Senate Bill No. 622
(By Senators Kessler, McCabe and Minard)
____________
[Introduced February 19, 2010; referred to the Committee on the
Judiciary.]
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A BILL to amend and reenact §36-1-4, §36-1-6, §36-1-17 and §36-1-18
of the Code of West Virginia of 1931, as amended; to amend and
reenact §38-1-13 of said code; to amend said code by adding
thereto a new section, designated §38-1-13a; to amend said
code by adding thereto a new section, designated §44-4-22; to
amend and reenact §44-5-1, §44-5-7, §44-5-11, §44-5-12,
§44-5-13, §44-5-14 and §44-5-15 of said code; to amend said
code by adding thereto a new section, designated §44-5-10a; to
amend and reenact §44-5A-2, §44-5A-3 and §44-5A-4 of said
code; to amend said code by adding thereto four new sections,
designated §44-5A-5, §44-5A-6, §44-5A-7 and §44-5A-8; to amend
and reenact §44-6-1, §44-6-2 and §44-6-2a of said code; to
amend said code by adding thereto a new section, designated
§44-6-5a; to amend and reenact §44-6C-1 and §44-6C-2 of said
code; to amend and reenact §44-7-1 of said code; to amend said
code by adding thereto a new section, designated §44-7-4; to amend and reenact §44-14-1, §44-14-2, §44-14-3, §44-14-4 and
§44-14-5 of said code; and to amend said code by adding
thereto a new chapter, designated §44D-1-101, §44D-1-102,
§44D-1-103, §44D-1-104, §44D-1-105, §44D-1-106, §44D-1-107,
§44D-1-108, §44D-1-109, §44D-1-110, §44D-1-111, §44D-1-112,
§44D-1-113, §44D-2-201, §44D-2-202, §44D-2-203, §44D-2-204,
§44D-3-301, §44D-3-302, §44D-3-303, §44D-3-304, §44D-3-305,
§44D-4-401, §44D-4-402, §44D-4-403, §44D-4-404, §44D-4-405,
§44D-4-406, §44D-4-407, §44D-4-408, §44D-4-409, §44D-4-410,
§44D-4-411, §44D-4-412, §44D-4-413, §44D-4-414, §44D-4-415,
§44D-4-416, §44D-4-417, §44D-5-501, §44D-5-502, §44D-5-503,
§44D-5-504, §44D-5-505, §44D-5-506, §44D-5-507, §44D-6-601,
§44D-6-602, §44D-6-603, §44D-6-604, §44D-7-701, §44D-7-702,
§44D-7-703, §44D-7-704, §44D-7-705, §44D-7-706, §44D-7-707,
§44D-7-708, §44D-7-709, §44D-8-801, §44D-8-802, §44D-8-803,
§44D-8-804, §44D-8-805, §44D-8-806, §44D-8-807, §44D-8-808,
§44D-8-809, §44D-8-810, §44D-8-811, §44D-8-812, §44D-8-813,
§44D-8-814, §44D-8-815, §44D-8-816, §44D-8-817, §44D-9-901,
§44D-10-1001, §44D-10-1002, §44D-10-1003, §44D-10-1004,
§44D-10-1005, §44D-10-1006, §44D-10-1007, §44D-10-1008,
§44D-10-1009, §44D-10-1010, §44D-10-1011, §44D-10-1012,
§44D-10-1013, §44D-11-1101, §44D-11-1102, §44D-11-1103,
§44D-11-1104 and §44D-11-1105, all relating generally to
estates and trusts and their administration; providing that
certain provisions of current law to have no effect after specified date; providing certain provisions of current law
are to not apply to trusts and trustees after specified date;
changing names of certain articles of existing code; providing
for the creation, administration, revision and termination of
trusts; providing for trustees, powers and duties of trustees
and substitution of trustees; providing for distribution of
trust assets; specifying powers and certain restrictions on
powers of fiduciaries; amending the Uniform Prudent Investor
Act; modernizing language of certain existing sections of code
and deleting obsolete language; adopting West Virginia Uniform
Trust Code; providing general provisions and definitions;
providing for judicial proceedings; providing for
representation of trusts; providing for creation, validity,
modification and termination of trusts; providing for
creditor's claims; providing for spendthrift trusts,
discretionary trusts and revocable trusts; providing for
office of trustee; providing duties and powers of trustees;
providing for liability of trustees and rights of persons
dealing with trustee; providing various miscellaneous
provisions for trusts and trustees; specifying delayed
effective date for West Virginia Uniform Trust Code; and
providing rules for application of that date.
Be it enacted by the Legislature of West Virginia:
That §36-1-4, §36-1-6, §36-1-17 and §36-1-18 of the Code of
West Virginia, 1931, as amended, be amended and reenacted; that §38-1-13 of said code be amended and reenacted; that said code be
amended by adding thereto a new section, designated §38-1-13a; that
said code be amended by adding thereto a new section, designated
§44-4-22; that §44-5-1, §44-5-7, §44-5-11, §44-5-12, §44-5-13,
§44-5-14 and §44-5-15 of said code be amended and reenacted; that
said code be amended by adding thereto a new section, designated
§44-5-10a; that §44-5A-2, §44-5A-3 and §44-5A-4 of said code be
amended and reenacted; that said code be amended by adding thereto
four new sections, designated §44-5A-5, §44-5A-6, §44-5A-7 and
§44-5A-8; that §44-6-1, §44-6-2 and §44-6-2a of said code be
amended and reenacted; that said code be amended by adding thereto
a new section, designated §44-6-5a; that §44-6C-1 and §44-6C-2 of
said code be amended and reenacted; that §44-7-1 of said code be
amended and reenacted; that said code be amended by adding thereto
a new section, designated §44-7-4; that §44-14-1, §44-14-2,
§44-14-3, §44-14-4 and §44-14-5 of said code be amended and
reenacted; and that said code be amended by adding thereto a new
chapter, designated §44D-1-101, §44D-1-102, §44D-1-103, §44D-1-104,
§44D-1-105, §44D-1-106, §44D-1-107, §44D-1-108, §44D-1-109,
§44D-1-110, §44D-1-111, §44D-1-112, §44D-1-113, §44D-2-201,
§44D-2-202, §44D-2-203, §44D-2-204, §44D-3-301, §44D-3-302,
§44D-3-303, §44D-3-304, §44D-3-305, §44D-4-401, §44D-4-402,
§44D-4-403, §44D-4-404, §44D-4-405, §44D-4-406, §44D-4-407,
§44D-4-408, §44D-4-409, §44D-4-410, §44D-4-411, §44D-4-412,
§44D-4-413, §44D-4-414, §44D-4-415, §44D-4-416, §44D-4-417, §44D-5-501, §44D-5-502, §44D-5-503, §44D-5-504, §44D-5-505,
§44D-5-506, §44D-5-507, §44D-6-601, §44D-6-602, §44D-6-603,
§44D-6-604, §44D-7-701, §44D-7-702, §44D-7-703, §44D-7-704,
§44D-7-705, §44D-7-706, §44D-7-707, §44D-7-708, §44D-7-709,
§44D-8-801, §44D-8-802, §44D-8-803, §44D-8-804, §44D-8-805,
§44D-8-806, §44D-8-807, §44D-8-808, §44D-8-809, §44D-8-810,
§44D-8-811, §44D-8-812, §44D-8-813, §44D-8-814, §44D-8-815,
§44D-8-816, §44D-8-817, §44D-9-901, §44D-10-1001, §44D-10-1002,
§44D-10-1003, §44D-10-1004, §44D-10-1005, §44D-10-1006,
§44D-10-1007, §44D-10-1008, §44D-10-1009, §44D-10-1010,
§44D-10-1011, §44D-10-1012, §44D-10-1013, §44D-11-1101,
§44D-11-1102, §44D-11-1103, §44D-11-1104 and §44D-11-1105, all to
read as follows:
CHAPTER 36. ESTATES AND PROPERTY.
ARTICLE 1. CREATION OF ESTATES GENERALLY.
§36-1-4. Creation of trusts in lands; necessity of writing.
No declaration of trust of land
shall be is enforceable,
unless it
be is made in writing, signed by the person who declares
such the trust or by his
or her agent. If a conveyance of land,
not fraudulent, is made to one in trust either for the grantor or
a third person,
such the trust may be enforced, though it
be is not
disclosed on the face of the conveyance, nor evidenced by a
writing:
Provided, however, That trusts arising by construction
or operation of law
shall not be are not subject to the provisions of this section.
This section has no effect after June 30, 2011.
§36-1-6. Declarations of trust in personal property; necessity of
writing.
No declaration of trust of any personal property, without
consideration,
shall be is valid unless it
be is in writing, signed
by the person who creates
such the trust or by his
or her agent.
This section
shall have has no application to a conveyance of
personal property to another person, in trust either for the person
making
such the conveyance, or for a third person.
This section has no effect after June 30, 2011.
§36-1-17. Uses and trusts; passing of legal title.
Whenever, by reason of any conveyance by written instrument or
by will, the bare legal title to real or personal property is held
by one person for the use or benefit of, or in trust for, another
person mentioned or described in the instrument or will, and the
holder of
such the legal title has no active duties of care or
management or disposition of the property by reason of
such the
trust, or has performed all
such the duties
as that were imposed
upon him
or her, the legal title to the same estate or interest
which he
or she had in the use of
such the property
shall pass
passes to and
be is legally
deemed to be in the person for whose
use or benefit or in trust for whom, the legal title to the
property was
so held.
This section has no effect after June 30, 2011.
§36-1-18. Trust estates; debts of beneficiaries; spendthrift
trusts; nonmerger of trusts.
(a) Estates held in trust are subject to the debts of the
beneficiary of the trust, except where the creator has expressly
provided in the trust instrument words substantially to the effect
that:
(1) The income or principal, or both, may only be applied to
the health, education, support or maintenance of a beneficiary,
other than the creator of the trust, for the life of the
beneficiary, or the income or principal, or both, may only be
applied at the discretion of the trustee to or for the benefit of
a beneficiary, other than the creator of the trust, for the life of
the beneficiary, for a fixed term of years or other fixed duration
of time, or a fixed annuity amount or a unitrust amount computed
under a formula as a percentage of fair market value of assets in
the trust, regardless of whether the same is income, principal or
both, may only be applied to or for the benefit of a beneficiary,
other than the creator of the trust, for the life of the
beneficiary or for a fixed term of years or other fixed duration of
time; and
(2) The trust is not subject to the liability of or alienation
by the beneficiary or beneficiaries.
(b) A trust, whenever created, may not be set aside or
terminated solely on the assertion of a creditor that the trustee
or trustees are the same person or persons as the beneficiary or beneficiaries of the trust.
(c) This section applies to any trust established by an
instrument executed on or after July 1, 2001, except as otherwise
expressly provided in the terms of the trust.
(d) This section applies to any trust established under an
instrument executed prior to July 1, 2001, when the trustee elects,
in his or her sole discretion, to administer the trust pursuant to
the provisions of this section.
(e) Except as provided in subsection (c) of this section, this
section
may not be construed to does not create or imply a duty on
a trustee to administer the trust pursuant to the provisions of
this section, and a trustee may not be held liable for refusing to
administer a trust pursuant to the provisions of this section.
(f) This section has no effect after June 30, 2011.
CHAPTER 38. LIENS.
ARTICLE 1. VENDOR'S AND TRUST DEED LIENS.
§38-1-13. Applicability of article 14 of chapter 44.
In cases not specifically provided
for in this article, the
provisions of article fourteen, chapter forty-four, of this code
shall be are applicable to trustees mentioned in this article.
This section has no effect after June 30, 2011.
§38-1-13a. Substitution of trustees under a trust deed securing
a debt.
(a) In the case of a trust deed to secure a debt or obligation if the trust deed does not by its terms prescribe a method for
substitution, the party secured by the trust deed, or any surety
indemnified by the deed, or the assignee or personal representative
of any secured party or surety has the authority, in the event of
death, removal, declination, resignation, refusal or inability of
the original trustee or trustees named in the instrument to
substitute a trustee or trustees in his
or her, or its place by a
writing duly signed and acknowledged and recorded in the office of
the clerk of the county commission where the real estate covered by
the trust deed is situate.
(b) In the case of a substitution made under this section of
a trustee or trustees of a trust deed securing a debt or
obligation, the substitution is effected when the party secured, or
a surety indemnified by the deed, or the assignee or personal
representative of any such secured party or surety has deposited
true copies of the notice of the substitution in the United States
mail, first class postage prepaid, addressed to the last known
addresses of the grantor or grantors or any other person owing the
debt or obligation, and to the trustee or trustees, and has
presented the original of the notice to the clerk of the county
commission in whose office the trust deed is recorded, causing the
notice to be recorded and indexed in a general lien book or other
appropriate book in which trust deeds or assignments of trust deeds
are recorded. There shall be appended to the notice presented for
recording a certificate by the party making the substitution, certifying that copies of the notice were mailed as required by
this subsection, and showing the date of the mailing.
(c) It is not necessary to give notice under this section to
a trustee who has removed from the state, declined to accept the
trust, refused to act as trustee, or has resigned, or to the
personal representative of one who has died.
(d) This section takes effect July 1, 2011.
CHAPTER 44. ADMINISTRATION OF ESTATES AND TRUSTS.
ARTICLE 4. ACCOUNTING BY PERSONAL REPRESENTATIVES.
§44-4-22. Application only to personal representatives, guardians,
curators or committees.
The provisions of this article apply only to personal
representatives, guardians, curators or committees, as the case may
be, and do not apply to or affect trustees who are governed by the
provisions of the West Virginia Uniform Trust Code in chapter
forty-four-d of this code.
This section enacted takes effect July 1, 2011.
ARTICLE 5. GENERAL PROVISIONS AS TO PERSONAL REPRESENTATIVES.
§44-5-1. List of fiduciaries.
The clerk of the county commission of each county shall keep
a record, to be known as the "Record of Fiduciaries," in which he
or she shall enter, in separate columns, first, the name of every
fiduciary authorized to act as such by
such the county commission
or clerk
thereof of the county commission; secondly, the name of the decedent for whose estate he
or she is personal representative
or curator; thirdly, the names of the distributees of
such the
estate, showing their relation to the decedent; fourthly, the name
of the living person or persons for whom he
or she is
minor
guardian, curator, committee or trustee; fifthly, the penalty of
his
or her bond; sixthly, the names of his
or her sureties;
seventhly, the date of the order conferring his
or her authority,
and a reference to the book and page where entered; eighthly, the
date of any order revoking his
or her authority, and a reference to
the book and page where entered; ninthly, the date of the return of
every inventory and appraisement of the estate; tenthly, the date
of the confirmation of each report of settlement of the accounts of
such the fiduciary; and the clerk shall index
such the record in
the name of the decedent, estate, ward or person represented by
such the fiduciary. Any clerk failing to make
such entry, as to
any fiduciary, within ten days after the order conferring or
revoking the authority, or the date of the return of
such the
inventory and/or appraisement, or the date of the confirmation of
any report of settlement, shall, for every
such failure, forfeit
$20.
After June 30, 2011, this section does not apply to a trustee.
§44-5-7. Authority of personal representatives to compound and
compromise liabilities due to or from them.
It
shall be is lawful for any guardian, committee or trustee,
to compound and compromise any liability due to or from him
or her, provided that such unless the compounding and compromise
be is
ratified and approved by a court
of equity of competent
jurisdiction, all parties in interest being before the court by
proper process. When
such the compounding and compromise has been
so ratified and approved, it
shall be is binding on all parties in
interest before the court. It
shall be is lawful for any personal
representative to compound and compromise any liability due to or
from him
provided that or her, as long as the compounding and
compromise is ratified and approved by the fiduciary commissioner
to whom the estate or trust has been referred, or by a commissioner
in chancery appointed by the circuit court when the estate of the
decedent is being settled in a chancery suit, and is reported by
the fiduciary commissioner to his
or her court. When the report is
confirmed, the compounding and compromise shall be binding on all
parties to the proceedings.
§44-5-10a. Application only to personal representatives, curators,
and minor guardians.
The provisions of this article apply only to personal
representatives, curators, and minor guardians, as the case may be,
and do not apply to or affect guardians and conservators of adult
protected persons who are governed by the provisions of the
Guardian and Conservatorship Act in chapter forty-four-a of this
code or trustees who are governed by the provisions of the West
Virginia Uniform Trust Code in chapter forty-four-d of this code.
This section takes effect July 1, 2011.
§44-5-11. Designation of testamentary trustee as beneficiary of
insurance.
A policy of life insurance may designate as beneficiary a
trustee or trustees named or to be named by will, if the
designation is made in accordance with the provisions of the policy
and the requirements of the insurer. The proceeds of
such the
insurance shall be paid to the trustee or trustees to be held and
disposed of under the terms of the will as they exist at the death
of the testator; but if no trustee or trustees make claim to the
proceeds from the insurance company within one year after the death
of the insured, or if satisfactory evidence is furnished the
insurance company within such one-year period showing that no
trustee can qualify to receive the proceeds, payment shall be made
by the insurance company to the executors, administrators or
assigns of the insured, unless otherwise provided by agreement with
the insurance company during the lifetime of the insured. The
proceeds of the insurance as collected by the trustee or trustees
shall not be are not subject to debts of the insured or to
inheritance tax to any greater extent than if
such the proceeds
were payable to any other named beneficiary other than the estate
of the insured, and
shall not be considered as are not payable to
the estate of the insured for any purpose.
Such The insurance
proceeds so held in trust may be commingled with any other assets
which may properly come into
such the trust as provided in the
will. Enactment of this section
shall does not invalidate previous life insurance policy designations naming trustees of trusts
established by will.
