Bill Text: OR SB592 | 2013 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the Oregon Uniform Trust Code; and declaring an emergency.
Sponsorship: Committee Bill
Status: (Passed) 2013-07-03 - Effective date, June 26, 2013. [SB592 Detail]
Download: Oregon-2013-SB592-Introduced.html
Bill Title: Relating to the Oregon Uniform Trust Code; and declaring an emergency.
Sponsorship: Committee Bill
Status: (Passed) 2013-07-03 - Effective date, June 26, 2013. [SB592 Detail]
Download: Oregon-2013-SB592-Introduced.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3076
Senate Bill 592
Sponsored by COMMITTEE ON JUDICIARY (at the request of Oregon Law
Commission)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Revises Oregon Uniform Trust Code.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to the Oregon Uniform Trust Code; creating new
provisions; amending ORS 130.010, 130.045, 130.170, 130.195,
130.200, 130.215, 130.305, 130.310, 130.315, 130.525, 130.555,
130.610, 130.615, 130.625, 130.630, 130.635, 130.650, 130.655,
130.710, 130.725, 130.730 and 130.735; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 130.010 is amended to read:
130.010. For the purposes of this chapter:
(1) 'Ascertainable standard' means an ascertainable standard
relating to an individual's health, education, support or
maintenance within the meaning of section 2041(b)(1)(A) or
2514(c)(1) of the Internal Revenue Code, as in effect on January
1, 2006.
(2) 'Beneficiary' means a person that:
(a) Has a present or future beneficial interest in a trust,
whether vested or contingent; or
(b) Holds a power of appointment over trust property in a
capacity other than that of trustee.
(3) 'Charitable trust' means a trust, or portion of a trust,
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) 'Remote interest beneficiary' means a beneficiary,
other than a qualified beneficiary, whose beneficial interest in
the trust at the time the determination of interest is made is
contingent upon the termination of the qualified beneficiary
interest, the secondary beneficiary interest and any other
beneficiary interest that precedes the interest of the remote
interest beneficiary. + }
{ - (15) - } { + (16) + } '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.
{ + (17) 'Secondary beneficiary' means a beneficiary who, at
the time the determination of interest is made, shall become a
qualified beneficiary on the termination of the interest of a
qualified beneficiary. + }
{ - (16) - } { + (18) + } '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) - } { + (19) + } 'Spendthrift provision' means a
term of a trust that restrains both voluntary and involuntary
transfer of a beneficiary's interest.
{ - (18) - } { + (20) + } '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) - } { + (21) + } '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) - } { + (22) + } ' Trust instrument' means an
instrument executed by a settlor that contains terms of the
trust, including any amendments to the instrument.
{ - (21) - } { + (23) + } 'Trustee' means an original
trustee, an additional trustee, a successor trustee or a
cotrustee.
SECTION 2. ORS 130.045 is amended to read:
130.045. (1) For purposes of this section, 'interested persons'
means { + :
(a) + } Any settlor of a trust who is living { - , - } { + ;
(b) + } All { + qualified + } beneficiaries { - of the trust
who have an interest in the subject of the agreement, - } { + ;
(c) + } Any acting trustee of the trust { - , - } { + ; + }
and { +
(d) + } 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) If the trust or a portion of the trust is a
charitable trust and is irrevocable, and the settlor retains a
power to change the beneficiaries of the charitable trust during
the settlor's lifetime or upon the settlor's death, the Attorney
General shall be substituted as the sole interested person to
represent all charitable trust beneficiaries whose beneficial
interests are subject to the settlor's retained power. + }
{ - (2) - } { + (3)(a) + } Except as otherwise provided in
subsection { - (3) - } { + (4) + } of this section, interested
persons may enter into a { - binding - } nonjudicial settlement
agreement with respect to any matter involving a trust.
{ + (b) If the agreement is not filed with the court under
subsection (6) of this section, the agreement is binding on all
parties to the agreement.
(c) If the agreement is filed with the court, the agreement is
binding as provided in subsections (6) and (7) of this section
unless, after the filing of objections and a hearing, the court
does not approve the agreement. If the court does not approve the
agreement, the agreement is not binding on any beneficiary or
party to the agreement. + }
{ - (3) - } { + (4) + } 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) - } { + (5) + } 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 { + or
cotrustee + } 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) - } { + (6)(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) - } { + (8) + } 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 - } { +
beneficiary of + } the trust whose address is known at the time
of the filing { + and who is not a party to the agreement + }.
