2009 Iowa Code
Title 15 - Judicial Branch and Judicial Procedures
Subtitle 4 - Probate - Fiduciaries
CHAPTER 633A - IOWA TRUST CODE
633A.4214 - DUTIES WITH REGARD TO DISCRETIONARY POWERS.

        633A.4214  DUTIES WITH REGARD TO DISCRETIONARY
      POWERS.
         1.  A trustee shall exercise a discretionary power within the
      bounds of reasonable judgment and in accordance with applicable
      fiduciary principles and the terms of the trust.
         2.  Notwithstanding the use of such terms as "absolute", "sole",
      or "uncontrolled" in the grant of discretion, a trustee shall act in
      accordance with fiduciary principles and shall not act in bad faith
      or in disregard of the purposes of the trust or the power.  Absent an
      abuse of discretion, a trustee's exercise of discretion is not
      subject to control by a court.
         3.  Subject to paragraph "c" and unless the terms of the trust
      expressly indicate that a rule in this subsection does not apply, all
      of the following shall apply:
         a.  A person other than a settlor who is a beneficiary and
      trustee of a trust that confers on the trustee the power to make
      discretionary distributions to or for the trustee's personal benefit
      may exercise the power only in accordance with an ascertainable
      standard relating to the trustee's individual health, education,
      support, or maintenance within the meaning of section 2041(b)(1)(A)
      or 2514(c)(1) of the Internal Revenue Code of 1986.
         b.  A trustee shall not exercise a power to make discretionary
      distributions to satisfy a legal obligation of support that the
      trustee personally owes to another person.
         c.  This subsection does not apply to the following:
         (1)  A power held by the settlor's spouse who is the trustee of a
      trust for which a marital deduction, as defined in section 2056(b)(5)
      or 2523(e) of the Internal Revenue Code of 1986, was previously
      allowed.
         (2)  A trust that may be revoked or amended by the settlor.
         (3)  A trust, if contributions to the trust qualify for an annual
      exclusion under section 2503(c) of the Internal Revenue Code of 1986.

         4.  A power whose exercise is limited or prohibited by subsection
      3 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.  

         99 Acts, ch 125, §60, 109
         C2001, §633.4214
         2002 Acts, ch 1107, §13; 2003 Acts, ch 95, §16; 2003 Acts, ch 108,
      §109; 2005 Acts, ch 38, §54
         CS2005, §633A.4214