Chapter 130 — Uniform
Trust Code
UNIFORM TRUST
CODE
2011 EDITION
PROTECTIVE PROCEEDINGS; POWERS OF
ATTORNEY; TRUSTS
GENERAL PROVISIONS AND DEFINITIONS
130.001 UTC 101. Short title
130.005 UTC 102. Scope
130.010 UTC 103. Definitions
130.015 UTC 104. Knowledge
130.020 UTC 105. Default and mandatory rules
130.022 UTC 108. Principal place of administration
130.025 UTC 106. Common law of trusts; principles of equity
130.030 UTC 107. Governing law
130.035 UTC 109. Methods of giving notice; waiver of notice
130.040 UTC 110. Other persons treated as qualified beneficiaries
130.045 UTC 111. Nonjudicial settlement
agreements
JUDICIAL PROCEEDINGS
130.050 UTC 201. Role of court in administration of trust
130.055 UTC 202. Jurisdiction over trustee and beneficiary
130.060 UTC 203. Subject-matter jurisdiction
130.065 UTC 204. Venue
REPRESENTATION
130.100 UTC 301. Representation; basic effect
130.105 UTC 302. Representation by holder of testamentary power of
appointment
130.110 UTC 303. Representation by fiduciaries and parents
130.115 UTC 304. Representation by person having substantially
identical interest
130.120 UTC 305. Appointment of special representative
CREATION, VALIDITY, MODIFICATION AND
TERMINATION OF TRUST
130.150 UTC 401. Methods of creating trust
130.155 UTC 402. Requirements for creation
130.160 UTC 403. Trusts created in other states, countries or
jurisdictions
130.165 UTC 404. Trust purposes
130.170 UTC 405. Charitable purposes; enforcement
130.175 UTC 406. Creation of trust induced by fraud, duress or
undue influence
130.180 UTC 407. Evidence of oral trust
130.185 UTC 408. Pet trust
130.190 UTC 409. Noncharitable trust
without ascertainable beneficiary
130.195 UTC 410. Modification or termination of trust; proceedings
for approval or disapproval
130.200 UTC 411. Modification or termination of irrevocable trust
by consent
130.205 UTC 412. Modifications or termination because of
unanticipated circumstances or inability to administer trust effectively
130.210 UTC 413. Cy pres
130.215 UTC 414. Modification or termination of uneconomic trust
130.220 UTC 415. Reformation to correct mistakes
130.225 UTC 416. Modification to achieve settlor’s
tax objectives
130.230 UTC 417. Combination and division of trusts
130.235 In
terrorem clause
130.240 Marital
deduction gifts
CREDITOR’S CLAIMS; SPENDTHRIFT AND
DISCRETIONARY TRUSTS
130.300 UTC 501. Rights of beneficiary’s creditor or assignee
130.305 UTC 502. Spendthrift provision
130.310 UTC 503. Exceptions to spendthrift provisions
130.315 UTC 505. Creditor’s claim against settlor
130.320 UTC 506. Overdue distribution
130.325 UTC 507. Personal obligations of trustee
CLAIMS AGAINST TRUST BASED ON DEBTS OF SETTLOR
130.350 Statute
of limitations
130.355 Commencement
of proceeding
130.360 Limitation
on presentation of claims when notice to claimants given
130.365 Publication
of notice
130.370 Notice
to individual claimants
130.375 Form
of claim; evidence in support
130.380 Claim
based on debt due or judgment
130.385 Claim
on debts not yet due
130.390 Claim
on secured debt that is due
130.395 Claim
on contingent or unliquidated debt
130.400 Allowance
and disallowance of claims
130.405 Creditor
may obtain order for payment
130.410 Evidence
required to allow court approval of claim disallowed by trustee
130.415 Waiver
of statute of limitations
130.420 Tolling
of statute of limitations on claim
130.425 Priority
of claims
130.430 Applicability
of time limitations to public bodies
130.435 Applicability
of time limitations to certain claims based on liens against property and
liability of settlor or trustee
130.440 Petition
to close case
130.445 Dismissal
for want of prosecution
130.450 Consolidation
of proceedings
REVOCABLE TRUSTS
130.500 UTC 601. Revocable trusts generally
130.505 UTC 602. Revocation or amendment of revocable trust
130.510 UTC 603. Settlor’s powers; powers
of withdrawal
130.515 UTC 604. Limitation on action contesting validity of
revocable trust; distribution of trust property
RULES GOVERNING REVOCABLE TRUSTS
130.520 Definition
for ORS 130.520 to 130.575
130.525 Applicability
of ORS 130.520 to 130.575
130.530 Effect
of marriage
130.535 Revocation
by divorce or annulment
130.540 Contract
of sale of property not revocation
130.545 Encumbrance
or disposition of property after trust instrument executed
130.550 When
trust assets pass to descendants of beneficiary; class gifts
130.555 Children
born or adopted after execution of trust instrument
130.560 Failure
of specific distribution
130.565 Effect
of failure of specific distribution
130.570 Advancement
against share of trust
130.575 Effect
of advancement on distribution
OFFICE OF TRUSTEE
130.600 UTC 701. Acceptance or rejection of trusteeship
130.605 UTC 702. Trustee’s bond
130.610 UTC 703. Cotrustees
130.615 UTC 704. Vacancy in trusteeship; appointment of successor
130.620 UTC 705. Resignation of trustee
130.625 UTC 706. Removal of trustee
130.630 UTC 707. Delivery of property by former trustee
130.635 UTC 708. Compensation of trustee
130.640 UTC 709. Reimbursement of expenses
DUTIES AND POWERS OF TRUSTEE
130.650 UTC 801. Duty to administer trust
130.655 UTC 802. Duty of loyalty
130.660 UTC 803. Impartiality
130.665 UTC 804. Prudent administration
130.670 UTC 805. Costs of administration
130.675 UTC 806. Trustee’s skills
130.680 UTC 807. Delegation by trustee
130.685 UTC 808. Powers to direct
130.690 UTC 809. Control and protection of trust property
130.695 UTC 810. Recordkeeping and identification of trust property
130.700 UTC 811. Enforcement and defense of claims
130.705 UTC 812. Collecting trust property
130.710 UTC 813. Duty to inform and report
130.715 UTC 814. Discretionary powers; tax savings
130.720 UTC 815. General powers of trustee
130.725 UTC 816. Specific powers of trustee
130.730 UTC 817. Distribution upon termination
ADVISERS
130.735 Appointment
of adviser; liability of trustee
UNIFORM PRUDENT INVESTOR ACT
130.750 Trustee’s
duty to comply with prudent investor rule
130.755 Prudent
investor rule
130.760 Diversification
of trust investments
130.765 Trustee
duty
130.770 Determination
of compliance with prudent investor rule
130.775 Trust
language authorizing investments permitted under prudent investor rule
LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS
DEALING WITH TRUSTEE
130.800 UTC 1001. Remedies for breach of trust
130.805 UTC 1002. Damages for breach of trust
130.810 UTC 1003. Damages in absence of breach
130.815 UTC 1004. Attorney fees and costs
130.820 UTC 1005. Limitation of action against trustee
130.825 UTC 1006. Reliance on trust instrument
130.830 UTC 1007. Event affecting administration or distribution
130.835 UTC 1008. Exculpation of trustee
130.840 UTC 1009. Beneficiary’s consent, release or ratification
130.845 UTC 1010. Limitation on personal liability of trustee
130.850 UTC 1011. Interest as general partner
130.855 UTC 1012. Protection of person dealing with trustee
130.860 UTC 1013. Certification of trust
MISCELLANEOUS PROVISIONS
130.900 Uniformity
of application and construction
130.905 UTC 1102. Electronic records and signatures
130.910 UTC 1106. Application
GENERAL PROVISIONS AND DEFINITIONS
130.001 UTC 101.
Short title. This chapter may be cited as the Oregon
Uniform Trust Code. [2005 c.348 §1]
130.005 UTC 102.
Scope. (1) Except as provided in subsection
(2) of this section, this chapter applies to express trusts, whether charitable
or noncharitable, and to trusts created pursuant to a
statute or a judgment that requires that the trust be administered in the manner
of an express trust.
(2)
This chapter does not apply to:
(a)
A trust that is part of an employee benefit arrangement or an individual
retirement account.
(b)
A trust account established under a qualified tuition savings program pursuant
to ORS 348.841 to 348.873.
(c)
Trust accounts maintained on behalf of clients or customers by licensed service
professionals, including trust accounts maintained by attorneys pursuant to
rules of professional conduct adopted under ORS 9.490 and by licensed real estate
property managers or principal real estate brokers pursuant to ORS 696.241.
(d)
An endowment care fund established by a cemetery authority pursuant to ORS
97.810.
(e)
Funds maintained by a public body, as defined in ORS 174.109, or other
governmental entities.
(f)
Trust funds held for a single business transaction or an escrow arrangement.
(g)
Trusts created by a depository agreement with a financial institution.
(h)
Trusts created by an account agreement with a regulated financial services
entity.
(i) An account maintained under the Oregon Uniform Transfers
to Minors Act as set forth in ORS 126.805 to 126.886.
(j)
A fund maintained pursuant to court order in conjunction with a bankruptcy
proceeding or business liquidation.
(k)
A business trust as described in ORS 128.560.
(L)
A voting trust as described in ORS 60.254.
(m)
Funds maintained to manage proceeds from class actions.
(n)
A trust deed as defined in ORS 86.705 or any other trust created solely to
secure the performance of an obligation.
(o)
A trust established on behalf of a resident of a residential facility under ORS
443.880.
(p)
A trust managed by a nonprofit association for persons with disabilities under
42 U.S.C. 1396p(d)(4)(C),
as in effect on January 1, 2006, and under the rules of the Department of Human
Services.
(q)
A resulting or constructive trust.
(r)
A trust fund established for a purchaser who enters into a prearrangement sales
contract, as defined in ORS 97.923, or a preconstruction sales contract, as
defined in ORS 97.923. [2005 c.348 §2; 2007 c.70 §32; 2011 c.158 §5; 2011 c.712 §3]
130.010 UTC 103.
Definitions. 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, 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.
(11)
“Person” means an individual, corporation, business 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. [2005 c.348
§3; 2009 c.275 §1; 2009 c.294
§16]
130.015 UTC 104.
Knowledge. (1) Subject to subsection (2) of this
section, a person has knowledge of a fact if the person:
(a)
Has actual knowledge of the fact;
(b)
Has received a notice or notification of the fact; or
(c)
From all the facts and circumstances known to the person at the time in
question, has reason to know the fact.
(2)
An organization that conducts activities through employees has notice or
knowledge of a fact involving a trust only from the time the information was
received by an employee having responsibility to act for the trust, or would
have been brought to the employee’s attention if the organization had exercised
reasonable diligence. An organization exercises reasonable diligence if the
organization maintains reasonable routines for communicating significant
information to the employee having responsibility to act for the trust and
there is reasonable compliance with the routines. Reasonable diligence does not
require an employee of the organization to communicate information unless the
communication is part of the employee’s regular duties or the employee knows a
matter involving the trust would be materially affected by the information. [2005
c.348 §4]
130.020 UTC 105.
Default and mandatory rules. (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 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) 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. [2005
c.348 §5; 2009 c.275 §2]
130.022 UTC 108.
Principal place of administration. (1) Terms of
a trust designating the principal place of administration are valid and
controlling if:
(a)
A trustee’s principal place of business is located in the designated state,
country or other jurisdiction, or the trustee is a resident of the designated
state, country or other jurisdiction;
(b)
All or part of the administration occurs in the designated state, country or
other jurisdiction; or
(c)
Other means exist for establishing a sufficient connection with the designated
state, country or other jurisdiction.
(2)
A trustee is under a continuing duty to administer the trust at a place
appropriate to the trust’s purposes, the trust’s administration and the
interests of the beneficiaries. Absent a substantial change of circumstances,
the trustee may assume that the original place of administration is also the
appropriate place of administration. The duty to administer the trust at an
appropriate place may prevent a trustee from moving the place of
administration.
(3)(a)
A trustee may transfer the trust’s principal place of administration to another
state, country or other jurisdiction if the transfer is in furtherance of the
duty imposed by subsection (2) of this section.
(b)
A trustee shall notify qualified beneficiaries of the trust of a proposed
transfer of the trust’s principal place of administration not fewer than 60
days before initiating the transfer. The notice of proposed transfer must include
all of the following:
(A)
The name of the state, country or other jurisdiction to which the principal
place of administration is to be transferred.
(B)
The address and telephone number at the new location at which the trustee can
be contacted.
(C)
An explanation of the reasons for the proposed transfer.
(D)
The date on which the proposed transfer is anticipated to occur.
(E)
The date by which the qualified beneficiary must notify the trustee of an
objection to the proposed transfer. The date for notifying a trustee of an
objection may not be fewer than 60 days after the date on which the notice is
given.
(c)
The authority of a trustee under this subsection to transfer a trust’s
principal place of administration terminates if a qualified beneficiary
notifies the trustee of an objection to the proposed transfer on or before the
date specified in the notice.