Service may be made personally, or by registered or certified
mail, return receipt requested. The notice of filing shall be
substantially in the following form:
_________________________________________________________________
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
CAPTION NOTICE OF FILING OF
OF CASE SETTLEMENT AGREEMENT
OR MEMORANDUM OF
SETTLEMENT AGREEMENT
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
You are hereby notified that the attached document was filed by
the undersigned in the above entitled court on the ___ day of
____ , __. Unless you file objections to the agreement within
{ - 120 - } { + 60 + } days after that date, the agreement
will be approved and will be binding on all { - persons
interested in the trust - } { + beneficiaries and parties to
the agreement + }.
If you file objections within the { - 120-day - } { +
60-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 - } { + beneficiaries and parties to the agreement + }.
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 - } { + 60 + } days after the filing of the agreement
or memorandum, the agreement is effective and binding on all
{ - persons interested in the trust - } { + beneficiaries who
received notice under paragraph (c) of this subsection and all
beneficiaries who waived notice under subsection (7)(e) of this
section + }.
{ - (6)(a) - } { + (7)(a) + } If objections are filed with
the court within
{ - 120 - } { + 60 + } 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) - }
{ + (8) + } 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 - } { + beneficiaries who
are parties to the agreement and all beneficiaries who received
notice under subsection (6)(c) of this section, + } 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 { + to
beneficiaries who are not interested persons and who are not
parties to the agreement + }.
(d) An agreement approved by the court after a hearing is
binding on all { - persons interested in the trust - } { +
beneficiaries and parties to the agreement + }.
(e) { - Persons interested in the trust - } { +
Beneficiaries entitled to notice under subsection (6)(c) of this
section + } 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) - } { + (8) + } 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) - } { + (6) + } of this section and for the filing of
objections under subsection { - (6) - } { + (7) + } of this
section.
SECTION 3. ORS 130.170 is amended to read:
130.170. (1) A charitable trust is a trust { + that:
(a) Expressly designates one or more charitable organizations,
or one or more classes of charitable organizations, to receive
distributions as beneficiaries of the trust unless the combined
interests of all charitable beneficiaries are negligible or all
charitable beneficiaries are remote interest beneficiaries; or
(b) Is + } 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 - } { + , but that does not contain + } 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 - } { + a charitable trust + } only if
the Attorney General is a party to the proceedings.
SECTION 4. ORS 130.195 is amended to read:
130.195. (1) In addition to the methods of termination
prescribed by ORS { + 130.045, + } 130.200, 130.205, 130.210 and
130.215, a trust terminates:
(a) To the extent the trust is revoked or expires pursuant to
the terms of the trust;
(b) If no purpose of the trust remains to be achieved; or
(c) To the extent one or more of the purposes of the trust have
become unlawful, contrary to public policy or impossible to
achieve.
(2) A proceeding to approve or disapprove a proposed
modification or termination under ORS 130.045, 130.200, 130.205,
130.210, 130.215, 130.220 and 130.225, or trust combination or
division under ORS 130.230, may be commenced by a trustee or
beneficiary. A proceeding to approve or disapprove a proposed
modification or termination under ORS 130.200 may be commenced by
the settlor. The settlor of a charitable trust may maintain a
proceeding to modify the trust under ORS 130.210.
SECTION 5. ORS 130.200 is amended to read:
130.200. (1) An irrevocable trust may be modified or terminated
with approval of the court upon consent of the settlor and all
beneficiaries { + who are not remote interest 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
{ + or the power of attorney + };
(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 a power of
attorney + }; 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 { + or a power of
attorney + } and a conservator has not been appointed.
(2) An irrevocable trust may be terminated upon consent of all
{ - of the - } beneficiaries { + who are not remote interest
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 { + who are not remote interest
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 { + who are not
remote interest beneficiaries + } if the court finds that:
(a) If all { - of the - } beneficiaries { + who are not
remote interest 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.
SECTION 6. ORS 130.215 is amended to read:
130.215. (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 { + qualified + } beneficiary of the
trust or has a duty of support for a { + qualified + }
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.
