UNIFORM TRUST CODE - Uniform Law TRUST CODE The Committee that acted for the National Conference of...

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Transcript of UNIFORM TRUST CODE - Uniform Law TRUST CODE The Committee that acted for the National Conference of...

  • UNIFORM TRUST CODE

    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 2000By

    NATIONAL CONFERENCE OF COMMISSIONERSON UNIFORM STATE LAWS

    April 25, 2001

  • UNIFORM TRUST CODE

    The Committee that acted for the National Conference of Commissioners on UniformState Laws in preparing the Uniform Trust Code was as follows:

    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 59812WILLIAM L. EVANS, Ohio Northern University, Pettit College of Law, 525 S. Main Street, Ada,

    OH 45810RUSSELL L. GEORGE, P.O. Box 907, 120 W. Third Street, Rifle, CO 81650JOHN 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 OFFICIO

    JOHN L. McCLAUGHERTY, P.O. Box 553, Charleston, WV 25322, PresidentLEON M. McCORKLE, JR., P.O. Box 387, Dublin, OH 43017, Division Chair

    AMERICAN BAR ASSOCIATION ADVISORS

    JOSEPH KARTIGANER, 955 Fifth Avenue, New York, NY 10021, AdvisorDAVID ALAN RICHARDS, 875 3rd Avenue, New York, NY 10022, Real Property,

    Probate & Trust Law Section AdvisorRAYMOND H. YOUNG, 26th Floor, 150 Federal Street, Boston, MA 02110, Real Property,

    Probate & Trust Law Section Advisor

    EXECUTIVE DIRECTOR

    FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman,OK 73019, Executive Director

    WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus

    Copies of this Act may be obtained from:

    NATIONAL CONFERENCE OF COMMISSIONERSON UNIFORM STATE LAWS

    211 E. Ontario Street, Suite 1300Chicago, Illinois 60611

    312/915-0195

  • www.nccusl.org

  • UNIFORM TRUST CODE

    TABLE OF CONTENTS

    ARTICLE 1. GENERAL PROVISIONS AND DEFINITIONS

    SECTION 101. SHORT TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9SECTION 102. SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9SECTION 103. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10SECTION 104. KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20SECTION 105. DEFAULT AND MANDATORY RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22SECTION 106. COMMON LAW OF TRUSTS; PRINCIPLES OF EQUITY . . . . . . . . . . . . . . . . . . . . . . . 25SECTION 107. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26SECTION 108. PRINCIPAL PLACE OF ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28SECTION 109. METHODS AND WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31SECTION 110. OTHERS TREATED AS QUALIFIED BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . 33SECTION 111. NONJUDICIAL SETTLEMENT AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34[SECTION 112. RULES OF CONSTRUCTION] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

    ARTICLE 2. JUDICIAL PROCEEDINGS

    SECTION 201. ROLE OF COURT IN ADMINISTRATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . 38SECTION 202. JURISDICTION OVER TRUSTEE AND BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . . . 40[SECTION 203. SUBJECT-MATTER JURISDICTION] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41[SECTION 204. VENUE] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

    ARTICLE 3. REPRESENTATION

    SECTION 301. REPRESENTATION: BASIC EFFECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43SECTION 302. REPRESENTATION BY HOLDER OF GENERAL TESTAMENTARY

    POWER OF APPOINTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45SECTION 303. REPRESENTATION BY FIDUCIARIES AND PARENTS . . . . . . . . . . . . . . . . . . . . . . . 46SECTION 304. REPRESENTATION BY PERSON HAVING SUBSTANTIALLY IDENTICAL

    INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47SECTION 305. APPOINTMENT OF REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

    ARTICLE 4. CREATION, VALIDITY, MODIFICATION,AND TERMINATION OF TRUST

    SECTION 401. METHODS OF CREATING TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51SECTION 402. REQUIREMENTS FOR CREATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53SECTION 403. TRUSTS CREATED IN OTHER JURISDICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55SECTION 404. TRUST PURPOSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56SECTION 405. CHARITABLE PURPOSES; ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57SECTION 406. CREATION OF TRUST INDUCED BY FRAUD, DURESS, OR UNDUE

    INFLUENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59SECTION 407. EVIDENCE OF ORAL TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59SECTION 408. TRUST FOR CARE OF ANIMAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60SECTION 409. NONCHARITABLE TRUST WITHOUT ASCERTAINABLE BENEFICIARY . . . . . . . 62SECTION 410. MODIFICATION OR TERMINATION OF TRUST; PROCEEDINGS FOR

    APPROVAL OR DISAPPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64SECTION 411. MODIFICATION OR TERMINATION OF NONCHARITABLE IRREVOCABLE

    TRUST BY CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65SECTION 412. MODIFICATION OR TERMINATION BECAUSE OF UNANTICIPATED

    CIRCUMSTANCES OR INABILITY TO ADMINISTER TRUST EFFECTIVELY . . . . 70

  • SECTION 413. CY PRES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72SECTION 414. MODIFICATION OR TERMINATION OF UNECONOMIC TRUST . . . . . . . . . . . . . . . 74SECTION 415. REFORMATION TO CORRECT MISTAKES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76SECTION 416. MODIFICATION TO ACHIEVE SETTLORS TAX OBJECTIVES . . . . . . . . . . . . . . . . 77SECTION 417. COMBINATION AND DIVISION OF TRUSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

    ARTICLE 5. CREDITORS CLAIMS; SPENDTHRIFT ANDDISCRETIONARY TRUSTS

    SECTION 501. RIGHTS OF BENEFICIARYS CREDITOR OR ASSIGNEE . . . . . . . . . . . . . . . . . . . . . . 81SECTION 502. SPENDTHRIFT PROVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82SECTION 503. EXCEPTIONS TO SPENDTHRIFT PROVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84SECTION 504. DISCRETIONARY TRUSTS; EFFECT OF STANDARD . . . . . . . . . . . . . . . . . . . . . . . . . 86SECTION 505. CREDITORS CLAIM AGAINST SETTLOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88SECTION 506. OVERDUE DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91SECTION 507. PERSONAL OBLIGATIONS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

    ARTICLE 6. REVOCABLE TRUSTS

    SECTION 601. CAPACITY OF SETTLOR OF REVOCABLE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . 94SECTION 602. REVOCATION OR AMENDMENT OF REVOCABLE TRUST . . . . . . . . . . . . . . . . . . . 95SECTION 603. SETTLORS POWERS; POWERS OF WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . 101SECTION 604. LIMITATION ON ACTION CONTESTING VALIDITY OF REVOCABLE

    TRUST; DISTRIBUTION OF TRUST PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

    ARTICLE 7. OFFICE OF TRUSTEE

    SECTION 701. ACCEPTING OR DECLINING TRUSTEESHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106SECTION 702. TRUSTEES BOND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108SECTION 703. COTRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110SECTION 704. VACANCY IN TRUSTEESHIP; APPOINTMENT OF SUCCESSOR . . . . . . . . . . . . . . 113SECTION 705. RESIGNATION OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115SECTION 706. REMOVAL OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .