75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
Enrolled
Senate Bill 371
Sponsored by COMMITTEE ON JUDICIARY (at the request of Oregon
State Bar Estate Planning Section)
CHAPTER ................
AN ACT
Relating to trusts; creating new provisions; and amending ORS
130.010, 130.020, 130.035, 130.040, 130.045, 130.060, 130.150,
130.170, 130.195, 130.200, 130.205, 130.210, 130.240, 130.400,
130.500, 130.510 and 130.710.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 130.010 is amended to read:
130.010. For the purposes of this chapter:
(1) 'Ascertainable standard' means an ascertainable standard
relating to an individual's health, education, support or
maintenance within the meaning of section 2041(b)(1)(A) or
2514(c)(1) of the Internal Revenue Code, as in effect on January
1, 2006.
(2) 'Beneficiary' means a person that:
(a) Has a present or future beneficial interest in a trust,
whether vested or contingent; or
(b) Holds a power of appointment over trust property in a
capacity other than that of trustee.
(3) 'Charitable trust' means a trust, or portion of a trust,
{ - created for a charitable purpose - } described in ORS
130.170 (1).
(4) 'Conservator' means a person appointed by a court to
administer the estate of a minor or adult individual.
(5) 'Environmental law' means a federal, state or local law,
rule, regulation or ordinance relating to protection of the
environment.
(6) 'Financial institution' has the meaning given that term in
ORS 706.008.
(7) 'Financially incapable' has the meaning given that term in
ORS 125.005. 'Financially capable' means not financially
incapable.
(8) 'Guardian' means a person appointed by a court to make
decisions regarding the support, care, education, health and
welfare of a minor or adult individual. 'Guardian' does not
include a guardian ad litem.
(9) 'Interests of the beneficiaries' means the beneficial
interests provided in the terms of a trust.
(10) 'Permissible distributee' means a beneficiary who is
currently eligible to receive distributions of trust income or
principal, whether the distribution is mandatory or
discretionary.
Enrolled Senate Bill 371 (SB 371-INTRO) Page 1
(11) 'Person' means an individual, corporation, business trust,
estate, trust, partnership, limited liability company,
association, joint venture, public body as defined in ORS 174.109
or any other legal or commercial entity.
(12) 'Power of withdrawal' means a presently exercisable
general power of appointment, other than a power exercisable by a
trustee that is limited by an ascertainable standard or that is
exercisable by another person only upon consent of the trustee or
a person holding an adverse interest.
(13) 'Property' means anything that may be the subject of
ownership, whether real or personal, legal or equitable, or any
interest therein.
(14) 'Qualified beneficiary' means a beneficiary who:
(a) Is a permissible distributee on the date the beneficiary's
qualification is determined;
(b) Would be a permissible distributee if the interests of all
permissible distributees described in paragraph (a) of this
subsection terminated on the date the beneficiary's qualification
is determined; or
(c) Would be a permissible distributee if the trust terminated
on the date the beneficiary's qualification is determined.
(15) 'Revocable trust' means a trust that can be revoked by the
settlor without the consent of the trustee or a person holding an
adverse interest.
(16) 'Settlor' means a person, including a testator, who
creates a trust or contributes property to a trust. If more than
one person creates or contributes property to a trust, each
person is a settlor of the portion of the trust property
attributable to that person's contribution and of the portion as
to which that person has the power to revoke or withdraw.
(17) 'Spendthrift provision' means a term of a trust that
restrains both voluntary and involuntary transfer of a
beneficiary's interest.
(18) 'State' means a state of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Islands or any
territory or insular possession subject to the jurisdiction of
the United States. 'State' includes an Indian tribe or band
recognized by federal law or formally acknowledged by a state.
(19) 'Terms of a trust' means the manifestation of the
settlor's intent regarding a trust's provisions as expressed in
the trust instrument or as may be established by other evidence
that would be admissible in a judicial proceeding.
(20) 'Trust instrument' means an instrument executed by a
settlor that contains terms of the trust, including any
amendments to the instrument.
(21) 'Trustee' means an original trustee, an additional
trustee, a successor trustee or a cotrustee.
SECTION 2. ORS 130.020 is amended to read:
130.020. (1) Except as otherwise provided in the terms of the
trust, this chapter governs the duties and powers of a trustee,
relations among trustees, and the rights and interests of a
beneficiary.
(2) The terms of a trust prevail over the provisions of this
chapter except:
(a) The requirements of ORS 130.150 to 130.190 governing the
creation of a trust.
(b) The duty of a trustee to act in good faith and in
accordance with the purposes of the trust.
(c) The requirement that a trust and the terms of a trust be
for the benefit of the trust beneficiaries, and that the trust
Enrolled Senate Bill 371 (SB 371-INTRO) Page 2
have a purpose that is lawful, not contrary to public policy and
possible to achieve.
(d) The power of the court to modify or terminate a trust under
ORS 130.195 to 130.225.
(e) The effect of a spendthrift provision and the rights of
creditors and assignees to reach interests in a trust as provided
in ORS 130.300 to 130.325.
(f) The power of the court under ORS 130.605 to require,
dispense with, modify or terminate a bond.
(g) The power of the court under ORS 130.635 (2) to adjust a
trustee's compensation specified in the terms of the trust if the
compensation is unreasonably low or high.
(h) Subject to subsection (3) of this section, the duty under
ORS 130.710 (2)(b) and (c) to notify qualified beneficiaries of
an irrevocable trust of the existence of the trust, of the
identity of the trustee and of their right to request trustee
reports.