This section has no effect after June 30, 2011.
§44-5-12. Distribution of assets in satisfaction of pecuniary
bequests; authority of fiduciaries to enter into
certain agreements; validating certain agreements;
providing for discretionary division of trusts for
tax, administrative or other purposes.
(a) Where a will, trust or other governing instrument
authorizes or directs the fiduciary to satisfy wholly or partly in
kind a pecuniary bequest or a separate trust to be funded by a
pecuniary amount or formula unless the will, trust or other
governing instrument
shall otherwise expressly
provide provides,
the assets selected by the fiduciary for that purpose shall be
valued at their respective values on the date or dates of their
distribution, and in the case of any pecuniary bequests or separate
trusts established under the will or trust by a pecuniary amount or
formula if the pecuniary bequest or separate trust is not entirely
funded or an amount necessary to fund the bequest or trust
completely is not irrevocably set aside within fifteen months after
the date of the testator's or grantor's death, the fiduciary shall
allocate to the bequest or trust a prorata share of the income
earned by the estate of the testator or grantor or
such other fund
from which the bequest or trust is to be funded between the date of death of the testator or grantor and the date or dates of the
funding.
(b) Whenever a fiduciary under the provisions of a will, trust
or other governing instrument is required to satisfy a pecuniary
bequest or transfer in trust and is authorized to satisfy the
bequest or transfer by selection and distribution of assets in
kind, and the will, trust or other governing instrument further
provides that the assets to be so distributed shall or may be
valued by some standard other than their fair market value on the
date of distribution, the fiduciary, unless the will, trust or
other governing instrument otherwise specifically directs, shall
distribute assets, including cash, fairly representative of
appreciation or depreciation in the value of all property available
for distribution in satisfaction of the pecuniary bequest or
transfer. This section
shall does not apply to prevent a fiduciary
from carrying into effect the provisions of the will, trust or
other governing instrument that the fiduciary, in order to
implement such a bequest or transfer, must distribute assets,
including cash, having an aggregate fair market value at the date
or dates of distribution amounting to no less than the amount of
the pecuniary bequest or transfer as finally determined for federal
estate tax purposes.
(c) (1) Any fiduciary having discretionary powers under a will
or other governing instrument with respect to the selection of
assets to be distributed in satisfaction of a pecuniary bequest or transfer in trust
shall be is authorized to enter into agreements
with the Commissioner of Internal Revenue of the United States of
America and other taxing authorities requiring the fiduciary to
exercise the fiduciary's discretion so that cash and other
properties distributed in satisfaction of the bequest or transfer
in trust will be fairly representative of the appreciation or
depreciation in value of all property then available for
distribution in satisfaction of the bequest or transfer in trust
and any such agreement
heretofore entered into after April 1, 1964,
is hereby validated. The fiduciary
shall be is authorized to enter
into any other agreement not in conflict with the express terms of
the will, trust or other governing instrument that may be necessary
or advisable in order to secure for federal estate tax purposes the
appropriate marital deduction or other deduction or exemption
available under the Internal Revenue laws of the United States of
America, and to do and perform all acts incident to
such that
purpose.
(2) Unless ordered by a court of competent jurisdiction, the
bank or trust company operating a common trust fund, as provided
for in section six of this article,
shall is not
be required to
render an accounting with regard to the fund, before any fiduciary
commissioner but it may, by application to the circuit court of the
county in which is located the principal place of business of
said
the bank or trust company, secure the approval of an accounting in
such condition as the court may fix:
Provided, That
nothing herein shall be interpreted as relieving this section does not relieve any
fiduciary acquiring, holding or disposing of an interest in any
common trust fund from making an accounting as required by law with
respect of the interest.
(d) The fiduciary of any trust created by will, trust or other
governing instrument
shall have discretionary power may from time
to time without need of court approval to divide the trust or
trusts for purposes of the Generation Skipping Transfer Tax ("GST")
of section 2601 of the Internal Revenue Code of 1986, as amended,
or any similar or successor law of like import, or for any other
tax, administrative or other purposes. In exercising this
authority for inclusion ratio, marital deduction election, reverse
qualified terminal interest property election or other GST or other
tax purposes, the power shall be exercised in a manner that
complies with applicable Internal Revenue Code Treasury Regulations
or other requirements for accomplishing the intended purposes. In
the event that division is made for purposes of separating assets
with respect to which the federal estate tax marital deduction
election is to be made from those as to which
such the election is
not to be made, the division shall be done on a fractional or
percentage basis and the assets of the trust or other fund to be
divided shall be valued for purposes of the division on the date or
dates of division.
(e) This section has no effect after June 30, 2011.
§44-5-13. Restrictions on exercise of power for fiduciary's benefit.
(a) A power conferred upon a person in his
or her capacity as
fiduciary to make discretionary distributions of principal or
income to himself
or herself or to make discretionary allocations
in his
or her favor of receipts or expenses between income and
principal cannot be exercised by him
or her. If the power is
conferred on two or more fiduciaries, it may be exercised by the
fiduciaries who are not so disqualified. If there is no fiduciary
qualified to exercise the power, it may be exercised by a special
fiduciary appointed by the circuit court authorized under article
fourteen of this chapter, and in accordance with the procedure
described therein, to appoint a successor or substitute trustee.
Except as provided in subsection (c), this section applies to all
trusts now in existence and to all trusts which
shall hereafter
come into existence.
(b) Unless either: (i) Mandatory; (ii) limited by an
ascertainable standard relating to the health, education, support
or maintenance of the fiduciary; or (iii) exercisable by the
fiduciary only in conjunction with another person having a
substantial interest in the trust which is adverse to the interest
of the fiduciary, a power to make distributions of principal or
income is a discretionary power for purposes of this section.
(c) This section does not apply to trusts that come into
existence or are amended after the effective date of this section
which show a clear intent that this section not apply.
(d) This section has no effect after June 30, 2011.
§44-5-14. Powers of fiduciaries regarding environmental laws.
(a) For purposes of this section:
(1) "Environmental law" means any federal, state or local law,
rule, regulation or ordinance relating to the regulation of
hazardous substances or hazardous wastes, air pollution, water
pollution and underground storage tanks;
(2) "Hazardous substance" means any substance defined as
hazardous in the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") [42 U.S.C. 9601, et seq. (1980) as
amended] and regulations promulgated thereunder;
(3) "Hazardous waste" means a waste characterized or listed as
hazardous in the Resource, Conservation and Recovery Act ("RCRA")
[42 U.S.C. 6901, et seq. as amended] and regulations promulgated
thereunder;
(4) "Fiduciary" means a fiduciary as defined by section one-d,
article four-d, chapter thirty-one of this code.
(b) In addition to powers, remedies and rights which may be
set forth in any will, trust agreement or other document which is
the source of authority, a trustee, executor, administrator,
guardian or one acting in any other fiduciary capacity, whether an
individual, corporation or other entity ("fiduciary") has the
following powers, rights and remedies whether or not set forth in
the will, trust agreement or other document which is the source of
authority:
(1) To inspect property held by the fiduciary including
interests in sole proprietorships, partnerships or corporations and
any assets owned by
any such the business enterprise, for the
purpose of determining compliance with any environmental law
affecting
such the property and to take necessary or reasonable
action, including reporting to the appropriate regulatory authority
as may be otherwise required by law, with respect to any actual or
potential violation of any environmental law affecting property
held by the fiduciary;
(2) To take, on behalf of the estate or trust, any action
necessary to prevent, abate or otherwise remedy any actual or
threatened violation of any environmental law affecting property
held by the fiduciary, either before or after the initiation of an
enforcement action by any governmental body;
(3) To refuse to accept property in trust or estate if the
fiduciary determines any property to be donated or conveyed to the
trust or estate is contaminated by any hazardous substance or
hazardous waste or is being used or has been used for any activity
directly or indirectly involving any violation of an environmental
law which is reasonably likely to result in liability to the
fiduciary:
Provided, That
such the refusal
shall not be construed
to does not limit the liability of the trust or estate or its
income or principal, for any liability
such the trust or estate may
otherwise have in connection with any environmental law, but only
to limit the liability of the fiduciary. Property not accepted into a trust or estate by the fiduciary may revert to the grantor
or its successors or pass by the laws of descent and distribution,
as may otherwise be provided by law;
(4) To settle or compromise at any time any and all claims
against the trust or estate which may be asserted by any
governmental body or private party involving the alleged violation
of any environmental law affecting property held in trust or in an
estate;
(5) To decline to serve as a fiduciary if the fiduciary
reasonably believes that there is or may be a conflict of interest
between it and its fiduciary capacity and in its individual
capacity because of potential claims or liabilities which may be
asserted against it on behalf of the trust or estate because of the
type or condition of assets held therein.
(c) The fiduciary is entitled to charge the cost of any
inspection, review, abatement, response, cleanup or remedial action
authorized herein against the income or principal of the trust or
estate.
(d) A fiduciary is not personally liable to any beneficiary or
other party for any decrease in value of assets in trust or in an
estate by reason of the fiduciary's compliance with any
environmental law, specifically including any reporting requirement
under
such the law.
(e) Neither the acceptance by the fiduciary of property nor
the failure by the fiduciary to inspect property creates any inference as to whether or not there is or may be any liability
under any environmental law with respect to
such the property.
(f) This section has no effect after June 30, 2011.
§44-5-15. Nonmerger of trusts.
(a) No trust is invalid or terminated, and title to trust
assets is not merged, because the trustee or trustees are the same
person or persons as the beneficiaries of the trust.
(b) No trust, which is otherwise irrevocable because the
grantor or settlor of the trust has not expressly reserved the
right to alter, amend, modify or revoke the trust or because the
creating instrument expressly provides or states that the trust is
irrevocable, is or becomes revocable by the grantor or settlor
because the grantor or settlor is the sole beneficiary of the
trust.
(c) This section applies to all trusts whenever executed or
created.
(d) This section has no effect after June 30, 2011.
ARTICLE 5A. POWERS OF FIDUCIARIES.
§44-5A-2. Incorporation by reference of enumerated powers by
testator; restriction on exercise of powers.
(a) By an express intention of the testator or settlor so to
do contained in a will, or in an instrument in writing whereby a
trust estate is created inter vivos, any or all of the powers or
any portion thereof enumerated in section three of this article, as they exist at the time of the signing of the will by the testator
or at the time of the signing by the first settlor who signs the
trust instrument, may be, by appropriate reference made thereto,
incorporated in
such the will or other written instrument, with the
same effect as though
such the language were set forth verbatim in
the instrument. Incorporation of one or more of the powers
contained in section three of this article by reference to that
section
shall be are in addition to and not in limitation of the
common law or statutory powers of the fiduciary: Provided, That
this subsection has no effect after June 30, 2011.
(b)
After June 30, 2011, by an intention of the testator
expressed in a will, any or all of the powers or any portion of the
powers enumerated in section three of this article, as they exist
at the time of the signing of the will by the testator may be, by
appropriate reference made thereto, incorporated in the will, with
the same effect as though the language were set forth verbatim in
the instrument. Incorporation of one or more of the powers
contained in section three of this article by reference to that
section is in addition to and not in limitation of the common law
or statutory powers of the fiduciary.
(c) No power of authority conferred upon a fiduciary as
provided in this article may be exercised by
such the fiduciary in
such a manner as, in the aggregate, to deprive the trust or the
estate involved of an otherwise available tax exemption, deduction
or credit, expressly including the marital deduction, or operate to impose a tax upon a donor or testator or other person as owner of
any portion of the trust or estate involved. "Tax" includes, but
is not limited to, any federal, state, or local income, gift,
estate or inheritance tax.
(c) (d) Nothing
herein shall be construed to prevent in this
section prevents the incorporation of the powers enumerated in
section three of this article in any other kind of instrument or
agreement.
§44-5A-3. Powers which may be incorporated by reference in trust
instrument.
The following powers may be incorporated by reference as
provided in section two of this article:
Provided, That after June
30, 2011, the following powers may be incorporated by reference by
a testator in the will as provided in section two of this article
and the following powers apply without the need for incorporation
by reference to trustees who are governed by the provisions of the
West Virginia Uniform Trust Code in chapter forty-four-d of this
code:
(a)
Retain original property. -- To retain for
such the time
as the fiduciary considers advisable any property, real or
personal, which the fiduciary may receive, even though the
retention of
such the property by reason of its character, amount,
proportion to the total estate or otherwise would not be
appropriate for the fiduciary apart from this provision.
(b)
Sell and exchange property. -- To sell, exchange, give options upon, partition or otherwise dispose of any property or
interest therein which the fiduciary may hold from time to time,
with or without order of court, at public or private sale or
otherwise, upon
such the terms and conditions, including credit,
and for
such the consideration
as the fiduciary considers
advisable, and to transfer and convey the property or interest
therein which is at the disposal of the fiduciary, in fee simple
absolute or otherwise, free of all trust; and the party dealing
with the fiduciary is not under a duty to follow the proceeds or
other consideration received by the fiduciary from
such the sale or
exchange.
(c)
Invest and reinvest. -- To invest and reinvest, as the
fiduciary considers advisable, in stocks (common or preferred),
bonds, debentures, notes, mortgages or other securities, in or
outside the United States; in insurance contracts on the life of
any beneficiary or of any person in whom a beneficiary has an
insurable interest, or in annuity contracts for any beneficiary, in
any real or personal property, in investment trusts; in
participations in common trust funds, and generally in
such
property
as the fiduciary considers advisable, even though
such the
investment is not of the character approved by applicable law but
for this provision.
(d)
Invest without diversification. -- To make investments
which cause a greater proportion of the total property held by the
fiduciary to be invested in investments of one type or of one company than would be considered appropriate for the fiduciary
apart from this provision.
(e)
Continue business. -- To the extent and upon
such terms
and conditions and for
such the periods
of time as the fiduciary
considers necessary or advisable, to continue or participate in the
operation of any business or other enterprise, whatever its form of
organization, including, but not limited to, the power:
(1) To effect incorporation, dissolution, or other change in
the form of the organization of the business or enterprise;
(2) To dispose of any interest therein or acquire the interest
of others therein;
(3) To contribute thereto or invest therein additional capital
or to lend money thereto, in any
such case upon
such terms and
conditions
as the fiduciary approves from time to time;
(4) To determine whether the liabilities incurred in the
conduct of the business are to be chargeable solely to the part of
the estate or trust set aside for use in the business or to the
estate or trust as a whole; and
(5) In all cases in which the fiduciary is required to file
accounts in any court or in any other public office, it is not
necessary to itemize receipts and disbursements and distributions
of property but it is sufficient for the fiduciary to show in the
account a single figure or consolidation of figures, and the
fiduciary is permitted to account for money and property received
from the business and any payments made to the business in lump sum without itemization.
(f)
Form corporation or other entity. -- To form a corporation
or other entity and to transfer, assign, and convey to
such the
corporation or entity all or any part of the estate or of any trust
property in exchange for the stock, securities or obligations of
any such the corporation or entity, and to continue to hold
such
the stock and securities and obligations.
(g)
Operate farm. -- To continue any farming operation
received by the fiduciary pursuant to the will or other instrument
and to do any and all things considered advisable by the fiduciary
in the management and maintenance of
such the farm and the
production and marketing of crops and dairy, poultry, livestock,
orchard and forest products including, but not limited to, the
following powers:
(1) To operate the farm with hired labor, tenants or
sharecroppers;
(2) To lease or rent the farm for cash or for a share of the
crops;
(3) To purchase or otherwise acquire farm machinery and
equipment and livestock;
(4) To construct, repair and improve farm buildings of all
kinds needed in the fiduciary's judgment, for the operation of the
farm;
(5) To make or obtain loans or advances at the prevailing rate
or rates of interest for farm purposes such as for production, harvesting or marketing, or for the construction, repair or
improvement of farm buildings or for the purchase of farm machinery
or equipment or livestock;
(6) To employ approved soil conservation practices in order to
conserve, improve and maintain the fertility and productivity of
the soil;
(7) To protect, manage and improve the timber and forest on
the farm and sell the timber and forest products when it is to the
best interest of the estate;
(8) To ditch, dam and drain damp or wet fields and areas of
the farm when and where needed;
(9) To engage in the production of livestock, poultry or dairy
products, and to construct such fences and buildings and plant
such
pastures and crops
as may be necessary to carry on
such the
operations;
(10) To market the products of the farm; and
(11) In general, to employ good husbandry in the farming
operation.
(h)
Manage real property. -- (1) To improve, manage, protect
and subdivide any real property;
(2) To dedicate or withdraw from dedication parks, streets,
highways or alleys;
(3) To terminate any subdivision or part thereof;
(4) To borrow money for the purposes authorized by this
subdivision for
such periods
of time and upon
such terms and conditions as to rates, maturities and renewals
as the fiduciary
considers advisable and to mortgage or otherwise encumber any
such
property or part thereof, whether in possession or reversion;
(5) To lease any
such property or part thereof to commence at
the present or in the future, upon
such terms and conditions,
including options to renew or purchase, and for such period or
periods
of time as the fiduciary considers advisable although
such
the period or periods may extend beyond the duration of the trust
or the administration of the estate involved;
(6) To make coal, gravel, sand, oil, gas and other mineral
leases, contracts, licenses, conveyances or grants of every nature
and kind which are lawful in the jurisdiction in which
such the
property lies;
(7) To manage and improve timber and forests on
such the
property, to sell the timber and forest products, and to make
grants, leases, and contracts with respect thereto;
(8) To modify, renew or extend leases;
(9) To employ agents to rent and collect rents;
(10) To create easements and release, convey or assign any
right, title or interest with respect to any easement on
such the
property or part
thereof of the property;
(11) To erect, repair or renovate any building or other
improvement on
such the property, and to remove or demolish any
building or other improvement, in whole or in part; and
(12) To deal with
any such the property and every part
thereof of the property in all other ways and for
such other purposes or
considerations as it would be lawful for any person owning the same
to deal with
such the property either in the same or in different
ways from those specified elsewhere in this subdivision.
