UNIFORM TRUST CODE
COMMENTS
Drafted by the
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
and by it
APPROVED AND RECOMMENDED FOR ENACTMENT
IN ALL THE STATES
at its
ANNUAL CONFERENCE
MEETING IN ITS ONE-HUNDRED-AND-NINTH YEAR
IN ST. AUGUSTINE, FLORIDA
JULY 28 – AUGUST 4, 2000
WITH TENTATIVE PREFATORY NOTE AND COMMENTS
Copyright ? 2001
By
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
March 10, 2001
UNIFORM TRUST CODE
The Committee that acted for the National Conference of Commissioners on Uniform State
Laws in preparing the Uniform Trust Code was as follows:
MAURICE A. HARTNETT, III, 144 Cooper Road, Dover, DE 19901, Chair FRANK W. DAYKIN, 4745 Giles Way, Carson City, NV 89704, Committee Member and Committee on
Style Liaison
E. EDWIN ECK, II, University of Montana, School of Law, Missoula, MT 59812
WILLIAM L. EVANS, Ohio Northern University, Pettit College of Law, 525 S. Main Street, Ada, OH
45810
RUSSELL L. GEORGE, P.O. Box 907, 120 W. Third Street, Rifle, CO 81650
JOHN H. LANGBEIN, Yale Law School, P.O. Box 208215, New Haven, CT 06520
GLEE S. SMITH, P.O. Box 360, 111 E. 8th, Larned, KS 67550
NATHANIEL STERLING, Law Revision Commission, Suite D-1, 4000 Middlefield Road, Palo Alto, CA
94303
RICHARD V. WELLMAN, University of Georgia, School of Law, Athens, GA 30602
DAVID M. ENGLISH, University of Missouri School of Law, Missouri and Conley Avenues, Columbia,
MO 65211, Reporter
EX OFFICIO
JOHN McCLAUGHERTY, P.O. Box 553, Charleston, WV 25322, President STANLEY M. FISHER, 1100 Huntington Building, 925 Euclid Avenue, Cleveland, OH 44115, Division
Chair
AMERICAN BAR ASSOCIATION ADVISORS
JOSEPH KARTIGANER, 955 Fifth Avenue, New York, NY 10021, Advisor DAVID ALAN RICHARDS, 875 3rd Avenue, New York, NY 10022, Real Property, Probate & Trust Law
Section Advisor
RAYMOND H. YOUNG, 26th Floor, 150 Federal Street, Boston, MA 02110, Real Property, Probate &
Trust Law Section Advisor
EXECUTIVE DIRECTOR
FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman, OK 73019,
Executive Director
WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus
Copies of this Code may be obtained from:
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
211 E. Ontario Street, Suite 1300
Chicago, Illinois 60611
312/915-0195
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UNIFORM TRUST CODE
TABLE OF CONTENTS
ARTICLE 1
GENERAL PROVISIONS AND DEFINITIONS SECTION 101. SHORT TITLE. ............................................................................................................................................ SECTION 102. SCOPE. ......................................................................................................................................................... SECTION 103. DEFINITIONS.............................................................................................................................................. SECTION 104. KNOWLEDGE. ............................................................................................................................................ SECTION 105. DEFAULT AND MANDATORY RULES. ................................................................................................ SECTION 106. COMMON LAW OF TRUSTS; PRINCIPLES OF EQUITY. ...................................................................
SECTION 107. GOVERNING LAW. .................................................................................................................................... SECTION 108. PRINCIPAL PLACE OF ADMINISTRATION. ......................................................................................... SECTION 109. METHODS AND WAIVER OF NOTICE. ................................................................................................. SECTION 110. OTHERS TREATED AS QUALIFIED BENEFICIARIES. ....................................................................... SECTION 111. NONJUDICIAL SETTLEMENT AGREEMENTS. ................................................................................... SECTION 112. RULES OF CONSTRUCTION. ..................................................................................................................
ARTICLE 2
JUDICIAL PROCEEDINGS
SECTION 201. ROLE OF COURT IN ADMINISTRATION OF TRUST.......................................................................... SECTION 202. JURISDICTION OVER TRUSTEE AND BENEFICIARY. .....................................................................
SECTION 203. SUBJECT-MATTER JURISDICTION. ...................................................................................................... SECTION 204. VENUE. ........................................................................................................................................................
