Text: HSB00671                          Text: HSB00673
Text: HSB00600 - HSB00699               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index



House Study Bill 672

Bill Text

PAG LIN
  1  1    Section 1.  Section 633.1102, Code 2001, is amended by
  1  2 adding the following new subsection:
  1  3    NEW SUBSECTION.  12A.  "Qualified beneficiary" means a
  1  4 beneficiary who, on the date the beneficiary's qualification
  1  5 is determined, is any of the following:
  1  6    a.  Eligible to receive distributions of income or
  1  7 principal from the trust.
  1  8    b.  Would receive property from the trust upon immediate
  1  9 termination of the trust.
  1 10    Sec. 2.  Section 633.2102, Code 2001, is amended to read as
  1 11 follows:
  1 12    633.2102  REQUIREMENTS FOR VALIDITY.
  1 13    1.  A trust is created only if all of the following
  1 14 elements are satisfied:
  1 15    a.  The settlor was competent and indicated an intention to
  1 16 create a trust.
  1 17    b.  The same person is not the sole trustee and sole
  1 18 beneficiary.
  1 19    c.  Unless the trust is a charitable trust, an honorary
  1 20 trust, or a trust for the care of an animal, the trust has a
  1 21 definite beneficiary or a beneficiary who will be definitely
  1 22 ascertained within the period of the applicable rule against
  1 23 perpetuities.  The trust has a definite beneficiary or a
  1 24 beneficiary who will be definitely ascertained within the
  1 25 period of the applicable rule against perpetuities, unless the
  1 26 trust is a charitable trust, an honorary trust, or a trust for
  1 27 pets.
  1 28    2.  A definite or definitely ascertainable beneficiary
  1 29 includes a beneficiary or class of beneficiaries designated
  1 30 under a power to select the beneficiaries granted by the terms
  1 31 of the trust to the trustee or another person.  If the power
  1 32 is not exercised within a reasonable time, the power fails and
  1 33 the property passes to the person or persons who would have
  1 34 taken the property had the power not been conferred.
  1 35    Sec. 3.  Section 633.2201, subsection 3, Code 2001, is
  2  1 amended by striking the subsection.
  2  2    Sec. 4.  Section 633.2205, subsection 2, Code 2001, is
  2  3 amended to read as follows:
  2  4    2.  Upon termination of a trust under this section, the
  2  5 trustee shall distribute the trust property in accordance with
  2  6 the probable intention of the settlor under the circumstances.
  2  7 Extrinsic evidence is admissible for the purpose of
  2  8 ascertaining the probable intention of the settlor.
  2  9    Sec. 5.  Section 633.2206, subsection 1, Code 2001, is
  2 10 amended by striking the subsection and inserting in lieu
  2 11 thereof the following:
  2 12    1.  The court may reform the terms of the trust, even if
  2 13 unambiguous, to conform to the settlor's intent if it is
  2 14 proved by clear and convincing evidence that the settlor's
  2 15 intent and the terms of the trust were affected by a mistake
  2 16 of fact or law whether expressed or induced.
  2 17    Sec. 6.  Section 633.4105, subsection 2, paragraph b,
  2 18 subparagraphs (1) and (2), Code 2001, are amended to read as
  2 19 follows:
  2 20    (1)  By majority vote of all adult qualified beneficiaries,
  2 21 who are adults, and the representative of any minor or
  2 22 incompetent qualified beneficiary, as defined by section
  2 23 633.6303.
  2 24    (2)  By a person appointed by the court on petition of an
  2 25 interested person or of a person named as trustee by the terms
  2 26 of the trust.  The court, in selecting a trustee, shall
  2 27 consider any nomination made by the adult beneficiaries and
  2 28 representatives of any minor and incompetent beneficiaries.
  2 29    Sec. 7.  Section 633.4105, subsection 3, Code 2001, is
  2 30 amended by striking the subsection.
