US Laws, Codes, Statutes & Cases

Chapter 130 — Uniform Trust Code

 

2007 EDITION

 

UNIFORM TRUST CODE

 

PROTECTIVE PROCEEDINGS; POWERS OF ATTORNEY; TRUSTS

 

GENERAL PROVISIONS AND DEFINITIONS

 

130.001     UTC 101. Short title

 

130.005     UTC 102. Scope

 

130.010     UTC 103. Definitions

 

130.015     UTC 104. Knowledge

 

130.020     UTC 105. Default and mandatory rules

 

130.022     UTC 108. Principal place of administration

 

130.025     UTC 106. Common law of trusts; principles of equity

 

130.030     UTC 107. Governing law

 

130.035     UTC 109. Methods of giving notice; waiver of notice

 

130.040     UTC 110. Other persons treated as qualified beneficiaries

 

130.045     UTC 111. Nonjudicial settlement agreements

 

JUDICIAL PROCEEDINGS

 

130.050     UTC 201. Role of court in administration of trust

 

130.055     UTC 202. Jurisdiction over trustee and beneficiary

 

130.060     UTC 203. Subject-matter jurisdiction

 

130.065     UTC 204. Venue

 

REPRESENTATION

 

130.100     UTC 301. Representation; basic effect

 

130.105     UTC 302. Representation by holder of testamentary power of appointment

 

130.110     UTC 303. Representation by fiduciaries and parents

 

130.115     UTC 304. Representation by person having substantially identical interest

 

130.120     UTC 305. Appointment of special representative

 

CREATION, VALIDITY, MODIFICATION AND TERMINATION OF TRUST

 

130.150     UTC 401. Methods of creating trust

 

130.155     UTC 402. Requirements for creation

 

130.160     UTC 403. Trusts created in other states, countries or jurisdictions

 

130.165     UTC 404. Trust purposes

 

130.170     UTC 405. Charitable purposes; enforcement

 

130.175     UTC 406. Creation of trust induced by fraud, duress or undue influence

 

130.180     UTC 407. Evidence of oral trust

 

130.185     UTC 408. Pet trust

 

130.190     UTC 409. Noncharitable trust without ascertainable beneficiary

 

130.195     UTC 410. Modification or termination of trust; proceedings for approval or disapproval

 

130.200     UTC 411. Modification or termination of irrevocable trust by consent

 

130.205     UTC 412. Modifications or termination because of unanticipated circumstances or inability to administer trust effectively

 

130.210     UTC 413. Cy pres

 

130.215     UTC 414. Modification or termination of uneconomic trust

 

130.220     UTC 415. Reformation to correct mistakes

 

130.225     UTC 416. Modification to achieve settlor’s tax objectives

 

130.230     UTC 417. Combination and division of trusts

 

130.235     In terrorem clause

 

130.240     Marital deduction gifts

 

CREDITOR’S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS

 

130.300     UTC 501. Rights of beneficiary’s creditor or assignee

 

130.305     UTC 502. Spendthrift provision

 

130.310     UTC 503. Exceptions to spendthrift provisions

 

130.315     UTC 505. Creditor’s claim against settlor

 

130.320     UTC 506. Overdue distribution

 

130.325     UTC 507. Personal obligations of trustee

 

CLAIMS AGAINST TRUST BASED ON DEBTS OF SETTLOR

 

130.350     Statute of limitations

 

130.355     Commencement of proceeding

 

130.360     Limitation on presentation of claims when notice to claimants given

 

130.365     Publication of notice

 

130.370     Notice to individual claimants

 

130.375     Form of claim; evidence in support

 

130.380     Claim based on debt due or judgment

 

130.385     Claim on debts not yet due

 

130.390     Claim on secured debt that is due

 

130.395     Claim on contingent or unliquidated debt

 

130.400     Allowance and disallowance of claims

 

130.405     Creditor may obtain order for payment

 

130.410     Evidence required to allow court approval of claim disallowed by trustee

 

130.415     Waiver of statute of limitations

 

130.420     Tolling of statute of limitations on claim

 

130.425     Priority of claims

 

130.430     Applicability of time limitations to public bodies

 

130.435     Applicability of time limitations to certain claims based on liens against property and liability of settlor or trustee

 

130.440     Petition to close case

 

130.445     Dismissal for want of prosecution

 

130.450     Consolidation of proceedings

 

REVOCABLE TRUSTS

 

130.500     UTC 601. Capacity of settlor of revocable trust

 

130.505     UTC 602. Revocation or amendment of revocable trust

 

130.510     UTC 603. Settlor’s powers; powers of withdrawal

 

