Changes to Existing Law

In case of the death, resignation, or removal of the vacancy of the office of trustee, unless the instrument creating the trust names the successor, such or allows the resigning trustee or another person to appoint its successor, the successor shall be appointed by24 - 3 -SB the court upon hearing and notice as provided in this chapter. In case of necessity the court may1 appoint a temporary trustee pending a permanent appointment. If the office of trustee remains vacant for more than thirty days, then any resigned trustee in possession of trust property may petition the court for the appointment of a successor trustee. If no successor trustee can be secured within ninety days following a hearing held of the resigned trustee's petition, the resigned trustee shall deliver the trust property within its possession to any other fiduciary or other persons, as ordered by the court. The resigned trustee shall be held harmless from any liability, absent the resigned trustee's gross negligence or willful misconduct, for any action taken pursuant to this section. The resigning trustee is entitled to reimbursement for advances it has made on behalf of the trust and for reasonable compensation for the performance of its duties as trustee. The advances and compensation shall act as a lien on trust assets under § 55-1A-34. Following a trustee's resignation, the resigned trustee shall be deemed to be serving only as a custodian of the documents and assets of the trust then in its possession and shall be relieved of its fiduciary and administrative duties under the terms of the trust instrument and pursuant to state law. The resigning trustee is entitled to reimbursement for advances it has made on behalf of the trust and for reasonable compensation as a custodian. Such advances and compensation shall act as a lien on trust assets under § 55-1A-34. The relief afforded to the trustee under this section does not limit other relief that may be requested or authorized under this chapter.

Any individual person may serve as an investment trust advisor described in13 subdivision 55-1B-1(6), notwithstanding that such individual the person is the transferor of the14 qualified disposition, but such an individual the person may not otherwise serve as a fiduciary15 of a trust that is a qualified disposition except with respect to the retention of the veto right16 permitted by subdivision 55-16-2(2). While serving as an advisor of the trust, the individual person may have all powers authorized by statute or by the trust instrument, including the power18 to vote by proxy any stock owned by the trust.

Terms used in this chapter mean: (1)"Bind" or "bound," to consent, receive notice or service of process, approve, agree, object, resist, waive, or demand for or as a person with the same binding and23 conclusive effective as if the person represented had;24 - 7 -SB (2)"Conflict of interest," a situation in which a representative's interest in the trust1 causes a significant likelihood that a reasonable person would disregard a2 representative's duty to a represented beneficiary. A conflict of interest, however, excludes (i) any adversity, conflict or opposed interests substantially unrelated to the representative's interest in the trust; (ii) any past situation which is not likely to re- occur; and (iii) any conflict of interest which falls short of a material conflict of interest; (3)"Co-representative," more than one simultaneously acting representative of the same8 class pursuant to § 55-18-9, as when co-guardians are acting: (4)"Conservator," a person appointed pursuant to chapter 29A-5 or equivalent10 provisions of another jurisdiction's laws including a temporary conservator, a11 guardian ad litem, and a limited conservator; (5)"Fiduciary," a person defined by subdivision 21-22-1(3), except as used in § 55-18- 17; (6)"Guardian," a person appointed pursuant to chapter 29A-5 or equivalent provisions15 of another jurisdiction's laws including a temporary guardian and a limited guardian; (7)"Incapacitated" or "incapacity," lacking the capacity to meaningfully understand the17 matter in question because of a mental or physical impairment; (8)"Interest," a beneficial interest as defined by subdivision 55-1-24(1) but including the19 holder of a power of appointment, and any power to remove or replace a fiduciary or20 a representative; (9)"Interested beneficiary," a person who, on the date the person's qualification is22 determined: (a)Is a current distributee or permissible distributee of trust income or principal;24 - 8 -SB (b)Would be a distributee or permissible distributee of trust income or principal1 if the interests of the current distributees terminated on that date; (c)Would be a distributee or permissible distributee of trust income or principal3 if the trust terminated on that date; (d)Holds a power of appointment; or5 (e)Would hold a power of appointment if the interests of the current distributees6 terminated on that date or the interests of the persons currently holding a7 power of appointment under this subdivision terminated on that date; (10)"Knows" or "knowingly," actual knowledge of the fact in question; (11)"Minor," any person who has not attained the age of eighteen. The term includes a10 minor with an incapacity; (12)"Nonjudicial settlement," an agreement, release, or other action whether or not12 approved by a court, which may include, without limitation: (a)The interpretation or construction of the terms of a trust; (b)The approval of any fiduciary's report or accounting; (c)Direction to any fiduciary to refrain from performing a particular act or the16 grant to a fiduciary of any necessary or desirable power; (d)The resignation or appointment of any fiduciary; (e)The determination of a fiduciary or a representative's compensation; (f)The transfer of a trust's principal place of administration or situs; (g)The liability of any fiduciary's action or omission relating to a trust; (h)Partial or final settlement agreements regarding a trust or its administration; or23 (i)The modification, amendment, reformation, or termination of a trust;24 - 9 -SB (13)"Notice" or "notifies," notice provided personally, by mail, postage prepaid, addressed to the person's last known post office address, or electronically in2 accordance with § 15-6-5(d); (14)"Notifier," a person who is undertaking notice or proposing consent with regard to4 a matter concerning a trust; (15)"Power of appointment," a power defined by § 55-1-12; (16)"Proceeding," any judicial or nonjudicial trust proceeding, accounting, termination, modification, reformation, decanting, settlement, nonjudicial settlement, and any8 proceeding conducted pursuant to chapter 21-22 or title 29A which concerns a trust; (17)"Protected person," a person other than a minor for whom a guardian or conservator10 is appointed; (18)"Reasonably available," with respect to a person, that the person can be identified and12 located with the exercise of reasonable diligence; (19)"Representative," a person who may bind another person pursuant to § 55-18-9; (20)"Trust," an express inter vivos or testamentary trust; (21)"Uninterested beneficiary," a beneficiary other than an interested beneficiary.

