Text: H08155                            Text: H08157
Text: H08100 - H08199                   Text: H Index
Bills and Amendments: General Index     Bill History: General Index

House Amendment 8156

Amendment Text

PAG LIN
  1  1    Amend House File 2518 as follows:
  1  2    #1.  Page 3, by inserting after line 33 the
  1  3 following:
  1  4    "Sec.    .  Section 633.1102, subsection 15, as
  1  5 enacted by 1999 Iowa Acts, chapter 125, section 2, is
  1  6 amended to read as follows:
  1  7    15.  "Term" or "terms", when used in relation to a
  1  8 trust, means the manifestation of the settlor's intent
  1  9 regarding a trust's provisions at the time of the
  1 10 trust's creation or amendment.  "Term" includes those
  1 11 concepts expressed directly in writing, as well as
  1 12 those inferred from constructional preferences or
  1 13 rules, or by other proof admissible under the rules of
  1 14 evidence.
  1 15    Sec.    .  Section 633.2106, subsections 1 and 2,
  1 16 as enacted by 1999 Iowa Acts, chapter 125, section 13,
  1 17 are amended to read as follows:
  1 18    1.  Where the owner of property gratuitously
  1 19 transfers the property and manifests in the trust
  1 20 instrument an intention that the transferee should
  1 21 hold the property in trust but the trust fails, the
  1 22 transferee holds the trust estate as a resulting trust
  1 23 for the transferor or the transferor's estate, unless
  1 24 all either of the following is true:
  1 25    a.  The transferor manifested in the trust
  1 26 instrument an intention that no resulting trust should
  1 27 arise.
  1 28    b.  The intended trust fails for illegality and the
  1 29 policy against unjust enrichment of the transferee is
  1 30 outweighed by the policy against giving relief to a
  1 31 person who has entered into an illegal transaction.
  1 32    2.  Where the owner of property gratuitously
  1 33 transfers the property subject to a trust which is
  1 34 properly declared and which has been fully performed
  1 35 without exhausting the trust estate, the trustee holds
  1 36 the surplus as a resulting trust for the transferor or
  1 37 the transferor's estate, unless the transferor
  1 38 manifested in the trust instrument an intention that
  1 39 no resulting trust of the surplus should arise.
  1 40    Sec.    .  Section 633.2201, as enacted by 1999
  1 41 Iowa Acts, chapter 125, section 15, is amended to read
  1 42 as follows:
  1 43    633.2201  TERMINATION OR MODIFICATION OF TRUST.
  1 44    1.  In addition to the methods specified in
  1 45 sections 633.2202 through 633.2205, a trust terminates
  1 46 when any of the following occurs:
  1 47    a.  The term of the trust expires.
  1 48    b.  The trust purpose is fulfilled.
  1 49    c.  The trust purpose becomes unlawful or
  1 50 impossible to fulfill.
  2  1    d.  The trust is revoked.
  2  2    2.  On termination of a trust, the trustee may
  2  3 exercise the powers necessary to wind up the affairs
  2  4 of the trust and distribute the trust property to
  2  5 those entitled to the trust property.
  2  6    3.  For purposes of sections 633.2202 through
  2  7 633.2205, a beneficiary is limited to a person that is
  2  8 an eligible recipient of income or principal, or would
  2  9 receive principal or income from the trust if it were
  2 10 terminated.
  2 11    Sec.    .  Section 633.2203, as enacted by 1999
  2 12 Iowa Acts, chapter 125, section 17, is amended to read
  2 13 as follows:
  2 14    633.2203  MODIFICATION OR TERMINATION OF
  2 15 IRREVOCABLE TRUST IF NO MATERIAL PURPOSE.
  2 16    1.  An irrevocable trust may be terminated or
  2 17 modified either by the court or upon with the consent
  2 18 of all of the beneficiaries if continuance of the
  2 19 trust on the same or different terms is not necessary
  2 20 to carry out a material purpose.
