponding or comparable provisions of the Internal Revenue Code as hereafter amended,
             545      redesignated, or reenacted.
             546          Section 7. Section 75-1-201 is amended to read:
             547           75-1-201. General definitions.
             548          Subject to additional definitions contained in the subsequent chapters that are
             549      applicable to specific chapters, parts, or sections, and unless the context otherwise requires, in
             550      this code:
             551          (1) "Agent" includes an attorney-in-fact under a durable or nondurable power of
             552      attorney, an individual authorized to make decisions concerning another's health care, and an


             553      individual authorized to make decisions for another under a natural death act.
             554          (2) "Application" means a written request to the registrar for an order of informal
             555      probate or appointment under Title 75, Chapter 3, Part 3, Informal Probate and Appointment
             556      Proceedings.
             557          (3) "Beneficiary," as it relates to trust beneficiaries, includes a person who has any
             558      present or future interest, vested or contingent, and also includes the owner of an interest by
             559      assignment or other transfer; as it relates to a charitable trust, includes any person entitled to
             560      enforce the trust; as it relates to a "beneficiary of a beneficiary designation," refers to a
             561      beneficiary of an insurance or annuity policy, of an account with POD designation, of a security
             562      registered in beneficiary form (TOD), or of a pension, profit-sharing, retirement, or similar
             563      benefit plan, or other nonprobate transfer at death; and, as it relates to a "beneficiary designated
             564      in a governing instrument," includes a grantee of a deed, a devisee, a trust beneficiary, a
             565      beneficiary of a beneficiary designation, a donee, appointee, or taker in default of a power of
             566      appointment, and a person in whose favor a power of attorney or a power held in any
             567      individual, fiduciary, or representative capacity is exercised.
             568          (4) "Beneficiary designation" refers to a governing instrument naming a beneficiary of
             569      an insurance or annuity policy, of an account with POD designation, of a security registered in
             570      beneficiary form (TOD), or of a pension, profit-sharing, retirement, or similar benefit plan, or
             571      other nonprobate transfer at death.
             572          (5) "Child" includes any individual entitled to take as a child under this code by
             573      intestate succession from the parent whose relationship is involved and excludes any person
             574      who is only a stepchild, a foster child, a grandchild, or any more remote descendant.
             575          (6) "Claims," in respect to estates of decedents and protected persons, includes
             576      liabilities of the decedent or protected person, whether arising in contract, in tort, or otherwise,
             577      and liabilities of the estate which arise at or after the death of the decedent or after the
             578      appointment of a conservator, including funeral expenses and expenses of administration.
             579      "Claims" does not include estate or inheritance taxes, or demands or disputes regarding title of
             580      a decedent or protected person to specific assets alleged to be included in the estate.
             581          (7) "Conservator" means a person who is appointed by a court to manage the estate of a
             582      protected person.
             583          (8) "Court" means any of the courts of record in this state having jurisdiction in matters


             584      relating to the affairs of decedents.
             585          (9) "Descendant" of an individual means all of his descendants of all generations, with
             586      the relationship of parent and child at each generation being determined by the definition of
             587      child and parent contained in this title.
             588          (10) "Devise," when used as a noun, means a testamentary disposition of real or
             589      personal property and, when used as a verb, means to dispose of real or personal property by
             590      will.
             591          (11) "Devisee" means any person designated in a will to receive a devise. For the
             592      purposes of Title 75, Chapter 3, Probate of Wills and Administration, in the case of a devise to
             593      an existing trust or trustee, or to a trustee in trust described by will, the trust or trustee is the
             594      devisee, and the beneficiaries are not devisees.
             595          (12) "Disability" means cause for a protective order as described by Section 75-5-401 .
             596          (13) "Distributee" means any person who has received property of a decedent from his
             597      personal representative other than as a creditor or purchaser. A testamentary trustee is a
             598      distributee only to the extent of distributed assets or increment thereto remaining in his hands.
             599      A beneficiary of a testamentary trust to whom the trustee has distributed property received from
             600      a personal representative is a distributee of the personal representative. For purposes of this
             601      provision, "testamentary trustee" includes a trustee to whom assets are transferred by will, to
             602      the extent of the devised assets.
             603          (14) "Estate" includes the property of the decedent, trust, or other person whose affairs
             604      are subject to this title as originally constituted and as it exists from time to time during
             605      administration.
             606          (15) "Exempt property" means that property of a decedent's estate which is described in
             607      Section 75-2-403 .
             608          (16) "Fiduciary" includes a personal representative, guardian, conservator, and trustee.
             609          (17) "Foreign personal representative" means a personal representative of another
             610      jurisdiction.
             611          (18) "Formal proceedings" means proceedings conducted before a judge with notice to
             612      interested persons.
             613          (19) "Governing instrument" means a deed, will, trust, insurance or annuity policy,
             614      account with POD designation, security registered in beneficiary form (TOD), pension,


             615      profit-sharing, retirement, or similar benefit plan, instrument creating or exercising a power of
             616      appointment or a power of attorney, or a dispositive, appointive, or nominative instrument of
             617      any similar type.
             618          (20) "Guardian" means a person who has qualified as a guardian of a minor or
             619      incapacitated person pursuant to testamentary or court appointment, or by written instrument as
             620      provided in Section 75-5-202.5 , but excludes one who is merely a guardian ad litem.
             621          (21) "Heirs," except as controlled by Section 75-2-711 , means persons, including the
             622      surviving spouse and state, who are entitled under the statutes of intestate succession to the
             623      property of a decedent.
             624          (22) "Incapacitated person" means any person who is impaired by reason of mental
             625      illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic
             626      intoxication, or other cause, except minority, to the extent of lacking sufficient understanding
             627      or capacity to make or communicate responsible decisions.
             628          (23) "Informal proceedings" mean those conducted without notice to interested persons
             629      by an officer of the court acting as a registrar for probate of a will or appointment of a personal
             630      representative.
             631          (24) "Interested person" includes heirs, devisees, children, spouses, creditors,
             632      beneficiaries, and any others having a property right in or claim against a trust estate or the
             633      estate of a decedent, ward, or protected person. It also includes persons having priority for
             634      appointment as personal representative [and], other fiduciaries representing interested persons,
             635      a settlor of a trust, if living, or the settlor's legal representative, if any, if the settlor is living but
             636      incapacitated. The meaning as it relates to particular persons may vary from time to time and
             637      shall be determined according to the particular purposes of, and matter involved in, any
             638      proceeding.
             639          (25) "Issue" of a person means descendant as defined in Subsection (9).
             640          (26) "Joint tenants with the right of survivorship" and "community property with the
             641      right of survivorship" includes coowners of property held under circumstances that entitle one
             642      or more to the whole of the property on the death of the other or others, but excludes forms of
             643      coownership registration in which the underlying ownership of each party is in proportion to
             644      that party's contribution.
             645          (27) "Lease" includes an oil, gas, or other mineral lease.


             646          (28) "Letters" includes letters testamentary, letters of guardianship, letters of
             647      administration, and letters of conservatorship.
             648          (29) "Minor" means a person who is under 18 years of age.
             649          (30) "Mortgage" means any conveyance, agreement, or arrangement in which property
             650      is used as security.
             651          (31) "Nonresident decedent" means a decedent who was domiciled in another
             652      jurisdiction at the time of his death.
             653          (32) "Organization" includes a corporation, limited liability company, business trust,
             654      estate, trust, partnership, joint venture, association, government or governmental subdivision or
             655      agency, or any other legal or commercial entity.
             656          (33) "Parent" includes any person entitled to take, or who would be entitled to take if
             657      the child died without a will, as a parent under this code by intestate succession from the child
             658      whose relationship is in question and excludes any person who is only a stepparent, foster
             659      parent, or grandparent.
             660          (34) "Payor" means a trustee, insurer, business entity, employer, government,
             661      governmental agency or subdivision, or any other person authorized or obligated by law or a
             662      governing instrument to make payments.
             663          (35) "Person" means an individual or an organization.
             664          (36) (a) "Personal representative" includes executor, administrator, successor personal
             665      representative, special administrator, and persons who perform substantially the same function
             666      under the law governing their status.
             667          (b) "General personal representative" excludes special administrator.
             668          (37) "Petition" means a written request to the court for an order after notice.
             669          (38) "Proceeding" includes action at law and suit in equity.
             670          (39) "Property" includes both real and personal property or any interest therein and
             671      means anything that may be the subject of ownership.
             672          (40) "Protected person" means a person for whom a conservator has been appointed. A
             673      "minor protected person" means a minor for whom a conservator has been appointed because
             674      of minority.
             675          (41) "Protective proceeding" means a proceeding described in Section 75-5-401 .
             676          (42) "Registrar" refers to the official of the court designated to perform the functions of


             677      registrar as provided in Section 75-1-307 .
             678          (43) "Security" includes any note, stock, treasury stock, bond, debenture, evidence of
             679      indebtedness, certificate of interest, or participation in an oil, gas, or mining title or lease or in
             680      payments out of production under such a title or lease, collateral trust certificate, transferable
             681      share, voting trust certificate, and, in general, any interest or instrument commonly known as a
             682      security, or any certificate of interest or participation, any temporary or interim certificate,
             683      receipt, or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of
             684      the foregoing.
             685          (44) "Settlement," in reference to a decedent's estate, includes the full process of
             686      administration, distribution, and closing.
             687          (45) "Special administrator" means a personal representative as described in Sections
             688      75-3-614 through 75-3-618 .
             689          (46) "State" means a state of the United States, the District of Columbia, the
             690      Commonwealth of Puerto Rico, [or] any territory or insular possession subject to the
             691      jurisdiction of the United States, or a Native American tribe or band recognized by federal law
             692      or formally acknowledged by a state.
             693          (47) "Successor personal representative" means a personal representative, other than a
             694      special administrator, who is appointed to succeed a previously appointed personal
             695      representative.
             696          (48) "Successors" means persons, other than creditors, who are entitled to property of a
             697      decedent under the decedent's will or this title.
             698          (49) "Supervised administration" refers to the proceedings described in Title 75,
             699      Chapter 3, Part 5, Supervised Administration.
             700          (50) "Survive," except for purposes of Part 3 of Article VI, Uniform TOD Security
             701      Registration Act, means that an individual has neither predeceased an event, including the
             702      death of another individual, nor is considered to have predeceased an event under Section
             703      75-2-104 or 75-2-702 . The term includes its derivatives, such as "survives," "survived,"
             704      "survivor," and "surviving."
             705          (51) "Testacy proceeding" means a proceeding to establish a will or determine
             706      intestacy.
             707          (52) "Testator" includes an individual of either sex.


             708          (53) "Trust" includes any express trust, private or charitable, with additions thereto,
             709      wherever and however created. The term also includes a trust created or determined by
             710      judgment or decree under which the trust is to be administered in the manner of an express
             711      trust. The term excludes other constructive trusts, and it excludes resulting trusts,
             712      conservatorships, personal representatives, trust accounts as defined in Title 75, Chapter 6,
             713      Nonprobate Transfers, custodial arrangements pursuant to any Uniform Transfers To Minors
             714      Act, business trusts providing for certificates to be issued to beneficiaries, common trust funds,
             715      voting trusts, preneed funeral plans under Title 58, Chapter 9, Funeral Services Licensing Act,
             716      security arrangements, liquidation trusts, and trusts for the primary purpose of paying debts,
             717      dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind, and any
             718      arrangement under which a person is nominee or escrowee for another.
             719          (54) "Trustee" includes an original, additional, [or] and successor trustee, and
             720      cotrustee, whether or not appointed or confirmed by the court.
             721          (55) "Ward" means a person for whom a guardian has been appointed. A "minor ward"
             722      is a minor for whom a guardian has been appointed solely because of minority.
             723          (56) "Will" includes codicil and any testamentary instrument which merely appoints an
             724      executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits
             725      the right of an individual or class to succeed to property of the decedent passing by intestate
             726      succession.
             727          Section 8. Section 75-1-403 is amended to read:
             728           75-1-403. Pleadings -- When parties bound by others -- Notice.
             729          In formal proceedings involving inter vivos or testamentary trusts, including
             730      proceedings to modify or terminate a trust, estates of decedents, minors, protected persons, or
             731      incapacitated persons, and in judicially supervised settlements, the following apply:
             732          (1) Interests to be affected shall be described in pleadings which give reasonable
             733      information to owners by name or class, by reference to the instrument creating the interests, or
             734      in any other appropriate manner.
             735          [(2) Persons are bound by orders binding others in the following cases:]
             736          [(a) To the extent there is no conflict of interest between the holder of a general
             737      testamentary power of appointment and the persons represented with respect to a particular
             738      question or dispute, the holder may represent and bind persons whose interests, as permissible


             739      appointees, takers in default, or otherwise, are subject to the power.]
             740          [(b) To the extent there is no conflict of interest between the representative and the
             741      person represented with respect to a particular question or dispute:]
             742          [(i) a conservator may represent and bind the person whose estate he controls;]
             743          [(ii) a guardian may represent and bind the ward if no conservator of the ward's estate
             744      has been appointed;]
             745          [(iii) an agent having authority to do so may represent and bind the principal;]
             746          [(iv) a trustee may represent and bind the beneficiaries of the trust;]
             747          [(v) a personal representative of a decedent's estate may represent and bind persons
             748      interested in the estate; and]
             749          [(vi) if no conservator or guardian has been appointed, a parent may represent and bind
             750      the parent's minor or unborn child.]
             751          [(c) Unless otherwise represented, a minor, incapacitated or unborn person, or a person
             752      whose identity or location is unknown and not reasonably ascertainable, may be represented
             753      and bound by another person having a substantially identical interest with respect to the
             754      particular question or dispute, but only to the extent there is no conflict of interest between the
             755      representative and the person represented.]
             756          [(3) Notice is required as follows:]
             757          [(a)] (2) Notice as prescribed by Section 75-1-401 shall be given to every interested
             758      person. Notice may be given both to a person and to another who may bind him.
             759          [(b) Whenever notice to a person is required or permitted under this chapter, notice to
             760      another person who may represent and bind the person represented under this section
             761      constitutes notice to the person represented.]
             762          [(4) Even if there is representation under this section, if the court determines that
             763      representation of the interest might otherwise be inadequate, the court may appoint a guardian
             764      ad litem to represent the interest of, and approve an agreement on behalf of, a minor,
             765      incapacitated or unborn person, or a person whose identity or location is unknown.]
             766          [(5) If not precluded by conflict of interest, a guardian ad litem may be appointed to
             767      represent several persons or interests. In approving an agreement, a guardian ad litem may
             768      consider general family benefit accruing to the living members of the family of the person
             769      represented.]