(h)
(i)
Pay taxes and expenses. -- To pay taxes, assessments,
compensation of the fiduciary, and other expenses incurred in the
collection, care, administration, and protection of the trust or
estate.
(j)
Receive additional property. -- To receive additional
property from any source and administer
such the additional
property as a portion of the appropriate trust or estate under the
management of the fiduciary but the fiduciary is not required to
receive
such the property without his or her consent.
(k)
Deal with other trusts. -- In dealing with one or more
fiduciaries:
(1) To sell property, real or personal, to, or to exchange
property with, the trustee of any trust which the decedent or the
settlor or his
or her spouse or any child of his
shall have or her
has created, for
such estates and upon
such terms and conditions as
to sale price, terms of payment, and security as the fiduciary
considers advisable; and the fiduciary is under no duty to follow
the proceeds of any such sale; and
(2) To borrow money for
such periods
of time and upon
such
terms and conditions as to rates, maturities, renewals and
securities
as the fiduciary considers advisable from any trust created by the decedent, his
or her spouse, or any child of his
or
her, for the purpose of paying debts of the decedent, taxes, the
costs of the administration of the estate, and like charges against
the estate, or any part thereof, or discharging the liability of
any fiduciary thereof and to mortgage, pledge or otherwise encumber
such a portion of the estate or any trust as may be required to
secure
such the loan or loans and to renew
such the loans.
(l)
Borrow money. -- To borrow money for
such periods
of time
and upon
such terms and conditions as to rates, maturities,
renewals, and security
as the fiduciary considers advisable,
including the power of a corporate fiduciary to borrow from its own
banking department, for the purpose of paying debts, taxes or other
charges against the estate or any trust, or any part thereof, and
to mortgage, pledge or otherwise encumber
such a portion of the
estate or any trust as may be required to secure
such the loan or
loans; and to renew existing loans either as maker or endorser.
(m)
Make advances. -- To advance money for the protection of
the trust or estate, and for all expenses, losses and liabilities
sustained in the administration of the trust or estate or because
of the holding or ownership of any trust or estate assets, for
which advances with any interest the fiduciary
shall have has a
lien on the assets of the trust or estate as against a beneficiary.
(n)
Vote shares. -- To vote shares of stock owned by the
estate or any trust at stockholders meetings in person or by
special, limited or general proxy, with or without power of substitution.
(o)
Register in name of nominee. -- To hold a security in the
name of a nominee or in other form without disclosure of the
fiduciary relationship so that title to the security may pass by
delivery, but the fiduciary is liable for any act of the nominee in
connection with the stock so held.
(p)
Exercise options, rights and privileges. -- To exercise
all options, rights, and privileges to convert stocks, bonds,
debentures, notes, mortgages or other property into other stocks,
bonds, debentures, notes, mortgages or other property; to subscribe
for other or additional stocks, bonds, debentures, notes, mortgages
or other property; and to hold
such the stocks, bonds, debentures,
notes, mortgages or other property so acquired as investments of
the estate or trust so long as the fiduciary considers advisable.
(q)
Participate in reorganizations. -- To unite with other
owners of property similar to any which may be held at any time in
the decedent's estate or in any trusts in carrying out any plan for
the consolidation or merger, dissolution or liquidation,
foreclosure, lease or sale of the property, incorporation or
reincorporation, reorganization or readjustment of the capital or
financial structure of any corporation, company or association the
securities of which may form any portion of an estate or trust; to
become and serve as a member of a stockholders or bondholders
protective committee; to deposit securities in accordance with any
plan agreed upon; to pay any assessments, expenses or sums of money that may be required for the protection or furtherance of the
interest of the distributees of an estate or beneficiaries of any
trust with reference to
any such the plan; and to receive as
investments of an estate or any trust any securities issued as a
result of the execution of
such the plan.
(r)
Reduce interest rates. -- To reduce the interest rate from
time to time on any obligation, whether secured or unsecured,
constituting a part of an estate or trust.
(s)
Renew and extend obligations. -- To continue any
obligation, whether secured or unsecured, upon and after maturity
with or without renewal or extension upon
such terms
as the
fiduciary considers advisable, without regard to the value of the
security, if any, at the time of
such the continuance.
(t)
Foreclose and bid in. -- To foreclose, as an incident to
the collection of any bond, note or other obligation, any mortgage,
deed of trust or other lien securing
such the bond, note or other
obligation, and to bid in the property at
such the foreclosure
sale, or to acquire the property by deed from the mortgagor or
obligor without foreclosure; and to retain the property so bid in
or taken over without foreclosure.
(u)
Insure. -- To carry
such insurance coverage, including
public liability, for
such hazards and in
such amounts, either in
stock companies or in mutual companies, as the fiduciary considers
advisable.
(v)
Collect. -- To collect, receive and receipt for rents, issues, profits, and income of an estate or trust.
(w)
Litigate, compromise or abandon. -- To compromise, adjust,
arbitrate, sue on or defend, abandon or otherwise deal with and
settle claims in favor of or against the estate or trust as the
fiduciary considers advisable, and the fiduciary's decision is
conclusive between the fiduciary and the beneficiaries of the
estate or trust and the person against or for whom the claim is
asserted, in the absence of fraud by
such those persons; and in the
absence of fraud, bad faith or gross negligence of the fiduciary,
is conclusive between the fiduciary and the beneficiaries of the
estate or trust.
(x)
Employ and compensate agents, etc. -- To employ and
compensate, out of income or principal or both and in
such
proportion as the fiduciary considers advisable, persons considered
by the fiduciary needful to advise or assist in the proper
settlement of the estate or administration of any trust, including,
but not limited to, agents, accountants, brokers, attorneys-at-law,
attorneys-in-fact, investment brokers, rental agents, realtors,
appraisers, and tax specialists; and to do so without liability for
any neglect, omission, misconduct or default of
such the agent or
representative
provided as long as he or she was selected and
retained with due care on the part of the fiduciary.
(y)
Acquire and hold property of two or more trusts undivided.
-- To acquire, receive, hold and retain the principal of several
trusts created by a single instrument undivided until division becomes necessary in order to make distributions; to hold, manage,
invest, reinvest, and account for the several shares or parts of
shares by appropriate entries in the fiduciary's books of account,
and to allocate to each share or part of share its proportionate
part of all receipts and expenses:
Provided, That the provisions
of this subdivision do not defer the vesting in possession of any
share or part of share of the estate or trust.
(z)
Establish and maintain reserves. -- To set up proper and
reasonable reserves for taxes, assessments, insurance premiums,
depreciation, obsolescence, amortization, depletion of mineral or
timber properties, repairs, improvements and general maintenance of
buildings or other property out of rents, profits or other income
received; and to set up reserves also for the equalization of
payments to or for beneficiaries:
Provided, That the provisions of
this subdivision do not affect the ultimate interests of
beneficiaries in
such the reserves.
(aa)
Distribute in cash or kind. -- To make distribution of
capital assets of the estate or trust in kind or in cash, or
partially in kind and partially in cash, in divided or undivided
interests, as the fiduciary finds to be most practicable and for
the best interests of the distributees; and to determine the value
of capital assets for the purpose of making distribution thereof if
and when there
be is more than one distributee thereof, which
determination
shall be is binding upon the distributees unless
clearly capricious, erroneous and inequitable:
Provided, That the fiduciary may not exercise any power under this subdivision unless
the fiduciary holds title to or an interest in the property to be
distributed and is required or authorized to make distribution
thereof.
(bb)
Pay to or for minors or incompetents. -- To make payments
in money, or in property in lieu of money, to or for a minor or
incompetent in any one or more of the following ways:
(1) Directly to
such the minor or incompetent;
(2) To apply directly in payment for the support, maintenance,
education, and medical, surgical, hospital or other institutional
care of
such the minor or incompetent;
(3) To the legal or natural guardian of
such the minor or
incompetent;
(4) To any other person, whether or not appointed guardian of
the person by any court, who does, in fact, have the care and
custody of the person of
such the minor or incompetent.
The fiduciary is not under any duty to see to the application
of the payments so made, if the fiduciary exercised due care in the
selection of the person, including the minor or incompetent, to
whom
such the payments were made; and the receipt of
such the
person is full acquittance to the fiduciary.
(cc)
Apportion and allocate receipts and expenses. -- Where
not otherwise provided by statute to determine:
(1) What is principal and what is income of any estate or
trust and to allocate or apportion receipts and expenses as between principal and income in the exercise of the fiduciary's discretion,
and, by way of illustration and not limitation of the fiduciary's
discretion, to charge premiums on securities purchased at a premium
against principal or income or partly against each;
(2) Whether to apply stock dividends and other noncash
dividends to income or principal or apportion them as the fiduciary
considers advisable; and
(3) What expenses, costs, taxes (other than estate,
inheritance, and succession taxes and other governmental charges)
shall be charged against principal or income or apportioned between
principal and income and in what proportions.
(dd)
Make contracts and execute instruments. -- To make
contracts and to execute instruments, under seal or otherwise, as
may be necessary in the exercise of the powers
herein granted
in
this section.
(ee) The foregoing powers are limited as follows for any trust
which
shall be is classified as a "private foundation" as that term
is defined by section 509 of the Internal Revenue Code of 1954 or
corresponding provisions of any subsequent federal tax laws
(including each nonexempt charitable trust described in section
4947(a)(1) of the code which is treated as a private foundation) or
nonexempt split-interest trust described in section 4947(a)(2) of
the Internal Revenue Code of 1954 or corresponding provisions of
any subsequent federal tax laws (but only to the extent that
section 508(e) of the code is applicable to
such the nonexempt split-interest trust under section 4947(a)(2)):
(1) The fiduciary shall make distributions of
such amounts,
for each taxable year, at
such time times and in
such a manner as
not to become subject to the tax imposed by section 4942 of the
Internal Revenue Code of 1954, or corresponding provisions of any
subsequent federal tax laws;
(2) No fiduciary may engage in any act of self-dealing as
defined in section 4941(d) of the Internal Revenue Code of 1954, or
corresponding provisions of any subsequent federal tax laws;
(3) No fiduciary may retain any excess business holdings as
defined in section 4943(c) of the Internal Revenue Code of 1954, or
corresponding provisions of any subsequent federal tax laws;
(4) No fiduciary may make any investments in
such a manner as
to subject the trust to tax under section 4944 of the Internal
Revenue Code of 1954, or corresponding provisions of any subsequent
federal tax laws;
(5) No fiduciary may make any taxable expenditures as defined
in section 4945(e) of the Internal Revenue Code of 1954, or
corresponding provisions of any subsequent federal tax laws.
§44-5A-4. Termination of trusts valued at less than $100,000;
spendthrift and other protective trusts for
incompetents and children.
(a) Upon application of a trustee of a trust with assets
valued at less than
fifty thousand dollars $100,000, the principal
of which is not distributable until some future time, a circuit court having in rem jurisdiction over the corpus of the trust may
order that the trust be terminated upon a finding that the
continued existence of the trust is no longer economically
beneficial or practical because, relative to the costs of
administering the trust or because of an existing economic
circumstance that directly threatens the solvency, financial
integrity or monetary value of such trust, continuance of the trust
pursuant to its existing terms will defeat or substantially impair
the accomplishment of its purposes.
(b) Notwithstanding the provisions of subsection (a) of this
section to the contrary, the court may not, pursuant to
said that
subsection, order the termination of a spendthrift or other
protective trust which exists for the benefit of one or more
incompetents or minors in the absence of the court's further
finding that there exists or will exist upon the termination of
such the trust an adequate alternative protective device or
provision for the management of the trust assets and protection of
the primary beneficiary or beneficiaries for whom the trust was
created.
(c) Upon the entry of an order that the trust be terminated
pursuant to the provisions of this section, the trustee shall, at
least fourteen days prior to the date upon which the trustee
proposes to terminate the trust, file with the court
such an
accounting of the activities and assets of the trust as
may be
directed by the court and serve a copy
thereof of the accounting upon the parties to the action and
such other persons that may be
affected by the termination of the trust. Upon the court's review
of the accounting, the court may enter an order approving the
accounting and the terms of the termination of the trust proposed
by the trustee or may enter such other order
as the court
may deem
considers appropriate in the action.
(d)This section has no effect after June 30, 2011.
§44-5A-5. Designation of testamentary trustee as beneficiary of
insurance.
(a) A policy of life insurance may designate as beneficiary a
trustee or trustees named or to be named by will, if the
designation is made in accordance with the provisions of the policy
and the requirements of the insurer. The proceeds of the insurance
shall be paid to the trustee or trustees to be held and disposed of
under the terms of the will as they exist at the death of the
testator; but if no trustee or trustees makes claim to the proceeds
from the insurance company within one year after the death of the
insured, or if satisfactory evidence is furnished the insurance
company within the one-year period showing that no trustee can
qualify to receive the proceeds, payment shall be made by the
insurance company to the executors, administrators or assigns of
the insured, unless otherwise provided by agreement with the
insurance company during the lifetime of the insured. The proceeds
of the insurance as collected by the trustee or trustees are not
subject to debts of the insured or to inheritance tax to any greater extent than if the proceeds were payable to any other named
beneficiary other than the estate of the insured, and are not
considered as payable to the estate of the insured for any purpose.
The insurance proceeds so held in trust may be commingled with any
other assets which may properly come into the trust as provided in
the will. Enactment of this section does not invalidate previous
life insurance policy designations naming trustees of trusts
established by will.
(b) This section takes effect July 1, 2011.
§44-5A-6. Distribution of assets in satisfaction of pecuniary
bequests; authority of fiduciaries to enter into
certain agreements; validating certain agreements;
providing for discretionary division of trusts for
tax, administrative or other purposes.
(a) Where a will, trust or other governing instrument
authorizes or directs the fiduciary to satisfy wholly or partly in
kind a pecuniary bequest or a separate trust to be funded by a
pecuniary amount or formula unless the will, trust or other
governing instrument expressly provides otherwise, the assets
selected by the fiduciary for that purpose shall be valued at their
respective values on the date or dates of their distribution, and
in the case of any pecuniary bequests or separate trusts
established under the will or trust by a pecuniary amount or
formula if the pecuniary bequest or separate trust is not entirely funded or an amount necessary to fund the bequest or trust
completely is not irrevocably set aside within fifteen months after
the date of the testator's or grantor's death, the fiduciary shall
allocate to the bequest or trust a prorata share of the income
earned by the estate of the testator or grantor or other fund from
which the bequest or trust is to be funded between the date of
death of the testator or grantor and the date or dates of the
funding.
(b) Whenever a fiduciary under the provisions of a will, trust
or other governing instrument is required to satisfy a pecuniary
bequest or transfer in trust and is authorized to satisfy the
bequest or transfer by selection and distribution of assets in
kind, and the will, trust or other governing instrument further
provides that the assets to be so distributed shall or may be
valued by some standard other than their fair market value on the
date of distribution, the fiduciary, unless the will, trust or
other governing instrument otherwise specifically directs, shall
distribute assets, including cash, fairly representative of
appreciation or depreciation in the value of all property available
for distribution in satisfaction of the pecuniary bequest or
transfer. This section does not apply to prevent a fiduciary from
carrying into effect the provisions of the will, trust or other
governing instrument that the fiduciary, in order to implement the
a bequest or transfer, must distribute assets, including cash,
having an aggregate fair market value at the date or dates of distribution amounting to no less than the amount of the pecuniary
bequest or transfer as finally determined for federal estate tax
purposes.
(c) (1) Any fiduciary having discretionary powers under a will
or other governing instrument with respect to the selection of
assets to be distributed in satisfaction of a pecuniary bequest or
transfer in trust is authorized to enter into agreements with the
Commissioner of Internal Revenue of the United States of America
and other taxing authorities requiring the fiduciary to exercise
the fiduciary's discretion so that cash and other properties
distributed in satisfaction of the bequest or transfer in trust
will be fairly representative of the appreciation or depreciation
in value of all property then available for distribution in
satisfaction of the bequest or transfer in trust and any such
agreement heretofore entered into after April 1, 1964, is hereby
validated. The fiduciary is authorized to enter into any other
agreement not in conflict with the express terms of the will, trust
or other governing instrument that may be necessary or advisable in
order to secure for federal estate tax purposes the appropriate
marital deduction or other deduction or exemption available under
the Internal Revenue laws of the United States of America, and to
do and perform all acts incident to that purpose.
(2) Unless ordered by a court of competent jurisdiction, the
bank or trust company operating a common trust fund, as provided in
section six of this article, is not required to render an accounting with regard to the fund, before any fiduciary
commissioner but it may, by application to the circuit court of the
county in which is located the principal place of business of the
bank or trust company, secure the approval of an accounting in the
condition the court may fix
: Provided, That nothing in this
section relieves a fiduciary acquiring, holding or disposing of an
interest in any common trust fund from making an accounting as
required by law with respect of the interest.