ARTICLE 3
REPRESENTATION
SECTION 301. REPRESENTATION: BASIC EFFECT. ..................................................................................................... SECTION 302. REPRESENTATION BY HOLDER OF GENERAL TESTAMENTARY POWER OF
APPOINTMENT. ............................................................................................................................................. SECTION 303. REPRESENTATION BY FIDUCIARIES AND PARENTS. ....................................................................
SECTION 304. REPRESENTATION BY PERSON HAVING SUBSTANTIALLY IDENTICAL INTEREST. .............
SECTION 305. APPOINTMENT OF REPRESENTATIVE. ...............................................................................................
ARTICLE 4
CREATION, VALIDITY, MODIFICATION,AND TERMINATION OF TRUST SECTION 401. METHODS OF CREATING TRUST. ........................................................................................................ SECTION 402. REQUIREMENTS FOR CREATION. ........................................................................................................ SECTION 403. TRUSTS CREATED IN OTHER JURISDICTIONS. ................................................................................ SECTION 404. TRUST PURPOSES..................................................................................................................................... SECTION 405. CHARITABLE PURPOSES; ENFORCEMENT. ....................................................................................... SECTION 406. CREATION OF TRUST INDUCED BY FRAUD, DURESS, OR UNDUE INFLUENCE. ...................
SECTION 407. EVIDENCE OF ORAL TRUST. ................................................................................................................. SECTION 408. TRUST FOR CARE OF ANIMAL. ............................................................................................................. SECTION 409. NONCHARITABLE TRUST WITHOUT ASCERTAINABLE BENEFICIARY.....................................
SECTION 410. MODIFICATION OR TERMINATION OF TRUST; PROCEEDINGS FOR APPROVAL OR
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DISAPPROVAL.............................................................................................................................................. SECTION 411. MODIFICATION OR TERMINATION OF NONCHARITABLE IRREVOCABLE TRUST BY
CONSENT........................................................................................................................................................ SECTION 412. MODIFICATION OR TERMINATION BECAUSE OF UNANTICIPATED
CIRCUMSTANCES OR INABILITY TO ADMINISTER TRUST EFFECTIVELY. .............................
SECTION 413. CY PRES. ..................................................................................................................................................... SECTION 414. TERMINATION OF UNECONOMIC TRUST. ......................................................................................... SECTION 415. REFORMATION TO CORRECT MISTAKES. ......................................................................................... SECTION 416. MODIFICATION TO ACHIEVE SETTLOR’S TAX OBJECTIVES. ...................................................... SECTION 417. COMBINATION AND DIVISION OF TRUSTS. .....................................................................................
ARTICLE 5
CREDITOR’S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS SECTION 501. RIGHTS OF BENEFICIARY’S CREDITOR OR ASSIGNEE. .................................................................
SECTION 502. SPENDTHRIFT PROVISION. .................................................................................................................... SECTION 503. EXCEPTIONS TO SPENDTHRIFT PROVISION. ................................................................................... SECTION 504. DISCRETIONARY TRUSTS; EFFECT OF STANDARD........................................................................
SECTION 505. CREDITOR’S CLAIM AGAINST SETTLOR. ..........................................................................................
SECTION 506. OVERDUE DISTRIBUTION. ..................................................................................................................... SECTION 507. PERSONAL OBLIGATIONS OF TRUSTEE.............................................................................................
ARTICLE 6
REVOCABLE TRUSTS
SECTION 601. CAPACITY OF SETTLOR OF REVOCABLE TRUST. ........................................................................... SECTION 602. REVOCATION OR AMENDMENT OF REVOCABLE TRUST.............................................................
SECTION 603. SETTLOR’S POWERS; POWERS OF WITHDRAWAL. .........................................................................
SECTION 604. LIMITATION ON ACTION CONTESTING VALIDITY OF REVOCABLE TRUST;
DISTRIBUTION OF TRUST PROPERTY. ....................................................................................................
ARTICLE 7
OFFICE OF TRUSTEE
SECTION 701. ACCEPTING OR DECLINING TRUSTEESHIP. ...................................................................................... SECTION 702. TRUSTEE’S BOND..................................................................................................................................... SECTION 703. COTRUSTEES. ............................................................................................................................................ SECTION 704. VACANCY IN TRUSTEESHIP; APPOINTMENT OF SUCCESSOR. ...................................................
