Uniform Trust Code

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  • UNIFORM TRUST CODE(Last Revised or Amended in 2010)

    Drafted by the

    NATIONAL CONFERENCE OF COMMISSIONERSON UNIFORM STATE LAWS

    and by it

    APPROVED AND RECOMMENDED FOR ENACTMENTIN ALL THE STATES

    at its

    ANNUAL CONFERENCEMEETING IN ITS ONE-HUNDRED-AND-NINTH YEAR

    ST. AUGUSTINE, FLORIDAJULY 28 AUGUST 4, 2000

    WITH PREFATORY NOTE AND COMMENTS

    Copyright 2000, 2010By

    NATIONAL CONFERENCE OF COMMISSIONERSON UNIFORM STATE LAWS

    January 15, 2013

  • ABOUT NCCUSL

    The National Conference of Commissioners on Uniform State Laws (NCCUSL), now in its114 year, provides states with non-partisan, well-conceived and well-drafted legislation thatthbrings clarity and stability to critical areas of state statutory law.

    Conference members must be lawyers, qualified to practice law. They are practicing lawyers,judges, legislators and legislative staff and law professors, who have been appointed by stategovernments as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands toresearch, draft and promote enactment of uniform state laws in areas of state law whereuniformity is desirable and practical.

    NCCUSL strengthens the federal system by providing rules and procedures that areconsistent from state to state but that also reflect the diverse experience of the states.

    NCCUSL statutes are representative of state experience, because the organization is madeup of representatives from each state, appointed by state government.

    NCCUSL keeps state law up-to-date by addressing important and timely legal issues.

    NCCUSLs efforts reduce the need for individuals and businesses to deal with differentlaws as they move and do business in different states.

    NCCUSLs work facilitates economic development and provides a legal platform forforeign entities to deal with U.S. citizens and businesses.

    NCCUSL Commissioners donate thousands of hours of their time and legal and draftingexpertise every year as a public service, and receive no salary or compensation for theirwork.

    NCCUSLs deliberative and uniquely open drafting process draws on the expertise ofcommissioners, but also utilizes input from legal experts, and advisors and observersrepresenting the views of other legal organizations or interests that will be subject to theproposed laws.

    NCCUSL is a state-supported organization that represents true value for the states,providing services that most states could not otherwise afford or duplicate.

  • DRAFTING COMMITTEE TO AMEND UNIFORM TRUST CODE

    MAURICE A. HARTNETT, III, Delaware Supreme Court, 144 Cooper Road, Dover, DE 19901,Chair

    FRANK W. DAYKIN, 4745 Giles Way, Carson City, NV 89704, Committee Member andCommittee on Style Liaison

    E. EDWIN ECK, II, University of Montana, School of Law, Missoula, MT 59812JOHN H. LANGBEIN, Yale Law School, P.O. Box 208215, New Haven, CT 06520GLEE S. SMITH, P.O. Box 360, 111 E. 8th, Larned, KS 67550NATHANIEL STERLING, Law Revision Commission, Suite D-1, 4000 Middlefield Road, Palo

    Alto, CA 94303RICHARD V. WELLMAN, University of Georgia, School of Law, Athens, GA 30602DAVID M. ENGLISH, University of Missouri School of Law, Missouri and Conley Avenues,

    Columbia, MO 65211, Reporter

    EX OFFICIOFRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Rd., Room 3056,

    Norman, OK 73019, PresidentREX BLACKBURN, 1673 West Shoreline Dr., Suite 200, P.O. Box 7808, Boise, ID 83702,

    Division Chair

    AMERICAN BAR ASSOCIATION ADVISORJOSEPH KARTIGANER, 812 Fifth Ave., New York, NY 10021, American Bar Association

    Advisor

    EXECUTIVE DIRECTORWILLIAM H. HENNING, University of Alabama School of Law, Box 870382, Tuscaloosa, AL

    35487-0382, Executive DirectorWILLIAM J. PIERCE, 1505 Roxbury Rd., Ann Arbor, MI 48104, Executive Director Emeritus

