2007 Oregon Chapter 130 :: Chapter 130 - Uniform Trust Code
Chapter 130 —
Uniform Trust Code
2007 EDITION
UNIFORM TRUST CODE
PROTECTIVE PROCEEDINGS; POWERS OF ATTORNEY;
TRUSTS
GENERAL PROVISIONS AND DEFINITIONS
130.001Â Â Â Â UTC
101. Short title
130.005Â Â Â Â UTC
102. Scope
130.010Â Â Â Â UTC
103. Definitions
130.015Â Â Â Â UTC
104. Knowledge
130.020Â Â Â Â UTC
105. Default and mandatory rules
130.022Â Â Â Â UTC
108. Principal place of administration
130.025Â Â Â Â UTC
106. Common law of trusts; principles of equity
130.030Â Â Â Â UTC
107. Governing law
130.035Â Â Â Â UTC
109. Methods of giving notice; waiver of notice
130.040Â Â Â Â UTC
110. Other persons treated as qualified beneficiaries
130.045Â Â Â Â UTC
111. Nonjudicial settlement agreements
JUDICIAL PROCEEDINGS
130.050Â Â Â Â UTC
201. Role of court in administration of trust
130.055Â Â Â Â UTC
202. Jurisdiction over trustee and beneficiary
130.060Â Â Â Â UTC
203. Subject-matter jurisdiction
130.065Â Â Â Â UTC
204. Venue
REPRESENTATION
130.100Â Â Â Â UTC
301. Representation; basic effect
130.105Â Â Â Â UTC
302. Representation by holder of testamentary power of appointment
130.110Â Â Â Â UTC
303. Representation by fiduciaries and parents
130.115Â Â Â Â UTC
304. Representation by person having substantially identical interest
130.120Â Â Â Â UTC
305. Appointment of special representative
CREATION, VALIDITY, MODIFICATION AND
TERMINATION OF TRUST
130.150Â Â Â Â UTC
401. Methods of creating trust
130.155Â Â Â Â UTC
402. Requirements for creation
130.160Â Â Â Â UTC
403. Trusts created in other states, countries or jurisdictions
130.165Â Â Â Â UTC
404. Trust purposes
130.170Â Â Â Â UTC
405. Charitable purposes; enforcement
130.175Â Â Â Â UTC
406. Creation of trust induced by fraud, duress or undue influence
130.180Â Â Â Â UTC
407. Evidence of oral trust
130.185Â Â Â Â UTC
408. Pet trust
130.190Â Â Â Â UTC
409. Noncharitable trust without ascertainable beneficiary
130.195Â Â Â Â UTC
410. Modification or termination of trust; proceedings for approval or
disapproval
130.200Â Â Â Â UTC
411. Modification or termination of irrevocable trust by consent
130.205Â Â Â Â UTC
412. Modifications or termination because of unanticipated circumstances or
inability to administer trust effectively
130.210Â Â Â Â UTC
413. Cy pres
130.215Â Â Â Â UTC
414. Modification or termination of uneconomic trust
130.220Â Â Â Â UTC
415. Reformation to correct mistakes
130.225Â Â Â Â UTC
416. Modification to achieve settlorÂ’s tax objectives
130.230Â Â Â Â UTC
417. Combination and division of trusts
130.235Â Â Â Â In
terrorem clause
130.240Â Â Â Â Marital
deduction gifts
CREDITORÂ’S CLAIMS; SPENDTHRIFT AND
DISCRETIONARY TRUSTS
130.300Â Â Â Â UTC
501. Rights of beneficiaryÂ’s creditor or assignee
130.305Â Â Â Â UTC
502. Spendthrift provision
130.310Â Â Â Â UTC
503. Exceptions to spendthrift provisions
130.315Â Â Â Â UTC
505. CreditorÂ’s claim against settlor
130.320Â Â Â Â UTC
506. Overdue distribution
130.325Â Â Â Â UTC
507. Personal obligations of trustee
CLAIMS AGAINST TRUST BASED ON DEBTS OF
SETTLOR
130.350Â Â Â Â Statute
of limitations
130.355Â Â Â Â Commencement
of proceeding
130.360Â Â Â Â Limitation
on presentation of claims when notice to claimants given
130.365Â Â Â Â Publication
of notice
130.370Â Â Â Â Notice
to individual claimants
130.375Â Â Â Â Form
of claim; evidence in support
130.380Â Â Â Â Claim
based on debt due or judgment
130.385Â Â Â Â Claim
on debts not yet due
130.390Â Â Â Â Claim
on secured debt that is due
130.395Â Â Â Â Claim
on contingent or unliquidated debt
130.400Â Â Â Â Allowance
and disallowance of claims
130.405Â Â Â Â Creditor
may obtain order for payment
130.410Â Â Â Â Evidence
required to allow court approval of claim disallowed by trustee
130.415Â Â Â Â Waiver
of statute of limitations
130.420Â Â Â Â Tolling
of statute of limitations on claim
130.425Â Â Â Â Priority
of claims
130.430Â Â Â Â Applicability
of time limitations to public bodies
130.435Â Â Â Â Applicability
of time limitations to certain claims based on liens against property and
liability of settlor or trustee
130.440Â Â Â Â Petition
to close case
130.445Â Â Â Â Dismissal
for want of prosecution
130.450Â Â Â Â Consolidation
of proceedings
REVOCABLE TRUSTS
130.500Â Â Â Â UTC
601. Capacity of settlor of revocable trust
130.505Â Â Â Â UTC
602. Revocation or amendment of revocable trust
130.510Â Â Â Â UTC
603. SettlorÂ’s powers; powers of withdrawal
130.515Â Â Â Â UTC
604. Limitation on action contesting validity of revocable trust; distribution
of trust property
RULES GOVERNING REVOCABLE TRUSTS
130.520Â Â Â Â Definition
for ORS 130.520 to 130.575
130.525Â Â Â Â Applicability
of ORS 130.520 to 130.575
130.530Â Â Â Â Effect
of marriage
130.535Â Â Â Â Revocation
by divorce or annulment
130.540Â Â Â Â Contract
of sale of property not revocation
130.545Â Â Â Â Encumbrance
or disposition of property after trust instrument executed
130.550Â Â Â Â When
trust assets pass to descendants of beneficiary; class gifts
130.555Â Â Â Â Children
born or adopted after execution of trust instrument
130.560Â Â Â Â Failure
of specific distribution
130.565Â Â Â Â Effect
of failure of specific distribution
130.570Â Â Â Â Advancement
against share of trust
130.575Â Â Â Â Effect
of advancement on distribution
OFFICE OF TRUSTEE
130.600Â Â Â Â UTC
701. Acceptance or rejection of trusteeship
130.605Â Â Â Â UTC
702. TrusteeÂ’s bond
130.610Â Â Â Â UTC
703. Cotrustees
130.615Â Â Â Â UTC
704. Vacancy in trusteeship; appointment of successor
130.620Â Â Â Â UTC
705. Resignation of trustee
130.625Â Â Â Â UTC
706. Removal of trustee
130.630Â Â Â Â UTC
707. Delivery of property by former trustee
130.635Â Â Â Â UTC
708. Compensation of trustee
130.640Â Â Â Â UTC
709. Reimbursement of expenses
DUTIES AND POWERS OF TRUSTEE
130.650Â Â Â Â UTC
801. Duty to administer trust
130.655Â Â Â Â UTC
802. Duty of loyalty
130.660Â Â Â Â UTC
803. Impartiality
130.665Â Â Â Â UTC
804. Prudent administration
130.670Â Â Â Â UTC
805. Costs of administration
130.675Â Â Â Â UTC
806. TrusteeÂ’s skills
130.680Â Â Â Â UTC
807. Delegation by trustee
130.685Â Â Â Â UTC
808. Powers to direct
130.690Â Â Â Â UTC
809. Control and protection of trust property
130.695Â Â Â Â UTC
810. Recordkeeping and identification of trust property
130.700Â Â Â Â UTC
811. Enforcement and defense of claims
130.705Â Â Â Â UTC
812. Collecting trust property
130.710Â Â Â Â UTC
813. Duty to inform and report
130.715Â Â Â Â UTC
814. Discretionary powers; tax savings
130.720Â Â Â Â UTC
815. General powers of trustee
130.725Â Â Â Â UTC
816. Specific powers of trustee
130.730Â Â Â Â UTC
817. Distribution upon termination
UNIFORM PRUDENT INVESTOR ACT
130.750Â Â Â Â TrusteeÂ’s
duty to comply with prudent investor rule
130.755Â Â Â Â Prudent
investor rule
130.760Â Â Â Â Diversification
of trust investments
130.765Â Â Â Â Trustee
duty
130.770Â Â Â Â Determination
of compliance with prudent investor rule
130.775Â Â Â Â Trust
language authorizing investments permitted under prudent investor rule
LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS
DEALING WITH TRUSTEE
130.800Â Â Â Â UTC
1001. Remedies for breach of trust
130.805Â Â Â Â UTC
1002. Damages for breach of trust
130.810Â Â Â Â UTC
1003. Damages in absence of breach
130.815Â Â Â Â UTC
1004. Attorney fees and costs
130.820Â Â Â Â UTC
1005. Limitation of action against trustee
130.825Â Â Â Â UTC
1006. Reliance on trust instrument
130.830Â Â Â Â UTC
1007. Event affecting administration or distribution
130.835Â Â Â Â UTC
1008. Exculpation of trustee
130.840Â Â Â Â UTC
1009. BeneficiaryÂ’s consent, release or ratification
130.845Â Â Â Â UTC
1010. Limitation on personal liability of trustee
130.850Â Â Â Â UTC
1011. Interest as general partner
130.855Â Â Â Â UTC
1012. Protection of person dealing with trustee
130.860Â Â Â Â UTC
1013. Certification of trust
MISCELLANEOUS PROVISIONS
130.900Â Â Â Â Uniformity
of application and construction
130.905Â Â Â Â UTC
1102. Electronic records and signatures
130.910Â Â Â Â UTC
1106. Application
GENERAL PROVISIONS AND DEFINITIONS
     130.001
UTC 101. Short title. This
chapter may be cited as the Oregon Uniform Trust Code. [2005 c.348 §1]
     130.005
UTC 102. Scope. (1) Except
as provided in subsection (2) of this section, this chapter applies to express
trusts, whether charitable or noncharitable, and to trusts created pursuant to
a statute or a judgment that requires that the trust be administered in the
manner of an express trust.
     (2) This chapter does not apply to:
     (a) A trust that is part of an employee
benefit arrangement or an individual retirement account.
     (b) A trust account established under a
qualified tuition savings program pursuant to ORS 348.841 to 348.873.
     (c) Trust accounts maintained on behalf of
clients or customers by licensed service professionals, including trust
accounts maintained by attorneys pursuant to rules of professional conduct
adopted under ORS 9.490 and by real estate brokers pursuant to ORS 696.241.
     (d) An endowment care fund established by
a cemetery authority pursuant to ORS 97.810.
     (e) Funds maintained by public bodies as
defined by ORS 174.109 or other governmental entities.
     (f) Trust funds held for a single business
transaction or an escrow arrangement.
     (g) Trusts created by a depository
agreement with a financial institution.
     (h) Trusts created by an account agreement
with a regulated financial services entity.
     (i) An account maintained under the Oregon
Uniform Transfers to Minors Act as set forth in ORS 126.805 to 126.886.
     (j) A fund maintained pursuant to court
order in conjunction with a bankruptcy proceeding or business liquidation.
     (k) A business trust as described in ORS
128.560.
     (L) A voting trust as described in ORS
60.254.
     (m) Funds maintained to manage proceeds
from class actions.
     (n) A trust deed as defined in ORS 86.705
(5) or any other trust created solely to secure the performance of an
obligation.
     (o) A trust established on behalf of a
resident of a residential facility under ORS 443.880.
     (p) A trust managed by a nonprofit
association for persons with disabilities under 42 U.S.C. 1396p(d)(4)(C), as in
effect on January 1, 2006, and under the rules of the Department of Human
Services.
     (q) A resulting or constructive trust.
     (r) A trust fund established for a
purchaser who enters into a prearrangement sales contract, as defined in ORS
97.923, or a preconstruction sales contract, as defined in ORS 97.923. [2005
c.348 §2; 2007 c.70 §32]
     130.010
UTC 103. Definitions. For
the purposes of this chapter:
     (1) “Ascertainable standard” means an
ascertainable standard relating to an individualÂ’s health, education, support
or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the
Internal Revenue Code, as in effect on January 1, 2006.
     (2) “Beneficiary” means a person that:
     (a) Has a present or future beneficial
interest in a trust, whether vested or contingent; or
     (b) Holds a power of appointment over
trust property in a capacity other than that of trustee.
     (3) “Charitable trust” means a trust, or
portion of a trust, created for a charitable purpose described in ORS 130.170
(1).
     (4) “Conservator” means a person appointed
by a court to administer the estate of a minor or adult individual.
     (5) “Environmental law” means a federal,
state or local law, rule, regulation or ordinance relating to protection of the
environment.
     (6) “Financial institution” has the
meaning given that term in ORS 706.008.
     (7) “Financially incapable” has the
meaning given that term in ORS 125.005. “Financially capable” means not
financially incapable.
     (8) “Guardian” means a person appointed by
a court to make decisions regarding the support, care, education, health and
welfare of a minor or adult individual. “Guardian” does not include a guardian
ad litem.
     (9) “Interests of the beneficiaries” means
the beneficial interests provided in the terms of a trust.
     (10) “Permissible distributee” means a
beneficiary who is currently eligible to receive distributions of trust income
or principal, whether the distribution is mandatory or discretionary.
     (11) “Person” means an individual,
corporation, business trust, estate, trust, partnership, limited liability
company, association, joint venture, public body as defined in ORS 174.109 or
any other legal or commercial entity.
     (12) “Power of withdrawal” means a
presently exercisable general power of appointment, other than a power
exercisable by a trustee that is limited by an ascertainable standard or that
is exercisable by another person only upon consent of the trustee or a person
holding an adverse interest.
     (13) “Property” means anything that may be
the subject of ownership, whether real or personal, legal or equitable, or any
interest therein.
     (14) “Qualified beneficiary” means a
beneficiary who:
     (a) Is a permissible distributee on the
date the beneficiaryÂ’s qualification is determined;
     (b) Would be a permissible distributee if
the interests of all permissible distributees described in paragraph (a) of
this subsection terminated on the date the beneficiaryÂ’s qualification is
determined; or
     (c) Would be a permissible distributee if
the trust terminated on the date the beneficiaryÂ’s qualification is determined.
     (15) “Revocable trust” means a trust that
can be revoked by the settlor without the consent of the trustee or a person
holding an adverse interest.
     (16) “Settlor” means a person, including a
testator, who creates a trust or contributes property to a trust. If more than
one person creates or contributes property to a trust, each person is a settlor
of the portion of the trust property attributable to that personÂ’s contribution
and of the portion as to which that person has the power to revoke or withdraw.
     (17) “Spendthrift provision” means a term
of a trust that restrains both voluntary and involuntary transfer of a
beneficiaryÂ’s interest.
     (18) “State” means a state of the
     (19) “Terms of a trust” means the
manifestation of the settlorÂ’s intent regarding a trustÂ’s provisions as
expressed in the trust instrument or as may be established by other evidence
that would be admissible in a judicial proceeding.
     (20) “Trust instrument” means an
instrument executed by a settlor that contains terms of the trust, including
any amendments to the instrument.
     (21) “Trustee” means an original trustee,
an additional trustee, a successor trustee or a cotrustee. [2005 c.348 §3]
     130.015
UTC 104. Knowledge. (1)
Subject to subsection (2) of this section, a person has knowledge of a fact if
the person:
     (a) Has actual knowledge of the fact;
     (b) Has received a notice or notification
of the fact; or
     (c) From all the facts and circumstances
known to the person at the time in question, has reason to know the fact.
     (2) An organization that conducts
activities through employees has notice or knowledge of a fact involving a
trust only from the time the information was received by an employee having
responsibility to act for the trust, or would have been brought to the employeeÂ’s
attention if the organization had exercised reasonable diligence. An
organization exercises reasonable diligence if the organization maintains
reasonable routines for communicating significant information to the employee
having responsibility to act for the trust and there is reasonable compliance
with the routines. Reasonable diligence does not require an employee of the
organization to communicate information unless the communication is part of the
employeeÂ’s regular duties or the employee knows a matter involving the trust
would be materially affected by the information. [2005 c.348 §4]
     130.020
UTC 105. Default and mandatory rules. (1) Except as otherwise provided in the terms of the trust, this
chapter governs the duties and powers of a trustee, relations among trustees,
and the rights and interests of a beneficiary.
     (2) The terms of a trust prevail over the
provisions of this chapter except:
     (a) The requirements of ORS 130.150 to
130.190 governing the creation of a trust.
     (b) The duty of a trustee to act in good
faith and in accordance with the purposes of the trust.
     (c) The requirement that a trust and the
terms of a trust be for the benefit of the trust beneficiaries, and that the
trust have a purpose that is lawful, not contrary to public policy and possible
to achieve.
     (d) The power of the court to modify or
terminate a trust under ORS 130.195 to 130.225.
     (e) The effect of a spendthrift provision
and the rights of creditors and assignees to reach interests in a trust as
provided in ORS 130.300 to 130.325.
     (f) The power of the court under ORS
130.605 to require, dispense with, modify or terminate a bond.
