Senate Bill No. 274
(By Senators Wooton, Anderson, Bowman, Buckalew, Deem, Dittmar,
Grubb, Miller, Ross, Scott, Wagner, Wiedebusch and Yoder)
[Passed March 7, 1996; in effect ninety days from passage.]
AN ACT to amend article six, chapter forty-four of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
two-a, relating to clarifying the duties of the trustee of
an irrevocable life insurance trust.
Be it enacted by the Legislature of West Virginia:
That article six, chapter forty-four of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section two-
a, to read as follows:
ARTICLE 6. INVESTMENTS BY FIDUCIARIES.
§44-6-2a. Duties of the trustee of an irrevocable life
(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 contract is or remains a proper
investment; (ii) to exercise policy options available under any
such contract in the event the policy lapses or is terminated due
to failure to pay premiums; or (iii) to diversify any such
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 not apply if, within sixty
days of the trustee's notice, the settlor notifies the trustee
that subsection (a) does not apply.