130.515     UTC 604. Limitation on action contesting validity of revocable trust; distribution of trust property

 

RULES GOVERNING REVOCABLE TRUSTS

 

130.520     Definition for ORS 130.520 to 130.575

 

130.525     Applicability of ORS 130.520 to 130.575

 

130.530     Effect of marriage

 

130.535     Revocation by divorce or annulment

 

130.540     Contract of sale of property not revocation

 

130.545     Encumbrance or disposition of property after trust instrument executed

 

130.550     When trust assets pass to descendants of beneficiary; class gifts

 

130.555     Children born or adopted after execution of trust instrument

 

130.560     Failure of specific distribution

 

130.565     Effect of failure of specific distribution

 

130.570     Advancement against share of trust

 

130.575     Effect of advancement on distribution

 

OFFICE OF TRUSTEE

 

130.600     UTC 701. Acceptance or rejection of trusteeship

 

130.605     UTC 702. Trustee’s bond

 

130.610     UTC 703. Cotrustees

 

130.615     UTC 704. Vacancy in trusteeship; appointment of successor

 

130.620     UTC 705. Resignation of trustee

 

130.625     UTC 706. Removal of trustee

 

130.630     UTC 707. Delivery of property by former trustee

 

130.635     UTC 708. Compensation of trustee

 

130.640     UTC 709. Reimbursement of expenses

 

DUTIES AND POWERS OF TRUSTEE

 

130.650     UTC 801. Duty to administer trust

 

130.655     UTC 802. Duty of loyalty

 

130.660     UTC 803. Impartiality

 

130.665     UTC 804. Prudent administration

 

130.670     UTC 805. Costs of administration

 

130.675     UTC 806. Trustee’s skills

 

130.680     UTC 807. Delegation by trustee

 

130.685     UTC 808. Powers to direct

 

130.690     UTC 809. Control and protection of trust property

 

130.695     UTC 810. Recordkeeping and identification of trust property

 

130.700     UTC 811. Enforcement and defense of claims

 

130.705     UTC 812. Collecting trust property

 

130.710     UTC 813. Duty to inform and report

 

130.715     UTC 814. Discretionary powers; tax savings

 

130.720     UTC 815. General powers of trustee

 

130.725     UTC 816. Specific powers of trustee

 

130.730     UTC 817. Distribution upon termination

 

UNIFORM PRUDENT INVESTOR ACT

 

130.750     Trustee’s duty to comply with prudent investor rule

 

130.755     Prudent investor rule

 

130.760     Diversification of trust investments

 

130.765     Trustee duty

 

130.770     Determination of compliance with prudent investor rule

 

130.775     Trust language authorizing investments permitted under prudent investor rule

 

LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING WITH TRUSTEE

 

130.800     UTC 1001. Remedies for breach of trust

 

130.805     UTC 1002. Damages for breach of trust

 

130.810     UTC 1003. Damages in absence of breach

 

130.815     UTC 1004. Attorney fees and costs

 

130.820     UTC 1005. Limitation of action against trustee

 

130.825     UTC 1006. Reliance on trust instrument

 

130.830     UTC 1007. Event affecting administration or distribution

 

130.835     UTC 1008. Exculpation of trustee

 

130.840     UTC 1009. Beneficiary’s consent, release or ratification

 

130.845     UTC 1010. Limitation on personal liability of trustee

 

130.850     UTC 1011. Interest as general partner

 

130.855     UTC 1012. Protection of person dealing with trustee

 

130.860     UTC 1013. Certification of trust

 

MISCELLANEOUS PROVISIONS

 

130.900     Uniformity of application and construction

 

130.905     UTC 1102. Electronic records and signatures

 

130.910     UTC 1106. Application

 

GENERAL PROVISIONS AND DEFINITIONS

 

      130.001 UTC 101. Short title. This chapter may be cited as the Oregon Uniform Trust Code. [2005 c.348 §1]

 

      130.005 UTC 102. Scope. (1) Except as provided in subsection (2) of this section, this chapter applies to express trusts, whether charitable or noncharitable, and to trusts created pursuant to a statute or a judgment that requires that the trust be administered in the manner of an express trust.

      (2) This chapter does not apply to:

      (a) A trust that is part of an employee benefit arrangement or an individual retirement account.

      (b) A trust account established under a qualified tuition savings program pursuant to ORS 348.841 to 348.873.

      (c) Trust accounts maintained on behalf of clients or customers by licensed service professionals, including trust accounts maintained by attorneys pursuant to rules of professional conduct adopted under ORS 9.490 and by 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 individual’s health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code, as in effect on January 1, 2006.