(d)
The trustee may transfer some or all of the trust property to a successor
trustee designated in the terms of the trust or appointed pursuant to ORS
130.615 in connection with a transfer of the trust’s principal place of
administration. [2005 c.348 §8]
130.025 UTC 106.
Common law of trusts; principles of equity. The
common law of trusts and principles of equity supplement this chapter, except
to the extent modified by this chapter or other law. [2005 c.348
§6]
130.030 UTC 107.
Governing law. The meaning and effect of the terms of
a trust are determined by:
(1)
The law of the state, country or other jurisdiction designated in the terms of
the trust unless the designation of the law of that state, country or other
jurisdiction is contrary to a strong public policy of the state, country or
other jurisdiction having the most significant relationship to the matter at
issue; or
(2)
In the absence of a controlling designation in the terms of the trust, the law
of the state, country or other jurisdiction having the most significant
relationship to the matter at issue. [2005 c.348 §7]
130.035 UTC 109.
Methods of giving notice; waiver of notice. (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 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. [2005 c.348 §9; 2009 c.275 §4]
130.040 UTC 110.
Other persons treated as qualified beneficiaries.
(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. [2005
c.348 §10; 2009 c.275 §5]
130.045 UTC 111.
Nonjudicial settlement agreements.
(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 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) 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:
______________________________________________________________________________
CAPTION NOTICE
OF FILING OF
OF CASE SETTLEMENT
AGREEMENT
OR
MEMORANDUM OF
SETTLEMENT
AGREEMENT
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) 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) The clerk of the circuit court shall
collect in advance the filing fees established under ORS 21.135 for the filing
of an agreement or memorandum of agreement under subsection (5) of this section
and for the filing of objections under subsection (6) of this section. [2005 c.348 §11; 2009 c.275 §6; 2011 c.595 §30]
JUDICIAL
PROCEEDINGS
130.050
UTC 201. Role of court in administration of trust.
(1) A court may intervene in the administration of a trust to the extent the
court’s jurisdiction is invoked by an interested person or as provided by law.
(2) A trust is not subject to continuing
judicial supervision unless ordered by a court.
(3) A judicial proceeding may relate to
any matter involving a trust’s administration, including a request for
instructions or a declaratory judgment action. [2005 c.348
§12]
130.055
UTC 202. Jurisdiction over trustee and beneficiary.
(1) By accepting the trusteeship of a trust having its principal place of
administration in Oregon or by moving the principal place of administration to
this state, the trustee submits personally to the jurisdiction of the courts of
this state regarding any matter involving the trust.
(2) The beneficiaries of a trust having
its principal place of administration in Oregon are subject to the jurisdiction
of the courts of Oregon regarding any matter involving the beneficiaries’
interests in the trust. By accepting a distribution from such a trust, the
recipient submits personally to the jurisdiction of the courts of this state
regarding any matter involving the trust.
(3) This section does not preclude other
methods of obtaining jurisdiction over a trustee, beneficiary or other person
receiving property from the trust. [2005 c.348 §13]
130.060
UTC 203. Subject-matter jurisdiction.
Except as provided in ORS 130.355, the circuit court has jurisdiction of
proceedings in this state concerning the administration of a trust. [2005 c.348 §14; 2009 c.275 §7]
130.065
UTC 204. Venue. (1)
Except as otherwise provided in this section, venue for a judicial proceeding
involving a trust is in the county in which the trust’s principal place of
administration is or will be located.
(2) If a trust is created by will and the
estate is not yet closed, venue for a judicial proceeding involving a trust is
in the county in which the decedent’s estate is being administered.
(3) If a trust has no trustee, venue for a
judicial proceeding for the appointment of a trustee is in a county in which a
beneficiary resides, in a county in which any trust property is located and, if
the trust is created by will, in the county in which the decedent’s estate was
or is being administered. [2005 c.348 §15]
REPRESENTATION
130.100
UTC 301. Representation; basic effect.
(1) Notice to a person who may represent and bind another person under ORS
130.100 to 130.120 has the same effect as if notice were given directly to the
other person. Notice to a representative must comply with ORS 130.035 (4).
(2) The consent of a person who may
represent and bind another person under ORS 130.100 to 130.120 is binding on
the person represented unless the person represented objects to the
representation before the consent would otherwise have become effective.
(3) Except as otherwise provided in ORS
130.200 and 130.505, a person who is authorized to represent a financially
incapable settlor under ORS 130.100 to 130.120 may
receive notice and give binding consent on the settlor’s
behalf.
(4) A settlor
may not represent and bind a beneficiary under ORS 130.100 to 130.120 with
respect to the termination or modification of an irrevocable trust under ORS
130.200 (1). [2005 c.348 §16]
130.105
UTC 302. Representation by holder of testamentary
power of appointment. To the extent there is no
conflict of interest between the holder of a testamentary power of appointment
and the persons represented with respect to the particular question or dispute,
the holder may represent and bind persons whose interests are subject to the
power as permissible appointees, as takers in default or by other reason. [2005
c.348 §17; 2007 c.33 §1]
130.110
UTC 303. Representation by fiduciaries and parents.
To the extent there is no conflict of interest between the representative and
the person represented or among those being represented with respect to a
particular question or dispute:
(1) A conservator may represent and bind
the estate that the conservator controls;
(2) An agent having authority to act with
respect to the particular question or dispute may represent and bind the
principal;
(3) A trustee may represent and bind the
beneficiaries of the trust;
(4) A personal representative of a
decedent’s estate may represent and bind persons interested in the estate; and
(5) A parent may represent and bind the
parent’s minor or unborn child if a conservator for the child has not been
appointed. [2005 c.348 §18]
130.115
UTC 304. Representation by person having substantially
identical interest. Unless otherwise represented, a
minor, financially incapable individual or unborn individual, or a person whose
identity or location is unknown and not reasonably ascertainable, may be
represented by and bound by another person having a substantially identical
interest with respect to the particular question or dispute, but only to the
extent there is no conflict of interest between the representative and the
person represented. [2005 c.348 §19]
130.120
UTC 305. Appointment of special representative.
(1) If the court determines that the interest of a person is not represented
under ORS 130.100 to 130.120, or that the otherwise available representation
might be inadequate, the court may appoint a special representative to receive
notice, give consent and otherwise represent, bind and act on behalf of a
minor, financially incapable individual or unborn individual, or a person whose
identity or location is unknown and not reasonably ascertainable. A special
representative may be appointed to represent several persons or interests, if
the interests of the persons represented do not conflict.
(2) A special representative may act on
behalf of the individual represented with respect to any matter that the court
has authorized, whether or not a judicial proceeding concerning the trust is
pending.
(3) In making decisions, a special
representative may consider general benefit accruing to the living members of
the individual’s family.
(4) A person appointed as special
representative must have appropriate skills and experience necessary to
adequately represent the individual in the matter for which the special
representative is appointed. A special representative may not have an interest
in the trust that is the subject of the appointment of the special
representative. A special representative may not be related to a personal
representative of an estate with an interest in the trust, or to a trustee,
beneficiary or other person with an interest in the trust.
(5) A person requesting the appointment of
a special representative must file a petition with the court describing the
proposed special representative, the need for a special representative, the qualifications
of the special representative, the person or persons who will be represented,
the actions that the special representative will take and the approximate date
or event when the authority of the special representative will terminate. The
person seeking to serve as special representative must file a consent to serve.
(6) A special representative appointed
under this section is entitled to reasonable compensation for services. The
trustee shall pay compensation to the special representative from the principal
of the trust that is attributable to those beneficiaries who are represented.
If the beneficiaries who are represented do not have principal that is
attributable to them, compensation is an administrative expense of the trust.
(7) Upon completion of the
responsibilities of the special representative, the special representative
shall move the court for an order discharging the special representative. Upon
order of the court, a special representative appointed under this section shall
be discharged from any further responsibility with respect to the trust. [2005 c.348 §20]
CREATION,
VALIDITY, MODIFICATION AND TERMINATION OF TRUST
130.150
UTC 401. Methods of creating trust.
(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
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. [2005 c.348 §21;
2009 c.275 §8]
130.155
UTC 402. Requirements for creation.
(1) A trust is created only if all of the following requirements are met:
(a) The settlor
has capacity to create a trust.
(b) The settlor
indicates an intention to create the trust.
(c) The trust has a definite beneficiary
or is:
(A) A charitable trust;
(B) A trust for the care of an animal, as
provided in ORS 130.185; or
(C) A trust for a noncharitable
purpose, as provided in ORS 130.190.
(d) The trustee has duties to perform.
(e) The same person is not the sole
trustee and sole beneficiary.
(2) A beneficiary is definite for the
purposes of subsection (1)(c) of this section if the beneficiary can be
ascertained when the trust is created or at any time thereafter, subject to any
applicable rule against perpetuities.
(3) A power of a trustee to select a
beneficiary from an indefinite class is valid. If the power is not exercised
within a reasonable time, the power fails and the property subject to the power
passes to the persons who would have taken the property had the power not been
conferred. [2005 c.348 §22]
130.160
UTC 403. Trusts created in other states, countries or
jurisdictions. A trust not created by will is validly
created if the creation of the trust complies with the law of the state,
country or other jurisdiction in which the trust instrument was executed, or
the law of the state, country or other jurisdiction in which, at the time of
creation:
(1) The settlor
was domiciled, had a place of abode or was a national;
(2) A trustee was domiciled or had a place
of business; or
(3) Any trust property was located. [2005 c.348 §23]
130.165
UTC 404. Trust purposes.
A trust may be created only to the extent the purposes of the trust are lawful,
not contrary to public policy and possible to achieve. A trust and its terms
must be for the benefit of the trust’s beneficiaries. [2005 c.348
§24]
130.170
UTC 405. Charitable purposes; enforcement.
(1) A charitable trust 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. [2005 c.348 §25; 2009 c.275 §9]
130.175
UTC 406. Creation of trust induced by fraud, duress
or undue influence. A trust is void to the extent
the creation of the trust was induced by fraud, duress or undue influence. [2005
c.348 §26]
130.180
UTC 407. Evidence of oral trust.
Except as required by a statute other than this chapter, a trust need not be
evidenced by a trust instrument. The creation of an oral trust, and the terms
of an oral trust, must be established by clear and convincing evidence. [2005 c.348 §27]
130.185
UTC 408. Pet trust. (1) A
trust may be created to provide for the care of one or more animals that are
alive during the settlor’s lifetime. The trust
terminates upon the death of the animal or, if the trust was created to provide
for the care of more than one animal, upon the death of the last surviving
animal. An oral or written declaration shall be liberally construed in favor of
finding the creation of a trust under this section. There is a presumption
against merely precatory or honorary disposition on
behalf of an animal.
(2) A trust authorized by this section may
be enforced by a person appointed in the terms of the trust or, if a person is
not appointed in the terms of the trust, by a person appointed by the court. A
person having an interest in the welfare of the animal may request the court to
appoint a person to enforce the trust or to remove a person appointed.
Reasonable compensation for a person appointed by the court may be paid from
the assets of the trust.
(3) Property of a trust authorized by this
section may be applied only to its intended use. Upon termination of the trust,
property of the trust must be distributed to those persons designated in the
trust. In the absence of a designation, the property shall be distributed to
the settlor if the settlor
is living when the distribution is made, or to the settlor’s
successors in interest if the settlor is not living
when the distribution is made.
(4) Except as ordered by a circuit court
or required by the trust instrument, a trustee for a trust authorized under
this section need not pay any fee or make any filing, report, registration,
periodic accounting, separate maintenance of funds or appointment by reason of
the existence of the fiduciary relationship of the trustee. A person appointed
to enforce the trust may request a report under ORS 130.710 (3). [2005 c.348 §28]
130.190
UTC 409. Noncharitable
trust without ascertainable beneficiary. Except as
otherwise provided in ORS 130.185 or by another statute:
(1) A trust may be created for a noncharitable purpose without a definite or definitely
ascertainable beneficiary or for a noncharitable but
otherwise valid purpose to be selected by the trustee. The trust may not be
enforced for more than 90 years.
(2) A trust authorized by this section may
be enforced by a person appointed in the terms of the trust or, if a person is
not appointed in the terms of the trust, by a person appointed by the court.
(3) Property of a trust authorized by this
section may be applied only to its intended use, except to the extent the court
determines that the value of the trust property exceeds the amount required for
the intended use. Trust property not required for the intended use must be
distributed to those persons designated in the trust. In the absence of a
designation, the property shall be distributed to the settlor
if the settlor is living when the distribution is
made, or to the settlor’s successors in interest if
the settlor is not living when the distribution is
made. [2005 c.348 §29]
130.195
UTC 410. Modification or termination of trust;
proceedings for approval or disapproval. (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. [2005 c.348 §30;
2009 c.275 §10]
130.200
UTC 411. Modification or termination of irrevocable
trust by consent. (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.
A settlor’s power to consent to a trust’s
modification or termination may be exercised by:
(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.
(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) A proposed modification or termination
of the trust under subsection (1) or (2) of this section may be approved by the
court without the consent of all beneficiaries if the court finds that:
(a) If all of the 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 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. [2005 c.348 §31; 2007 c.129 §21; 2009 c.275 §11]
130.205
UTC 412. Modifications or termination because of
unanticipated circumstances or inability to administer trust effectively.
(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.