SECTION 705. RESIGNATION OF TRUSTEE. ................................................................................................................. SECTION 706. REMOVAL OF TRUSTEE. ......................................................................................................................... SECTION 707. DELIVERY OF PROPERTY BY FORMER TRUSTEE. .......................................................................... SECTION 708. COMPENSATION OF TRUSTEE. ............................................................................................................. SECTION 709. REIMBURSEMENT OF EXPENSES. .......................................................................................................
ARTICLE 8
DUTIES AND POWERS OF TRUSTEE
SECTION 801. DUTY TO ADMINISTER TRUST. ............................................................................................................ SECTION 802. DUTY OF LOYALTY. ................................................................................................................................ SECTION 803. IMPARTIALITY. ......................................................................................................................................... SECTION 804. PRUDENT ADMINISTRATION. ...............................................................................................................
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SECTION 805. COSTS OF ADMINISTRATION. ............................................................................................................... SECTION 806. TRUSTEE’S SKILLS. .................................................................................................................................. SECTION 807. DELEGATION BY TRUSTEE. .................................................................................................................. SECTION 808. POWERS TO DIRECT. ............................................................................................................................... SECTION 809. CONTROL AND PROTECTION OF TRUST PROPERTY. ....................................................................
SECTION 810. RECORDKEEPING AND IDENTIFICATION OF TRUST PROPERTY. ..............................................
SECTION 811. ENFORCEMENT AND DEFENSE OF CLAIMS...................................................................................... SECTION 812. COLLECTING TRUST PROPERTY. ......................................................................................................... SECTION 813. DUTY TO INFORM AND REPORT.......................................................................................................... SECTION 814. DISCRETIONARY POWERS; TAX SAVINGS. ...................................................................................... SECTION 815. GENERAL POWERS OF TRUSTEE. ........................................................................................................ SECTION 816. SPECIFIC POWERS OF TRUSTEE. .......................................................................................................... SECTION 817. DISTRIBUTION UPON TERMINATION. ................................................................................................
ARTICLE 9
UNIFORM PRUDENT INVESTOR ACT
ARTICLE 10
LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING WITH TRUSTEE SECTION 1001. REMEDIES FOR BREACH OF TRUST. ................................................................................................. SECTION 1002. DAMAGES FOR BREACH OF TRUST. ................................................................................................. SECTION 1003. DAMAGES IN ABSENCE OF BREACH. ............................................................................................... SECTION 1004. ATTORNEY’S FEES AND COSTS. ........................................................................................................
SECTION 1005. LIMITATION OF ACTION AGAINST TRUSTEE. ................................................................................ SECTION 1006. RELIANCE ON TRUST INSTRUMENT................................................................................................. SECTION 1007. EVENT AFFECTING ADMINISTRATION OR DISTRIBUTION........................................................
SECTION 1008. EXCULPATION OF TRUSTEE. .............................................................................................................. SECTION 1009. BENEFICIARY’S CONSENT, RELEASE, OR RATIFICATION. ......................................................... SECTION 1010. LIMITATION ON PERSONAL LIABILITY OF TRUSTEE. .................................................................
SECTION 1011. INTEREST AS GENERAL PARTNER. ................................................................................................... SECTION 1012. PROTECTION OF PERSON DEALING WITH TRUSTEE. ..................................................................
SECTION 1013. CERTIFICATION OF TRUST. .................................................................................................................
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 1101. UNIFORMITY OF APPLICATION AND CONSTRUCTION. ..............................................................
SECTION 1102. ELECTRONIC RECORDS AND SIGNATURES. .................................................................................. SECTION 1103. SEVERABILITY CLAUSE. ...................................................................................................................... SECTION 1104. EFFECTIVE DATE.................................................................................................................................... SECTION 1105. REPEALS. .................................................................................................................................................. SECTION 1106. APPLICATION TO EXISTING RELATIONSHIPS. ...............................................................................
UNIFORM TRUST CODE
PREFATORY NOTE
The Uniform Trust Code, which was approved by the National Conference of
Commissioners on Uniform State Laws in 2000, is the first national codification of the law of
trusts. The primary stimulus to the drafting of the Uniform Trust Code is the greater use of trusts
in recent years, both in family estate planning and in commercial transactions, both in the United
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States and internationally. This greater use of the trust, and consequent rise in the number of day-
to-day questions involving trusts, has led to a recognition that the trust law in many states is thin.
It has also led to a recognition that the existing Uniform Acts relating to trusts, while numerous,
are fragmentary. The Uniform Trust Code will provide states with precise, comprehensive, and
easily accessible guidance on trust law questions. On issues on which states diverge or on which
the law is unclear or unknown, the Code will for the first time provide a uniform rule. The Code
also includes a number of innovative provisions.