             770          [(6) Whenever consent may be given by a person pursuant to this chapter, the consent
             771      of a person who may represent and bind the person represented under this section is the consent
             772      of, and is binding on, the person represented unless the person represented objects to the
             773      representation before the consent would otherwise become effective.]
             774          Section 9. Section 75-2-1209 is amended to read:
             775           75-2-1209. Real estate conveyed to a trust under the Statutory Rule Against
             776      Perpetuities.
             777          On or after the effective date, when title to real property is granted to the trustee of a
             778      trust governed by Title 75, Chapter 2, Part 12, [Uniform] Statutory Rule Against Perpetuities,
             779      the terms of the trust, provisions regarding the appointment of successor trustees, and the
             780      names and addresses of successor trustees must be disclosed in accordance with Section
             781      [ 75-7-409 ] 75-7-816 .
             782          Section 10. Section 75-3-703 is amended to read:
             783           75-3-703. General duties -- Relation and liability to persons interested in estate --
             784      Standing to sue.
             785          (1) A personal representative is a fiduciary who shall observe the standard of care
             786      applicable to trustees as described by Section [ 75-7-302 ] 75-7-902 . A personal representative is
             787      under a duty to settle and distribute the estate of the decedent in accordance with the terms of
             788      any probated and effective will and this code and as expeditiously and efficiently as is
             789      consistent with the best interests of the estate. He shall use the authority conferred upon him by
             790      this code, the terms of the will, if any, and any order in proceedings to which he is party for the
             791      best interests of successors to the estate.
             792          (2) A personal representative shall not be surcharged for acts of administration or
             793      distribution if the conduct in question was authorized at the time. Subject to other obligations
             794      of administration, an informally probated will is authority to administer and distribute the
             795      estate according to its terms. An order of appointment of a personal representative, whether
             796      issued in informal or formal proceedings, is authority to distribute apparently intestate assets to
             797      the heirs of the decedent if, at the time of distribution, the personal representative is not aware
             798      of a pending testacy proceeding, a proceeding to vacate an order entered in an earlier testacy
             799      proceeding, a formal proceeding questioning his appointment or fitness to continue, or a
             800      supervised administration proceeding. Nothing in this section affects the duty of the personal


             801      representative to administer and distribute the estate in accordance with the rights of claimants,
             802      the surviving spouse, any minor and dependent children, and any pretermitted child of the
             803      decedent as described elsewhere in this code.
             804          (3) Except as to proceedings which do not survive the death of the decedent, a personal
             805      representative of a decedent domiciled in this state at his death has the same standing to sue
             806      and be sued in the courts of this state and courts of any other jurisdiction as his decedent had
             807      immediately prior to death.
             808          Section 11. Section 75-3-913 is amended to read:
             809           75-3-913. Distributions to trustee.
             810          (1) Before distributing to a trustee, the personal representative may require that the trust
             811      be registered if the state in which it is to be administered provides for registration and that the
             812      trustee inform qualified the beneficiaries as provided in Section [ 75-7-303 ] 75-7-811 .
             813          (2) If the trust instrument does not excuse the trustee from giving bond, the personal
             814      representative may petition the appropriate court to require that the trustee post bond if he
             815      apprehends that distribution might jeopardize the interests of persons who are not able to
             816      protect themselves; and he may withhold distribution until the court has acted.
             817          (3) No inference of negligence on the part of the personal representative shall be drawn
             818      from his failure to exercise the authority conferred by Subsections (1) and (2).
             819          Section 12. Section 75-5-417 is amended to read:
             820           75-5-417. General duty of conservator.
             821          (1) A conservator shall act as a fiduciary and shall observe the standards of care as set
             822      forth in Section [ 75-7-302 ] 75-7-902 .
             823          (2) The conservator shall, for all estates in excess of $50,000, excluding the residence
             824      owned by the ward, send a report with a full accounting to the court on an annual basis. For
             825      estates less than $50,000, excluding the residence owned by the ward, the conservator shall fill
             826      out an informal annual report and mail the report to the court. The report shall include the
             827      following: a statement of assets at the beginning and end of the reporting year, income received
             828      during the year, disbursements for the support of the ward, and other expenses incurred by the
             829      estate. The court may require additional information. The forms for both the informal report
             830      for estates under $50,000, excluding the residence owned by the ward, and the full accounting
             831      report for larger estates shall be approved by the judicial council. This annual report shall be


             832      examined and approved by the court.
             833          (3) Corporate fiduciaries are not required to fully petition the court, but shall submit
             834      their internal report annually to the court. The report shall be examined and approved by the
             835      court.
             836          (4) (a) [If] The court may impose a fine in an amount not to exceed $5,000, if, after
             837      receiving written notice of the failure to file and after a grace period of two months have
             838      elapsed, a conservator or corporate fiduciary: [(a)]
             839          (i) makes a substantial misstatement on filings of any required annual reports; [(b)]
             840          (ii) is guilty of gross impropriety in handling the property of the ward; or [(c)]
             841          (iii) willfully fails to file the report required by this section[, after receiving written
             842      notice of the failure to file and after a grace period of two months have elapsed; then the court
             843      may impose a fine in an amount not to exceed $5,000].
             844          (b) The court may also order restitution of funds misappropriated from the estate of a
             845      ward.
             846          (c) The penalty shall be paid by the conservator or corporate fiduciary and may not be
             847      paid by the estate.
             848          (5) These provisions and penalties governing annual reports do not apply if the
             849      conservator is the parent of the ward.
             850          Section 13. Section 75-7-101 is repealed and reenacted to read:
             851     
CHAPTER 7. UTAH UNIFORM TRUST CODE

             852     
Part 1. General Provisions

             853          75-7-101. Title.
             854          This chapter is known as the "Utah Uniform Trust Code."
             855          Section 14. Section 75-7-102 is enacted to read:
             856          75-7-102. Scope.
             857          This chapter applies to trusts as defined in Section 75-1-201 .
             858          Section 15. Section 75-7-103 is enacted to read:
             859          75-7-103. Definitions.
             860          (1) In this chapter:
             861          (a) "Action," with respect to an act of a trustee, includes a failure to act.
             862          (b) "Beneficiary" means a person that:


             863          (i) has a present or future beneficial interest in a trust, vested or contingent; or
             864          (ii) in a capacity other than that of trustee, holds a power of appointment over trust
             865      property.
             866          (c) "Charitable trust" means a trust, or portion of a trust, created for a charitable
             867      purpose described in Subsection 75-7-405 (1).
             868          (d) "Environmental law" means a federal, state, or local law, rule, regulation, or
             869      ordinance relating to protection of the environment.
             870          (e) "Interests of the beneficiaries" means the beneficial interests provided in the terms
             871      of the trust.
             872          (f) "Jurisdiction," with respect to a geographic area, includes a state or country.
             873          (g) "Power of withdrawal" means a presently exercisable general power of appointment
             874      other than a power exercisable only upon consent of the trustee or a person holding an adverse
             875      interest.
             876          (h) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's
             877      qualification is determined:
             878          (i) is a current distributee or permissible distributee of trust income or principal; or
             879          (ii) would be a distributee or permissible distributee of trust income or principal if the
             880      trust terminated on that date.
             881          (i) "Resident estate" or "resident trust"means:
             882          (i) an estate of a decedent who at death was domiciled in this state;
             883          (ii) a trust, or a portion of a trust, consisting of property transferred by will of a
             884      decedent who at his death was domiciled in this state; or
             885          (iii) a trust administered in this state.
             886          (j) "Revocable," as applied to a trust, means revocable by the settlor without the
             887      consent of the trustee or a person holding an adverse interest.
             888          (k) "Settlor" means a person, including a testator, who creates, or contributes property
             889      to, a trust. If more than one person creates or contributes property to a trust, each person is a
             890      settlor of the portion of the trust property attributable to that person's contribution except to the
             891      extent another person has the power to revoke or withdraw that portion.
             892          (l) "Spendthrift provision" means a term of a trust which restrains both voluntary and
             893      involuntary transfer or encumbrance of a beneficiary's interest.


             894          (m) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's
             895      provisions as expressed in the trust instrument or as may be established by other evidence that
             896      would be admissible in a judicial proceeding.
             897          (n) "Trust instrument" means an instrument executed by the settlor that contains terms
             898      of the trust, including any amendments thereto.
             899          (2) Terms not specifically defined in this section have the meanings provided in
             900      Section 75-1-201 .
             901          Section 16. Section 75-7-104 is enacted to read:
             902          75-7-104. Knowledge.
             903          (1) Subject to Subsection (2), a person has knowledge of a fact if the person:
             904          (a) has actual knowledge of it;
             905          (b) has received a notice or notification of it; or
             906          (c) from all the facts and circumstances known to the person at the time in question,
             907      has reason to know it.
             908          (2) An organization that conducts activities through employees has notice or
             909      knowledge of a fact involving a trust only from the time the information was received by an
             910      employee having responsibility to act for the trust, or would have been brought to the
             911      employee's attention if the organization had exercised reasonable diligence. An organization
             912      exercises reasonable diligence if it maintains reasonable routines for communicating significant
             913      information to the employee having responsibility to act for the trust and there is reasonable
             914      compliance with the routines. Reasonable diligence does not require an employee of the
             915      organization to communicate information unless the communication is part of the individual's
             916      regular duties or the individual knows a matter involving the trust would be materially affected
             917      by the information.
             918          Section 17. Section 75-7-105 is enacted to read:
             919          75-7-105. Default and mandatory rules.
             920          (1) Except as otherwise provided in the terms of the trust, this chapter governs the
             921      duties and powers of a trustee, relations among trustees, and the rights and interests of a
             922      beneficiary.
             923          (2) Except as specifically provided in this chapter, the terms of a trust prevail over any
             924      provision of this chapter except:


             925          (a) the requirements for creating a trust;
             926          (b) the duty of a trustee to act in good faith and in accordance with the purposes of the
             927      trust;
             928          (c) the requirement that a trust and its terms be for the benefit of its beneficiaries;
             929          (d) the power of the court to modify or terminate a trust under Sections 75-7-410
             930      through 75-7-416 ;
             931          (e) the effect of a spendthrift provision, Section 26-6-14 , and the rights of certain
             932      creditors and assignees to reach a trust as provided in Part 5, Creditor's Claims-Spendthrift and
             933      Discretionary Trusts;
             934          (f) the power of the court under Section 75-7-702 to require, dispense with, or modify
             935      or terminate a bond;
             936          (g) the effect of an exculpatory term under Section 75-7-1008 ;
             937          (h) the rights under Sections 75-7-1010 through 75-7-1013 of a person other than a
             938      trustee or beneficiary;
             939          (i) periods of limitation for commencing a judicial proceeding; and
             940          (j) the subject-matter jurisdiction of the court and venue for commencing a proceeding
             941      as provided in Sections 75-7-203 and 75-7-205 .
             942          Section 18. Section 75-7-106 is enacted to read:
             943          75-7-106. Common law of trusts -- Principles of equity.
             944          The common law of trusts and principles of equity supplement this chapter, except to
             945      the extent modified by this chapter or laws of this state.
             946          Section 19. Section 75-7-107 , which is renumbered from Section 75-7-208 is
             947      renumbered and amended to read:
             948           [75-7-208].     75-7-107. Governing law.
             949          (1) For purposes of this section:
             950          (a) "Foreign trust" means a trust that is created in another state or country and valid in
             951      the state or country in which the trust is created.
             952          (b) "State law provision" means a provision that the laws of a named state govern the
             953      validity, construction, and administration of a trust.
             954          (2) If a trust has a state law provision specifying this state, the validity, construction,
             955      and administration of the trust are to be governed by the laws of this state if any administration


             956      of the trust is done in this state.
             957          (3) For all trusts created on or after December 31, 2003, if a trust does not have a state
             958      law provision, the validity, construction, and administration of the trust are to be governed by
             959      the laws of this state if the trust is administered in this state.
             960          (4) A trust shall be considered to be administered in this state if:
             961          (a) the trust states that this state is the place of administration, and any administration
             962      of the trust is done in this state; or
             963          (b) the place of business where the fiduciary transacts a major portion of its
             964      administration of the trust is in this state.
             965          [(4)] (5) If a foreign trust is administered in this state as provided in this section, the
             966      following provisions are effective and enforceable under the laws of this state:
             967          (a) a provision in the trust that restricts the transfer of trust assets in a manner similar
             968      to Section 25-6-14 ;
             969          (b) a provision that allows the trust to be perpetual; or
             970          (c) a provision that is not expressly prohibited by the law of this state.
             971          [(5)] (6) A foreign trust that moves its administration to this state is valid whether or
             972      not the trust complied with the laws of this state at the time of the trust's creation or after the
             973      trust's creation.
             974          [(6)] (7) Unless otherwise designated in the trust instrument, a trust is administered in
             975      this state if it meets the requirements of Subsection [ 59-10-103 (1)(r)(ii)] (4).
             976          Section 20. Section 75-7-108 is enacted to read:
             977          75-7-108. Principal place of administration.
             978          (1) Without precluding other means for establishing a sufficient connection with the
             979      designated jurisdiction, terms of a trust designating the principal place of administration are
             980      valid and controlling if:
             981          (a) a trustee's principal place of business is located in or a trustee is a resident of the
             982      designated jurisdiction; or
             983          (b) all or part of the administration occurs in the designated jurisdiction.
             984          (2) A trustee is under a continuing duty to administer the trust at a place appropriate to
             985      its purposes, its administration, and the interests of the beneficiaries.
             986          (3) Without precluding the right of the court to order, approve, or disapprove a transfer,


             987      the trustee, in furtherance of the duty prescribed by Subsection (2), may transfer the trust's
             988      principal place of administration to another state or to a jurisdiction outside of the United
             989      States.
             990          (4) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's
             991      principal place of administration not less than 60 days before initiating the transfer. The notice
             992      of proposed transfer must include:
             993          (a) the name of the jurisdiction to which the principal place of administration is to be
             994      transferred;
             995          (b) the address and telephone number at the new location at which the trustee can be
             996      contacted;
             997          (c) an explanation of the reasons for the proposed transfer;
             998          (d) the date on which the proposed transfer is anticipated to occur; and
             999          (e) the date, not less than 60 days after the giving of the notice, by which the qualified
             1000      beneficiary must notify the trustee of an objection to the proposed transfer.
             1001          (5) The authority of a trustee under this section to transfer a trust's principal place of
             1002      administration terminates if a qualified beneficiary notifies the trustee of an objection to the
             1003      proposed transfer on or before the date specified in the notice.
             1004          (6) In connection with a transfer of the trust's principal place of administration, the
             1005      trustee may transfer some or all of the trust property to a successor trustee designated in the
             1006      terms of the trust or appointed pursuant to Section 75-7-704 .
             1007          Section 21. Section 75-7-109 is enacted to read:
             1008          75-7-109. Methods and waiver of notice.
             1009          (1) Notice to a person under this chapter or the sending of a document to a person
             1010      under this chapter must be accomplished in a manner reasonably suitable under the
             1011      circumstances and likely to result in receipt of the notice or document. Permissible methods of
             1012      notice or for sending a document include first-class mail, personal delivery, delivery to the
             1013      person's last known place of residence or place of business, or a properly directed electronic
             1014      message.
             1015          (2) Notice under this chapter or the sending of a document under this chapter may be
             1016      waived by the person to be notified or sent the document.
             1017          (3) Notice of a judicial proceeding must be given as provided in the applicable rules of


             1018      civil procedure.
             1019          Section 22. Section 75-7-110 is enacted to read:
             1020          75-7-110. Nonjudicial settlement agreements.
             1021          (1) For purposes of this section, "interested persons" means persons whose consent
             1022      would be required in order to achieve a binding settlement were the settlement to be approved
             1023      by the court.
             1024          (2) Except as otherwise provided in Subsection (3), interested persons may enter into a
             1025      binding nonjudicial settlement agreement with respect to any matter involving a trust.
             1026          (3) A nonjudicial settlement agreement is valid only to the extent it does not violate a
             1027      material purpose of the trust and includes terms and conditions that could be properly approved
             1028      by the court under this chapter or other applicable law.
             1029          (4) Matters that may be resolved by a nonjudicial settlement agreement include:
             1030          (a) the interpretation or construction of the terms of the trust;
             1031          (b) the approval of a trustee's report or accounting;
             1032          (c) direction to a trustee to refrain from performing a particular act or the grant to a
             1033      trustee of any necessary or desirable power;
             1034          (d) the resignation or appointment of a trustee and the determination of a trustee's
             1035      compensation;
             1036          (e) transfer of a trust's principal place of administration; and
             1037          (f) liability of a trustee for an action relating to the trust.
             1038          (5) Any interested person may request the court to approve a nonjudicial settlement
             1039      agreement, to determine whether the representation as provided in Part 3 was adequate, and to
             1040      determine whether the agreement contains terms and conditions the court could have properly
             1041      approved.
             1042          Section 23. Section 75-7-111 is enacted to read:
             1043          75-7-111. Rules of construction.
             1044          The rules of construction that apply to the interpretation of and disposition of property
             1045      by will or other governing instrument, as defined in Section 75-1-201 , also apply as appropriate
             1046      to the interpretation of the terms of a trust and the disposition of the trust property.
             1047          Section 24. Section 75-7-112 is enacted to read:
             1048          75-7-112. Penalty provisions.