(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. [2005 c.348 §32; 2007
c.515 §1; 2009 c.275 §12]
130.210
UTC 413. Cy pres. (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
(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 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. [2005 c.348 §33;
2009 c.275 §13]
130.215
UTC 414. Modification or termination of uneconomic
trust. (1) After notice to the qualified
beneficiaries, a trustee may terminate a trust if the trustee concludes that
the value of the trust property is insufficient to justify the cost of
administration. A trustee may not terminate a trust under this section if the
trustee is a beneficiary of the trust or has a duty of support for a
beneficiary of the trust.
(2) The court may modify or terminate a
trust, or remove the trustee and appoint a different trustee, if the court
finds that the value of the trust property is insufficient to justify the cost
of administration.
(3) 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.
(4) This section does not apply to an
easement for conservation or preservation. [2005 c.348
§34]
130.220
UTC 415. Reformation to correct mistakes.
The court may reform the terms of a trust, even if unambiguous, to conform the
terms to the settlor’s intention if the person
requesting reformation proves by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected
by a mistake of fact or law, whether in expression or inducement. [2005 c.348 §35]
130.225
UTC 416. Modification to achieve settlor’s
tax objectives. The court may modify the terms
of a trust to achieve the settlor’s tax objectives if
the modification is not contrary to the settlor’s
probable intention. The court may provide that the modification has retroactive
effect. [2005 c.348 §36]
130.230
UTC 417. Combination and division of trusts.
After notice to all qualified beneficiaries, a trustee may combine two or more
trusts into a single trust or divide a trust into two or more separate trusts,
if the result does not materially impair rights of any beneficiary or adversely
affect achievement of the purposes of the trust. [2005 c.348
§37]
130.235
In terrorem clause. (1)
Except as provided in this section, an in terrorem
clause in a trust is valid and enforceable. If a beneficiary challenges a trust
that contains an in terrorem clause that applies to
the beneficiary, the court shall enforce the clause against the beneficiary
even though the beneficiary establishes that there was probable cause for the
challenge.
(2) The court shall not enforce an in terrorem clause if the beneficiary challenging the trust
establishes that the beneficiary has probable cause to believe that the trust
is a forgery or that the trust has been revoked.
(3) The court shall not enforce an in terrorem clause if the challenge is brought by a fiduciary
acting on behalf of a protected person under the provisions of ORS chapter 125,
a guardian ad litem appointed for a minor or a
guardian ad litem appointed for an incapacitated or
financially incapable person.
(4) For the purposes of this section, “in terrorem clause” means a provision in a trust that reduces
or eliminates the interest of a beneficiary under the trust if the beneficiary
challenges the validity of part or all of the trust. [2005 c.348
§38]
130.240
Marital deduction gifts. (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, 2008, or the federal gift tax
deduction allowed for transfers under section 2523 of the Internal Revenue
Code, as in effect on January 1, 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, 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.
(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, 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, 2008.
(7) Subsections (4) and (6) of this
section do not apply to a trust that qualifies for the marital deduction under
26 U.S.C. 2056, as described in 26 C.F.R. 2056(c)-2(b)(1), as in effect on January 1, 2008. [Formerly
128.398; 2009 c.275 §14]
CREDITOR’S
CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS
130.300
UTC 501. Rights of beneficiary’s creditor or
assignee. To the extent a beneficiary’s interest
is not protected by a spendthrift provision, the court may authorize a creditor
or assignee of the beneficiary to reach the beneficiary’s interest by
garnishment or other execution against present or future distributions to or
for the benefit of the beneficiary or by other means. The court may limit the
award to such relief as is appropriate under the circumstances. [2005 c.348 §39]
130.305
UTC 502. Spendthrift provision.
(1) A spendthrift provision is valid only if the provision restrains both
voluntary and involuntary transfer of a beneficiary’s interest.
(2) A term of a trust providing that the
interest of a beneficiary is held subject to a spendthrift trust, or words of
similar import, is sufficient to restrain both voluntary and involuntary
transfer of the beneficiary’s interest.
(3) A beneficiary may not transfer an
interest in a trust in violation of a valid spendthrift provision. Except as
otherwise provided in ORS 130.300 to 130.325, a creditor or assignee of a
beneficiary may not reach the interest of a beneficiary or a distribution by
the trustee before the distribution is received by the beneficiary. [2005 c.348 §40]
130.310
UTC 503. Exceptions to spendthrift provisions.
(1) As used in this section, “child” means any individual for whose benefit a
judgment, court order or administrative order for child support has been
entered in any state, country or other jurisdiction.
(2) Even if a trust contains a spendthrift
provision, the holder of a judgment, court order or administrative order
against a beneficiary for support or maintenance of the beneficiary’s child,
spouse or former spouse or a judgment creditor who has provided services for
the protection of a beneficiary’s interest in the trust, may obtain an order
from a court of this state authorizing garnishment or other execution against
present or future distributions to or for the benefit of the beneficiary. The
court may issue an order authorizing execution against such amount as the court
determines to be equitable under the circumstances but not more than the amount
the trustee would have been required to distribute to or for the benefit of the
beneficiary. Distributions subject to execution under this subsection include
distributions required by the express terms of the trust, such as mandatory
payments of income, and distributions the trustee has otherwise decided to
make, such as through the exercise of discretion.
(3) A spendthrift provision is
unenforceable against a claim of this state or the United States to the extent
a statute of this state or federal law so provides. [2005 c.348
§41]
130.315
UTC 505. Creditor’s claim against settlor.
(1) Whether or not the terms of a trust contain a spendthrift provision:
(a) During the lifetime of the settlor, the property of a revocable trust is subject to
claims of the settlor’s creditors.
(b) A creditor or assignee of the settlor of an irrevocable trust may reach the maximum
amount that can be distributed to or for the settlor’s
benefit. If an irrevocable trust has more than one settlor,
the amount the creditor or assignee of a particular settlor
may reach may not exceed the settlor’s interest in
the portion of the trust attributable to that settlor’s
contribution.
(c) If a trust was revocable at the settlor’s death, the property of the trust becomes subject
to creditors’ claims as provided in ORS 130.350 to 130.450 when the settlor dies. The payment of claims is subject to the settlor’s right to direct the priority of the sources from
which liabilities of the settlor are to be paid.
(2) For the purpose of creditors’ claims,
the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent property of the
trust is subject to the power. The provisions of this subsection apply to the
holder of a power of withdrawal only during the period that the power may be
exercised.
(3) Upon the lapse, release or waiver of a
power of withdrawal, the property of the trust that is the subject of the
lapse, release or waiver becomes subject to claims of creditors of the holder
of the power only to the extent the value of the property exceeds the greater
of the amount specified in section 2041(b)(2) or 2514(e) of the Internal
Revenue Code, as in effect on January 1, 2006, or section 2503(b) of the
Internal Revenue Code, as in effect on January 1, 2006.
(4) Subsections (2) and (3) of this
section do not apply to a person other than a settlor
who is a beneficiary of a revocable or irrevocable trust and who is also a
trustee of the trust, if the power to withdraw for the person’s own benefit is
limited by an ascertainable standard. [2005 c.348 §42]
130.320
UTC 506. Overdue distribution.
Whether or not a trust contains a spendthrift provision, a creditor or assignee
of a beneficiary may reach a mandatory distribution of income or principal, including
a distribution upon termination of the trust, if the trustee has not made the
distribution to the beneficiary within a reasonable time after the designated
distribution date. [2005 c.348 §43]
130.325
UTC 507. Personal obligations of trustee.
Trust property is not subject to personal obligations of the trustee, even if
the trustee becomes insolvent or bankrupt. [2005 c.348
§44]
CLAIMS
AGAINST TRUST BASED ON DEBTS OF SETTLOR
130.350
Statute of limitations. (1) Claims against a trust
described in subsection (2) of this section that are not presented within the
time limitations established under ORS 130.360 or within the statute of
limitations applicable to the claim, whichever is earlier, are barred from
payment from the trust estate.
(2) ORS 130.350 to 130.450 apply only if:
(a) A claim is made against assets of a
trust;
(b) The trust came into existence during
the settlor’s lifetime and was a revocable trust at
any time after the trust was created and before the death of the settlor;
(c) The claim is based on the debts or
liabilities of the settlor; and
(d) The claim is made against the assets
of the trust after the death of the settlor.
(3) ORS 130.350 to 130.450 apply to all
claims against a trust described in subsection (2) of this section, without
regard to whether the claims are contingent, unliquidated
or not yet due. [Formerly 128.256]
130.355
Commencement of proceeding. (1) At any time after the death
of a settlor of a trust described in ORS 130.350 (2),
a trustee of the trust may petition the probate court to determine the claims
of creditors of the settlor. A petition under this
section must include all of the following information to the extent known by
the trustee:
(a) The settlor’s
name, the settlor’s date of birth, the settlor’s date and place of death and the last four digits
of the settlor’s Social Security number.
(b) The name of the trustee.
(c) The address at which claims must be
presented.
(d) The name of the trust, if any, and the
date of the trust, including the dates of any amendments.
(e) The facts establishing venue in the
county where the petition is being filed.
(2) The clerk of the court shall charge
and collect in advance from the trustee the filing fee required from a
plaintiff under ORS 21.135.
(3) A proceeding under this section may be
brought only:
(a) In the county where the settlor had domicile or a place of abode at the time of
death;
(b) In any county where assets of the
trust were located at the time of death or are located at the time the
proceeding is commenced; or
(c) In the county where the settlor died.
(4) The court has personal jurisdiction
over a trustee that files a petition under this section, whether the trustee is
a resident or nonresident of this state, for the purposes of any proceeding
relating to the trust that may be instituted by an interested person. [Formerly
128.258; 2009 c.363 §1; 2010 c.107
§§43,44; 2011 c.595 §131]
130.360
Limitation on presentation of claims when notice to claimants given.
Not later than four months after a petition under ORS 130.355 is entered in the
register of the court, the trustee of the trust shall give notice to persons
with claims against the trust estate in the manner provided by ORS 130.365 and
130.370. All claims against the trust estate are barred unless those claims are
submitted before the later of:
(1) Four months after the date of first
publication of notice to claimants in the manner provided by ORS 130.365; or
(2) If the trustee delivers or mails a
notice to a claimant under ORS 130.370, 30 days after a notice meeting the
requirements of ORS 130.370 is delivered or mailed to the last-known address of
the person having or asserting the claim. [Formerly 128.262]
130.365
Publication of notice. After filing a petition under
ORS 130.355, a trustee must cause a notice to claimants to be published once in
each of three consecutive weeks in a newspaper of general circulation published
in the county in which the petition is filed. The notice must include:
(1) The name of the settlor;
(2) The name of the trustee and the
address at which claims must be presented;
(3) The date of the first publication of
the notice; and
(4) A statement that claims against the
trust estate may be barred unless presented to the trustee at the address
specified in the notice within four months after the date of the first
publication of the notice. [Formerly 128.264]
130.370
Notice to individual claimants. (1) Within
three months after a petition is entered in the register of the court under ORS
130.355, or within such longer time as the court allows, a trustee must make
reasonably diligent efforts to investigate the financial records and affairs of
the settlor and to take such further actions as are
reasonably necessary to ascertain the identity and address of each person who
has or asserts a claim against the trust estate. The court shall allow the
trustee as much time as requested by the trustee for the purpose of determining
the claims against the trust estate. The trustee must thereafter cause to be
delivered or mailed a notice containing the information required in subsection
(2) of this section to the Department of Human Services and the Oregon Health
Authority, or as otherwise provided by rule adopted by the authority, and to
each person known by the trustee to have or to assert a claim against the trust
estate. Notice under this section is not required for any claim that has
already been presented, accepted or paid in full or on account of a claim that
is merely conjectural.
(2) The notice required by this section
must include:
(a) The name of the settlor
and the last four digits of the settlor’s Social
Security number;
(b) The name of the trustee and the
address at which claims must be presented;
(c) A statement that claims against the
trust estate that are not presented to the trustee within 30 days after the
date of the notice may be barred;
(d) The date of the notice, which shall be
the date on which the notice is delivered or mailed; and
(e) A copy of the settlor’s
death certificate. [Formerly 128.266; 2009 c.363 §2;
2009 c.595 §90; 2011 c.720 §63]
130.375
Form of claim; evidence in support. (1) A claim
presented under ORS 130.350 to 130.450 must:
(a) Be in writing.
(b) Describe the nature and the amount of
the claim, if ascertainable.
(c) State the name and address of the
claimant and any attorney for the claimant.
(2) A defect of form of a claim timely
presented may be waived by the trustee or by the court.
(3) Upon demand of a trustee, a claimant
must produce any written evidence supporting a claim made under ORS 130.350 to
130.450 and account for any written evidence supporting a claim that is not
produced. [Formerly 128.268]
130.380
Claim based on debt due or judgment. (1) If a
claim on a debt due is presented and allowed, allowance shall be in the amount
of the debt remaining unpaid on the date of allowance.