(i) Subject to subsection (3) of this section, the duty under
ORS 130.710 (1) to respond to the request of a qualified
beneficiary of an irrevocable trust for trustee reports and other
information reasonably related to the administration of a trust.
(j) The effect of an exculpatory term under ORS 130.835.
(k) The rights under ORS 130.845, 130.850, 130.855 and 130.860
of a person other than a trustee or beneficiary.
(L) Periods of limitation for commencing a judicial proceeding.
(m) The power of the court to take such action and exercise
such jurisdiction as may be necessary in the interests of
justice.
(n) The subject-matter jurisdiction of the court and venue for
commencing a proceeding as provided in ORS 130.060 and 130.065.
(3) { + Except as provided in subsection (4) of this
section, + } the settlor, in the trust instrument or in another
writing delivered to the trustee, may waive or modify the duties
of a trustee under ORS 130.710 to give notice, information and
reports to qualified beneficiaries by:
(a) Waiving or modifying those duties during the period that
either the settlor is alive and financially capable, or the
settlor's spouse, if a qualified beneficiary, is alive and
financially capable; or
(b) Designating a person or persons to act in good faith to
protect the interests of qualified beneficiaries and to receive
any notice, information or reports required under ORS 130.710
(1), (2)(b) { - and (2)(c) - } { + to (d) and (3) + } in lieu
of providing the notice, information or reports to the qualified
beneficiaries.
{ + (4) All reports under ORS 130.710 (3) that contain
information relating to termination of the trust must be provided
to the qualified beneficiaries and to any person or persons
designated under subsection (3)(b) of this section. + }
SECTION 3. { + The amendments to ORS 130.020 by section 2 of
this 2009 Act apply only to reports made under ORS 130.710 (3) on
or after the effective date of this 2009 Act. + }
SECTION 4. ORS 130.035 is amended to read:
130.035. (1) If any provision of this chapter requires that a
trustee or other person give notice or requires that the trustee
or other person send a document, the trustee or other person must
give the notice or send the document in a manner reasonably
suitable under the circumstances and likely to result in receipt
of the notice or document. Permissible methods of giving notice
and sending documents under this chapter include first class
Enrolled Senate Bill 371 (SB 371-INTRO) Page 3
mail, personal delivery, delivery to a person's last known place
of residence or place of business, or properly directed
electronic mail.
(2) If any provision of this chapter requires that a trustee or
other person give notice or requires that the trustee or other
person send a document to another person, the trustee or other
person need not give the notice or send the document to any
person whose identity or location is unknown and not reasonably
ascertainable. If the trustee or other person cannot give notice
or send a document, the trustee or other person shall prepare an
affidavit setting forth the efforts made to find the person. The
trustee must file the affidavit in any pending court proceeding
or hold the affidavit as part of the trust records if a court
proceeding is not pending.
(3) Any person entitled to receive a notice or a document under
this chapter may waive receipt of the notice or document.
(4) { + Subsections (1) to (3) of this section do not apply to
notices of judicial proceedings. + } Except as provided in
subsection (5) of this section, notice of a judicial proceeding
shall be given in the manner required by statute for the approval
of the final account in a decedent's estate. Notice of a judicial
proceeding must be given by the petitioner to the following
persons:
(a) To the trustee and all persons whose interests are affected
by the requested action or relief.
(b) If a person who is entitled to notice is a minor, to the
minor's conservator or to another appropriate representative
under ORS 130.100 to 130.120 if the minor does not have a
conservator. If the minor is 14 years of age or older, notice
must also be given to the minor.
(c) If a person who is entitled to notice is financially
incapable, to the person and to the person's conservator or
another appropriate representative under ORS 130.100 to 130.120
if the person does not have a conservator.
(d) To any other person the court requires.
(5) A judicial proceeding to contest the validity of a
revocable trust must be commenced by the service of a summons in
the manner required by ORCP 7. Notice of any other judicial
proceeding must be given in the manner prescribed by subsection
(4) of this section.
SECTION 5. ORS 130.040 is amended to read:
130.040. (1) A charitable organization expressly designated to
receive distributions under the terms of a charitable trust has
the rights of a qualified beneficiary under this chapter if the
charitable organization is otherwise a qualified beneficiary as
defined in ORS 130.010.
(2) A person appointed to enforce a trust created for the care
of an animal or another noncharitable purpose as provided in ORS
130.185 or 130.190 has the rights of a qualified beneficiary
under this chapter.
(3) The Attorney General has the rights of a qualified
beneficiary with respect to a charitable trust having its
principal place of administration in Oregon { - , unless
contingencies make the charitable interest negligible - } .
SECTION 6. ORS 130.045 is amended to read:
130.045. (1) For purposes of this section, 'interested persons'
means any settlor of a trust who is living, all beneficiaries of
the trust who have an interest in the subject of the agreement,
any acting trustee of the trust, and the Attorney General if the
trust is a charitable trust subject to the enforcement or
Enrolled Senate Bill 371 (SB 371-INTRO) Page 4
supervisory powers of the state or the Attorney General under the
provisions of ORS 128.610 to 128.750.
(2) Except as otherwise provided in subsection (3) of this
section, interested persons may enter into a binding nonjudicial
settlement agreement with respect to any matter involving a
trust.
(3) A nonjudicial settlement agreement is valid only to the
extent the agreement does not violate a material purpose of the
trust and includes terms and conditions that could be properly
approved by the court under this chapter or other applicable law.
