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Written notice to beneficiaries is required if the trustee wants to change the principal place of trust administration.
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Once a trust matter has been brought before the court, continuing judicial supervision of the trust is not required unless the court determines it to be necessary.
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The creation of a trust for care of animals is now available and enforceable.
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There are procedures available for modification or termination of a trust.
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Claims of creditors after the death of someone who creates a revocable trust are not limited to the decedent’s probate estate. The act provides that assets of a trust that was revocable at time of death are subject to creditor claims.
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A spendthrift clause can still be used to protect trust assets from creditors of or judgments against a beneficiary under certain circumstances, so long as the spendthrift clause restricts both voluntary and involuntary transfers.
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There is now a statute of limitations on actions contesting the validity of a revocable trust or the distribution of trust property after the death of the person who created the trust. A person may commence a judicial proceeding to contest the validity of a trust that was revocable at death within the earlier of: (1) one year after the death of the person who created the trust; or (2) sixty days after the trustee sent the contesting person a copy of the trust instrument and a notice informing the person of the trust’s existence, the trustee’s name and address and the time allowed for commencing a proceeding.
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Trustees are required to have a surety bond unless waived by the terms of the trust or by the Court.
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Co-trustees who are unable to reach a unanimous decision may act by majority vote.
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If a vacancy occurs in a co-trusteeship, the remaining co-trustees may act for the trust.
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Generally, a co-trustee must participate in the performance of the trustees' duties. If a co-trustee is unavailable to perform duties because of absence, illness, or other reasons, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining co-trustee or a majority of the remaining co-trustees may act for the trust.
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Each trustee must exercise reasonable care to: (1) prevent a co-trustee from committing a breach of trust; and (2) compel a co-trustee to redress a breach of trust. Otherwise, a trustee who does not join in an action of another trustee shall not be liable for the action.
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The settlor, a co-trustee or a beneficiary may request the court to remove a trustee or a trustee may be removed by the court on its own initiative. The court may remove a trustee if: (1) the trustee has committed a serious breach of trust; (2) there is a lack of cooperation among co-trustees that substantially impairs the administration of the trust; (3) because of unfitness, unwillingness or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or (4) there has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust and a suitable co-trustee or successor trustee is available.
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Except as otherwise provided in a contract, a trustee shall not be personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administering the trust if the trustee, in the contract, disclosed the fiduciary capacity.
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A trustee shall be 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.
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A claim based on a contract entered into by a trustee in the trustee’s fiduciary capacity, on an obligation arising from ownership or control of trust property or on a tort committed in the course of administering a trust, may be asserted in a judicial proceeding against the trustee in the trustee’s fiduciary capacity, whether or not the trustee is personally liable for the claim.
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Generally, the MUTC applies to all trusts whether created before or after the July 8, 2012 enactment of the MUTC. There are some exceptions. For example: The requirement a spendthrift clause must prohibit both voluntary and involuntary transfers does not apply to spendthrift provisions in a trust created under an instrument executed before July 8, 2012. The provision that co-trustees who cannot unanimously reach agreement may act by majority vote does not apply to trust instruments executed before July 8, 2012.