(2) If a judgment was entered on a claim
prior to the death of the settlor, the claim shall be
presented under ORS 130.350 to 130.450 in the same manner as if no judgment had
been entered, and a copy of the judgment shall be attached to the claim. The
claim may be disallowed only if the judgment was void or voidable, or if the
judgment could have been set aside on the date of the settlor’s
death, or if the claim is not presented within the time required by ORS
130.350. If the judgment was a lien against the property of the trust estate on
the date of the settlor’s death, the judgment shall
be treated as a claim on a debt due for which the creditor holds security. In
all other respects, a claim that has been reduced to judgment shall have the
same priority under ORS 130.425 as a claim that has not been reduced to
judgment. [Formerly 128.272]
130.385
Claim on debts not yet due. A claim on a debt not due,
whether or not the creditor holds security for the claim, may be presented
under ORS 130.350 to 130.450 as a claim on a debt due. If the claim is allowed,
allowance shall be in an amount equal to the value of the debt on the date of
allowance. The creditor, after allowance of the claim, may withdraw the claim
without prejudice to other remedies. Payment on the basis of the amount allowed
discharges the debt and the security, if any, held by the creditor for the
claim. [Formerly 128.274]
130.390
Claim on secured debt that is due. (1) A claim on
a debt due for which the creditor holds security may be presented under ORS
130.350 to 130.450 as a claim on an unsecured debt due, or the creditor may
elect to rely entirely on the security without presentation of the claim.
(2) If the claim is presented under this
section, the claim shall describe the security. If the security is an
encumbrance that is recorded, the encumbrance may be described by reference to
the book, page, date and place of recording.
(3) If a claim is presented and allowed
under this section, payment shall be on the basis of the amount of the debt
remaining unpaid on the date that the claim is allowed.
(4) If the creditor surrenders the
security for a claim presented and allowed under this section, payment shall be
on the basis of the amount allowed.
(5)(a) If the creditor does not surrender
the security for a claim presented and allowed under this section, and the
creditor exhausts the security before receiving payment on the claim, payment
shall be on the basis of the amount allowed less the amount realized on
exhausting the security unless otherwise provided by law.
(b) If the creditor does not surrender the
security for a claim presented and allowed under this section, and the creditor
does not exhaust the security before receiving payment or does not have the
right to exhaust the security, payment shall be on the basis of the amount
allowed less the value of the security determined by agreement or as the court
may order.
(6) The trustee may convey the secured
property to the creditor in consideration of the satisfaction or partial
satisfaction of the claim. [Formerly 128.276]
130.395
Claim on contingent or unliquidated debt.
(1) A claim on a contingent or unliquidated debt
shall be presented under ORS 130.350 to 130.450 in the same manner as other
claims. If the debt becomes absolute or liquidated before distribution of the
trust estate, the claim shall be paid in the same manner as a claim on an
absolute or liquidated debt.
(2) If a contingent or unliquidated
debt does not become absolute or liquidated before distribution of the trust
estate, the trustee may provide for payment of the claim by any of the
following methods:
(a) The creditor and trustee may
determine, by agreement, arbitration or compromise, the value of the debt and
the claim may be allowed and paid in the same manner as a claim on an absolute
or liquidated debt.
(b) The trustee may distribute the trust
estate, but retain sufficient funds to pay the claim if and when the debt
becomes absolute or liquidated. Distribution of trust assets may not be delayed
under this paragraph for more than two years after distribution would otherwise
be required by the terms of the trust. If the debt does not become absolute or
liquidated within that time, the funds retained, after payment therefrom of any
expenses accruing during that time, shall be distributed to the beneficiaries.
(3) A court may order the trustee to make
distribution of the trust estate as though the claim did not exist.
(4) If after distribution under subsection
(2)(b) or (3) of this section the debt becomes absolute or liquidated, the
beneficiaries are liable to the creditor to the extent of the trust estate
received by them. Payment of the debt may be arranged by creating a trust,
giving a mortgage, securing a bond from a distributee
or by other method. [Formerly 128.278]
130.400
Allowance and disallowance of claims. (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 probate court.
(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 21.135 and other
fees applicable to civil actions in circuit court. [Formerly 128.280; 2009 c.275 §15; 2010 c.107 §§46,47; 2011
c.595 §133]
130.405
Creditor may obtain order for payment. A creditor
whose claim has been allowed or established by summary determination or
separate action, and who has not received payment within six months after the
date of the first publication of notice to interested persons, may apply to the
court for an order directing the trustee to pay the claim. The trustee may
recover amounts owing under the claim from any beneficiary who received a
distribution from the trust estate. The right of recovery is limited to the
extent the beneficiary’s distribution would have been reduced by timely payment
of all allowed or established claims. [Formerly 128.282]
130.410
Evidence required to allow court approval of claim disallowed by trustee.
A claim that has been disallowed by a trustee under ORS 130.350 to 130.450 may
not be allowed by any court except upon some competent, satisfactory evidence
other than the testimony of the claimant. [Formerly 128.284]
130.415
Waiver of statute of limitations. A claim subject
to ORS 130.350 to 130.450 that is barred by a statute of limitations may not be
allowed by the trustee or by any court except upon the written direction or
consent of those interested persons who would be adversely affected by
allowance of the claim. [Formerly 128.286]
130.420
Tolling of statute of limitations on claim. If a
claim is not barred by the statute of limitations on the date of death of the settlor, the claim is not barred by any statute of
limitations until at least one year after the date of death. [Formerly 128.288]
130.425
Priority of claims. (1) Claims allowed against the
trust estate under ORS 130.350 to 130.450 must be paid by the trustee in the
following order of priority:
(a) Expenses of administering the trust
estate.
(b) Expenses of a plain and decent funeral
and disposition of the remains of the settlor.
(c) Debts and taxes with preference under
federal law.
(d) Reasonable and necessary medical and
hospital expenses of the last illness of the settlor,
including compensation of persons attending the settlor.
(e) Taxes with preference under the laws
of this state that are due and payable while possession of the trust estate of
the settlor is retained by the trustee.
(f) Debts owed employees of the settlor for labor performed within 90 days immediately
preceding the date of death of the settlor.
(g) Child support arrearages.
(h) Claims of the Department of Human
Services and the Oregon Health Authority for the net amount of public
assistance, as defined in ORS 411.010.
(i) Claims of
the Department of Human Services and the Oregon Health Authority for the care
and maintenance of any settlor who was a patient at a
state institution under ORS 179.610 to 179.770.
(j) All other claims against the trust
estate.
(2) If the assets of the trust estate are
insufficient to pay in full all expenses or claims of any one class specified
in subsection (1) of this section, each expense or claim of that class shall be
paid only in proportion to the amount thereof. [Formerly 128.290; 2009 c.595 §91; 2011 c.720 §64]
130.430
Applicability of time limitations to public bodies.
Notwithstanding ORS 12.250, all statutes of limitations and other time
limitations imposed under ORS 130.350 to 130.450 apply to actions brought in
the name of the state, or brought in the name of any county or public
corporation, and to actions brought for the benefit of the state or for the
benefit of any county or public corporation. [Formerly 128.292]
130.435
Applicability of time limitations to certain claims based on liens against
property and liability of settlor or trustee.
The statutes of limitations and time limitations provided by ORS 130.350 to
130.450 do not affect:
(1) Any proceeding to enforce a mortgage,
pledge or other lien upon property of the trust estate;
(2) Any proceeding to quiet title or
reform any instrument with respect to title to property; or
(3) To the limits of the insurance
protection only, any proceeding to establish liability of the settlor or the trustee for which the settlor
or trustee is protected by liability insurance at the time the proceeding is
commenced. [Formerly 128.294]
130.440
Petition to close case. (1) Not earlier than four months
after the publication of notice to claimants, or the date on which all claims
against the trust estate have been resolved, whichever is later, a trustee that
has filed a petition under ORS 130.355 must file a petition to close the case
with a statement that all claims received by the trustee have been paid in full
or otherwise resolved in the manner required by ORS 130.350 to 130.450. The
trustee must attach to the petition an affidavit attesting to compliance with
ORS 130.365 and 130.370. The trustee must attach to the affidavit a copy of the
notice published under ORS 130.365 and a copy of any notice delivered or mailed
under ORS 130.370. The affidavit must attest to the date on which each notice
was delivered or mailed, and the name and address of the person to whom each
notice was delivered or mailed.
(2) Upon the filing of the petition to close
the case in compliance with the provisions of this section, the court shall
enter an order closing the case. [Formerly 128.296]
130.445
Dismissal for want of prosecution. (1) If the
trustee does not file a petition to close the case under ORS 130.440 within one
year after filing a petition under ORS 130.355, the court clerk shall mail a
notice to the trustee, or the attorney for the trustee if the trustee is
represented by counsel, informing the trustee that a judgment of dismissal will
be entered in the case for want of prosecution unless an application for a
continuance is made to the court and good cause is shown within 60 days after
the date of the notice. Good cause for a continuance includes the pendency of a
separate action under ORS 130.400 (4).
(2) If an application for a continuance is
not made under this section, or the court fails to find good cause for a
continuance, the court shall enter a judgment of dismissal of the proceeding
without prejudice. The dismissal does not bar a claimant’s right to pursue
claims against a trustee, and a claimant shall have the same rights as if the
trustee filed no proceeding. [Formerly 128.298]
130.450
Consolidation of proceedings. If the
proceeding to determine claims against a deceased settlor
is pending under ORS 130.350 to 130.450 at the same time as probate proceedings
under ORS chapter 115, upon motion of any party or upon the court’s own motion,
any of the courts conducting proceedings may:
(1) Order a joint hearing or trial on the
common claims;
(2) Order that the proceedings be
consolidated; or
(3) Make orders concerning the proceedings
to avoid unnecessary costs for delays. [Formerly 128.300]
REVOCABLE
TRUSTS
130.500
UTC 601. Revocable trusts generally.
(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. [2005 c.348
§45; 2009 c.275 §16]
130.505
UTC 602. Revocation or amendment of revocable trust.
(1) Unless the terms of a trust expressly provide that the trust is
irrevocable, the settlor of the trust may revoke or
amend the trust.
(2) Unless the trust expressly provides
otherwise, if a revocable trust is created or funded by more than one settlor:
(a) To the extent the trust consists of
community property, the trust may be revoked by either spouse acting alone but
may be amended only by joint action of both spouses;
(b) To the extent the trust consists of
property other than community property, each settlor
may revoke or amend the trust as to the portion of the trust property
attributable to that settlor’s contribution; and
(c) Upon the revocation or amendment of
the trust by fewer than all of the settlors, the
trustee shall promptly notify the other settlors of
the revocation or amendment.
(3) The settlor
may revoke or amend a revocable trust:
(a) By substantial compliance with a
method provided in the terms of the trust; or
(b) If the terms of the trust do not
provide a method, by any other method, except for execution of a will or
codicil, manifesting clear and convincing evidence of the settlor’s
intent.
(4) Upon revocation of a revocable trust,
the trustee shall deliver the trust property as the settlor
directs.
(5) A settlor’s
powers with respect to revocation, amendment or distribution of trust property
may be exercised by an agent or attorney-in-fact under a power of attorney only
to the extent expressly authorized by the terms of the trust.
(6) The settlor’s
conservator, or the settlor’s guardian if a
conservator has not been appointed for the settlor,
may exercise a settlor’s powers with respect to
revocation, amendment or distribution of trust property only with the approval
of the court supervising the conservatorship or guardianship.
(7) A trustee who does not know that a
trust has been revoked or amended is not liable to the settlor
or settlor’s successors in interest for distributions
made and other actions taken on the assumption that the trust had not been
amended or revoked. [2005 c.348 §46]
Note:
Section 47, chapter 348, Oregon Laws 2005, provides:
Sec.
47. Section 46 (1) of this 2005 Act
[130.505 (1)] does not apply to a trust created under an instrument executed
before the effective date of this 2005 Act [January 1, 2006]. [2005 c.348 §47]
130.510
UTC 603. Settlor’s powers;
powers of withdrawal. (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 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 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. [2005 c.348 §48; 2009 c.275
§17]
130.515
UTC 604. Limitation on action contesting validity of
revocable trust; distribution of trust property.
(1) A person must commence a judicial proceeding to contest the validity of a
trust that was revocable at the settlor’s death in
the manner prescribed by ORS 12.020 within the earlier of:
(a) Three years after the settlor’s death; or
(b) Four months after the trustee sends
the person a copy of the trust instrument and notice informing the person of
the trust’s existence, of the trustee’s name and address and of the time
allowed for commencing a proceeding.
(2) Upon the death of the settlor of a trust that was revocable at the settlor’s death, the trustee may proceed to distribute the
trust property in accordance with the terms of the trust. The trustee is not
subject to liability for distribution of the property unless:
(a) The trustee knows of a pending
judicial proceeding contesting the validity of the trust; or
(b) Any person has notified the trustee in
writing that the person might commence a judicial proceeding to contest the
trust and a judicial proceeding is commenced by the person within 60 days after
the person gives the notification.