     (g) The power of the court under ORS
130.635 (2) to adjust a trusteeÂ’s compensation specified in the terms of the
trust if the compensation is unreasonably low or high.
     (h) Subject to subsection (3) of this
section, the duty under ORS 130.710 (2)(b) and (c) to notify qualified
beneficiaries of an irrevocable trust of the existence of the trust, of the
identity of the trustee and of their right to request trustee reports.
     (i) Subject to subsection (3) of this
section, the duty under ORS 130.710 (1) to respond to the request of a
qualified beneficiary of an irrevocable trust for trustee reports and other
information reasonably related to the administration of a trust.
     (j) The effect of an exculpatory term
under ORS 130.835.
     (k) The rights under ORS 130.845, 130.850,
130.855 and 130.860 of a person other than a trustee or beneficiary.
     (L) Periods of limitation for commencing a
judicial proceeding.
     (m) The power of the court to take such
action and exercise such jurisdiction as may be necessary in the interests of
justice.
     (n) The subject-matter jurisdiction of the
court and venue for commencing a proceeding as provided in ORS 130.060 and
130.065.
     (3) The settlor, in the trust instrument
or in another writing delivered to the trustee, may waive or modify the duties
of a trustee under ORS 130.710 to give notice, information and reports to
qualified beneficiaries by:
     (a) Waiving or modifying those duties
during the period that either the settlor is alive and financially capable, or
the settlorÂ’s spouse, if a qualified beneficiary, is alive and financially
capable; or
     (b) Designating a person or persons to act
in good faith to protect the interests of qualified beneficiaries and to
receive any notice, information or reports required under ORS 130.710 (1),
(2)(b) and (2)(c) in lieu of providing the notice, information or reports to
the qualified beneficiaries. [2005 c.348 §5]
     130.022
UTC 108. Principal place of administration. (1) Terms of a trust designating the principal place of administration
are valid and controlling if:
     (a) A trustee’s principal place of
business is located in the designated state, country or other jurisdiction, or
the trustee is a resident of the designated state, country or other
jurisdiction;
     (b) All or part of the administration
occurs in the designated state, country or other jurisdiction; or
     (c) Other means exist for establishing a
sufficient connection with the designated state, country or other jurisdiction.
     (2) A trustee is under a continuing duty to
administer the trust at a place appropriate to the trustÂ’s purposes, the trustÂ’s
administration and the interests of the beneficiaries. Absent a substantial
change of circumstances, the trustee may assume that the original place of
administration is also the appropriate place of administration. The duty to
administer the trust at an appropriate place may prevent a trustee from moving
the place of administration.
     (3)(a) A trustee may transfer the trust’s
principal place of administration to another state, country or other
jurisdiction if the transfer is in furtherance of the duty imposed by
subsection (2) of this section.
     (b) A trustee shall notify qualified
beneficiaries of the trust of a proposed transfer of the trustÂ’s principal
place of administration not fewer than 60 days before initiating the transfer.
The notice of proposed transfer must include all of the following:
     (A) The name of the state, country or
other jurisdiction to which the principal place of administration is to be
transferred.
     (B) The address and telephone number at
the new location at which the trustee can be contacted.
     (C) An explanation of the reasons for the
proposed transfer.
     (D) The date on which the proposed
transfer is anticipated to occur.
     (E) The date by which the qualified
beneficiary must notify the trustee of an objection to the proposed transfer.
The date for notifying a trustee of an objection may not be fewer than 60 days
after the date on which the notice is given.
     (c) The authority of a trustee under this
subsection to transfer a trustÂ’s principal place of administration terminates
if a qualified beneficiary notifies the trustee of an objection to the proposed
transfer on or before the date specified in the notice.
     (d) The trustee may transfer some or all
of the trust property to a successor trustee designated in the terms of the
trust or appointed pursuant to ORS 130.615 in connection with a transfer of the
trust’s principal place of administration. [2005 c.348 §8]
     130.025
UTC 106. Common law of trusts; principles of equity. The common law of trusts and principles of
equity supplement this chapter, except to the extent modified by this chapter
or other law. [2005 c.348 §6]
     130.030
UTC 107. Governing law. The
meaning and effect of the terms of a trust are determined by:
     (1) The law of the state, country or other
jurisdiction designated in the terms of the trust unless the designation of the
law of that state, country or other jurisdiction is contrary to a strong public
policy of the state, country or other jurisdiction having the most significant
relationship to the matter at issue; or
     (2) In the absence of a controlling
designation in the terms of the trust, the law of the state, country or other
jurisdiction having the most significant relationship to the matter at issue. [2005
c.348 §7]
     130.035
UTC 109. Methods of giving notice; waiver of notice. (1) If any provision of this chapter
requires that a trustee or other person give notice or requires that the
trustee or other person send a document, the trustee or other person must give
the notice or send the document in a manner reasonably suitable under the
circumstances and likely to result in receipt of the notice or document.
Permissible methods of giving notice and sending documents under this chapter
include first class mail, personal delivery, delivery to a personÂ’s last known
place of residence or place of business, or properly directed electronic mail.
     (2) If any provision of this chapter
requires that a trustee or other person give notice or requires that the
trustee or other person send a document to another person, the trustee or other
person need not give the notice or send the document to any person whose
identity or location is unknown and not reasonably ascertainable. If the
trustee or other person cannot give notice or send a document, the trustee or
other person shall prepare an affidavit setting forth the efforts made to find
the person. The trustee must file the affidavit in any pending court proceeding
or hold the affidavit as part of the trust records if a court proceeding is not
pending.
     (3) Any person entitled to receive a
notice or a document under this chapter may waive receipt of the notice or
document.
     (4) Except as provided in subsection (5)
of this section, notice of a judicial proceeding shall be given in the manner
required by statute for the approval of the final account in a decedentÂ’s
estate. Notice of a judicial proceeding must be given by the petitioner to the
following persons:
     (a) To the trustee and all persons whose
interests are affected by the requested action or relief.
     (b) If a person who is entitled to notice
is a minor, to the minorÂ’s conservator or to another appropriate representative
under ORS 130.100 to 130.120 if the minor does not have a conservator. If the
minor is 14 years of age or older, notice must also be given to the minor.
     (c) If a person who is entitled to notice
is financially incapable, to the person and to the personÂ’s conservator or
another appropriate representative under ORS 130.100 to 130.120 if the person
does not have a conservator.
     (d) To any other person the court
requires.
     (5) A judicial proceeding to contest the
validity of a revocable trust must be commenced by the service of a summons in
the manner required by ORCP 7. Notice of any other judicial proceeding must be
given in the manner prescribed by subsection (4) of this section. [2005 c.348 §9]
     130.040
UTC 110. Other persons treated as qualified beneficiaries. (1) A charitable organization expressly
designated to receive distributions under the terms of a charitable trust has
the rights of a qualified beneficiary under this chapter if the charitable
organization is otherwise a qualified beneficiary as defined in ORS 130.010.
     (2) A person appointed to enforce a trust
created for the care of an animal or another noncharitable purpose as provided
in ORS 130.185 or 130.190 has the rights of a qualified beneficiary under this
chapter.
     (3) The Attorney General has the rights of
a qualified beneficiary with respect to a charitable trust having its principal
place of administration in
     130.045
UTC 111. Nonjudicial settlement agreements. (1) For purposes of this section, “interested persons” means any
settlor of a trust who is living, all beneficiaries of the trust who have an
interest in the subject of the agreement, any acting trustee of the trust, and
the Attorney General if the trust is a charitable trust subject to the
enforcement or supervisory powers of the state or the Attorney General under
the provisions of ORS 128.610 to 128.750.
     (2) Except as otherwise provided in
subsection (3) of this section, interested persons may enter into a binding
nonjudicial settlement agreement with respect to any matter involving a trust.
     (3) A nonjudicial settlement agreement is
valid only to the extent the agreement does not violate a material purpose of
the trust and includes terms and conditions that could be properly approved by
the court under this chapter or other applicable law.
     (4) Matters that may be resolved by a
nonjudicial settlement agreement include:
     (a) The interpretation or construction of
the terms of the trust or other writings that affect the trust.
     (b) The approval of a trustee’s report or
accounting.
     (c) Direction to a trustee to refrain from
performing a particular act or the grant to a trustee of any necessary or
desirable power.
     (d) The resignation or appointment of a
trustee and the determination of a trusteeÂ’s compensation.
     (e) Transfer of a trust’s principal place
of administration.
     (f) Liability of a trustee for an action
or failure to act relating to the trust.
     (g) Determining classes of creditors,
beneficiaries, heirs, next of kin or other persons.
     (h) Resolving disputes arising out of the
administration or distribution of the trust.
     (5) Any interested person may petition the
court to approve a nonjudicial settlement agreement, to determine whether the
representation as provided in ORS 130.100 to 130.120 was adequate and to
determine whether the agreement contains terms and conditions the court could
have properly approved.
     (6) Modification or termination of an
irrevocable trust by nonjudicial settlement agreement is governed by ORS
130.200. [2005 c.348 §11]
JUDICIAL
PROCEEDINGS
     130.050
UTC 201. Role of court in administration of trust. (1) A court may intervene in the
administration of a trust to the extent the courtÂ’s jurisdiction is invoked by
an interested person or as provided by law.
     (2) A trust is not subject to continuing judicial
supervision unless ordered by a court.
     (3) A judicial proceeding may relate to
any matter involving a trustÂ’s administration, including a request for
instructions or a declaratory judgment action. [2005 c.348 §12]
     130.055
UTC 202. Jurisdiction over trustee and beneficiary. (1) By accepting the trusteeship of a trust
having its principal place of administration in
     (2) The beneficiaries of a trust having
its principal place of administration in
     (3) This section does not preclude other
methods of obtaining jurisdiction over a trustee, beneficiary or other person
receiving property from the trust. [2005 c.348 §13]
     130.060
UTC 203. Subject-matter jurisdiction. The circuit court has jurisdiction of proceedings in this state
concerning the administration of a trust. [2005 c.348 §14]
     130.065
UTC 204. Venue. (1) Except
as otherwise provided in this section, venue for a judicial proceeding
involving a trust is in the county in which the trustÂ’s principal place of
administration is or will be located.
     (2) If a trust is created by will and the
estate is not yet closed, venue for a judicial proceeding involving a trust is
in the county in which the decedentÂ’s estate is being administered.
     (3) If a trust has no trustee, venue for a
judicial proceeding for the appointment of a trustee is in a county in which a
beneficiary resides, in a county in which any trust property is located and, if
the trust is created by will, in the county in which the decedentÂ’s estate was
or is being administered. [2005 c.348 §15]
REPRESENTATION
     130.100
UTC 301. Representation; basic effect. (1) Notice to a person who may represent and bind another person under
ORS 130.100 to 130.120 has the same effect as if notice were given directly to
the other person. Notice to a representative must comply with ORS 130.035 (4).
     (2) The consent of a person who may
represent and bind another person under ORS 130.100 to 130.120 is binding on
the person represented unless the person represented objects to the
representation before the consent would otherwise have become effective.
     (3) Except as otherwise provided in ORS
130.200 and 130.505, a person who is authorized to represent a financially
incapable settlor under ORS 130.100 to 130.120 may receive notice and give
binding consent on the settlorÂ’s behalf.
     (4) A settlor may not represent and bind a
beneficiary under ORS 130.100 to 130.120 with respect to the termination or
modification of an irrevocable trust under ORS 130.200 (1). [2005 c.348 §16]
     130.105
UTC 302. Representation by holder of testamentary power of appointment. To the extent there is no conflict of
interest between the holder of a testamentary power of appointment and the
persons represented with respect to the particular question or dispute, the
holder may represent and bind persons whose interests are subject to the power
as permissible appointees, as takers in default or by other reason. [2005 c.348
§17; 2007 c.33 §1]
     130.110
UTC 303. Representation by fiduciaries and parents. To the extent there is no conflict of
interest between the representative and the person represented or among those
being represented with respect to a particular question or dispute:
     (1) A conservator may represent and bind
the estate that the conservator controls;
     (2) An agent having authority to act with
respect to the particular question or dispute may represent and bind the
principal;
     (3) A trustee may represent and bind the
beneficiaries of the trust;
     (4) A personal representative of a
decedentÂ’s estate may represent and bind persons interested in the estate; and
     (5) A parent may represent and bind the
parentÂ’s minor or unborn child if a conservator for the child has not been
appointed. [2005 c.348 §18]
     130.115
UTC 304. Representation by person having substantially identical interest. Unless otherwise represented, a minor,
financially incapable individual or unborn individual, or a person whose
identity or location is unknown and not reasonably ascertainable, may be
represented by and bound by another person having a substantially identical
interest with respect to the particular question or dispute, but only to the
extent there is no conflict of interest between the representative and the
person represented. [2005 c.348 §19]
     130.120
UTC 305. Appointment of special representative. (1) If the court determines that the
interest of a person is not represented under ORS 130.100 to 130.120, or that
the otherwise available representation might be inadequate, the court may
appoint a special representative to receive notice, give consent and otherwise
represent, bind and act on behalf of a minor, financially incapable individual
or unborn individual, or a person whose identity or location is unknown and not
reasonably ascertainable. A special representative may be appointed to
represent several persons or interests, if the interests of the persons
represented do not conflict.
     (2) A special representative may act on
behalf of the individual represented with respect to any matter that the court
has authorized, whether or not a judicial proceeding concerning the trust is
pending.
     (3) In making decisions, a special
representative may consider general benefit accruing to the living members of
the individualÂ’s family.
     (4) A person appointed as special
representative must have appropriate skills and experience necessary to
adequately represent the individual in the matter for which the special
representative is appointed. A special representative may not have an interest
in the trust that is the subject of the appointment of the special
representative. A special representative may not be related to a personal
representative of an estate with an interest in the trust, or to a trustee,
beneficiary or other person with an interest in the trust.
     (5) A person requesting the appointment of
a special representative must file a petition with the court describing the
proposed special representative, the need for a special representative, the
qualifications of the special representative, the person or persons who will be
represented, the actions that the special representative will take and the
approximate date or event when the authority of the special representative will
terminate. The person seeking to serve as special representative must file a
consent to serve.
     (6) A special representative appointed
under this section is entitled to reasonable compensation for services. The
trustee shall pay compensation to the special representative from the principal
of the trust that is attributable to those beneficiaries who are represented.
If the beneficiaries who are represented do not have principal that is
attributable to them, compensation is an administrative expense of the trust.
     (7) Upon completion of the
responsibilities of the special representative, the special representative
shall move the court for an order discharging the special representative. Upon
order of the court, a special representative appointed under this section shall
be discharged from any further responsibility with respect to the trust. [2005
c.348 §20]
CREATION,
VALIDITY, MODIFICATION AND TERMINATION OF TRUST
     130.150
UTC 401. Methods of creating trust. (1) A trust may be created:
     (a) By transfer of property to another
person as trustee during the settlorÂ’s lifetime or by will or other disposition
taking effect upon the settlorÂ’s death;
     (b) By declaration by the owner of
property that the owner holds identifiable property as trustee;
     (c) By exercise of a power of appointment
in favor of a trustee;
     (d) By an agent or attorney-in-fact under
a power of attorney that expressly grants authority to create the trust; or
     (e) Pursuant to a statute or judgment that
requires property to be administered in the manner of an express trust.
     (2) The following apply to trusts for
death benefits:
     (a) A trustee may be named as beneficiary
of any death benefits, and the death benefits shall be paid to the trustee and
be held and disposed of by the trustee as provided in a trust created by the
designator during the lifetime of the designator. A trust is valid even though
the trust does not have a trust corpus other than the right of the trustee to
receive death benefits as beneficiary.
     (b) A trustee named by will may be
designated as beneficiary of death benefits if the designation is made in
accordance with the provisions of the policy, contract, plan, trust or other
governing instrument. Upon probate of the will, the death benefits are payable
to the trustee to be held and disposed of under the terms of the designatorÂ’s
will in the same manner as other testamentary trusts are administered. Unless
otherwise provided by the designator, an obligor may make payment of death
benefits to the personal representative of the designator, or to the persons
who are otherwise entitled to the death benefits, if a qualified trustee does
not claim the death benefits within one year after the death of the designator,
or if satisfactory evidence is furnished within the one-year period showing
that there is no trustee who can qualify to receive the death benefits. The
obligor is discharged from any liability for the death benefits upon making the
payment.
     (c) Death benefits received by the trustee
are not subject to the debts of the designator or to inheritance or estate
taxes to any greater extent than if the death benefits were payable to the
beneficiaries named in the trust and not to the estate of the designator.
     (d) Death benefits held in trust may be
commingled with any other assets that may properly become a part of the trust.
     (3) As used in this section:
     (a) “Death benefits” means death benefits
of any kind, including proceeds of life insurance policies, payments under
annuity or endowment contracts, and funds payable in connection with pension,
retirement, stock bonus or profit-sharing plans, or any trust administered in
connection with these arrangements.
     (b) “Designator” means the person entitled
to designate the beneficiary of death benefits upon the death of the person.
     (c) “Obligor” means the insurer or other
person obligated to pay death benefits. [2005 c.348 §21]
     130.155
UTC 402. Requirements for creation. (1) A trust is created only if all of the following requirements are
met:
     (a) The settlor has capacity to create a
trust.
     (b) The settlor indicates an intention to
create the trust.