(4) Matters that may be resolved by a nonjudicial settlement
agreement include:
(a) The interpretation or construction of the terms of the
trust or other writings that affect the trust.
(b) The approval of a trustee's report or accounting.
(c) Direction to a trustee to refrain from performing a
particular act or the grant to a trustee of any necessary or
desirable power.
(d) The resignation or appointment of a trustee and the
determination of a trustee's compensation.
(e) Transfer of a trust's principal place of administration.
(f) Liability of a trustee for an action or failure to act
relating to the trust.
(g) Determining classes of creditors, beneficiaries, heirs,
next of kin or other persons.
(h) Resolving disputes arising out of the administration or
distribution of the trust.
{ + (i) Modifying the terms of the trust, including extending
or reducing the period during which the trust operates.
(5)(a) Any interested person may file a settlement agreement
entered into under this section, or a memorandum summarizing the
provisions of the agreement, with the circuit court for any
county where trust assets are located or where the trustee
administers the trust.
(b) After collecting the fee provided for in subsection (7)(a)
of this section, the clerk shall enter the agreement or
memorandum of record in the court's register.
(c) Within five days after the filing of an agreement or
memorandum under this subsection, the person making the filing
must serve a notice of the filing and a copy of the agreement or
memorandum on each person interested in the trust whose address
is known at the time of the filing. Service may be made
personally, or by registered or certified mail, return receipt
requested. The notice of filing shall be substantially in the
following form: + }
________________________________________________________________
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
CAPTION OF CASENOTICE OF FILING
OF SETTLEMENT AGREEMENT OR
MEMORANDUM OF
SETTLEMENT AGREEMENT + }
____________________________________________________________
Enrolled Senate Bill 371 (SB 371-INTRO) Page 5
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
{ + You are hereby notified that the attached document was
filed by the undersigned in the above entitled court on the ___
day of _____, __. Unless you file objections to the agreement
within 120 days after that date, the agreement will be approved
and will be binding on all persons interested in the trust.
If you file objections within the 120-day period, the court
will fix a time and place for a hearing. At least 10 days before
the date of that hearing, you must serve a copy of your
objections and give notice of the time and place of the hearing
to all persons interested in the trust. See ORS 130.045. + }
______________
{ + Signature + }
________________________________________________________________
{ + (d) Proof of mailing of the notices required under this
subsection must be filed with the court. Proof of service may be
made by a certificate of service in the form provided by ORCP 7
F, by a signed acceptance of service or by a return receipt from
the postal authorities.
(e) If no objections are filed with the court within 120 days
after the filing of the agreement or memorandum, the agreement is
effective and binding on all persons interested in the trust.
(6)(a) If objections are filed with the court within 120 days
after the filing of a settlement agreement or memorandum under
this section, the clerk of the court shall collect the fee
provided in subsection (7)(a) of this section. Upon the filing of
objections, the court shall fix a time and place for a hearing.
The person filing the objections must serve a copy of the
objections on all persons interested in the trust and give notice
to those persons of the time and place fixed by the court for a
hearing. Service must be made at least 10 days before the date
set by the court for the hearing. Service of the objections may
be made personally or by registered or certified mail, return
receipt requested.
(b) Proof of mailing of objections must be filed with the
court. Proof of service may be made by a certificate of service
in the form provided by ORCP 7 F, by a signed acceptance of
service or by a return receipt from the postal authorities.
(c) The court shall approve an agreement entered into under
this section after a hearing upon objections filed under this
subsection unless:
(A) The agreement does not reflect the signatures of all
persons required by this section;
(B) The agreement is not authorized by this section; or
(C) Approval of the agreement would not be equitable.
(d) An agreement approved by the court after a hearing is
binding on all persons interested in the trust.
(e) Persons interested in the trust may waive the notice
required under subsection (5) of this section. If all persons
interested in the trust waive the notice, the agreement is
effective and binding on all persons interested in the trust upon
filing of the agreement or memorandum with the court.
(7)(a) The clerk of the circuit court shall collect in advance
a fee of $65 for the filing of an agreement or memorandum of
agreement under subsection (5) of this section, and a fee of
$32.50 for the filing of objections under subsection (6) of this
section.
Enrolled Senate Bill 371 (SB 371-INTRO) Page 6
(b) In addition to the filing fees provided for in paragraph
(a) of this subsection, the clerk shall charge and collect in
proceedings under this section all additional fees authorized by
law for civil actions, suits or proceedings in circuit court.
(c) A pleading or other document is not considered filed unless
the fees required by this subsection are paid. Filing fees may
not be refunded to any party. + }
{ - (5) Any interested person may petition the court to
approve a nonjudicial settlement agreement, to determine whether
the representation as provided in ORS 130.100 to 130.120 was
adequate and to determine whether the agreement contains terms
and conditions the court could have properly approved. - }
{ - (6) Modification or termination of an irrevocable trust
by nonjudicial settlement agreement is governed by ORS
130.200. - }
SECTION 7. ORS 130.060 is amended to read:
130.060. { + Except as provided in ORS 130.355, + } the
circuit court has jurisdiction of proceedings in this state
concerning the administration of a trust.
SECTION 8. ORS 130.150 is amended to read:
130.150. (1) A trust may be created:
(a) By transfer of property to another person as trustee during
the settlor's lifetime or by will or other disposition taking
effect upon the settlor's death;
(b) By declaration by the owner of property that the owner
holds identifiable property as trustee;
(c) By exercise of a power of appointment in favor of a
trustee;
(d) By an agent or attorney-in-fact under a power of attorney
that expressly grants authority to create the trust; or
(e) Pursuant to a statute or judgment that requires property to
be administered in the manner of an express trust.