(3) If a trust is determined to be
invalid, any beneficiary who received a distribution from the trust is liable
to the person entitled to the distributed property for the amount or value of
the distribution. [2005 c.348 §49]
RULES
GOVERNING REVOCABLE TRUSTS
130.520
Definition for ORS 130.520 to 130.575. For the
purposes of ORS 130.520 to 130.575, “specific distribution” means a
distribution of specific property to a specific beneficiary that is required
under the terms of a trust instrument. [Formerly 128.370]
130.525
Applicability of ORS 130.520 to 130.575. ORS 130.520
to 130.575 apply only to a trust, or a portion of a trust, that comes into
existence during the settlor’s lifetime and is a
revocable trust at any time after the trust was created and before the death of
the settlor. [2005 c.348 §110]
130.530
Effect of marriage. Unless otherwise provided by the
terms of the trust instrument, a trust is not revoked by the marriage of the settlor after the trust instrument is executed. [Formerly
128.375]
130.535
Revocation by divorce or annulment. (1) Unless
otherwise provided by the terms of the trust instrument, a settlor’s
divorce or the annulment of the settlor’s marriage,
after the trust instrument is executed:
(a) Revokes all provisions of the trust in
favor of the former spouse of the settlor;
(b) Revokes all powers of appointment,
general or nongeneral, in the trust that are
exercisable by the former spouse; and
(c) Revokes any provision in the trust
naming the former spouse as trustee.
(2) Unless otherwise provided by the terms
of the trust instrument, a trust shall be construed as though the former spouse
predeceased the settlor if, after the trust
instrument is executed, the settlor divorces the
spouse or the marriage of the settlor to the spouse
is annulled. [Formerly 128.378]
130.540
Contract of sale of property not revocation. Unless
otherwise provided by the terms of the trust instrument, a contract of sale
made by a trustee to convey property that is the subject of a specific
distribution is not a revocation of the specific distribution. If all or part
of the property that is the subject of the contract of sale has not been
delivered at the time set in the trust instrument for the specific
distribution, the property passes by the specific distribution but is subject
to the terms of the contract of sale. [Formerly 128.380]
130.545
Encumbrance or disposition of property after trust instrument executed.
Unless otherwise provided by the terms of the trust instrument:
(1) A disposition of a portion of property
that is subject to a specific distribution does not affect the operation of the
trust upon the remaining portion of the property; and
(2) If property subject to a specific
distribution is encumbered, the property passes under the specific distribution
but is subject to the encumbrance. [Formerly 128.382]
130.550
When trust assets pass to descendants of beneficiary; class gifts.
Unless otherwise provided by the terms of the trust instrument, when property
is to be distributed under the trust to any beneficiary who is related by blood
or adoption to the settlor, and the beneficiary dies
leaving lineal descendants either before the settlor
dies or before the time set in the trust instrument for distribution, the
descendants take by right of representation the property the beneficiary would
have taken if the beneficiary had not died. Unless otherwise provided by the
terms of the trust instrument, this section applies to a beneficiary who is
entitled to receive property under a class gift if the beneficiary dies after
the trust instrument is executed. [Formerly 128.385]
130.555
Children born or adopted after execution of trust instrument.
(1) As used in this section, “pretermitted child”
means a child of a settlor who is born or adopted
after the execution of the trust instrument, who is not provided for in the
trust or mentioned in the trust instrument and who survives the settlor.
(2) If a settlor
has one or more children living when the settlor
executes a trust instrument and no provision is made in the trust for any of
those children, a pretermitted child is not entitled
to any share of the trust estate.
(3) If a settlor
has one or more children living when the settlor
executes a trust instrument and provision is made in the trust for any of those
children, a pretermitted child is entitled to share
in the trust estate as follows:
(a) The pretermitted
child may share only in the portion of the trust estate intended to benefit
living children.
(b) The share of each pretermitted
child is equal to the total value of the portion of the trust estate intended
to benefit the living children divided by the number of pretermitted
children plus the number of living children for whom provision, other than
nominal provision, is made in the trust.
(c) To the extent possible, the interest
of each pretermitted child in the trust estate shall
be of the same character, whether equitable or legal, as the interest the settlor gave to the living children under the trust.
(4) If a settlor
has no child living when the settlor executes a trust
instrument, a pretermitted child is entitled to a
share of the trust estate as though the settlor had
died intestate and had not executed the trust instrument.
(5) A pretermitted
child may recover the share of the trust estate to which the child is entitled
as follows:
(a) If the pretermitted
child is entitled to a share of the trust estate under subsection (3) of this
section, the share must be recovered from the other children.
(b) If the pretermitted
child is entitled to a share of the trust estate under subsection (4) of this
section, the share must be recovered from the beneficiaries on a pro rata
basis, out of the portions of the trust estate passing to those persons under
the trust.
(c) In reducing the shares of the
beneficiaries under this subsection, the character of the dispositive plan adopted
by the settlor in the trust must be preserved to the
extent possible. [Formerly 128.388]
130.560
Failure of specific distribution. (1) Subject
to this section, a specific distribution does not fail by reason of the
destruction, damage, sale, condemnation or change in form of the property that
is the subject of the specific distribution unless:
(a) The trust instrument provides that the
specific distribution fails under the particular circumstances; or
(b) The settlor,
during the lifetime of the settlor, or the trustee
gives property to the beneficiary of the specific distribution with the intent
of satisfying the specific distribution.
(2) If part of the property that is the
subject of a specific distribution is destroyed, damaged, sold or condemned,
the remaining interest in the property passes pursuant to the specific
distribution. The part of the property that is destroyed, damaged, sold or
condemned is subject to subsections (3) to (6) of this section if the property
would have been adeemed under the common law had the
property been subject to probate in the settlor’s
estate.
(3) If property that is the subject of a
specific distribution is insured and the property is destroyed or damaged, the
beneficiary of the specific distribution is entitled to receive the following
amounts, less any amount expended or incurred by the settlor
or trust estate in restoration or repair of the property:
(a) Any insurance proceeds for the
destroyed or damaged property unpaid at the time set in the trust instrument
for the specific distribution; and
(b) An amount equal to all insurance
payments paid to the settlor, and such proceeds or
awards paid to the trustee for the destroyed or damaged property, during the
six-month period immediately preceding the time set in the trust instrument for
the specific distribution.
(4) If property that is the subject of a
specific distribution is sold by the settlor or the
trustee, the beneficiary of the specific distribution is entitled to receive:
(a) Any balance of the purchase price
unpaid at the time set in the trust instrument for the specific distribution,
including any security interest in the property and interest accruing before
the time set in the trust instrument for the specific distribution; and
(b) An amount equal to all payments paid
to the settlor or the trustee for the property during
the six-month period immediately preceding the time set in the trust instrument
for the specific distribution. Acceptance of a promissory note of the purchaser
or a third party is not considered payment under this paragraph, but payment on
the note is payment on the purchase price.
(5) If property that is the subject of a
specific distribution is taken by condemnation before the time set in the trust
instrument for the specific distribution, the beneficiary of the specific
distribution is entitled to receive:
(a) Any amount of the condemnation award
unpaid at the time set in the trust instrument for the specific distribution;
and
(b) An amount equal to the sums paid under
the condemnation award to the settlor or the trustee
during the six-month period immediately preceding the time set in the trust
instrument for the specific distribution.
(6) If securities as defined in ORS 59.015
are the subject of a specific distribution, and after the execution of the
trust instrument other securities of the same or another entity are distributed
to the trustee or trust estate by reason of a partial liquidation, stock
dividend, stock split, merger, consolidation, reorganization, recapitalization,
redemption, exchange or any other similar transaction, the specific
distribution includes the additional or substituted securities.
(7) The amount that a beneficiary of a
specific distribution receives under this section must be reduced by any
expenses of the sale or of the collection of the proceeds of insurance, sale or
condemnation award and by any amount by which income is increased by reasons of
items provided for in this section. Expenses subject to this subsection include
attorney fees. [Formerly 128.390]
130.565
Effect of failure of specific distribution. If a
specific distribution, other than a specific distribution that governs the
residue of the trust estate, fails for any reason, the property that is the
subject of the specific distribution becomes part of the residue and must be
distributed as provided by the terms of the trust instrument for the residue. [Formerly
128.392]
130.570
Advancement against share of trust. Property that
the settlor gives during the settlor’s
lifetime to a beneficiary of the trust is an advancement against the
beneficiary’s share of the trust only if either the settlor
makes a written statement that the property constitutes an advancement or the
beneficiary makes a written statement acknowledging that the property
constitutes an advancement. For purposes of applying the property against the
beneficiary’s share of the trust, the property must be valued as of the time
the beneficiary takes possession or enjoyment of the property, or as of the
time of death of the settlor, whichever occurs first.
[Formerly 128.395]
130.575
Effect of advancement on distribution. (1) If the
value of an advancement made to a beneficiary under ORS 130.570 exceeds the
beneficiary’s share in the trust estate, the beneficiary shall be excluded from
any further share of the trust estate, but the beneficiary is not required to
refund any part of the advancement. If the value of the beneficiary’s share in
the trust estate is greater than the value of all property received as
advancements, the beneficiary is entitled to receive from the trust estate the
balance of the share owing to the beneficiary after deducting all amounts
received as advancements.
(2) For the purpose of determining the
shares of the beneficiaries of either a residuary gift or a class gift under a
trust, the value of all advancements made by the settlor
to beneficiaries of such gift shall be added to the value of the total property
distributed pursuant to the gift, the sum then divided among all beneficiaries
of the gift, and the value of the advancement then deducted from the share of
the beneficiary to whom the advancement was made. [Formerly 128.397]
OFFICE
OF TRUSTEE
130.600
UTC 701. Acceptance or rejection of trusteeship.
(1) Except as otherwise provided in subsection (3) or (4) of this section, a
person designated as trustee accepts the trusteeship:
(a) By substantially complying with a
method of acceptance provided in the terms of the trust; or
(b) If the terms of the trust do not
provide a method of acceptance, or the method provided in the terms of the
trust is not expressly made exclusive, by knowingly accepting delivery of the
trust property, knowingly exercising powers or performing duties as trustee, or
otherwise indicating acceptance of the trusteeship.
(2) A person designated as trustee who has
not yet accepted the trusteeship may reject the trusteeship. A designated
trustee who does not accept the trusteeship within a reasonable time after
knowing of the designation is deemed to have rejected the trusteeship.
(3) A person designated as trustee may act
to preserve the trust property without accepting the trusteeship. The person
must send a rejection of the trusteeship to the settlor
within a reasonable time after taking the action. If the settlor
is dead or is financially incapable, the person must send the rejection to a
qualified beneficiary within a reasonable time after taking the action.
(4) A person designated as trustee may
inspect or investigate trust property to determine potential liability under environmental
or other law, or for any other purpose, without accepting the trusteeship. [2005
c.348 §50]
130.605
UTC 702. Trustee’s bond.
(1) A trustee shall acquire a bond to secure performance of the trustee’s
duties only if a bond is required by the terms of the trust or if a court finds
that a bond is needed to protect the interests of the beneficiaries. A court
may waive a bond required by the terms of a trust if the court finds that a
bond is not needed to protect the interests of the beneficiaries.
(2) The court may specify the amount and
terms of a bond. The court may modify or terminate any requirement for a bond
at any time.
(3) A trust company as defined in ORS
706.008 need not give a bond, even if required by the terms of the trust. [2005
c.348 §51]
130.610
UTC 703. Cotrustees.
(1) Cotrustees who are unable to reach a unanimous
decision may act by majority decision.
(2) If a vacancy occurs in a cotrusteeship, the remaining cotrustee
or cotrustees may act for the trust.
(3) A cotrustee
must participate in the performance of a trustee’s function unless:
(a) The cotrustee
is unavailable to perform the function because of absence, illness or
disqualification under other law;
(b) The cotrustee
is unavailable to perform the function because the cotrustee
is temporarily financially incapable; or
(c) The cotrustee
has properly delegated the performance of the function to another trustee.
(4) If a cotrustee
is unavailable to perform duties because of absence, illness, disqualification
under other law or temporary financial incapability, and prompt action is
necessary to achieve the purposes of the trust or to avoid injury to the trust
property, the remaining cotrustee or a majority of
the remaining cotrustees may act for the trust.
(5) Except as prohibited in the terms of
the trust, a cotrustee may delegate to a cotrustee the performance of a function. Unless a
delegation was irrevocable, a cotrustee may revoke
any delegation.
(6) Except as otherwise provided in
subsection (7) of this section, a cotrustee who does
not join in an action of another cotrustee is not
liable for the action.
(7) Each cotrustee
shall exercise reasonable care to:
(a) Prevent a cotrustee
from committing a serious breach of trust; and
(b) Compel a cotrustee
to redress a serious breach of trust.
(8) A dissenting cotrustee
who joins in an action at the direction of the majority of the cotrustees and who notified any cotrustee
of the dissent at or before the time of the action is not liable for the action
unless the action is a serious breach of trust. [2005 c.348
§52]
130.615
UTC 704. Vacancy in trusteeship; appointment of
successor. (1) A vacancy in a trusteeship occurs
if:
(a) A person designated as trustee rejects
the trusteeship;
(b) A person designated as trustee cannot
be identified, cannot be located or does not exist;
(c) A trustee resigns;
(d) A trustee is disqualified or removed;
(e) A trustee dies; or
(f) A guardian or conservator is appointed
for an individual serving as trustee.
(2) If one or more cotrustees
remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a
trusteeship must be filled if the trust has no remaining trustee.
(3) A vacancy in a trusteeship of a noncharitable trust that is required to be filled must be
filled in the following order of priority:
(a) By a person designated in the terms of
the trust to act as successor trustee;
(b) By a person appointed by unanimous
agreement of the qualified beneficiaries; or
(c) By a person appointed by the court.