  2 21    2.  Upon petition to the court by the settlor,
  2 22 trustee, or other interested person, the court may set
  2 23 aside an improper termination or modification by the
  2 24 beneficiaries.
  2 25    3. 2.  Upon termination of the trust, the trustee
  2 26 court shall distribute order the distribution of trust
  2 27 property in accordance with the probable intention of
  2 28 the settlor or as agreed by the beneficiaries.
  2 29    4. 3.  For purposes of this section, the consent of
  2 30 a person who may bind a beneficiary is considered the
  2 31 consent of the beneficiary.
  2 32    Sec.    .  1999 Iowa Acts, chapter 125, is amended
  2 33 by adding the following new section:
  2 34    SEC. 110.  NEW SECTION.  633.2203A  MODIFICATION OF
  2 35 ADMINISTRATIVE PROVISIONS BY COURT FOR CHANGE OF
  2 36 CIRCUMSTANCES.
  2 37    On petition by a trustee or beneficiary, the court
  2 38 may modify the administrative provisions of the trust,
  2 39 if, owing to circumstances not known to the settlor
  2 40 and not anticipated by the settlor, the continuation
  2 41 of the trust under its terms would defeat or
  2 42 substantially impair the accomplishment of the
  2 43 purposes of the trust.  If necessary to carry out the
  2 44 purposes of the trust, the court may order the trustee
  2 45 to do acts that are not authorized or are forbidden by
  2 46 the trust instrument.
  2 47    Sec.    .  Section 633.2206, subsection 1, as
  2 48 enacted by 1999 Iowa Acts, chapter 125, section 20, is
  2 49 amended to read as follows:
  2 50    1.  A trustee, without approval of court, may
  3  1 combine two or more trusts with substantially similar
  3  2 beneficial interests unless the trust is a court
  3  3 reporting trust.
  3  4    Sec.    .  Section 633.2207, as enacted by 1999
  3  5 Iowa Acts, chapter 125, section 21, is amended to read
  3  6 as follows:
  3  7    633.2207  DIVISION OF TRUSTS.
  3  8    1.  Without approval of a court, a trustee may
  3  9 divide a trust into two or more separate trusts with
  3 10 substantially similar terms if the division will not
  3 11 defeat or substantially impair the accomplishment of
  3 12 the trust purposes or the rights of the beneficiaries
  3 13 unless the trust is a court reporting trust.
  3 14    2.  On petition by a trustee or beneficiary, the
  3 15 court may divide a trust into two or more separate
  3 16 trusts, whether or not their terms are similar, if the
  3 17 court determines that dividing the trust is in the
  3 18 best interest of the beneficiaries and will not defeat
  3 19 or substantially impair the accomplishment of the
  3 20 trust purposes or the rights of the beneficiaries.  To
  3 21 facilitate the division, the trustee may divide the
  3 22 trust assets in kind, by pro rata or non-pro rata
  3 23 division, or by any combination of the methods.
  3 24    Sec.    .  Section 633.3101, subsection 1, as
  3 25 enacted by 1999 Iowa Acts, chapter 125, section 25, is
  3 26 amended to read as follows:
  3 27    1.  The competency necessary to To create, revoke,
  3 28 or modify a revocable trust, that contains dispositive
  3 29 provisions upon the death of the settlor is the same
  3 30 as the competency required to make a will must be
  3 31 competent.  An aggrieved person shall have all causes
  3 32 of action and remedies available to the aggrieved
  3 33 person in attacking the creation, revocation, or
  3 34 modification of a revocable trust as one would if
  3 35 attacking the propriety of the execution of a will.
  3 36    Sec.    .  Section 633.3104, subsection 2, as
  3 37 enacted by 1999 Iowa Acts, chapter 125, section 28, is
  3 38 amended to read as follows:
  3 39    2.  Following the death of a settlor, the property
  3 40 of a revocable trust subject to the settlor's power of
  3 41 revocation at the time of death is subject to the
  3 42 claims of the settlor's creditors and costs of
  3 43 administration of the settlor's estate to the extent
  3 44 of the value of the property over which the settlor's
  3 45 settlor had a power of revocation and, if the
  3 46 settlor's estate is inadequate to satisfy those claims
  3 47 and costs.