Existing Uniform Laws on Trust Law Subjects– Certain older Uniform Acts are
incorporated into the Uniform Trust Code. Others, addressing more specialized topics, will
continue to be available for enactment in free-standing form.
The following Uniform Acts are incorporated into or otherwise superseded by the Code:
Uniform Probate Code Article VII – approved in 1969, Article VII has been enacted in
about 15 jurisdictions. Article VII, although titled “Trust Administration,” is a modest
statute, addressing only a limited number of topics. Except for its provisions on trust
registration, Article VII is superseded by the Code. Its provisions on jurisdiction are
incorporated into Article 2 of the Code, and its provision on trustee liability to persons
other than beneficiaries are replaced by Section 1010.
Uniform Prudent Investor Act – approved in 1994, this Act has been enacted in 35
jurisdictions. This Act, and variant forms enacted in a number of other states, has
displaced the older “prudent man” standard, bringing trust law into line with modern
investment practice. States which have enacted the Uniform Prudent Investor Act are
encouraged to recodify it as part of this Code. A place for this is provided in Article 9.
Uniform Trustee Powers Act – approved in 1964, this Act has been enacted in 16 states.
The Act contains a list of specific trustee powers and deals with other selected issues,
particularly relations of a trustee with persons other than beneficiaries. The Trustee
Powers Act is outdated and is entirely superseded by the Trust Code, principally at
Sections 815, 816 and 1012. States enacting the Uniform Trust Code should repeal their
existing trustee powers legislation.
Uniform Trusts Act (1937) – this largely overlooked Act of similar name was enacted in
only six states, none within the past several decades. Despite a title suggesting
comprehensive coverage of its topic, this Act, like Article VII of the UPC, addresses only
a limited number of topics. These include the duty of loyalty, the registration and voting
of securities, and trustee liability to persons other than beneficiaries. States enacting the
Uniform Trust Code should repeal this earlier namesake.
The following uniform acts address topics relevant to the Code but are not affected by its
enactment:
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Uniform Common Trust Fund Act – approved in 1938, this Act has been enacted in 34
jurisdictions. The Uniform Trust Code does not address the subject of common trust funds. In recent years, many banks have replaced their common trust funds with
proprietary mutual funds that may also be available to non-trust customers. The Uniform Trust Code addresses the use of proprietary funds at Section 802(f).
Uniform Custodial Trust Act – approved in 1987, this Act has been enacted in 14
jurisdictions. This Act allows standard trust provisions to be automatically incorporated into the terms of the trust simply by referring to the Act. This Act is not displaced by the Uniform Trust Code but complements it.
Uniform Management of Institutional Funds Act – approved in 1972, this Act has been
enacted in 47 jurisdictions. This Act governs the administration of endowment funds held by charitable, religious, and other eleemosynary institutions. The Act establishes a standard of prudence for use of appreciation on assets, provides specific authority for the making of investments, authorizes the delegation of this authority, and specifies a procedure, through either donor consent or court approval, for removing restrictions on the use of donated funds.
Uniform Principal and Income Act – a major revision of this widely enacted Uniform Act
was approved in 1997. Because this Act addresses issues with respect both to decedent’s estates and trusts, a jurisdiction enacting the Principal and Income Act may wish to codify it either as part of this Code or as part of its probate code.
Uniform Probate Code – approved in 1969, and enacted in close to complete form in
about 20 states but influential in virtually all, the UPC overlaps with trust topics in several areas. One area of overlap, already mentioned, is UPC Article VII. Another area of overlap concerns representation of beneficiaries. UPC Section 1-403 provides principles of representation for achieving binding judicial settlements of matters involving both estates and trusts. The Uniform Trust Code refines these representation principles, and extends them to nonjudicial settlement agreements and to optional notices and consents. See Uniform Trust Code, Section 111 and Article 3. A final area of overlap between the UPC and trust law concerns rules of construction. The UPC, in Article II, Part 7, extends certain of the rules on the construction of wills to trusts and other nonprobate instruments.
The Uniform Trust Code similarly extends to trusts the rules on the construction of wills. However, unlike the UPC, the Trust Code does not prescribe the exact rules. Instead, Section 112 of the Code is an optional provision applying to trusts whatever rules the enacting jurisdiction already has in place on the construction of wills.