(4) A vacancy in a trusteeship of a
charitable trust that is required to be filled must be filled in the following
order of priority:
(a) By a person designated in the terms of
the trust to act as successor trustee;
(b) By a person appointed by unanimous
agreement of the charitable organizations expressly designated to receive
distributions under the terms of the trust, all noncharitable
qualified beneficiaries and the Attorney General; or
(c) By a person appointed by the court.
(5) Whether or not a vacancy in a trusteeship
exists or is required to be filled, the court may appoint an additional trustee
or special fiduciary whenever the court considers the appointment necessary for
the administration of the trust. [2005 c.348 §53]
130.620
UTC 705. Resignation of trustee.
(1) A trustee may resign:
(a) After at least 30 days’ notice to the
qualified beneficiaries, the settlor, if living, and
all cotrustees; or
(b) At any time with the approval of a
court.
(2) If a court approves a resignation, the
court may issue orders and impose conditions reasonably necessary for the
protection of the trust property.
(3) Any liability of a resigning trustee
or of any sureties on the trustee’s bond for acts or omissions of the trustee
is not discharged or affected by the trustee’s resignation. [2005 c.348 §54]
130.625
UTC 706. Removal of trustee.
(1) The settlor, a cotrustee
or a beneficiary may request that a court remove a trustee, or a trustee may be
removed by a court on its own motion.
(2) A court may remove a trustee if the
court finds:
(a) The trustee has committed a serious
breach of trust;
(b) Lack of cooperation among cotrustees substantially impairs the administration of the
trust;
(c) Removal of the trustee best serves the
interests of the beneficiaries because the trustee is unfit or unwilling, or
has persistently failed to administer the trust effectively; or
(d) Removal of the trustee best serves the
interests of all of the beneficiaries and:
(A) There has been a substantial change of
circumstances or removal has been requested by all of the qualified
beneficiaries;
(B) Removal is not inconsistent with a
material purpose of the trust; and
(C) A suitable cotrustee
or successor trustee is available.
(3) Pending a final decision on a request
to remove a trustee, or in lieu of or in addition to removing a trustee, the
court may order such appropriate relief under ORS 130.800 (2) as may be
necessary to protect the trust property or the interests of the beneficiaries. [2005
c.348 §55]
130.630
UTC 707. Delivery of property by former trustee.
(1) Unless a cotrustee remains in office or the court
otherwise orders, a trustee who has resigned or been removed has the duties of
a trustee and the powers necessary to protect the trust property until the
trust property is delivered to a successor trustee or other person who is
entitled to the property.
(2) A trustee who has resigned or been
removed shall proceed expeditiously to deliver any trust property in the
trustee’s possession to the cotrustee, successor
trustee or other person who is entitled to the property. [2005 c.348 §56]
130.635
UTC 708. Compensation of trustee.
(1) If the terms of a trust do not specify the trustee’s compensation, a
trustee is entitled to compensation that is reasonable under the circumstances.
(2) If the terms of a trust specify the
trustee’s compensation, the trustee is entitled to be compensated as specified,
but the court may allow more or less compensation if:
(a) The duties of the trustee are
substantially different from those contemplated when the trust was created; or
(b) The compensation specified by the
terms of the trust would be unreasonably low or high. [2005 c.348
§57]
130.640
UTC 709. Reimbursement of expenses.
(1) A trustee is entitled to be reimbursed out of the trust property, with
reasonable interest if appropriate, for:
(a) Expenses that were properly incurred
in the administration of the trust; and
(b) To the extent necessary to prevent
unjust enrichment of the trust, expenses that were not properly incurred in the
administration of the trust.
(2) A trustee is entitled to be reimbursed
out of the trust property or from property that has been distributed from the
trust, with reasonable interest, for an advance of money made by the trustee
for the protection of the trust. [2005 c.348 §58]
DUTIES
AND POWERS OF TRUSTEE
130.650
UTC 801. Duty to administer trust.
Upon acceptance of a trusteeship, the trustee shall administer the trust in
good faith, in accordance with its terms and purposes and the interests of the
beneficiaries, and in accordance with this chapter. [2005 c.348
§59]
130.655
UTC 802. Duty of loyalty.
(1) A trustee shall administer the trust solely in the interests of the
beneficiaries.
(2) Subject to the rights of persons
dealing with or assisting the trustee as provided in ORS 130.855, a sale,
encumbrance or other transaction involving the investment or management of
trust property entered into by the trustee for the trustee’s own personal
account or that is otherwise affected by a conflict between the trustee’s
fiduciary and personal interests is voidable by a beneficiary affected by the
transaction unless:
(a) The transaction was authorized by the
terms of the trust;
(b) The transaction was approved by a
court;
(c) The beneficiary did not commence a judicial
proceeding within the time allowed by ORS 130.820;
(d) The beneficiary consented to the
trustee’s conduct, ratified the transaction or released the trustee in the
manner provided by ORS 130.840; or
(e) The transaction involves a contract
entered into or claim acquired by the trustee before the person became or
contemplated becoming trustee.
(3) A sale, encumbrance or other
transaction involving the investment or management of trust property is
presumed to be affected by a conflict between the personal and fiduciary
interests of the trustee if it is entered into by the trustee with:
(a) The trustee’s spouse;
(b) The trustee’s descendants, siblings or
parents, or their spouses;
(c) An agent or attorney of the trustee;
or
(d) A corporation or other person or
enterprise in which the trustee, or a person that owns a significant interest
in the trustee, has an interest that might affect the trustee’s best judgment.
(4) Unless a trustee can establish that
the transaction was fair to the beneficiary, a transaction between a trustee
and a beneficiary that does not concern trust property but from which the
trustee obtains an advantage is voidable by the beneficiary if the transaction
occurs during the existence of the trust or while the trustee retains significant
influence over the beneficiary.
(5) A transaction not concerning trust
property in which the trustee engages in the trustee’s individual capacity
involves a conflict between personal and fiduciary interests if the transaction
concerns an opportunity properly belonging to the trust.
(6) An investment by a trustee in
securities of an investment company or an investment trust to which the
trustee, or an affiliate of the trustee, provides services in a capacity other
than as trustee is not presumed to be affected by a conflict between personal
and fiduciary interests if the investment otherwise complies with the prudent
investor rule of ORS 130.750 to 130.775. In addition to compensation for acting
as trustee, the trustee may be compensated by the investment company or
investment trust for providing those services out of fees charged to the trust.
If the trustee receives compensation from the investment company or investment
trust for providing investment advisory or investment management services, the
trustee at least annually shall give notice of the rate and method by which
that compensation was determined to the persons entitled under ORS 130.710 to
receive a copy of the trustee’s annual report.
(7) In voting shares of stock of a
corporation or in exercising powers of control over similar interests in other
forms of business entities, the trustee shall act in the best interests of the
beneficiaries. If the trust is the sole owner of a corporation or other form of
business entity, the trustee shall elect or appoint directors or other managers
who will manage the corporation or entity in the best interests of the
beneficiaries.
(8) This section does not preclude the
following transactions, if fair to the beneficiaries:
(a) An agreement between a trustee and a
beneficiary relating to the appointment or compensation of the trustee;
(b) Payment of reasonable compensation to
the trustee;
(c) A transaction between a trust and
another trust, decedent’s estate, custodianship or conservatorship of which the
trustee is a fiduciary or in which a beneficiary has an interest;
(d) A deposit of trust money in a
financial institution operated by the trustee;
(e) An advance by the trustee of money for
the protection of the trust;
(f) An advance by the trustee of money to
the trust for the payment of expenses, losses or liabilities sustained by the
trustee in the administration of the trust or by reason of owning or possessing
any trust assets; or
(g) A loan to the trustee for the
protection of the trust, or for the payment of expenses, losses or liabilities
sustained by the trustee in the administration of the trust or by reason of
owning or possessing any trust assets. A loan under this paragraph may be from
a lender operated by, or affiliated with, the trustee.
(9) The court may appoint a special
fiduciary to make a decision with respect to any proposed transaction that
might violate this section if entered into by the trustee. [2005 c.348 §60; 2007 c.515 §2]
130.660
UTC 803. Impartiality.
If a trust has two or more beneficiaries, the trustee shall act impartially in
investing, managing and distributing the trust property, giving due regard to
the beneficiaries’ respective interests. [2005 c.348 §61]
130.665
UTC 804. Prudent administration.
A trustee shall administer the trust as a prudent person would, by considering
the purposes, terms, distributional requirements and other circumstances of the
trust. In satisfying this standard, the trustee shall exercise reasonable care,
skill and caution. [2005 c.348 §62]
130.670
UTC 805. Costs of administration.
In administering a trust, the trustee may incur only costs that are reasonable
in relation to the trust property, the purposes of the trust and the skills of
the trustee. [2005 c.348 §63]
130.675
UTC 806. Trustee’s skills.
A trustee who has special skills or expertise, or is named trustee in reliance
upon the trustee’s representation that the trustee has special skills or
expertise, shall use those special skills or expertise in administering the
trust. [2005 c.348 §64]
130.680
UTC 807. Delegation by trustee.
(1) A trustee may delegate duties and powers that a prudent trustee of
comparable skills could properly delegate under the circumstances. The trustee
shall exercise reasonable care, skill and caution in:
(a) Selecting an agent;
(b) Establishing the scope and terms of
the delegation, consistent with the purposes and terms of the trust; and
(c) Periodically reviewing the agent’s
actions in order to monitor the agent’s performance and compliance with the terms
of the delegation.
(2) In performing a delegated function, an
agent owes a duty to the trust to exercise reasonable care to comply with the
terms of the delegation.
(3) A trustee who complies with subsection
(1) of this section is not liable to the beneficiaries or to the trust for an
action of the agent.
(4) By accepting a delegation of powers or
duties from the trustee of a trust that is subject to this state’s law, an
agent submits to the jurisdiction of the courts of this state. [2005 c.348 §65]
130.685
UTC 808. Powers to direct.
(1) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.
(2) If the terms of a trust confer upon a
person other than the settlor of a revocable trust
power to direct certain actions of the trustee, the trustee shall act in
accordance with an exercise of the power unless the exercise is manifestly
contrary to the terms of the trust or the trustee knows the attempted exercise
would constitute a serious breach of a fiduciary duty that the person holding
the power owes to the beneficiaries of the trust.
(3) The terms of a trust may confer upon a
trustee or other person a power to direct the modification or termination of
the trust.
(4) A person other than a beneficiary who
holds a power to direct is rebuttably presumed to be
a fiduciary and is required to act in good faith with regard to the purposes of
the trust and the interests of the beneficiaries. The holder of a power to
direct is liable for any loss that results from breach of a fiduciary duty. [2005
c.348 §66]
130.690
UTC 809. Control and protection of trust property.
A trustee shall take reasonable steps to take control of and protect the trust
property. [2005 c.348 §67]
130.695
UTC 810. Recordkeeping and identification of trust
property. (1) A trustee shall keep adequate
records of the administration of the trust.
(2) A trustee shall keep trust property
separate from the trustee’s own property.
(3) Except as otherwise provided in
subsection (4) of this section, a trustee shall cause the trust property to be
designated so that the interest of the trust, to the extent feasible, appears
in records maintained by a party other than a trustee or beneficiary.
(4) If the trustee maintains records clearly
indicating the respective interests of the different trusts, a trustee may
invest as a whole the property of two or more separate trusts. [2005 c.348 §68]
130.700
UTC 811. Enforcement and defense of claims.
A trustee shall take reasonable steps to enforce claims of the trust and to
defend claims against the trust. [2005 c.348 §69]
130.705
UTC 812. Collecting trust property.
A trustee shall take reasonable steps to compel a former trustee or other
person to deliver trust property to the trustee, and to remedy a breach of
trust known to the trustee to have been committed by a former trustee. [2005 c.348 §70]
130.710
UTC 813. Duty to inform and report.
(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) 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 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) 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. [2005
c.348 §71; 2009 c.275 §18]
Note:
Section 72, chapter 348, Oregon Laws 2005, provides:
Sec.
72. (1) Section 71 (2)(b) of this 2005 Act
[130.710 (2)(b)] applies only to a trustee who accepts a trusteeship on or
after the effective date of this 2005 Act [January 1, 2006].
(2) Section 71 (2)(c) of this 2005 Act
[130.710 (2)(c)] applies only to irrevocable trusts created on or after the
effective date of this 2005 Act and to revocable trusts that become irrevocable
on or after the effective date of this 2005 Act. [2005 c.348
§72]
Note:
Section 19, chapter 275, Oregon Laws 2009, provides:
Sec.
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 [January 1, 2010].
[2009 c.275 §19]
130.715
UTC 814. Discretionary powers; tax savings.
(1) A trustee shall exercise a discretionary power in good faith and in a
manner that is in accordance with the terms and purposes of the trust and the
interests of the beneficiaries. The duty imposed by this subsection is not
affected by the grant of discretion in the terms of the trust, even though the
terms of the trust provide that the trustee has absolute, sole or uncontrolled
discretion or use other words purporting to convey broad discretion.
(2) Subject to subsection (4) of this
section, and unless the terms of the trust expressly provide otherwise:
(a) A person other than a settlor who is a beneficiary and trustee of a trust that
confers on the trustee a power to make discretionary distributions to or for
the trustee’s personal benefit may exercise the power only in accordance with
an ascertainable standard; and
(b) A trustee may not exercise a power to
make discretionary distributions to satisfy a legal obligation of support that
the trustee personally owes another person.