(2) The following apply to trusts for death benefits:
(a) A trustee may be named as beneficiary of any death
benefits, and the death benefits shall be paid to the trustee and
be held and disposed of by the trustee as provided in a trust
created by the designator during the lifetime of the designator.
A trust is valid even though the trust does not have a trust
corpus other than the right of the trustee to receive death
benefits as beneficiary.
(b) A trustee named by will may be designated as beneficiary of
death benefits if the designation is made in accordance with the
provisions of the policy, contract, plan, trust or other
governing instrument. Upon probate of the will, { + or upon the
filing of an affidavit under ORS 114.515, + } the death benefits
are payable to the trustee to be held and disposed of under the
terms of the designator's will in the same manner as other
testamentary trusts are administered. Unless otherwise provided
by the designator, an obligor may make payment of death benefits
to the personal representative of the designator, or to the
persons who are otherwise entitled to the death benefits, if a
qualified trustee does not claim the death benefits within one
year after the death of the designator, or if satisfactory
evidence is furnished within the one-year period showing that
there is no trustee who can qualify to receive the death
benefits. The obligor is discharged from any liability for the
death benefits upon making the payment.
(c) Death benefits received by the trustee are not subject to
the debts of the designator or to inheritance or estate taxes to
any greater extent than if the death benefits were payable to the
Enrolled Senate Bill 371 (SB 371-INTRO) Page 7
beneficiaries named in the trust and not to the estate of the
designator.
(d) Death benefits held in trust may be commingled with any
other assets that may properly become a part of the trust.
(3) As used in this section:
(a) 'Death benefits' means death benefits of any kind,
including proceeds of life insurance policies, payments under
annuity or endowment contracts, and funds payable in connection
with pension, retirement, stock bonus or profit-sharing plans, or
any trust administered in connection with these arrangements.
(b) 'Designator' means the person entitled to designate the
beneficiary of death benefits upon the death of the person.
(c) 'Obligor' means the insurer or other person obligated to
pay death benefits.
SECTION 9. ORS 130.170 is amended to read:
130.170. (1) A charitable trust { - may be - } { + is a
trust + } created for the relief of poverty, the advancement of
education or religion, the promotion of health, governmental or
municipal purposes, or other purposes beneficial to the
community. { + A trust is not a charitable trust if the trust
contains contingencies that make the charitable interest
negligible. + }
(2) If the terms of a charitable trust do not indicate a
particular charitable purpose or beneficiary, the court may
select one or more charitable purposes or beneficiaries. The
selection must be consistent with the settlor's intention to the
extent that intent can be ascertained.
(3) The settlor of a charitable trust, in addition to other
persons authorized by law or the trust instrument, may maintain a
proceeding to enforce the trust.
(4) A court may modify or terminate any trust of property for
charitable purposes only if the Attorney General is a party to
the proceedings.
SECTION 10. ORS 130.195 is amended to read:
130.195. (1) In addition to the methods of termination
prescribed by ORS 130.200, 130.205, 130.210 and 130.215, a trust
terminates:
(a) To the extent the trust is revoked or expires pursuant to
the terms of the trust;
(b) If no purpose of the trust remains to be achieved; or
(c) To the extent one or more of the purposes of the trust have
become unlawful, contrary to public policy or impossible to
achieve.
(2) A proceeding to approve or disapprove a proposed
modification or termination under ORS { + 130.045, + } 130.200,
130.205, 130.210, 130.215, 130.220 and 130.225, or trust
combination or division under ORS 130.230, may be commenced by a
trustee or beneficiary. A proceeding to approve or disapprove a
proposed modification or termination under ORS 130.200 may be
commenced by the settlor. The settlor of a charitable trust may
maintain a proceeding to modify the trust under ORS 130.210.
SECTION 11. ORS 130.200 is amended to read:
130.200. (1) An irrevocable trust may be modified or terminated
{ + with approval of the court + } upon consent of the settlor
and all beneficiaries, even if the modification or termination is
inconsistent with a material purpose of the trust. The Attorney
General must consent to any modification or termination of a
charitable trust { - , unless contingencies make the charitable
interest negligible - } . A settlor's power to consent to a
trust's modification or termination may be exercised by:
Enrolled Senate Bill 371 (SB 371-INTRO) Page 8
(a) An agent or attorney-in-fact under a power of attorney only
to the extent expressly authorized by the terms of the trust;
(b) The settlor's conservator with the approval of the court
supervising the conservatorship if an agent or attorney-in-fact
is not authorized by the terms of the trust; or
(c) The settlor's guardian with the approval of the court
supervising the guardianship if an agent or attorney-in-fact is
not authorized by the terms of the trust and a conservator has
not been appointed.
(2) An irrevocable trust may be terminated upon consent of all
of the beneficiaries if the court concludes that continuance of
the trust is not necessary to achieve any material purpose of the
trust. An irrevocable trust may be modified upon consent of all
of the beneficiaries if the court concludes that the modification
is not inconsistent with a material purpose of the trust. The
Attorney General must consent to any modification or termination
of a charitable trust { - , unless contingencies make the
charitable interest negligible - } .
(3) For the purposes of subsections (1) and (2) of this
section, a spendthrift provision in the terms of the trust is
rebuttably presumed to constitute a material purpose of the
trust.