  2 31    Sec. 8.  Section 633.4106, subsection 1, paragraph c, Code
  2 32 2001, is amended to read as follows:
  2 33    c.  With the consent of the adult qualified beneficiaries
  2 34 as defined in section 633.4105, subsection 1, who are adults
  2 35 if the trust is irrevocable or the holder of the power to
  3  1 revoke lacks competency or is not represented by a guardian,
  3  2 conservator, or agent.
  3  3    Sec. 9.  Section 633.4111, subsection 2, paragraph a, Code
  3  4 2001, is amended to read as follows:
  3  5    a.  Each qualified beneficiary who is entitled to an
  3  6 accounting under section 633.4213, subsection 6.
  3  7    Sec. 10.  Section 633.4202, subsections 2, 3, and 5, Code
  3  8 2001, are amended to read as follows:
  3  9    2.  Any transaction involving the trust which is affected
  3 10 by a substantial material conflict between the trustee's
  3 11 fiduciary and personal interests is voidable by a beneficiary
  3 12 affected by the transaction unless one of the following
  3 13 applies:
  3 14    a.  The transaction was expressly authorized by the terms
  3 15 of the trust.
  3 16    b.  The beneficiary consented to or affirmed the
  3 17 transaction or released the trustee from liability as provided
  3 18 in section 633.4506.
  3 19    c.  The transaction is approved by the court after notice
  3 20 to interested persons.
  3 21    3.  A transaction affected by a substantial material
  3 22 conflict between personal and fiduciary interests includes any
  3 23 sale, encumbrance, or other transaction involving the trust
  3 24 property entered into by the trustee, the spouse, descendant,
  3 25 agent, or attorney of a trustee, or corporation or other
  3 26 enterprise in which the trustee has a substantial beneficial
  3 27 interest.
  3 28    5.  This section does not apply to any of the following:
  3 29    a.  An agreement between a trustee and a beneficiary
  3 30 relating to the appointment of the trustee.
  3 31    b.  The payment of compensation to the trustee, whether by
  3 32 agreement, the terms of the trust, or this trust code.
  3 33    c.  A transaction between a trust and another trust,
  3 34 decedent's or conservatorship estate of which the trustee is a
  3 35 fiduciary if the transaction is fair to the beneficiaries of
  4  1 the trust.
  4  2    d.  An investment by a trustee in securities of an
  4  3 investment company or investment trust to which the trustee,
  4  4 or its affiliate, provides services in a capacity other than
  4  5 as trustee if the investment complies with the prudent
  4  6 investor rule.  The trustee may be compensated by the
  4  7 investment company or investment trust for providing services
  4  8 from fees charged to the trust if the trustee provides annual
  4  9 notice and a copy of the trustee's annual report, including
  4 10 the rate and method by which the trustee's compensation was
  4 11 determined, to the persons specified in section 633.4213.
  4 12    e.  A deposit of trust money in a regulated financial
  4 13 service institution operated by the trustee.
  4 14    Sec. 11.  Section 633.4211, Code 2001, is amended to read
  4 15 as follows:
  4 16    633.4211  ENFORCEMENT AND DEFENSE OF CLAIMS AND ACTIONS.
  4 17    A trustee shall take reasonable steps to enforce claims
  4 18 that are part of the trust property of the trust, to defend
  4 19 claims against the trust, and to defend against actions that
  4 20 may result in a loss to the trust.
  4 21    Sec. 12.  Section 633.4213, Code Supplement 2001, is
  4 22 amended by striking the section and inserting in lieu thereof
  4 23 the following:
  4 24    633.4213  DUTY TO INFORM AND ACCOUNT.
  4 25    A trustee shall keep the qualified beneficiaries of the
  4 26 trust reasonably informed about the administration of the
  4 27 trust and the material facts necessary to protect the
  4 28 beneficiaries' interests.