(3) A power the exercise of which is
limited or prohibited by subsection (2) of this section may be exercised by a
majority of the remaining trustees whose exercise of the power is not so
limited or prohibited. If the power of all trustees is so limited or
prohibited, the court may appoint a special fiduciary with authority to
exercise the power.
(4) Subsection (2) of this section does
not apply to:
(a) A power held by the settlor’s spouse who is the trustee of a trust for which a
marital deduction, as described in section 2056(b)(5) or 2523(e) of the
Internal Revenue Code, as in effect on January 1, 2006, was previously allowed;
(b) Any trust during any period that the
trust may be revoked or amended by its settlor; or
(c) A trust if contributions to the trust
qualify for the annual exclusion under section 2503(c) of the Internal Revenue
Code, as in effect on January 1, 2006. [2005 c.348 §73]
130.720
UTC 815. General powers of trustee.
(1) A trustee, without authorization by the court, may exercise powers
conferred by the terms of the trust and, except as limited by the terms of the
trust:
(a) All powers over the trust property
that an unmarried financially capable owner has over individually owned
property;
(b) Any other powers appropriate to
achieve the proper investment, management and distribution of the trust
property; and
(c) Any other powers conferred by this
chapter.
(2) The exercise of a power is subject to
the fiduciary duties prescribed by ORS 130.650 to 130.730. [2005 c.348 §74]
130.725
UTC 816. Specific powers of trustee.
Without limiting the authority conferred by ORS 130.720, a trustee may do any
of the following:
(1) Collect trust property and accept or
reject additions to the trust property from a settlor
or any other person.
(2) Acquire or sell property, for cash or
on credit, at public or private sale.
(3) Exchange, partition or otherwise
change the character of trust property.
(4) Deposit trust money in an account in a
financial institution, including a financial institution operated by the
trustee, if the deposit is adequately insured or secured.
(5) Borrow money, with or without
security, to be repaid from trust assets or otherwise, and advance money for
the protection of the trust and for all expenses, losses and liabilities
sustained in the administration of the trust or because of the holding or
ownership of any trust assets. Money may be borrowed under this subsection from
any lender, including a financial institution operated by or affiliated with
the trustee. A trustee is entitled to be reimbursed out of the trust property
or from property that has been distributed from the trust, with reasonable
interest, for an advance of money under this subsection.
(6) Continue operation of any
proprietorship, partnership, limited liability company, business trust,
corporation or other form of business or enterprise in which the trust has an
interest, and take any action that may be taken by shareholders, members or
property owners, including merging, dissolving or otherwise changing the form
of business organization or contributing additional capital.
(7) Exercise the rights of an absolute
owner of stocks and other securities, including the right to:
(a) Vote, or give proxies to vote, with or
without power of substitution, or enter into or continue a voting trust
agreement;
(b) Hold a security in the name of a
nominee or in other form without disclosure of the trust so that title may pass
by delivery;
(c) Pay calls, assessments and other sums
chargeable or accruing against the securities, and sell or exercise stock
subscription or conversion rights; and
(d) Deposit the securities with a
depository or other financial institution.
(8) Construct, repair, alter or otherwise
improve buildings or other structures on real property in which the trust has
an interest, demolish improvements, raze existing or erect new party walls or
buildings on real property in which the trust has an interest, subdivide or
develop land, dedicate land to public use or grant public or private easements,
and make or vacate plats and adjust boundaries.
(9) Enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement
for exploration and removal of natural resources, with or without the option to
purchase or renew, even though the period of the lease extends beyond the
duration of the trust.
(10) Grant an option involving a sale,
lease or other disposition of trust property or acquire an option for the acquisition
of property, even though the option is exercisable after the trust is
terminated, and exercise an option so acquired.
(11) Insure the property of the trust
against damage or loss and insure the trustee, the trustee’s agents, and
beneficiaries against liability arising from the administration of the trust.
(12) Abandon or decline to administer
property of no value or property of a value that is not adequate to justify its
collection or continued administration.
(13) Avoid possible liability for
violation of environmental law by:
(a) Inspecting or investigating property
the trustee holds or has been asked to hold, or property owned or operated by
an organization in which the trustee holds or has been asked to hold an
interest, for the purpose of determining the application of environmental law
with respect to the property;
(b) Taking action to prevent, abate or
otherwise remedy any actual or potential violation of any environmental law
affecting property held directly or indirectly by the trustee, whether taken
before or after the assertion of a claim or the initiation of governmental
enforcement;
(c) Declining to accept property into
trust or disclaiming any power with respect to property that is or may be
burdened with liability for violation of environmental law;
(d) Compromising claims against the trust
that may be asserted for an alleged violation of environmental law; and
(e) Paying the expense of any inspection,
review, abatement or remedial action to comply with environmental law.
(14) Pay or contest any claim, settle a
claim by or against the trust, and release, in whole or in part, a claim
belonging to the trust.
(15) Pay taxes, assessments, compensation
of the trustee and of employees and agents of the trust, and other expenses
incurred in the administration of the trust.
(16) Exercise elections available under
federal, state and local tax laws.
(17) Select a mode of payment under any
employee benefit or retirement plan, annuity or life insurance payable to the
trustee, exercise rights under employee benefit or retirement plans, annuities
or policies of life insurance, including exercise of the right to
indemnification for expenses and against liabilities, and take appropriate
action to collect the proceeds.
(18) Make loans out of trust property. The
trustee may make a loan to a beneficiary on terms and conditions the trustee
considers to be fair and reasonable under the circumstances. The trustee may
collect loans made to a beneficiary by making deductions from future
distributions to the beneficiary.
(19) Pledge trust property to guarantee
loans made by others to the beneficiary.
(20) Appoint a trustee to act in another
state, country or other jurisdiction with respect to trust property located in
the other state, country or other jurisdiction, confer upon the appointed
trustee all of the powers and duties of the appointing trustee, require that
the appointed trustee furnish security and remove any trustee so appointed.
(21) Make a distribution to a beneficiary
who is under a legal disability or who the trustee reasonably believes is
financially incapable, either:
(a) Directly;
(b) By application of the distribution for
the beneficiary’s benefit;
(c) By paying the distribution to the
beneficiary’s conservator or, if the beneficiary does not have a conservator,
the beneficiary’s guardian;
(d) By creating a custodianship under the
Uniform Transfers to Minors Act by paying the distribution to a custodian for
the beneficiary;
(e) By paying the distribution to any
existing custodian under the Uniform Transfers to Minors Act;
(f) By paying the distribution to an adult
relative or other person having legal or physical care or custody of the
beneficiary, to be expended on the beneficiary’s behalf, if the trustee does
not know of a conservator, guardian or custodian for the beneficiary; or
(g) By managing the distribution as a
separate fund held by the trustee on behalf of the beneficiary, subject to the
beneficiary’s continuing right to withdraw the distribution.
(22) On distribution of trust property or
the division or termination of a trust, make distributions in divided or
undivided interests, allocate particular assets in proportionate or
disproportionate shares, value the trust property for those purposes and adjust
for resulting differences in valuation.
(23) Resolve a dispute concerning the
interpretation of the trust or the administration of the trust by mediation,
arbitration or other procedure for alternative dispute resolution.
(24) Prosecute or defend an action, claim
or judicial proceeding in any state, country or other jurisdiction to protect
trust property and the trustee in the performance of the trustee’s duties.
(25) Sign and deliver contracts and other
instruments that are useful to achieve or facilitate the exercise of the
trustee’s powers.
(26) On termination of the trust, exercise
the powers appropriate to wind up the administration of the trust and
distribute the trust property to the persons entitled to the property.
(27) Allocate items of income or expense to
either trust income or principal, as provided by law, including creation of
reserves out of income for depreciation, obsolescence or amortization, or for
depletion in mineral or timber properties.
(28) Employ persons, including attorneys,
auditors, investment advisors or agents, to advise or assist the trustee in the
performance of administrative duties. A trustee may act based on the
recommendations of professionals without independently investigating the
recommendations.
(29) Apply for and qualify all or part of
the property in the trust estate for special governmental tax programs or other
programs that may benefit the trust estate or any of the beneficiaries.
(30) Deposit securities in a clearing
corporation as provided in ORS 128.100. [2005 c.348 §75;
2007 c.515 §3]
130.730
UTC 817. Distribution upon termination.
(1) Upon termination or partial termination of a trust, the trustee may send to
the beneficiaries a proposal for distribution. The right of any beneficiary to
object to a distribution made pursuant to the proposal terminates if the
beneficiary does not notify the trustee of an objection within 30 days after
the proposal was sent, but only if the proposal informed the beneficiary of the
right to object and the time allowed for objection.
(2) Upon the occurrence of an event
terminating or partially terminating a trust, the trustee shall proceed
expeditiously to distribute the trust property to the persons entitled to the
property. The trustee may retain a reasonable reserve for the payment of debts,
expenses and taxes.
(3) A release by a beneficiary of a
trustee from liability for breach of trust is invalid to the extent:
(a) The release was induced by improper
conduct of the trustee; or
(b) The beneficiary, at the time of the
release, did not know of the beneficiary’s rights or of the material facts
relating to the breach. [2005 c.348 §76]
ADVISERS
130.735
Appointment of adviser; liability of trustee. (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 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. [2009 c.275 §21]
UNIFORM
PRUDENT INVESTOR ACT
130.750
Trustee’s duty to comply with prudent investor rule.
(1) Except as otherwise provided in subsection (2) of this section, a trustee
who invests and manages trust assets owes a duty to the beneficiaries of the
trust to comply with the prudent investor rule set forth in ORS 130.755.
(2) The prudent investor rule is a default
rule that may be expanded, restricted, eliminated or otherwise altered by the
provisions of a trust. A trustee is not liable to a beneficiary to the extent
that the trustee acted in reasonable reliance on the provisions of the trust. [2005
c.348 §77]
130.755
Prudent investor rule. (1) A trustee shall invest and
manage trust assets as a prudent investor would, by considering the purposes,
terms, distribution requirements and other circumstances of the trust. In
satisfying this standard, the trustee shall exercise reasonable care, skill and
caution.
(2) A trustee’s investment and management
decisions respecting individual assets are not evaluated in isolation, but in
the context of the trust portfolio as a whole and as a part of the overall
investment strategy having risk and return objectives reasonably suited to the
trust.
(3) A trustee shall consider all relevant
circumstances in investing and managing trust assets, including any of the
following that are relevant to the trust or the beneficiaries of the trust:
(a) General economic conditions;
(b) The possible effect of inflation or
deflation;
(c) The expected tax consequences of
investment decisions or strategies;
(d) The role that each investment or
course of action plays within an overall trust portfolio, which may include
financial assets, interests in closely held enterprises, tangible and
intangible personal property, and real property;
(e) The expected total return from income
and the appreciation of capital;
(f) Other resources of the beneficiaries;
(g) Needs for liquidity, regularity of
income and preservation or appreciation of capital; and
(h) An asset’s special relationship or
special value, if any, to the purposes of the trust or to one or more of the
beneficiaries.
(4) A trustee shall make a reasonable effort
to verify facts relevant to the investment and management of trust assets.
(5) A trustee may invest in any kind of
property or type of investment consistent with the standards of ORS 130.750 to
130.775.
(6) A trustee who has special skills or
expertise, or is named trustee in reliance upon the trustee’s representation
that the trustee has special skills or expertise, has a duty to use those
special skills or expertise in investing and managing trust assets. [2005 c.348 §78]
130.760
Diversification of trust investments. A trustee
shall diversify the investments of the trust unless the trustee reasonably
determines that, because of special circumstances, the purposes of the trust
are better served without diversifying. [2005 c.348 §79]
130.765
Trustee duty. Within a reasonable time after
accepting a trusteeship or receiving trust assets, a trustee shall review the
trust assets and make and implement decisions concerning the retention and
disposition of assets in order to bring the trust portfolio into compliance
with the requirements of ORS 130.750 to 130.775 and with the purposes, terms,
distribution requirements and other circumstances of the trust. [2005 c.348 §80]
130.770
Determination of compliance with prudent investor rule.
Compliance with the prudent investor rule is determined in light of the facts
and circumstances existing at the time of a trustee’s decision or action and
not by hindsight. [2005 c.348 §81]
130.775
Trust language authorizing investments permitted under prudent investor rule.
Unless otherwise limited or modified, the following terms or comparable
language in the provisions of a trust authorize any investment or strategy
permitted under ORS 130.750 to 130.775: “investments permissible by law for
investment of trust funds,” “legal investments,” “authorized investments,” “using
the judgment and care under the circumstances then prevailing that persons of
prudence, discretion and intelligence exercise in the management of their own
affairs, not in regard to speculation but in regard to the permanent
disposition of their funds, considering the probable income as well as the
probable safety of their capital,” “prudent man rule,” “prudent trustee rule”
and “prudent investor rule.” [2005 c.348 §82]
LIABILITY
OF TRUSTEE AND RIGHTS OF PERSONS DEALING WITH TRUSTEE
130.800
UTC 1001. Remedies for breach of trust.
(1) A violation by a trustee of a duty the trustee owes to a beneficiary is a
breach of trust. A breach of trust may occur by reason of an action or by
reason of a failure to act.