(4) Upon termination of a trust under subsection (1) or (2) of
this section, the trustee shall distribute the trust property as
agreed to by the beneficiaries and, in the case of a charitable
trust requiring the Attorney General's consent, as agreed to by
the Attorney General.
(5) { - If all of the required parties do not consent to - }
A proposed modification or termination of the trust under
subsection (1) or (2) of this section { - , the modification or
termination - } may be approved by the court { + without the
consent of all beneficiaries + } if the court finds that:
(a) If all of the { - required parties - } { +
beneficiaries + } had consented, the trust could have been
modified or terminated under this section; and
(b) The interests of any beneficiary who does not consent will
be adequately protected.
{ - (6)(a) A trustee, or any other person interested in the
trust, may file an agreement entered into under subsection (1) or
(2) of this section, or a memorandum summarizing the provisions
of the agreement, with the circuit court for any county where
trust assets are located or where the trustee administers the
trust. - }
{ - (b) After collecting the fee provided for in subsection
(8)(a) of this section, the clerk shall enter the agreement or
memorandum of record in the court's register. - }
{ - (c) Within five days after the filing of an agreement or
memorandum under this subsection, the person making the filing
must serve a notice of the filing and a copy of the agreement or
memorandum on each person interested in the trust whose address
is known at the time of the filing. Service may be made
personally, or by registered or certified mail, return receipt
requested. The notice of filing shall be substantially in the
following form: - }
? _____________________________________________________________ ?
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
Enrolled Senate Bill 371 (SB 371-INTRO) Page 9
_______________________________________________________________
{ -
CAPTION OF CASENOTICE OF FILING - }
{ -
OF AGREEMENT OR - }
{ -
MEMORANDUM OF - }
{ -
AGREEMENT - }
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
{ - You are hereby notified that the attached document was
filed by the undersigned in the above entitled court on the ___
day of ____, __. Unless you file objections to the agreement
within 120 days after that date, the agreement will be approved
and will be binding on all persons interested in the trust.
{ - If you file objections within the 120-day period, the
court will fix a time and place for a hearing. At least 10 days
before the date of that hearing, you must serve a copy of your
objections and give notice of the time and place of the hearing
to all persons interested in the trust. See ORS 130.200. - }
{ - ______________ - }
{ - Signature - }
? _____________________________________________________________ ?
{ - (d) Proof of mailing of the notices required under this
subsection must be filed with the court. Proof of service may be
made by a certificate of service in the form provided by ORCP 7
F, by a signed acceptance of service or by a return receipt from
the postal authorities. - }
{ - (e) If no objections are filed with the court within 120
days after the filing of the agreement or memorandum, the
agreement is effective and binding on all persons interested in
the trust. - }
{ - (7)(a) If objections are filed with the court within 120
days after the filing of an agreement or memorandum under this
section, the clerk of the court shall collect the fee provided in
subsection (8)(a) of this section. Upon the filing of objections,
the court shall fix a time and place for a hearing. The person
filing the objections must serve a copy of the objections on all
persons interested in the trust and give notice to those persons
of the time and place fixed by the court for a hearing. Service
must be made at least 10 days before the date set by the court
for the hearing. Service of the objections may be made personally
or by registered or certified mail, return receipt requested. - }
{ - (b) Proof of mailing of objections must be filed with the
court. Proof of service may be made by a certificate of service
in the form provided by ORCP 7 F, by a signed acceptance of
service or by a return receipt from the postal authorities. - }
{ - (c) The court shall approve an agreement entered into
under subsection (1) or (2) of this section after a hearing upon
objections filed under this subsection unless: - }
{ - (A) The agreement does not reflect the signatures of all
persons required by subsection (1) or (2) of this section; - }
{ - (B) The agreement is not authorized by subsection (1) or
(2) of this section; or - }
Enrolled Senate Bill 371 (SB 371-INTRO) Page 10
{ - (C) Approval of the agreement would not be equitable. - }
{ - (d) An agreement approved by the court after a hearing is
binding on all persons interested in the trust. - }
{ - (e) Persons interested in the trust may waive the notice
required under subsection (6) of this section. If all persons
interested in the trust waive the notice, the agreement is
effective and binding on all persons interested in the trust upon
filing of the agreement or memorandum with the court. - }
{ - (8)(a) The clerk of the circuit court shall collect in
advance a fee of $65 for the filing of an agreement or memorandum
of agreement under subsection (6) of this section, and a fee of
$32.50 for the filing of objections under subsection (7) of this
section. - }
{ - (b) In addition to the filing fees provided for in
paragraph (a) of this subsection, the clerk shall charge and
collect in proceedings under this section all additional fees
authorized by law for civil actions, suits or proceedings in
circuit court. - }
{ - (c) A pleading or other document is not considered filed
unless the fees required by this subsection are paid. Filing fees
may not be refunded to any party. - }
{ + (6) A binding nonjudicial settlement agreement relating
to modification or termination of a trust may be entered into by
all interested persons, as defined in ORS 130.045. + }
SECTION 12. ORS 130.205 is amended to read:
130.205. (1) The court may modify the administrative or
dispositive terms of a trust or terminate the trust if
modification or termination will further the purposes of the
trust and the modification or termination is requested by reason
of circumstances not anticipated by the settlor. To the extent
practicable, the modification must be made in accordance with the
settlor's probable intention.
(2) The court may modify the administrative terms of a trust if
continuation of the trust on its existing terms would be
impracticable or wasteful, or would impair the trust's
administration.