  4 29    1.  The trustee shall inform each qualified beneficiary of
  4 30 their right to receive an annual accounting and a copy of the
  4 31 trust instrument.  The trustee shall also inform each
  4 32 qualified beneficiary about the process necessary to obtain an
  4 33 annual accounting or a copy of the trust instrument, if not
  4 34 provided.  The trustee shall further inform the beneficiary
  4 35 whether the beneficiary will, or will not, receive an annual
  5  1 accounting if the beneficiary fails to take any action.  If a
  5  2 beneficiary has previously been provided the notice required
  5  3 by this section, additional notice shall not be required due
  5  4 to a change of trustees or a change in the composition of the
  5  5 qualified beneficiaries.
  5  6    2.  The trustee shall provide the notice required in
  5  7 subsection 1 to each qualified beneficiary within a reasonable
  5  8 time following any of the following events:
  5  9    a.  The commencement of the trust administration.
  5 10    b.  The trustee becoming aware that there is a new
  5 11 qualified beneficiary or a representative of any minor or
  5 12 incompetent beneficiary.
  5 13    c.  The trust becoming irrevocable.
  5 14    d.  The time that no person, except the trustee, has the
  5 15 right to change the beneficiaries of the trust.
  5 16    3.  A trustee of an irrevocable trust shall provide
  5 17 annually to each adult beneficiary and the representative of
  5 18 any minor or incompetent beneficiary who may receive a
  5 19 distribution of income or principal during the accounting time
  5 20 period, an accounting, unless an accounting has been waived
  5 21 specifically for a particular accounting time period.
  5 22    4.  This section does not apply to any trust where the
  5 23 grantor has retained the right, or has transferred the right,
  5 24 to change the beneficiaries of the trust.
  5 25    5.  The only consequence to a trustee's failure to provide
  5 26 a required accounting or notice is that the trustee shall not
  5 27 be able to rely upon the statute of limitations under section
  5 28 633.4504.  If the trustee has refused, after a reasonable
  5 29 request, to provide an accounting to a qualified beneficiary,
  5 30 the court may assess costs, including attorney fees, against
  5 31 the trustee personally.
  5 32    6.  The format and content of an accounting required by
  5 33 this section shall be within the discretion of the trustee, if
  5 34 sufficient to reasonably inform the beneficiary of the
  5 35 condition and activities of the trust during the accounting
  6  1 period.
  6  2    7.  This section applies to any trust created on or after
  6  3 July 1, 2002, unless the trustor has specifically waived the
  6  4 requirements of this section in the trust instrument.  Waiver
  6  5 of this section shall not bar any beneficiary's common-law
  6  6 right to an accounting, and shall not provide any immunity to
  6  7 a trustee, acting under the terms of the trust, for liability
  6  8 to any beneficiary who discovers facts giving rise to a cause
  6  9 of action against the trustee.
  6 10    Sec. 13.  Section 633.4214, Code 2001, is amended by adding
  6 11 the following new subsections:
  6 12    NEW SUBSECTION.  3.  Subject to paragraph "c" and unless
  6 13 the terms of the trust expressly indicate that a rule in this
  6 14 subsection does not apply, all of the following shall apply:
  6 15    a.  A person other than a settlor who is a beneficiary and
  6 16 trustee of a trust that confers on the trustee the power to
  6 17 make discretionary distributions to or for the trustee's
  6 18 personal benefit may exercise the power only in accordance
  6 19 with an ascertainable standard relating to the trustee's
  6 20 individual health, education, support, or maintenance within
  6 21 the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the
  6 22 Internal Revenue Code of 1986.
  6 23    b.  A trustee shall not exercise a power to make
  6 24 discretionary distributions to satisfy a legal obligation of
  6 25 support that the trustee personally owes to another person.
  6 26    c.  This subsection does not apply to the following:
  6 27    (1)  A power held by the settlor's spouse who is the
  6 28 trustee of a trust for which a marital deduction, as defined
  6 29 in section 2056(b)(5) or 2523(e) of the Internal Revenue Code
  6 30 of 1986, that was previously allowed.