SECTION 7. ORS 130.305 is amended to read:
130.305. (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.
{ + (4) A settlement agreement entered into under ORS 130.045
is not, by itself, a transfer in violation of a valid spendthrift
provision. + }
SECTION 8. ORS 130.310 is amended to read:
130.310. (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 - } { + is + } 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.
SECTION 9. ORS 130.315 is amended to read:
130.315. (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.
{ + (d) Notwithstanding the provisions of paragraph (b) of
this subsection, the assets of an irrevocable trust may not be
subject to the claims of an existing or subsequent creditor or
assignee of the settlor, in whole or in part, solely because of
the existence of a discretionary power granted to the trustee by
the terms of the trust or any other provision of law to pay the
amount of tax owed directly to the taxing authorities or to
reimburse the settlor for any tax on trust income or principal
that is payable or has been paid by the settlor under the law
imposing the tax. + }
(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 { + :
(a) + }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 - } { + December 31, 2012;
(b) The amount specified in section 2503(b) of the Internal
Revenue Code, as in effect on December 31, 2012; or
(c) Twice the amount specified in section 2503(b) of the
Internal Revenue Code, as in effect on December 31, 2012, if the
donor was married at the time of the transfer to which the power
of withdrawal applies.
(4) The assets of an irrevocable trust that are attributable to
a contribution to an inter vivos marital deduction trust
described in section 2523(c) or (f) of the Internal Revenue Code,
as in effect on December 31, 2012, after the death of the spouse
of the settlor of the inter vivos marital deduction trust shall
be deemed to have been contributed by the settlor's spouse and
not by the settlor.
(5) The assets of an irrevocable trust for the benefit of a
person, including the settlor, are not subject to claims of
creditors of the settlor to the extent that the property of the
trust is subject to a presently exercisable general power of
appointment held by a person other than the settlor + }.
{ - (4) - } { + (6) + } 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.
SECTION 10. ORS 130.525 is amended to read:
130.525. { - 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. - }
{ + (1) ORS 130.530 and 130.535 apply only to a trust, or
portion of a trust:
(a) That comes into existence during the settlor's lifetime;
and
(b) Is a revocable trust on the occurrence of any of the events
described in ORS 130.530 or 130.535.
(2) ORS 130.540 to 130.575 apply only to a trust, or a portion
of a trust, that comes into existence during the settlor's
lifetime and that was a revocable trust at the time of the
settlor's death. + }
SECTION 11. ORS 130.555 is amended to read:
130.555. (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, { + is
born or adopted during the lifetime of the settlor or is in
gestation at the time of the settlor's death, + }who is not
{ - provided for in the trust - } { + acknowledged + } or
mentioned { + , either by name or by class, + } in the trust
instrument { + or in the settlor's will, + } 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 - } { + the pretermitted children are entitled to the
following + } share of the trust estate { - as though the
settlor had died intestate and had not executed the trust
instrument - } { + :
(a) If the settlor dies leaving a surviving spouse and all
pretermitted children are the issue of the surviving spouse, the
pretermitted children are not entitled to any share of the trust
estate.
(b) If the settlor dies leaving a surviving spouse and not all
pretermitted children are the issue of the surviving spouse, the
pretermitted children, as a class, are entitled to one-half of
the trust estate, with shares of the trust to be divided equally.
(c) If the settlor dies without leaving a surviving spouse, the
pretermitted children are entitled to the entire trust estate,
with shares of the trust to be divided equally + }.
(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.
SECTION 12. ORS 130.610 is amended to read:
130.610. (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 { + pursuant to
subsection (5) of this section + }.
(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 - } { + the performance of a function to another
cotrustee, and the other cotrustee may accept the delegation of
the performance of the function. The delegation and the
acceptance must be in writing. A delegation shall remain in
effect until it terminates by its terms, is revoked in writing by
the cotrustee making the delegation or is terminated in writing
by the cotrustee accepting the 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.
SECTION 13. ORS 130.615 is amended to read:
130.615. (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 - }
{ + all + } 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.
SECTION 14. ORS 130.625 is amended to read:
130.625. (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) - } { + (B) + } A suitable cotrustee or successor
trustee is available { + ; and
(C) The trustee fails to establish by clear and convincing
evidence that removal is inconsistent with a material purpose of
the trust + }.