(2) To remedy a breach of trust that has
occurred or to prevent a breach of trust, the court may:
(a) Compel the trustee to perform the
trustee’s duties;
(b) Enjoin the trustee from committing a
breach of trust;
(c) Compel the trustee to pay money or
restore property;
(d) Order a trustee to account;
(e) Appoint a special fiduciary to take
possession of the trust property and administer the trust;
(f) Suspend the trustee;
(g) Remove the trustee as provided in ORS
130.625;
(h) Reduce or deny compensation to the
trustee;
(i) Subject to
ORS 130.855, void an act of the trustee, impose a lien or a constructive trust
on trust property, or trace trust property wrongfully disposed of and recover
the property or its proceeds; or
(j) Order any other appropriate relief. [2005
c.348 §83]
130.805
UTC 1002. Damages for breach of trust.
(1) A trustee who commits a breach of trust is liable to the beneficiaries
affected for the greater of:
(a) The amount of damages caused by the
breach;
(b) The amount required to restore the
value of the trust property and trust distributions to what they would have
been had the breach not occurred; or
(c) The profit the trustee made by reason
of the breach.
(2) Except as otherwise provided in this
subsection, if more than one trustee is liable to the beneficiaries for a
breach of trust, a trustee is entitled to contribution from the other trustee
or trustees. In determining the amount of contribution, the court shall
consider the degree of fault of each trustee and whether any trustee or
trustees acted in bad faith or with reckless indifference to the purposes of
the trust or the interests of the beneficiaries. A trustee who received a
benefit from the breach of trust is not entitled to contribution from another
trustee to the extent of the benefit received. [2005 c.348
§84]
130.810
UTC 1003. Damages in absence of breach.
(1) Except as provided by ORS 130.725 (4) and (15) or 709.175 or other law of
this state, a trustee is accountable to an affected beneficiary for any profit
made by the trustee arising from the administration of the trust, without
regard to whether the profit resulted from a breach of trust.
(2) Unless there is a breach of trust, a
trustee is not liable to a beneficiary for a loss or depreciation in the value
of trust property or for not having made a profit. [2005 c.348
§85]
130.815
UTC 1004. Attorney fees and costs.
In a judicial proceeding involving the validity or administration of a trust,
the court may award costs and expenses and reasonable attorney’s fees to any
party, to be paid by another party or from the trust. [2005 c.348
§86]
130.820
UTC 1005. Limitation of action against trustee.
(1) Notwithstanding ORS chapter 12 or any other provision of law, but subject
to subsection (2) of this section, a civil action against a trustee based on
any act or omission of the trustee, whether based in tort, contract or other
theory of recovery, must be commenced within six years after the date the act
or omission is discovered, or six years after the date the act or omission
should have been discovered, whichever is earlier.
(2) A beneficiary may not commence a
proceeding against a trustee more than one year after the date the beneficiary
or a representative of the beneficiary is sent a report by certified or regular
mail that adequately discloses the existence of a potential claim and that
informs the beneficiary of the time allowed for commencing a proceeding. A copy
of this section must be attached to the report. The report must provide
sufficient information so that the beneficiary or representative knows of the
potential claim or should have inquired into its existence.
(3) If subsections (1) and (2) of this
section do not apply, a judicial proceeding against a trustee must be commenced
within 10 years from the date of the act or omission complained of, or two
years from the termination of any fiduciary account established under the
trust, whichever is later. [2005 c.348 §87]
130.825
UTC 1006. Reliance on trust instrument.
A trustee who acts in reasonable reliance on the terms of the trust as
expressed in the trust instrument is not liable to a beneficiary for a breach
of trust to the extent the breach resulted from the reliance. [2005 c.348 §88]
130.830
UTC 1007. Event affecting administration or distribution.
A trustee is not liable for failing to determine whether a marriage, a divorce,
a death, the performance of educational requirements or another event affecting
the administration or distribution of a trust has occurred if the trustee has
exercised reasonable care in attempting to determine whether the event has
occurred. [2005 c.348 §89]
130.835
UTC 1008. Exculpation of trustee.
(1) A term of a trust relieving a trustee of liability for breach of trust is
unenforceable to the extent that the term:
(a) Relieves the trustee of liability for
breach of trust committed in bad faith or with reckless indifference to the
purposes of the trust or the interests of the beneficiaries; or
(b) Was inserted as the result of an abuse
by the trustee of a fiduciary or confidential relationship to the settlor.
(2) An exculpatory term drafted or caused
to be drafted by the trustee is invalid as an abuse of a fiduciary or
confidential relationship unless:
(a) The settlor
is represented by an independent counsel who reviewed the term; or
(b) The trustee proves that the
exculpatory term is fair under the circumstances and that the term’s existence
and contents were adequately communicated to the settlor.
[2005 c.348 §90]
130.840
UTC 1009. Beneficiary’s consent, release or ratification.
If a beneficiary consents to conduct of a trustee that constitutes a breach of
trust, releases a trustee from liability for a breach of trust or ratifies a
transaction entered into by a trustee that constitutes a breach of trust, the
trustee is not liable to the beneficiary for the breach of trust unless:
(1) The consent, release or ratification
of the beneficiary was induced by improper conduct of the trustee; or
(2) At the time of the consent, release or
ratification, the beneficiary did not know of the beneficiary’s rights or know
of the material facts relating to the breach. [2005 c.348
§91]
130.845
UTC 1010. Limitation on personal liability of
trustee. (1) Except as otherwise provided in the
contract, a trustee is not personally liable on a contract properly entered
into in the trustee’s fiduciary capacity in the course of administering the
trust if the trustee disclosed the trustee’s fiduciary capacity in the
contract.
(2) A trustee is personally liable for
torts committed in the course of administering a trust or for obligations
arising from ownership or control of trust property, including liability for
violation of environmental law, only if the trustee is personally at fault.
(3) The following claims may be asserted
in a judicial proceeding against the trustee in the trustee’s fiduciary
capacity, whether or not the trustee is personally liable for the claim:
(a) A claim based on a contract entered
into by a trustee in the trustee’s fiduciary capacity.
(b) A claim based on an obligation arising
from ownership or control of trust property.
(c) A claim based on a tort committed in
the course of administering a trust.
(4) This section does not impose personal
liability on a trustee solely because the trustee holds property under an
instrument that shows title in the name of the trustee but does not state that
the trustee holds the property in a representative capacity. [2005 c.348 §92]
130.850
UTC 1011. Interest as general partner.
(1) Except as otherwise provided in subsection (3) of this section or unless
personal liability is imposed in the contract, a trustee who holds an interest
as a general partner in a general or limited partnership is not personally
liable on a contract entered into by the partnership after the trust’s
acquisition of the interest if the trustee’s fiduciary capacity is disclosed.
(2) Except as otherwise provided in
subsection (3) of this section, a trustee who holds an interest as a general
partner is not personally liable for torts committed by the partnership or for
obligations arising from ownership or control of the interest unless the
trustee is personally at fault.
(3) The immunity provided by this section
does not apply if an interest in a partnership is held by the trustee in a
capacity other than that of trustee.
(4) If the trustee of a revocable trust
holds an interest as a general partner, the settlor
is personally liable for contracts and other obligations of the partnership to
the same extent that the settlor would be liable if
the settlor were a general partner. [2005 c.348 §93]
130.855
UTC 1012. Protection of person dealing with trustee.
(1) A person other than a beneficiary who in good faith assists a trustee, or
who in good faith and for value deals with a trustee, is not liable for acts of
the trustee that exceed the trustee’s powers or for the improper exercise of
the trustee’s powers, unless the person knows that the trustee has exceeded the
trustee’s powers or improperly exercised those powers.
(2) A person other than a beneficiary who
deals with a trustee in good faith is not required to inquire about the extent
of the trustee’s powers or about the propriety of the trustee’s exercise of
those powers.
(3) A person who in good faith delivers
assets to a trustee need not ensure that the assets are properly applied.
(4) Any person other than a beneficiary
who in good faith assists a former trustee, or who in good faith and for value
deals with a former trustee, without knowledge that the trusteeship has
terminated, is not liable solely because the former trustee is no longer a
trustee.
(5) Comparable protective provisions of
other laws relating to commercial transactions or transfer of securities by
fiduciaries prevail over the protection provided by this section. [2005 c.348 §94]
130.860
UTC 1013. Certification of trust.
(1) A person who is not a beneficiary and who proposes to deal with the trustee
of a trust may require that all trustees execute and furnish to the person a
certification of trust.
(2) The certification of trust shall
contain the following information:
(a) That the trust exists and the date the
trust instrument was executed;
(b) The identity of the settlor;
(c) The identity and address of the
currently acting trustee;
(d) The powers of the trustee;
(e) The revocability or irrevocability of
the trust and the identity of any person holding a power to revoke the trust;
(f) The existence or nonexistence of any
power to modify or amend the trust and the identity of any person holding a
power to modify or amend the trust;
(g) The authority of cotrustees
to sign or otherwise authenticate and whether all cotrustees
or fewer than all are required in order to exercise powers of the trustee;
(h) The last four digits of the settlor’s Social Security number, or the trust’s employer
identification number;
(i) The manner
of taking title to trust property; and
(j) The state, country or other
jurisdiction under the laws of which the trust was established.
(3) A certification of trust must be
signed or otherwise authenticated by all the trustees.
(4) A certification of trust must state
that the trust has not been revoked, modified or amended in any manner that
would cause the representations contained in the certification of trust to be
incorrect.
(5) A certification of trust need not
contain the dispositive terms of a trust.
(6) A recipient of a certification of
trust may not require the trustee to furnish the entire trust instrument, but
may require the trustee to furnish copies of excerpts from the original trust
instrument and later amendments that designate the trustee and confer upon the
trustee the power to act in the pending transaction.
(7) A person may require that the
certification of trust:
(a) Include facts other than those listed
in this section that are reasonably related to the administration of the trust;
(b) Be executed by one or more of the settlors;
(c) Be executed by one or more of the
beneficiaries if the certification is reasonably related to a pending or
contemplated transaction with the person; and
(d) Be adapted to the person’s own
standard form, which may be incorporated in an account signature agreement or
other account document.
(8) A certification of trust may contain
the identity of any successor trustee or trustees and the circumstances under
which any successor trustee or trustees will assume trust powers.
(9)(a) A person who acts in reliance upon
a certification of trust without actual knowledge that the representations
contained in the certification are incorrect is not liable to any person for so
acting and may assume without inquiry the existence of the facts contained in
the certification. A person does not have actual knowledge that the
representations contained in the certification are incorrect solely by reason
of having a copy of all or part of the trust instrument.
(b) Any transaction, and any lien created
by that transaction, is enforceable against a trust if the transaction is
entered into by a person acting in reliance on a certification of trust
containing the information set forth in this section without actual knowledge
that the representations contained in the certification are incorrect.
(c) If a person has actual knowledge that
the trustee or trustees are acting outside the scope of the trust, and the
actual knowledge was acquired by the person before entering into the
transaction or making a binding commitment to do so, the transaction is not
enforceable against the trust.
(10) A person is not liable for acting in
reliance on a certification of trust solely because the certification fails to
contain all the information required in this section.
(11) This section does not limit the
rights of the beneficiaries of the trust against a trustee.
(12) A person’s failure to demand or
refusal to accept and rely solely upon a certification of trust does not affect
the protection provided the person by ORS 130.855, and no inference as to
whether the person has acted in good faith may be drawn from the failure to
demand or the refusal to accept and rely solely upon a certification.
(13) This section applies to all trusts,
whether established under the laws of this state or under the law of another
state, country or other jurisdiction. [2005 c.348 §95;
2009 c.363 §3]
MISCELLANEOUS
PROVISIONS
130.900
Uniformity of application and construction. In
applying and construing ORS chapter 130, consideration must be given to the
need to promote uniformity of the law with respect to trusts among states that
enact the Uniform Trust Code. [2005 c.348 §96]
Note:
130.900 to 130.910 were enacted into law by the Legislative Assembly but were
not added to or made a part of ORS chapter 130 or any series therein by
legislative action. See Preface to Oregon Revised Statutes for further
explanation.
130.905
UTC 1102. Electronic records and signatures.
The legal effect, validity or enforceability of electronic records or
electronic signatures under ORS chapter 130, and of contracts formed or
performed with the use of such records or signatures, are governed by ORS
84.001 to 84.061. [2005 c.348 §97]
Note:
See note under 130.900.
130.910
UTC 1106. Application.
(1) Except as otherwise provided in ORS chapter 130:
(a) ORS chapter 130 applies to all trusts
created before, on or after January 1, 2006.
(b) ORS chapter 130 does not apply to
judicial, administrative and other proceedings concerning trusts commenced
before January 1, 2006.
(c) Any rule of construction or
presumption provided in ORS chapter 130 applies to trust instruments executed
before January 1, 2006, unless there is a clear indication of a contrary intent
in the terms of the trust.
(d) An act done before January 1, 2006, is
not affected by ORS chapter 130.
(2) If a right is acquired, extinguished
or barred upon the expiration of a prescribed period that has commenced to run
under any other statute before January 1, 2006, that statute continues to apply
to the right even if it has been repealed or superseded. [2005 c.348 §98]
Note:
See note under 130.900.
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