  3 48    Sec.    .  Section 633.3107, subsection 1, as
  3 49 enacted by 1999 Iowa Acts, chapter 125, section 31, is
  3 50 amended to read as follows:
  4  1    1.  If, after executing a revocable trust, the
  4  2 settlor is divorced or the settlor's marriage is
  4  3 dissolved, all provisions in the trust in favor of the
  4  4 settlor's spouse including, but not limited to,
  4  5 dispositions, appointments of property, and
  4  6 nominations to serve in any fiduciary or
  4  7 representative capacity are revoked by divorce or
  4  8 dissolution of marriage.
  4  9    Sec.    .  Section 633.3108, as enacted by 1999
  4 10 Iowa Acts, chapter 125, section 32, is amended to read
  4 11 as follows:
  4 12    633.3108  LIMITATION ON CONTEST OF REVOCABLE TRUST.
  4 13    Unless notice is given as provided in section
  4 14 633.3109, the following provisions shall apply:
  4 15    1.  Unless previously barred by adjudication,
  4 16 consent, or other limitation, a proceeding to contest
  4 17 the validity of a revocable trust must be brought no
  4 18 later than one year following the death of the
  4 19 settlor.
  4 20    2.  Unless the trustee is a party to a pending
  4 21 proceeding contesting its validity, six months
  4 22 following the death of the settlor, the trustee of a
  4 23 revocable trust may assume the trust's validity and
  4 24 proceed to distribute the trust property in accordance
  4 25 with the terms of the trust, without liability for so
  4 26 doing.  Liability for an improper distribution in such
  4 27 a case is solely on the beneficiaries.
  4 28    3.  If notice is given pursuant to section
  4 29 633.3109, the six month period in subsection 2 is
  4 30 ineffectual and the applicable time period shall be
  4 31 determined by section 633.3109.
  4 32    Sec.    .  Section 633.3109, as enacted by 1999
  4 33 Iowa Acts, chapter 125, section 33, is amended to read
  4 34 as follows:
  4 35    633.3109  NOTICE TO CREDITORS, HEIRS, SPOUSE, AND
  4 36 BENEFICIARIES.
  4 37    1.  As used in this section, "intestate heir" means
  4 38 only such person as would, in an intestate estate, be
  4 39 entitled to a share under section 633.219, subsection
  4 40 1, 2, or 3, or 4.
  4 41    2.  A creditor of a deceased settlor of a revocable
  4 42 trust must bring suit to enforce its claim against the
  4 43 assets of the decedent's trust within one year of the
  4 44 decedent's death or be forever barred from collection
  4 45 against the trust assets.  If a probate administration
  4 46 is commenced for the decedent and notice is properly
  4 47 given pursuant to section 633.230 or 633.304, a
  4 48 creditor's rights shall be determined under those
  4 49 sections and section 633.3104.
  4 50    3.  If no notice is given to creditors and heirs
  5  1 pursuant to subsection 1 2, a creditor's rights may be
  5  2 established or terminated if the trustee gives notice
  5  3 as follows:
  5  4    a.  The trustee shall publish a notice once each
  5  5 week for two consecutive weeks in a daily or weekly
  5  6 newspaper of general circulation published in the
  5  7 county in which the settlor was domiciled decedent was
  5  8 a resident at the time of death, and in any county of
  5  9 which the decedent was a nonresident but in which some
  5 10 real estate of the trust is located.  If the decedent
  5 11 was not a resident of Iowa, but the principal place of
  5 12 administration is in Iowa, the trustee shall publish
  5 13 notice in the county that is the principal place of
  5 14 administration pursuant to section 633.6102.