(d) The fiduciary of any trust created by will, trust or other
governing instrument may from time to time without need of court
approval to divide the trust or trusts for purposes of the
generation skipping transfer tax ("GST") of section 2601 of the
Internal Revenue Code of 1986, as in effect on January 1, 2010, or
any similar or successor law of like import, or for any other tax,
administrative or other purposes. In exercising this authority for
inclusion ratio, marital deduction election, reverse qualified
terminal interest property election or other GST or other tax
purposes, the power shall be exercised in a manner that complies
with applicable Internal Revenue Code Treasury Regulations or other
requirements for accomplishing the intended purposes. In the event
that division is made for purposes of separating assets with
respect to which the federal estate tax marital deduction election
is to be made from those as to which the election is not to be
made, the division shall be done on a fractional or percentage
basis and the assets of the trust or other fund to be divided shall be valued for purposes of the division on the date or dates of
division.
(e) This section takes effect July 1, 2011.
§44-5A-7. Restrictions on exercise of power for fiduciary's
benefit.
(a) A power conferred upon a person in his or her capacity as
fiduciary to make discretionary distributions of principal or
income to himself or herself or to make discretionary allocations
in his or her favor of receipts or expenses between income and
principal cannot be exercised by him or her. If the power is
conferred on two or more fiduciaries, it may be exercised by the
fiduciaries who are not so disqualified. If there is no fiduciary
qualified to exercise the power, it may be exercised by a special
fiduciary appointed by the court authorized under article fourteen
of this chapter, and in accordance with the procedure described
therein, to appoint a successor or substitute trustee. Except as
provided in subsection (c) of this section this section applies to
all trusts now in existence and to all trusts which are created
later.
(b) Unless either: (1) Mandatory; (2) limited by an
ascertainable standard relating to the health, education, support
or maintenance of the fiduciary; or (3) exercisable by the
fiduciary only in conjunction with another person having a
substantial interest in the trust which is adverse to the interest of the fiduciary, a power to make distributions of principal or
income is a discretionary power for purposes of this section.
(c) This section does not apply to trusts that come into
existence or are amended after the effective date of this section
which show a clear intent that this section not apply.
(d) This section takes effect July 1, 2011.
§44-5A-8. Powers of fiduciaries regarding environmental laws.
(a) For purposes of this section:
(1) "Environmental law" means any federal, state or local law,
rule, regulation or ordinance relating to the regulation of
hazardous substances or hazardous wastes, air pollution, water
pollution and underground storage tanks;
(2) "Hazardous substance" means any substance defined as
hazardous in the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") [42 U.S.C. 9601, et seq. (1980)] as
amended and in effect on January 1, 2010, and regulations
promulgated thereunder;
(3) "Hazardous waste" means a waste characterized or listed as
hazardous in the Resource, Conservation and Recovery Act ("RCRA")
[42 U.S.C. 6901, et seq. as amended] as in effect on January 1,
2010, and regulations promulgated thereunder;
(4) "Fiduciary" means a fiduciary as defined by section one-d,
article four-d, chapter thirty-one of this code.
(b) In addition to powers, remedies and rights which may be
set forth in any will, trust agreement or other document which is the source of authority, a trustee, executor, administrator,
guardian or one acting in any other fiduciary capacity, whether an
individual, corporation or other entity ("fiduciary") has the
following powers, rights and remedies whether or not set forth in
the will, trust agreement or other document which is the source of
authority:
(1) To inspect property held by the fiduciary including
interests in sole proprietorships, partnerships or corporations and
any assets owned by any such business enterprise, for the purpose
of determining compliance with any environmental law affecting the
property and to take necessary or reasonable action, including
reporting to the appropriate regulatory authority as may be
otherwise required by law, with respect to any actual or potential
violation of any environmental law affecting property held by the
fiduciary;
(2) To take, on behalf of the estate or trust, any action
necessary to prevent, abate or otherwise remedy any actual or
threatened violation of any environmental law affecting property
held by the fiduciary, either before or after the initiation of an
enforcement action by any governmental body;
(3) To refuse to accept property in trust or estate if the
fiduciary determines any property to be donated or conveyed to the
trust or estate is contaminated by any hazardous substance or
hazardous waste or is being used or has been used for any activity
directly or indirectly involving any violation of an environmental law which is reasonably likely to result in liability to the
fiduciary
: Provided, That the refusal does not limit the liability
of the trust or estate or its income or principal, for any
liability the trust or estate may otherwise have in connection with
any environmental law, but only to limit the liability of the
fiduciary. Property not accepted into a trust or estate by the
fiduciary may revert to the grantor or its successors or pass by
the laws of descent and distribution, as may otherwise be provided
by law;
(4) To settle or compromise at any time any and all claims
against the trust or estate which may be asserted by any
governmental body or private party involving the alleged violation
of any environmental law affecting property held in trust or in an
estate;
(5) To decline to serve as a fiduciary if the fiduciary
reasonably believes that there is or may be a conflict of interest
between it and its fiduciary capacity and in its individual
capacity because of potential claims or liabilities which may be
asserted against it on behalf of the trust or estate because of the
type or condition of assets held therein.
(c) The fiduciary is entitled to charge the cost of any
inspection, review, abatement, response, cleanup or remedial action
authorized herein against the income or principal of the trust or
estate.
(d) A fiduciary is not personally liable to any beneficiary or
other party for any decrease in value of assets in trust or in an
estate by reason of the fiduciary's compliance with any
environmental law, specifically including any reporting requirement
under the law.
(e) Neither the acceptance by the fiduciary of property nor
the failure by the fiduciary to inspect property creates any
inference as to whether or not there is or may be any liability
under any environmental law with respect to the property.
(f) This section takes effect July 1, 2011.
ARTICLE 6. INVESTMENTS BY FIDUCIARIES.
§44-6-1. Fiduciaries to put money out at interest.
Executors, administrators, guardians, curators, committees or
trustees may, by direction of the circuit court of the county,
where they were appointed or qualified, put out at interest all
moneys in their hands which they are or may be lawfully required to
retain, whether
the same it belongs to minors, legatees or other
person or persons, upon
such security, and for
such the length of
time, as
such the court will allow, and if the security so taken,
bona fide and without fraud,
shall prove proves insufficient, it
shall be is the loss of the beneficiaries entitled thereto; and it
shall be is the duty of
such the executors, administrators,
guardians, curators, committees or trustees, in cases where the
estates in their hands may be materially benefited thereby, to make
application to
such the circuit court for
such direction, and in case they
shall neglect so to do they
shall be are accountable for
the interest that might have been made thereby; but if no person
who may be willing to take
such the money at interest, giving
such
the security, can be found by
such the executors, administrators,
guardians, curators, committees or trustees, then
such the
executors, administrators, guardians, curators, committees or
trustees,
shall in
such those cases,
be are accountable for the
principal money only, until it can be put out at interest as
aforesaid; but in any case where executors, administrators,
guardians, curators, committees or trustees use the money of the
estates which
shall come to their hands, they
shall be are
accountable not only for the principal, but also for the interest
thereon.
After June 30, 2011, this section does not apply to a trust or
a trustee.
§44-6-2. In what securities fiduciaries may invest trust funds.
Any executor, administrator, guardian, curator, committee,
trustee or other fiduciary whose duty it may be to loan or invest
money entrusted to him
or her as such, may, without any order of
any court, invest the same or any part thereof in any of the
following securities, and without liability for any loss resulting
from investments therein:
Provided, That except as otherwise
provided in article six-c of this chapter,
such the fiduciary shall
exercise the judgment and care under the circumstances then
prevailing which
men 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:
(a) In bonds or interest-bearing notes or obligations of the
United States, or those for which the faith of the United States is
distinctly pledged to provide for the payment of the principal and
interest thereof, including, but not by way of limitation, bonds or
debentures issued under the "Farm Credit Act Amendments of 1986"
(12 U. S. C. §2001 et. seq.), as amended, debentures issued by the
Federal National Mortgage Association, securities issued by the
Federal Home Loan Bank System; and in bonds, interest-bearing notes
and obligations issued, guaranteed or assumed by the "International
Bank for Reconstruction and Development" or by the "Inter-American
Development Bank" or by the "Asian Development Bank" or by the
"African Development Bank";
(b) In bonds or interest-bearing notes or obligations of this
state;
(c) In bonds of any state of the United States which has not
within ten years previous to the making of
such the investment
defaulted in the payment of any part of either principal or
interest on any of its bonds issued by authority of the Legislature
of
such the state;
(d) In the bonds or interest-bearing notes or obligations of
any county, district, school district or independent school district, municipality or any other political division of this
state that have been issued pursuant to the authority of any law of
this state, since May 9, 1917;
(e) In bonds and negotiable notes secured by first mortgage or
first trust deed upon improved real estate where the amount secured
by
such the mortgage or trust deed
shall does not at the time of
making the same exceed eighty percent of the assessed value, or
sixty-six and two-thirds percent of the appraised value as
determined by wholly disinterested and independent appraisers,
whichever value
shall be is the higher, of the real estate covered
by
such the mortgage or trust deed, and when
such the mortgage or
trust deed is accompanied by a satisfactory abstract of title,
certificate of title or title insurance policy, showing good title
in the mortgagor when making
such the mortgage or trust deed, and
by a fire insurance policy in an old line company with loss, if
any, payable to the mortgagee or trustee as his
or her interest may
appear:
Provided, That the rate of interest upon the above
enumerated securities in this subdivision, in which
such the
investments may be made,
shall may not be less than three and
one-half percent per annum nor greater than the maximum rate of
interest which
such the bonds or negotiable notes may bear under
applicable law:
Provided, however, That the provisions herein
establishing a minimum rate of interest
shall do not apply to
investments in force as of the effective date of this section;
(f) In savings accounts and time deposits of bank or trust
companies to the extent that
such the deposits are insured by the
Federal Deposit Insurance Corporation, or by any other similar
federal instrumentality that may be hereafter created,
provided
there shall be such if there is an instrumentality in existence and
available for the purpose, or by bonds of solvent surety companies:
Provided, That the rate of interest upon
such the savings accounts
or time deposits
shall may not be less than the rate paid other
depositors in
such the bank or trust company;
(g) In shares of state building and loan associations, or
federal savings and loan associations, to the extent that
such the
shares are insured by the Federal Savings and Loan Insurance
Corporation, or by any other similar federal instrumentality that
may be hereafter created:
Provided, That there
shall be such is an
instrumentality in existence and available for the purpose, or by
bonds of solvent surety companies:
Provided, however, That the
dividend rate upon
such the shares
shall may not be less than the
rate paid to other shareholders in
such the associations; and
(h) In other securities of corporations organized and existing
under the laws of the United States, or of the District of Columbia
or any state of the United States, including, but not by way of
limitation, bonds, debentures, notes, equipment trust obligations
or other evidences of indebtedness and shares of common and
preferred stocks of
such the corporations and securities of any
open end or closed end management type investment company or investment trust registered under the "Federal Investment Company
Act" of 1940, as from time to time amended, which
men persons of
prudence, discretion and intelligence acquire or retain for their
own account,
provided, and upon conditions, however, that as long
as:
(1) No investment
shall be is made pursuant to the provisions
of this subdivision which, at the time
such the investment
shall be
is made, will cause the aggregate market value thereof to exceed
fifty percent of the aggregate market value at that time of all of
the property of the fund held by
such the fiduciary.
Notwithstanding the aforesaid percentage limitation the cash
proceeds of the sale of securities received or purchased by a
fiduciary and made eligible by this subdivision may be reinvested
in any securities of the type described in this subdivision;
(2) No bonds, debentures, notes, equipment trust obligations
or other evidence of indebtedness of
such the corporations
shall be
are purchased under authority of this subdivision unless
such the
obligations, if other than issues of a common carrier subject to
the provisions of section twenty-a of the "Interstate Commerce
Act", as amended,
shall be are obligations issued, guaranteed or
assumed by corporations which have any securities currently
registered with the Securities and Exchange Commission; and
(3) No common or preferred stocks, other than bank and
insurance company stocks,
shall be are purchased under authority of
this subdivision unless currently fully listed and registered upon an exchange registered with the Securities and Exchange Commission
as a national securities exchange. No sale or other liquidation of
any investment
shall be is required solely because of any change in
the relative market value of those investments made eligible by
this subdivision and those made eligible by the preceding
subdivisions of this section. In determining the aggregate market
value of the property of a fund and the percentage of a fund to be
invested under the provisions of this subdivision, a fiduciary may
rely upon published market quotations as to those investments for
which
such the quotations are available, and upon such valuations
of other investments as in the fiduciary's best judgment seem fair
and reasonable according to available information.
Trust funds received by executors, administrators, guardians,
curators, committees, trustees and other fiduciaries may be kept
invested in the securities originally received by them, or if the
trust funds originally received were stock or securities of a bank,
in shares of stock or other securities (and securities received as
distributions in respect thereof) of a holding company subject to
the federal Bank Holding Company Act of 1956, as amended, received
upon conversion of, or in exchange for, shares of stock or other
securities of
such the bank; unless otherwise ordered by a court
having jurisdiction of the matter, as hereinafter provided, or
unless the instrument under which the trust was created
shall
direct directs that a change of investment be made, and any such fiduciary
shall not be is not liable for any loss that may occur by
depreciation of
such the securities.
This section
shall does not apply where the instrument
creating the trust, or the last will and testament of any testator
or any court having jurisdiction of the matter, specially directs
in what securities the trust funds shall be invested, and every
such the court
is hereby given has power specially to direct by
order or orders, from time to time, additional securities in which
trust funds may be invested, and any investment thereof made in
accordance with
any such the special direction
shall be is legal,
and no executor, administrator, guardian, curator, committee,
trustee or other fiduciary
shall may be held for any loss resulting
in any such case.
This section does not apply to trusts or trustees after June
30, 2011.
§44-6-2a. Duties of the trustee of an irrevocable life insurance
trust.
(a) Unless otherwise directed by the terms of the trust
instrument, the duties of a trustee of an irrevocable life
insurance trust with respect to acquiring or retaining a contract
of insurance upon the life of the settlor, or the lives of the
settlor and the settlor's spouse, do not include a duty: (i) To
determine whether
any such the contract is or remains a proper
investment; (ii) to exercise policy options available under any
such the contract in the event the policy lapses or is terminated due to failure to pay premiums; or (iii) to diversify any
such the
contract. A trustee is not liable to the beneficiaries of the
trust or to any other party for any loss arising from the absence
of those duties upon the trustee.
(b) The trustee of a trust described under subsection (a) of
this section which was established prior to the effective date of
this section, shall notify the settlor in writing that, unless the
settlor provides written notice to the contrary to the trustee
within sixty days of the trustee's notice, the provisions of
subsection (a) of this section
shall apply to the trust.
Subsection (a) of this section
shall do not apply if, within sixty
days of the trustee's notice, the settlor notifies the trustee that
subsection (a) does not apply.
(c) This section has no effect after June 30, 2011.
§44-6-5a. Application only to executors, administrators,
guardians, curators or committees.
(a) The provisions of this article apply only to executors,
administrators, guardians, curators or committees, as the case may
be, and do not apply to or affect trustees who are governed by the
provisions of the West Virginia Uniform Prudent Investor Act in
article six-c of this chapter and the West Virginia Uniform Trust
Code in chapter forty-four-d of this code.
(b) This section takes effect July 1, 2011.
ARTICLE 6C. UNIFORM PRUDENT INVESTOR ACT.
§44-6C-1. Prudent investor rule.
(a)
Notwithstanding the provisions of section two, article six
of this chapter, and Except as otherwise provided in subsection (b)
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 this article.
(b) The prudent investor rule, a default rule, may be
expanded, restricted, eliminated or otherwise altered by the
provisions of a trust
instrument. A trustee is not liable to a
beneficiary to the extent that the trustee acted in reasonable
reliance on the provisions of the trust
instrument.
§44-6C-2. Standard of care; portfolio strategy; risk and return
objectives.
(a) 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.
(b) A trustee's investment and management decisions respecting
individual assets must be evaluated not in isolation but in the
context of the trust portfolio as a whole and as a part of an
overall investment strategy having risk and return objectives
reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in
investing and managing trust assets are such of the following as
are relevant to the trust or its beneficiaries:
(1) General economic conditions;
(2) The possible effect of inflation or deflation;
(3) The expected tax consequences of investment decisions or
strategies;
(4) The role that each investment or course of action plays
within the overall trust portfolio, which may include financial
assets, interests in closely held enterprises, tangible and
intangible personal property and real property;
(5) The expected total return from income and the appreciation
of capital;
(6) Other resources of the beneficiaries;
(7) Needs for liquidity, regularity of income and preservation
or appreciation of capital; and
(8) An asset's special relationship or special value, if any,
to the purposes of the trust or to one or more of the
beneficiaries.
(d) A trustee shall make a reasonable effort to verify facts
relevant to the investment and management of trust assets.
(e) A trustee may invest in any kind of property or type of
investment consistent with the standards of this article.
(f) 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.
(g)(1) Unless otherwise directed by the terms of the trust
instrument, the duties of a trustee of an irrevocable life
insurance trust with respect to acquiring or retaining a contract
of insurance upon the life of the grantor, or the lives of the
grantor and the grantor's spouse, do not include a duty:
(A) To determine whether the contract is or remains a proper
investment;
(B) To exercise policy options available under the contract in
the event the policy lapses or is terminated due to failure to pay
premiums; or
(C) To diversify the contract.
(2) A trustee is not liable to the beneficiaries of the trust
or to any other party for any loss arising from the absence of
those duties upon the trustee.
ARTICLE 7. RESIGNATION OF PERSONAL REPRESENTATIVES AND PROCEDURE
UPON RESIGNATION.
§44-7-1. Fiduciary desiring to resign to file petition; summons
thereon.