      (2) “Beneficiary” means a person that:

      (a) Has a present or future beneficial interest in a trust, whether vested or contingent; or

      (b) Holds a power of appointment over trust property in a capacity other than that of trustee.

      (3) “Charitable trust” means a trust, or portion of a trust, 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 beneficiary’s qualification is determined;

      (b) Would be a permissible distributee if the interests of all permissible distributees described in paragraph (a) of this subsection terminated on the date the beneficiary’s qualification is determined; or

      (c) Would be a permissible distributee if the trust terminated on the date the beneficiary’s qualification is determined.

      (15) “Revocable trust” means a trust that can be revoked by the settlor without the consent of the trustee or a person holding an adverse interest.

      (16) “Settlor” means a person, including a testator, who creates a trust or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution and of the portion as to which that person has the power to revoke or withdraw.

      (17) “Spendthrift provision” means a term of a trust that restrains both voluntary and involuntary transfer of a beneficiary’s interest.

      (18) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States. “State” includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.

      (19) “Terms of a trust” means the manifestation of the settlor’s intent regarding a trust’s provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.

      (20) “Trust instrument” means an instrument executed by a settlor that contains terms of the trust, including any amendments to the instrument.

      (21) “Trustee” means an original trustee, an additional trustee, a successor trustee or a cotrustee. [2005 c.348 §3]

 

      130.015 UTC 104. Knowledge. (1) Subject to subsection (2) of this section, a person has knowledge of a fact if the person:

      (a) Has actual knowledge of the fact;

      (b) Has received a notice or notification of the fact; or

      (c) From all the facts and circumstances known to the person at the time in question, has reason to know the fact.

      (2) An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act for the trust, or would have been brought to the employee’s attention if the organization had exercised reasonable diligence. An organization exercises reasonable diligence if the organization maintains reasonable routines for communicating significant information to the employee having responsibility to act for the trust and there is reasonable compliance with the routines. Reasonable diligence does not require an employee of the organization to communicate information unless the communication is part of the employee’s regular duties or the employee knows a matter involving the trust would be materially affected by the information. [2005 c.348 §4]

 

      130.020 UTC 105. Default and mandatory rules. (1) Except as otherwise provided in the terms of the trust, this chapter governs the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.

      (2) The terms of a trust prevail over the provisions of this chapter except:

      (a) The requirements of ORS 130.150 to 130.190 governing the creation of a trust.

      (b) The duty of a trustee to act in good faith and in accordance with the purposes of the trust.

      (c) The requirement that a trust and the terms of a trust be for the benefit of the trust beneficiaries, and that the trust have a purpose that is lawful, not contrary to public policy and possible to achieve.

      (d) The power of the court to modify or terminate a trust under ORS 130.195 to 130.225.

      (e) The effect of a spendthrift provision and the rights of creditors and assignees to reach interests in a trust as provided in ORS 130.300 to 130.325.

      (f) The power of the court under ORS 130.605 to require, dispense with, modify or terminate a bond.

      (g) The power of the court under ORS 130.635 (2) to adjust a trustee’s compensation specified in the terms of the trust if the compensation is unreasonably low or high.

      (h) Subject to subsection (3) of this section, the duty under ORS 130.710 (2)(b) and (c) to notify qualified beneficiaries of an irrevocable trust of the existence of the trust, of the identity of the trustee and of their right to request trustee reports.

      (i) Subject to subsection (3) of this section, the duty under ORS 130.710 (1) to respond to the request of a qualified beneficiary of an irrevocable trust for trustee reports and other information reasonably related to the administration of a trust.

      (j) The effect of an exculpatory term under ORS 130.835.

      (k) The rights under ORS 130.845, 130.850, 130.855 and 130.860 of a person other than a trustee or beneficiary.

      (L) Periods of limitation for commencing a judicial proceeding.

      (m) The power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice.

      (n) The subject-matter jurisdiction of the court and venue for commencing a proceeding as provided in ORS 130.060 and 130.065.

      (3) The settlor, in the trust instrument or in another writing delivered to the trustee, may waive or modify the duties of a trustee under ORS 130.710 to give notice, information and reports to qualified beneficiaries by:

      (a) Waiving or modifying those duties during the period that either the settlor is alive and financially capable, or the settlor’s spouse, if a qualified beneficiary, is alive and financially capable; or

      (b) Designating a person or persons to act in good faith to protect the interests of qualified beneficiaries and to receive any notice, information or reports required under ORS 130.710 (1), (2)(b) 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 trust’s purposes, the trust’s administration and the interests of the beneficiaries. Absent a substantial change of circumstances, the trustee may assume that the original place of administration is also the appropriate place of administration. The duty to administer the trust at an appropriate place may prevent a trustee from moving the place of administration.