  5 15    b.  If the decedent was a nonresident of the county
  5 16 in which some real estate of the trust is located, and
  5 17 at any time during the pendency of the trust
  5 18 administration the trustee has knowledge of the name
  5 19 and address of a person believed to own or possess a
  5 20 claim which will not, or may not, be paid or otherwise
  5 21 satisfied during administration, the trustee shall
  5 22 provide a notice by ordinary mail to each such
  5 23 claimant at the claimant's last known address.
  5 24    c.  As soon as practicable, the trustee shall give
  5 25 a notice by ordinary mail to the surviving spouse, the
  5 26 intestate heirs of the decedent, and each beneficiary
  5 27 under the trust whose identities are reasonably
  5 28 ascertainable, at such person's last known addresses.
  5 29    d.  The notice in paragraphs "a", "b", and "c"
  5 30 shall include notification of the decedent's death,
  5 31 and the fact that any action to contest the validity
  5 32 of the trust must be brought within the later to occur
  5 33 of sixty days from the date of the second publication
  5 34 of the notice made pursuant to paragraph "a" or thirty
  5 35 days from the date of mailing of the notice pursuant
  5 36 to paragraph "b" or "c".  A person who does not make a
  5 37 claim within the appropriate period is forever barred.
  5 38    e.  The trustee shall give notice to debtors to
  5 39 make payment, and to creditors having claims against
  5 40 the trust assets to mail proof of their claim to the
  5 41 trustee via certified mail, return receipt requested,
  5 42 within the later to occur of sixty days from the
  5 43 second publication of the notice or thirty days from
  5 44 the date of mailing of the notice, or thereafter be
  5 45 forever barred.
  5 46    4.  The notice described in subsection 3 shall be
  5 47 substantially in the following form:
  5 48    To all persons regarding _______________, deceased,
  5 49 who died on or about _____________________,
  5 50 (year)____.  You are hereby notified that ____________
  6  1 is the trustee of the __________ Trust.  At this time,
  6  2 no probate administration is contemplated with regard
  6  3 to the above-referenced decedent's estate.
  6  4    Any action to contest the validity of the trust
  6  5 must be brought in the District Court of
  6  6 ________________ County, Iowa, within the later to
  6  7 occur of sixty days from the date of second
  6  8 publication of this notice, or thirty days from the
  6  9 date of mailing this notice to all heirs of the
  6 10 decedent, spouse of the decedent, and beneficiaries
  6 11 under the trust whose identities are reasonably
  6 12 ascertainable.  Any claim not filed within this period
  6 13 shall be forever barred.
  6 14    Notice is further given that all persons indebted
  6 15 to the decedent or to the trust are requested to make
  6 16 immediate payment to the undersigned trustee.
  6 17 Creditors having claims against the trust must mail
  6 18 them to the trustee at the address listed below via
  6 19 certified mail, return receipt requested.  Unless
  6 20 creditor claims are mailed by the later to occur of
  6 21 sixty days from the second publication of this notice
  6 22 or thirty days from the date of mailing this notice, a
  6 23 claim shall be forever barred, unless otherwise
  6 24 allowed or paid.  
  6 25    Dated this _______ day of ______________, (year)____.
  6 26 _________________________________________ Trust
  6 27                            ____________________________
  6 28                            Trustee
  6 29                            Address: ___________________
  6 30                                     ___________________
  6 31    Date of second publication ______ day of ____________,
  6 32 (year) ____.
  6 33    5.  The claimant either must receive satisfaction
  6 34 of its claim within sixty days of mailing its claim to
  6 35 the trustee, or must file suit against the trust to
  6 36 enforce collection of the creditor's claim within
  6 37 sixty days of mailing its claim to the trustee.  The
  6 38 trustee and creditor may agree to extend the
  6 39 limitations period for filing an action to enforce the
  6 40 claim.  If the claimant fails to properly file its
  6 41 claim within the established time period or bring an
  6 42 action to enforce its claim within the established
  6 43 time period, the creditor's claim shall be forever
  6 44 barred.