Any executor, administrator, guardian A personal
representative or curator
or committee, desiring to resign his
or
her trust, may file his
or her petition for that purpose in the
county
court commission of the county in which he
or she was appointed,
as such, stating the names of all persons, so far as
known by him
or her, interested in the estate in his
or her hands
or under his
or her control, and to which his
or her duties as
such
fiduciary relate, and if any of them
be are under disability, or
nonresidents of the state; or if there
be are persons interested in
such the estate whose names are unknown, all of
such these facts,
and the names of the guardians and committees of
such the persons
under disability, if there
be such are guardians or committees,
shall be stated in the petition. Upon the filing of
such the
petition the clerk of the court shall issue a summons against all
the persons so named and the guardians and the committees of
such
as are those under disability, if they have any, and against "the
unknown parties in interest," if any there
be are, mentioned in
such the petition, to appear before the court on a day to be named
in the summons, which day
shall may be not less than thirty days
from the filing of
such the petition, and answer the
same petition,
and state to the court the reasons, if any they have, why
such the
petition should not be granted. If any of the persons
so
interested reside in another county in this state, the summons as
to them shall be directed and sent by mail by the clerk to the
sheriff of that county to be served and returned by him
or her; and
as to the persons named in
such the petition who reside out of this
state, or who cannot by the use of due diligence be found, and as
to
such the unknown parties, an order of publication shall be
awarded against them, which shall be published or posted and published, as in cases of appointment and qualification of personal
representatives.
§44-7-4. Application only to personal representatives, curators or
minor guardians.
(a) The provisions of this article apply only to personal
representatives, curators and minor guardians, as the case may be,
and do not apply to or affect guardians and conservators of an
adult protected person who are governed by the provisions of the
Guardian and Conservatorship Act in chapter forty-four-a of this
code or trustees who are governed by the provisions of the West
Virginia Uniform Trust Code in chapter forty-four-d of this code.
(b) This section takes effect July 1, 2011.
ARTICLE 14. SUBSTITUTION OF TRUSTEES; POWERS OF SURVIVING OR
REMAINING TRUSTEES.
§44-14-1. By circuit court or judge, for trustee in deed, will or
other writing; appointment of ancillary trustee under
certain circumstances; substitution of trustee by
party secured by trust deed.
(a) When the trustee, or, if there is more than one trustee,
one or more of the trustees, in any will, deed or other writing,
die or remove beyond the limits of this state, or decline to accept
the trust, or having accepted, resign the same, or refuse to act as
trustee, or
be is unable due to physical or mental disability to
perform his, her or their duties under the trust, the circuit court of the county in which
such the will was admitted to probate, or
such the deed or other writing is or may be recorded, may, on
motion of any party interested, and upon satisfactory evidence of
such the death, removal, declination, resignation, refusal or
inability, appoint a trustee or trustees in the place of the
trustee or trustees named in
such the instrument and
so dying,
removing, declining, resigning or refusing, or
being unable to
perform his
or her, her, or their duties under the trust.
(b) As an alternative to the method of substitution provided
for in subsection (a) of this section, in the case of a trust deed
to secure a debt or obligation if the trust deed does not by its
terms prescribe a method for substitution, the party secured by the
trust deed, or any surety indemnified by the deed, or the assignee
or personal representative of
any such a secured party or surety
has the authority, in the event of
such the death, removal,
declination, resignation, refusal or inability as is described in
subsection (a), to substitute a trustee or trustees in the place of
the trustee or trustees named in
such the instrument, independent
of any court action otherwise required by the provisions of
subsection (a).
(c) If
any such a trust, other than a security trust,
include
includes real property
situate in this state, and the trustee, or,
if there
be is more than one trustee, one or more of the trustees,
appointed by or under the will, deed or other writing creating
such
the trust and required under the provisions thereof to act in respect of
such the real property,
be is a corporation or
association chartered under the laws of any other state or
jurisdiction which is not qualified under the laws of this state to
hold property or transact business in this state, and refuses or is
unable to so qualify,
such the court may in like manner appoint an
ancillary trustee of
such the trust to act with respect to
such the
real property
situate in this state pursuant to, and with all the
powers and authorities granted to the trustee or trustees of
such
the trust by, the provision of the will, deed or other writing
creating
such the trust.
(d) This section has no effect after June 30, 2011.
§44-14-2. Procedure for appointment by court or judge; appointment
by secured party under trust deed.
(a) A motion under the provisions of subsection (a) of
the
preceding section
shall one of this article, may be
made only after
ten days' notice to all persons interested in the execution of the
trust other than the plaintiff in
such the motion. If any of the
parties on whom
such the notice is required to be served
be are
under disability and have no guardian or committee, the court,
judge or clerk shall appoint some discreet and competent
attorney-at-law as guardian ad litem to
such the person, on whom
notice may be served. If there
be such is a guardian or committee,
the notice shall be served on him
or her.
(b) In the case of a substitution made under subsection (b) of
the preceding section
one of this article, substituting a trustee or trustees of a trust deed securing a debt or obligation, the
substitution is effected when the party secured, or a surety
indemnified by the deed, or the assignee or personal representative
of
any such the secured party or surety has deposited true copies
of the notice of
such the substitution in the United States mail,
first class postage prepaid, addressed to the last known addresses
of the grantor or grantors or any other person owing the debt or
obligation, and to the trustee or trustees, and has presented the
original of
such the notice to the clerk of the county commission
in whose office the trust deed is recorded, causing
such the notice
to be recorded and indexed in a general lien book or
other such
appropriate book
wherein in which trust deeds or assignments of
trust deeds are recorded. There shall be appended to the notice
presented for recordation a certificate by the party making the
substitution, certifying that copies of the notice were mailed as
required by this subsection, and showing the date of
such the
mailing.
(c) It
shall not be is not necessary to give notice under this
section to a trustee who has removed from the state, declined to
accept the trust, refused to act as trustee, or has resigned, nor
to the personal representative of one who has died.
(d) This section has no effect after June 30, 2011.
§44-14-3. Remaining trustees or personal representative of sole or
surviving trustee, may execute trust.
The personal representative of a sole or surviving trustee, or
if there
be is more than one trustee, and one or more of them die,
resign, or remove from the state, or decline to accept the trust,
or refuse to act as
such the trustee or trustees, the remaining
trustee or trustees, may execute the trust, or so much thereof as
remained unexecuted at the death, removal, declination,
resignation, or refusal aforesaid (whether the trust subject be
real or personal property), unless the instrument creating the
trust directs otherwise, or some other trustee be appointed for the
purpose pursuant to the provisions of this article.
This section has no effect after June 30, 2011.
§44-14-4. Powers and responsibilities of substituted or remaining
trustee.
Any trustee or trustees appointed under authority of this
article, if he
or she, she, or they accept, or the personal
representative of a sole or surviving trustee, or the surviving or
remaining trustee, who has power to execute any trust or the
remainder of any trust under authority of this article,
shall be is
vested with all the estates, rights and powers, and charged with
all the duties and responsibilities, of the trustee or trustees
named in the trust instrument.
This section has no effect after June 30, 2011.
§44-14-5. Validation of good faith acts by substitute trustees.
This section is enacted to prevent or redress problems which
might be caused by the improper appointment of substitute trustees under a trust deed to secure a debt or obligation who in good faith
performed their acts as trustees in substantial compliance with the
provisions of article one, chapter thirty-eight of this code. With
respect to acts performed by
such those trustees in good faith and
in substantial compliance with the statutory law of this state and
the terms of their trust deed the otherwise lawful acts of a
substitute trustee performed prior to the effective date of this
section shall be conclusively presumed to be valid, notwithstanding
that the method of appointment of
such the trustee did not comply
with the provisions of a prior enactment of this article.
This section has no effect after June 30, 2011.
CHAPTER 44D. UNIFORM TRUST CODE.
ARTICLE 1. GENERAL PROVISIONS AND DEFINITIONS.
§44D-1-101. Short title.
This chapter may be cited as the "West Virginia Uniform Trust
Code."
§44D-1-102. Scope.
This chapter applies to express trusts, charitable or
noncharitable, and trusts created pursuant to a statute, judgment,
or decree that requires the trust to be administered in the manner
of an express trust.
§44D-1-103. Definitions.
In this chapter:
"Action," with respect to an act of a trustee, includes a
failure to act.
"Ascertainable standard" means a 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.
"Beneficiary" means a person that:
(1) Has a present or future beneficial interest in a trust,
vested or contingent;
(2) In a capacity other than that of trustee, holds a power of
appointment over trust property; or
(3) A charitable organization that is expressly designated in
the terms of the trust instrument to receive distributions.
"Charitable trust" means a trust, or portion of a trust,
created for a charitable purpose described in subsection (a),
section four hundred five, article four of this chapter.
"Conservator" means a person appointed by the court to
administer the estate and financial affairs of a protected person.
"Court" means a court of this state having proper jurisdiction
under section two hundred three, article two of this chapter, and
venue under section two hundred four of that article.
"Current beneficiary" means a beneficiary that, on the date
the beneficiary's qualification is determined, is a distributee or
permissible distributee of trust income or principal.
"Environmental law" means a federal, state or local law, rule,
regulation or ordinance relating to protection of the environment.
"Grantor" means a person, including a testator, who creates,
or contributes property to, a trust. If more than one person
creates or contributes property to a trust, each person is a
grantor of the portion of the trust property attributable to that
person's contribution except to the extent another person has the
power to revoke or withdraw that portion.
"Guardian" means a person appointed by the court or a parent
to make decisions regarding the support, care, education, health,
and welfare of a minor. The term does not include a guardian ad
litem.
"Interests of the beneficiaries" means the beneficial
interests provided in the terms of the trust.
"Jurisdiction," with respect to a geographic area, includes a
state or country.
"Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, unincorporated nonprofit association, charitable
organization, government, governmental subdivision, agency or
instrumentality, public corporation or any other legal or
commercial entity.
"Power of withdrawal" means a presently exercisable general
power of appointment other than a power:
(1) Exercisable by a trustee and limited by an ascertainable
standard; or
(2) Exercisable by another person only upon consent of the
trustee or a person holding an adverse interest.
"Property" means anything that may be the subject of
ownership, whether real or personal, legal or equitable or any
interest therein.
"Qualified beneficiary" means a beneficiary who, on the date
the beneficiary's qualification is determined:
(1) Is a distributee or permissible distributee of trust
income or principal;
(2) Would be a distributes or permissible distributee of trust
income or principal if the interests of the distributees described
in subparagraph (A) terminated on that date without causing the
trust to terminate; or
(3) Would be a distributes or permissible distributes of trust
income or principal if the trust terminated on that date.
"Revocable," as applied to a trust, means revocable by the
grantor without the consent of the trustee or a person holding an
adverse interest.
"Spendthrift provision" means a term of a trust which
restrains both voluntary and involuntary transfer of a
beneficiary's interest.
"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. The term includes an Indian tribe or band
recognized by federal law or formally acknowledged by a state.
"Terms of a trust" means the manifestation of the grantor'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.
"Trust instrument" means an instrument, including a will,
executed by the grantor that contains terms of the trust, including
any amendments thereto.
"Trustee" includes an original, additional, and successor
trustee, and a cotrustee.
§44D-1-104. Internal Revenue Code defined.
For purposes of this chapter and chapter forty-four of this
code, "Internal Revenue Code" or "Internal Revenue Code of 1986"
mean the Internal Revenue Code of 1986 codified in 26 U.S.C. 1 et
seq., as amended and in effect on January 1, 2010.
§44D-1-105. Knowledge.
(a) Subject to subsection (b) of this section, a person has
knowledge of a fact if the person:
(1) Has actual knowledge of it;
(2) Has received a notice or notification of it; or
(3) From all the facts and circumstances known to the person
at the time in question, has reason to know it.
(b) 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 it 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 individual's regular duties or the individual knows a
matter involving the trust would be materially affected by the
information.
§44D-1-106. Default and mandatory rules.
(a) Except as otherwise provided in the terms of the trust
instrument, this chapter governs the duties and powers of a
trustee, relations among trustees, and the rights and interests of
a beneficiary.
(b) The terms of a trust prevail over any provision of this
chapter except:
(1) The requirements for creating a trust;
(2) The duty of a trustee to act in good faith and in
accordance with the terms and purposes of the trust;
(3) The requirement that a trust and its terms have a purpose
that is lawful, not contrary to public policy, and possible to
achieve;
(4) The power of the court to modify or terminate a trust
under section four hundred ten through four hundred sixteen,
article four of this chapter;
(5) The effect of a spendthrift provision and the rights of
certain creditors and assignees to reach a trust as provided in
article five of this chapter;
(6) The power of the court under section seven hundred two,
article seven of this chapter to require, dispense with, or modify
or terminate a bond;
(7) The power of the court under subsection (b), section seven
hundred eight, article seven of this chapter,to adjust a trustee's
compensation specified in the terms of the trust instrument which
is unreasonably low or high;
(8) The effect of an exculpatory term under section one
thousand eight, article ten of this chapter;
(9) The rights under sections one thousand ten through one
thousand thirteen, article ten of this chapter, of a person other
than a trustee or beneficiary;
(10) Periods of limitation for commencing a judicial
proceeding;
(11) The power of the court to take action and exercise
jurisdiction as may be necessary in the interests of justice; and
(12) The subject-matter jurisdiction of the court and venue
for commencing a proceeding as provided in sections two hundred
three and two hundred four, article two of this chapter.
§44D-1-107. 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
another statute of this state.
§44D-1-108. Governing law.
The meaning and effect of the terms of a trust are determined
by:
(1) The law of the jurisdiction designated in the terms of the
trust instrument, including terms which may provide for change of
jurisdiction from time to time, unless the designation of that
jurisdiction's law is contrary to a strong public policy of the
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 instrument, the law of the jurisdiction in which the
grantor is domiciled when the trust becomes irrevocable.
§44D-1-109. Principal place of administration.
(a) Without precluding other means for establishing a
sufficient connection with the designated jurisdiction, terms of a
trust designating the principal place of administration are valid
and controlling if:
(1) A trustee's principal place of business is located in or
a trustee is a resident of the designated jurisdiction; or
(2) All or part of the administration occurs in the designated
jurisdiction.
(b) Without precluding the right of the court to order,
approve, or disapprove a transfer, the trustee, may transfer the
trust's principal place of administration to another state or to a
jurisdiction outside of the United States that is appropriate to
the trust's purposes, its administration, and the interests of the
beneficiaries.
(c) When the proposed transfer of a trust's principal place of
administration is to another state or to a jurisdiction outside of
the United States, the trustee shall notify the current
beneficiaries of a proposed transfer of a trust's principal place
of administration not less than sixty days before initiating the
transfer. A corporate trustee that maintains a place of business
in West Virginia where one or more trust officers are available on
a regular basis for personal contact with trust customers and
beneficiaries has not transferred its principal place of
administration merely because all or a significant portion of the
administration of the trust is performed outside West Virginia.
The notice of proposed transfer must include:
(1) The name of the jurisdiction to which the principal place
of administration is to be transferred;
(2) The address and telephone number at the new location at
which the trustee can be contacted;
(3) An explanation of the reasons for the proposed transfer;
(4) The date on which the proposed transfer is anticipated to
occur; and
(5) The date, not less than sixty days after the giving of the
notice, by which the current beneficiary must notify the trustee of
an objection to the proposed transfer.
(d) The authority of a trustee under this section to transfer
a trust's principal place of administration to another state or to
a jurisdiction outside the United States terminates if a current
beneficiary notifies the trustee of an objection to the proposed
transfer on or before the date specified in the notice.
(e) In connection with a transfer of the trust's principal
place of administration, the trustee may transfer some or all of
the trust property to a successor trustee designated in the terms
of the trust instrument or appointed pursuant to section seven
hundred four, article seven of this chapter.
§44D-1-110. Methods and waiver of notice.
(a) Notice to a person under this chapter or the sending of a
document to a person under this chapter must be accomplished in a
manner reasonably suitable under the circumstances and likely to
result in receipt of the notice or document. Permissible methods
of notice or for sending a document include first-class mail,
personal delivery, delivery to the person's last known place of residence or place of business, or a properly directed electronic
message.
(b) Notice otherwise required under this chapter or a document
otherwise required to be sent under this chapter need not be
provided to a person whose identity or location is unknown to and
not reasonably ascertainable by the trustee.
(c) Notice under this chapter or the sending of a document
under this chapter may be waived by the person to be notified or
sent the document.
(d) Notice of a judicial proceeding shall be given as provided
in the applicable rules of civil procedure.
§44D-1-111. Others treated as qualified beneficiaries.
(a) Whenever notice to qualified or current beneficiaries of
a trust is required under this chapter, the trustee shall also give
notice to any other beneficiary who has sent the trustee a request
for notice.
(b) 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, on the date the charitable organization's
qualification is being determined is also a current beneficiary of
trust income or principal.
(c) A person appointed to enforce a trust created for the care
of an animal or another noncharitable purpose as provided in section four hundred eight or four hundred nine, article four of
this chapter has the rights of a qualified beneficiary under this
chapter.
§44D-1-112. Nonjudicial settlement agreements.
(a) For purposes of this section, "interested persons" means
persons whose consent would be required in order to achieve a
binding settlement were the settlement to be approved by the court.
(b) Except as otherwise provided in subsection (c) of this
section, interested persons may enter into a binding nonjudicial
settlement agreement with respect to any matter involving a trust,
including, but not limited to:
(1) The interpretation or construction of the terms of the
trust;
(2) The approval of a trustee's report or accounting or waiver
of the preparation of a trustee's report or accounting;
(3) Direction to a trustee to refrain from performing a
particular act or the grant to a trustee of any necessary or
desirable power;
(4) The resignation or appointment of a trustee and the
determination of a trustee's compensation;
(5) Transfer of a trust's principal place of administration;
(6) Liability or release from liability of a trustee for an
action relating to the trust;
(7) Questions relating to the property or an interest in
property held as part of a trust;
(8) An investment decision, policy, plan or program of the
trustee;
(9) The grant to a trustee of any necessary or desirable
power;
(10) The exercise or nonexercise of any power by a trustee;
(11) An action or proposed action by or against a trust or
trustee;
(12) The modification or termination of a trust; and
(13) Any other matter concerning the administration of a
trust.
