A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.
If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.
In investing and managing trust assets, a trustee may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the trust, and the skills of the trustee.
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.
Repealed or Renumbered
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.
A corporate trustee may not purchase for a trust shares of its own stock, or its bonds, or other securities, or the stock, bonds, or other securities of an affiliate.
AS 13.36.105 - 13.36.220 may be cited as the Alaska Trusts Act.
Unless otherwise provided by the trust instrument, an amendment of the trust instrument, or a court order, the powers of a trustee are attached to the office and are not personal.
A trustee of a trust owning corporate stock is liable for a loss resulting to the beneficiaries from a failure to use reasonable care in deciding how to vote the stock and in voting the stock only if personally at fault.
AS 13.36.225 - 13.36.290 may be cited as the Alaska Uniform Prudent Investor Act.
Article 05. MISCELLANEOUS PROVISIONS
A trustee may be held personally liable for a tort committed by the trustee, or by the trustee's agents or employees in the course of their agency or employment, subject to the rights of exoneration or reimbursement under AS 13.36.180 .
A provision in an inter vivos or testamentary trust purporting to penalize a beneficiary by charging the beneficiary's interest in the trust, or to penalize the beneficiary in another manner, for instituting a proceeding to challenge the acts of the trustee or other fiduciary of a trust, or for instituting other proceedings relating to the trust, is enforceable even if probable cause exists for instituting the proceedings.
AS 13.36.225 - 13.36.290 shall be applied and construed to carry out their general purpose to make uniform the law with respect to the subject of those sections among the states that enact them.
Except as provided in AS 13.36.145 , a corporate trustee may not lend trust funds to itself or an affiliate, or to a director, an officer, or an employee of itself or an affiliate, and a noncorporate trustee may not lend trust funds to itself or to a relative, an employer, an employee, or a partner or other business associate.
Except as specifically provided, the general duty of the trustee to administer a trust expeditiously for the benefit of the beneficiaries is not altered by AS 13.06 - AS 13.36.
If a trustee violates a provision of AS 13.36.105 - 13.36.220, the trustee may be removed as trustee and denied compensation in whole or in part, and a beneficiary, co-trustee, or successor trustee may treat the violation as a breach of trust.
If a beneficiary for whom a trust bank account is created under AS 13.36.125 does not present the beneficiary's claim to the bank for payment within one year after the claim is due, the depositor who created the trust may revoke the trust as to the beneficiary.
A trustee, unless expressly authorized by the trust instrument, may not directly or indirectly lease, buy, or sell property for the trust from or to
(1) itself or an affiliate;
(2) a director, an officer, or an employee of the trustee or an affiliate; or
(3) a relative, an employer, or a partner or other business associate.
Venue for proceedings under AS 13.36.035 involving registered trusts is in the place of registration. Venue for proceedings under AS 13.36.035 involving trusts not registered in this state is in any place where the trust properly could have been registered, and otherwise by the rules of civil procedure.
(a) The terms of a trust shall be construed to achieve the settlor's tax objectives.
(b) On petition by a trustee, settlor, or beneficiary, a court may modify the terms of an irrevocable trust to achieve the settlor's tax objectives in a manner that does not violate the settlor's probable intent. The court may order that the modification operate retroactively.
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 purposes, terms, distribution requirements, and other circumstances of the trust and with the requirements of AS 13.36.225 - 13.36.290.
Whenever a bank account is, by entries made on the books of the depositor and the bank at the time of the deposit, created exclusively for the purpose of paying dividends, interest, interest coupons, salaries, wages, or pensions or other employee benefits, and the depositor at the time of opening the account does not expressly declare otherwise, the depositor is considered a trustee of the account for the creditors to be paid from the account, subject to any power of revocation that the depositor may have reserved by agreement with the bank.
The court of the place in which the trust is registered has concurrent jurisdiction with other courts of this state of actions and proceedings to determine the existence or nonexistence of trusts created other than by will, of actions by or against creditors or debtors of trusts, and of other actions and proceedings involving trustees and third parties. Venue is determined by the rules generally applicable to civil actions.
(a) A trust instrument may provide for the appointment of a person to act as an advisor to the trustee with regard to all or some of the matters relating to the property of the trust.
(b) Unless the terms of the trust instrument provide otherwise, if an advisor is appointed under (a) of this section, the property and management of the trust and the exercise of all powers and discretionary acts exercisable by the trustee remain vested in the trustee as fully and effectively as if an advisor were not appointed, the trustee is not required to follow the advice of the advisor, and the advisor is not liable as or considered to be a trustee of the trust or a fiduciary when acting as an advisor to the trust.