  6 45    Sec.    .  Section 633.3111, subsection 2, as
  6 46 enacted by 1999 Iowa Acts, chapter 125, section 35, is
  6 47 amended to read as follows:
  6 48    2.  A trustee shall be entitled to indemnification
  6 49 from the beneficiaries for all amounts paid to
  6 50 creditors under this section, to the extent of
  7  1 distributions made.
  7  2    Sec.    .  Section 633.4101, as enacted by 1999
  7  3 Iowa Acts, chapter 125, section 36, is amended to read
  7  4 as follows:
  7  5    633.4101  ACCEPTANCE OR REJECTION OF TRUST BY
  7  6 DECLINATION TO SERVE AS TRUSTEE.
  7  7    1.  A person named as trustee accepts the office of
  7  8 trustee by doing one of the following:
  7  9    a.  Signing the trust instrument, or signing a
  7 10 separate written acceptance.
  7 11    b.  Except as provided in subsection 3, knowingly
  7 12 accepting delivery of the trust property or exercising
  7 13 powers or performing duties as trustee.
  7 14    2.  A person named as trustee who has not yet
  7 15 accepted the office of trustee may in writing reject
  7 16 the trust decline to serve as trustee.
  7 17    3.  If there is an immediate risk of damage to the
  7 18 trust property, the person named as trustee may act to
  7 19 preserve the trust property without accepting the
  7 20 office of trustee, if within a reasonable time after
  7 21 acting, the person delivers a written rejection of the
  7 22 trust declination to serve to the settlor, or if the
  7 23 settlor is dead or lacks capacity, to the
  7 24 beneficiaries eligible to receive income or principal
  7 25 distributions from the trust.
  7 26    Sec.    .  Section 633.4104, subsection 1, as
  7 27 enacted by 1999 Iowa Acts, chapter 125, section 39, is
  7 28 amended to read as follows:
  7 29    1.  The person named as trustee rejects the trust
  7 30 declines to serve as trustee.
  7 31    Sec.    .  Section 633.4105, as enacted by 1999
  7 32 Iowa Acts, chapter 125, section 40, is amended to read
  7 33 as follows:
  7 34    633.4105  FILLING VACANCY.
  7 35    1.  For purposes of this section, "adult
  7 36 beneficiaries" shall not include either of the
  7 37 following:
  7 38    a.  Beneficiaries who are not competent and are not
  7 39 represented by a guardian, conservator, or agent.
  7 40    b.  Beneficiaries who are not entitled or eligible
  7 41 to receive trust income or a distribution of principal
  7 42 were the trust to terminate at the time the agreement
  7 43 is made.
  7 44    2. 1.  A trustee must be appointed to fill a
  7 45 vacancy in the office of the trustee only if the trust
  7 46 has no trustee or the terms of the trust require a
  7 47 vacancy in the office of cotrustee to be filled.
  7 48    3. 2.  A vacancy in the office of trustee shall be
  7 49 filled according to the following:
  7 50    a.  By the person named in or nominated pursuant to
  8  1 the method specified by the terms of the trust.
  8  2    b.  If the terms of the trust do not name a person
  8  3 or specify a method for filling the vacancy, or if the
  8  4 person named or nominated pursuant to the method
  8  5 specified fails to accept, one of the following
  8  6 methods shall be used:
  8  7    (1)  By a trust company designated by agreement of
  8  8 the adult beneficiaries specified in subsection 1.
  8  9    (2) (1)  By majority vote of all adult
  8 10 beneficiaries and the parent or legal guardian
  8 11 representative of any minor or incompetent
  8 12 beneficiary, as defined by section 633.6303.
  8 13    (3) (2)  By a person appointed by the court on
  8 14 petition of an interested person or of a person named
  8 15 as trustee by the terms of the trust.  The court, in
  8 16 selecting a trustee, shall consider any nomination
  8 17 made by the adult beneficiaries and representatives.