(3) A trustee may terminate a trust if:
(a) Termination is appropriate by reason of circumstances not
anticipated by the settlor;
(b) Termination will not be inconsistent with the material
purposes of the trust;
(c) All qualified beneficiaries have consented to the
termination;
(d) The trustee is not a beneficiary of the trust and has no
duty of support for any beneficiary of the trust; and
(e) In the case of a charitable trust, the Attorney General has
consented to the termination { - , or contingencies have made
the charitable interest negligible - } .
(4) Upon termination of a trust under this section, the trustee
shall distribute the trust property in a manner consistent with
the purposes of the trust.
SECTION 13. ORS 130.210 is amended to read:
130.210. (1) Except as otherwise provided in subsection (2) of
this section, if a particular charitable purpose of a trust
becomes unlawful, impracticable, impossible to achieve or
wasteful:
(a) The trust does not fail, in whole or in part;
(b) The trust property does not revert to the settlor or the
settlor's successors in interest; and
Enrolled Senate Bill 371 (SB 371-INTRO) Page 11
(c) The court may apply cy pres to modify or terminate the
trust by directing that the trust property be applied or
distributed, in whole or in part, in a manner consistent with the
settlor's charitable purposes.
(2) If a provision in the terms of a charitable trust would
result in distribution of the trust property to a noncharitable
beneficiary, a court may { + not + } apply cy pres to modify or
terminate the trust under subsection (1)(c) of this section
{ - only - } if, when the provision takes effect:
(a) The trust property is to revert to the settlor and the
settlor is still living; or
(b) Fewer than 50 years have elapsed since the date of the
trust's creation.
SECTION 14. ORS 130.240 is amended to read:
130.240. (1) As used in this section:
(a) 'Marital deduction' means the federal estate tax deduction
allowed for transfers under section 2056 of the Internal Revenue
Code, as in effect on January 1, { - 2006 - } { + 2008 + },
or the federal gift tax deduction allowed for transfers under
section 2523 of the Internal Revenue Code, as in effect on
January 1,
{ - 2006 - } { + 2008 + }.
(b) 'Marital deduction gift' means a transfer of property that
the settlor intended to qualify for the marital deduction.
(2) If a trust contains a marital deduction gift:
(a) The provisions of the trust, including any power, duty or
discretionary authority given to a fiduciary, must be construed
as necessary to comply with the marital deduction provisions of
the Internal Revenue Code.
(b) The fiduciary may not take any action or have any power
that impairs the tax deduction for the marital deduction gift.
(c) The marital deduction gift may be satisfied only with
property that qualifies for the tax deduction.
(3) If a trust executed before September 12, 1981, indicates
the settlor intended that a gift provide the maximum allowable
marital deduction, the trust gives the recipient an amount equal
to the maximum amount of the marital deduction that would have
been allowed as of the date of the gift under federal law as it
existed before September 12, 1981, with adjustments for:
(a) The provisions of section 2056(c)(1)(B) and (C) of the
Internal Revenue Code in effect immediately before September 12,
1981.
(b) Reduction of the amount passing under the gift by the final
federal estate tax values of any other property that passes under
the trust, or by other means, that qualifies for the marital
deduction. This paragraph does not apply to qualified terminable
interest property under section 2056(b)(7) of the Internal
Revenue Code, as in effect on January 1, { - 2006 - } { +
2008 + }.
(4) If a marital deduction gift is made in trust:
(a) The settlor's spouse is the only beneficiary of income or
principal of the marital deduction property as long as the spouse
lives. Nothing in this paragraph prevents exercise by the
settlor's spouse of a power of appointment included in a trust
that qualifies as a general power of appointment marital
deduction trust.
(b) Subject to paragraph (d) of this subsection, the settlor's
spouse is entitled to all of the income of the marital deduction
property at least once a year, as long as the spouse is alive.
Enrolled Senate Bill 371 (SB 371-INTRO) Page 12
(c) The settlor's spouse has the right to require that the
trustee of the trust make unproductive marital deduction property
productive or convert it into productive property within a
reasonable time.
(d) Notwithstanding any provision of ORS chapter 129, upon the
death of the settlor's spouse all remaining accrued or
undistributed income from qualified terminable interest property
under sections 2056(b)(7) or 2523(f) of the Internal Revenue
Code, as in effect on January 1, { - 2006 - } { + 2008 + },
passes to the estate of the settlor's spouse, unless the trust
provides a different disposition that qualifies for the marital
deduction.
(5)(a) Except as provided in paragraph (b) of this subsection,
if a trust that makes a marital deduction gift includes a
requirement that the settlor's spouse survive the settlor by a
period of more than six months, or contains provisions that could
result in a loss of the spouse's interest in the trust if the
spouse fails to survive the settlor by at least six months, the
spouse need only survive the settlor by six months to receive the
marital deduction gift.
(b) If a trust that makes a marital deduction gift includes a
requirement that the settlor's spouse survive a common disaster
that results in the death of the settlor, the spouse need only
survive until the final audit of the federal estate tax return
for the settlor's estate, if any, to receive the marital
deduction gift.
(6) A trustee is not liable for a good faith decision whether
to make any election referred to in sections 2056(b)(7) or
2523(f) of the Internal Revenue Code, as in effect on January 1,
{ - 2006 - } { + 2008 + }.
(7) Subsections (4) and (6) of this section do not apply to a
trust that qualifies for the marital deduction under
{ - section 20.2056(e)-2(b) of the Code of Federal
Regulations - } { + 26 U.S.C. 2056, as described in 26 C.F.R.