             1049          A provision in a trust instrument purporting to penalize a beneficiary by charging the
             1050      beneficiary's interest in the trust, or to penalize the beneficiary in another manner, for
             1051      instituting a proceeding to challenge the acts of the trustee or other fiduciary of a trust, or for
             1052      instituting other proceedings relating to the trust is unenforceable if probable cause exists for
             1053      instituting the proceedings.
             1054          Section 25. Section 75-7-202 is amended to read:
             1055           75-7-202. Effect of administration in this state -- Consent to jurisdiction.
             1056          (1) The trustee submits personally to the jurisdiction of the courts of this state
             1057      regarding any matter involving the trust if the trustee acts as trustee of a trust administered in
             1058      this state.
             1059          (2) To the extent of the beneficial interests in a trust administered in this state, the
             1060      beneficiaries of the trust are subject to the jurisdiction of the courts of this state regarding any
             1061      matter involving the trust. By accepting a distribution from such a trust, the recipient submits
             1062      personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
             1063          (3) By accepting the delegation of a trust function from the trustee of a trust
             1064      administered in this state, the agent submits to the jurisdiction of the courts of this state
             1065      regarding any matter involving the trust.
             1066          (4) Unless otherwise designated in the trust instrument, a trust is administered in this
             1067      state if it meets the requirements of Subsection [ 59-10-103 (1)(r)(ii)] 75-7-107 (4).
             1068          Section 26. Section 75-7-203 is repealed and reenacted to read:
             1069          75-7-203. Subject matter jurisdiction.
             1070          (1) The district court has exclusive jurisdiction of proceedings in this state brought by a
             1071      trustee or beneficiary concerning the administration of a trust.
             1072          (2) The district court has concurrent jurisdiction with other courts of this state of other
             1073      proceedings involving a trust.
             1074          (3) This section does not preclude judicial or nonjudicial alternative dispute resolution.
             1075          Section 27. Section 75-7-205 is repealed and reenacted to read:
             1076          75-7-205. Venue.
             1077          (1) Except as otherwise provided in Subsection (2), venue for a judicial proceeding
             1078      involving a trust is in the county in which the trust's principal place of administration is or will
             1079      be located and, if the trust is created by will and the estate is not yet closed, in the county in


             1080      which the decedent's estate is being administered.
             1081          (2) If a trust has no trustee, venue for a judicial proceeding for the appointment of a
             1082      trustee is in any county of this state in which a beneficiary resides, in any county in which any
             1083      trust property is located, and if the trust is created by will, in the county in which the decedent's
             1084      estate was or is being administered.
             1085          Section 28. Section 75-7-301 is repealed and reenacted to read:
             1086     
Part 3. Representation

             1087          75-7-301. Basic effect.
             1088          (1) Notice to a person who may represent and bind another person under this part has
             1089      the same effect as if notice were given directly to the other person.
             1090          (2) The consent of a person who may represent and bind another person under this part
             1091      is binding on the person represented unless the person represented objects to the representation
             1092      before the consent would otherwise have become effective.
             1093          (3) Except as otherwise provided in Sections 75-7-411 and 25-6-14 , a person who
             1094      under this part may represent a settlor who lacks capacity may receive notice and give a
             1095      binding consent on the settlor's behalf.
             1096          Section 29. Section 75-7-302 is repealed and reenacted to read:
             1097          75-7-302. Representation by holder of general testamentary power of
             1098      appointment.
             1099          To the extent there is no conflict of interest between the holder of a general
             1100      testamentary power of appointment and the persons represented with respect to the particular
             1101      question or dispute, the holder may represent and bind persons whose interests, as permissible
             1102      appointees, takers in default, or otherwise, are subject to the power.
             1103          Section 30. Section 75-7-303 is repealed and reenacted to read:
             1104          75-7-303. Representation by fiduciaries and parents.
             1105          To the extent there is no conflict of interest between the representative and the person
             1106      represented or among those being represented with respect to a particular question or dispute:
             1107          (1) a conservator may represent and bind the protected person whose estate the
             1108      conservator controls;
             1109          (2) a guardian may represent and bind the ward if a conservator of the ward's estate has
             1110      not been appointed;


             1111          (3) an agent having authority to act with respect to the particular question or dispute
             1112      may represent and bind the principal;
             1113          (4) a trustee may represent and bind the beneficiaries of the trust;
             1114          (5) a personal representative of a decedent's estate may represent and bind persons
             1115      interested in the estate; and
             1116          (6) a parent may represent and bind the parent's minor or unborn child if a conservator
             1117      or guardian for the child has not been appointed.
             1118          Section 31. Section 75-7-304 is repealed and reenacted to read:
             1119          75-7-304. Representation by person having substantially identical interest.
             1120          Unless otherwise represented, a minor, incapacitated, or unborn individual, or a person
             1121      whose identity or location is unknown and not reasonably ascertainable, may be represented by
             1122      and bound by another having a substantially identical interest with respect to the particular
             1123      question or dispute, but only to the extent there is no conflict of interest between the
             1124      representative and the person represented.
             1125          Section 32. Section 75-7-305 is repealed and reenacted to read:
             1126          75-7-305. Appointment of guardian ad litem or other representative.
             1127          (1) If the court determines that an interest is not represented under this part, or that the
             1128      otherwise available representation might be inadequate, the court may appoint a guardian ad
             1129      litem or other representative to receive notice, give consent, and otherwise represent, bind, and
             1130      act on behalf of a minor, incapacitated or protected person, or unborn individual, or a person
             1131      whose identity or location is unknown. A guardian ad litem or other representative may be
             1132      appointed to represent several persons or interests.
             1133          (2) A guardian ad litem or other representative may act on behalf of the individual
             1134      represented with respect to any matter arising under this chapter, whether or not a judicial
             1135      proceeding concerning the trust is pending.
             1136          (3) In making decisions, a guardian ad litem or other representative may consider
             1137      general benefit accruing to the living members of the individual's family.
             1138          Section 33. Section 75-7-401 is repealed and reenacted to read:
             1139     
Part 4. Creation, Validity, Modification, and Termination of Trust

             1140          75-7-401. Methods of creating trust.
             1141          A trust may be created by:


             1142          (1) transfer of property to another person as trustee during the settlor's lifetime or by
             1143      will or other disposition taking effect upon the settlor's death;
             1144          (2) declaration by the owner of property that the owner holds identifiable property as
             1145      trustee; or
             1146          (3) exercise of a power of appointment in favor of a trustee.
             1147          Section 34. Section 75-7-402 is repealed and reenacted to read:
             1148          75-7-402. Requirements for creation.
             1149          (1) A trust is created only if:
             1150          (a) the settlor has capacity to create a trust, which standard of capacity shall be the
             1151      same as for a person to create a will;
             1152          (b) the settlor indicates an intention to create the trust or a statute, judgment, or decree
             1153      authorizes the creation of a trust;
             1154          (c) the trust has a definite beneficiary or is:
             1155          (i) a charitable trust;
             1156          (ii) a trust for the care of an animal, as provided in Section 75-2-1001 ; or
             1157          (iii) a trust for a noncharitable purpose, as provided in Section 75-2-1001 ;
             1158          (d) the trustee has duties to perform; and
             1159          (e) the same person is not the sole trustee and sole beneficiary.
             1160          (2) A beneficiary is definite if the beneficiary can be ascertained now or in the future,
             1161      subject to any applicable rule against perpetuities.
             1162          (3) A power in a trustee to select a beneficiary from an indefinite class is valid. If the
             1163      power is not exercised within a reasonable time, the power fails and the property subject to the
             1164      power passes to the persons who would have taken the property had the power not been
             1165      conferred.
             1166          Section 35. Section 75-7-403 is repealed and reenacted to read:
             1167          75-7-403. Trusts created in other jurisdictions.
             1168          A trust not created by will is validly created if its creation complies with the law of the
             1169      jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which,
             1170      at the time of creation:
             1171          (1) the settlor was domiciled, had a place of abode, or was a national;
             1172          (2) a trustee was domiciled or had a place of business; or


             1173          (3) any trust property was located.
             1174          Section 36. Section 75-7-404 is repealed and reenacted to read:
             1175          75-7-404. Trust purposes.
             1176          A trust may be created only to the extent its purposes are lawful, not contrary to public
             1177      policy, and possible to achieve. A trust and its terms must be for the benefit of its
             1178      beneficiaries.
             1179          Section 37. Section 75-7-405 is repealed and reenacted to read:
             1180          75-7-405. Charitable purposes -- Enforcement.
             1181          (1) A charitable trust may be created for the relief of poverty, the advancement of
             1182      education or religion, the promotion of health, governmental or municipal purposes, or other
             1183      purposes the achievement of which is beneficial to the community.
             1184          (2) If the terms of a charitable trust do not indicate a particular charitable purpose or
             1185      beneficiary, the trustee, if authorized by the terms of the trust, or if not, the court may select
             1186      one or more charitable purposes or beneficiaries. The selection must be consistent with the
             1187      settlor's intention to the extent it can be ascertained.
             1188          (3) The settlor of a charitable trust, among others, may maintain a proceeding to
             1189      enforce the trust.
             1190          Section 38. Section 75-7-406 is repealed and reenacted to read:
             1191          75-7-406. Creation of trust induced by fraud, duress, or undue influence.
             1192          A trust is void to the extent its creation was induced by fraud, duress, or undue
             1193      influence.
             1194          Section 39. Section 75-7-407 is repealed and reenacted to read:
             1195          75-7-407. Evidence of oral trust.
             1196          Except as required by a statute other than this chapter, a trust need not be evidenced by
             1197      a trust instrument, but the creation of an oral trust and its terms may be established only by
             1198      clear and convincing evidence.
             1199          Section 40. Section 75-7-408 is repealed and reenacted to read:
             1200          75-7-408. Trust for care of animal.
             1201          A trust may be created to provide for the care of a pet or animal as provided in Section
             1202      75-2-1001 .
             1203          Section 41. Section 75-7-409 is repealed and reenacted to read:


             1204          75-7-409. Noncharitable trust without ascertainable beneficiary.
             1205          A trust may be created for a noncharitable purpose without a definite or definitely
             1206      ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by
             1207      the trustee as provided in Section 75-2-1001 .
             1208          Section 42. Section 75-7-410 is repealed and reenacted to read:
             1209          75-7-410. Modification or termination of trust -- Proceedings for approval or
             1210      disapproval.
             1211          (1) In addition to the methods of termination prescribed by Sections 75-7-411 through
             1212      75-7-414 , a trust terminates to the extent the trust is revoked or expires pursuant to its terms,
             1213      no purpose of the trust remains to be achieved, or the purposes of the trust have become
             1214      unlawful, contrary to public policy, or impossible to achieve.
             1215          (2) A proceeding to approve or disapprove a proposed modification or termination
             1216      under Sections 75-7-411 through 75-7-416 , or trust combination or division under Section
             1217      75-7-417 , may be commenced by a trustee or qualified beneficiary, and a proceeding to
             1218      approve or disapprove a proposed modification or termination under Section 75-7-411 may be
             1219      commenced by the settlor. The settlor of a charitable trust may maintain a proceeding to
             1220      modify the trust under Section 75-7-413 .
             1221          Section 43. Section 75-7-411 is repealed and reenacted to read:
             1222          75-7-411. Modification or termination of noncharitable irrevocable trust by
             1223      consent.
             1224          (1) A noncharitable, irrevocable trust may be modified or terminated upon consent of
             1225      the settlor and all beneficiaries, even if the modification or termination is inconsistent with a
             1226      material purpose of the trust. A settlor's power to consent to a trust's termination may be
             1227      exercised by an agent under a power of attorney only to the extent expressly authorized by the
             1228      power of attorney or the terms of the trust, by the settlor's conservator with the approval of the
             1229      court supervising the conservatorship if an agent is not so authorized, or by the settlor's
             1230      guardian with the approval of the court supervising the guardianship if an agent is not so
             1231      authorized and a conservator has not been appointed.
             1232          (2) A noncharitable, irrevocable trust may be terminated upon consent of all of the
             1233      beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any
             1234      material purpose of the trust. A noncharitable, irrevocable trust may be modified upon consent


             1235      of all of the beneficiaries if the court concludes that modification is not inconsistent with a
             1236      material purpose of the trust.
             1237          (3) A spendthrift provision in the terms of the trust is not presumed to constitute a
             1238      material purpose of the trust.
             1239          (4) Upon termination of a trust under Subsection (1) or (2), the trustee shall distribute
             1240      the trust property as agreed by the beneficiaries.
             1241          (5) If not all of the beneficiaries consent to a proposed modification or termination of
             1242      the trust under Subsection (1) or (2), the modification or termination may be approved by the
             1243      court if the court is satisfied that:
             1244          (a) if all of the beneficiaries had consented, the trust could have been modified or
             1245      terminated under this section; and
             1246          (b) the interests of a beneficiary who does not consent will be adequately protected.
             1247          Section 44. Section 75-7-412 is enacted to read:
             1248          75-7-412. Modification or termination because of unanticipated circumstances or
             1249      inability to administer trust effectively.
             1250          (1) The court may modify the administrative or dispositive terms of a trust or terminate
             1251      the trust if, because of circumstances not anticipated by the settlor, modification or termination
             1252      will further the purposes of the trust. To the extent practicable, the modification must be made
             1253      in accordance with the settlor's probable intention.
             1254          (2) The court may modify the administrative terms of a trust if continuation of the trust
             1255      on its existing terms would be impracticable or wasteful or impair the trust's administration.
             1256          (3) Upon termination of a trust under this section, the trustee shall distribute the trust
             1257      property as directed by the court or otherwise in a manner consistent with the purposes of the
             1258      trust.
             1259          Section 45. Section 75-7-413 is enacted to read:
             1260          75-7-413. Cy pres.
             1261          (1) Except as otherwise provided in Subsection (2), if a particular charitable purpose
             1262      becomes unlawful, impracticable, impossible to achieve, or wasteful:
             1263          (a) the trust does not fail, in whole or in part;
             1264          (b) the trust property does not revert to the settlor or the settlor's successors in interest;
             1265      and


             1266          (c) the court may apply cy pres to modify or terminate the trust by directing that the
             1267      trust property be applied or distributed, in whole or in part, in a manner consistent with the
             1268      settlor's charitable purposes.
             1269          (2) A provision in the terms of a charitable trust that would result in distribution of the
             1270      trust property to a noncharitable beneficiary prevails over the power of the court under
             1271      Subsection (1) to apply cy pres to modify or terminate the trust only if, when the provision
             1272      takes effect:
             1273          (a) the trust property is to revert to the settlor and the settlor is still living; or
             1274          (b) fewer than 21 years have elapsed since the date of the trust's creation.
             1275          Section 46. Section 75-7-414 is enacted to read:
             1276          75-7-414. Modification or termination of uneconomic trust.
             1277          (1) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust
             1278      property having a total value less than $100,000, may terminate the trust if the trustee
             1279      concludes that the value of the trust property is insufficient to justify the cost of administration.
             1280          (2) The court may modify or terminate a trust or remove the trustee and appoint a
             1281      different trustee if it determines that the value of the trust property is insufficient to justify the
             1282      cost of administration.
             1283          (3) Upon termination of a trust under this section, the trustee shall distribute the trust
             1284      property in a manner consistent with the purposes of the trust.
             1285          (4) This section does not apply to an easement for conservation or preservation.
             1286          Section 47. Section 75-7-415 is enacted to read:
             1287          75-7-415. Reformation to correct mistakes.
             1288          The court may reform the terms of a trust, even if unambiguous, to conform the terms
             1289      to the settlor's intention if it is proved by clear and convincing evidence that both the settlor's
             1290      intent and the terms of the trust were affected by a mistake of fact or law, whether in
             1291      expression or inducement.
             1292          Section 48. Section 75-7-416 is enacted to read:
             1293          75-7-416. Modification to achieve settlor's tax objectives.
             1294          To achieve the settlor's tax objectives, the court may modify the terms of a trust in order
             1295      to achieve the settlor's tax objectives. The court may provide that the modification has
             1296      retroactive effect.