If the transaction is fair to both trusts and if the transaction is not prohibited by the instruments creating the trustee relationship, a corporate trustee may sell to itself as trustee of a trust the following held by the corporate trustee as trustee for another trust:
(1) stocks, bonds, and other securities listed on a securities exchange supervised by the United States Securities and Exchange Commission; and
(2) obligations of the United States treasury and obligations of United States government agencies.
(a) On petition by a trustee, settlor, or beneficiary, a court may modify the administrative or dispositive terms of an irrevocable trust or terminate an irrevocable trust if, because of circumstances not anticipated by the settlor, modification or termination would substantially further the settlor's purposes in creating the trust.
(b) Upon termination of a trust under this section, the trust property shall be distributed in accordance with the settlor's probable intention.
Proceedings under AS 13.36.035 are initiated by filing a petition in the court and giving notice under AS 13.06.110 to interested parties. The court may order notification of additional persons. A decree is valid as to all who are given notice of the proceeding though fewer than all interested parties are notified.
Article 03. DUTIES AND LIABILITIES OF TRUSTEES
The asset distribution provisions of AS 13.16.540 - 13.16.545, 13.16.560, and the provisions of AS 13.38 apply to the administration of a revocable trust following the death of the settlor of the trust, unless the terms of the trust indicate a different intention.
(a) Unless a trust is expressly made irrevocable, a trust executed on or after August 30, 2000 is revocable by the settlor.
(b) Notwithstanding AS 13.36.035 - 13.36.050, this section applies only if the
(1) settlor is domiciled in this state when the trust is created;
(2) trust instrument is executed in this state; or
(3) trust provides that the law of this state governs the trust.
(a) On petition by a trustee, settlor, or beneficiary, a court may reform the terms of an irrevocable trust, even if the trust instrument is not ambiguous, to conform to the settlor's intention if the failure to conform was due to a mistake of fact or law, whether in expression in the trust or inducement to create the trust, and if the settlor's intent can be established by clear and convincing evidence.
(b) A court may consider evidence, including direct evidence contradicting the plain meaning of the text, when determining the settlor's intent or for any other purpose under this section.
(a) Except as otherwise provided in (b) 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 out in AS 13.36.230 - 13.36.290.
(b) The prudent investor rule, a default rule, may be expanded, restricted, eliminated, or otherwise altered by the direction of the settlor to 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.
On petition of an interested person, after notice to all interested persons, the court may review the propriety of employment of any person by a trustee including any attorney, auditor, investment advisor or other specialized agent or assistant, and the reasonableness of the compensation of any person so employed, and the reasonableness of the compensation determined by the trustee for the trustee's services. Any person who has received excessive compensation from a trust may be ordered to make appropriate refunds.
A dissenting trustee who has joined another trustee in exercising a power is not liable to the beneficiaries or to others for the consequences of the exercise of the power if the dissenting trustee joins because of a requirement for unanimous trustee consent to the exercise of the power. The dissenting trustee's dissent must be presented in writing to a co-trustee and a legally competent beneficiary or, if the beneficiary is a minor or an incompetent person, the representative of the beneficiary. A trustee who is not authorized to exercise a power is not liable to the beneficiaries or to others for
(1) the exercise by a co-trustee of the power; or
(2) the failure to exercise that power.
A court of competent jurisdiction may, for cause shown and on notice to the beneficiaries, relieve a trustee from any or all of the duties and restrictions that would otherwise be placed on the trustee by AS 13.36.105 - 13.36.220 or wholly or partly excuse a trustee who has acted honestly and reasonably from liability for violations of AS 13.36.105 - 13.36.220.
A trustee is under a continuing duty to administer the trust at a place appropriate to the purposes of the trust and to its sound, efficient management. If the principal place of administration becomes inappropriate for any reason, the court may enter any order furthering efficient administration and the interests of beneficiaries, including, if appropriate, release of registration, removal of the trustee and appointment of a trustee in another state. Trust provisions relating to the place of administration and to changes in the place of administration or of trustee control unless compliance would be contrary to efficient administration or the purposes of the trust. Views of adult beneficiaries shall be given weight in determining the suitability of the trustee and the place of administration.
(a) Without authorization by a court, a trustee may exercise the powers conferred by the terms of the trust and, except as limited by the terms of the trust, the powers conferred by this chapter.
(b) This chapter does not affect the power of a court to
(1) relieve a trustee from provisions contained in the terms of the trust that restrict the exercise of powers;
(2) confer on a trustee additional powers, whether or not the powers are authorized by the terms of the trust; or
(3) restrict the exercise of a power otherwise given to the trustee by the terms of the trust or this chapter.