  6 31    (2)  A trust that may be revoked or amended by the settlor.
  6 32    (3)  A trust, if contributions to the trust which qualify
  6 33 for an annual exclusion under section 2503(c) of the Internal
  6 34 Revenue Code of 1986.
  6 35    NEW SUBSECTION.  4.  A power whose exercise is limited or
  7  1 prohibited by subsection 3 may be exercised by a majority of
  7  2 the remaining trustees whose exercise of the power is not so
  7  3 limited or prohibited.  If the power of all trustees is so
  7  4 limited or prohibited, the court may appoint a special
  7  5 fiduciary with authority to exercise the power.
  7  6    Sec. 14.  Section 633.4402, subsections 3, 6, 16, 25, and
  7  7 27, Code 2001, are amended to read as follows:
  7  8    3.  Continue or participate in the operation of a business
  7  9 or other enterprise that is part of the trust property and
  7 10 affect an incorporation, dissolution, or other change in the
  7 11 form of the organization of the business or enterprise.  With
  7 12 respect to an interest in a proprietorship, partnership,
  7 13 limited liability company, business trust, corporation, or
  7 14 other form of business or enterprise, continue or participate
  7 15 in the operation of a business or other enterprise that is
  7 16 part of the trust and take any action that may be taken by
  7 17 shareholders, members, or property owners, including merging,
  7 18 dissolving, or otherwise changing the form of a business
  7 19 organization and contributing additional capital.
  7 20    6.  Manage, control, divide, develop, improve, exchange,
  7 21 partition, change the character of, or abandon trust property.
  7 22 Consent, directly or through a committee or other agent, to
  7 23 the reorganization, consolidation, merger, dissolution, or
  7 24 liquidation of a corporation or other business enterprise, and
  7 25 participate in voting trusts, pooling arrangements, and
  7 26 foreclosures, and in connection therewith, deposit securities
  7 27 with and transfer title and delegate discretion to any
  7 28 protective or other committee as the trustee considers
  7 29 advisable.
  7 30    16.  Consent, directly or through a committee or other
  7 31 agent, to the reorganization, consolidation, merger,
  7 32 dissolution, or liquidation of a corporation or other business
  7 33 enterprise, and participate in voting trusts, pooling
  7 34 arrangements, and foreclosures, and in connection therewith,
  7 35 deposit securities with and transfer title and delegate
  8  1 discretion to any protective or other committee as the trustee
  8  2 considers advisable.  Select a mode of payment under any
  8  3 employee benefit or retirement plan, annuity, or life
  8  4 insurance payable to the trustee, and exercise rights
  8  5 thereunder, including the right to indemnification for
  8  6 expenses and against liabilities, and take appropriate action
  8  7 to collect proceeds.
  8  8    25.  Make a distribution of property and money in divided
  8  9 or undivided interests, pro rata or non-pro rata, and adjust
  8 10 resulting differences in valuation.  Upon distribution of
  8 11 trust property or the division or termination of a trust, make
  8 12 distribution in divided or undivided interests, allocate
  8 13 particular assets in proportionate or disproportionate shares,
  8 14 value the trust property for those purposes, and adjust for
  8 15 resulting differences in valuation.
  8 16    27.  Expend trust funds to inspect or investigate property
  8 17 that the trustee has been asked to hold, or property owned or
  8 18 operated by an entity in which the trustee holds or has been
  8 19 asked to hold an interest for the purpose of determining the
  8 20 application of environmental law with respect to the property,
  8 21 and take action to prevent, abate, or otherwise remedy any
  8 22 actual or potential violation of any environmental law
  8 23 affecting property held directly or indirectly by the trustee.