     (c) The trust has a definite beneficiary
or is:
     (A) A charitable trust;
     (B) A trust for the care of an animal, as
provided in ORS 130.185; or
     (C) A trust for a noncharitable purpose,
as provided in ORS 130.190.
     (d) The trustee has duties to perform.
     (e) The same person is not the sole
trustee and sole beneficiary.
     (2) A beneficiary is definite for the
purposes of subsection (1)(c) of this section if the beneficiary can be
ascertained when the trust is created or at any time thereafter, subject to any
applicable rule against perpetuities.
     (3) A power of a trustee to select a
beneficiary from an indefinite class is valid. If the power is not exercised
within a reasonable time, the power fails and the property subject to the power
passes to the persons who would have taken the property had the power not been
conferred. [2005 c.348 §22]
     130.160
UTC 403. Trusts created in other states, countries or jurisdictions. A trust not created by will is validly
created if the creation of the trust complies with the law of the state,
country or other jurisdiction in which the trust instrument was executed, or
the law of the state, country or other jurisdiction in which, at the time of
creation:
     (1) The settlor was domiciled, had a place
of abode or was a national;
     (2) A trustee was domiciled or had a place
of business; or
     (3) Any trust property was located. [2005
c.348 §23]
     130.165
UTC 404. Trust purposes. A
trust may be created only to the extent the purposes of the trust are lawful,
not contrary to public policy and possible to achieve. A trust and its terms
must be for the benefit of the trust’s beneficiaries. [2005 c.348 §24]
     130.170
UTC 405. Charitable purposes; enforcement. (1) A charitable trust 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 beneficial to the community.
     (2) If the terms of a charitable trust do
not indicate a particular charitable purpose or beneficiary, the court may
select one or more charitable purposes or beneficiaries. The selection must be
consistent with the settlorÂ’s intention to the extent that intent can be
ascertained.
     (3) The settlor of a charitable trust, in
addition to other persons authorized by law or the trust instrument, may
maintain a proceeding to enforce the trust.
     (4) A court may modify or terminate any
trust of property for charitable purposes only if the Attorney General is a
party to the proceedings. [2005 c.348 §25]
     130.175
UTC 406. Creation of trust induced by fraud, duress or undue influence. A trust is void to the extent the creation
of the trust was induced by fraud, duress or undue influence. [2005 c.348 §26]
     130.180
UTC 407. Evidence of oral trust. Except as required by a statute other than this chapter, a trust need
not be evidenced by a trust instrument. The creation of an oral trust, and the
terms of an oral trust, must be established by clear and convincing evidence. [2005
c.348 §27]
     130.185
UTC 408. Pet trust. (1) A
trust may be created to provide for the care of one or more animals that are
alive during the settlorÂ’s lifetime. The trust terminates upon the death of the
animal or, if the trust was created to provide for the care of more than one
animal, upon the death of the last surviving animal. An oral or written
declaration shall be liberally construed in favor of finding the creation of a
trust under this section. There is a presumption against merely precatory or
honorary disposition on behalf of an animal.
     (2) A trust authorized by this section may
be enforced by a person appointed in the terms of the trust or, if a person is
not appointed in the terms of the trust, by a person appointed by the court. A
person having an interest in the welfare of the animal may request the court to
appoint a person to enforce the trust or to remove a person appointed.
Reasonable compensation for a person appointed by the court may be paid from
the assets of the trust.
     (3) Property of a trust authorized by this
section may be applied only to its intended use. Upon termination of the trust,
property of the trust must be distributed to those persons designated in the
trust. In the absence of a designation, the property shall be distributed to
the settlor if the settlor is living when the distribution is made, or to the
settlorÂ’s successors in interest if the settlor is not living when the
distribution is made.
     (4) Except as ordered by a circuit court
or required by the trust instrument, a trustee for a trust authorized under
this section need not pay any fee or make any filing, report, registration,
periodic accounting, separate maintenance of funds or appointment by reason of
the existence of the fiduciary relationship of the trustee. A person appointed
to enforce the trust may request a report under ORS 130.710 (3). [2005 c.348 §28]
     130.190
UTC 409. Noncharitable trust without ascertainable beneficiary. Except as otherwise provided in ORS 130.185
or by another statute:
     (1) A trust may be created for a
noncharitable purpose without a definite or definitely ascertainable
beneficiary or for a noncharitable but otherwise valid purpose to be selected
by the trustee. The trust may not be enforced for more than 90 years.
     (2) A trust authorized by this section may
be enforced by a person appointed in the terms of the trust or, if a person is
not appointed in the terms of the trust, by a person appointed by the court.
     (3) Property of a trust authorized by this
section may be applied only to its intended use, except to the extent the court
determines that the value of the trust property exceeds the amount required for
the intended use. Trust property not required for the intended use must be
distributed to those persons designated in the trust. In the absence of a
designation, the property shall be distributed to the settlor if the settlor is
living when the distribution is made, or to the settlorÂ’s successors in
interest if the settlor is not living when the distribution is made. [2005
c.348 §29]
     130.195
UTC 410. Modification or termination of trust; proceedings for approval or
disapproval. (1) In addition
to the methods of termination prescribed by ORS 130.200, 130.205, 130.210 and
130.215, a trust terminates:
     (a) To the extent the trust is revoked or
expires pursuant to the terms of the trust;
     (b) If no purpose of the trust remains to
be achieved; or
     (c) To the extent one or more of the purposes
of the trust have become unlawful, contrary to public policy or impossible to
achieve.
     (2) A proceeding to approve or disapprove
a proposed modification or termination under ORS 130.200, 130.205, 130.210,
130.215, 130.220 and 130.225, or trust combination or division under ORS
130.230, may be commenced by a trustee or beneficiary. A proceeding to approve
or disapprove a proposed modification or termination under ORS 130.200 may be
commenced by the settlor. The settlor of a charitable trust may maintain a
proceeding to modify the trust under ORS 130.210. [2005 c.348 §30]
     130.200
UTC 411. Modification or termination of irrevocable trust by consent. (1) An irrevocable trust may be modified or
terminated upon consent of the settlor and all beneficiaries, even if the
modification or termination is inconsistent with a material purpose of the
trust. The Attorney General must consent to any modification or termination of
a charitable trust, unless contingencies make the charitable interest
negligible. A settlorÂ’s power to consent to a trustÂ’s modification or
termination may be exercised by:
     (a) An agent or attorney-in-fact under a
power of attorney only to the extent expressly authorized by the terms of the
trust;
     (b) The settlor’s conservator with the approval
of the court supervising the conservatorship if an agent or attorney-in-fact is
not authorized by the terms of the trust; or
     (c) The settlor’s guardian with the
approval of the court supervising the guardianship if an agent or
attorney-in-fact is not authorized by the terms of the trust and a conservator
has not been appointed.
     (2) An irrevocable trust may be terminated
upon consent of all of the beneficiaries if the court concludes that
continuance of the trust is not necessary to achieve any material purpose of
the trust. An irrevocable trust may be modified upon consent of all of the
beneficiaries if the court concludes that the modification is not inconsistent
with a material purpose of the trust. The Attorney General must consent to any
modification or termination of a charitable trust, unless contingencies make
the charitable interest negligible.
     (3) For the purposes of subsections (1)
and (2) of this section, a spendthrift provision in the terms of the trust is
rebuttably presumed to constitute a material purpose of the trust.
     (4) Upon termination of a trust under
subsection (1) or (2) of this section, the trustee shall distribute the trust
property as agreed to by the beneficiaries and, in the case of a charitable
trust requiring the Attorney GeneralÂ’s consent, as agreed to by the Attorney
General.
     (5) If all of the required parties do not
consent to a proposed modification or termination of the trust under subsection
(1) or (2) of this section, the modification or termination may be approved by
the court if the court finds that:
     (a) If all of the required parties had
consented, the trust could have been modified or terminated under this section;
and
     (b) The interests of any beneficiary who
does not consent will be adequately protected.
     (6)(a) A trustee, or any other person
interested in the trust, may file an agreement entered into under subsection
(1) or (2) of this section, or a memorandum summarizing the provisions of the
agreement, with the circuit court for any county where trust assets are located
or where the trustee administers the trust.
     (b) After collecting the fee provided for
in subsection (8)(a) of this section, the clerk shall enter the agreement or
memorandum of record in the courtÂ’s register.
     (c) Within five days after the filing of
an agreement or memorandum under this subsection, the person making the filing
must serve a notice of the filing and a copy of the agreement or memorandum on
each person interested in the trust whose address is known at the time of the
filing. Service may be made personally, or by registered or certified mail,
return receipt requested. The notice of filing shall be substantially in the
following form:
______________________________________________________________________________
CAPTION OF CASEÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â NOTICE
OF FILING
                                                                       OF
AGREEMENT OR
                                                                       MEMORANDUM
OF
                                                                       AGREEMENT
     You are hereby notified that the attached
document was filed by the undersigned in the above entitled court on the _____
day of ______, ___. Unless you file objections to the agreement within 120
days after that date, the agreement will be approved and will be binding on all
persons interested in the trust.
     If you file objections within the 120-day
period, the court will fix a time and place for a hearing. At least 10 days
before the date of that hearing, you must serve a copy of your objections and
give notice of the time and place of the hearing to all persons interested in
the trust. See ORS 130.200.
_____________________
Signature
______________________________________________________________________________
     (d) Proof of mailing of the notices
required under this subsection must be filed with the court. Proof of service
may be made by a certificate of service in the form provided by ORCP 7 F, by a
signed acceptance of service or by a return receipt from the postal
authorities.
     (e) If no objections are filed with the
court within 120 days after the filing of the agreement or memorandum, the
agreement is effective and binding on all persons interested in the trust.
     (7)(a) If objections are filed with the
court within 120 days after the filing of an agreement or memorandum under this
section, the clerk of the court shall collect the fee provided in subsection
(8)(a) of this section. Upon the filing of objections, the court shall fix a
time and place for a hearing. The person filing the objections must serve a
copy of the objections on all persons interested in the trust and give notice
to those persons of the time and place fixed by the court for a hearing.
Service must be made at least 10 days before the date set by the court for the
hearing. Service of the objections may be made personally or by registered or
certified mail, return receipt requested.
     (b) Proof of mailing of objections must be
filed with the court. Proof of service may be made by a certificate of service
in the form provided by ORCP 7 F, by a signed acceptance of service or by a
return receipt from the postal authorities.
     (c) The court shall approve an agreement
entered into under subsection (1) or (2) of this section after a hearing upon
objections filed under this subsection unless:
     (A) The agreement does not reflect the
signatures of all persons required by subsection (1) or (2) of this section;
     (B) The agreement is not authorized by
subsection (1) or (2) of this section; or
     (C) Approval of the agreement would not be
equitable.
     (d) An agreement approved by the court
after a hearing is binding on all persons interested in the trust.
     (e) Persons interested in the trust may
waive the notice required under subsection (6) of this section. If all persons
interested in the trust waive the notice, the agreement is effective and
binding on all persons interested in the trust upon filing of the agreement or
memorandum with the court.
     (8)(a) The clerk of the circuit court
shall collect in advance a fee of $65 for the filing of an agreement or
memorandum of agreement under subsection (6) of this section, and a fee of
$32.50 for the filing of objections under subsection (7) of this section.
     (b) In addition to the filing fees
provided for in paragraph (a) of this subsection, the clerk shall charge and
collect in proceedings under this section all additional fees authorized by law
for civil actions, suits or proceedings in circuit court.
     (c) A pleading or other document is not
considered filed unless the fees required by this subsection are paid. Filing
fees may not be refunded to any party. [2005 c.348 §31; 2007 c.129 §21]
     Note: Section 15 (20), chapter 860, Oregon Laws
2007, provides:
     Sec.
15. (20) In addition to the fee provided for in ORS 130.200 (8)(a), for the
period commencing September 1, 2007, and ending June 30, 2009, the clerk of the
circuit court shall collect a surcharge of $3 for the filing of an agreement or
memorandum of agreement under ORS 130.200 (6) and a surcharge of $2 for the
filing of objections under ORS 130.200 (7). [2007 c.860 §15(20)]
     130.205
UTC 412. Modifications or termination because of unanticipated circumstances or
inability to administer trust effectively. (1) The court may modify the administrative or dispositive terms of a
trust or terminate the trust if modification or termination will further the
purposes of the trust and the modification or termination is requested by
reason of circumstances not anticipated by the settlor. To the extent practicable,
the modification must be made in accordance with the settlorÂ’s probable
intention.
     (2) The court may modify the
administrative terms of a trust if continuation of the trust on its existing
terms would be impracticable or wasteful, or would impair the trustÂ’s
administration.
     (3) A trustee may terminate a trust if:
     (a) Termination is appropriate by reason
of circumstances not anticipated by the settlor;
     (b) Termination will not be inconsistent
with the material purposes of the trust;
     (c) All qualified beneficiaries have
consented to the termination;
     (d) The trustee is not a beneficiary of
the trust and has no duty of support for any beneficiary of the trust; and
     (e) In the case of a charitable trust, the
Attorney General has consented to the termination, or contingencies have made
the charitable interest negligible.
     (4) Upon termination of a trust under this
section, the trustee shall distribute the trust property in a manner consistent
with the purposes of the trust. [2005 c.348 §32; 2007 c.515 §1]
     Note: Section 4, chapter 515, Oregon Laws 2007,
provides:
     Sec.
4. The amendments to ORS
130.205, 130.655 and 130.725 by sections 1 to 3 of this 2007 Act apply to all
trusts, whether created before, on or after the effective date of this 2007 Act
[January 1, 2008]. [2007 c.515 §4]
     130.210
UTC 413. Cy pres. (1) Except
as otherwise provided in subsection (2) of this section, if a particular
charitable purpose of a trust becomes unlawful, impracticable, impossible to
achieve or wasteful:
     (a) The trust does not fail, in whole or
in part;
     (b) The trust property does not revert to
the settlor or the settlorÂ’s successors in interest; and
     (c) The court may apply cy pres to modify
or terminate the trust by directing that the trust property be applied or
distributed, in whole or in part, in a manner consistent with the settlorÂ’s
charitable purposes.
     (2) If a provision in the terms of a
charitable trust would result in distribution of the trust property to a
noncharitable beneficiary, a court may apply cy pres to modify or terminate the
trust under subsection (1)(c) of this section only if, when the provision takes
effect:
     (a) The trust property is to revert to the
settlor and the settlor is still living; or
     (b) Fewer than 50 years have elapsed since
the date of the trust’s creation. [2005 c.348 §33]
     130.215
UTC 414. Modification or termination of uneconomic trust. (1) After notice to the qualified
beneficiaries, a trustee may terminate a trust if the trustee concludes that
the value of the trust property is insufficient to justify the cost of
administration. A trustee may not terminate a trust under this section if the
trustee is a beneficiary of the trust or has a duty of support for a
beneficiary of the trust.
     (2) The court may modify or terminate a
trust, or remove the trustee and appoint a different trustee, if the court
finds that the value of the trust property is insufficient to justify the cost
of administration.
     (3) Upon termination of a trust under this
section, the trustee shall distribute the trust property in a manner consistent
with the purposes of the trust.
     (4) This section does not apply to an
easement for conservation or preservation. [2005 c.348 §34]
     130.220
UTC 415. Reformation to correct mistakes. The court may reform the terms of a trust, even if unambiguous, to
conform the terms to the settlorÂ’s intention if the person requesting
reformation proves by clear and convincing evidence that both the settlorÂ’s
intent and the terms of the trust were affected by a mistake of fact or law,
whether in expression or inducement. [2005 c.348 §35]
     130.225
UTC 416. Modification to achieve settlorÂ’s tax objectives. The court may modify the terms of a trust to
achieve the settlorÂ’s tax objectives if the modification is not contrary to the
settlorÂ’s probable intention. The court may provide that the modification has
retroactive effect. [2005 c.348 §36]
     130.230
UTC 417. Combination and division of trusts. After notice to all qualified beneficiaries, a trustee may combine two
or more trusts into a single trust or divide a trust into two or more separate
trusts, if the result does not materially impair rights of any beneficiary or
adversely affect achievement of the purposes of the trust. [2005 c.348 §37]
     130.235
In terrorem clause. (1)
Except as provided in this section, an in terrorem clause in a trust is valid
and enforceable. If a beneficiary challenges a trust that contains an in
terrorem clause that applies to the beneficiary, the court shall enforce the
clause against the beneficiary even though the beneficiary establishes that
there was probable cause for the challenge.
     (2) The court shall not enforce an in
terrorem clause if the beneficiary challenging the trust establishes that the
beneficiary has probable cause to believe that the trust is a forgery or that
the trust has been revoked.
     (3) The court shall not enforce an in
terrorem clause if the challenge is brought by a fiduciary acting on behalf of
a protected person under the provisions of ORS chapter 125, a guardian ad litem
appointed for a minor or a guardian ad litem appointed for an incapacitated or
financially incapable person.
     (4) For the purposes of this section, “in
terrorem clause” means a provision in a trust that reduces or eliminates the
interest of a beneficiary under the trust if the beneficiary challenges the
validity of part or all of the trust. [2005 c.348 §38]
     130.240
Marital deduction gifts. (1)
As used in this section:
     (a) “Marital deduction” means the federal
estate tax deduction allowed for transfers under section 2056 of the Internal
Revenue Code, as in effect on January 1, 2006, or the federal gift tax
deduction allowed for transfers under section 2523 of the Internal Revenue
Code, as in effect on January 1, 2006.