(c) The grant of a power to a trustee, whether under the terms of the trust, this chapter, or a court, does not alone govern the exercise of the power.
In AS 13.36.105 - 13.36.220, unless the context or subject matter otherwise requires,
(1) 'affiliate' means a person directly or indirectly controlling or controlled by another person or a person under direct or indirect common control with another person, including a person with whom a trustee has an express or implied agreement regarding the purchase of trust investments by each from the other, directly or indirectly, except a broker or stock exchange;
(2) 'relative' means a spouse, ancestor, descendant, brother, or sister;
(3) 'trust' means an express trust only;
(4) 'trustee' includes a trustee that is a corporation or a natural person and a successor or substitute trustee.
If a person who is a trustee of two or more trusts mingles the funds of two or more trusts in the same aggregate of cash or in the same bank or brokerage account or other investment, and if a withdrawal is made from the cash aggregate, account, or investment by the trustee for the trustee's own benefit, for the benefit of a third person who is not a beneficiary or creditor of one or more of the trusts, or for an unknown purpose, the withdrawal must be charged first to the amount of the personal cash, credit, or other property, if any, of the trustee in the mingled fund, and, after the exhaustion of the trustee's cash, credit, or other property, then to the several trusts in proportion to their several interests in the cash, credit, or other property in the cash aggregate, account, or investment at the time of the withdrawal. Nothing in this section is intended to authorize the mingling of trust funds.
Registration shall be accomplished by filing a statement indicating the name and address of the trustee in which it acknowledges the trusteeship. The statement shall indicate whether the trust has been registered elsewhere. The statement shall identify the trust: (1) in the case of a testamentary trust, by the name of the testator and the date and place of domiciliary probate; (2) in the case of a written inter vivos trust, by the name of each settlor and the original trustee and the date of the trust instrument; or (3) in the case of an oral trust, by information identifying the settlor or other source of funds and describing the time and manner of the trust's creation and the terms of the trust, including the subject matter, beneficiaries and time of performance. If a trust has been registered elsewhere, registration in this state is ineffective until either the earlier registration is released by order of the court where prior registration occurred or an instrument executed by the trustee and all beneficiaries is filed with the registration in this state.
A trustee need not provide bond to secure performance of the trustee's duties unless required by the terms of the trust, reasonably requested by a beneficiary or found by the court to be necessary to protect the interests of the beneficiaries who are not able to protect themselves and whose interests otherwise are not adequately represented. On petition of the trustee or other interested person the court may excuse a requirement of bond, reduce the amount of the bond, release the surety, or permit the substitution of another bond with the same or different sureties. If bond is required, it shall be filed in the court of registration or other appropriate court in amounts and with sureties and liabilities as provided in AS 13.16.260 and 13.16.270 relating to bonds of personal representatives.
(a) A trustee who has incurred personal liability for a tort committed in the administration of the trust is entitled to exoneration for the liability from the trust property if the trustee has not discharged the claim, or to reimbursement for the liability out of trust funds if the trustee has paid the claim, if the trustee or an officer or employee of the trustee was not guilty of personal fault in incurring the liability.
(b) If a trustee has incurred personal liability for a tort committed in the administration of the trust and that tort increases the value of the trust property, the trustee is entitled to exoneration or reimbursement to the extent of the increase in value as a result of the tort even though the trustee would not otherwise be entitled to exoneration or reimbursement.
(c) Nothing in this section shall be construed to change the existing law with regard to the liability of trustees of charitable trusts for torts of the trustees or their employees.
(a) By registering a trust, or accepting the trusteeship of a registered trust, the trustee submits personally to the jurisdiction of the court in any proceeding under AS 13.36.035 relating to the trust that may be initiated by any interested person while the trust remains registered. Notice of any proceeding shall be delivered to the trustee, or mailed by ordinary first-class mail to the trustee's address as listed in the registration or as thereafter reported to the court and to the trustee's address as then known to the petitioner.
(b) To the extent of their interests in the trust, all beneficiaries of a trust properly registered in this state are subject to the jurisdiction of the court of registration for the purposes of proceedings under AS 13.36.035 , if notice is given under AS 13.06.110 .
The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes an investment or strategy permitted under AS 13.36.225 - 13.36.290: '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,' 'prudent person rule,' and 'prudent investor rule.'
A trustee who fails to register a trust in a proper place as required by AS 13.36.005 - 13.36.025, for purposes of any proceedings initiated by a beneficiary of the trust before registration is subject to the personal jurisdiction of any court in which the trust could have been registered. In addition, any trustee who, within 30 days after receipt of a written demand by a settlor or beneficiary of the trust, fails to register a trust as required by AS 13.36.005 - 13.36.025 is subject to removal and denial of compensation or to surcharge as the court may direct. A provision in the terms of the trust purporting to excuse the trustee from the duty to register, or directing that the trust or trustee is not subject to the jurisdiction of the court, is ineffective.