Uniform Statutory Rule Against Perpetuities - approved in 1990, this Act has been
enacted in 27 jurisdictions. This Act reforms the durational limit on when property interests, including interests created under trusts, must vest or fail. The Uniform Trust Code does not limit the duration of trusts or alter the time when interests must otherwise vest, but leaves the issue to other state law. The Uniform Trust Code may be enacted without change regardless of the status of the perpetuities law in the enacting jurisdiction.
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Uniform Supervision of Trustees for Charitable Purposes Act – approved in 1954, this Act
has been enacted in four states. This Act is limited to mechanisms for monitoring the
actions of charitable trustees and does not address the substantive law of charitable trusts.
Uniform Testamentary Additions to Trusts Act – this Act is available in two versions: the
1960 Act, with 24 enactments; and the 1991 Act, with 20 enactments through 1999. This
Act, as its name suggests, validates pourover devises to trusts. Because the Act validates
provisions in wills, it is incorporated into the Uniform Probate Code, not into this Code.
Role of Restatement of Trusts – The Restatement (Second) of Trusts was approved by the American Law Institute in 1957. Work on the Restatement Third began in the late 1980s.
The portion of Restatement Third relating to the prudent investor rule and other investment topics
was completed and approved in 1990. A tentative draft of the portion of Restatement Third
relating to the rules on the creation and validity of trusts was approved in 1996, and the portion
relating to the office of trustee, trust purposes, spendthrift provisions and the rights of creditors
was approved in 1999. The Uniform Trust Code was drafted in close coordination with the
writing of the Restatement Third.
Models for Drafting – While the Uniform Trust Code is the first comprehensive Uniform
Act on the subject of trusts, comprehensive trust statutes are already in effect in several states.
Notable examples include the statutes in California, Georgia, Indiana, Texas, and Washington, all
of which were referred to in the drafting process. Most influential was the 1986 California statute,
found at Division 9 of the California Probate Code (Sections 15000 et seq.), which was used by
the drafting committee as its initial model.
Innovative Provisions – Much of the Code codifies the common law. But the Code does include a number of innovative provisions. Among the more significant are specification of
the rules of trust law not subject to override in the trust’s terms (Section 105), the inclusion of a
comprehensive article on representation of beneficiaries (Article 3), rules on trust modification
and termination that will enhance flexibility (Sections 410-417), and the inclusion of an article
collecting the special rules pertaining to revocable trusts (Article 6).
Overview of Code
The Uniform Trust Code consists of 11 articles. The substance of the Code is focused in
the first 10 articles: Article 11 is primarily an effective date provision.
Article 1 – General Provisions and Definitions – In addition to definitions, this article
addresses miscellaneous but important topics. The Code is primarily default law. A settlor,
subject to certain limitations, is free to draft trust terms departing from the provisions of the Code.
The settlor, if minimum contacts are present, may in addition designate the trust’s principal place
of administration; the trustee, if certain standards are met, may transfer the principal place of
administration to another state or country. To encourage nonjudicial resolution of disputes, the
Code provides more certainty for when such settlements are binding. While the Code does not
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prescribe the exact rules to be applied to the construction of trusts, it does extend to trusts
whatever rules the enacting jurisdiction has on the construction of wills. The Code, although
comprehensive, does not legislate on every issue. Its provisions are supplemented by the common
law of trusts and principles of equity.
Article 2 - Judicial Proceedings -This article addresses selected issues involving judicial
proceedings concerning trusts, particularly trusts having contacts with more than one state or
country. The courts in the trust’s principal place of administration have jurisdiction over both the trustee and the beneficiaries as to any matter relating to the trust. Optional provisions on subject-matter jurisdiction and venue are provided. The minimal coverage of this article was deliberate.
The drafting committee concluded that most issues related to jurisdiction and procedure are not
appropriate to a Trust Code, but are best left to other bodies of law.
Article 3 - Representation – This article deals with the representation of beneficiaries and
other interested persons, both by fiduciaries (personal representatives, guardians and
conservators), and through what is known as virtual representation. The representation principles
of the article apply to settlement of disputes, whether by a court or nonjudicially. They apply for
the giving of required notices. They apply for the giving of consents to certain actions. The
article also authorizes a court to appoint a representative if the court concludes that
representation of a person might otherwise be inadequate. The court may appoint a
representative to represent and approve a settlement on behalf of a minor, incapacitated, or
unborn person or person whose identity or location is unknown and not reasonably ascertainable.