     (b) “Marital deduction gift” means a
transfer of property that the settlor intended to qualify for the marital
deduction.
     (2) If a trust contains a marital
deduction gift:
     (a) The provisions of the trust, including
any power, duty or discretionary authority given to a fiduciary, must be
construed as necessary to comply with the marital deduction provisions of the
Internal Revenue Code.
     (b) The fiduciary may not take any action
or have any power that impairs the tax deduction for the marital deduction
gift.
     (c) The marital deduction gift may be
satisfied only with property that qualifies for the tax deduction.
     (3) If a trust executed before September
12, 1981, indicates the settlor intended that a gift provide the maximum
allowable marital deduction, the trust gives the recipient an amount equal to
the maximum amount of the marital deduction that would have been allowed as of
the date of the gift under federal law as it existed before September 12, 1981,
with adjustments for:
     (a) The provisions of section
2056(c)(1)(B) and (C) of the Internal Revenue Code in effect immediately before
September 12, 1981.
     (b) Reduction of the amount passing under
the gift by the final federal estate tax values of any other property that
passes under the trust, or by other means, that qualifies for the marital
deduction. This paragraph does not apply to qualified terminable interest
property under section 2056(b)(7) of the Internal Revenue Code, as in effect on
January 1, 2006.
     (4) If a marital deduction gift is made in
trust:
     (a) The settlor’s spouse is the only
beneficiary of income or principal of the marital deduction property as long as
the spouse lives. Nothing in this paragraph prevents exercise by the settlorÂ’s
spouse of a power of appointment included in a trust that qualifies as a
general power of appointment marital deduction trust.
     (b) Subject to paragraph (d) of this
subsection, the settlorÂ’s spouse is entitled to all of the income of the
marital deduction property at least once a year, as long as the spouse is
alive.
     (c) The settlor’s spouse has the right to
require that the trustee of the trust make unproductive marital deduction
property productive or convert it into productive property within a reasonable
time.
     (d) Notwithstanding any provision of ORS
chapter 129, upon the death of the settlorÂ’s spouse all remaining accrued or
undistributed income from qualified terminable interest property under sections
2056(b)(7) or 2523(f) of the Internal Revenue Code, as in effect on January 1,
2006, passes to the estate of the settlorÂ’s spouse, unless the trust provides a
different disposition that qualifies for the marital deduction.
     (5)(a) Except as provided in paragraph (b)
of this subsection, if a trust that makes a marital deduction gift includes a
requirement that the settlorÂ’s spouse survive the settlor by a period of more
than six months, or contains provisions that could result in a loss of the
spouseÂ’s interest in the trust if the spouse fails to survive the settlor by at
least six months, the spouse need only survive the settlor by six months to
receive the marital deduction gift.
     (b) If a trust that makes a marital
deduction gift includes a requirement that the settlorÂ’s spouse survive a
common disaster that results in the death of the settlor, the spouse need only
survive until the final audit of the federal estate tax return for the settlorÂ’s
estate, if any, to receive the marital deduction gift.
     (6) A trustee is not liable for a good
faith decision whether to make any election referred to in sections 2056(b)(7)
or 2523(f) of the Internal Revenue Code, as in effect on January 1, 2006.
     (7) Subsections (4) and (6) of this
section do not apply to a trust that qualifies for the marital deduction under
section 20.2056(e)-2(b) of the Code of Federal Regulations, as in effect on
January 1, 2006. [Formerly 128.398]
CREDITORÂ’S CLAIMS;
SPENDTHRIFT AND DISCRETIONARY TRUSTS
     130.300
UTC 501. Rights of beneficiaryÂ’s creditor or assignee. To the extent a beneficiaryÂ’s interest is
not protected by a spendthrift provision, the court may authorize a creditor or
assignee of the beneficiary to reach the beneficiaryÂ’s interest by garnishment
or other execution against present or future distributions to or for the
benefit of the beneficiary or by other means. The court may limit the award to
such relief as is appropriate under the circumstances. [2005 c.348 §39]
     130.305
UTC 502. Spendthrift provision.
(1) A spendthrift provision is valid only if the provision restrains both
voluntary and involuntary transfer of a beneficiaryÂ’s interest.
     (2) A term of a trust providing that the
interest of a beneficiary is held subject to a spendthrift trust, or words of
similar import, is sufficient to restrain both voluntary and involuntary
transfer of the beneficiaryÂ’s interest.
     (3) A beneficiary may not transfer an
interest in a trust in violation of a valid spendthrift provision. Except as
otherwise provided in ORS 130.300 to 130.325, a creditor or assignee of a
beneficiary may not reach the interest of a beneficiary or a distribution by
the trustee before the distribution is received by the beneficiary. [2005 c.348
§40]
     130.310
UTC 503. Exceptions to spendthrift provisions. (1) As used in this section, “child” means
any individual for whose benefit a judgment, court order or administrative
order for child support has been entered in any state, country or other
jurisdiction.
     (2) Even if a trust contains a spendthrift
provision, the holder of a judgment, court order or administrative order
against a beneficiary for support or maintenance of the beneficiaryÂ’s child,
spouse or former spouse or a judgment creditor who has provided services for
the protection of a beneficiaryÂ’s interest in the trust, may obtain an order
from a court of this state authorizing garnishment or other execution against
present or future distributions to or for the benefit of the beneficiary. The
court may issue an order authorizing execution against such amount as the court
determines to be equitable under the circumstances but not more than the amount
the trustee would have been required to distribute to or for the benefit of the
beneficiary. Distributions subject to execution under this subsection include
distributions required by the express terms of the trust, such as mandatory
payments of income, and distributions the trustee has otherwise decided to
make, such as through the exercise of discretion.
     (3) A spendthrift provision is
unenforceable against a claim of this state or the
     130.315
UTC 505. CreditorÂ’s claim against settlor. (1) Whether or not the terms of a trust contain a spendthrift
provision:
     (a) During the lifetime of the settlor,
the property of a revocable trust is subject to claims of the settlorÂ’s
creditors.
     (b) A creditor or assignee of the settlor
of an irrevocable trust may reach the maximum amount that can be distributed to
or for the settlorÂ’s benefit. If an irrevocable trust has more than one
settlor, the amount the creditor or assignee of a particular settlor may reach
may not exceed the settlorÂ’s interest in the portion of the trust attributable
to that settlorÂ’s contribution.
     (c) If a trust was revocable at the
settlorÂ’s death, the property of the trust becomes subject to creditorsÂ’ claims
as provided in ORS 130.350 to 130.450 when the settlor dies. The payment of
claims is subject to the settlorÂ’s right to direct the priority of the sources
from which liabilities of the settlor are to be paid.
     (2) For the purpose of creditors’ claims,
the holder of a power of withdrawal is treated in the same manner as the
settlor of a revocable trust to the extent property of the trust is subject to
the power. The provisions of this subsection apply to the holder of a power of
withdrawal only during the period that the power may be exercised.
     (3) Upon the lapse, release or waiver of a
power of withdrawal, the property of the trust that is the subject of the
lapse, release or waiver becomes subject to claims of creditors of the holder
of the power only to the extent the value of the property exceeds the greater
of the amount specified in section 2041(b)(2) or 2514(e) of the Internal
Revenue Code, as in effect on January 1, 2006, or section 2503(b) of the
Internal Revenue Code, as in effect on January 1, 2006.
     (4) Subsections (2) and (3) of this
section do not apply to a person other than a settlor who is a beneficiary of a
revocable or irrevocable trust and who is also a trustee of the trust, if the
power to withdraw for the personÂ’s own benefit is limited by an ascertainable
standard. [2005 c.348 §42]
     130.320
UTC 506. Overdue distribution.
Whether or not a trust contains a spendthrift provision, a creditor or assignee
of a beneficiary may reach a mandatory distribution of income or principal,
including a distribution upon termination of the trust, if the trustee has not
made the distribution to the beneficiary within a reasonable time after the
designated distribution date. [2005 c.348 §43]
     130.325
UTC 507. Personal obligations of trustee. Trust property is not subject to personal obligations of the trustee, even
if the trustee becomes insolvent or bankrupt. [2005 c.348 §44]
CLAIMS AGAINST
TRUST BASED ON DEBTS OF SETTLOR
     130.350
Statute of limitations. (1)
Claims against a trust described in subsection (2) of this section that are not
presented within the time limitations established under ORS 130.360 or within
the statute of limitations applicable to the claim, whichever is earlier, are
barred from payment from the trust estate.
     (2) ORS 130.350 to 130.450 apply only if:
     (a) A claim is made against assets of a
trust;
     (b) The trust came into existence during
the settlorÂ’s lifetime and was a revocable trust at any time after the trust
was created and before the death of the settlor;
     (c) The claim is based on the debts or
liabilities of the settlor; and
     (d) The claim is made against the assets
of the trust after the death of the settlor.
     (3) ORS 130.350 to 130.450 apply to all
claims against a trust described in subsection (2) of this section, without
regard to whether the claims are contingent, unliquidated or not yet due. [Formerly
128.256]
     130.355
Commencement of proceeding.
(1) At any time after the death of a settlor of a trust described in ORS
130.350 (2), a trustee of the trust may petition the probate court to determine
the claims of creditors of the settlor. A petition under this section must
include all of the following information to the extent known by the trustee:
     (a) The settlor’s name, date of birth,
date and place of death and Social Security number.
     (b) The name of the trustee.
     (c) The address at which claims must be
presented.
     (d) The name of the trust, if any, and the
date of the trust, including the dates of any amendments.
     (e) The facts establishing venue in the
county where the petition is being filed.
     (2) The clerk of the court shall charge
and collect in advance from the trustee the filing fee required from a
plaintiff under ORS 21.110 (1).
     (3) A proceeding under this section may be
brought only:
     (a) In the county where the settlor had
domicile or a place of abode at the time of death;
     (b) In any county where assets of the
trust were located at the time of death or are located at the time the
proceeding is commenced; or
     (c) In the county where the settlor died.
     (4) The court has personal jurisdiction
over a trustee that files a petition under this section, whether the trustee is
a resident or nonresident of this state, for the purposes of any proceeding
relating to the trust that may be instituted by an interested person. [Formerly
128.258]
     130.360
Limitation on presentation of claims when notice to claimants given. Not later than four months after a petition
under ORS 130.355 is entered in the register of the court, the trustee of the
trust shall give notice to persons with claims against the trust estate in the
manner provided by ORS 130.365 and 130.370. All claims against the trust estate
are barred unless those claims are submitted before the later of:
     (1) Four months after the date of first
publication of notice to claimants in the manner provided by ORS 130.365; or
     (2) If the trustee delivers or mails a
notice to a claimant under ORS 130.370, 30 days after a notice meeting the
requirements of ORS 130.370 is delivered or mailed to the last-known address of
the person having or asserting the claim. [Formerly 128.262]
     130.365
Publication of notice. After
filing a petition under ORS 130.355, a trustee must cause a notice to claimants
to be published once in each of three consecutive weeks in a newspaper of
general circulation published in the county in which the petition is filed. The
notice must include:
     (1) The name of the settlor;
     (2) The name of the trustee and the
address at which claims must be presented;
     (3) The date of the first publication of
the notice; and
     (4) A statement that claims against the
trust estate may be barred unless presented to the trustee at the address
specified in the notice within four months after the date of the first
publication of the notice. [Formerly 128.264]
     130.370
Notice to individual claimants.
(1) Within three months after a petition is entered in the register of the
court under ORS 130.355, or within such longer time as the court allows, a
trustee must make reasonably diligent efforts to investigate the financial
records and affairs of the settlor and to take such further actions as are
reasonably necessary to ascertain the identity and address of each person who
has or asserts a claim against the trust estate. The court shall allow the
trustee as much time as requested by the trustee for the purpose of determining
the claims against the trust estate. The trustee must thereafter cause to be
delivered or mailed a notice containing the information required in subsection
(2) of this section to each person known by the trustee to have or to assert a
claim against the trust estate and to the Department of Human Services. Notice
under this section is not required for any claim that has already been
presented, accepted or paid in full or on account of a claim that is merely
conjectural.
     (2) The notice required by this section
must include:
     (a) The name and Social Security number of
the settlor;
     (b) The name of the trustee and the
address at which claims must be presented;
     (c) A statement that claims against the
trust estate that are not presented to the trustee within 30 days after the date
of the notice may be barred;
     (d) The date of the notice, which shall be
the date on which the notice is delivered or mailed; and
     (e) A copy of the settlor’s death
certificate. [Formerly 128.266]
     130.375
Form of claim; evidence in support. (1) A claim presented under ORS 130.350 to 130.450 must:
     (a) Be in writing.
     (b) Describe the nature and the amount of
the claim, if ascertainable.
     (c) State the name and address of the
claimant and any attorney for the claimant.
     (2) A defect of form of a claim timely
presented may be waived by the trustee or by the court.
     (3) Upon demand of a trustee, a claimant
must produce any written evidence supporting a claim made under ORS 130.350 to
130.450 and account for any written evidence supporting a claim that is not
produced. [Formerly 128.268]
     130.380
Claim based on debt due or judgment. (1) If a claim on a debt due is presented and allowed, allowance shall
be in the amount of the debt remaining unpaid on the date of allowance.
     (2) If a judgment was entered on a claim
prior to the death of the settlor, the claim shall be presented under ORS
130.350 to 130.450 in the same manner as if no judgment had been entered, and a
copy of the judgment shall be attached to the claim. The claim may be
disallowed only if the judgment was void or voidable, or if the judgment could
have been set aside on the date of the settlorÂ’s death, or if the claim is not
presented within the time required by ORS 130.350. If the judgment was a lien
against the property of the trust estate on the date of the settlorÂ’s death,
the judgment shall be treated as a claim on a debt due for which the creditor
holds security. In all other respects, a claim that has been reduced to
judgment shall have the same priority under ORS 130.425 as a claim that has not
been reduced to judgment. [Formerly 128.272]
     130.385
Claim on debts not yet due.
A claim on a debt not due, whether or not the creditor holds security for the
claim, may be presented under ORS 130.350 to 130.450 as a claim on a debt due.
If the claim is allowed, allowance shall be in an amount equal to the value of
the debt on the date of allowance. The creditor, after allowance of the claim,
may withdraw the claim without prejudice to other remedies. Payment on the
basis of the amount allowed discharges the debt and the security, if any, held
by the creditor for the claim. [Formerly 128.274]
     130.390
Claim on secured debt that is due. (1) A claim on a debt due for which the creditor holds security may be
presented under ORS 130.350 to 130.450 as a claim on an unsecured debt due, or
the creditor may elect to rely entirely on the security without presentation of
the claim.
     (2) If the claim is presented under this
section, the claim shall describe the security. If the security is an
encumbrance that is recorded, the encumbrance may be described by reference to
the book, page, date and place of recording.
     (3) If a claim is presented and allowed
under this section, payment shall be on the basis of the amount of the debt
remaining unpaid on the date that the claim is allowed.
     (4) If the creditor surrenders the
security for a claim presented and allowed under this section, payment shall be
on the basis of the amount allowed.
     (5)(a) If the creditor does not surrender
the security for a claim presented and allowed under this section, and the
creditor exhausts the security before receiving payment on the claim, payment
shall be on the basis of the amount allowed less the amount realized on
exhausting the security unless otherwise provided by law.
     (b) If the creditor does not surrender the
security for a claim presented and allowed under this section, and the creditor
does not exhaust the security before receiving payment or does not have the
right to exhaust the security, payment shall be on the basis of the amount
allowed less the value of the security determined by agreement or as the court
may order.
     (6) The trustee may convey the secured
property to the creditor in consideration of the satisfaction or partial
satisfaction of the claim. [Formerly 128.276]
     130.395
Claim on contingent or unliquidated debt. (1) A claim on a contingent or unliquidated debt shall be presented
under ORS 130.350 to 130.450 in the same manner as other claims. If the debt
becomes absolute or liquidated before distribution of the trust estate, the
claim shall be paid in the same manner as a claim on an absolute or liquidated
debt.
     (2) If a contingent or unliquidated debt
does not become absolute or liquidated before distribution of the trust estate,
the trustee may provide for payment of the claim by any of the following
methods:
     (a) The creditor and trustee may
determine, by agreement, arbitration or compromise, the value of the debt and
the claim may be allowed and paid in the same manner as a claim on an absolute
or liquidated debt.
     (b) The trustee may distribute the trust
estate, but retain sufficient funds to pay the claim if and when the debt
becomes absolute or liquidated. Distribution of trust assets may not be delayed
under this paragraph for more than two years after distribution would otherwise
be required by the terms of the trust. If the debt does not become absolute or
liquidated within that time, the funds retained, after payment therefrom of any
expenses accruing during that time, shall be distributed to the beneficiaries.
     (3) A court may order the trustee to make
distribution of the trust estate as though the claim did not exist.
     (4) If after distribution under subsection
(2)(b) or (3) of this section the debt becomes absolute or liquidated, the
beneficiaries are liable to the creditor to the extent of the trust estate
received by them. Payment of the debt may be arranged by creating a trust,
giving a mortgage, securing a bond from a distributee or by other method. [Formerly
128.278]
     130.400
Allowance and disallowance of claims. (1) The trustee may compromise a claim against the trust estate.