(c) A nonjudicial settlement agreement is valid only to the
extent it 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.
(d) Any interested person may request the court to approve a
nonjudicial settlement agreement, to determine whether the
representation as provided in article three of this chapter was
adequate, and to determine whether the agreement contains terms and
conditions the court could have properly approved.
§44D-1-113. Rules of construction.
The rules of construction that apply in this state to the
interpretation of and disposition of property by will also apply as
appropriate to the interpretation of the terms of a trust and the
disposition of the trust property.
ARTICLE 2. JUDICIAL PROCEEDINGS.
§44D-2-201. Role of court in administration of trust.
(a) The court may intervene in the administration of a trust
to the extent its jurisdiction is invoked by an interested person
or as provided by law.
(b) A trust is not subject to continuing judicial supervision
unless ordered by the court.
(c) A judicial proceeding involving a trust may relate to any
matter involving the trust's administration, including a request
for instructions and an action to declare rights.
§44D-2-202. Jurisdiction over trustee and beneficiary.
(a) By accepting the trusteeship of a trust having its
principal place of administration in this state 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.
(b) With respect to their interests in the trust, the
beneficiaries of a trust having its principal place of
administration in this state are subject to the jurisdiction of the
courts of this state regarding any matter involving 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.
(c) This section does not preclude other methods of obtaining
jurisdiction over a trustee, beneficiary or other person receiving
property from the trust.
§44D-2-203. Subject-matter jurisdiction.
The court has exclusive jurisdiction of proceedings in this
state brought by a trustee or beneficiary concerning the
administration of a trust.
§44D-2-204. Venue.
(a) Except as otherwise provided in subsection (b) of this
section, venue for a judicial proceeding involving a trust is in
the county of this state in which the trust's principal place of
administration is or will be located unless the proceeding is to
recover land, determine title to the land or subject it to a debt,
determine the county where the land or any part may be, or, if the
trust is created by will and the estate is not yet closed, in the
county in which the decedent's estate is being administered.
(b) If a trust has no trustee, venue for a judicial proceeding
for the appointment of a trustee is in a county of this state in
which a beneficiary resides, in a county in which any trust
property is located, or if the trust is created by will, in the
county in which the decedent's estate was or is being administered.
ARTICLE 3. REPRESENTATION.
§44D-3-301. Representation; basic effect.
(a) Notice to a person who may represent and bind another
person under this chapter has the same effect as if notice were
given directly to the other person.
(b) The consent of a person who may represent and bind another
person under this chapter is binding on the person represented
unless the person represented objects to the representation by
notifying the trustee or the representative before the consent
would otherwise have become effective.
(c) Except as otherwise provided in section four hundred
eleven, article four of this chapter, and section six hundred two,
article six of this chapter, a person who under this article may
represent a grantor who lacks capacity may receive notice and give
a binding consent on the grantor's behalf.
(d) A grantor may not represent and bind a beneficiary under
this article with respect to the termination or modification of a
trust under subsection (a), section four hundred eleven, article
four of this chapter.
§44D-3-302. Representation by holder of general testamentary
power of appointment.
To the extent there is no conflict of interest between the
holder of a general 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,
as permissible appointees, takers in default, or otherwise, are
subject to the power.
§44D-3-303. 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 or guardian of the protected person may
represent and bind the estate that the fiduciary 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;
(5) A parent may represent and bind the parent's minor or
unborn child if a conservator or guardian for the child has not
been appointed; and
(6) If a minor or unborn person is not otherwise represented
under this section, a grandparent or more remote ancestor may
represent and bind that minor or unborn person.
§44D-3-304. Representation by person having substantially
identical interest.
Unless otherwise represented, a minor, incapacitated or unborn
individual, or a person whose identity or location is unknown and
not reasonably ascertainable, may be represented by and bound by
another having a substantially identical interest with respect to
the particular question or dispute, but only to the extent there is no conflict of interest with respect to the particular question or
dispute between the representative and the person represented.
§44D-3-305. Appointment of representative.
(a) If the court determines in a judicial proceeding that an
interest is not represented under this chapter, or that the
otherwise available representation might be inadequate, the court
may appoint a representative to receive notice, give consent, and
otherwise represent, bind, and act on behalf of a minor,
incapacitated or unborn individual, or a person whose identity or
location is unknown. A representative may be appointed to represent
several persons or interests.
(b) A representative may act on behalf of the individual
represented with respect to any matter arising under this chapter,
whether or not a judicial proceeding concerning the trust is
pending.
(c) In making decisions, a representative may consider general
benefit accruing to the living members of the individual's family.
ARTICLE 4. CREATION, VALIDITY, MODIFICATION AND TERMINATION OF
TRUST.
§44D-4-401. Methods of creating trust.
A trust may be created by:
(1) Transfer of property to another person as trustee during
the grantor's lifetime by the grantor or by the grantor's agent,
acting in accordance under a durable power of attorney which expressly authorizes the agent to create a trust on the grantor's
behalf, or fund an existing trust of the grantor on the grantor's
behalf or by will or other disposition taking effect upon the
grantor's death;
(2) Declaration by the owner of property that the owner holds
identifiable property as trustee;
(3) Exercise of a power of appointment in favor of a trustee;
or
(4) An order of the court.
§44D-4-402. Requirement for creation.
(a) Except as created by an order of the court, a trust is
created only if:
(1) The grantor has capacity to create a trust, or the
grantor's agent when the trust is created by the grantor's agent
acting in accordance under a durable power of attorney which
expressly authorizes the agent to create a trust on the grantor's
behalf;
(2) The grantor indicates an intention, in writing, to create
the trust, which may be by the grantor's agent acting in accordance
under a durable power of attorney which expressly authorizes the
agent to create a trust on the grantor's behalf;
(3) The trust has a definite beneficiary or is:
(A) A charitable trust;
(B) A trust for the care of an animal, as provided in section
four hundred eight of this article; or
(C) A trust for a noncharitable purpose, as provided in
section four hundred nine, article four of this chapter;
(4) The trustee has duties to perform; and
(5) The same person is not the sole trustee and sole
beneficiary.
(b) A beneficiary is definite if the beneficiary can be
ascertained now or in the future, subject to any applicable rule
against perpetuities.
(c) A power in 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.
(d) A trust is valid regardless of the existence, value or
character of the corpus of the trust.
(e) No trust is invalid or terminated, and title to trust
assets is not merged, because the trustee or trustees are the same
person or persons as the beneficiaries of the trust.
§44D-4-403. Trusts created in other jurisdictions.
A trust not created by will is validly created if its creation
complies with the law of the jurisdiction in which the trust
instrument was executed, or the law of the jurisdiction in which,
at the time of creation:
(1) The grantor was domiciled, had a place of abode, or was a
national;
(2) A trustee was domiciled or had a place of business; or
(c) Any trust property was located.
§44D-4-404. Trust purposes.
A trust may be created only to the extent its purposes are
lawful, not contrary to public policy and possible to achieve. A
trust and its terms must be for the benefit of its beneficiaries.
§44D-4-405. Charitable purposes; enforcement.
(a) A charitable trust may be created for the relief of
poverty, the advancement of education or religion, the promotion of
health, governmental or municipal purposes or other purposes the
achievement of which is beneficial to the community.
(b) If the terms of a charitable trust do not indicate a
particular charitable purpose or beneficiary, upon petition by the
trustee or a person having a significant interest in the trust, the
court may select one or more charitable purposes or beneficiaries.
The selection must be consistent with the grantor's intention to
the extent it can be ascertained.
(c) The grantor of a charitable trust, trustee or a person
having a significant interest in the trust, may maintain a
proceeding to enforce the trust.
(d) This section is not intended to override the provisions of
section four, article one, chapter thirty-five of this code,
concerning conveyances, devises, dedications, gifts or bequests to
religious organizations and to the extent there is a conflict with
that section, this section controls.
§44D-4-406. Creation of trust induced by fraud, duress or undue
influence.
A trust is void to the extent its creation was induced by
fraud, duress or undue influence. As used in this section, "fraud,"
"duress" and "undue influence" have the same meanings for trust
validity purposes as they have for purposes of determining the
validity of a will.
§44D-4-407. Evidence of oral trust.
Oral trusts are unenforceable in this state.
§44D-4-408. Trust for care of animal.
(a) A trust may be created to provide for the care of an
animal alive during the grantor'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 alive during the
grantor's lifetime, upon the death of the last surviving animal.
(b) A trust authorized by this section may be enforced by a
person appointed in the terms of the trust instrument or, if no
person is so appointed, 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.
(c) 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. Except as otherwise provided in the
terms of the trust instrument, property not required for the
intended use must be distributed to the grantor, if then living,
otherwise to the grantor's successors in interest.
§44D-4-409. Noncharitable trust without ascertainable beneficiary.
Except as otherwise provided in section four hundred eight of
this article, or by the provisions of article five-a, chapter
thirty-five of this code, or by another statute, the following
rules apply:
(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 the period set
forth in section one, article one-a, chapter thirty-six of this
code.
(2) A trust authorized by this section may be enforced by a
person appointed in the terms of the trust instrument or, if no
person is so appointed, 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. Except as otherwise provided in the
terms of the trust instrument, property not required for the
intended use must be distributed to the grantor, if then living,
otherwise to the grantor's successors in interest.
§44D-4-410. Modification or termination of trust; proceedings for
approval or disapproval.
(a) In addition to the methods of termination prescribed by
sections four hundred eleven through four hundred fourteen, article
four of this chapter, a trust terminates to the extent the trust is
revoked or expires pursuant to its terms, no purpose of the trust
remains to be achieved, or the purposes of the trust have become
unlawful, contrary to public policy, or impossible to achieve.
(b) A proceeding to approve or disapprove a proposed
modification or termination under sections four hundred eleven
through four hundred sixteen of this article, or trust combination
or division under section four hundred seventeen of this article,
may be commenced by a trustee or beneficiary, and a proceeding to
approve or disapprove a proposed modification or termination under
section four hundred eleven of this article may be commenced by the
grantor.The grantor of a charitable trust may maintain a
proceeding to modify the trust under section four hundred thirteen
of this article.
§44D-4-411. Modification or termination of noncharitable
irrevocable trust by consent.
(a) If, upon petition, the court finds that the grantor and
all beneficiaries consent to the modification or termination of a
noncharitable irrevocable trust, the court shall approve the
modification or termination even if the modification or termination is inconsistent with a material purpose of the trust. A grantor's
power to consent to a trust's modification or termination may be
exercised by an agent under a power of attorney only to the extent
expressly authorized by the power of attorney or the terms of the
trust instrument; by the grantor's conservator with the approval of
the court supervising the conservatorship if an agent is not so
authorized; or by the grantor's guardian with the approval of the
court supervising the guardianship if an agent is not so authorized
and a conservator has not been appointed.
(b) A noncharitable 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. A noncharitable irrevocable trust may be
modified upon consent of all of the beneficiaries if the court
concludes that modification is not inconsistent with a material
purpose of the trust.
(c) A spendthrift provision in the terms of the trust
instrument is presumed to constitute a material purpose of the
trust.
(d) Upon termination of a trust under subsection (a) or (b) of
this section, the trustee shall distribute the trust property as
agreed by the beneficiaries.
(e) If not all of the beneficiaries consent to a proposed
modification or termination of the trust under subsection (a) or
(b) of this section, the modification or termination including any distributions of the trust property, may be approved by the court
if the court is satisfied that:
(1) If all of the beneficiaries had consented, the trust could
have been modified or terminated under this section; and
(2) The interests of a beneficiary who does not consent will
be adequately protected.
§44D-4-412. Modification or termination because of unanticipated
circumstances or inability to administer trust
effectively.
(a) The court may modify the administrative or dispositive
terms of a trust or terminate the trust if, because of
circumstances not anticipated by the grantor, modification or
termination will further the purposes of the trust. To the extent
practicable, the modification must be made in accordance with the
grantor's probable intention.
(b) 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 impair the trust's administration.
(c) 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.
§44D-4-413. Cy pres.
(a) Except as otherwise provided in subsection (b) of this
section, if a particular charitable purpose becomes unlawful,
impracticable, impossible to achieve, or wasteful:
(1) The charitable trust does not fail, in whole or in part;
(2) The charitable trust property does not revert to the
grantor or the grantor's successors in interest; and
(3) Upon petition by a trustee or a person having a
significant interest in the trust, the court shall apply cy pres to
fulfill as nearly as possible the grantor's charitable intention,
whether it be general or specific.
(b) A provision in the terms of a charitable trust that would
result in distribution of the trust property to a noncharitable
beneficiary prevails over the power of the court under subsection
(a) of this section to apply cy pres to modify or terminate the
trust only if, when the provision takes effect:
(1) The charitable trust property is to revert to the grantor
and the grantor is still living; or
(2) Fewer than twenty-one years have elapsed since the date of
the trust's creation.
§44D-4-414. Modification or termination of uneconomic trust.
(a) After notice to the qualified beneficiaries, the trustee
of a trust consisting of a noncharitable trust property having a
total value less than $100,000 may terminate the trust, without the
necessity of court approval, if the trustee concludes that the value of the trust property is insufficient to justify the cost of
administration.
(b) The court may modify or terminate a trust or remove the
trustee and appoint a different trustee if it determines that the
value of the trust property is insufficient to justify the cost of
administration.
(c) 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.
(d) This section does not apply to an easement for
conservation or preservation.
§44D-4-415. Reformation to correct mistakes.
The court may reform the terms of a trust, even if
unambiguous, to conform the terms to the grantor's intention if it
is proved by preponderance of the evidence that both the grantor's
intent and the terms of the trust instrument were affected by a
mistake of fact or law, whether in expression or inducement.
§44D-4-416. Modification to achieve grantor's tax objectives.
To achieve the grantor's tax objectives, the court may modify
the terms of a trust in a manner that is not contrary to the
grantor's probable intention. The court may provide that the
modification has retroactive effect.
§44D-4-417. Combination and division of trusts.
After notice to the 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 impair
rights of any beneficiary or adversely affect achievement of the
purposes of the trust.
ARTICLE 5. CREDITOR'S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS.
§44D-5-501. Rights of beneficiary's creditor or assignee.
To the extent a beneficiary's interest is not subject to a
spendthrift provision, the court may authorize a creditor or
assignee of the beneficiary to reach the beneficiary's interest in
a trust by execution or other process against the present or future
distributions to or for the benefit of the beneficiary. The court
may limit the award to relief as appropriate under the
circumstances.
§44D-5-502. Spendthrift provision.
(a) A spendthrift provision contained in a trust instrument is
valid if it contains language substantially to the effect that it
restrains both voluntary and involuntary transfers of a
beneficiary's interest.
(b) A term of a trust instrument 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.
(c) A beneficiary may not transfer an interest in a trust in
violation of a valid spendthrift provision, and, except as
otherwise provided in this article, a creditor or assignee of the beneficiary may not reach the interest or a distribution by the
trustee before its receipt by the beneficiary.
§44D-5-503. Exceptions to spendthrift provision.
(a) In this section, "child" includes any person for whom an
order or judgment for child support has been entered in this or
another state.
(b) A spendthrift provision is unenforceable against:
(1) A beneficiary's child, who has a judgment or court order
against the beneficiary for child support;
(2) A judgment creditor who has provided services for the
protection of a beneficiary's interest in the trust; and
(3) A claim of this state or the United States to the extent
a statute of this state or federal law so provides.
(c) A claimant against whom a spendthrift provision cannot be
enforced may obtain from a court an order attaching present or
future distributions to or for the benefit of the beneficiary. The
court may limit the award to such relief as is appropriate under
the circumstances.
§44D-5-504. Discretionary trusts; effect of standard.
(a) In this section, "child" includes any person for whom an
order or judgment for child support has been entered in this or
another state.
(b) Except as otherwise provided in subsection (c) of this
section, whether or not a trust instrument contains a spendthrift provision, a creditor of a beneficiary may not compel a
distribution that is subject to the trustee's discretion, even if:
(1) The discretion is expressed in the form of a standard of
distribution; or
(2) The trustee has abused the discretion.
(c) To the extent a trustee has not complied with a standard
of distribution or has abused a discretion:
(1) A distribution may be ordered by the court to satisfy a
judgment or court order against the beneficiary for child support
the beneficiary's child; and
(2) The court shall direct the trustee to pay to the child,
spouse or former spouse such amount as is 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 had the trustee complied with the standard or not
abused the discretion.
(d) This section does not limit the right of a beneficiary to
maintain a judicial proceeding against a trustee for an abuse of
discretion or failure to comply with a standard for distribution.
(e) A creditor may not reach the interest of a beneficiary who
is also a trustee or cotrustee or otherwise compel a distribution,
if the trustee's discretion to make distributions for the trustee's
own benefit is limited by an ascertainable standard.
§44D-5-505. Creditor's claim against grantor.
(a) Whether or not the terms of a trust instrument contain a
spendthrift provision, the following rules apply:
(1) During the lifetime of the grantor, the property of a
revocable trust is subject to claims of the grantor's creditors.