  8 24 With respect to any actual or potential violation of any
  8 25 environmental law affecting property held directly or
  8 26 indirectly by the trustee, a trustee shall do all of the
  8 27 following:
  8 28    a.  Inspect or investigate property the trustee holds or
  8 29 has been asked to hold or property owned or operated by an
  8 30 organization in which the trustee holds an interest in or has
  8 31 been asked to hold an interest in, and expend trust funds
  8 32 therefore, for the purpose of determining any potential
  8 33 environmental law violations with respect to the property.
  8 34    b.  Take action to prevent, abate, or otherwise remedy any
  8 35 actual or potential violation of any environmental law
  9  1 affecting property held directly or indirectly by the trustee,
  9  2 whether taken before or after the assertion of a claim or the
  9  3 initiation of governmental enforcement.
  9  4    c.  Decline to accept property into trust or disclaim any
  9  5 power with respect to property that is or may be burdened with
  9  6 liability for violation of any environmental law.
  9  7    d.  Negotiate claims against the trust which may be
  9  8 asserted for an alleged violation of environmental law.
  9  9    e.  Pay the expense of any inspection, review, abatement,
  9 10 or remedial action to comply with environmental law.
  9 11    Sec. 15.  Section 633.4402, Code 2001, is amended by adding
  9 12 the following new subsections:
  9 13    NEW SUBSECTION.  31.  Resolve a dispute concerning the
  9 14 interpretation of the trust or its administration by
  9 15 mediation, arbitration, or other procedure for alternative
  9 16 dispute resolution.
  9 17    NEW SUBSECTION.  32.  Upon termination of the trust,
  9 18 exercise the powers necessary to conclude the administration
  9 19 of the trust and distribute the trust property to the person
  9 20 or persons entitled to the trust property.
  9 21    Sec. 16.  Section 633.4502, Code 2001, is amended by adding
  9 22 the following new subsection:
  9 23    NEW SUBSECTION.  8.  Order any other appropriate relief.
  9 24    Sec. 17.  Section 633.4506, subsection 2, Code 2001, is
  9 25 amended to read as follows:
  9 26    2.  Notwithstanding the provisions of subsection 1, a A
  9 27 beneficiary may hold a trustee liable for breach of trust
  9 28 under either of the following circumstances despite a consent,
  9 29 release, or affirmance by the beneficiary, if, at the time of
  9 30 the consent, release, or affirmance, all of the following
  9 31 applied:
  9 32    a.  The beneficiary at the time of the consent, release, or
  9 33 affirmance did not know of the beneficiary's rights and of the
  9 34 material facts the trustee knew or should have known and the
  9 35 trustee did not reasonably believe that the beneficiary knew
 10  1 did not know of the beneficiary's rights.
 10  2    b.  The consent, release, or affirmance of the beneficiary
 10  3 was induced by improper conduct of the trustee beneficiary did
 10  4 not know the material facts known to the trustee or which the
 10  5 trustee should have known.
 10  6    c.  The trustee did not reasonably believe that the
 10  7 beneficiary knew the beneficiary's rights or that the
 10  8 beneficiary knew material facts known to the trustee or which
 10  9 the trustee should have known.
 10 10    Sec. 18.  Section 633.4506, Code 2001, is amended by adding
 10 11 the following new subsection:
 10 12    NEW SUBSECTION.  3.  A beneficiary may hold a trustee
 10 13 liable for breach of a trust, despite a consent, release, or
 10 14 affirmance by the beneficiary, if the consent, release, or
 10 15 affirmance was induced by improper conduct of the trustee.
 10 16    Sec. 19.  Section 633.4601, subsection 2, Code 2001, is
 10 17 amended to read as follows:
 10 18    2.  A trustee is personally liable for obligations arising
 10 19 from ownership or control of trust property or, including
 10 20 liability for environmental law violations, and for torts
 10 21 committed in the course of administering a trust only if the
 10 22 trustee is personally at fault.
 10 23    Sec. 20.  Section 633.6101, Code 2001, is amended by
 10 24 striking the section and inserting in lieu thereof the
 10 25 following:
 10 26    633.6101  SUBJECT MATTER JURISDICTION.
