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1 1 Section 1. NEW SECTION. 633.699A MODIFICATION OR
1 2 TERMINATION OF TESTAMENTARY TRUST.
1 3 1. On petition by a trustee or beneficiary, and after
1 4 notice to all interested parties as determined by the court,
1 5 the court may modify the provisions of a testamentary trust or
1 6 may terminate a testamentary trust in whole or in part if the
1 7 continuation of the trust under its terms would defeat or
1 8 substantially impair the accomplishment of the purposes of the
1 9 trust, or if the purposes of the trust have been fulfilled, or
1 10 have become illegal or impossible to fulfill.
1 11 a. The court may order the trustee to do acts that are not
1 12 authorized or are forbidden by the will creating the trust, or
1 13 may order that the trustee be prohibited from performing acts
1 14 that are required by the terms of the trust.
1 15 b. The existence of a trust provision restraining transfer
1 16 of the beneficiary's interest does not prevent application of
1 17 this subsection.
1 18 c. If the court orders the termination of the trust,
1 19 disposition of all property shall be made according to the
1 20 will provisions that address the disposition of the property
1 21 in the event the trust is terminated. However, if the will
1 22 does not address the disposition of the property in the event
1 23 the trust is terminated, the court shall determine the
1 24 disposition of the trust property.
1 25 2. On petition by a trustee or beneficiary, and after
1 26 notice to all interested parties as determined by the court,
1 27 if the court determines that the fair market value of a
1 28 testamentary trust has become so low in relation to the cost
1 29 of administration that continuation of the trust under its
1 30 existing terms will defeat or substantially impair the
1 31 accomplishment of its purposes, the court may, in its
1 32 discretion, order termination of the trust, modification of
1 33 the trust, or appointment of a new trustee.
1 34 a. If the court orders the termination of the trust,
1 35 disposition of all property shall be made according to the
2 1 will provisions that address the disposition of the property
2 2 in the event the trust is terminated. However, if the will
2 3 does not address the disposition of the property in the event
2 4 the trust is terminated, the court shall determine the
2 5 disposition of the trust property.
2 6 b. The existence of a trust provision restraining transfer
2 7 of the beneficiary's interest does not prevent application of
2 8 this subsection.
2 9 3. In the case of a charitable testamentary trust, the
2 10 attorney general shall be considered an interested party under
2 11 this section. This section shall not be construed to limit
2 12 intervention by the attorney general according to section
2 13 633.303.
2 14 EXPLANATION
2 15 This bill adds a new section to the probate code pertaining
2 16 to modification or termination of trusts. The section
2 17 proposes that the court may modify or terminate a trust when
2 18 the enforcement of the terms of a trust is no longer
2 19 consistent with the purposes of the trust, or it is impossible
2 20 to continue the trust, or when the trust has become
2 21 uneconomical to administer.
2 22 LSB 3465HV 76
2 23 jls/jw/5
Text: HF02459 Text: HF02461 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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