     (2) A claim presented to a trustee under
ORS 130.350 to 130.450 shall be considered allowed as presented unless within
60 days after the date of presentment of the claim the trustee mails or
delivers a notice of disallowance of the claim in whole or in part to the
claimant and to the attorney of the claimant if the claimant has an attorney.
     (3) A notice of disallowance of a claim
shall inform the claimant that the claim has been disallowed in whole or in
part and, to the extent disallowed, will be barred unless the claimant requests
a summary determination or brings an action in the manner provided by
subsection (4) of this section.
     (4) If a trustee disallows a claim submitted
under ORS 130.350 to 130.450 in whole or in part, the claimant, within 30 days
after the date of mailing or delivery of the notice of disallowance, may:
     (a) File a request for summary
determination of the claim in the probate court, with proof of service of a
copy of the request upon the trustee or the attorney of the trustee; or
     (b) Commence a separate action against the
trustee on the claim in the circuit court.
     (5) If the claimant fails either to
request a summary determination or commence a separate action as provided in
subsection (4) of this section, the claim is barred to the extent the claim has
been disallowed by the trustee.
     (6) If a claimant prevails in a proceeding
or action under subsection (4) of this section, the claim shall be allowed or
judgment entered in the full amount determined to be due to the claimant. The
claim or judgment shall be paid from the assets of the trust estate only to the
extent that funds are available after payment of other claims with higher
priority under ORS 130.425.
     (7) If the claimant files a request for
summary determination of a claim under subsection (4) of this section, the
trustee may notify the claimant in writing that the claimant must commence a
separate action against the trustee on the claim within 60 days after the
claimant receives the notice. Notice under this subsection must be given by the
trustee within 30 days after the request for summary determination is served on
the trustee or the attorney of the trustee. If the claimant fails to commence a
separate action within the time allowed, the claim is barred to the extent the
claim has been disallowed by the trustee.
     (8) In a proceeding for summary
determination under this section:
     (a) The trustee shall make response to the
claim as though the claim were a complaint filed in an action.
     (b) The court shall hear the matter
without a jury, after notice to the claimant and trustee. The court shall
determine the claim in a summary manner, and shall make an order allowing or
disallowing the claim in whole or in part.
     (c) No appeal may be taken from the order
of the court made in a proceeding for summary determination under this section.
     (9) If a civil action is commenced under
subsection (4) of this section, a trustee, or beneficiary, may petition the
court to approve a proposed disposition of claims or to provide instructions on
the treatment of claims.
     (10) A claimant filing a request for
summary determination of a claim under subsection (4) of this section must pay
the filing fee required of a defendant or respondent under ORS 21.110 (1) and
other fees applicable to civil actions in circuit court. [Formerly 128.280]
     130.405
Creditor may obtain order for payment. A creditor whose claim has been allowed or established by summary
determination or separate action, and who has not received payment within six
months after the date of the first publication of notice to interested persons,
may apply to the court for an order directing the trustee to pay the claim. The
trustee may recover amounts owing under the claim from any beneficiary who
received a distribution from the trust estate. The right of recovery is limited
to the extent the beneficiaryÂ’s distribution would have been reduced by timely
payment of all allowed or established claims. [Formerly 128.282]
     130.410
Evidence required to allow court approval of claim disallowed by trustee. A claim that has been disallowed by a
trustee under ORS 130.350 to 130.450 may not be allowed by any court except
upon some competent, satisfactory evidence other than the testimony of the
claimant. [Formerly 128.284]
     130.415
Waiver of statute of limitations. A claim subject to ORS 130.350 to 130.450 that is barred by a statute
of limitations may not be allowed by the trustee or by any court except upon
the written direction or consent of those interested persons who would be
adversely affected by allowance of the claim. [Formerly 128.286]
     130.420
Tolling of statute of limitations on claim. If a claim is not barred by the statute of limitations on the date of
death of the settlor, the claim is not barred by any statute of limitations
until at least one year after the date of death. [Formerly 128.288]
     130.425
Priority of claims. (1)
Claims allowed against the trust estate under ORS 130.350 to 130.450 must be
paid by the trustee in the following order of priority:
     (a) Expenses of administering the trust
estate.
     (b) Expenses of a plain and decent funeral
and disposition of the remains of the settlor.
     (c) Debts and taxes with preference under
federal law.
     (d) Reasonable and necessary medical and
hospital expenses of the last illness of the settlor, including compensation of
persons attending the settlor.
     (e) Taxes with preference under the laws
of this state that are due and payable while possession of the trust estate of
the settlor is retained by the trustee.
     (f) Debts owed employees of the settlor
for labor performed within 90 days immediately preceding the date of death of
the settlor.
     (g) Child support arrearages.
     (h) A claim of the Department of Human
Services for the net amount of public assistance, as defined in ORS 411.010,
paid to or for the settlor, and the claim of the department for care and
maintenance of any settlor who was at a state institution to the extent
provided in ORS 179.610 to 179.770.
     (i) All other claims against the trust
estate.
     (2) If the assets of the trust estate are
insufficient to pay in full all expenses or claims of any one class specified
in subsection (1) of this section, each expense or claim of that class shall be
paid only in proportion to the amount thereof. [Formerly 128.290]
     130.430
Applicability of time limitations to public bodies. Notwithstanding ORS 12.250, all statutes of
limitations and other time limitations imposed under ORS 130.350 to 130.450
apply to actions brought in the name of the state, or brought in the name of
any county or public corporation, and to actions brought for the benefit of the
state or for the benefit of any county or public corporation. [Formerly
128.292]
     130.435
Applicability of time limitations to certain claims based on liens against
property and liability of settlor or trustee. The statutes of limitations and time limitations provided by ORS
130.350 to 130.450 do not affect:
     (1) Any proceeding to enforce a mortgage,
pledge or other lien upon property of the trust estate;
     (2) Any proceeding to quiet title or
reform any instrument with respect to title to property; or
     (3) To the limits of the insurance
protection only, any proceeding to establish liability of the settlor or the
trustee for which the settlor or trustee is protected by liability insurance at
the time the proceeding is commenced. [Formerly 128.294]
     130.440
Petition to close case. (1)
Not earlier than four months after the publication of notice to claimants, or
the date on which all claims against the trust estate have been resolved,
whichever is later, a trustee that has filed a petition under ORS 130.355 must
file a petition to close the case with a statement that all claims received by
the trustee have been paid in full or otherwise resolved in the manner required
by ORS 130.350 to 130.450. The trustee must attach to the petition an affidavit
attesting to compliance with ORS 130.365 and 130.370. The trustee must attach
to the affidavit a copy of the notice published under ORS 130.365 and a copy of
any notice delivered or mailed under ORS 130.370. The affidavit must attest to
the date on which each notice was delivered or mailed, and the name and address
of the person to whom each notice was delivered or mailed.
     (2) Upon the filing of the petition to
close the case in compliance with the provisions of this section, the court
shall enter an order closing the case. [Formerly 128.296]
     130.445
Dismissal for want of prosecution. (1) If the trustee does not file a petition to close the case under
ORS 130.440 within one year after filing a petition under ORS 130.355, the
court clerk shall mail a notice to the trustee, or the attorney for the trustee
if the trustee is represented by counsel, informing the trustee that a judgment
of dismissal will be entered in the case for want of prosecution unless an
application for a continuance is made to the court and good cause is shown
within 60 days after the date of the notice. Good cause for a continuance
includes the pendency of a separate action under ORS 130.400 (4).
     (2) If an application for a continuance is
not made under this section, or the court fails to find good cause for a
continuance, the court shall enter a judgment of dismissal of the proceeding
without prejudice. The dismissal does not bar a claimantÂ’s right to pursue
claims against a trustee, and a claimant shall have the same rights as if the
trustee filed no proceeding. [Formerly 128.298]
     130.450
Consolidation of proceedings.
If the proceeding to determine claims against a deceased settlor is pending
under ORS 130.350 to 130.450 at the same time as probate proceedings under ORS
chapter 115, upon motion of any party or upon the courtÂ’s own motion, any of
the courts conducting proceedings may:
     (1) Order a joint hearing or trial on the
common claims;
     (2) Order that the proceedings be
consolidated; or
     (3) Make orders concerning the proceedings
to avoid unnecessary costs for delays. [Formerly 128.300]
REVOCABLE TRUSTS
     130.500
UTC 601. Capacity of settlor of revocable trust. A person who has capacity to make a will has
capacity to create, amend, revoke or add property to a revocable trust, or to
direct the actions of the trustee of a revocable trust. [2005 c.348 §45]
     130.505
UTC 602. Revocation or amendment of revocable trust. (1) Unless the terms of a trust expressly
provide that the trust is irrevocable, the settlor of the trust may revoke or
amend the trust.
     (2) Unless the trust expressly provides
otherwise, if a revocable trust is created or funded by more than one settlor:
     (a) To the extent the trust consists of
community property, the trust may be revoked by either spouse acting alone but
may be amended only by joint action of both spouses;
     (b) To the extent the trust consists of
property other than community property, each settlor may revoke or amend the
trust as to the portion of the trust property attributable to that settlorÂ’s
contribution; and
     (c) Upon the revocation or amendment of
the trust by fewer than all of the settlors, the trustee shall promptly notify
the other settlors of the revocation or amendment.
     (3) The settlor may revoke or amend a
revocable trust:
     (a) By substantial compliance with a
method provided in the terms of the trust; or
     (b) If the terms of the trust do not
provide a method, by any other method, except for execution of a will or
codicil, manifesting clear and convincing evidence of the settlorÂ’s intent.
     (4) Upon revocation of a revocable trust,
the trustee shall deliver the trust property as the settlor directs.
     (5) A settlor’s powers with respect to
revocation, amendment or distribution of trust property may be exercised by an
agent or attorney-in-fact under a power of attorney only to the extent
expressly authorized by the terms of the trust.
     (6) The settlor’s conservator, or the
settlorÂ’s guardian if a conservator has not been appointed for the settlor, may
exercise a settlorÂ’s powers with respect to revocation, amendment or
distribution of trust property only with the approval of the court supervising
the conservatorship or guardianship.
     (7) A trustee who does not know that a
trust has been revoked or amended is not liable to the settlor or settlorÂ’s
successors in interest for distributions made and other actions taken on the
assumption that the trust had not been amended or revoked. [2005 c.348 §46]
     Note: Section 47, chapter 348, Oregon Laws 2005,
provides:
     Sec.
47. Section 46 (1) of this
2005 Act [130.505 (1)] does not apply to a trust created under an instrument
executed before the effective date of this 2005 Act [January 1, 2006]. [2005
c.348 §47]
     130.510
UTC 603. SettlorÂ’s powers; powers of withdrawal. (1) While the settlor of a revocable trust
is alive, rights of the beneficiaries are subject to the control of the
settlor, and the duties of the trustee are owed exclusively to the settlor.
Beneficiaries other than the settlor have no right to receive notice,
information or reports under ORS 130.710.
     (2) The rights of the beneficiaries with
respect to property that is subject to a power of withdrawal are subject to the
control of the holder of the power during the period that the power may be
exercised, and the duties of the trustee are owed exclusively to the holder of
a power of withdrawal with respect to the property that is subject to the
power. [2005 c.348 §48]
     130.515
UTC 604. Limitation on action contesting validity of revocable trust; distribution
of trust property. (1) A
person must commence a judicial proceeding to contest the validity of a trust
that was revocable at the settlorÂ’s death in the manner prescribed by ORS
12.020 within the earlier of:
     (a) Three years after the settlor’s death;
or
     (b) Four months after the trustee sends
the person a copy of the trust instrument and notice informing the person of
the trustÂ’s existence, of the trusteeÂ’s name and address and of the time
allowed for commencing a proceeding.
     (2) Upon the death of the settlor of a
trust that was revocable at the settlorÂ’s death, the trustee may proceed to
distribute the trust property in accordance with the terms of the trust. The
trustee is not subject to liability for distribution of the property unless:
     (a) The trustee knows of a pending
judicial proceeding contesting the validity of the trust; or
     (b) Any person has notified the trustee in
writing that the person might commence a judicial proceeding to contest the
trust and a judicial proceeding is commenced by the person within 60 days after
the person gives the notification.
     (3) If a trust is determined to be
invalid, any beneficiary who received a distribution from the trust is liable
to the person entitled to the distributed property for the amount or value of
the distribution. [2005 c.348 §49]
RULES GOVERNING
REVOCABLE TRUSTS
     130.520
Definition for ORS 130.520 to 130.575. For the purposes of ORS 130.520 to 130.575, “specific distribution”
means a distribution of specific property to a specific beneficiary that is
required under the terms of a trust instrument. [Formerly 128.370]
     130.525
Applicability of ORS 130.520 to 130.575. ORS 130.520 to 130.575 apply only to a trust, or a portion of a trust,
that comes into existence during the settlorÂ’s lifetime and is a revocable
trust at any time after the trust was created and before the death of the
settlor. [2005 c.348 §110]
     130.530
Effect of marriage. Unless
otherwise provided by the terms of the trust instrument, a trust is not revoked
by the marriage of the settlor after the trust instrument is executed. [Formerly
128.375]
     130.535
Revocation by divorce or annulment. (1) Unless otherwise provided by the terms of the trust instrument, a
settlorÂ’s divorce or the annulment of the settlorÂ’s marriage, after the trust
instrument is executed:
     (a) Revokes all provisions of the trust in
favor of the former spouse of the settlor;
     (b) Revokes all powers of appointment,
general or nongeneral, in the trust that are exercisable by the former spouse;
and
     (c) Revokes any provision in the trust
naming the former spouse as trustee.
     (2) Unless otherwise provided by the terms
of the trust instrument, a trust shall be construed as though the former spouse
predeceased the settlor if, after the trust instrument is executed, the settlor
divorces the spouse or the marriage of the settlor to the spouse is annulled. [Formerly
128.378]
     130.540
Contract of sale of property not revocation. Unless otherwise provided by the terms of the trust instrument, a
contract of sale made by a trustee to convey property that is the subject of a
specific distribution is not a revocation of the specific distribution. If all
or part of the property that is the subject of the contract of sale has not
been delivered at the time set in the trust instrument for the specific
distribution, the property passes by the specific distribution but is subject
to the terms of the contract of sale. [Formerly 128.380]
     130.545
Encumbrance or disposition of property after trust instrument executed. Unless otherwise provided by the terms of
the trust instrument:
     (1) A disposition of a portion of property
that is subject to a specific distribution does not affect the operation of the
trust upon the remaining portion of the property; and
     (2) If property subject to a specific
distribution is encumbered, the property passes under the specific distribution
but is subject to the encumbrance. [Formerly 128.382]
     130.550
When trust assets pass to descendants of beneficiary; class gifts. Unless otherwise provided by the terms of
the trust instrument, when property is to be distributed under the trust to any
beneficiary who is related by blood or adoption to the settlor, and the
beneficiary dies leaving lineal descendants either before the settlor dies or
before the time set in the trust instrument for distribution, the descendants
take by right of representation the property the beneficiary would have taken
if the beneficiary had not died. Unless otherwise provided by the terms of the
trust instrument, this section applies to a beneficiary who is entitled to
receive property under a class gift if the beneficiary dies after the trust
instrument is executed. [Formerly 128.385]
     130.555
Children born or adopted after execution of trust instrument. (1) As used in this section, “pretermitted
child” means a child of a settlor who is born or adopted after the execution of
the trust instrument, who is not provided for in the trust or mentioned in the
trust instrument and who survives the settlor.
     (2) If a settlor has one or more children
living when the settlor executes a trust instrument and no provision is made in
the trust for any of those children, a pretermitted child is not entitled to
any share of the trust estate.
     (3) If a settlor has one or more children
living when the settlor executes a trust instrument and provision is made in
the trust for any of those children, a pretermitted child is entitled to share
in the trust estate as follows:
     (a) The pretermitted child may share only
in the portion of the trust estate intended to benefit living children.
     (b) The share of each pretermitted child
is equal to the total value of the portion of the trust estate intended to
benefit the living children divided by the number of pretermitted children plus
the number of living children for whom provision, other than nominal provision,
is made in the trust.
     (c) To the extent possible, the interest
of each pretermitted child in the trust estate shall be of the same character,
whether equitable or legal, as the interest the settlor gave to the living
children under the trust.
     (4) If a settlor has no child living when
the settlor executes a trust instrument, a pretermitted child is entitled to a
share of the trust estate as though the settlor had died intestate and had not
executed the trust instrument.
     (5) A pretermitted child may recover the
share of the trust estate to which the child is entitled as follows:
     (a) If the pretermitted child is entitled
to a share of the trust estate under subsection (3) of this section, the share
must be recovered from the other children.
     (b) If the pretermitted child is entitled
to a share of the trust estate under subsection (4) of this section, the share
must be recovered from the beneficiaries on a pro rata basis, out of the
portions of the trust estate passing to those persons under the trust.
     (c) In reducing the shares of the
beneficiaries under this subsection, the character of the dispositive plan
adopted by the settlor in the trust must be preserved to the extent possible. [Formerly
128.388]
     130.560
Failure of specific distribution. (1) Subject to this section, a specific distribution does not fail by
reason of the destruction, damage, sale, condemnation or change in form of the
property that is the subject of the specific distribution unless:
     (a) The trust instrument provides that the
specific distribution fails under the particular circumstances; or
     (b) The settlor, during the lifetime of
the settlor, or the trustee gives property to the beneficiary of the specific
distribution with the intent of satisfying the specific distribution.