    Copies of this Code may be obtained from:NATIONAL CONFERENCE OF COMMISSIONERS

    ON UNIFORM STATE LAWS211 E. Ontario Street, Suite 1300

    Chicago, Illinois 60611312/915-0195

    www.nccusl.org

  • UNIFORM TRUST CODE

    TABLE OF CONTENTS

    PREFATORY NOTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

    ARTICLE 1GENERAL PROVISIONS AND DEFINITIONS

    SECTION 101. SHORT TITLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9SECTION 102. SCOPE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9SECTION 103. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10SECTION 104. KNOWLEDGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20SECTION 105. DEFAULT AND MANDATORY RULES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21SECTION 106. COMMON LAW OF TRUSTS; PRINCIPLES OF EQUITY. . . . . . . . . . . . . . 27SECTION 107. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27SECTION 108. PRINCIPAL PLACE OF ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . 29SECTION 109. METHODS AND WAIVER OF NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32SECTION 110. OTHERS TREATED AS QUALIFIED BENEFICIARIES. . . . . . . . . . . . . . . . 33SECTION 111. NONJUDICIAL SETTLEMENT AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . 36SECTION 112. RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37[SECTION 113. INSURABLE INTEREST OF TRUSTEE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

    ARTICLE 2JUDICIAL PROCEEDINGS

    SECTION 201. ROLE OF COURT IN ADMINISTRATION OF TRUST. . . . . . . . . . . . . . . . . 46SECTION 202. JURISDICTION OVER TRUSTEE AND BENEFICIARY.. . . . . . . . . . . . . . . 47SECTION 203. SUBJECT-MATTER JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48SECTION 204. VENUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

    ARTICLE 3REPRESENTATION

    SECTION 301. REPRESENTATION: BASIC EFFECT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50SECTION 302. REPRESENTATION BY HOLDER OF GENERAL TESTAMENTARY

    POWER OF APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52SECTION 303. REPRESENTATION BY FIDUCIARIES AND PARENTS. . . . . . . . . . . . . . . 52SECTION 304. REPRESENTATION BY PERSON HAVING SUBSTANTIALLY

    IDENTICAL INTEREST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54SECTION 305. APPOINTMENT OF REPRESENTATIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

  • ARTICLE 4CREATION, VALIDITY, MODIFICATION,

    AND TERMINATION OF TRUST

    SECTION 401. METHODS OF CREATING TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57SECTION 402. REQUIREMENTS FOR CREATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59SECTION 403. TRUSTS CREATED IN OTHER JURISDICTIONS. . . . . . . . . . . . . . . . . . . . . 61SECTION 404. TRUST PURPOSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62SECTION 405. CHARITABLE PURPOSES; ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . . 63SECTION 406. CREATION OF TRUST INDUCED BY FRAUD, DURESS, OR UNDUE

    INFLUENCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64SECTION 407. EVIDENCE OF ORAL TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65SECTION 408. TRUST FOR CARE OF ANIMAL.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65SECTION 409. NONCHARITABLE TRUST WITHOUT ASCERTAINABLE

    BENEFICIARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67SECTION 410. MODIFICATION OR TERMINATION OF TRUST; PROCEEDINGS FOR

    APPROVAL OR DISAPPROVAL.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69SECTION 411. MODIFICATION OR TERMINATION OF NONCHARITABLE

    IRREVOCABLE TRUST BY CONSENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70SECTION 412. MODIFICATION OR TERMINATION BECAUSE OF UNANTICIPATED

    CIRCUMSTANCES OR INABILITY TO ADMINISTER TRUST EFFECTIVELY.. . . 76SECTION 413. CY PRES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77SECTION 414. MODIFICATION OR TERMINATION OF UNECONOMIC TRUST. . . . . . . 79SECTION 415. REFORMATION TO CORRECT MISTAKES. . . . . . . . . . . . . . . . . . . . . . . . . 81SECTION 416. MODIFICATION TO ACHIEVE SETTLORS TAX OBJECTIVES. . . . . . . . 82SECTION 417. COMBINATION AND DIVISION OF TRUSTS.. . . . . . . . . . . . . . . . . . . . . . . 83

    ARTICLE 5CREDITORS CLAIMS; SPENDTHRIFT AND

    DISCRETIONARY TRUSTS

    SECTION 501. RIGHTS OF BENEFICIARYS CREDITOR OR ASSIGNEE. . . . . . . . . . . . . 85SECTION 502. SPENDTHRIFT PROVISION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86SECTION 503. EXCEPTIONS TO SPENDTHRIFT PROVISION. . . . . . . . . . . . . . . . . . . . . . 88SECTION 504. DISCRETIONARY TRUSTS; EFFECT OF STANDARD. . . . . . . . . . . . . . . . 91SECTION 505. CREDITORS CLAIM AGAINST SETTLOR.. . . . . . . . . . . . . . . . . . . . . . . . . 94SECTION 506. OVERDUE DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97SECTION 507. PERSONAL OBLIGATIONS OF TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . 98

    ARTICLE 6REVOCABLE TRUSTS