      (3)(a) A trustee may transfer the trust’s principal place of administration to another state, country or other jurisdiction if the transfer is in furtherance of the duty imposed by subsection (2) of this section.

      (b) A trustee shall notify qualified beneficiaries of the trust of a proposed transfer of the trust’s principal place of administration not fewer than 60 days before initiating the transfer. The notice of proposed transfer must include all of the following:

      (A) The name of the state, country or other jurisdiction to which the principal place of administration is to be transferred.

      (B) The address and telephone number at the new location at which the trustee can be contacted.

      (C) An explanation of the reasons for the proposed transfer.

      (D) The date on which the proposed transfer is anticipated to occur.

      (E) The date by which the qualified beneficiary must notify the trustee of an objection to the proposed transfer. The date for notifying a trustee of an objection may not be fewer than 60 days after the date on which the notice is given.

      (c) The authority of a trustee under this subsection to transfer a trust’s principal place of administration terminates if a qualified beneficiary notifies the trustee of an objection to the proposed transfer on or before the date specified in the notice.

      (d) The trustee may transfer some or all of the trust property to a successor trustee designated in the terms of the trust or appointed pursuant to ORS 130.615 in connection with a transfer of the trust’s principal place of administration. [2005 c.348 §8]

 

      130.025 UTC 106. Common law of trusts; principles of equity. The common law of trusts and principles of equity supplement this chapter, except to the extent modified by this chapter or other law. [2005 c.348 §6]

 

      130.030 UTC 107. Governing law. The meaning and effect of the terms of a trust are determined by:

      (1) The law of the state, country or other jurisdiction designated in the terms of the trust unless the designation of the law of that state, country or other jurisdiction is contrary to a strong public policy of the state, country or other jurisdiction having the most significant relationship to the matter at issue; or

      (2) In the absence of a controlling designation in the terms of the trust, the law of the state, country or other jurisdiction having the most significant relationship to the matter at issue. [2005 c.348 §7]

 

      130.035 UTC 109. Methods of giving notice; waiver of notice. (1) If any provision of this chapter requires that a trustee or other person give notice or requires that the trustee or other person send a document, the trustee or other person must give the notice or send the document in a manner reasonably suitable under the circumstances and likely to result in receipt of the notice or document. Permissible methods of giving notice and sending documents under this chapter include first class mail, personal delivery, delivery to a person’s last known place of residence or place of business, or properly directed electronic mail.

      (2) If any provision of this chapter requires that a trustee or other person give notice or requires that the trustee or other person send a document to another person, the trustee or other person need not give the notice or send the document to any person whose identity or location is unknown and not reasonably ascertainable. If the trustee or other person cannot give notice or send a document, the trustee or other person shall prepare an affidavit setting forth the efforts made to find the person. The trustee must file the affidavit in any pending court proceeding or hold the affidavit as part of the trust records if a court proceeding is not pending.

      (3) Any person entitled to receive a notice or a document under this chapter may waive receipt of the notice or document.

      (4) Except as provided in subsection (5) of this section, notice of a judicial proceeding shall be given in the manner required by statute for the approval of the final account in a decedent’s estate. Notice of a judicial proceeding must be given by the petitioner to the following persons:

      (a) To the trustee and all persons whose interests are affected by the requested action or relief.

      (b) If a person who is entitled to notice is a minor, to the minor’s conservator or to another appropriate representative under ORS 130.100 to 130.120 if the minor does not have a conservator. If the minor is 14 years of age or older, notice must also be given to the minor.

      (c) If a person who is entitled to notice is financially incapable, to the person and to the person’s conservator or another appropriate representative under ORS 130.100 to 130.120 if the person does not have a conservator.

      (d) To any other person the court requires.

      (5) A judicial proceeding to contest the validity of a revocable trust must be commenced by the service of a summons in the manner required by ORCP 7. Notice of any other judicial proceeding must be given in the manner prescribed by subsection (4) of this section. [2005 c.348 §9]

 

      130.040 UTC 110. Other persons treated as qualified beneficiaries. (1) A charitable organization expressly designated to receive distributions under the terms of a charitable trust has the rights of a qualified beneficiary under this chapter if the charitable organization is otherwise a qualified beneficiary as defined in ORS 130.010.

      (2) A person appointed to enforce a trust created for the care of an animal or another noncharitable purpose as provided in ORS 130.185 or 130.190 has the rights of a qualified beneficiary under this chapter.

      (3) The Attorney General has the rights of a qualified beneficiary with respect to a charitable trust having its principal place of administration in Oregon, unless contingencies make the charitable interest negligible. [2005 c.348 §10]

 

      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.