 10 27    The district court has exclusive jurisdiction of
 10 28 proceedings concerning the internal affairs of a trust and of
 10 29 actions and proceedings to determine the existence of a trust,
 10 30 actions and proceedings by or against creditors or debtors of
 10 31 a trust, and other actions and proceedings involving a trust
 10 32 and third persons.
 10 33    Sec. 21.  Section 633.6105, Code 2001, is amended by
 10 34 striking the section and inserting in lieu thereof the
 10 35 following:
 11  1    633.6105  TRANSFER OF JURISDICTION.
 11  2    1.  The court may transfer the place of administration of a
 11  3 trust to or from this state or transfer some or all of the
 11  4 trust property to a trustee in or outside this state if it
 11  5 finds that the transfer of the trust property to a trustee in
 11  6 this or another jurisdiction, or the transfer of the place of
 11  7 administration of a trust to this or another jurisdiction,
 11  8 will promote the best interests of the trust and those
 11  9 interested in it, taking into account the economical and
 11 10 convenient administration of the trust and the views of the
 11 11 qualified beneficiaries.
 11 12    2.  A new trustee to whom the trust property is to be
 11 13 transferred shall be qualified, willing, and able to
 11 14 administer the trust or trust property under the terms of the
 11 15 trust.
 11 16    3.  If the trust or any portion of the trust property is
 11 17 transferred to another jurisdiction and if approval of the
 11 18 transfer by the other court is required under the law of the
 11 19 other jurisdiction, the proper court in the other jurisdiction
 11 20 must have approved the transfer in order for the transfer to
 11 21 be effective.
 11 22    4.  If a transfer is ordered, the court may direct the
 11 23 manner of transfer and impose terms and conditions as may be
 11 24 just, including a requirement for the substitution of a
 11 25 successor trustee in any pending litigation in this state.  A
 11 26 delivery of property in accordance with the order of the court
 11 27 is a full discharge of the trustee with respect to all
 11 28 property specified in the order.
 11 29    5.  If the court grants a petition to transfer a trust or
 11 30 trust property to this state, the court shall require the
 11 31 trustee to give a bond, if necessary under the law of the
 11 32 other jurisdiction or of this state, and may require bond as
 11 33 provided in section 633.4102.
 11 34    Sec. 22.  Section 633.6301, Code 2001, is amended by adding
 11 35 the following new subsections:
 12  1    NEW SUBSECTION.  4.  Notice to a person who may represent
 12  2 and bind another person under this chapter has the same effect
 12  3 as if notice were given directly to the person represented.
 12  4    NEW SUBSECTION.  5.  The consent of a person who may
 12  5 represent and bind another person under this chapter is
 12  6 binding on the person represented unless the person
 12  7 represented objects to the representation before the consent
 12  8 would otherwise have become effective.
 12  9    Sec. 23.  NEW SECTION.  633.7101  DIVISION PREVAILS.
 12 10    Notwithstanding any Code provision to the contrary, the
 12 11 provisions of this Division XX shall prevail over any other
 12 12 applicable Code provision.  
 12 13                           EXPLANATION
 12 14    This bill provides for a number of amendments to the Iowa
 12 15 trust code.
 12 16    The bill defines "qualified beneficiary" to mean any
 12 17 beneficiary who, on the date the beneficiary's qualification
 12 18 is determined, is eligible to receive income or principal, or
 12 19 would receive property from the trustee upon immediate
 12 20 termination of the trust.  The bill makes numerous
 12 21 modifications to the use of the term throughout the trust
 12 22 code.
 12 23    The bill provides that the power to select beneficiaries
 12 24 under the trust must be exercised within a reasonable time, or
 12 25 the power fails and the property passes to the person or
 12 26 persons who would have taken the property had the power not
 12 27 been conferred.