(a) The court will not, over the objection of a party, entertain proceedings under AS 13.36.035 involving a trust registered or having its principal place of administration in another state, unless
(1) all appropriate parties could not be bound by litigation in the courts of the state where the trust is registered or has its principal place of administration;
(2) the interests of justice otherwise would seriously be impaired; or
(3) the trust satisfies AS 13.36.035 (c).
(b) The court may condition a stay or dismissal of a proceeding under this section on any party's consent to jurisdiction of the state in which the trust is registered or has its principal place of business, or the court may grant a continuance or enter any other appropriate order.
(a) [Repealed, Sec. 22 ch 105 SLA 1998].
(b) Subject to AS 13.36.105 - 13.36.220, a trustee is personally liable for obligations arising from ownership or control of property of the trust estate or for torts committed in the course of administration of the trust estate only if personally at fault.
(c) Claims based on contracts entered into by a trustee in a fiduciary capacity, on obligations arising from ownership or control of the trust estate, or on torts committed in the course of trust administration may be asserted against the trust estate by proceeding against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for them.
(d) The question of liability as between the trust estate and the trustee individually may be determined in a proceeding for accounting surcharge or indemnification or other appropriate proceeding.
(a) A foreign corporate trustee is required to qualify as a foreign corporation doing business in this state if it maintains the principal place of administration of any trust within the state. A foreign co-trustee is not required to qualify in this state solely because its co-trustee maintains the principal place of administration in this state. Unless otherwise doing business in this state, local qualification by a foreign trustee, corporate or individual, is not required in order for the trustee to receive distribution from a local estate or to hold, invest in, manage or acquire property located in this state, or maintain litigation. Nothing in this section affects a determination of what other acts require qualification as doing business in this state.
(b) The provisions of (a) of this section are not intended to override any provision of AS 06.26, and AS 06.26 governs to the extent of any conflict.
Article 02. JURISDICTION OF COURT CONCERNING TRUSTS; CHOICE OF LAW
(a) A trustee of a trust owning stocks, bonds, notes, debentures, or other written obligations of a public or private corporation may hold the obligations in the name of a nominee, without mention of the trust in the records of the corporation or in the stock certificate or stock registration book of the corporation, if
(1) the trust records and all reports or accounts rendered by the trustee clearly show the ownership of the stocks, bonds, notes, debentures, or other written obligations of the public or private corporation by the trustee and the facts regarding the holding by the trustee; and
(2) the nominee deposits with the trustee a signed statement showing the trust ownership, endorses the stock certificate or other title instruments for the obligations in blank, and does not have possession of or access to the stock certificate or other title instruments for the obligations except under the immediate supervision of the trustee.
(b) A trustee holding obligations under (a) of this section is personally liable for a loss to the trust resulting from an act of the nominee in connection with the stocks, bonds, notes, debentures, or other written obligations held under (a) of this section.
(a) Notwithstanding the other provisions of AS 13.36.338 - 13.36.365, if the value of the property of an irrevocable trust is less than $50,000, the trustee may terminate the trust unless the trust instrument provides otherwise.
(b) Notwithstanding the other provisions of AS 13.36.338 - 13.36.365 and the terms of the trust, on petition to the superior court by a trustee, settlor, or beneficiary, the court may modify or terminate an irrevocable noncharitable trust, or remove the trustee and appoint a different trustee, if the court determines that the value of the trust property is insufficient to justify the cost of administration.
(c) Upon termination of a trust under this section, the trustee shall distribute the trust property in accordance with the settlor's probable intent.
(a) The situs of a foreign trust is moved to this state when the trust satisfies the conditions listed in AS 13.36.035 (c)(1) - (4) and a qualified person serving as trustee registers the trust under AS 13.36.010.
(b) If the situs of a foreign trust is moved to this state as provided in this section, a provision in the trust that restricts the transfer of trust assets in a manner similar to AS 34.40.110 , that allows the trust to be perpetual, or that is not expressly prohibited by the law of this state is effective and enforceable under the laws of this state.
(c) A foreign trust that moves its situs to this state is valid whether or not the trust complied with the laws of this state at the time of its creation or after its creation.
(d) In this section, 'foreign trust' means a trust that is created in another state or country and that is valid in that state or country.
(a) A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in
(1) selecting an agent;
(2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(3) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(b) 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.
(c) A trustee who complies with the requirements of (a) of this section is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d) By accepting the delegation of a trust function from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.