     (2) If part of the property that is the
subject of a specific distribution is destroyed, damaged, sold or condemned,
the remaining interest in the property passes pursuant to the specific
distribution. The part of the property that is destroyed, damaged, sold or
condemned is subject to subsections (3) to (6) of this section if the property
would have been adeemed under the common law had the property been subject to
probate in the settlorÂ’s estate.
     (3) If property that is the subject of a
specific distribution is insured and the property is destroyed or damaged, the
beneficiary of the specific distribution is entitled to receive the following
amounts, less any amount expended or incurred by the settlor or trust estate in
restoration or repair of the property:
     (a) Any insurance proceeds for the
destroyed or damaged property unpaid at the time set in the trust instrument
for the specific distribution; and
     (b) An amount equal to all insurance
payments paid to the settlor, and such proceeds or awards paid to the trustee
for the destroyed or damaged property, during the six-month period immediately
preceding the time set in the trust instrument for the specific distribution.
     (4) If property that is the subject of a
specific distribution is sold by the settlor or the trustee, the beneficiary of
the specific distribution is entitled to receive:
     (a) Any balance of the purchase price
unpaid at the time set in the trust instrument for the specific distribution,
including any security interest in the property and interest accruing before
the time set in the trust instrument for the specific distribution; and
     (b) An amount equal to all payments paid
to the settlor or the trustee for the property during the six-month period
immediately preceding the time set in the trust instrument for the specific
distribution. Acceptance of a promissory note of the purchaser or a third party
is not considered payment under this paragraph, but payment on the note is
payment on the purchase price.
     (5) If property that is the subject of a
specific distribution is taken by condemnation before the time set in the trust
instrument for the specific distribution, the beneficiary of the specific
distribution is entitled to receive:
     (a) Any amount of the condemnation award
unpaid at the time set in the trust instrument for the specific distribution;
and
     (b) An amount equal to the sums paid under
the condemnation award to the settlor or the trustee during the six-month
period immediately preceding the time set in the trust instrument for the
specific distribution.
     (6) If securities as defined in ORS 59.015
are the subject of a specific distribution, and after the execution of the
trust instrument other securities of the same or another entity are distributed
to the trustee or trust estate by reason of a partial liquidation, stock
dividend, stock split, merger, consolidation, reorganization, recapitalization,
redemption, exchange or any other similar transaction, the specific
distribution includes the additional or substituted securities.
     (7) The amount that a beneficiary of a
specific distribution receives under this section must be reduced by any
expenses of the sale or of the collection of the proceeds of insurance, sale or
condemnation award and by any amount by which income is increased by reasons of
items provided for in this section. Expenses subject to this subsection include
attorney fees. [Formerly 128.390]
     130.565
Effect of failure of specific distribution. If a specific distribution, other than a specific distribution that
governs the residue of the trust estate, fails for any reason, the property
that is the subject of the specific distribution becomes part of the residue
and must be distributed as provided by the terms of the trust instrument for
the residue. [Formerly 128.392]
     130.570
Advancement against share of trust. Property that the settlor gives during the settlorÂ’s lifetime to a
beneficiary of the trust is an advancement against the beneficiaryÂ’s share of
the trust only if either the settlor makes a written statement that the
property constitutes an advancement or the beneficiary makes a written
statement acknowledging that the property constitutes an advancement. For
purposes of applying the property against the beneficiaryÂ’s share of the trust,
the property must be valued as of the time the beneficiary takes possession or
enjoyment of the property, or as of the time of death of the settlor, whichever
occurs first. [Formerly 128.395]
     130.575
Effect of advancement on distribution. (1) If the value of an advancement made to a beneficiary under ORS
130.570 exceeds the beneficiaryÂ’s share in the trust estate, the beneficiary
shall be excluded from any further share of the trust estate, but the
beneficiary is not required to refund any part of the advancement. If the value
of the beneficiaryÂ’s share in the trust estate is greater than the value of all
property received as advancements, the beneficiary is entitled to receive from
the trust estate the balance of the share owing to the beneficiary after
deducting all amounts received as advancements.
     (2) For the purpose of determining the
shares of the beneficiaries of either a residuary gift or a class gift under a
trust, the value of all advancements made by the settlor to beneficiaries of
such gift shall be added to the value of the total property distributed
pursuant to the gift, the sum then divided among all beneficiaries of the gift,
and the value of the advancement then deducted from the share of the
beneficiary to whom the advancement was made. [Formerly 128.397]
OFFICE OF TRUSTEE
     130.600
UTC 701. Acceptance or rejection of trusteeship. (1) Except as otherwise provided in
subsection (3) or (4) of this section, a person designated as trustee accepts
the trusteeship:
     (a) By substantially complying with a
method of acceptance provided in the terms of the trust; or
     (b) If the terms of the trust do not
provide a method of acceptance, or the method provided in the terms of the
trust is not expressly made exclusive, by knowingly accepting delivery of the
trust property, knowingly exercising powers or performing duties as trustee, or
otherwise indicating acceptance of the trusteeship.
     (2) A person designated as trustee who has
not yet accepted the trusteeship may reject the trusteeship. A designated
trustee who does not accept the trusteeship within a reasonable time after
knowing of the designation is deemed to have rejected the trusteeship.
     (3) A person designated as trustee may act
to preserve the trust property without accepting the trusteeship. The person
must send a rejection of the trusteeship to the settlor within a reasonable
time after taking the action. If the settlor is dead or is financially incapable,
the person must send the rejection to a qualified beneficiary within a
reasonable time after taking the action.
     (4) A person designated as trustee may
inspect or investigate trust property to determine potential liability under
environmental or other law, or for any other purpose, without accepting the
trusteeship. [2005 c.348 §50]
     130.605
UTC 702. TrusteeÂ’s bond. (1)
A trustee shall acquire a bond to secure performance of the trusteeÂ’s duties
only if a bond is required by the terms of the trust or if a court finds that a
bond is needed to protect the interests of the beneficiaries. A court may waive
a bond required by the terms of a trust if the court finds that a bond is not
needed to protect the interests of the beneficiaries.
     (2) The court may specify the amount and
terms of a bond. The court may modify or terminate any requirement for a bond
at any time.
     (3) A trust company as defined in ORS
706.008 need not give a bond, even if required by the terms of the trust. [2005
c.348 §51]
     130.610
UTC 703. Cotrustees. (1)
Cotrustees who are unable to reach a unanimous decision may act by majority
decision.
     (2) If a vacancy occurs in a
cotrusteeship, the remaining cotrustee or cotrustees may act for the trust.
     (3) A cotrustee must participate in the performance
of a trusteeÂ’s function unless:
     (a) The cotrustee is unavailable to
perform the function because of absence, illness or disqualification under
other law;
     (b) The cotrustee is unavailable to
perform the function because the cotrustee is temporarily financially
incapable; or
     (c) The cotrustee has properly delegated
the performance of the function to another trustee.
     (4) If a cotrustee is unavailable to
perform duties because of absence, illness, disqualification under other law or
temporary financial incapability, and prompt action is necessary to achieve the
purposes of the trust or to avoid injury to the trust property, the remaining
cotrustee or a majority of the remaining cotrustees may act for the trust.
     (5) Except as prohibited in the terms of
the trust, a cotrustee may delegate to a cotrustee the performance of a
function. Unless a delegation was irrevocable, a cotrustee may revoke any
delegation.
     (6) Except as otherwise provided in
subsection (7) of this section, a cotrustee who does not join in an action of
another cotrustee is not liable for the action.
     (7) Each cotrustee shall exercise
reasonable care to:
     (a) Prevent a cotrustee from committing a
serious breach of trust; and
     (b) Compel a cotrustee to redress a
serious breach of trust.
     (8) A dissenting cotrustee who joins in an
action at the direction of the majority of the cotrustees and who notified any
cotrustee of the dissent at or before the time of the action is not liable for
the action unless the action is a serious breach of trust. [2005 c.348 §52]
     130.615
UTC 704. Vacancy in trusteeship; appointment of successor. (1) A vacancy in a trusteeship occurs if:
     (a) A person designated as trustee rejects
the trusteeship;
     (b) A person designated as trustee cannot
be identified, cannot be located or does not exist;
     (c) A trustee resigns;
     (d) A trustee is disqualified or removed;
     (e) A trustee dies; or
     (f) A guardian or conservator is appointed
for an individual serving as trustee.
     (2) If one or more cotrustees remain in
office, a vacancy in a trusteeship need not be filled. A vacancy in a
trusteeship must be filled if the trust has no remaining trustee.
     (3) A vacancy in a trusteeship of a
noncharitable trust that is required to be filled must be filled in the
following order of priority:
     (a) By a person designated in the terms of
the trust to act as successor trustee;
     (b) By a person appointed by unanimous
agreement of the qualified beneficiaries; or
     (c) By a person appointed by the court.
     (4) A vacancy in a trusteeship of a
charitable trust that is required to be filled must be filled in the following
order of priority:
     (a) By a person designated in the terms of
the trust to act as successor trustee;
     (b) By a person appointed by unanimous
agreement of the charitable organizations expressly designated to receive
distributions under the terms of the trust, all noncharitable qualified
beneficiaries and the Attorney General; or
     (c) By a person appointed by the court.
     (5) Whether or not a vacancy in a
trusteeship exists or is required to be filled, the court may appoint an
additional trustee or special fiduciary whenever the court considers the
appointment necessary for the administration of the trust. [2005 c.348 §53]
     130.620
UTC 705. Resignation of trustee. (1) A trustee may resign:
     (a) After at least 30 days’ notice to the
qualified beneficiaries, the settlor, if living, and all cotrustees; or
     (b) At any time with the approval of a
court.
     (2) If a court approves a resignation, the
court may issue orders and impose conditions reasonably necessary for the
protection of the trust property.
     (3) Any liability of a resigning trustee
or of any sureties on the trusteeÂ’s bond for acts or omissions of the trustee
is not discharged or affected by the trustee’s resignation. [2005 c.348 §54]
     130.625
UTC 706. Removal of trustee.
(1) The settlor, a cotrustee or a beneficiary may request that a court remove a
trustee, or a trustee may be removed by a court on its own motion.
     (2) A court may remove a trustee if the
court finds:
     (a) The trustee has committed a serious
breach of trust;
     (b) Lack of cooperation among cotrustees
substantially impairs the administration of the trust;
     (c) Removal of the trustee best serves the
interests of the beneficiaries because the trustee is unfit or unwilling, or
has persistently failed to administer the trust effectively; or
     (d) Removal of the trustee best serves the
interests of all of the beneficiaries and:
     (A) There has been a substantial change of
circumstances or removal has been requested by all of the qualified
beneficiaries;
     (B) Removal is not inconsistent with a
material purpose of the trust; and
     (C) A suitable cotrustee or successor
trustee is available.
     (3) Pending a final decision on a request
to remove a trustee, or in lieu of or in addition to removing a trustee, the
court may order such appropriate relief under ORS 130.800 (2) as may be
necessary to protect the trust property or the interests of the beneficiaries. [2005
c.348 §55]
     130.630
UTC 707. Delivery of property by former trustee. (1) Unless a cotrustee remains in office or
the court otherwise orders, a trustee who has resigned or been removed has the
duties of a trustee and the powers necessary to protect the trust property
until the trust property is delivered to a successor trustee or other person
who is entitled to the property.
     (2) A trustee who has resigned or been
removed shall proceed expeditiously to deliver any trust property in the
trusteeÂ’s possession to the cotrustee, successor trustee or other person who is
entitled to the property. [2005 c.348 §56]
     130.635
UTC 708. Compensation of trustee. (1) If the terms of a trust do not specify the trusteeÂ’s compensation,
a trustee is entitled to compensation that is reasonable under the
circumstances.
     (2) If the terms of a trust specify the
trusteeÂ’s compensation, the trustee is entitled to be compensated as specified,
but the court may allow more or less compensation if:
     (a) The duties of the trustee are
substantially different from those contemplated when the trust was created; or
     (b) The compensation specified by the
terms of the trust would be unreasonably low or high. [2005 c.348 §57]
     130.640
UTC 709. Reimbursement of expenses. (1) A trustee is entitled to be reimbursed out of the trust property,
with reasonable interest if appropriate, for:
     (a) Expenses that were properly incurred
in the administration of the trust; and
     (b) To the extent necessary to prevent
unjust enrichment of the trust, expenses that were not properly incurred in the
administration of the trust.
     (2) A trustee is entitled to be reimbursed
out of the trust property or from property that has been distributed from the
trust, with reasonable interest, for an advance of money made by the trustee
for the protection of the trust. [2005 c.348 §58]
DUTIES AND POWERS
OF TRUSTEE
     130.650
UTC 801. Duty to administer trust. Upon acceptance of a trusteeship, the trustee shall administer the
trust in good faith, in accordance with its terms and purposes and the
interests of the beneficiaries, and in accordance with this chapter. [2005
c.348 §59]
     130.655
UTC 802. Duty of loyalty.
(1) A trustee shall administer the trust solely in the interests of the
beneficiaries.
     (2) Subject to the rights of persons
dealing with or assisting the trustee as provided in ORS 130.855, a sale,
encumbrance or other transaction involving the investment or management of
trust property entered into by the trustee for the trusteeÂ’s own personal
account or that is otherwise affected by a conflict between the trusteeÂ’s
fiduciary and personal interests is voidable by a beneficiary affected by the
transaction unless:
     (a) The transaction was authorized by the
terms of the trust;
     (b) The transaction was approved by a
court;
     (c) The beneficiary did not commence a
judicial proceeding within the time allowed by ORS 130.820;
     (d) The beneficiary consented to the
trusteeÂ’s conduct, ratified the transaction or released the trustee in the
manner provided by ORS 130.840; or
     (e) The transaction involves a contract
entered into or claim acquired by the trustee before the person became or
contemplated becoming trustee.
     (3) A sale, encumbrance or other
transaction involving the investment or management of trust property is
presumed to be affected by a conflict between the personal and fiduciary interests
of the trustee if it is entered into by the trustee with:
     (a) The trustee’s spouse;
     (b) The trustee’s descendants, siblings or
parents, or their spouses;
     (c) An agent or attorney of the trustee;
or
     (d) A corporation or other person or
enterprise in which the trustee, or a person that owns a significant interest
in the trustee, has an interest that might affect the trusteeÂ’s best judgment.
     (4) Unless a trustee can establish that
the transaction was fair to the beneficiary, a transaction between a trustee
and a beneficiary that does not concern trust property but from which the
trustee obtains an advantage is voidable by the beneficiary if the transaction
occurs during the existence of the trust or while the trustee retains
significant influence over the beneficiary.
     (5) A transaction not concerning trust
property in which the trustee engages in the trusteeÂ’s individual capacity
involves a conflict between personal and fiduciary interests if the transaction
concerns an opportunity properly belonging to the trust.
     (6) An investment by a trustee in
securities of an investment company or an investment trust to which the
trustee, or an affiliate of the trustee, provides services in a capacity other
than as trustee is not presumed to be affected by a conflict between personal
and fiduciary interests if the investment otherwise complies with the prudent
investor rule of ORS 130.750 to 130.775. In addition to compensation for acting
as trustee, the trustee may be compensated by the investment company or investment
trust for providing those services out of fees charged to the trust. If the
trustee receives compensation from the investment company or investment trust
for providing investment advisory or investment management services, the
trustee at least annually shall give notice of the rate and method by which
that compensation was determined to the persons entitled under ORS 130.710 to
receive a copy of the trusteeÂ’s annual report.
     (7) In voting shares of stock of a
corporation or in exercising powers of control over similar interests in other
forms of business entities, the trustee shall act in the best interests of the
beneficiaries. If the trust is the sole owner of a corporation or other form of
business entity, the trustee shall elect or appoint directors or other managers
who will manage the corporation or entity in the best interests of the
beneficiaries.
     (8) This section does not preclude the
following transactions, if fair to the beneficiaries:
     (a) An agreement between a trustee and a
beneficiary relating to the appointment or compensation of the trustee;
     (b) Payment of reasonable compensation to
the trustee;
     (c) A transaction between a trust and
another trust, decedentÂ’s estate, custodianship or conservatorship of which the
trustee is a fiduciary or in which a beneficiary has an interest;
     (d) A deposit of trust money in a
financial institution operated by the trustee;
     (e) An advance by the trustee of money for
the protection of the trust;
     (f) An advance by the trustee of money to
the trust for the payment of expenses, losses or liabilities sustained by the
trustee in the administration of the trust or by reason of owning or possessing
any trust assets; or
     (g) A loan to the trustee for the
protection of the trust, or for the payment of expenses, losses or liabilities
sustained by the trustee in the administration of the trust or by reason of
owning or possessing any trust assets. A loan under this paragraph may be from
a lender operated by, or affiliated with, the trustee.
     (9) The court may appoint a special
fiduciary to make a decision with respect to any proposed transaction that
might violate this section if entered into by the trustee. [2005 c.348 §60;
2007 c.515 §2]
     Note: See note under 130.205.