             1297          Section 49. Section 75-7-417 is enacted to read:
             1298          75-7-417. Combination and division of trusts.
             1299          After notice to the qualified beneficiaries, a trustee may combine two or more trusts
             1300      into a single trust or divide a trust into two or more separate trusts, if the result does not impair
             1301      rights of any beneficiary or adversely affect achievement of the purposes of the trust.
             1302          Section 50. Section 75-7-501 is repealed and reenacted to read:
             1303     
Part 5. Creditor's Claims - Spendthrift and Discretionary Trusts

             1304          75-7-501. Rights of beneficiary's creditor or assignee.
             1305          To the extent a beneficiary's interest is not protected by a spendthrift provision or
             1306      Section 26-6-14 , the court may authorize a creditor or assignee of the beneficiary to reach the
             1307      beneficiary's interest by attachment of present or future distributions to or for the benefit of the
             1308      beneficiary or other means. The court may limit the award to relief as is appropriate under the
             1309      circumstances.
             1310          Section 51. Section 75-7-502 is enacted to read:
             1311          75-7-502. Spendthrift provisions for beneficiaries other than the settlor.
             1312          (1) A spendthrift provision for a beneficiary other than the settlor is valid only if it
             1313      restrains both voluntary and involuntary transfer of a beneficiary's interest, even if the
             1314      beneficiary is the trustee or cotrustee of the trust.
             1315          (2) A term of a trust providing that the interest of a beneficiary other than the settlor is
             1316      held subject to a "spendthrift trust," or words of similar import, is sufficient to restrain both
             1317      voluntary and involuntary transfer of the beneficiary's interest.
             1318          (3) A beneficiary may not transfer an interest in a trust in violation of a valid
             1319      spendthrift provision and, except as otherwise provided in this part, a creditor or assignee of
             1320      the beneficiary may not reach the interest or a distribution by the trustee before its receipt by
             1321      the beneficiary.
             1322          Section 52. Section 75-7-503 is enacted to read:
             1323          75-7-503. Exceptions to spendthrift provision.
             1324          (1) In this section, "child" includes any person for whom an order or judgment for child
             1325      support has been entered in this or another state.
             1326          (2) Even if a trust contains a spendthrift provision, a beneficiary's child who has a
             1327      judgment or court order against the beneficiary for support or maintenance, or a judgment


             1328      creditor who has provided services for the protection of a beneficiary's interest in the trust, may
             1329      obtain from a court an order attaching present or future distributions to or for the benefit of the
             1330      beneficiary.
             1331          (3) A spendthrift provision is unenforceable against a claim of this state or the United
             1332      States to the extent a statute of this state or federal law so provides.
             1333          Section 53. Section 75-7-504 is enacted to read:
             1334          75-7-504. Discretionary trusts -- Effect of standard.
             1335          (1) In this section, "child" includes any person for whom an order or judgment for child
             1336      support has been entered in this or another state.
             1337          (2) Except as otherwise provided in Subsection (3), whether or not a trust contains a
             1338      spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to
             1339      the trustee's discretion, even if:
             1340          (a) the discretion is expressed in the form of a standard of distribution; or
             1341          (b) the trustee has abused the discretion.
             1342          (3) To the extent a trustee has not complied with a standard of distribution or has
             1343      abused a discretion:
             1344          (a) a distribution may be ordered by the court to satisfy a judgment or court order
             1345      against the beneficiary for support or maintenance of the beneficiary's child, spouse, or former
             1346      spouse; and
             1347          (b) the court shall direct the trustee to pay to the child, spouse, or former spouse such
             1348      amount as is equitable under the circumstances but not more than the amount the trustee would
             1349      have been required to distribute to or for the benefit of the beneficiary had the trustee complied
             1350      with the standard or not abused the discretion.
             1351          (4) This section does not limit the right of a beneficiary to maintain a judicial
             1352      proceeding against a trustee for an abuse of discretion or failure to comply with a standard for
             1353      distribution.
             1354          Section 54. Section 75-7-505 is enacted to read:
             1355          75-7-505. Creditor's claim against settlor.
             1356          (1) Whether or not the terms of a trust contain a spendthrift provision, the following
             1357      rules apply:
             1358          (a) During the lifetime of the settlor, the property of a revocable trust is subject to the


             1359      claims of the settlor's creditors. If a trust has more than one settlor, the amount the creditor or
             1360      assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of
             1361      the trust attributable to that settlor's contribution.
             1362          (b) With respect to an irrevocable trust other than an irrevocable trust that meets the
             1363      requirements of Section 25-6-14 , a creditor or assignee of the settlor may reach the maximum
             1364      amount that can be distributed to or for the settlor's benefit. If the trust has more than one
             1365      settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the
             1366      settlor's interest in the portion of the trust attributable to that settlor's contribution.
             1367          (c) After the death of a settlor, and subject to the settlor's right to direct the source from
             1368      which liabilities will be paid, the property of a trust that was revocable at the settlor's death, but
             1369      not property received by the trust as a result of the death of the settlor which is otherwise
             1370      exempt from the claims of the settlor's creditors, is subject to claims of the settlor's creditors,
             1371      costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal
             1372      of remains, and statutory allowances to a surviving spouse and children to the extent the
             1373      settlor's probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.
             1374          (2) For purposes of this section:
             1375          (a) during the period the power may be exercised, the holder of a power of withdrawal
             1376      is treated in the same manner as the settlor of a revocable trust to the extent of the property
             1377      subject to the power; and
             1378          (b) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of
             1379      the trust only to the extent the value of the property affected by the lapse, release, or waiver
             1380      exceeds the greater of the amount specified in Subsection 2041(b)(2), 2514(e), or Section
             1381      2503(b) of the Internal Revenue Code of 1986, in each case as in effect on May 1,2004.
             1382          Section 55. Section 75-7-506 is enacted to read:
             1383          75-7-506. Overdue distribution.
             1384          Whether or not a trust contains a spendthrift provision, a creditor or assignee of a
             1385      beneficiary may reach a mandatory distribution of income or principal, including a distribution
             1386      upon termination of the trust, if the trustee has not made the distribution to the beneficiary
             1387      within a reasonable time after the required distribution date.
             1388          Section 56. Section 75-7-507 is enacted to read:
             1389          75-7-507. Personal obligations of trustee.


             1390          Trust property is not subject to personal obligations of the trustee, even if the trustee
             1391      becomes insolvent or bankrupt.
             1392          Section 57. Section 75-7-508 , which is renumbered from Section 75-7-308 is
             1393      renumbered and amended to read:
             1394           [75-7-308].     75-7-508. Notice to creditors.
             1395          (1) A trustee for an inter vivos revocable trust, upon the death of the settlor, may
             1396      publish a notice to creditors once a week for three successive weeks in a newspaper of general
             1397      circulation in the county where the settlor resided at the time of death, providing the trustee's
             1398      name and address and notifying creditors of the deceased settlor to present their claims within
             1399      three months after the date of the first publication of the notice or be forever barred.
             1400          (2) A trustee may give written notice by mail or other delivery to any known creditor of
             1401      the deceased settlor, notifying the creditor to present his claim within 90 days from the
             1402      published notice if given as provided in Subsection (1) or within 60 days from the mailing or
             1403      other delivery of the notice, whichever is later, or be forever barred. Written notice shall be the
             1404      notice described in Subsection (1) or a similar notice.
             1405          (3) The trustee shall not be liable to any creditor or to any successor of the deceased
             1406      settlor for giving or failing to give notice under this section.
             1407          Section 58. Section 75-7-509 , which is renumbered from Section 75-7-309 is
             1408      renumbered and amended to read:
             1409           [75-7-309].     75-7-509. Limitations on presentation of claims.
             1410          (1) All claims against a deceased settlor which arose before the death of the deceased
             1411      settlor, including claims of the state and any subdivision of it, whether due or to become due,
             1412      absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal
             1413      basis, if not barred earlier by other statute of limitations, are barred against the deceased
             1414      settlor's estate, the trustee, the trust estate, and the beneficiaries of the deceased settlor's trust,
             1415      unless presented within the earlier of the following:
             1416          (a) one year after the settlor's death; or
             1417          (b) the time provided by Subsection [ 75-3-308 ] 75-7-508 (2) for creditors who are
             1418      given actual notice, and where notice is published, within the time provided in Subsection
             1419      [ 75-3-308 ] 75-7-508 (1) for all claims barred by publication.
             1420          (2) In all events, claims barred by the nonclaim statute at the deceased settlor's


             1421      domicile are also barred in this state.
             1422          (3) All claims against a deceased settlor's estate or trust estate which arise at or after
             1423      the death of the settlor, including claims of the state and any of its subdivisions, whether due or
             1424      to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or
             1425      other legal basis are barred against the deceased settlor's estate, the trustee, the trust estate, and
             1426      the beneficiaries of the deceased settlor, unless presented as follows:
             1427          (a) a claim based on a contract with the trustee within three months after performance
             1428      by the trustee is due; or
             1429          (b) any other claim within the later of three months after it arises, or the time specified
             1430      in Subsection (1).
             1431          (4) Nothing in this section affects or prevents:
             1432          (a) any proceeding to enforce any mortgage, pledge, or other lien upon property of the
             1433      deceased settlor's estate or the trust estate;
             1434          (b) to the limits of the insurance protection only, any proceeding to establish liability of
             1435      the deceased settlor or the trustee for which he is protected by liability insurance; or
             1436          (c) collection of compensation for services rendered and reimbursement for expenses
             1437      advanced by the trustee or by the attorney or accountant for the trustee of the trust estate.
             1438          Section 59. Section 75-7-510 , which is renumbered from Section 75-7-310 is
             1439      renumbered and amended to read:
             1440           [75-7-310].     75-7-510. Manner of presentation of claims.
             1441          (1) Claims against a deceased settlor's estate or inter vivos revocable trust shall be
             1442      presented as follows:
             1443          (a) The claimant may deliver or mail to the trustee, or the trustee's attorney of record, a
             1444      written statement of the claim indicating its basis, the name and address of the claimant, and
             1445      the amount claimed. The claim is considered presented upon the receipt of the written
             1446      statement of claim by the trustee or the trustee's attorney of record. If a claim is not yet due, the
             1447      date when it will become due shall be stated. If the claim is contingent or unliquidated, the
             1448      nature of the uncertainty shall be stated. If the claim is secured, the security shall be described.
             1449      Failure to describe correctly the security, the nature of any uncertainty, and the due date of a
             1450      claim not yet due does not invalidate the presentation made.
             1451          (b) The claimant may commence a proceeding against the trustee in any court where


             1452      the trustee may be subjected to jurisdiction to obtain payment of the claim against the deceased
             1453      settlor's estate or the trust estate, but the commencement of the proceeding must occur within
             1454      the time limited for presenting the claim. No presentation of claim is required in regard to
             1455      matters claimed in proceedings against the deceased settlor which were pending at the time of
             1456      the deceased settlor's death.
             1457          (2) If a claim is presented under Subsection (1)(a), no proceeding thereon may be
             1458      commenced more than 60 days after the trustee has mailed a notice of disallowance; but, in the
             1459      case of a claim which is not presently due or which is contingent or unliquidated, the trustee
             1460      may consent to an extension of the 60-day period, or to avoid injustice, the court, on petition,
             1461      may order an extension of the 60-day period, but in no event may the extension run beyond the
             1462      applicable statute of limitations.
             1463          Section 60. Section 75-7-511 , which is renumbered from Section 75-7-311 is
             1464      renumbered and amended to read:
             1465           [75-7-311].     75-7-511. Classification of claims.
             1466          (1) If the applicable assets of the deceased settlor's estate or trust estate are insufficient
             1467      to pay all claims in full, the trustee shall make payment in the following order:
             1468          (a) reasonable funeral expenses;
             1469          (b) costs and expenses of administration;
             1470          (c) debts and taxes with preference under federal law;
             1471          (d) reasonable and necessary medical and hospital expenses of the last illness of the
             1472      deceased settlor, including compensation of persons attending him, and medical assistance if
             1473      Section 26-19-13.5 applies;
             1474          (e) debts and taxes with preference under other laws of this state; and
             1475          (f) all other claims.
             1476          (2) No preference shall be given in the payment of any claim over any other claim of
             1477      the same class, and a claim due and payable shall not be entitled to a preference over claims not
             1478      due.
             1479          Section 61. Section 75-7-512 , which is renumbered from Section 75-7-312 is
             1480      renumbered and amended to read:
             1481           [75-7-312].     75-7-512. Allowance of claims.
             1482          (1) As to claims presented in the manner described in Section [ 75-7-310 ] 75-7-510 and


             1483      within the time limit prescribed in Section [ 75-7-309 ] 75-7-509 , the trustee may mail a notice
             1484      to any claimant stating that the claim has been allowed or disallowed. If, after allowing or
             1485      disallowing a claim, the trustee changes the decision concerning the claim, the trustee shall
             1486      notify the claimant. The trustee may not change a disallowance of a claim after the time for the
             1487      claimant to file a petition for allowance or to commence a proceeding on the claim has expired
             1488      and the claim has been barred. If the notice of disallowance warns the claimant of the
             1489      impending bar, a claim which is disallowed in whole or in part by the trustee is barred so far as
             1490      not allowed, unless the claimant seeks a court-ordered allowance by filing a petition for
             1491      allowance in the court or by commencing a proceeding against the trustee not later than 60 days
             1492      after the mailing of the notice of disallowance or partial allowance. If the trustee fails to mail
             1493      notice to a claimant of action on the claim within 60 days after the time for original
             1494      presentation of the claim has expired, this failure has the effect of a notice of allowance.
             1495          (2) Upon the petition of the trustee or a claimant in a proceeding for this purpose, the
             1496      court may order any claim presented to the trustee or trustee's attorney in a timely manner and
             1497      not barred by Subsection (1) to be allowed in whole or in part. Notice of this proceeding shall
             1498      be given to the claimant, the trustee, and those other persons interested in the trust estate as the
             1499      court may direct by order at the time the proceeding is commenced.
             1500          (3) A judgment in a proceeding in another court against the trustee to enforce a claim
             1501      against a deceased settlor's estate is a court-ordered allowance of the claim.
             1502          (4) Unless otherwise provided in any judgment in another court entered against a
             1503      trustee, allowed claims bear interest at the legal rate for the period commencing six months
             1504      after the deceased settlor's date of death unless based on a contract making a provision for
             1505      interest, in which case they bear interest in accordance with that provision.
             1506          Section 62. Section 75-7-513 , which is renumbered from Section 75-7-313 is
             1507      renumbered and amended to read:
             1508           [75-7-313].     75-7-513. Payment of claims.
             1509          (1) Upon the expiration of the earliest of the time limitations provided in Section
             1510      [ 75-7-309 ] 75-7-509 for the presentation of claims, the trustee shall pay the claims allowed
             1511      against the deceased settlor's estate in the order of priority prescribed, for claims already
             1512      presented which have not yet been allowed or whose allowance has been appealed, and for
             1513      unbarred claims which may yet be presented, including costs and expenses of administration.