(2) During the lifetime of the grantor, with respect to an
irrevocable trust, a creditor or assignee of the grantor may reach
the maximum amount that can be distributed to or for the grantor's
benefit. If a trust has more than one grantor, the amount the
creditor or assignee of a particular grantor may reach may not
exceed the grantor's interest in the portion of the trust
attributable to that grantor's contribution.
(3) After the death of a grantor, and subject to the grantor's
right to direct the source from which liabilities will be paid, the
property of a trust that was revocable at the grantor's death is
subject to claims of, to the extent the grantor's probate estate is
inadequate to satisfy them:
(A) The costs and expenses of administration of the grantor's
estate;
(B) Reasonable funeral expenses;
(C) Debts and taxes with preference under federal law;
(D) Unpaid child support which is due and owing at the time of
the decedent's death;
(E) Debts and taxes with preference under other laws of the
State of West Virginia;
(F) Reasonable and necessary medical and hospital expenses of
the last illness of the decedent, including compensation for
persons attending the decedent during his or her last illness; and
(G) All other claims.
(b) For purposes of this section:
(1) During the period the power may be exercised, the holder
of a power of withdrawal is treated in the same manner as the
grantor of a revocable trust to the extent of the property subject
to the power; and
(2) Upon the lapse, release or waiver of the power, the holder
is treated as the grantor of the trust only to the extent the value
of the property affected by the lapse, release or waiver exceeds
the greater of the amount specified in Section 2041(b)(2), Section
2503(b) or Section 2514(e) of the Internal Revenue Code.
§44D-5-506. Overdue distribution.
(a) In this section, "mandatory distribution" means a
distribution of income or principal which the trustee is required
to make to a beneficiary under the terms of the trust instrument,
including a distribution upon termination of the trust. The term
does not include a distribution subject to the exercise of the
trustee's discretion even if:
(1) The discretion is expressed in the form of a standard of
distribution; or
(2) The terms of the trust instrument authorizing a
distribution couple language of discretion with language of
direction.
(b) 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.
§44D-5-507. Personal obligations of trustee.
Trust property is not subject to personal obligations of the
trustee, even if the trustee becomes insolvent or bankrupt.
ARTICLE 6. REVOCABLE TRUSTS.
§44D-6-601. Capacity of grantor of revocable trust.
The capacity required to create, amend, revoke or add property
to a revocable trust, or to direct the actions of the trustee of a
revocable trust, is the same as that required to make a will.
§44D-6-602. Revocation or amendment of revocable trust.
(a) Unless the terms of a trust expressly provide that the
trust is irrevocable, the grantor may revoke or amend the trust.
This subsection does not apply to a trust created under an
instrument executed before the effective date of this chapter.
(b) Unless the terms of a trust provide otherwise, if a
revocable trust is created or funded by more than one grantor:
(1) 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;
(2) To the extent the trust consists of property other than
community property, each grantor may revoke or amend the trust with
regard the portion of the trust property attributable to that
grantor's contribution; and
(3) Upon the revocation or amendment of the trust by fewer
than all of the grantors, the trustee shall promptly notify the
other grantors of the revocation or amendment.
(c) The grantor may revoke or amend a revocable trust:
(1) By substantially complying with a method provided in the
terms of the trust instrument; or
(2) If the terms of the trust instrument do not provide a
method, by any other method manifesting clear and convincing
evidence of the grantor's intent.
(d) Upon revocation of a revocable trust, the trustee shall
deliver the trust property as the grantor directs.
(e) A grantor's powers with respect to revocation, amendment,
or distribution of trust property may be exercised by an agent
under a power of attorney only to the extent expressly authorized
by the terms of the trust instrument or the power.
(f) A conservator of the grantor or, if no conservator has
been appointed, a guardian of the grantor may exercise a grantor's
powers with respect to revocation, amendment or distribution of
trust property only with the approval of the court supervising the
conservatorship or guardianship.
(g) A trustee who does not know that a trust has been revoked
or amended is not liable to the grantor or grantor's successors in
interest for distributions made and other actions taken on the
assumption that the trust had not been amended or revoked.
(h) No trust which is otherwise irrevocable because the trust
instrument expressly provides or states that the trust is
irrevocable is or becomes revocable by the grantor because the
grantor is the sole beneficiary of the trust.
§44D-6-603. Grantor's powers; powers of withdrawal.
(a) While a trust is revocable and the grantor has capacity to
revoke the trust, rights of the beneficiaries are subject to the
control of, and the duties of the trustee are owed exclusively to,
the grantor.
(b) During the period the power may be exercised, the holder
of a power of withdrawal has the rights of a grantor of a revocable
trust under this section to the extent of the property subject to
the power.
§44D-6-604. Limitation on action contesting validity of revocable
trust; distribution of trust property.
(a)(1) A beneficiary of a trust may commence a judicial
proceeding to contest the validity of a trust that was revocable at
the grantor's death within the earlier of:
(A) Two years after the grantor's death; or
(B) Six months after the trustee has sent the beneficiary a
copy of the trust instrument and a notice informing the beneficiary
of the trust's existence, of the trustee's name and address, and of
the time allowed for commencing a proceeding.
(2) Notwithstanding subdivision (1) of this subsection:
(A) If the beneficiary is under the age of eighteen years or
is a convict or mentally incapacitated person, the beneficiary has
one year after he or she becomes of age or the disability ceases to
commence a judicial proceeding; and
(B) If the beneficiary resided out of the state at the time
the beneficiary received the trust instrument and notice, the
beneficiary has one year after receipt thereof to commence the
judicial proceeding.
(b) Upon the death of the grantor of a trust that was
revocable at the grantor's death, the trustee may proceed to
distribute the trust property in accordance with the terms of the
trust instrument. The trustee is not subject to liability for
doing so unless:
(1) The trustee knows of a pending judicial proceeding
contesting the validity of the trust; or
(2) A potential contestant has notified the trustee of a
possible judicial proceeding to contest the trust and a judicial
proceeding is commenced within sixty days after the contestant sent
the notification.
(c) A beneficiary of a trust that was revocable at the
grantor's death that is determined to have been invalid is liable
to return any distribution received.
ARTICLE 7. OFFICE OF THE TRUSTEE.
§44D-7-701. Accepting or declining trusteeship.
(a) Except as otherwise provided in subsection (c) of this
section, a person designated as trustee accepts the trusteeship:
(1) By substantially complying with a method of acceptance
provided in the terms of the trust instrument; or
(2) If the terms of the trust instrument do not provide a
method or the method provided in the terms is not expressly made
exclusive, by accepting delivery of the trust property, exercising
powers or performing duties as trustee, or otherwise indicating
acceptance of the trusteeship including by signing a written
instrument so stating.
(b) A person designated as trustee who has not yet accepted
the trusteeship may reject the trusteeship. A person designated as
trustee who does not accept the trusteeship within a reasonable
time after knowing of the designation is deemed to have rejected
the trusteeship.
(c) A person designated as trustee, without accepting the
trusteeship, may:
(1) Act to preserve the trust property if, within a reasonable
time after acting, the person sends a rejection of the trusteeship
to the grantor or, if the grantor is dead or lacks capacity, to a
qualified beneficiary; and
(2) Inspect or investigate trust property to determine
potential liability under environmental or other law or for any
other proper purpose.
§44D-7-702. Trustee's bond.
(a) A trustee shall give bond to secure performance of the
trustee's duties only if a bond is required by the terms of the
trust instrument or if the court having jurisdiction of the trust
finds that a bond is needed to protect the interests of the
beneficiaries and the court has not dispensed with the requirement
of a bond.
(b) The court may specify the amount of a bond, its
liabilities and whether sureties are necessary. The court may
modify or terminate a bond at any time upon petition by the
grantor, if living, a qualified beneficiary, or cotrustee.
(c) In accordance with the provisions of section eighteen,
article four, chapter thirty-one-a of this code, a regulated
financial-service institution authorized to exercise trust powers
in this state need not give bond, even if required by the terms of
the trust instrument.
§44D-7-703. Cotrustees.
(a) Unless otherwise provided in the terms of the trust
instrument, cotrustees who are unable to reach a unanimous decision
may act by majority decision. When a dispute arises among trustees
as to the exercise or nonexercise of any of their powers and there
is no agreement by a majority of them, unless otherwise provided by
the trust instrument, the court, in its discretion, upon petition
filed by any of the trustees, grantor, if living, or qualified
beneficiary, or any party in interest, may direct the exercise or
nonexercise of the power as it considers necessary for the best
interest of the trust.
(b) If a vacancy occurs in a cotrusteeship, the remaining
cotrustees may act for the trust, unless otherwise provided in the
terms of the trust instrument.
(c) A cotrustee must participate in the performance of a
trustee's function unless the cotrustee is unavailable to perform
the function because of absence, illness, disqualification under
other law, or other temporary incapacity or the cotrustee has
properly delegated the performance of the function to another
trustee.
(d) If a cotrustee is unavailable to perform duties because of
absence, illness, disqualification under other law, or other
temporary incapacity, 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.
(e) A trustee may delegate to a cotrustee the performance of
a function other than a function that the terms of the trust expressly require to be performed by the trustees jointly. Unless
a delegation was irrevocable, a trustee may revoke a delegation of
a function previously made.
(f) Except as otherwise provided in subsection (g) of this
section, a trustee who does not join in an action of another
trustee is not liable for the action.
(g) Each trustee shall exercise reasonable care to:
(1) Prevent a cotrustee from committing a serious breach of
trust; and
(2) Compel a cotrustee to redress a serious breach of trust.
(h) A dissenting trustee who joins in an action at the
direction of the majority of the trustees and who notifies 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.
§44D-7-704. Vacancy in trusteeship; appointment of successor.
(a) A vacancy in a trusteeship occurs if:
(1) A person designated as trustee rejects the trusteeship;
(2) A person designated as trustee cannot be identified or
does not exist;
(3) A trustee resigns;
(4) A trustee is disquaified or removed;
(5) A trustee dies; or
(6) A guardian or conservator is appointed for an individual
serving as trustee.
(b) If one or more cotrustees remain in office, a vacancy in
a trusteeship need not be filled, unless otherwise provided in the
terms of the trust instrument. A vacancy in a trusteeship must be
filled if the trust has no remaining trustee.
(c) Unless otherwise provided in the terms of the trust
instrument, a vacancy in a trusteeship of a noncharitable trust
that is required to be filled must be filled in the following order
of priority:
(1) By a person designated in the terms of the trust
instrument to act as successor trustee;
(2) By a person appointed by unanimous written agreement of
the qualified beneficiaries; or
(3) By a person appointed by the court having jurisdiction of
the trust.
(d) Unless otherwise provided, a vacancy in a trusteeship of
a charitable trust that is required to be filled shall be filled in
the following order of priority:
(1) By a person designated in the terms of the trust to act as
successor trustee;
(2) By a person selected by the charitable organizations
expressly designated to receive distributions under the terms of
the trust instrument if the Attorney General of West Virginia
either concurs in writing to the selection or fails to make a
written objection to the selection within ninety days after receiving by certified or registered mail a notice of the selection
by the charitable organizations; or
(3) By a person appointed by the court having jurisdiction of
the trust.
(e) Whether or not a vacancy in a trusteeship exists or is
required to be filled, the court may upon petition of the grantor,
a qualified beneficiary, or a cotrustee appoint an additional
trustee or special fiduciary whenever the court considers the
appointment necessary for the administration of the trust.
§44D-7-705. Resignation of trustee.
(a) Unless otherwise provided in the terms of the trust
instrument, a trustee may resign without court approval by giving
at least thirty days' notice in writing to the grantor, if living,
all of the qualified beneficiaries, and all cotrustees, if any.
(b) A trustee may resign with the approval of the court having
jurisdiction of the trust upon the filing of a petition for such
purpose which joins as respondents the grantor, if living, all of
the qualified beneficiaries, and all cotrustees, if any. In
approving a resignation, the court may issue orders and impose
conditions reasonably necessary for the protection of the trust
property.
(c) Unless otherwise provided by order of the court, 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.
§44D-7-706. Removal of trustee.
(a) The grantor, a cotrustee or a beneficiary may upon
petition request the court to remove a trustee, or a trustee may be
removed by the court on its own initiative. In the case of a
charitable trust, the Attorney General of West Virginia shall also
have standing to petition the court to remove a trustee.
(b) The court may remove a trustee if the court finds by a
preponderance of the evidence that:
(1) The trustee has committed a serious breach of trust;
(2) Lack of cooperation among cotrustees substantially impairs
the administration of the trust;
(3) Because of unfitness, unwillingness or persistent failure
of the trustee to administer the trust effectively, removal of the
trustee best serves the interests of the beneficiaries; or
(4) There has been a substantial change of circumstances or
removal is requested by all of the qualified beneficiaries, removal
of the trustee best serves the interests of all of the
beneficiaries, removal is not inconsistent with a material purpose
of the trust, and a suitable cotrustee or successor trustee is
available.
(c) 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 appropriate relief under subsection (b) section one thousand
one, article ten of this chapter as may be necessary to protect the
trust property or the interests of the beneficiaries.
§44D-7-707. Delivery of property by former trustee.
(a) Unless a cotrustee remains in office or the court
otherwise orders, and until the trust property is delivered to a
successor trustee or other person entitled to it, a trustee who has
resigned or been removed has the duties of a trustee and the powers
necessary to protect the trust property.
(b) A trustee who has resigned or been removed shall proceed
expeditiously to deliver the trust property within the trustee's
possession to the cotrustee, successor trustee or other person
entitled to it.
(c) Title to all trust property shall be owned and vested in
any successor trustee, upon acceptance of the trusteeship, without
any conveyance, transfer or assignment by the prior trustee.
§44D-7-708. Compensation of trustee.
(a) If the terms of the trust instrument do not specify the
trustee's compensation, a trustee is entitled to compensation that
is reasonable under the circumstances.
(b) If the terms of the trust instrument specify the trustee's
compensation, the trustee is entitled to be compensated as
specified, but the court may upon petition of the grantor,
qualified beneficiary, the trustee or cotrustee, if any, may allow
more or less compensation if:
(1) The duties of the trustee are substantially different from
those contemplated when the trust was created; or
(2) The compensation specified by the terms of the trust
instrument would be unreasonably low or high.
§44D-7-709. Reimbursement of expenses.
(a) A trustee is entitled to be reimbursed out of the trust
property, with interest as appropriate, for:
(1) Expenses that were properly incurred in the administration
of the trust; and
(2) To the extent necessary to prevent unjust enrichment of
the trust, expenses that were not properly incurred in the
administration of the trust.
(b) An advance by the trustee of money for the protection of
the trust gives rise to a lien against trust property to secure
reimbursement with reasonable interest.
ARTICLE 8. DUTIES AND POWERS OF TRUSTEE.
§44D-8-801. Duty to administer trust.
Upon acceptance of a trusteeship, the trustee shall administer
the trust and invest the trust assets in good faith, in accordance
with its terms and purposes and the interests of the beneficiaries,
and in accordance with this chapter. In administering, managing
and investing trust assets, the trustee shall comply with the
provisions of the Uniform Prudent Investor Act in article six-c,
chapter forty-four of this code, and the Uniform Principal and
Income Act in chapter forty-four-b of this code.
§44D-8-802. Duty of loyalty.
(a) A trustee shall administer the trust solely in the
interests of the beneficiaries.
(b) Subject to the rights of persons dealing with or assisting
the trustee as provided in section one thousand twelve, article ten
of this chapter, 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 which is
otherwise affected by a conflict between the trustee's fiduciary
and personal interests is voidable by a beneficiary affected by the
transaction unless:
(1) The transaction was authorized by the terms of the trust
instrument;
(2) The transaction was approved by the court having
jurisdiction over the trust;
(3) The beneficiary did not commence a judicial proceeding
within the time allowed by section one thousand five, article ten
of this chapter;
(4) The beneficiary consented to the trustee's conduct,
ratified the transaction or released the trustee in compliance with
section one thousand nine, article ten of this chapter; or
(5) The transaction involves a contract entered into or claim
acquired by the trustee before the person became or contemplated
becoming trustee.
(c) A sale, encumbrance or other transaction involving the
investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if
it is entered into by the trustee with:
(1) The trustee's spouse;
(2) The trustee's descendants, siblings, parents or their
spouses;
(3) An agent or attorney of the trustee; or
(4) 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.
(d) A transaction between a trustee and a beneficiary that
does not concern trust property but that occurs during the
existence of the trust or while the trustee retains significant
influence over the beneficiary and from which the trustee obtains
an advantage beyond the normal commercial advantage from such
transaction is voidable by the beneficiary unless the trustee
establishes that the transaction was fair to the beneficiary.
(e) 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.
(f) An investment by a trustee in securities of an investment
company or investment trust, mutual fund or other investment or
financial product to which the trustee, or its affiliate, 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 Uniform Prudent Investor
Act in article six-c, chapter forty-four of this code. In addition
to its compensation for acting as trustee, the trustee may be
compensated by the investment company, investment trust, mutual
fund or other investment or financial product, or by the affiliated
entity sponsoring, selling or providing the service, and the
compensation may be in addition to the compensation the trustee is
receiving as a trustee if the trustee notifies the persons entitled
to receive a copy of the trustee's annual report as provided
hereunder of the rate and method by which that compensation was
determined and of any subsequent changes to the rate or method of
compensation.
(g) In voting shares of stock or in exercising powers of
control over similar interests in other forms of enterprise, 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
enterprise, the trustee shall elect or appoint directors or other
managers who will manage the corporation or enterprise in the best
interests of the beneficiaries.