 12 28    The bill provides that the court may reform the terms of
 12 29 the trust, even if unambiguous, to conform to the settlor's
 12 30 intent if it is proved by clear and convincing evidence that
 12 31 the settlor's intent and the terms of the trust were affected
 12 32 by a mistake of fact or law whether expressed or induced.
 12 33    The bill provides that extrinsic evidence may be considered
 12 34 in determining to whom to distribute the trust property when a
 12 35 trust with insufficient value to justify continued
 13  1 administration is terminated.
 13  2    The bill substitutes the term "material" for the term
 13  3 "substantial" when referring to conflicts between the
 13  4 trustee's fiduciary and personal interests.  The bill allows
 13  5 the trustee in a capacity other than as trustee to invest in
 13  6 mutual and proprietary funds even where the trustee provides
 13  7 services to the fund.  The investment must comply with the
 13  8 prudent investor rule.  If the trust pays a fee for these
 13  9 services, the trustee must provide notification pursuant to
 13 10 Code section 633.4213.  The trustee is also permitted to
 13 11 establish trust funds in the trustee's own banking department.
 13 12    The bill also provides that the trustee shall keep the
 13 13 qualified beneficiaries of the trust reasonably informed about
 13 14 the administration of the trust and the material facts
 13 15 necessary for the qualified beneficiaries to protect their
 13 16 interests, including an annual accounting and a copy of the
 13 17 trust instrument.
 13 18    The bill provides certain provisions regarding the terms of
 13 19 a trust relating to estate and gift tax consequences.
 13 20    The bill provides additional trust powers to a trustee,
 13 21 including certain actions necessary to accomplish the proper
 13 22 management, investment, and distribution of the trust property
 13 23 including trustee power to make certain discretionary
 13 24 distributions, trustee participation in the operation of a
 13 25 business or other enterprise that is part of the trust
 13 26 property, trustee participation in an employee benefit or
 13 27 retirement plan, annuity, or life insurance, trustee
 13 28 participation in the distribution or division of trust
 13 29 property, trustee participation in any potential environmental
 13 30 law violations in regard to any trust property, trustee
 13 31 participation in dispute resolution concerning the
 13 32 interpretation of the trust, and trustee participation in
 13 33 administering the trust upon termination.
 13 34    The bill provides that a beneficiary may hold a trustee
 13 35 liable for breach of trust, despite a consent, release, or
 14  1 affirmance by the beneficiary, if at the time of such consent,
 14  2 release or affirmance, the beneficiary did not know the
 14  3 beneficiary's rights, the beneficiary did not know the
 14  4 material facts known to the trustee or which the trustee
 14  5 should have known, and the trustee did not reasonably believe
 14  6 the beneficiary knew either of the above.  The bill further
 14  7 provides a beneficiary may hold a trustee liable for a breach
 14  8 of trust if the beneficiary's consent, release, or affirmance
 14  9 was induced by improper conduct on the part of the trustee.
 14 10    The bill provides that a trustee is personally liable for
 14 11 environmental law violations for torts committed in the course
 14 12 of administering a trust only if the trustee is personally at
 14 13 fault.
 14 14    The bill provides that the district court has exclusive
 14 15 jurisdiction over proceedings concerning the internal affairs
 14 16 of a trust and of actions and proceedings to determine the
 14 17 existence of a trust, actions and proceedings by or against
 14 18 creditors or debtors of a trust, and other actions and
 14 19 proceedings involving a trust and third persons.
 14 20    The bill provides that notice to a representative is
 14 21 considered to be binding on the person represented unless the
 14 22 person represented objects to the representation before the
 14 23 consent would otherwise have become effective.
 14 24    The bill provides that, notwithstanding any Code provision
 14 25 to the contrary, the provisions of this division XX shall
 14 26 prevail over any other applicable Code provision.  
 14 27 LSB 5396HC 79
 14 28 rh/sh/8
     

Text: HSB00671                          Text: HSB00673
Text: HSB00600 - HSB00699               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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