     130.660
UTC 803. Impartiality. If a
trust has two or more beneficiaries, the trustee shall act impartially in
investing, managing and distributing the trust property, giving due regard to
the beneficiaries’ respective interests. [2005 c.348 §61]
     130.665
UTC 804. Prudent administration. A trustee shall administer the trust as a prudent person would, by
considering the purposes, terms, distributional requirements and other
circumstances of the trust. In satisfying this standard, the trustee shall
exercise reasonable care, skill and caution. [2005 c.348 §62]
     130.670
UTC 805. Costs of administration. In administering a trust, the trustee may incur only costs that are
reasonable in relation to the trust property, the purposes of the trust and the
skills of the trustee. [2005 c.348 §63]
     130.675
UTC 806. TrusteeÂ’s skills. A
trustee who has special skills or expertise, or is named trustee in reliance
upon the trusteeÂ’s representation that the trustee has special skills or
expertise, shall use those special skills or expertise in administering the trust.
[2005 c.348 §64]
     130.680
UTC 807. Delegation by trustee.
(1) A trustee may delegate duties and powers that a prudent trustee of
comparable skills could properly delegate under the circumstances. The trustee
shall exercise reasonable care, skill and caution in:
     (a) Selecting an agent;
     (b) Establishing the scope and terms of
the delegation, consistent with the purposes and terms of the trust; and
     (c) Periodically reviewing the agent’s
actions in order to monitor the agentÂ’s performance and compliance with the
terms of the delegation.
     (2) In performing a delegated function, an
agent owes a duty to the trust to exercise reasonable care to comply with the
terms of the delegation.
     (3) A trustee who complies with subsection
(1) of this section is not liable to the beneficiaries or to the trust for an
action of the agent.
     (4) By accepting a delegation of powers or
duties from the trustee of a trust that is subject to this stateÂ’s law, an
agent submits to the jurisdiction of the courts of this state. [2005 c.348 §65]
     130.685
UTC 808. Powers to direct.
(1) While a trust is revocable, the trustee may follow a direction of the
settlor that is contrary to the terms of the trust.
     (2) If the terms of a trust confer upon a
person other than the settlor of a revocable trust power to direct certain
actions of the trustee, the trustee shall act in accordance with an exercise of
the power unless the exercise is manifestly contrary to the terms of the trust
or the trustee knows the attempted exercise would constitute a serious breach
of a fiduciary duty that the person holding the power owes to the beneficiaries
of the trust.
     (3) The terms of a trust may confer upon a
trustee or other person a power to direct the modification or termination of
the trust.
     (4) A person other than a beneficiary who
holds a power to direct is rebuttably presumed to be a fiduciary and is
required to act in good faith with regard to the purposes of the trust and the
interests of the beneficiaries. The holder of a power to direct is liable for
any loss that results from breach of a fiduciary duty. [2005 c.348 §66]
     130.690
UTC 809. Control and protection of trust property. A trustee shall take reasonable steps to
take control of and protect the trust property. [2005 c.348 §67]
     130.695
UTC 810. Recordkeeping and identification of trust property. (1) A trustee shall keep adequate records of
the administration of the trust.
     (2) A trustee shall keep trust property
separate from the trusteeÂ’s own property.
     (3) Except as otherwise provided in
subsection (4) of this section, a trustee shall cause the trust property to be
designated so that the interest of the trust, to the extent feasible, appears
in records maintained by a party other than a trustee or beneficiary.
     (4) If the trustee maintains records
clearly indicating the respective interests of the different trusts, a trustee
may invest as a whole the property of two or more separate trusts. [2005 c.348 §68]
     130.700
UTC 811. Enforcement and defense of claims. A trustee shall take reasonable steps to enforce claims of the trust
and to defend claims against the trust. [2005 c.348 §69]
     130.705
UTC 812. Collecting trust property. A trustee shall take reasonable steps to compel a former trustee or
other person to deliver trust property to the trustee, and to remedy a breach
of trust known to the trustee to have been committed by a former trustee. [2005
c.348 §70]
     130.710
UTC 813. Duty to inform and report. (1) A trustee shall keep the qualified beneficiaries of the trust
reasonably informed about the administration of the trust and of the material
facts necessary for those beneficiaries to protect their interests. If
reasonable under the circumstances, a trustee may respond to a request for
information related to the administration of the trust from a beneficiary who
is not a qualified beneficiary.
     (2)(a) Upon request of a qualified
beneficiary, a trustee shall promptly furnish to the qualified beneficiary a
copy of the trust instrument.
     (b) Within a reasonable time after
accepting a trusteeship, a trustee shall notify all qualified beneficiaries of
the acceptance and of the trusteeÂ’s name, address and telephone number.
     (c) Within a reasonable time after the
date the trustee acquires knowledge of the creation of an irrevocable trust, or
the date the trustee acquires knowledge that a formerly revocable trust has
become irrevocable, whether by the death of the settlor or otherwise, the
trustee shall notify the qualified beneficiaries of the trustÂ’s existence, of
the identity of the settlor or settlors, of the right to request a copy of the
trust instrument and of the right to a trusteeÂ’s report as provided in
subsection (3) of this section.
     (d) A trustee shall notify the qualified
beneficiaries in advance of any change in the method or rate of the trusteeÂ’s
compensation.
     (3) At least annually and upon termination
of the trust, a trustee shall send a trustee report to the permissible
distributees of trust income or principal and to other qualified beneficiaries
who request the report. The report must include a listing of trust property and
liabilities, and must show the market values of trust assets, if feasible. The
report must reflect all receipts and disbursements of the trust, including the
source and amount of the trusteeÂ’s compensation. Upon a vacancy in a
trusteeship, unless a cotrustee remains in office, a trustee report must be
sent to the qualified beneficiaries by the former trustee. A personal
representative, conservator or guardian may send the qualified beneficiaries a
trustee report on behalf of a deceased or financially incapable trustee.
     (4) A qualified beneficiary may waive the
right to a trustee report or other information otherwise required to be
furnished under this section. A qualified beneficiary may withdraw a waiver at
any time for the purpose of future reports and other information.
     (5) A trustee may charge a reasonable fee
to a beneficiary for providing information under this section.
     (6) A beneficiary’s request for any
information under this section must be with respect to a single trust that is
sufficiently identified to enable the trustee to locate the trustÂ’s records.
     (7) If the trustee is bound by any
confidentiality restrictions regarding a trust asset, any beneficiary eligible
under this section to receive information about that asset must agree to be
bound by the same confidentiality restrictions before receiving the
information.
     (8) Despite any other provision of this
section, information, notice and reports required by this section shall be
given only to the settlorÂ’s spouse if:
     (a) The spouse survives the settlor;
     (b) The spouse is financially capable;
     (c) The spouse is the only permissible
distributee of the trust; and
     (d) All of the other qualified
beneficiaries of the trust are descendants of the spouse.
     (9) Despite any other provision of this
section, while the settlor of a revocable trust is alive, beneficiaries other
than the settlor have no right to receive notice, information or reports under
this section. [2005 c.348 §71]
     Note: Section 72, chapter 348, Oregon Laws 2005,
provides:
     Sec.
72. (1) Section 71 (2)(b) of
this 2005 Act [130.710 (2)(b)] applies only to a trustee who accepts a
trusteeship on or after the effective date of this 2005 Act [January 1, 2006].
     (2) Section 71 (2)(c) of this 2005 Act
[130.710 (2)(c)] applies only to irrevocable trusts created on or after the
effective date of this 2005 Act and to revocable trusts that become irrevocable
on or after the effective date of this 2005 Act. [2005 c.348 §72]
     130.715
UTC 814. Discretionary powers; tax savings. (1) A trustee shall exercise a discretionary power in good faith and
in a manner that is in accordance with the terms and purposes of the trust and
the interests of the beneficiaries. The duty imposed by this subsection is not
affected by the grant of discretion in the terms of the trust, even though the
terms of the trust provide that the trustee has absolute, sole or uncontrolled
discretion or use other words purporting to convey broad discretion.
     (2) Subject to subsection (4) of this
section, and unless the terms of the trust expressly provide otherwise:
     (a) A person other than a settlor who is a
beneficiary and trustee of a trust that confers on the trustee a power to make
discretionary distributions to or for the trusteeÂ’s personal benefit may
exercise the power only in accordance with an ascertainable standard; and
     (b) A trustee may not exercise a power to
make discretionary distributions to satisfy a legal obligation of support that
the trustee personally owes another person.
     (3) A power the exercise of which is
limited or prohibited by subsection (2) of this section may be exercised by a
majority of the remaining trustees whose exercise of the power is not so
limited or prohibited. If the power of all trustees is so limited or
prohibited, the court may appoint a special fiduciary with authority to
exercise the power.
     (4) Subsection (2) of this section does
not apply to:
     (a) A power held by the settlor’s spouse
who is the trustee of a trust for which a marital deduction, as described in
section 2056(b)(5) or 2523(e) of the Internal Revenue Code, as in effect on
January 1, 2006, was previously allowed;
     (b) Any trust during any period that the
trust may be revoked or amended by its settlor; or
     (c) A trust if contributions to the trust
qualify for the annual exclusion under section 2503(c) of the Internal Revenue
Code, as in effect on January 1, 2006. [2005 c.348 §73]
     130.720
UTC 815. General powers of trustee. (1) A trustee, without authorization by the court, may exercise powers
conferred by the terms of the trust and, except as limited by the terms of the
trust:
     (a) All powers over the trust property
that an unmarried financially capable owner has over individually owned
property;
     (b) Any other powers appropriate to achieve
the proper investment, management and distribution of the trust property; and
     (c) Any other powers conferred by this
chapter.
     (2) The exercise of a power is subject to
the fiduciary duties prescribed by ORS 130.650 to 130.730. [2005 c.348 §74]
     130.725
UTC 816. Specific powers of trustee. Without limiting the authority conferred by ORS 130.720, a trustee may
do any of the following:
     (1) Collect trust property and accept or
reject additions to the trust property from a settlor or any other person.
     (2) Acquire or sell property, for cash or
on credit, at public or private sale.
     (3) Exchange, partition or otherwise
change the character of trust property.
     (4) Deposit trust money in an account in a
financial institution, including a financial institution operated by the
trustee, if the deposit is adequately insured or secured.
     (5) Borrow money, with or without
security, to be repaid from trust assets or otherwise, and advance money for
the protection of the trust and for all expenses, losses and liabilities
sustained in the administration of the trust or because of the holding or
ownership of any trust assets. Money may be borrowed under this subsection from
any lender, including a financial institution operated by or affiliated with
the trustee. A trustee is entitled to be reimbursed out of the trust property
or from property that has been distributed from the trust, with reasonable
interest, for an advance of money under this subsection.
     (6) Continue operation of any
proprietorship, partnership, limited liability company, business trust,
corporation or other form of business or enterprise in which the trust has an
interest, and take any action that may be taken by shareholders, members or
property owners, including merging, dissolving or otherwise changing the form
of business organization or contributing additional capital.
     (7) Exercise the rights of an absolute
owner of stocks and other securities, including the right to:
     (a) Vote, or give proxies to vote, with or
without power of substitution, or enter into or continue a voting trust
agreement;
     (b) Hold a security in the name of a
nominee or in other form without disclosure of the trust so that title may pass
by delivery;
     (c) Pay calls, assessments and other sums
chargeable or accruing against the securities, and sell or exercise stock
subscription or conversion rights; and
     (d) Deposit the securities with a
depository or other financial institution.
     (8) Construct, repair, alter or otherwise
improve buildings or other structures on real property in which the trust has
an interest, demolish improvements, raze existing or erect new party walls or
buildings on real property in which the trust has an interest, subdivide or
develop land, dedicate land to public use or grant public or private easements,
and make or vacate plats and adjust boundaries.
     (9) Enter into a lease for any purpose as
lessor or lessee, including a lease or other arrangement for exploration and
removal of natural resources, with or without the option to purchase or renew,
even though the period of the lease extends beyond the duration of the trust.
     (10) Grant an option involving a sale,
lease or other disposition of trust property or acquire an option for the
acquisition of property, even though the option is exercisable after the trust
is terminated, and exercise an option so acquired.
     (11) Insure the property of the trust
against damage or loss and insure the trustee, the trusteeÂ’s agents, and
beneficiaries against liability arising from the administration of the trust.
     (12) Abandon or decline to administer
property of no value or property of a value that is not adequate to justify its
collection or continued administration.
     (13) Avoid possible liability for
violation of environmental law by:
     (a) Inspecting or investigating property
the trustee holds or has been asked to hold, or property owned or operated by
an organization in which the trustee holds or has been asked to hold an
interest, for the purpose of determining the application of environmental law
with respect to the property;
     (b) Taking action to prevent, abate or
otherwise remedy any actual or potential violation of any environmental law
affecting property held directly or indirectly by the trustee, whether taken
before or after the assertion of a claim or the initiation of governmental
enforcement;
     (c) Declining to accept property into
trust or disclaiming any power with respect to property that is or may be
burdened with liability for violation of environmental law;
     (d) Compromising claims against the trust
that may be asserted for an alleged violation of environmental law; and
     (e) Paying the expense of any inspection,
review, abatement or remedial action to comply with environmental law.
     (14) Pay or contest any claim, settle a
claim by or against the trust, and release, in whole or in part, a claim
belonging to the trust.
     (15) Pay taxes, assessments, compensation
of the trustee and of employees and agents of the trust, and other expenses
incurred in the administration of the trust.
     (16) Exercise elections available under
federal, state and local tax laws.
     (17) Select a mode of payment under any
employee benefit or retirement plan, annuity or life insurance payable to the
trustee, exercise rights under employee benefit or retirement plans, annuities
or policies of life insurance, including exercise of the right to
indemnification for expenses and against liabilities, and take appropriate
action to collect the proceeds.
     (18) Make loans out of trust property. The
trustee may make a loan to a beneficiary on terms and conditions the trustee
considers to be fair and reasonable under the circumstances. The trustee may
collect loans made to a beneficiary by making deductions from future
distributions to the beneficiary.
     (19) Pledge trust property to guarantee
loans made by others to the beneficiary.
     (20) Appoint a trustee to act in another
state, country or other jurisdiction with respect to trust property located in
the other state, country or other jurisdiction, confer upon the appointed
trustee all of the powers and duties of the appointing trustee, require that
the appointed trustee furnish security and remove any trustee so appointed.
     (21) Make a distribution to a beneficiary
who is under a legal disability or who the trustee reasonably believes is
financially incapable, either:
     (a) Directly;
     (b) By application of the distribution for
the beneficiaryÂ’s benefit;
     (c) By paying the distribution to the
beneficiaryÂ’s conservator or, if the beneficiary does not have a conservator,
the beneficiaryÂ’s guardian;
     (d) By creating a custodianship under the
Uniform Transfers to Minors Act by paying the distribution to a custodian for
the beneficiary;
     (e) By paying the distribution to any
existing custodian under the Uniform Transfers to Minors Act;
     (f) By paying the distribution to an adult
relative or other person having legal or physical care or custody of the
beneficiary, to be expended on the beneficiaryÂ’s behalf, if the trustee does
not know of a conservator, guardian or custodian for the beneficiary; or
     (g) By managing the distribution as a
separate fund held by the trustee on behalf of the beneficiary, subject to the
beneficiaryÂ’s continuing right to withdraw the distribution.
     (22) On distribution of trust property or
the division or termination of a trust, make distributions in divided or
undivided interests, allocate particular assets in proportionate or
disproportionate shares, value the trust property for those purposes and adjust
for resulting differences in valuation.
     (23) Resolve a dispute concerning the
interpretation of the trust or the administration of the trust by mediation,
arbitration or other procedure for alternative dispute resolution.
     (24) Prosecute or defend an action, claim
or judicial proceeding in any state, country or other jurisdiction to protect
trust property and the trustee in the performance of the trusteeÂ’s duties.
     (25) Sign and deliver contracts and other
instruments that are useful to achieve or facilitate the exercise of the
trusteeÂ’s powers.
     (26) On termination of the trust, exercise
the powers appropriate to wind up the administration of the trust and
distribute the trust property to the persons entitled to the property.
     (27) Allocate items of income or expense
to either trust income or principal, as provided by law, including creation of
reserves out of income for depreciation, obsolescence or amortization, or for
depletion in mineral or timber properties.
     (28) Employ persons, including attorneys,
auditors, investment advisors or agents, to advise or assist the trustee in the
performance of administrative duties. A trustee may act based on the
recommendations of professionals without independently investigating the
recommendations.
     (29) Apply for and qualify all or part of
the property in the trust estate for special governmental tax programs or other
programs that may benefit the trust estate or any of the beneficiaries.
     (30) Deposit securities in a clearing
corporation as provided in ORS 128.100. [2005 c.348 §75; 2007 c.515 §3]
     Note: See note under 130.205.
     130.730
UTC 817. Distribution upon termination. (1) Upon termination or partial termination of a trust, the trustee
may send to the beneficiaries a proposal for distribution. The right of any
beneficiary to object to a distribution made pursuant to the proposal
terminates if the beneficiary does not notify the trustee of an objection
within 30 days after the proposal was sent, but only if the proposal informed
the beneficiary of the right to object and the time allowed for objection.
     (2) Upon the occurrence of an event terminating
or partially terminating a trust, the trustee shall proceed expeditiously to
distribute the trust property to the persons entitled to the property. The
trustee may retain a reasonable reserve for the payment of debts, expenses and
taxes.