(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.
SECTION 15. ORS 130.630 is amended to read:
130.630. (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.
{ + (3) A successor trustee or the court may require a
trustee that has resigned or been removed to send a report as
provided in ORS 130.710 (3). Reasonable compensation for
preparation of the report, and reasonable fees and costs incurred
in the preparation and distribution of the report, shall be paid
by the trust. + }
SECTION 16. ORS 130.635 is amended to read:
130.635. (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.
{ + (3) If more than one trustee is serving and the terms of
the trust do not specify the trustees' compensation, the
compensation paid to all trustees under this section shall be
based on the total services provided by all trustees.
(4) If the terms of a trust do not specify the trustee's
compensation, the fees paid to third parties, including but not
limited to financial advisors, who perform trustee functions must
be taken into account in determining reasonable trustee
compensation under this section. + }
SECTION 17. ORS 130.650 is amended to read:
130.650. { + (1) + } 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.
{ + (2) A trustee is not required to object to a
modification, reformation or termination of the trust under ORS
130.045, 130.200, 130.205, 130.210, 130.215, 130.220 or 130.225,
or a trust combination or division under ORS 130.230, solely
because of the existence of the duty to administer the trust
under subsection (1) of this section or the duty of loyalty under
ORS 130.655 (1). + }
SECTION 18. ORS 130.655 is amended to read:
130.655. (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) A trustee is not required to object to a
modification, reformation or termination of the trust under ORS
130.045, 130.200, 130.205, 130.210, 130.215, 130.220 or 130.225,
or a trust combination or division under ORS 130.230, solely
because of the existence of the duty of loyalty under subsection
(1) of this section or the duty to administer the trust under ORS
130.650 (1). + }
{ - (9) - } { + (10) + } 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.
SECTION 19. ORS 130.710 is amended to read:
130.710. (1) A trustee shall keep the qualified beneficiaries
of the trust reasonably informed about the administration of the
trust and of the material facts necessary for those beneficiaries
to protect their interests. If reasonable under the
circumstances, a trustee may respond to a request for information
related to the administration of the trust from a beneficiary who
is not a qualified beneficiary.
(2)(a) Upon request of a qualified beneficiary, a trustee shall
promptly furnish to the qualified beneficiary a copy of the trust
instrument.
(b) Within a reasonable time after accepting a trusteeship, a
trustee shall notify all qualified beneficiaries of the
acceptance and of the trustee's name, address and telephone
number.
(c) Except as provided in subsection (10) of this section,
within a reasonable time after the date the trustee acquires
knowledge of the creation of an irrevocable trust, or the date
the trustee acquires knowledge that a formerly revocable trust
has become irrevocable, whether by the death of the settlor or
otherwise, the trustee shall notify the qualified beneficiaries
of the trust's existence, of the identity of the settlor or
settlors, of the right to request a copy of the trust instrument
and of the right to a trustee's report as provided in subsection
(3) of this section.
(d) A trustee shall notify the qualified beneficiaries in
advance of any change in the method or rate of the trustee's
compensation.
(3) { + (a) + } 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.
{ + (b) + } 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 - } { +
and if required by the successor trustee or the court, the former
trustee shall send a trustee report for the period from the prior
report, if any, through the time of vacancy to the qualified
beneficiaries of the trust + }.
{ + (c) + } 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.
SECTION 20. ORS 130.725 is amended to read:
130.725. 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 { + or payment + } of trust property or
the division or termination of a trust, make distributions
{ + and payments in cash or in kind, or + } 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.
SECTION 21. ORS 130.730 is amended to read:
130.730. { - (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. - }
{ + (1) Upon the occurrence of an event, satisfaction of a
condition or exercise of a power that terminates or partially
terminates a trust or creates an obligation for the trustee to
pay or distribute all or any portion of a trust to a beneficiary,
the beneficiary's interest in the terminated trust, portion or
distribution indefeasibly vests in the beneficiary as of the
event, satisfaction or exercise, subject to ORS 114.600 to
114.725, rights of creditors and the administration and sale of
trust property by the trustee. 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, fees, expenses and taxes.