  8 18    3.  Beneficiaries entitled to vote are those who
  8 19 are currently entitled or eligible to receive trust
  8 20 income or a distribution of principal if the trust
  8 21 were to terminate at the time of the vote.
  8 22    Sec.    .  Section 633.4107, subsection 1, as
  8 23 enacted by 1999 Iowa Acts, chapter 125, section 42, is
  8 24 amended to read as follows:
  8 25    1.  A trustee may be removed in accordance with the
  8 26 terms of the trust, by the court on its own motion, or
  8 27 on petition of a settlor, cotrustee, or beneficiary
  8 28 under section 633.6202.
  8 29    Sec.    .  Section 633.4111, subsection 2,
  8 30 paragraph b, as enacted by 1999 Iowa Acts, chapter
  8 31 125, section 46, is amended to read as follows:
  8 32    b.  Each beneficiary who was given the last
  8 33 preceding account accounting.
  8 34    Sec.    .  Section 633.4504 as enacted by 1999 Iowa
  8 35 Acts, chapter 125, section 76, is amended to read as
  8 36 follows:
  8 37    633.4504  LIMITATION OF ACTION AGAINST TRUSTEE
  8 38 FOLLOWING FINAL ACCOUNT.
  8 39    1.  Unless previously barred by adjudication,
  8 40 consent, or other limitation, a claim against a
  8 41 trustee for breach of trust is barred as to a
  8 42 beneficiary who has received a final account or other
  8 43 report adequately disclosing the existence of the
  8 44 claim, unless a proceeding to assert the claim is
  8 45 commenced within one year after the later earlier of
  8 46 the receipt of the account accounting or report or of
  8 47 the termination of the trust relationship between the
  8 48 trustee and beneficiary.  An account or report
  8 49 adequately discloses the existence of a claim if it
  8 50 provides sufficient information so that the
  9  1 beneficiary knows of the claim or reasonably should
  9  2 have inquired into its existence.
  9  3    2.  For the purpose of subsection 1, a beneficiary
  9  4 is deemed to have received an account or report in the
  9  5 following instances:
  9  6    a.  In the case of an adult who is reasonably
  9  7 capable of understanding the account or report, if it
  9  8 is received by the adult personally.
  9  9    b.  In the case of an adult who is not reasonably
  9 10 capable of understanding the account or report, if it
  9 11 is received by the adult's legal representative,
  9 12 including a guardian ad litem or other person
  9 13 appointed for this purpose.
  9 14    c.  In the case of a minor, if it is received by
  9 15 the minor's guardian or conservator or, if the minor
  9 16 does not have a guardian or conservator, if it is
  9 17 received by a parent of the minor who does not have a
  9 18 conflict of interest.
  9 19    3.  Any claim for breach of trust against a trustee
  9 20 who has presented a final report to a beneficiary more
  9 21 than one year prior to the effective date of this Act
  9 22 shall be time barred unless some exception stated in
  9 23 this section applies which tolls the statute.  Any
  9 24 claim arising under this section within one year of
  9 25 the effective date of the Act shall be time barred
  9 26 after one year unless an exception applies to toll the
  9 27 statute.
  9 28    Sec.    .  1999 Iowa Acts, chapter 125, section 69
  9 29 is repealed."
  9 30    #2.  Title page, line 1, by inserting after the
  9 31 word "probate" the following:  "and trust".
  9 32    #3.  Title page, line 4, by striking the words "and
  9 33 powers of attorney" and inserting the following:
  9 34 "powers of attorney, and making certain amendments to
  9 35 the Iowa trust code".  
  9 36 
  9 37 
  9 38                               
  9 39 LARSON of Linn
  9 40 
  9 41 
  9 42                               
  9 43 KREIMAN of Davis
  9 44 HF 2518.302 78
  9 45 jj/cf
     

Text: H08155                            Text: H08157
Text: H08100 - H08199                   Text: H Index
Bills and Amendments: General Index     Bill History: General Index

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