     (3) A release by a beneficiary of a
trustee from liability for breach of trust is invalid to the extent:
     (a) The release was induced by improper
conduct of the trustee; or
     (b) The beneficiary, at the time of the
release, did not know of the beneficiaryÂ’s rights or of the material facts
relating to the breach. [2005 c.348 §76]
UNIFORM PRUDENT
INVESTOR ACT
     130.750
TrusteeÂ’s duty to comply with prudent investor rule. (1) Except as otherwise provided in
subsection (2) of this section, a trustee who invests and manages trust assets
owes a duty to the beneficiaries of the trust to comply with the prudent
investor rule set forth in ORS 130.755.
     (2) The prudent investor rule is a default
rule that may be expanded, restricted, eliminated or otherwise altered by the
provisions of a trust. A trustee is not liable to a beneficiary to the extent
that the trustee acted in reasonable reliance on the provisions of the trust. [2005
c.348 §77]
     130.755
Prudent investor rule. (1) A
trustee shall invest and manage trust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements and other
circumstances of the trust. In satisfying this standard, the trustee shall
exercise reasonable care, skill and caution.
     (2) A trustee’s investment and management
decisions respecting individual assets are not evaluated in isolation, but in
the context of the trust portfolio as a whole and as a part of the overall
investment strategy having risk and return objectives reasonably suited to the
trust.
     (3) A trustee shall consider all relevant
circumstances in investing and managing trust assets, including any of the
following that are relevant to the trust or the beneficiaries of the trust:
     (a) General economic conditions;
     (b) The possible effect of inflation or deflation;
     (c) The expected tax consequences of
investment decisions or strategies;
     (d) The role that each investment or
course of action plays within an overall trust portfolio, which may include
financial assets, interests in closely held enterprises, tangible and
intangible personal property, and real property;
     (e) The expected total return from income
and the appreciation of capital;
     (f) Other resources of the beneficiaries;
     (g) Needs for liquidity, regularity of
income and preservation or appreciation of capital; and
     (h) An asset’s special relationship or
special value, if any, to the purposes of the trust or to one or more of the
beneficiaries.
     (4) A trustee shall make a reasonable
effort to verify facts relevant to the investment and management of trust
assets.
     (5) A trustee may invest in any kind of
property or type of investment consistent with the standards of ORS 130.750 to
130.775.
     (6) A trustee who has special skills or
expertise, or is named trustee in reliance upon the trusteeÂ’s representation
that the trustee has special skills or expertise, has a duty to use those
special skills or expertise in investing and managing trust assets. [2005 c.348
§78]
     130.760
Diversification of trust investments. A trustee shall diversify the investments of the trust unless the
trustee reasonably determines that, because of special circumstances, the
purposes of the trust are better served without diversifying. [2005 c.348 §79]
     130.765
Trustee duty. Within a
reasonable time after accepting a trusteeship or receiving trust assets, a
trustee shall review the trust assets and make and implement decisions
concerning the retention and disposition of assets in order to bring the trust
portfolio into compliance with the requirements of ORS 130.750 to 130.775 and
with the purposes, terms, distribution requirements and other circumstances of
the trust. [2005 c.348 §80]
     130.770
Determination of compliance with prudent investor rule. Compliance with the prudent investor rule is
determined in light of the facts and circumstances existing at the time of a
trustee’s decision or action and not by hindsight. [2005 c.348 §81]
     130.775
Trust language authorizing investments permitted under prudent investor rule. Unless otherwise limited or modified, the
following terms or comparable language in the provisions of a trust authorize
any investment or strategy permitted under ORS 130.750 to 130.775: “investments
permissible by law for investment of trust funds,” “legal investments,” “authorized
investments,” “using the judgment and care under the circumstances then
prevailing that persons of prudence, discretion and intelligence exercise in
the management of their own affairs, not in regard to speculation but in regard
to the permanent disposition of their funds, considering the probable income as
well as the probable safety of their capital,” “prudent man rule,” “prudent
trustee rule” and “prudent investor rule.” [2005 c.348 §82]
LIABILITY OF
TRUSTEE AND RIGHTS OF PERSONS DEALING WITH TRUSTEE
     130.800
UTC 1001. Remedies for breach of trust. (1) A violation by a trustee of a duty the trustee owes to a
beneficiary is a breach of trust. A breach of trust may occur by reason of an
action or by reason of a failure to act.
     (2) To remedy a breach of trust that has
occurred or to prevent a breach of trust, the court may:
     (a) Compel the trustee to perform the
trusteeÂ’s duties;
     (b) Enjoin the trustee from committing a
breach of trust;
     (c) Compel the trustee to pay money or
restore property;
     (d) Order a trustee to account;
     (e) Appoint a special fiduciary to take
possession of the trust property and administer the trust;
     (f) Suspend the trustee;
     (g) Remove the trustee as provided in ORS
130.625;
     (h) Reduce or deny compensation to the
trustee;
     (i) Subject to ORS 130.855, void an act of
the trustee, impose a lien or a constructive trust on trust property, or trace
trust property wrongfully disposed of and recover the property or its proceeds;
or
     (j) Order any other appropriate relief. [2005
c.348 §83]
     130.805
UTC 1002. Damages for breach of trust. (1) A trustee who commits a breach of trust is liable to the
beneficiaries affected for the greater of:
     (a) The amount of damages caused by the
breach;
     (b) The amount required to restore the
value of the trust property and trust distributions to what they would have
been had the breach not occurred; or
     (c) The profit the trustee made by reason
of the breach.
     (2) Except as otherwise provided in this
subsection, if more than one trustee is liable to the beneficiaries for a
breach of trust, a trustee is entitled to contribution from the other trustee
or trustees. In determining the amount of contribution, the court shall
consider the degree of fault of each trustee and whether any trustee or
trustees acted in bad faith or with reckless indifference to the purposes of
the trust or the interests of the beneficiaries. A trustee who received a
benefit from the breach of trust is not entitled to contribution from another
trustee to the extent of the benefit received. [2005 c.348 §84]
     130.810
UTC 1003. Damages in absence of breach. (1) Except as provided by ORS 130.725 (4) and (15) or 709.175 or other
law of this state, a trustee is accountable to an affected beneficiary for any
profit made by the trustee arising from the administration of the trust,
without regard to whether the profit resulted from a breach of trust.
     (2) Unless there is a breach of trust, a
trustee is not liable to a beneficiary for a loss or depreciation in the value
of trust property or for not having made a profit. [2005 c.348 §85]
     130.815
UTC 1004. Attorney fees and costs. In a judicial proceeding involving the validity or administration of a
trust, the court may award costs and expenses and reasonable attorneyÂ’s fees to
any party, to be paid by another party or from the trust. [2005 c.348 §86]
     130.820
UTC 1005. Limitation of action against trustee. (1) Notwithstanding ORS chapter 12 or any
other provision of law, but subject to subsection (2) of this section, a civil
action against a trustee based on any act or omission of the trustee, whether
based in tort, contract or other theory of recovery, must be commenced within
six years after the date the act or omission is discovered, or six years after
the date the act or omission should have been discovered, whichever is earlier.
     (2) A beneficiary may not commence a
proceeding against a trustee more than one year after the date the beneficiary
or a representative of the beneficiary is sent a report by certified or regular
mail that adequately discloses the existence of a potential claim and that
informs the beneficiary of the time allowed for commencing a proceeding. A copy
of this section must be attached to the report. The report must provide
sufficient information so that the beneficiary or representative knows of the potential
claim or should have inquired into its existence.
     (3) If subsections (1) and (2) of this
section do not apply, a judicial proceeding against a trustee must be commenced
within 10 years from the date of the act or omission complained of, or two years
from the termination of any fiduciary account established under the trust,
whichever is later. [2005 c.348 §87]
     130.825
UTC 1006. Reliance on trust instrument. A trustee who acts in reasonable reliance on the terms of the trust as
expressed in the trust instrument is not liable to a beneficiary for a breach
of trust to the extent the breach resulted from the reliance. [2005 c.348 §88]
     130.830
UTC 1007. Event affecting administration or distribution. A trustee is not liable for failing to
determine whether a marriage, a divorce, a death, the performance of
educational requirements or another event affecting the administration or
distribution of a trust has occurred if the trustee has exercised reasonable
care in attempting to determine whether the event has occurred. [2005 c.348 §89]
     130.835
UTC 1008. Exculpation of trustee. (1) A term of a trust relieving a trustee of liability for breach of
trust is unenforceable to the extent that the term:
     (a) Relieves the trustee of liability for
breach of trust committed in bad faith or with reckless indifference to the
purposes of the trust or the interests of the beneficiaries; or
     (b) Was inserted as the result of an abuse
by the trustee of a fiduciary or confidential relationship to the settlor.
     (2) An exculpatory term drafted or caused
to be drafted by the trustee is invalid as an abuse of a fiduciary or
confidential relationship unless:
     (a) The settlor is represented by an
independent counsel who reviewed the term; or
     (b) The trustee proves that the exculpatory
term is fair under the circumstances and that the termÂ’s existence and contents
were adequately communicated to the settlor. [2005 c.348 §90]
     130.840
UTC 1009. BeneficiaryÂ’s consent, release or ratification. If a beneficiary consents to conduct of a
trustee that constitutes a breach of trust, releases a trustee from liability
for a breach of trust or ratifies a transaction entered into by a trustee that
constitutes a breach of trust, the trustee is not liable to the beneficiary for
the breach of trust unless:
     (1) The consent, release or ratification
of the beneficiary was induced by improper conduct of the trustee; or
     (2) At the time of the consent, release or
ratification, the beneficiary did not know of the beneficiaryÂ’s rights or know
of the material facts relating to the breach. [2005 c.348 §91]
     130.845
UTC 1010. Limitation on personal liability of trustee. (1) Except as otherwise provided in the
contract, a trustee is not personally liable on a contract properly entered
into in the trusteeÂ’s fiduciary capacity in the course of administering the
trust if the trustee disclosed the trusteeÂ’s fiduciary capacity in the
contract.
     (2) A trustee is personally liable for
torts committed in the course of administering a trust or for obligations
arising from ownership or control of trust property, including liability for
violation of environmental law, only if the trustee is personally at fault.
     (3) The following claims may be asserted
in a judicial proceeding against the trustee in the trusteeÂ’s fiduciary
capacity, whether or not the trustee is personally liable for the claim:
     (a) A claim based on a contract entered
into by a trustee in the trusteeÂ’s fiduciary capacity.
     (b) A claim based on an obligation arising
from ownership or control of trust property.
     (c) A claim based on a tort committed in
the course of administering a trust.
     (4) This section does not impose personal
liability on a trustee solely because the trustee holds property under an
instrument that shows title in the name of the trustee but does not state that
the trustee holds the property in a representative capacity. [2005 c.348 §92]
     130.850
UTC 1011. Interest as general partner. (1) Except as otherwise provided in subsection (3) of this section or
unless personal liability is imposed in the contract, a trustee who holds an
interest as a general partner in a general or limited partnership is not
personally liable on a contract entered into by the partnership after the trustÂ’s
acquisition of the interest if the trusteeÂ’s fiduciary capacity is disclosed.
     (2) Except as otherwise provided in
subsection (3) of this section, a trustee who holds an interest as a general
partner is not personally liable for torts committed by the partnership or for
obligations arising from ownership or control of the interest unless the
trustee is personally at fault.
     (3) The immunity provided by this section
does not apply if an interest in a partnership is held by the trustee in a
capacity other than that of trustee.
     (4) If the trustee of a revocable trust
holds an interest as a general partner, the settlor is personally liable for
contracts and other obligations of the partnership to the same extent that the
settlor would be liable if the settlor were a general partner. [2005 c.348 §93]
     130.855
UTC 1012. Protection of person dealing with trustee. (1) A person other than a beneficiary who in
good faith assists a trustee, or who in good faith and for value deals with a
trustee, is not liable for acts of the trustee that exceed the trusteeÂ’s powers
or for the improper exercise of the trusteeÂ’s powers, unless the person knows
that the trustee has exceeded the trusteeÂ’s powers or improperly exercised
those powers.
     (2) A person other than a beneficiary who
deals with a trustee in good faith is not required to inquire about the extent
of the trusteeÂ’s powers or about the propriety of the trusteeÂ’s exercise of
those powers.
     (3) A person who in good faith delivers
assets to a trustee need not ensure that the assets are properly applied.
     (4) Any person other than a beneficiary
who in good faith assists a former trustee, or who in good faith and for value
deals with a former trustee, without knowledge that the trusteeship has
terminated, is not liable solely because the former trustee is no longer a
trustee.
     (5) Comparable protective provisions of
other laws relating to commercial transactions or transfer of securities by
fiduciaries prevail over the protection provided by this section. [2005 c.348 §94]
     130.860
UTC 1013. Certification of trust. (1) A person who is not a beneficiary and who proposes to deal with
the trustee of a trust may require that all trustees execute and furnish to the
person a certification of trust.
     (2) The certification of trust shall
contain the following information:
     (a) That the trust exists and the date the
trust instrument was executed;
     (b) The identity of the settlor;
     (c) The identity and address of the
currently acting trustee;
     (d) The powers of the trustee;
     (e) The revocability or irrevocability of
the trust and the identity of any person holding a power to revoke the trust;
     (f) The existence or nonexistence of any
power to modify or amend the trust and the identity of any person holding a
power to modify or amend the trust;
     (g) The authority of cotrustees to sign or
otherwise authenticate and whether all cotrustees or fewer than all are
required in order to exercise powers of the trustee;
     (h) The trust’s taxpayer identification
number, whether the settlorÂ’s Social Security number or an employer
identification number;
     (i) The manner of taking title to trust
property; and
     (j) The state, country or other
jurisdiction under the laws of which the trust was established.
     (3) A certification of trust must be
signed or otherwise authenticated by all the trustees.
     (4) A certification of trust must state
that the trust has not been revoked, modified or amended in any manner that
would cause the representations contained in the certification of trust to be
incorrect.
     (5) A certification of trust need not
contain the dispositive terms of a trust.
     (6) A recipient of a certification of
trust may not require the trustee to furnish the entire trust instrument, but
may require the trustee to furnish copies of excerpts from the original trust
instrument and later amendments that designate the trustee and confer upon the
trustee the power to act in the pending transaction.
     (7) A person may require that the
certification of trust:
     (a) Include facts other than those listed
in this section that are reasonably related to the administration of the trust;
     (b) Be executed by one or more of the
settlors;
     (c) Be executed by one or more of the
beneficiaries if the certification is reasonably related to a pending or
contemplated transaction with the person; and
     (d) Be adapted to the person’s own standard
form, which may be incorporated in an account signature agreement or other
account document.
     (8) A certification of trust may contain
the identity of any successor trustee or trustees and the circumstances under
which any successor trustee or trustees will assume trust powers.
     (9)(a) A person who acts in reliance upon
a certification of trust without actual knowledge that the representations
contained in the certification are incorrect is not liable to any person for so
acting and may assume without inquiry the existence of the facts contained in
the certification. A person does not have actual knowledge that the
representations contained in the certification are incorrect solely by reason
of having a copy of all or part of the trust instrument.
     (b) Any transaction, and any lien created
by that transaction, is enforceable against a trust if the transaction is
entered into by a person acting in reliance on a certification of trust
containing the information set forth in this section without actual knowledge
that the representations contained in the certification are incorrect.
     (c) If a person has actual knowledge that
the trustee or trustees are acting outside the scope of the trust, and the
actual knowledge was acquired by the person before entering into the
transaction or making a binding commitment to do so, the transaction is not
enforceable against the trust.
     (10) A person is not liable for acting in
reliance on a certification of trust solely because the certification fails to
contain all the information required in this section.
     (11) This section does not limit the
rights of the beneficiaries of the trust against a trustee.
     (12) A person’s failure to demand or
refusal to accept and rely solely upon a certification of trust does not affect
the protection provided the person by ORS 130.855, and no inference as to
whether the person has acted in good faith may be drawn from the failure to
demand or the refusal to accept and rely solely upon a certification.
     (13) This section applies to all trusts,
whether established under the laws of this state or under the law of another
state, country or other jurisdiction. [2005 c.348 §95]
MISCELLANEOUS
PROVISIONS
     130.900
Uniformity of application and construction. In applying and construing ORS chapter 130, consideration must be
given to the need to promote uniformity of the law with respect to trusts among
states that enact the Uniform Trust Code. [2005 c.348 §96]
     Note: 130.900 to 130.910 were enacted into law by
the Legislative Assembly but were not added to or made a part of ORS chapter
130 or any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
     130.905
UTC 1102. Electronic records and signatures. The legal effect, validity or enforceability of electronic records or
electronic signatures under ORS chapter 130, and of contracts formed or
performed with the use of such records or signatures, are governed by ORS
84.001 to 84.061. [2005 c.348 §97]
     Note: See note under 130.900.
     130.910
UTC 1106. Application. (1)
Except as otherwise provided in ORS chapter 130:
     (a) ORS chapter 130 applies to all trusts
created before, on or after January 1, 2006.
     (b) ORS chapter 130 does not apply to
judicial, administrative and other proceedings concerning trusts commenced
before January 1, 2006.
     (c) Any rule of construction or
presumption provided in ORS chapter 130 applies to trust instruments executed
before January 1, 2006, unless there is a clear indication of a contrary intent
in the terms of the trust.
     (d) An act done before January 1, 2006, is
not affected by ORS chapter 130.
     (2) If a right is acquired, extinguished
or barred upon the expiration of a prescribed period that has commenced to run
under any other statute before January 1, 2006, that statute continues to apply
to the right even if it has been repealed or superseded. [2005 c.348 §98]
     Note: See note under 130.900.
_______________
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