(2) Incidental to a termination or partial termination of a
trust, the trustee may request that a beneficiary execute a
release of the trustee from liability for breach of trust. A
release under this subsection is invalid to the extent:
(a) The release was induced by improper conduct of the trustee;
or
(b) The trustee failed to adequately disclose to the
beneficiary, at the time of the release, the material facts
relating to the breach or sufficient information to enable the
beneficiary to know of a potential claim or to inquire into the
existence of a breach or potential claim. + }
SECTION 22. ORS 130.735 is amended to read:
130.735. (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. { + The
appointment may provide for succession of advisers and for a
process for the removal of advisers. + }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.
{ + (6) A court may remove an adviser if the court finds:
(a) The adviser has committed a serious breach of trust; or
(b) Removal of the adviser best serves the interests of the
beneficiaries because the adviser is unfit or unwilling, or has
persistently failed to timely and effectively advise the trustee
in matters assigned to the adviser in the trust instrument under
subsection (1) of this section. + }
SECTION 23. { + Sections 24 and 25 of this 2013 Act are added
to and made a part of ORS chapter 130. + }
SECTION 24. { + If the occurrence of an event, satisfaction of
a condition or exercise of a power allows or creates an
obligation for the trustee to divide a trust or any portion of a
trust into separate shares or portions for the benefit of
separate beneficiaries:
(1) Each share resulting from the division of the trust will be
deemed to be a new trust for the sole benefit of its
beneficiaries;
(2) All of the terms of the trust instrument will be applied
independently to each new trust created pursuant to this section
except as terms are specifically limited in the trust instrument;
and
(3) The trust or portion of the trust from which the new trust
originates will be deemed to terminate to the extent of the new
trust, subject only to the proper administration of the
terminated trust occasioned by the terminating event, condition
or exercise. + }
SECTION 25. { + (1) Prior to a proposed action to be taken by
a trustee regarding the administration of a trust, the trustee
may send the beneficiaries a written notice of the proposed
action informing the beneficiaries of the proposed action.
(2) The right of a beneficiary receiving a notice of proposed
action under subsection (1) of this section to object to a
proposed action described in the notice is barred if the
beneficiary does not notify the trustee in writing of an
objection within 45 days after the notice was sent, or within
such longer time as may be stated in the notice, but only to the
extent that the notice of proposed action:
(a) Clearly informs the beneficiary of the right to object, the
manner in which to object and the date by which the objection
must be received by the trustee;
(b) States that the beneficiary's right to object may be barred
if the beneficiary does not object within the time and in the
manner allowed for objection; and
(c) Adequately provides sufficient information regarding the
proposed action to enable the beneficiary to make an informed
decision.
(3) If a beneficiary receiving notice does not object as
provided in this section, the beneficiary will be deemed to have
consented to the proposed action and the beneficiary may not
thereafter file an action or other civil proceeding based in
tort, contract or otherwise if the proposed action is taken by
the trustee within a reasonable time after the notice was given
under this section. This subsection does not apply to the
following:
(a) Allowance of the trustee's compensation;
(b) Settlement of trust accounts or the trustee's report;
(c) Sale of trust property to the trustee or sale of the
trustee's property to the trust;
(d) Exchange of trust property for property of the trustee;
(e) Grant of an option to the trustee to purchase trust
property;
(f) Allowance, payment or settlement of a trustee's claim
against the trust;
(g) Compromise or settlement of a claim, action or proceeding
by the trust against the trustee; or
(h) Extension, renewal or modification of the terms of a debt
or other obligation of the trustee owing to or in favor of the
trust.
(4) The receipt of an objection by the trustee does not
prohibit the trustee from taking the proposed action or sending
subsequent notices of proposed actions to the beneficiaries
regarding the same or similar proposed actions. + }
SECTION 26. { + Sections 24 and 25 of this 2013 Act and the
amendments to ORS 130.010, 130.045, 130.170, 130.195, 130.200,
130.215, 130.305, 130.310, 130.315, 130.525, 130.555, 130.610,
130.615, 130.625, 130.630, 130.635, 130.650, 130.655, 130.710,
130.725, 130.730 and 130.735 by sections 1 to 22 of this 2013 Act
apply to trust proceedings commenced on or after the effective
date of this 2013 Act. + }
SECTION 27. { + This 2013 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2013 Act takes effect on
its passage. + }
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