2056(c)-2(b)(1) + }, as in effect on January 1, { - 2006 - }
{ + 2008 + }.
SECTION 15. ORS 130.400 is amended to read:
130.400. (1) The trustee may compromise a claim against the
trust estate.
(2) A claim presented to a trustee under ORS 130.350 to 130.450
shall be considered allowed as presented unless within 60 days
after the date of presentment of the claim the trustee mails or
delivers a notice of disallowance of the claim in whole or in
part to the claimant and to the attorney of the claimant if the
claimant has an attorney.
(3) A notice of disallowance of a claim shall inform the
claimant that the claim has been disallowed in whole or in part
and, to the extent disallowed, will be barred unless the claimant
requests a summary determination or brings an action in the
manner provided by subsection (4) of this section.
(4) If a trustee disallows a claim submitted under ORS 130.350
to 130.450 in whole or in part, the claimant, within 30 days
after the date of mailing or delivery of the notice of
disallowance, may:
(a) File a request for summary determination of the claim in
the probate court, with proof of service of a copy of the request
upon the trustee or the attorney of the trustee; or
(b) Commence a separate action against the trustee on the claim
in the { - circuit - } { + probate + } court.
Enrolled Senate Bill 371 (SB 371-INTRO) Page 13
(5) If the claimant fails either to request a summary
determination or commence a separate action as provided in
subsection (4) of this section, the claim is barred to the extent
the claim has been disallowed by the trustee.
(6) If a claimant prevails in a proceeding or action under
subsection (4) of this section, the claim shall be allowed or
judgment entered in the full amount determined to be due to the
claimant. The claim or judgment shall be paid from the assets of
the trust estate only to the extent that funds are available
after payment of other claims with higher priority under ORS
130.425.
(7) If the claimant files a request for summary determination
of a claim under subsection (4) of this section, the trustee may
notify the claimant in writing that the claimant must commence a
separate action against the trustee on the claim within 60 days
after the claimant receives the notice. Notice under this
subsection must be given by the trustee within 30 days after the
request for summary determination is served on the trustee or the
attorney of the trustee. If the claimant fails to commence a
separate action within the time allowed, the claim is barred to
the extent the claim has been disallowed by the trustee.
(8) In a proceeding for summary determination under this
section:
(a) The trustee shall make response to the claim as though the
claim were a complaint filed in an action.
(b) The court shall hear the matter without a jury, after
notice to the claimant and trustee. The court shall determine the
claim in a summary manner, and shall make an order allowing or
disallowing the claim in whole or in part.
(c) No appeal may be taken from the order of the court made in
a proceeding for summary determination under this section.
(9) If a civil action is commenced under subsection (4) of this
section, a trustee, or beneficiary, may petition the court to
approve a proposed disposition of claims or to provide
instructions on the treatment of claims.
(10) A claimant filing a request for summary determination of a
claim under subsection (4) of this section must pay the filing
fee required of a defendant or respondent under ORS 21.110 (1)
and other fees applicable to civil actions in circuit court.
SECTION 16. ORS 130.500 is amended to read:
130.500. { + (1) + } A person who has capacity to make a will
has capacity to create, amend, revoke or add property to a
revocable trust, or to direct the actions of the trustee of a
revocable trust.
{ + (2) A revocable trust remains a revocable trust for the
purposes of ORS 130.520 to 130.575 even though the trust cannot
be revoked because:
(a) The settlor becomes financially incapable; or
(b) An event occurs that by the terms of the trust prevents the
revocation of the trust. + }
SECTION 17. ORS 130.510 is amended to read:
130.510. (1) While the settlor of a revocable trust is alive,
rights of the beneficiaries are subject to the control of the
settlor, and the duties of the trustee are owed exclusively to
the settlor. Beneficiaries other than the settlor have no right
to receive notice, information or reports under { - ORS
130.710 - } { + this chapter + }.
(2) The rights of the beneficiaries with respect to property
that is subject to a power of withdrawal are subject to the
control of the holder of the power during the period that the
Enrolled Senate Bill 371 (SB 371-INTRO) Page 14
power may be exercised, and the duties of the trustee are owed
exclusively to the holder of a power of withdrawal with respect
to the property that is subject to the power.
SECTION 18. ORS 130.710 is amended to read:
130.710. (1) A trustee shall keep the qualified beneficiaries
of the trust reasonably informed about the administration of the
trust and of the material facts necessary for those beneficiaries
to protect their interests. If reasonable under the
circumstances, a trustee may respond to a request for information
related to the administration of the trust from a beneficiary who
is not a qualified beneficiary.
(2)(a) Upon request of a qualified beneficiary, a trustee shall
promptly furnish to the qualified beneficiary a copy of the trust
instrument.
(b) Within a reasonable time after accepting a trusteeship, a
trustee shall notify all qualified beneficiaries of the
acceptance and of the trustee's name, address and telephone
number.
(c) { + Except as provided in subsection (10) of this
section, + } within a reasonable time after the date the trustee
acquires knowledge of the creation of an irrevocable trust, or
the date the trustee acquires knowledge that a formerly revocable
trust has become irrevocable, whether by the death of the settlor
or otherwise, the trustee shall notify the qualified
beneficiaries of the trust's existence, of the identity of the
settlor or settlors, of the right to request a copy of the trust
instrument and of the right to a trustee's report as provided in
subsection (3) of this section.