             1514      By petition to the court in a proceeding for that purpose, a claimant whose claim has been
             1515      allowed but not paid as provided in this section may secure an order directing the trustee to pay
             1516      the claim to the extent that funds of the deceased settlor's estate or trust estate are available for
             1517      the payment.
             1518          (2) The trustee at any time may pay any just claim that has not been barred, with or
             1519      without formal presentation, but he shall be personally liable to any other claimant whose claim
             1520      is allowed and who is injured by the payment if:
             1521          (a) the payment was made before the expiration of the time limit stated in Subsection
             1522      (1) and the trustee failed to require the payee to give adequate security for the refund of any of
             1523      the payment necessary to pay other claimants; or
             1524          (b) the payment was made, due to the negligence or willful fault of the trustee, in a way
             1525      that deprived the injured claimant of his priority.
             1526          Section 63. Section 75-7-514 , which is renumbered from Section 75-7-314 is
             1527      renumbered and amended to read:
             1528           [75-7-314].     75-7-514. Secured claims.
             1529          Payment of a secured claim shall be upon the basis of the amount allowed if the creditor
             1530      surrenders his security; but otherwise payment shall be based upon one of the following:
             1531          (1) if the creditor exhausts his security before receiving payment, unless precluded by
             1532      another provision of the law, upon the amount of the claim allowed less the fair value of the
             1533      security; or
             1534          (2) if the creditor does not have the right to exhaust his security or has not done so,
             1535      upon the amount of the claim allowed less the value of the security determined by converting it
             1536      into money according to the terms of the agreement pursuant to which the security was
             1537      delivered to the creditor, or by the creditor and trustee by agreement, arbitration, compromise,
             1538      or litigation.
             1539          Section 64. Section 75-7-515 , which is renumbered from Section 75-7-315 is
             1540      renumbered and amended to read:
             1541           [75-7-315].     75-7-515. Claims not due and contingent -- unliquidated claims.
             1542          (1) If a claim which will become due at a future time or a contingent or unliquidated
             1543      claim becomes due or certain before the distribution of the trust estate, and if the claim has
             1544      been allowed or established by a proceeding, it shall be paid in the same manner as presently


             1545      due and absolute claims of the same class.
             1546          (2) In other cases the trustee, or, on petition of the trustee or the claimant in a special
             1547      proceeding for that purpose, the court, may provide for payment as follows:
             1548          (a) if the claimant consents, he may be paid the present or agreed value of the claim,
             1549      taking any uncertainty into account; or
             1550          (b) arrangement for future payment, or possible payment, on the happening of the
             1551      contingency or on liquidation may be made by creating a trust, giving a mortgage, obtaining a
             1552      bond or security from a beneficiary, or otherwise.
             1553          Section 65. Section 75-7-516 , which is renumbered from Section 75-7-316 is
             1554      renumbered and amended to read:
             1555           [75-7-316].     75-7-516. Counterclaims.
             1556          (1) In allowing a claim, the trustee may deduct any counterclaim which the deceased
             1557      settlor's estate has against the claimant. In determining a claim against a deceased settlor's
             1558      estate, a court shall reduce the amount allowed by the amount of any counterclaims and, if the
             1559      counterclaims exceed the claim, render a judgment against the claimant in the amount of the
             1560      excess.
             1561          (2) A counterclaim, liquidated or unliquidated, may arise from a transaction other than
             1562      that upon which the claim is based.
             1563          (3) A counterclaim may give rise to relief exceeding in amount or different in kind
             1564      from that sought in the claim.
             1565          Section 66. Section 75-7-517 , which is renumbered from Section 75-7-317 is
             1566      renumbered and amended to read:
             1567           [75-7-317].     75-7-517. Execution and levies prohibited.
             1568          (1) No execution may issue upon nor may any levy be made against any property of the
             1569      deceased settlor's estate under any judgment against a deceased settlor or a trustee.
             1570          (2) This section may not be construed to prevent the enforcement of mortgages,
             1571      pledges, or liens upon real or personal property in an appropriate proceeding.
             1572          Section 67. Section 75-7-518 , which is renumbered from Section 75-7-318 is
             1573      renumbered and amended to read:
             1574           [75-7-318].     75-7-518. Compromise of claims.
             1575          When a claim against a deceased settlor's estate has been presented in any manner, the


             1576      trustee may, if it appears in the best interest of the deceased settlor's estate, compromise the
             1577      claim, whether due or not due, absolute or contingent, liquidated or unliquidated.
             1578          Section 68. Section 75-7-519 , which is renumbered from Section 75-7-319 is
             1579      renumbered and amended to read:
             1580           [75-7-319].     75-7-519. Encumbered assets.
             1581          (1) If any assets of the deceased settlor's estate are encumbered by mortgage, pledge,
             1582      lien, or other security interest, the trustee may pay the encumbrance or any part thereof, renew
             1583      or extend any obligation secured by the encumbrance, or convey or transfer the assets to the
             1584      creditor in satisfaction of his lien, in whole or in part, whether or not the holder of the
             1585      encumbrance has presented a claim, if it appears to be in the best interest of the deceased
             1586      settlor's estate.
             1587          (2) Payment of an encumbrance does not increase the share of the beneficiary entitled
             1588      to the encumbered assets unless the beneficiary is entitled to exoneration or unless the terms of
             1589      the deceased settlor's trust, under which the beneficiary is entitled to the encumbered assets,
             1590      provides otherwise.
             1591          Section 69. Section 75-7-604 is enacted to read:
             1592     
Part 6. Revocable Trusts

             1593          75-7-604. Capacity of settlor of revocable trust.
             1594          The capacity required to create, amend, revoke, or add property to a revocable trust, or
             1595      to direct the actions of the trustee of a revocable trust, is the same as that required to make a
             1596      will.
             1597          Section 70. Section 75-7-605 is enacted to read:
             1598          75-7-605. Revocation or amendment of revocable trust.
             1599          (1) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor
             1600      may revoke or amend the trust. This Subsection (1) does not apply to a trust created under an
             1601      instrument executed before May 1, 2004.
             1602          (2) If a revocable trust is created or funded by more than one settlor:
             1603          (a) to the extent the trust consists of community property, the trust may be revoked by
             1604      either spouse acting alone but may be amended only by joint action of both spouses; and
             1605          (b) to the extent the trust consists of property other than community property, each
             1606      settlor may revoke or amend the trust with regard to the portion of the trust property


             1607      attributable to that settlor's contribution.
             1608          (3) The settlor may revoke or amend a revocable trust:
             1609          (a) by substantially complying with a method provided in the terms of the trust; or
             1610          (b) if the terms of the trust do not provide a method or the method provided in the
             1611      terms is not expressly made exclusive, by:
             1612          (i) executing a later will or codicil that expressly refers to the trust or specifically
             1613      devises property that would otherwise have passed according to the terms of the trust; or
             1614          (ii) any other method manifesting clear and convincing evidence of the settlor's intent.
             1615          (4) Upon revocation of a revocable trust, the trustee shall deliver the trust property as
             1616      the settlor directs.
             1617          (5) A settlor's powers with respect to revocation, amendment, or distribution of trust
             1618      property may be exercised by an agent under a power of attorney only to the extent expressly
             1619      authorized by the terms of the trust or the power.
             1620          (6) A conservator of the settlor or, if no conservator has been appointed, a guardian of
             1621      the settlor may exercise a settlor's powers with respect to revocation, amendment, or
             1622      distribution of trust property only with the approval of the court supervising the
             1623      conservatorship or guardianship.
             1624          (7) A trustee who does not know that a trust has been revoked or amended is not liable
             1625      to the settlor or settlor's successors in interest for distributions made and other actions taken on
             1626      the assumption that the trust had not been amended or revoked.
             1627          Section 71. Section 75-7-606 is enacted to read:
             1628          75-7-606. Settlor's powers -- Powers of withdrawal.
             1629          (1) While a trust is revocable and the settlor has capacity to revoke the trust, rights of
             1630      the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively
             1631      to, the settlor.
             1632          (2) If a revocable trust has more than one settlor, the duties of the trustee are owed to
             1633      all of the settlors having capacity to revoke the trust.
             1634          (3) During the period the power may be exercised, the holder of a power of withdrawal
             1635      has the rights of a settlor of a revocable trust under this section to the extent of the property
             1636      subject to the power.
             1637          Section 72. Section 75-7-607 is enacted to read:


             1638          75-7-607. Limitation on action contesting validity of revocable trust --
             1639      Distribution of trust property.
             1640          (1) A person shall commence a judicial proceeding to contest the validity of a trust that
             1641      was revocable at the settlor's death within the earlier of:
             1642          (a) three years after the settlor's death; or
             1643          (b) 90 days after the trustee sent the person a copy of the trust instrument and a notice
             1644      informing the person of the trust's existence, of the trustee's name and address, and of the time
             1645      allowed for commencing a proceeding.
             1646          (2) Upon the death of the settlor of a trust that was revocable at the settlor's death, the
             1647      trustee may proceed to distribute the trust property in accordance with the terms of the trust.
             1648      The trustee is not subject to liability for doing so unless:
             1649          (a) the trustee knows of a pending judicial proceeding contesting the validity of the
             1650      trust; or
             1651          (b) a potential contestant has notified the trustee of a possible judicial proceeding to
             1652      contest the trust and a judicial proceeding is commenced within 60 days after the contestant
             1653      sent the notification.
             1654          (3) With respect to a potential contest, the trustee is only liable for actions taken two or
             1655      more business days after the trustee has actual receipt of written notice from a potential
             1656      contestant. The written notice shall include the name of the settlor or of the trust, the name of
             1657      the potential contestant, and a description of the basis for the potential contest. The written
             1658      notice shall be mailed to the trustee at the principal place of administration of the trust by
             1659      registered or certified mail, return receipt requested, or served upon the trustee in the same
             1660      manner as a summons in a civil action. Any other form or service of notice is not sufficient to
             1661      impose liability on the trustee for actions taken pursuant to the terms of the trust.
             1662          (4) A beneficiary of a trust that is determined to have been invalid is liable to return
             1663      any distribution received.
             1664          Section 73. Section 75-7-701 is enacted to read:
             1665     
Part 7. Office of Trustee

             1666          75-7-701. Accepting or declining trusteeship.
             1667          (1) Except as otherwise provided in Subsection (3), a person designated as trustee
             1668      accepts the trusteeship:


             1669          (a) by substantially complying with a method of acceptance provided in the terms of
             1670      the trust; or
             1671          (b) if the terms of the trust do not provide a method or the method provided in the
             1672      terms is not expressly made exclusive, by accepting delivery of the trust property, exercising
             1673      powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
             1674          (2) A person designated as trustee who has not yet accepted the trusteeship may reject
             1675      the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable
             1676      time after knowing of the designation is considered to have rejected the trusteeship.
             1677          (3) A person designated as trustee, without accepting the trusteeship, may:
             1678          (a) act to preserve the trust property if, within a reasonable time after acting, the person
             1679      sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to a
             1680      qualified beneficiary; and
             1681          (b) inspect or investigate trust property to determine potential liability under
             1682      environmental or other law or for any other purpose.
             1683          Section 74. Section 75-7-702 is enacted to read:
             1684          75-7-702. Trustee's bond.
             1685          (1) A trustee shall give bond to secure performance of the trustee's duties only if the
             1686      court finds that a bond is needed to protect the interests of the beneficiaries or is required by
             1687      the terms of the trust and the court has not dispensed with the requirement.
             1688          (2) The court may specify the amount of a bond, its liabilities, and whether sureties are
             1689      necessary. The court may modify or terminate a bond at any time.
             1690          (3) A regulated financial service institution qualified to do trust business in this state
             1691      need not give bond, unless required by the terms of the trust. The cost of any bond shall be
             1692      borne by the trust.
             1693          (4) Unless otherwise directed by the court, the cost of the bond is charged to the trust.
             1694          Section 75. Section 75-7-703 is enacted to read:
             1695          75-7-703. Cotrustees.
             1696          (1) Cotrustees who are unable to reach a unanimous decision may act by majority
             1697      decision.
             1698          (2) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the
             1699      trust.


             1700          (3) A cotrustee must participate in the performance of a trustee's function unless the
             1701      cotrustee is unavailable to perform the function because of absence, illness, disqualification
             1702      under other law, or other temporary incapacity, or the cotrustee has properly delegated the
             1703      performance of the function to another trustee.
             1704          (4) If a cotrustee is unavailable to perform duties because of absence, illness,
             1705      disqualification under other law, or other temporary incapacity, or if a cotrustee fails or refuses
             1706      to act after reasonable notice, and prompt action is necessary to achieve the purposes of the
             1707      trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the
             1708      remaining cotrustees may act for the trust.
             1709          (5) A trustee may not delegate to a cotrustee the performance of a function the settlor
             1710      intended the trustees to perform jointly as determined from the terms of the trust. If one of the
             1711      cotrustees is a regulated financial service institution qualified to do trust business in this state
             1712      and the remaining cotrustees are individuals, a delegation by the individual cotrustees to the
             1713      regulated financial service institution of the performance of trust investment functions shall be
             1714      presumed to be in accordance with the settlor's intent unless the terms of the trust specifically
             1715      provide otherwise. Unless a delegation was irrevocable, a trustee may revoke a delegation
             1716      previously made.
             1717          (6) Except as otherwise provided in Subsection (7), a trustee who does not join in an
             1718      action of another trustee is not liable for the action.
             1719          (7) Each trustee shall exercise reasonable care to:
             1720          (a) prevent a cotrustee from committing a serious breach of trust; and
             1721          (b) compel a cotrustee to redress a serious breach of trust.
             1722          (8) A dissenting trustee who joins in an action at the direction of the majority of the
             1723      trustees and who notified any cotrustee of the dissent at or before the time of the action is not
             1724      liable for the action unless the action is a serious breach of trust.
             1725          Section 76. Section 75-7-704 is enacted to read:
             1726          75-7-704. Vacancy in trusteeship -- Appointment of successor.
             1727          (1) A vacancy in a trusteeship occurs if:
             1728          (a) a person designated as trustee rejects the trusteeship;
             1729          (b) a person designated as trustee cannot be identified or does not exist;
             1730          (c) a trustee resigns;