Article 4 – Creation, Validity, Modification and Termination of Trust – This article
specifies the requirements for creating, modifying and terminating trusts. Most of the
requirements relating to creation of trusts (Sections 401 through 409) track traditional doctrine,
including requirements of intent, capacity, property, and valid trust purpose. The Code articulates
a three-part classification system for trusts: noncharitable, charitable, and honorary.
Noncharitable trusts, the most common type, require an ascertainable beneficiary and a valid
purpose. Charitable trusts, on the other hand, by their very nature are created to benefit the
public at large. The so called honorary or purposes trust, although unenforceable at common law,
is valid and enforceable under the Code despite the absence of an ascertainable beneficiary.
Examples include a trust for the care of an animal and a trust for the maintenance of a cemetery
lot.
Sections 410 through 417 provide a series of interrelated rules on when a trust may be terminated or modified other than by its express terms. The overall objective of these sections is
to enhance flexibility consistent with the principle that preserving the settlor’s intent is paramount.
Termination or modification may be allowed upon beneficiary consent if the court concludes that
the trust or a particular provision no longer serves a material purpose or if the settlor concurs; by the court in response to unanticipated circumstances or to remedy ineffective administrative terms;
or by the court or trustee if the trust is of insufficient size to justify continued administration under its existing terms. Trusts may be reformed to correct a mistake of law or fact, or modified to
achieve the settlor’s tax objectives. Trusts may be combined or divided. Charitable trusts may be
modified or terminated under cy pres to better achieve the settlor’s charitable purposes.
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Article 5 – Creditor’s Claims; Spendthrift and Discretionary Trusts - This article
addresses the validity of a spendthrift provision and other issues relating to the rights of creditors
to reach the trust to collect a debt. To the extent a trust is protected by a spendthrift provision, a
beneficiary’s creditor may not reach the beneficiary’s interest until distribution is made by the
trustee. To the extent not protected by a spendthrift provision, a creditor can reach the
beneficiary’s interest, subject to the court’s power to limit the award. Certain categories of claims
are exempt from a spendthrift restriction, including certain governmental claims and claims for
child support or alimony. Other issues addressed in this article include creditor claims against
discretionary trusts; creditor claims against a settlor, whether the trust is revocable or irrevocable;
and the rights of creditors when a trustee fails to make a required distribution within a reasonable
time.
Article 6 - Revocable Trusts – This short article deals with issues of significance not totally settled under current law. The basic policy of this article and of the Code in general is to
treat the revocable trust as the functional equivalent of a will. The article specifies a standard of
capacity, provides that a trust is presumed revocable unless its terms provide otherwise,
prescribes the procedure for revocation or amendment of a revocable trust, addresses the rights of
beneficiaries during the settlor’s lifetime, and provides a statute of limitations on contests.
Article 7 - Office of Trustee – This article contains a series of default rules dealing with the office of trustee, all of which may be modified by the terms of the trust. Rules are provided
on acceptance of office and bonding. The role of the cotrustee is addressed, including the extent
that one cotrustee may delegate to another, and the extent to which one cotrustee can be held
liable for actions of another trustee. Also covered are changes in trusteeship, the circumstances
when a vacancy must be filled, the procedure for resignation, the grounds for removal, and the
process for appointing a successor trustee. Finally, standards are provided for trustee
compensation and reimbursement for expenses.
Article 8 - Duties and Powers of Trustee – This article states the fundamental duties of a trustee and enumerates the trustee’s powers. The duties listed are not new, although some of the
particulars have changed over the years. This article was drafted where possible to conform with
the 1994 Uniform Prudent Investor Act. The Prudent Investor Act prescribes a trustee’s
responsibilities with respect to the management and investment of trust property. This article also
addresses a trustee’s duties regarding distributions to beneficiaries.
Article 9 - Uniform Prudent Investor Act – This article provides a place for the enacting state to codify its version of the Uniform Prudent Investor Act. States adopting this
Code which have previously enacted the Prudent Investor Act are encouraged to recodify their
version of the Prudent Investor Act by reenacting it in this article.
Article 10 - Liability of Trustees and Rights of Persons Dealing With Trustees –
Sections 1001 through 1009 list the remedies for breach of trust, describe how money damages
are to be determined, provide a statute of limitations on claims against a trustee, and specify other
defenses, including consent of a beneficiary and recognition of and limitations on the effect of an
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