(h) This section does not preclude the following transactions,
if fair to the beneficiaries:
(1) An agreement between a trustee and a beneficiary relating
to the appointment or compensation of the trustee;
(2) Payment of reasonable compensation to the trustee;
(3) A transaction between a trust and another trust,
decedent's estate or conservatorship of which the trustee is a
fiduciary or in which a beneficiary has an interest;
(4) A deposit of trust money in a regulated financial?service
institution operated by the trustee; or
(5) An advance by the trustee of money for the protection of
the trust.
(i) The court having jurisdiction over the trust 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.
§44D-8-803. 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.
§44D-8-804. 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.
§44D-8-805. 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.
§44D-8-806. 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.
§44D-8-807. Delegation by trustee.
(a) 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:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation,
consistent with the purposes and terms of the trust instrument; and
(3) Periodically reviewing the agent's actions in order to
monitor the agent's performance and compliance with the terms of
the delegation.
(b) 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.
(c) A trustee who complies with subsection (a) of this section
is not liable to the beneficiaries or to the trust for an action of
the agent to whom the function was delegated.
(d) By accepting a delegation of powers or duties from the
trustee of a trust that is subject to the law of this state, an
agent submits to the jurisdiction of the courts of this state.
(e) The delegating trustee is not responsible for the
decisions, actions or inactions of the trustee to whom those duties
and powers have been delegated if the delegating trustee has
exercised reasonable care, skill and caution in establishing the
scope and specific terms of the delegation and in reviewing
periodically the performance of the trustee to whom the duties and
powers have been delegated and the trustee's compliance with the
scope and specific terms of the delegation.
§44D-8-808. Powers to direct.
(a) While a trust is revocable, the trustee may follow a
direction of the grantor that is contrary to the terms of the trust
instrument.
(b) If the terms of a trust instrument confer upon a person
other than the grantor 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 attempted exercise is manifestly
contrary to the terms of the trust instrument 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.
(c) The terms of a trust instrument may confer upon a trustee
or other person a power to direct the modification or termination
of the trust.
(d) A person, other than a beneficiary, who holds a power to
direct is presumptively a fiduciary who, as such, 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 the holder's breach of a
fiduciary duty.
§44D-8-809. Control and protection of trust property.
A trustee shall take reasonable steps to take control of and
protect the trust property.
§44D-8-810. Recordkeeping and identification of trust property.
(a) A trustee shall keep adequate records of the
administration of the trust.
(b) A trustee shall keep trust property separate from the
trustee's own property.
(c) Except as otherwise provided in subsection (d) 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.
(d) If the trustee maintains records clearly indicating the
respective interests, a trustee may invest as a whole the property
of two or more separate trusts.
§44D-8-811. Enforcement and defense of claims.
A trustee shall take reasonable steps to enforce claims of the
trust and to defend claims against the trust.
§44D-8-812. 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 redress a breach of trust known to the trustee to have been
committed by a former trustee.
§44D-8-813. Duty to inform and report.
(a) A trustee shall keep the current beneficiaries of the
trust reasonably informed about the administration of the trust and
of the material facts necessary for them to protect their
interests. Unless unreasonable under the circumstances, a trustee
shall within a reasonable time respond to a beneficiary's request
for information related to the administration of the trust.
(b) A trustee:
(1) Upon request of a beneficiary, shall within a reasonable
time furnish to the beneficiary a copy of the trust instrument;
(2) Within sixty days after accepting a trusteeship, shall
notify the qualified beneficiaries of the acceptance and of the
trustee's name, address and telephone number;
(3) Within sixty days 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 grantor or otherwise, shall notify the qualified beneficiaries of the trust's
existence, of the identity of the grantor or grantors, of the right
to request a copy of the trust instrument, and of the right to a
trustee's report as provided in subsection (c) of this section; and
(4) Shall notify the qualified beneficiaries within a
reasonable time in advance of any change in the method or rate of
the trustee's compensation.
(c) A trustee shall send to the distributees or permissible
distributees of trust income or principal, and to other qualified
or nonqualified beneficiaries who request it, at least annually and
at the termination of the trust, a report of the trust property,
liabilities, receipts, and disbursements, including the source and
amount of the trustee's compensation, a listing of the trust assets
and, if feasible, their respective market values. Upon a vacancy
in a trusteeship, unless a cotrustee remains in office, a report
shall be sent to the qualified beneficiaries by the former trustee.
A personal representative, conservator or guardian is responsible
for sending the qualified beneficiaries a report on behalf of a
deceased or incapacitated trustee.
(d) A beneficiary may waive the right to a trustee's report or
other information otherwise required to be furnished under this
section. A beneficiary, with respect to future reports and other
information, may withdraw a waiver previously given.
(e) Subdivisions (2) and (3), subsection (b) of this section
do not apply to a trustee who accepts a trusteeship before the effective date of this chapter, to an irrevocable trust created
before the effective date of this chapter, or to a revocable trust
that becomes irrevocable before the effective date of this chapter.
§44D-8-814. Discretionary powers; tax savings.
(a) Notwithstanding the breadth of discretion granted to a
trustee in the terms of the trust instrument, including the use of
such terms as "absolute," "sole" or "uncontrolled," the trustee
shall exercise a discretionary power in good faith and in
accordance with the general and specific terms and purposes of the
trust and the interests of the beneficiaries.
(b) Subject to subsection (d) of this section, and unless the
terms of the trust instrument expressly indicate that a rule in
this subsection does not apply:
(1) A person other than a grantor 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
(2) 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.
(c) A power whose exercise is limited or prohibited by
subsection (b) 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 having jurisdiction may appoint a special
fiduciary with authority to exercise the power.
(d) Subsection (b) of this section does not apply to:
(1) A power held by the grantor's spouse who is the trustee of
a trust for which a marital deduction, as defined in Section
2056(b)(5) or Section 2523(e) of the Internal Revenue Code;
(2) Any trust during any period that the trust may be revoked
or amended by its grantor; or
(3) A trust if contributions to the trust qualify for the
annual exclusion under Section 2503(c) of the Internal Revenue
Code.
§44D-8-815. General powers of trustee.
(a) A trustee, without authorization by the court having
jurisdiction, may exercise:
(1) Powers conferred by the terms of the trust instrument; or
(2) Except as limited by the terms of the trust instrument:
(A) All powers over the trust property which an unmarried
competent 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 code.
(b) The exercise of a power is subject to the fiduciary duties
prescribed by this article.
§44D-8-816. Specific powers of trustee.
Without limiting the authority conferred by section eight
hundred fifteen of this article, a trustee has the powers
enumerated in the provisions of section three, article five-a,
chapter forty-four of this code.
§44D-8-817. Distribution upon termination.
(a) 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 the proposed distribution
terminates if the beneficiary does not notify the trustee of an
objection within sixty days after the proposal was sent but only if
the proposal informed the beneficiary of the right to object and of
the time allowed for objection.
(b) 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 it,
subject to the right of the trustee to retain a reasonable reserve
for the payment of debts, expenses and taxes.
(c) A release by a beneficiary of a trustee from liability for
breach of trust is invalid to the extent:
(1) It was induced by improper conduct of the trustee; or
(2) 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.
ARTICLE 9. UNIFORM PRUDENT INVESTOR ACT.
§44D-9-901. Uniform Prudent Investor Act.
The Uniform Prudent Investor Act is contained in article
six-c, chapter forty-four of this code.
ARTICLE 10. LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING
WITH TRUSTEE.
§44D-10-1001. Remedies for breach of trust.
(a) A violation by a trustee of a duty the trustee owes to a
beneficiary is a breach of trust.
(b) To remedy a breach of trust that has occurred or may
occur, the court may:
(1) Compel the trustee to perform the trustee's duties;
(2) Enjoin the trustee from committing a breach of trust;
(3) Compel the trustee to redress a breach of trust by paying
money, restoring property or other means;
(4) Order a trustee to account;
(5) Appoint a special fiduciary to take possession of the
trust property and administer the trust in accordance with the
limitations and directions as ordered by the court;
(6) Suspend the trustee;
(7) Remove the trustee as provided in section seven hundred
six, article seven of this chapter;
(8) Reduce or deny compensation to the trustee;
(9) Subject to section one thousand twelve of this article,
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
(10) Order any other appropriate relief.
§44D-10-1002. Damages for breach of trust.
(a) A trustee who commits a breach of trust is liable to the
beneficiaries affected for the greater of:
(1) 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
(2) The profit the trustee made by reason of the breach.
(b) 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. A trustee is not entitled to contribution if the
trustee was substantially more at fault than another trustee or if
the trustee committed the breach of trust 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.
§44D-10-1003. Damages in absence of breach.
Absent 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.
§44D-10-1004. Attorney's fees and costs.
In a judicial proceeding involving the administration of a
trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney's fees, to any
party, to be paid by another party or from the trust that is the
subject of the controversy.
§44D-10-1005. Limitation of action against trustee.
(a) A beneficiary may not commence a proceeding against a
trustee for breach of trust more than one year after the date the
beneficiary or a representative of the beneficiary was sent a
report that adequately disclosed the existence of a potential claim
for breach of trust and informed the beneficiary of the time
allowed for commencing a proceeding.
(b) A report adequately discloses the existence of a potential
claim for breach of trust if it provides sufficient information so
that the beneficiary or representative of the beneficiary knows of
the potential claim or should know of the existence of the
potential claim.
(c) If subsection (a) of this section does not apply, a
judicial proceeding by a beneficiary against a trustee for breach
of trust must be commenced within five years after the first to
occur of:
(1) The removal, resignation or death of the trustee;
(2) The termination of the beneficiary's interest in the
trust;
(3) The termination of the trust; or
(4) The time when the beneficiary knew or should have known of
the breach of trust.
§44D-10-1006. Reliance on trust instrument.
A trustee who acts in reasonable reliance on the terms of the
trust instrument 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.
§44D-10-1007. Event affecting administration or distribution.
If the happening of an event, including, but not limited to,
marriage, divorce, performance of educational requirements,
attaining a specific age or death, affects the administration or
distribution of a trust, a trustee who has exercised reasonable
care to ascertain the happening of the event is not liable for a
loss resulting from the trustee's lack of knowledge.
§44D-10-1008. Exculpation of trustee.
(a) A term of a trust instrument relieving a trustee of
liability for breach of trust is unenforceable to the extent that
it:
(1) 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
(2) Was inserted as the result of an abuse by the trustee of
a fiduciary or confidential relationship to the grantor.
(b) An exculpatory term drafted or caused to be drafted by the
trustee is invalid as an abuse of a fiduciary or confidential
relationship unless:
(1) The trustee proves that the exculpatory term is fair under
the circumstances and that its existence and contents were
adequately communicated to the grantor; or
(2) The grantor was represented by an attorney not employed by
the trustee with respect to the trust and the attorney provided
independent legal advice.
§44D-10-1009. Beneficiary's consent, release or ratification.
(a) A trustee is not liable to a beneficiary for breach of
trust if the beneficiary, while having capacity, consented to the
conduct constituting the breach, released the trustee from
liability for the breach, or ratified the transaction constituting
the breach, 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 of the
material facts relating to the breach.
(b) A beneficiary is also bound to the extent an approval is
given by a person authorized to represent the beneficiary as
provided in article three of this chapter.
§44D-10-1010. Limitation on personal liability of trustee.
(a) 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 in the contract disclosed the fiduciary
capacity.
(b) 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.
(c) A claim based on a contract entered into by a trustee in
the trustee's fiduciary capacity, on an obligation arising from
ownership or control of trust property, or on a tort committed in
the course of administering a trust, 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.
§44D-10-1011. Interest as general partner.
(a) Except as otherwise provided in subsection (c) 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 fiduciary capacity was disclosed in the contract.
The requirement of disclosure in the contract is satisfied if the
trustee signs the contract, or signs another writing which is
contemporaneously delivered to the other parties to the contract,
in a manner that clearly evidences that the trustee executed the
contract in a fiduciary capacity.
(b) Except as otherwise provided in subsection (c) 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.
(c) The immunity provided by this section does not apply if an
interest in the partnership is held by the trustee in a capacity
other than that of trustee or is held by the trustee's spouse or
one or more of the trustee's descendants, siblings or parents or
the spouse of any of them.
(d) If the trustee of a revocable trust holds an interest as
a general partner, the grantor is personally liable for contracts
and other obligations of the partnership as if the grantor were a
general partner.
§44D-10-1012. Protection of person dealing with trustee.
(a) 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, without knowledge that the trustee is exceeding or
improperly exercising the trustee's powers is protected from
liability as if the trustee properly exercised the power.
(b) A person other than a beneficiary who in good faith deals
with a trustee is not required to inquire into the extent of the
trustee's powers or the propriety of their exercise.
(c) A person who in good faith delivers assets to a trustee
need not ensure their proper application.
(d) A 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 protected from liability as if the former trustee
were still a trustee.
(e) Comparable protective provisions of other laws relating to
commercial transactions or transfer of securities by fiduciaries
prevail over the protection provided by this section.
§44D-10-1013. Certification of trust.
(a) Instead of furnishing a copy of the trust instrument to a
person other than a beneficiary, the trustee may furnish to the
person a certification of trust containing the following
information:
(1) That the trust exists and the date the trust instrument
was executed;
(2) The identity of the grantor;
(3) The identity and address of the currently acting trustee;
(4) The powers of the trustee;
(5) The revocability or irrevocability of the trust and the
identity of any person holding a power to revoke the trust;
(6) The authority of cotrustees to sign or otherwise
authenticate and whether all or less than all are required in order
to exercise powers of the trustee;
(7) The trust's taxpayer identification number; and
(8) The manner of taking title to trust property.
(b) A certification of trust may be signed or otherwise
authenticated by any trustee.
(c) 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.
(d) A certification of trust need not contain the dispositive
terms of a trust.
(e) A recipient of a certification of trust may require the
trustee to furnish copies of those excerpts from the original trust
instrument and later amendments which designate the trustee and
confer upon the trustee the power to act in the pending
transaction.
(f) A person who acts in reliance upon a certification of
trust without 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. Knowledge of the terms of the
trust instrument may not be inferred solely from the fact that a
copy of all or part of the trust instrument is held by the person
relying upon the certification.
(g) A person who in good faith enters into a transaction in
reliance upon a certification of trust may enforce the transaction
against the trust property as if the representations contained in
the certification were correct.
(h) A person making a demand for the trust instrument in
addition to a certification of trust or excerpts is liable for
damages if the court having jurisdiction over the trust determines
that the person did not act in good faith in demanding the trust
instrument.
(i) This section does not limit the right of a person to
obtain a copy of the trust instrument in a judicial proceeding
concerning the trust.
(j) Nothing in this section expands, limits or otherwise
affects the provisions contained in section four-a, article one,
chapter thirty-six of this code pertaining to memoranda of trust.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
§44D-11-1101. Uniformity of application and construction.
In applying and construing this chapter, consideration shall
be given to the need to promote uniformity of the law with respect
to its subject matter among states that enact it.
§44D-11-1102. Electronic records and signatures.
The provisions of this chapter governing the legal effect,
validity or enforceability of electronic records or electronic
signatures, and of contracts formed or performed with the use of
the records or signatures, conform to the requirements of Section
102 of the Electronic Signatures in Global and National Commerce
Act (15 U.S.C. § 7002) and supersede, modify, and limit the
requirements of the Electronic Signatures in Global and National
Commerce Act.
§44D-11-1103. Severability clause.
If any provision of this chapter or its application to any
person or circumstances is held invalid, the invalidity does not
affect other provisions or applications of this chapter which can
be given effect without the invalid provision or application, and
to this end the provisions of this chapter are severable.
§44D-11-1104. Effective date.
This chapter takes effect on July 1, 2011.
§44D-11-1105. Application to existing relationships.
(a) Except as otherwise provided in this chapter:
(1) This chapter applies to all trusts created before, on, or
after July 1, 2011;
(2) This chapter applies to all judicial proceedings
concerning trusts commenced on or after July 1, 2011;
(3) This chapter applies to judicial proceedings concerning
trusts commenced before July 1, 2011, unless the court finds that
application of a particular provision of this chapter would
substantially interfere with the effective conduct of the judicial
proceedings or prejudice the rights of the parties, in which case
the particular provision of this chapter does not apply and the
superseded law applies;
(4) Any rule of construction or presumption provided in this
chapter applies to trust instruments executed before July 1, 2011,
unless there is a clear indication of a contrary intent in the
terms of the trust instrument; and
(5) An act done before July 1, 2011 is not affected by this
chapter.
(b) If a right is acquired or vested before July 1, 2011, or
if a right is extinguished or barred upon the expiration of a
prescribed period that has commenced to run under any other statute
before July 1, 2011, that right or statute continues to apply even
if the statute has been repealed or superseded.
NOTE: The purpose of this bill is to make comprehensive
revision to the state's trust laws by substantially enacting the
Uniform Trust Code and integrating it into the existing statutes in
West Virginia which deal with trusts. The Uniform Trust Code was
adopted by the National Conference of Commissioners on Uniform
State Laws and approved by the American Bar Association, the ABA
Real Property, Probate and Trust Law Section, and the AARP and
provides a comprehensive model for codifying the law of trusts. The
original language of the Uniform Trust Code has been modified where
necessary to conform to existing West Virginia practices and
procedures. In order to eliminate confusion, clarifications have
also been made where necessary to existing statutory provisions
governing personal representatives of estates, who are also
fiduciaries like trustees, and provisions governing trustees of
real estate deeds of trust. The Uniform Trust Code would apply
beginning July 1, 2011.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
Sections §38-1-13a, §44-4-22; §44-5-10a, §44-5A-5, §44-5A-6,
§44-5A-7, §44-5A-8, §44-6-5a, §44-7-4 are new and all of chapter
44D is new; therefore, strike-throughs and underscoring have been
omitted.