House File 2344 - Introduced HOUSE FILE 2344 BY GUSTOFF A BILL FOR An Act relating to trusts, including irrevocable trusts, trust 1 petitions, and trust proceedings. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5834YH (3) 90 cm/jh

H.F. 2344 Section 1. Section 633A.2203, subsection 5, Code 2024, is 1 amended to read as follows: 2 5. A spendthrift provision, or a provision giving the 3 trustee discretion to distribute income or principal to a 4 beneficiary or among beneficiaries, in the terms of the trust 5 is presumed to constitute a material purpose of the trust 6 may help implement a material purpose of the settlor . A 7 spendthrift provision, or a provision giving the trustee 8 discretion to distribute income or principal to a beneficiary 9 or among beneficiaries, is enforceable against beneficiaries 10 and third parties that attempt to force the trustee to act or 11 to reach trust assets. A spendthrift provision, or a provision 12 giving the trustee discretion to distribute income or principal 13 to a beneficiary or among beneficiaries, does not create a 14 presumption that the settlor would not want the trust to be 15 modified or terminated when all of the beneficiaries consent 16 and if circumstances not anticipated by the settlor indicate 17 that the best interests of the beneficiaries as a class will be 18 better served if the trust is modified or terminated. 19 Sec. 2. Section 633A.6202, subsection 1, Code 2024, is 20 amended to read as follows: 21 1. Except as otherwise provided in section 633A.3103 , a 22 trustee , or beneficiary , or other interested party of a trust 23 may petition the court concerning the internal affairs of the 24 trust or to determine the existence of the trust. 25 Sec. 3. Section 633A.6202, subsection 2, paragraphs e, f, h, 26 i, j, and k, Code 2024, are amended to read as follows: 27 e. Settle accounts and pass upon the acts of the any 28 trustee , trust director, or trust protector , including the 29 exercise of discretionary powers. 30 f. Instruct the any trustee , trust director, or trust 31 protector . 32 h. Grant powers to or modify powers of the any trustee , 33 trust director, or trust protector . 34 i. Fix or allow payment of the trustee’s compensation of the 35 -1- LSB 5834YH (3) 90 cm/jh 1/ 3

H.F. 2344 trustee or any trust director or trust protector or review the 1 reasonableness of the compensation. 2 j. Appoint or remove a any trustee , trust director, or trust 3 protector . 4 k. Accept the resignation of a any trustee , trust director, 5 or trust protector . 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to trusts, including irrevocable trust 10 provisions, petitions, and proceedings. 11 The bill provides that a spendthrift provision may help 12 implement a material purpose of a trust. The bill provides 13 that spendthrift provisions, or provisions giving the 14 trustee discretion to distribute income or principal to a 15 beneficiary or among beneficiaries, shall be enforceable 16 against beneficiaries and third parties that (1) try to force 17 the trustee to do something against the provisions of the trust 18 or (2) try to gain access to the trust assets. A spendthrift 19 provision, or a provision giving the trustee discretion to 20 distribute income or principal to a beneficiary or among 21 beneficiaries, shall not create a presumption that the settlor 22 would not want the trust modified or terminated if doing so 23 would be in the best interests of the beneficiaries and all the 24 beneficiaries consent to the modification or termination of the 25 trust. 26 The bill allows an interested party, in addition to a trustee 27 or beneficiary of a trust, to petition the court about the 28 internal affairs of the trust or to determine the trust. The 29 bill also expands the scope of the proceedings to include the 30 following: (1) to settle accounts and pass upon the acts of 31 the trust director or trust protector, (2) to instruct the 32 trust director or trust protector, (3) to grant or modify 33 powers of the trust director or trust protector, (4) fix the 34 compensation of the trust director or trust protector, (5) to 35 -2- LSB 5834YH (3) 90 cm/jh 2/ 3

H.F. 2344 appoint or remove the trust director or trust protector, and 1 (6) to accept the resignation of the trust director or trust 2 protector. 3 -3- LSB 5834YH (3) 90 cm/jh 3/ 3