             1731          (d) a trustee is disqualified or removed;
             1732          (e) a trustee dies; or
             1733          (f) a guardian or conservator is appointed for an individual serving as trustee, unless
             1734      otherwise provided in the trust.
             1735          (2) If one or more cotrustees remain in office, a vacancy in a trusteeship need not be
             1736      filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.
             1737          (3) A vacancy in a trusteeship required to be filled must be filled in the following order
             1738      of priority:
             1739          (a) by a person designated in the terms of the trust to act as successor trustee;
             1740          (b) by a person appointed by unanimous agreement of the qualified beneficiaries; or
             1741          (c) by a person appointed by the court.
             1742          (4) A vacancy in a trusteeship of a charitable trust that is required to be filled must be
             1743      filled in the following order of priority:
             1744          (a) by a person designated in the terms of the trust to act as successor trustee;
             1745          (b) by a person selected by the charitable organizations expressly designated to receive
             1746      distributions under the terms of the trust if the attorney general concurs in the selection; or
             1747          (c) by a person appointed by the court.
             1748          (5) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court
             1749      may appoint an additional trustee or special fiduciary whenever the court considers the
             1750      appointment necessary for the administration of the trust.
             1751          Section 77. Section 75-7-705 is enacted to read:
             1752          75-7-705. Resignation of trustee.
             1753          (1) A trustee may resign:
             1754          (a) upon at least 30 days' notice to the qualified beneficiaries, the settlor, if living, and
             1755      all cotrustees; or
             1756          (b) with the approval of the court.
             1757          (2) In approving a resignation, the court may issue orders and impose conditions
             1758      reasonably necessary for the protection of the trust property.
             1759          (3) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or
             1760      omissions of the trustee is not discharged or affected by the trustee's resignation.
             1761          Section 78. Section 75-7-706 is enacted to read:


             1762          75-7-706. Removal of trustee.
             1763          (1) The settlor, a cotrustee, or a qualified beneficiary may request the court to remove a
             1764      trustee, or a trustee may be removed by the court on its own initiative.
             1765          (2) The court may remove a trustee if:
             1766          (a) the trustee has committed a serious breach of trust;
             1767          (b) lack of cooperation among cotrustees substantially impairs the administration of the
             1768      trust;
             1769          (c) because of unfitness, unwillingness, or persistent failure of the trustee to administer
             1770      the trust effectively, the court determines that removal of the trustee best serves the interests of
             1771      the beneficiaries; or
             1772          (d) there has been a substantial change of circumstances or removal is requested by all
             1773      of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests
             1774      of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a
             1775      suitable cotrustee or successor trustee is available.
             1776          (3) Pending a final decision on a request to remove a trustee, or in lieu of or in addition
             1777      to removing a trustee, the court may order appropriate relief under Subsection 75-7-1001 (2)
             1778      necessary to protect the trust property or the interests of the beneficiaries.
             1779          Section 79. Section 75-7-707 is enacted to read:
             1780          75-7-707. Delivery of property by former trustee.
             1781          (1) Unless a cotrustee remains in office or the court otherwise orders, and until the trust
             1782      property is delivered to a successor trustee or other person entitled to it, a trustee who has
             1783      resigned or been removed has the duties of a trustee and the powers necessary to protect the
             1784      trust property.
             1785          (2) A trustee who has resigned or been removed shall proceed expeditiously to deliver
             1786      the trust property within the trustee's possession to the cotrustee, successor trustee, or other
             1787      person entitled to it.
             1788          Section 80. Section 75-7-708 is enacted to read:
             1789          75-7-708. Compensation of trustee.
             1790          If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to
             1791      compensation that is reasonable under the circumstances.
             1792          Section 81. Section 75-7-709 is enacted to read:


             1793          75-7-709. Reimbursement of expenses.
             1794          (1) A trustee is entitled to be reimbursed out of the trust property, with interest as
             1795      appropriate, for:
             1796          (a) expenses that were properly incurred in the administration of the trust; and
             1797          (b) to the extent necessary to prevent unjust enrichment of the trust, expenses that were
             1798      not properly incurred in the administration of the trust.
             1799          (2) An advance by the trustee of money for the protection of the trust gives rise to a
             1800      lien against trust property to secure reimbursement with reasonable interest.
             1801          Section 82. Section 75-7-801 is enacted to read:
             1802     
Part 8. Duties and Powers of Trustee

             1803          75-7-801. Duty to administer trust.
             1804          Upon acceptance of a trusteeship, the trustee shall administer the trust expeditiously
             1805      and in good faith, in accordance with its terms and purposes and the interests of the
             1806      beneficiaries, and in accordance with this chapter.
             1807          Section 83. Section 75-7-802 is enacted to read:
             1808          75-7-802. Duty of loyalty.
             1809          (1) A trustee shall administer the trust solely in the interests of the beneficiaries.
             1810          (2) Subject to the rights of persons dealing with or assisting the trustee as provided in
             1811      Section 75-7-1012 , a sale, encumbrance, or other transaction involving the investment or
             1812      management of trust property entered into by the trustee for the trustee's own personal account
             1813      or which is otherwise affected by a conflict between the trustee's fiduciary and personal
             1814      interests is voidable by a beneficiary affected by the transaction unless:
             1815          (a) the transaction was authorized by the terms of the trust;
             1816          (b) the transaction was approved by the court;
             1817          (c) the beneficiary did not commence a judicial proceeding within the time allowed by
             1818      Section 75-7-1005 ;
             1819          (d) the beneficiary consented to the trustee's conduct, ratified the transaction, or
             1820      released the trustee in compliance with Section 75-7-1009 ; or
             1821          (e) the transaction involves a contract entered into or claim acquired by the trustee
             1822      before the person became or contemplated becoming trustee.
             1823          (3) A sale, encumbrance, or other transaction involving the investment or management


             1824      of trust property is presumed to be affected by a conflict between personal and fiduciary
             1825      interests if it is entered into by the trustee with:
             1826          (a) the trustee's spouse;
             1827          (b) the trustee's descendants, siblings, parents, or their spouses;
             1828          (c) an agent of the trustee, including but not limited to an attorney, accountant, or
             1829      financial advisor; or
             1830          (d) a corporation or other person or enterprise in which the trustee, or a person that
             1831      owns a significant interest in the trustee, has an interest that might affect the trustee's best
             1832      judgment.
             1833          (4) A transaction between a trustee and a beneficiary that does not concern trust
             1834      property but that occurs during the existence of the trust or while the trustee retains significant
             1835      influence over the beneficiary and from which the trustee obtains an advantage is voidable by
             1836      the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.
             1837          (5) A transaction not concerning trust property in which the trustee engages in the
             1838      trustee's individual capacity involves a conflict between personal and fiduciary interests if the
             1839      transaction concerns an opportunity properly belonging to the trust.
             1840          (6) An investment by a trustee in securities of an investment company or investment
             1841      trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is
             1842      not presumed to be affected by a conflict between personal and fiduciary interests if the
             1843      investment complies with the prudent investor rule of Section 75-7-901 . The trustee may be
             1844      compensated by the investment company or investment trust for providing those services out of
             1845      fees charged to the trust.
             1846          (7) In voting shares of stock or in exercising powers of control over similar interests in
             1847      other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the
             1848      trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or
             1849      appoint directors or other managers who will manage the corporation or enterprise in the best
             1850      interests of the beneficiaries.
             1851          (8) This section does not preclude the following actions by the trustee:
             1852          (a) an agreement between the trustee and a beneficiary relating to the appointment or
             1853      compensation of the trustee;
             1854          (b) payment of reasonable compensation to the trustee;


             1855          (c) a transaction between a trust and another trust, decedent's estate, conservatorship, or
             1856      guardianship of which the trustee is a fiduciary or in which a beneficiary has an interest;
             1857          (d) a deposit of trust money in a regulated financial service institution operated by the
             1858      trustee;
             1859          (e) an advance by the trustee of money for the protection of the trust;
             1860          (f) collecting, holding, and retaining trust assets received from a trustor until, in the
             1861      judgment of the trustee, disposition of the assets should be made, even though the assets
             1862      include an asset in which the trustee is personally interested;
             1863          (g) acquiring an undivided interest in a trust asset in which the trustee, in any trust
             1864      capacity, holds an undivided interest;
             1865          (h) borrowing money to be repaid from the trust assets or otherwise;
             1866          (i) advancing money to be repaid from the assets or otherwise;
             1867          (j) employing persons, including attorneys, auditors, investment advisers, or agents,
             1868      even if they are associated with the trustee:
             1869          (i) to advise or assist the trustee in the performance of the trustee's administrative
             1870      duties or perform any act of administration, whether or not discretionary; or
             1871          (ii) to act without independent investigation upon their recommendations;
             1872          (k) if a governing instrument or order requires or authorizes investment in United
             1873      States government obligations, investing in those obligations, either directly or in the form of
             1874      securities or other interests, in any open-end or closed-end management type investment
             1875      company or investment trust registered under the provisions of the Investment Company Act of
             1876      1940, 15 U.S.C. Sections 80a-1 through 80a-64 if:
             1877          (i) the portfolio of the investment company or investment trust is limited to United
             1878      States government obligations, and repurchase agreements are fully collateralized by United
             1879      States government obligations; and
             1880          (ii) the investment company or investment trust takes delivery of the collateral for any
             1881      repurchase agreement either directly or through an authorized custodian.
             1882          (9) The court may appoint a special fiduciary to make a decision with respect to any
             1883      proposed transaction that might violate this section if entered into by the trustee.
             1884          Section 84. Section 75-7-803 is enacted to read:
             1885          75-7-803. Impartiality.


             1886          If a trust has two or more beneficiaries, the trustee shall act impartially in investing,
             1887      managing, and distributing the trust property, giving due regard to the beneficiaries' respective
             1888      interests.
             1889          Section 85. Section 75-7-804 is enacted to read:
             1890          75-7-804. Prudent administration.
             1891          A trustee shall administer the trust as a prudent person would, by considering the
             1892      purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying
             1893      this standard, the trustee shall exercise reasonable care, skill, and caution.
             1894          Section 86. Section 75-7-805 is enacted to read:
             1895          75-7-805. Costs of administration.
             1896          In administering a trust, the trustee may incur only costs that are reasonable in relation
             1897      to the trust property, the purposes of the trust, and the skills of the trustee.
             1898          Section 87. Section 75-7-806 is enacted to read:
             1899          75-7-806. Trustee's skills.
             1900          A trustee who is named trustee in reliance upon the trustee's representation that the
             1901      trustee has special skills or expertise, shall use those special skills or expertise.
             1902          Section 88. Section 75-7-807 is enacted to read:
             1903          75-7-807. Control and protection of trust property.
             1904          A trustee shall take reasonable steps to take control of and protect the trust property.
             1905          Section 89. Section 75-7-808 is enacted to read:
             1906          75-7-808. Recordkeeping and identification of trust property.
             1907          (1) A trustee shall keep adequate records of the administration of the trust.
             1908          (2) A trustee shall keep trust property separate from the trustee's own property.
             1909          (3) Except as otherwise provided in Subsection (4), a trustee shall cause the trust
             1910      property to be designated so that the interest of the trust, to the extent feasible, appears in
             1911      records maintained by a party other than a trustee or beneficiary.
             1912          (4) If the trustee maintains records clearly indicating the respective interests, a trustee
             1913      may invest as a whole the property of two or more separate trusts.
             1914          Section 90. Section 75-7-809 is enacted to read:
             1915          75-7-809. Enforcement and defense of claims.
             1916          A trustee shall take reasonable steps to enforce claims of the trust and to defend claims


             1917      against the trust.
             1918          Section 91. Section 75-7-810 is enacted to read:
             1919          75-7-810. Collecting trust property.
             1920          A trustee shall take reasonable steps to compel a former trustee or other person to
             1921      deliver trust property to the trustee, and to redress a breach of trust known to the trustee to have
             1922      been committed by a former trustee, unless the terms of the trust provide otherwise.
             1923          Section 92. Section 75-7-811 is enacted to read:
             1924          75-7-811. Duty to inform and report.
             1925          (1) Except to the extent the terms of the trust provide otherwise, a trustee shall keep the
             1926      qualified beneficiaries of the trust reasonably informed about the administration of the trust and
             1927      of the material facts necessary for them to protect their interests. Unless unreasonable under
             1928      the circumstances, and unless otherwise provided by the terms of the trust a trustee shall
             1929      promptly respond to a qualified beneficiary's request for information related to the
             1930      administration of the trust.
             1931          (2) Except to the extent the terms of the trust provide otherwise, a trustee:
             1932          (a) upon request of a qualified beneficiary, shall promptly furnish to the beneficiary a
             1933      copy of the portions of the trust instrument which describe or affect the beneficiary's interest;
             1934          (b) within 60 days after accepting a trusteeship, shall notify the qualified beneficiaries
             1935      of the acceptance and of the trustee's name, address, and telephone number;
             1936          (c) within 60 days after the date the trustee acquires knowledge of the creation of an
             1937      irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has
             1938      become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified
             1939      beneficiaries of the trust's existence, of the identity of the settlor or settlors, of the right to
             1940      request a copy of the trust instrument, and of the right to a trustee's report as provided in
             1941      Subsection (3); and
             1942          (d) shall notify the qualified beneficiaries in advance of any change in the method or
             1943      rate of the trustee's compensation.
             1944          (3) A trustee shall send to the qualified beneficiaries who request it, at least annually
             1945      and at the termination of the trust, a report of the trust property, liabilities, receipts, and
             1946      disbursements, including the amount of the trustee's compensation or a fee schedule or other
             1947      writing showing how the trustee's compensation was determined, a listing of the trust assets


             1948      and, if feasible, their respective market values. Upon a vacancy in a trusteeship, unless a
             1949      cotrustee remains in office, a report must be sent to the qualified beneficiaries by the former
             1950      trustee, unless the terms of the trust provide otherwise. A personal representative, conservator,
             1951      or guardian may send the qualified beneficiaries a report on behalf of a deceased or
             1952      incapacitated trustee.
             1953          (4) A qualified beneficiary may waive the right to a trustee's report or other information
             1954      otherwise required to be furnished under this section. A beneficiary, with respect to future
             1955      reports and other information, may withdraw a waiver previously given.
             1956          Section 93. Section 75-7-812 is enacted to read:
             1957          75-7-812. Discretionary powers -- Tax savings.
             1958          (1) Notwithstanding the breadth of discretion granted to a trustee in the terms of the
             1959      trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the trustee shall
             1960      exercise a discretionary power in good faith and in accordance with the terms and purposes of
             1961      the trust and the interests of the beneficiaries.
             1962          (2) Subject to Subsection (4), and unless the terms of the trust expressly indicate that a
             1963      rule in this section does not apply:
             1964          (a) a person other than a settlor who is a beneficiary and trustee of a trust that confers
             1965      on the trustee a power to make discretionary distributions to or for the trustee's personal benefit
             1966      may exercise the power only in accordance with an ascertainable standard relating to the
             1967      trustee's individual health, education, support, or maintenance within the meaning of
             1968      Subsection 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code of 1986, as in effect on
             1969      May 1, 2004; and
             1970          (b) a trustee may not exercise a power to make discretionary distributions to satisfy a
             1971      legal obligation of support that the trustee personally owes another person.
             1972          (3) A power whose exercise is limited or prohibited by Subsection (2) may be
             1973      exercised by a majority of the remaining trustees whose exercise of the power is not so limited
             1974      or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a
             1975      special fiduciary with authority to exercise the power.
             1976          (4) Subsection (2) does not apply to:
             1977          (a) a power held by the settlor's spouse who is the trustee of a trust for which a marital
             1978      deduction, as defined in Subsection 2056(b)(5) or 2523(e) of the Internal Revenue Code of