Except as provided in subdivisions 55-18-9(5), (11) and (16) Without diminishing the powers of a trustee over the affairs of the trust or trust property, a trustee may not bind a19 beneficiary of the trustee's trust except as provided in subdivisions 55-18-9(5), (9), (11), and (16).21

The office of a trustee is vacated: (1)By his its death; or (2)By his its discharge; or (3)By its resignation.

An irrevocable trust may be modified or terminated upon the consent of all of the10 beneficiaries if continuance of the trust on its existing terms is not necessary to carry out a11 material purpose. Whether or not continuance of the trust on its existing terms is necessary to12 carry out a material purpose, an irrevocable trust may be modified or terminated upon the13 consent of the trustor and all of the beneficiaries. Upon termination of a trust under this section, the trustee shall distribute the trust property in accordance with the trustor's probable intention15 or in any other manner as agreed by all the beneficiaries. No person may be required to seek16 court affirmation of the trust's modification or termination made pursuant to this section. The17 provisions of chapter 55-18 apply to this section. Thirty days prior to the effective date of a modification or termination of a trust under this section, the trustor or beneficiaries shall provide notice in writing of the modification or termination, including a copy of the modification or termination, to all fiduciaries as defined in § 21-22-1(3) serving as of the date of the notice. The modification or termination shall be effective no earlier than thirty days after the notice is given, unless the notice is waived.

If the declaration of trust reserves a power of revocation to the trustor, the trust may be revoked if the power is strictly pursued. Unless the terms of a trust expressly reserve a power to the settlor to revoke or modify a trust, a trust shall be irrevocable.

24 - 6 -SB 55-4-51.1. A certificate of trust executed under § 55-4-51 may be recorded in the office of1 the register of deeds with respect to land described in the certificate of trust or any attachment2 to it. If it is recorded or filed in any county where real property is situated, or in the case of3 personal property, if it is presented to a third party, the certificate of trust serves to document4 the existence of the trust, the identity of the trustees, the powers of the trustees, and any5 limitations on those powers, and other matters the certificate of trust sets out, as though the full6 trust instrument had been recorded, filed, or presented. Until amended or revoked, or until the7 full trust instrument or will is recorded, filed, or presented, a certificate of trust is conclusive8 proof as to the matters contained in it and any party may rely upon the certificate, except a party9 dealing directly with the trustee or trustees who have who has actual knowledge of the facts to10 the contrary.