(d) A trustee shall notify the qualified beneficiaries in
advance of any change in the method or rate of the trustee's
compensation.
(3) { - At least annually and upon termination of the
trust - } { + Except as provided in subsection (10) of this
section + }, a trustee shall send a trustee report { + , at least
annually and upon termination of the trust, + } to the
permissible distributees of trust income or principal and to
other qualified beneficiaries who request the report. The report
must include a listing of trust property and liabilities, and
must show the market values of trust assets, if feasible. The
report must reflect all receipts and disbursements of the trust,
including the source and amount of the trustee's compensation.
Upon a vacancy in a trusteeship, unless a cotrustee remains in
office, a trustee report must be sent to the qualified
beneficiaries by the former trustee. A personal representative,
conservator or guardian may send the qualified beneficiaries a
trustee report on behalf of a deceased or financially incapable
trustee.
(4) A qualified beneficiary may waive the right to a trustee
report or other information otherwise required to be furnished
under this section. A qualified beneficiary may withdraw a waiver
at any time for the purpose of future reports and other
information.
(5) A trustee may charge a reasonable fee to a beneficiary for
providing information under this section.
(6) A beneficiary's request for any information under this
section must be with respect to a single trust that is
sufficiently identified to enable the trustee to locate the
trust's records.
(7) If the trustee is bound by any confidentiality restrictions
regarding a trust asset, any beneficiary eligible under this
Enrolled Senate Bill 371 (SB 371-INTRO) Page 15
section to receive information about that asset must agree to be
bound by the same confidentiality restrictions before receiving
the information.
(8) Despite any other provision of this section, information,
notice and reports required by this section shall be given only
to the settlor's spouse if:
(a) The spouse survives the settlor;
(b) The spouse is financially capable;
(c) The spouse is the only permissible distributee of the
trust; and
(d) All of the other qualified beneficiaries of the trust are
descendants of the spouse.
(9) { - Despite - } { + Notwithstanding + } any other
provision of this section, while the settlor of a revocable trust
is alive, beneficiaries other than the settlor have no right to
receive notice, information or reports under this section.
{ + (10) A trustee need not provide a qualified beneficiary
with the notice of the right to a trustee's report under
subsection (2)(c) of this section, and need not send trustee
reports to the beneficiary under subsection (3) of this section,
until six months after a revocable trust becomes irrevocable if
the beneficiary's only interest in the trust is a distribution of
a specific item of property or distribution of a specific amount
of money. The trustee must provide the notice of the right to a
trustee's report required by subsection (2)(c) of this section at
the end of the six-month period if the beneficiary has not
received distribution of the specific item of property or
specific amount of money before the end of the period. If notice
is provided to a qualified beneficiary under this subsection, the
trustee must thereafter send trustee reports to the beneficiary
until distribution of the specific item of property or specific
amount of money. + }
SECTION 19. { + The amendments to ORS 130.710 by section 18 of
this 2009 Act apply only to revocable trusts that become
irrevocable on or after the effective date of this 2009 Act. + }
SECTION 20. { + Section 21 of this 2009 Act is added to and
made a part of ORS chapter 130. + }
SECTION 21. { + (1) A trust instrument may appoint a person to
act as an adviser for the purpose of directing or approving
decisions made by the trustee, including decisions related to
distribution of trust assets and to the purchase, sale or
exchange of trust investments. The appointment must be made by a
provision of the trust that specifically refers to this section.
An adviser shall exercise all authority granted under the trust
instrument as a fiduciary unless the trust instrument provides
otherwise. A person who agrees to act as an adviser is subject to
Oregon law and submits to the jurisdiction of the courts of this
state.
(2) If a trust instrument provides that a trustee is to follow
the direction of an adviser, and that trustee acts in accordance
with the adviser's directions, the trustee is not liable for any
loss resulting directly or indirectly from the trustee's decision
unless the decision constitutes reckless indifference to the
purposes of the trust or the interests of the beneficiaries.
(3) If a trust instrument provides that a trustee is to make
decisions with the approval of an adviser, and the adviser does
not provide approval within a reasonable time after the trustee
has made a request for approval of a decision, the trustee is not
liable for any loss resulting directly or indirectly from the
Enrolled Senate Bill 371 (SB 371-INTRO) Page 16
decision unless the decision constitutes reckless indifference to
the purposes of the trust or the interests of the beneficiaries.
(4) Except to the extent specifically provided by the trust
instrument, a trustee has no duty to monitor an adviser's
conduct, provide advice to the adviser, consult with the adviser
or give notice to any beneficiary or third party about decisions
made pursuant to the adviser's direction that the trustee would
have decided differently.
(5) Absent clear and convincing evidence to the contrary, all
actions taken by a trustee for the purpose of implementing
directions from an adviser, including confirming that the
adviser's directions have been carried out and recording and
reporting activities requested by the adviser, are presumed to be
administrative actions taken by the trustee solely for the
purpose of allowing the trustee to perform the duties assigned to
the trustee under the trust instrument. Administrative actions
taken by a trustee for the purpose of implementing directions
from an adviser do not constitute monitoring of the adviser or
other participation in decisions that are within the scope of the
adviser's authority. + }
----------
Passed by Senate March 20, 2009
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 26, 2009
...........................................................
Speaker of House
Enrolled Senate Bill 371 (SB 371-INTRO) Page 17
Received by Governor:
......M.,............., 2009
Approved:
......M.,............., 2009
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2009
...........................................................
Secretary of State
Enrolled Senate Bill 371 (SB 371-INTRO) Page 18