             1979      1986, as in effect on May 1, 2004, was previously allowed;
             1980          (b) any trust during any period that the trust may be revoked or amended by its settlor;
             1981      or
             1982          (c) a trust if contributions to the trust qualify for the annual exclusion under Subsection
             1983      2503(c) of the Internal Revenue Code of 1986, as in effect on May 1, 2004.
             1984          Section 94. Section 75-7-813 is enacted to read:
             1985          75-7-813. General powers of trustee.
             1986          (1) A trustee, without authorization by the court, may exercise:
             1987          (a) powers conferred by the terms of the trust; or
             1988          (b) except as limited by the terms of the trust:
             1989          (i) all powers over the trust property which an unmarried competent owner has over
             1990      individually owned property;
             1991          (ii) any other powers appropriate to achieve the proper investment, management, and
             1992      distribution of the trust property; and
             1993          (iii) any other powers conferred by this chapter.
             1994          (2) The exercise of a power is subject to the fiduciary duties prescribed by this part.
             1995          Section 95. Section 75-7-814 is enacted to read:
             1996          75-7-814. Specific powers of trustee.
             1997          (1) Without limiting the authority conferred by Section 75-7-813 , a trustee may:
             1998          (a) collect trust property and accept or reject additions to the trust property from a
             1999      settlor or any other person;
             2000          (b) acquire or sell property, for cash or on credit, at public or private sale;
             2001          (c) exchange, partition, or otherwise change the character of trust property;
             2002          (d) deposit trust money in an account in a regulated financial service institution;
             2003          (e) borrow money, with or without security from any financial institution, including a
             2004      financial institution that is serving as a trustee or one of its affiliates, and mortgage or pledge
             2005      trust property for a period within or extending beyond the duration of the trust;
             2006          (f) with respect to an interest in a proprietorship, partnership, limited liability company,
             2007      business trust, corporation, or other form of business or enterprise, continue the business or
             2008      other enterprise and take any action that may be taken by shareholders, members, or property
             2009      owners, including merging, dissolving, or otherwise changing the form of business


             2010      organization or contributing additional capital;
             2011          (g) with respect to stocks or other securities, exercise the rights of an absolute owner,
             2012      including the right to:
             2013          (i) vote, or give proxies to vote, with or without power of substitution, or enter into or
             2014      continue a voting trust agreement;
             2015          (ii) hold a security in the name of a nominee or in other form without disclosure of the
             2016      trust so that title may pass by delivery;
             2017          (iii) pay calls, assessments, and other sums chargeable or accruing against the
             2018      securities, and sell or exercise stock subscription or conversion rights; and
             2019          (iv) deposit the securities with a depositary or other regulated financial service
             2020      institution;
             2021          (h) with respect to an interest in real property, construct, or make ordinary or
             2022      extraordinary repairs to, alterations to, or improvements in, buildings or other structures,
             2023      demolish improvements, raze existing or erect new party walls or buildings, subdivide or
             2024      develop land, dedicate land to public use or grant public or private easements, and make or
             2025      vacate plats and adjust boundaries;
             2026          (i) enter into a lease for any purpose as lessor or lessee, including a lease or other
             2027      arrangement for exploration and removal of natural resources, with or without the option to
             2028      purchase or renew, for a period within or extending beyond the duration of the trust;
             2029          (j) grant an option involving a sale, lease, or other disposition of trust property or
             2030      acquire an option for the acquisition of property, including an option exercisable beyond the
             2031      duration of the trust, and exercise an option so acquired;
             2032          (k) insure the property of the trust against damage or loss and insure the trustee, the
             2033      trustee's agents, and beneficiaries against liability arising from the administration of the trust;
             2034          (l) abandon or decline to administer property of no value or of insufficient value to
             2035      justify its collection or continued administration;
             2036          (m) with respect to possible liability for violation of environmental law:
             2037          (i) inspect or investigate property the trustee holds or has been asked to hold, or
             2038      property owned or operated by an organization in which the trustee holds or has been asked to
             2039      hold an interest, for the purpose of determining the application of environmental law with
             2040      respect to the property;


             2041          (ii) take action to prevent, abate, or otherwise remedy any actual or potential violation
             2042      of any environmental law affecting property held directly or indirectly by the trustee, whether
             2043      taken before or after the assertion of a claim or the initiation of governmental enforcement;
             2044          (iii) decline to accept property into trust or disclaim any power with respect to property
             2045      that is or may be burdened with liability for violation of environmental law;
             2046          (iv) compromise claims against the trust which may be asserted for an alleged violation
             2047      of environmental law; and
             2048          (v) pay the expense of any inspection, review, abatement, or remedial action to comply
             2049      with environmental law;
             2050          (n) pay or contest any claim, settle a claim by or against the trust, and release, in whole
             2051      or in part, a claim belonging to the trust;
             2052          (o) pay taxes, assessments, compensation of the trustee and of employees and agents of
             2053      the trust, and other expenses incurred in the administration of the trust;
             2054          (p) exercise elections with respect to federal, state, and local taxes;
             2055          (q) select a mode of payment under any employee benefit or retirement plan, annuity,
             2056      or life insurance payable to the trustee, exercise rights thereunder, including exercise of the
             2057      right to indemnification for expenses and against liabilities, and take appropriate action to
             2058      collect the proceeds;
             2059          (r) make loans out of trust property, including loans to a beneficiary on terms and
             2060      conditions the trustee considers to be fair and reasonable under the circumstances, and the
             2061      trustee has a lien on future distributions for repayment of those loans;
             2062          (s) pledge trust property to guarantee loans made by others to the beneficiary;
             2063          (t) appoint a trustee to act in another jurisdiction with respect to trust property located
             2064      in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the
             2065      appointing trustee, require that the appointed trustee furnish security, and remove any trustee so
             2066      appointed;
             2067          (u) pay an amount distributable to a beneficiary who is under a legal disability or who
             2068      the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or
             2069      applying it for the beneficiary's benefit, or by:
             2070          (i) paying it to the beneficiary's conservator or, if the beneficiary does not have a
             2071      conservator, the beneficiary's guardian;


             2072          (ii) paying it to the beneficiary's custodian under Title 75, Chapter 5a, Uniform
             2073      Transfers to Minors Act;
             2074          (iii) if the trustee does not know of a conservator, guardian, custodian, or custodial
             2075      trustee, paying it to an adult relative or other person having legal or physical care or custody of
             2076      the beneficiary, to be expended on the beneficiary's behalf; or
             2077          (iv) managing it as a separate fund on the beneficiary's behalf, subject to the
             2078      beneficiary's continuing right to withdraw the distribution;
             2079          (v) on distribution of trust property or the division or termination of a trust, make
             2080      distributions in divided or undivided interests, allocate particular assets in proportionate or
             2081      disproportionate shares, value the trust property for those purposes, and adjust for resulting
             2082      differences in valuation;
             2083          (w) resolve a dispute concerning the interpretation of the trust or its administration by
             2084      mediation, arbitration, or other procedure for alternative dispute resolution;
             2085          (x) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to
             2086      protect trust property and the trustee in the performance of the trustee's duties;
             2087          (y) sign and deliver contracts and other instruments that are useful to achieve or
             2088      facilitate the exercise of the trustee's powers; and
             2089          (z) on termination of the trust, exercise the powers appropriate to finalize the
             2090      administration of the trust and distribute the trust property to the persons entitled to it.
             2091          (2) A trustee may delegate investment and management functions that a prudent trustee
             2092      of comparable skills could properly delegate under the circumstances.
             2093          (a) The trustee shall exercise reasonable care, skill, and caution in:
             2094          (i) selecting the agent;
             2095          (ii) establishing the scope and terms of the delegation consistent with the purposes of
             2096      the trust; and
             2097          (iii) periodically reviewing the agent's actions to monitor the agent's performance and
             2098      compliance with the terms of the delegation.
             2099          (b) In performing a delegated function, an agent has a duty to the trust to exercise
             2100      reasonable care to comply with the terms of the delegation.
             2101          (c) A trustee who complies with the requirements of this Subsection (2) is not liable to
             2102      the beneficiaries or to the trust for the decisions or actions of the agent to whom the function


             2103      was delegated.
             2104          Section 96. Section 75-7-815 is enacted to read:
             2105          75-7-815. Distribution upon termination.
             2106          (1) Upon termination or partial termination of a trust, the trustee may send to the
             2107      beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed
             2108      distribution terminates if the beneficiary does not notify the trustee of an objection within 30
             2109      days after the proposal was sent but only if the proposal informed the beneficiary of the right to
             2110      object and of the time allowed for objection.
             2111          (2) Upon the occurrence of an event terminating or partially terminating a trust, the
             2112      trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it,
             2113      subject to the right of the trustee to retain a reasonable reserve for the payment of debts,
             2114      expenses, and taxes.
             2115          (3) A release by a beneficiary of a trustee from liability for breach of trust is invalid to
             2116      the extent:
             2117          (a) it was induced by improper conduct of the trustee; or
             2118          (b) the beneficiary, at the time of the release, did not know or had no reason to know of
             2119      the beneficiary's rights or of the material facts relating to the breach.
             2120          Section 97. Section 75-7-816 is enacted to read:
             2121          75-7-816. Recitals when title to real property is in trust -- Failure.
             2122          (1) When title to real property is granted to a person as trustee, the terms of the trust
             2123      may be given either:
             2124          (a) in the deed of transfer; or
             2125          (b) in an instrument signed by the grantor and recorded in the same office as the grant
             2126      to the trustee.
             2127          (2) If the terms of the trust are not made public as required in Subsection (1), a
             2128      conveyance from the trustee is absolute in favor of purchasers for value who take the property
             2129      without notice of the terms of the trust.
             2130          (3) The terms of the trust recited in the deed of transfer or the instrument recorded
             2131      under Subsection (1)(b) shall include:
             2132          (a) the name of the trustee;
             2133          (b) the address of the trustee; and


             2134          (c) the name and date of the trust.
             2135          (4) Any real property titled in a trust which has a restriction on transfer described in
             2136      Section 25-6-14 shall include in the title the words "asset protection trust".
             2137          Section 98. Section 75-7-817 is enacted to read:
             2138          75-7-817. Marital deduction formulas -- Trusts.
             2139          (1) For estates of decedents dying after December 31, 1981, where a decedent's trust
             2140      executed before September 13, 1981, contains a formula expressly providing that the
             2141      decedent's spouse is to receive the maximum amount of property qualifying for the marital
             2142      deduction allowable by federal law, this formula shall be construed as referring to the unlimited
             2143      marital deduction allowable by federal law as amended by Section 403(a) of the Economic
             2144      Recovery Tax Act of 1981.
             2145          (2) The intention of a trustor as expressed in the trust shall control the legal effect of
             2146      any dispositions made by it for purposes of construing Subsection (1), and the rule of
             2147      construction of Subsection (1) shall apply unless a contrary intention is indicated by the trust.
             2148          Section 99. Section 75-7-901 is enacted to read:
             2149     
Part 9. Utah Uniform Prudent Investor Act

             2150          75-7-901. Prudent investor rule.
             2151          (1) Except as otherwise provided in Subsection (2), a trustee who invests and manages
             2152      trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule
             2153      set forth in this chapter. If a trustee is named on the basis of a trustee's representations of
             2154      special skills or expertise, the trustee has a duty to use those special skills or expertise.
             2155          (2) The prudent investor rule is a default rule and may be expanded, restricted,
             2156      eliminated, or otherwise altered by the provisions of a trust. A trustee is not liable to a
             2157      beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the
             2158      trust.
             2159          Section 100. Section 75-7-902 is enacted to read:
             2160          75-7-902. Standard of care -- Portfolio strategy -- Risk and return objectives.
             2161          (1) A trustee shall invest and manage trust assets as a prudent investor would, by
             2162      considering the purposes, terms, distribution requirements, and other circumstances of the trust.
             2163      In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
             2164          (2) A trustee's investment and management decisions respecting individual assets must


             2165      be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of
             2166      an overall investment strategy having risk and return objectives reasonably suited to the trust.
             2167          (3) Among circumstances that a trustee shall consider in investing and managing trust
             2168      assets are the following which may be relevant to the trust or its beneficiaries:
             2169          (a) general economic conditions;
             2170          (b) the possible effect of inflation or deflation;
             2171          (c) the expected tax consequences of investment decisions or strategies;
             2172          (d) the role that each investment or course of action plays within the overall trust
             2173      portfolio, which may include financial assets, interests in closely held enterprises, tangible and
             2174      intangible personal property, and real property;
             2175          (e) the expected total return from income and the appreciation of capital;
             2176          (f) other resources of the beneficiaries;
             2177          (g) needs for liquidity, regularity of income, and preservation or appreciation of capital;
             2178      and
             2179          (h) an asset's special relationship or special value, if any, to the purposes of the trust or
             2180      to one or more of the beneficiaries.
             2181          (4) A trustee shall make a reasonable effort to verify facts relevant to the investment
             2182      and management of trust assets.
             2183          (5) A trustee may invest in any kind of property or type of investment consistent with
             2184      the standards of this chapter.
             2185          Section 101. Section 75-7-903 is enacted to read:
             2186          75-7-903. Diversification.
             2187          A trustee shall diversify the investments of the trust unless the trustee reasonably
             2188      determines that, because of special circumstances, the purposes of the trust are better served
             2189      without diversifying.
             2190          Section 102. Section 75-7-904 is enacted to read:
             2191          75-7-904. Duties at inception of trusteeship.
             2192          Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee
             2193      shall review the trust assets and make and implement decisions concerning the retention and
             2194      disposition of assets, in order to bring the trust portfolio into compliance with the purposes,
             2195      terms, distribution requirements, and other circumstances of the trust, and with the


             2196      requirements of this chapter.
             2197          Section 103. Section 75-7-905 is enacted to read:
             2198          75-7-905. Reviewing compliance.
             2199          Compliance with the prudent investor rule is determined in light of the facts and
             2200      circumstances existing at the time of a trustee's decision or action and not by hindsight. This
             2201      section does not require a specific outcome in investing.
             2202          Section 104. Section 75-7-906 is enacted to read:
             2203          75-7-906. Investment direction.
             2204          (1) For purposes of this section, "investment direction" means a direction that is
             2205      binding on the trustee, except for an investment direction given by a settlor as described in
             2206      Subsection (2) to do any of the following with respect to an investment:
             2207          (a) retention;
             2208          (b) purchase;
             2209          (c) sale;
             2210          (d) exchange;
             2211          (e) tender; or
             2212          (f) any other transaction affecting ownership in the investment.
             2213          (2) (a) During the time period that a trust is revocable, the trustee may follow any
             2214      investment direction of the settlor, including an investment direction that:
             2215          (i) is manifestly contrary to the terms of the trust; or
             2216          (ii) seriously breaches a fiduciary duty to the beneficiaries.
             2217          (b) The trustee is not liable for any loss resulting from following an investment
             2218      direction described in Subsection (2)(a).
             2219          (3) If the terms of a trust authorize a person to give investment direction to the trustee,
             2220      the person authorized to give investment direction:
             2221          (a) is presumptively a fiduciary only with respect to an investment direction that the
             2222      person gives to the trustee;
             2223          (b) is required to act in good faith with regard to:
             2224          (i) the purposes of the trust; and
             2225          (ii) the interests of the beneficiaries; and
             2226          (c) is liable for any loss that results from breach of the fiduciary duty only with respect


             2227      to an investment direction that the person gives to the trustee.
             2228          (4) Except in cases of willful misconduct or gross negligence, a trustee is not liable for
             2229      any loss that results from following an investment direction if:
             2230          (a) the terms of a trust authorizes a person to give the investment direction to the
             2231      trustee; and
             2232          (b) the trustee acts in accordance with the investment direction given by a person
             2233      described in Subsection (4)(a).
             2234          (5) If the terms of a trust require another person's approval or consent to an investment
             2235      decision of the trustee:
             2236          (a) the person from whom approval or consent is required:
             2237          (i) is presumptively a fiduciary;
             2238          (ii) is required to act in good faith with regard to:
             2239          (A) the purposes of the trust; and
             2240          (B) the interests of the beneficiaries; and
             2241          (iii) is liable for any loss that results from breach of the fiduciary duty; and
             2242          (b) except in cases of willful misconduct or gross negligence, the trustee is not liable
             2243      for any loss resulting from any act not taken as a result of the person's failure to respond to a
             2244      request for approval or consent.
             2245          Section 105. Section 75-7-907 is enacted to read:
             2246          75-7-907. Language invoking standard of chapter.
             2247          The following terms or comparable language in the provisions of a trust, unless
             2248      otherwise limited or modified, authorizes any investment or strategy permitted under this
             2249      chapter: "investments permissible by law for investment of trust funds," "legal investments,"
             2250      "authorized investments," "using the judgment and care under the circumstances then
             2251      prevailing that persons of prudence, discretion, and intelligence exercise in the management of
             2252      their own affairs, not in regard to speculation but in regard to the permanent disposition of their
             2253      funds, considering the probable income as well as the probable safety of their capital," "prudent
             2254      man rule," "prudent trustee rule," "prudent person rule," and "prudent investor rule."
             2255          Section 106. Section 75-7-1001 is enacted to read:
             2256     
Part 10. Liability of Trustees and Rights of Persons Dealing with Trustee

             2257          75-7-1001. Remedies for breach of trust.


             2258          (1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of
             2259      trust.
             2260          (2) To remedy a breach of trust that has occurred or may occur, the court may:
             2261          (a) compel the trustee to perform the trustee's duties;
             2262          (b) enjoin the trustee from committing a breach of trust;
             2263          (c) compel the trustee to redress a breach of trust by paying money, restoring property,
             2264      or other means;
             2265          (d) order a trustee to account;
             2266          (e) appoint a special fiduciary to take possession of the trust property and administer
             2267      the trust;
             2268          (f) suspend the trustee;
             2269          (g) remove the trustee as provided in Section 75-7-706 ;
             2270          (h) reduce or deny compensation to the trustee;
             2271          (i) subject to Section 75-7-1012 , void an act of the trustee, impose a lien or a
             2272      constructive trust on trust property, or trace trust property wrongfully disposed of and recover
             2273      the property or its proceeds; or
             2274          (j) order any other appropriate relief.
             2275          Section 107. Section 75-7-1002 is enacted to read:
             2276          75-7-1002. Damages for breach of trust.
             2277          (1) A trustee who commits a breach of trust is liable to the beneficiaries affected for the
             2278      greater of:
             2279          (a) the amount required to restore the value of the trust property and trust distributions
             2280      to what they would have been had the breach not occurred; or
             2281          (b) the profit the trustee made by reason of the breach.
             2282          (2) Except as otherwise provided in this Subsection (2), if more than one trustee is
             2283      liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the
             2284      other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially
             2285      more at fault than another trustee or if the trustee committed the breach of trust in bad faith or
             2286      with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A
             2287      trustee who received a benefit from the breach of trust is not entitled to contribution from
             2288      another trustee to the extent of the benefit received.


             2289          Section 108. Section 75-7-1003 is enacted to read:
             2290          75-7-1003. Damages in absence of breach.
             2291          (1) A trustee is accountable to an affected beneficiary for any profit made by the trustee
             2292      arising from the administration of the trust, even absent a breach of trust.
             2293          (2) Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or
             2294      depreciation in the value of trust property or for not having made a profit.
             2295          Section 109. Section 75-7-1004 is enacted to read:
             2296          75-7-1004. Attorney's fees and costs.
             2297          (1) In a judicial proceeding involving the administration of a trust, the court may, as
             2298      justice and equity may require, award costs and expenses, including reasonable attorney's fees,
             2299      to any party, to be paid by another party or from the trust that is the subject of the controversy.
             2300          (2) If a trustee defends or prosecutes any proceeding in good faith, whether successful
             2301      or not, the trustee is entitled to receive from the trust the necessary expenses and
             2302      disbursements, including reasonable attorney's fees, incurred.
             2303          Section 110. Section 75-7-1005 is enacted to read:
             2304          75-7-1005. Limitation of action against trustee.
             2305          (1) A beneficiary may not commence a proceeding against a trustee for breach of trust
             2306      more than six months after the date that the beneficiary or a person who may represent and
             2307      bind the beneficiary was sent a report that adequately disclosed the existence of a potential
             2308      claim for breach of trust and informed the beneficiary of the time allowed for commencing a
             2309      proceeding.
             2310          (2) A report adequately discloses the existence of a potential claim for breach of trust if
             2311      it provides sufficient information so that the beneficiary or representative knows of the
             2312      potential claim or should have inquired into its existence.
             2313          (3) If Subsection (1) does not apply, a judicial proceeding by a beneficiary against a
             2314      trustee for breach of trust must be commenced within one year after the first to occur of:
             2315          (a) the removal, resignation, or death of the trustee;
             2316          (b) the termination of the beneficiary's interest in the trust; or
             2317          (c) the termination of the trust.
             2318          (4) This section does not preclude an action to recover for fraud or misrepresentation
             2319      related to the report.


             2320          Section 111. Section 75-7-1006 is enacted to read:
             2321          75-7-1006. Reliance on trust instrument.
             2322          A trustee who acts in reasonable reliance on the terms of the trust as expressed in the
             2323      trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach
             2324      resulted from the reliance.
             2325          Section 112. Section 75-7-1007 is enacted to read:
             2326          75-7-1007. Event affecting administration or distribution.
             2327          If the happening of an event, including marriage, divorce, performance of educational
             2328      requirements, or death, affects the administration or distribution of a trust, a trustee is not liable
             2329      for a loss resulting from the trustee's lack of knowledge or lack of notice.
             2330          Section 113. Section 75-7-1008 is enacted to read:
             2331          75-7-1008. Exculpation of trustee.
             2332          A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the
             2333      extent that it:
             2334          (1) relieves the trustee of liability for breach of trust committed in bad faith or with
             2335      reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
             2336          (2) was inserted by the trustee or fiduciary without disclosure of its existence and
             2337      contents.
             2338          Section 114. Section 75-7-1009 is enacted to read:
             2339          75-7-1009. Beneficiary's consent, release, or ratification.
             2340          A trustee is not liable to a beneficiary for breach of trust if the beneficiary, while having
             2341      capacity, consented to the conduct constituting the breach, released the trustee from liability for
             2342      the breach, or ratified the transaction constituting the breach, unless at the time of the consent,
             2343      release, or ratification, the beneficiary did not know of the beneficiary's rights or of the material
             2344      facts relating to the breach.
             2345          Section 115. Section 75-7-1010 is enacted to read:
             2346          75-7-1010. Limitation on personal liability of trustee.
             2347          (1) Except as otherwise provided in the contract, a trustee is not personally liable on a
             2348      contract properly entered into in the trustee's fiduciary capacity in the course of administering
             2349      the trust if the trustee in the contract disclosed the fiduciary capacity.
             2350          (2) A trustee is personally liable for torts committed in the course of administering a


             2351      trust, or for obligations arising from ownership or control of trust property, including liability
             2352      for violation of environmental law, only if the trustee is personally at fault.
             2353          (3) A claim based on a contract entered into by a trustee in the trustee's fiduciary
             2354      capacity, on an obligation arising from ownership or control of trust property, or on a tort
             2355      committed in the course of administering a trust, may be asserted in a judicial proceeding
             2356      against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally
             2357      liable for the claim.
             2358          (4) The question of liability as between the trust estate and the trustee individually may
             2359      be determined in a proceeding for accounting, surcharge, or indemnification or other
             2360      appropriate proceeding.
             2361          (5) Whenever an instrument creating a trust reserves to the settlor, or vests in an
             2362      advisory or investment committee, or in any other person or persons, including one or more
             2363      cotrustees to the exclusion of the trustee or to the exclusion of one or more of several trustees,
             2364      authority to direct the making or retention of any investment, the excluded trustee or trustees
             2365      shall not be liable, either individually or as a fiduciary, for any loss resulting from the making
             2366      or retention of any investment pursuant to such direction.
             2367          (6) In the absence of actual knowledge or information which would cause a reasonable
             2368      trustee to inquire further, no trustee shall be liable for failure to take necessary steps to compel
             2369      the redress of any breach of trust or fiduciary duty by any predecessor personal representative,
             2370      trustee, or other fiduciary. The provisions of this section shall not be construed to limit the
             2371      fiduciary liability of any trustee for his own acts or omissions with respect to the trust estate.
             2372          Section 116. Section 75-7-1011 is enacted to read:
             2373          75-7-1011. Interest as general partner.
             2374          (1) Except as otherwise provided in Subsection (3) or unless personal liability is
             2375      imposed in the contract, a trustee who holds an interest as a general partner in a general or
             2376      limited partnership is not personally liable on a contract entered into by the partnership after
             2377      the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in
             2378      a statement previously filed pursuant to Title 48, Chapter 2a, Utah Revised Uniform Limited
             2379      Partnership Act.
             2380          (2) Except as otherwise provided in Subsection (3), a trustee who holds an interest as a
             2381      general partner is not personally liable for torts committed by the partnership or for obligations


             2382      arising from ownership or control of the interest unless the trustee is personally at fault.
             2383          (3) The immunity provided by this section does not apply if an interest in the
             2384      partnership is held by the trustee in a capacity other than that of trustee or is held by the
             2385      trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or the spouse
             2386      of any of them.
             2387          (4) If the trustee of a revocable trust holds an interest as a general partner, the settlor is
             2388      personally liable for contracts and other obligations of the partnership as if the settlor were a
             2389      general partner.
             2390          Section 117. Section 75-7-1012 is enacted to read:
             2391          75-7-1012. Protection of person dealing with trustee.
             2392          (1) A person other than a beneficiary who in good faith assists a trustee, or who in
             2393      good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or
             2394      improperly exercising the trustee's powers is protected from liability as if the trustee properly
             2395      exercised the power.
             2396          (2) A person other than a beneficiary who in good faith deals with a trustee is not
             2397      required to inquire into the extent of the trustee's powers or the propriety of their exercise.
             2398          (3) A person who in good faith delivers assets to a trustee need not ensure their proper
             2399      application.
             2400          (4) A person other than a beneficiary who in good faith assists a former trustee, or who
             2401      in good faith and for value deals with a former trustee, without knowledge that the trusteeship
             2402      has terminated is protected from liability as if the former trustee were still a trustee.
             2403          (5) Comparable protective provisions of other laws relating to commercial transactions
             2404      or transfer of securities by fiduciaries prevail over the protection provided by this section.
             2405          Section 118. Section 75-7-1013 is enacted to read:
             2406          75-7-1013. Certification of trust.
             2407          (1) Instead of furnishing a copy of the trust instrument to a person other than a
             2408      beneficiary, the trustee may furnish to the person a certification of trust containing the
             2409      following information:
             2410          (a) that the trust exists and the date the trust instrument was executed;
             2411          (b) the identity of the settlor;
             2412          (c) the identity and address of the currently acting trustee;


             2413          (d) the powers of the trustee in the pending transaction;
             2414          (e) the revocability or irrevocability of the trust and the identity of any person holding a
             2415      power to revoke the trust;
             2416          (f) the authority of cotrustees to sign or otherwise authenticate and whether all or less
             2417      than all are required in order to exercise powers of the trustee; and
             2418          (g) the name in which title to trust property may be taken.
             2419          (2) A certification of trust may be signed or otherwise authenticated by any trustee.
             2420          (3) A certification of trust must state that the trust has not been revoked, modified, or
             2421      amended in any manner that would cause the representations contained in the certification of
             2422      trust to be incorrect.
             2423          (4) A certification of trust need not contain the dispositive terms of a trust.
             2424          (5) A recipient of a certification of trust may require the trustee to furnish copies of
             2425      those excerpts from the original trust instrument and later amendments which designate the
             2426      trustee and confer upon the trustee the power to act in the pending transaction.
             2427          (6) A person who acts in reliance upon a certification of trust without knowledge that
             2428      the representations contained in it are incorrect is not liable to any person for acting and may
             2429      assume without inquiry the existence of the facts contained in the certification. Knowledge of
             2430      the terms of the trust may not be inferred solely from the fact that a copy of all or part of the
             2431      trust instrument is held by the person relying upon the certification.
             2432          (7) A person who in good faith enters into a transaction in reliance upon a certification
             2433      of trust may enforce the transaction against the trust property as if the representations contained
             2434      in the certification were correct.
             2435          (8) A person making a demand for the trust instrument in addition to a certification of
             2436      trust or excerpts is liable for costs, expenses, attorney fees, and damages if the court determines
             2437      that the person did not act in good faith in demanding the trust instrument.
             2438          (9) This section does not limit the right of a person to obtain a copy of the trust
             2439      instrument in a judicial proceeding concerning the trust.
             2440          Section 119. Section 75-7-1101 is enacted to read:
             2441     
Part 11. Miscellaneous Provisions

             2442          75-7-1101. Uniformity of application and construction.
             2443          In applying and construing this chapter, consideration must be given to the need to


             2444      promote uniformity of the law with respect to its subject matter among states that enact it.
             2445          Section 120. Section 75-7-1102 is enacted to read:
             2446          75-7-1102. Electronic records and signatures.
             2447          The provisions of this chapter governing the legal effect, validity, or enforceability of
             2448      electronic records or electronic signatures, and of contracts formed or performed with the use
             2449      of such records or signatures, conform to the requirements of Section 102 of the Electronic
             2450      Signatures in Global and National Commerce Act (15 U.S.C. §7002) and supersede, modify,
             2451      and limit the requirements of the Electronic Signatures in Global and National Commerce Act.
             2452          Section 121. Section 75-7-1103 is enacted to read:
             2453          75-7-1103. Application to existing relationships.
             2454          (1) Except as otherwise provided, this chapter applies to:
             2455          (a) all trusts created before, on, or after July 1, 2004;
             2456          (b) all judicial proceedings concerning trusts commenced on or after July 1, 2004; and
             2457          (c) judicial proceedings concerning trusts commenced before July 1, 2004 unless the
             2458      court finds that application of a particular provision of this chapter would substantially interfere
             2459      with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in
             2460      which case the particular provision of this chapter does not apply and the superseded section
             2461      will apply.
             2462          (2) Any rule of construction or presumption provided in this chapter applies to trust
             2463      instruments executed before July 1, 2004 unless there is a clear indication of a contrary intent
             2464      in the terms of the trust.
             2465          (3) An act done before July 1, 2004 is not affected by this chapter.
             2466          (4) If a right is acquired, extinguished, or barred upon the expiration of a prescribed
             2467      period that has commenced to run under any other statute before July 1, 2004, that statute
             2468      continues to apply to the right even if it has been repealed or superseded.
             2469          Section 122. Repealer.
             2470          This bill repeals:
             2471          Section 75-7-206, Proceedings for review of employment of agents and review of
             2472      compensation of trustee and employees of trust.
             2473          Section 75-7-207, Trust proceedings -- Initiation by notice -- Necessary parties.
             2474          Section 75-7-306, Personal liability of trustee to third parties.


             2475          Section 75-7-307, Limitations on proceedings against trustees after final account.
             2476          Section 75-7-405.5, Vacancy in trusteeship -- Appointment of successor.
             2477          Section 123. Effective date.
             2478          This bill takes effect on July 1, 2004.
             2479          Section 124. Coordinating S.B. 47 with S.B. 30.
             2480          If this S.B. 47 and S.B. 30, Medical Benefits Recovery Act Amendments, both pass it is
             2481      the intent of the Legislature that cross-references in S.B. 30 to Sections 75-7-308 and 75-7-309
             2482      be changed to 75-7-508 and 75-7-509 , respectively.


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