(a) If at least one qualified person serves as trustee of a trust whose state jurisdiction provision is valid, effective, and conclusive under AS 13.36.035 (c), then the following persons also may serve as trustees even though they are not qualified persons:
(1) individuals who do not reside in the state;
(2) trust companies that have their principal place of business outside the state and that are not organized under AS 06.26; and
(3) banks that have their principal place of business outside the state or that are not organized under AS 06.05.
(b) Notwithstanding other provisions of law to the contrary, a trustee who is not a qualified person is not considered to be engaging in business in this state solely by reason of serving as trustee of a trust whose state jurisdiction provision is valid, effective, and conclusive under AS 13.36.035 (c).
(a) The trustee of a trust having its principal place of administration in this state shall register the trust in the court of this state at the principal place of administration. Unless otherwise designated in the trust instrument, the principal place of administration of a trust is the trustee's usual place of business where the records pertaining to the trust are kept, or at the trustee's residence if the trustee has no such place of business. In the case of co-trustees, the principal place of administration, if not otherwise designated in the trust instrument, is
(1) the usual place of business of the corporate trustee if there is but one corporate co-trustee; or
(2) the usual place of business or residence of the individual trustee who is a professional fiduciary if there is but one such person and no corporate co-trustee; and otherwise
(3) the usual place of business or residence of any of the co-trustees as agreed upon by them.
(b) The duty to register under AS 13.36.005 - 13.36.025 does not apply to the trustee of a trust if registration would be inconsistent with the retained jurisdiction of a foreign court from which the trustee cannot obtain release.
(a) AS 13.36.225 - 13.36.290 apply to trusts existing on and created after May 23, 1998. As applied to trusts existing on May 23, 1998, AS 13.36.225 - 13.36.290 govern only decisions or actions occurring after May 23, 1998.
(b) AS 13.36.225 - 13.36.290 govern only decisions or actions of personal representatives under AS 13.16.350 (a) or of conservators under AS 13.26.245 that occur on or after May 23, 1998.
A beneficiary of a trust affected by AS 13.36.105 - 13.36.220 may, if the beneficiary has full legal capacity and acts on full information, by written instrument delivered to the trustee, relieve the trustee, as regards the beneficiary, from any or all of the duties, restrictions, and liabilities that would otherwise be imposed on the trustee by AS 13.36.105 - 13.36.220, except for the duties, restrictions, and liabilities imposed by AS 13.36.140 - 13.36.150. The beneficiary may release the trustee from liability to the beneficiary for past violations of AS 13.36.105 - 13.36.220.
(a) A trust instrument may provide for the appointment of a disinterested third party to act as a trust protector.
(b) A trust protector appointed under (a) of this section has the powers, delegations, and functions conferred on the protector by the trust instrument, which may include the power to
(1) remove and appoint a trustee;
(2) modify or amend the trust instrument to achieve favorable tax status or to respond to changes in 26 U.S.C. (Internal Revenue Code) or state law, or the rulings and regulations under those laws;
(3) increase or decrease the interests of any beneficiary to the trust; and
(4) modify the terms of a power of appointment granted by the trust.
(c) A modification authorized under (b) of this section may not
(1) grant a beneficial interest to an individual or a class of individuals unless the individual or class of individuals is specifically provided for under the trust instrument;
(2) modify the beneficial interest of a governmental unit in a trust created under AS 47.07.020 (f).
(d) Subject to the terms of the trust instrument, a trust protector is not liable or accountable as a trustee or fiduciary because of an act or omission of the trust protector taken when performing the function of a trust protector under the trust instrument.
(a) Unless the terms of the instrument expressly provide otherwise, a trustee who has the absolute discretion under the terms of a testamentary instrument or irrevocable inter vivos agreement to invade the principal of a trust for the benefit of the beneficiary who is eligible or entitled to the income of the trust may exercise without prior court approval the trustee's discretion by appointing part or all of the principal of the trust in favor of a trustee of a trust under an instrument other than that under which the power to invade was created if the exercise of this discretion
(1) does not reduce any fixed income interest of an income beneficiary of the trust;
(2) is in favor of the beneficiary of the trust; and
(3) does not violate the limitations on validity under AS 34.27.051 or 34.27.100.
(b) This section applies to a trust governed by the laws of this state, including a trust whose governing jurisdiction is transferred to this state.
(c) The exercise of the power to invade the principal of a trust under (a) of this section is considered to be the exercise of a special power of appointment.
(a) A corporate trustee that is subject to regulation and supervision by state or federal authorities may deposit with itself trust funds that are being held out of necessity pending investment, distribution, or payment of debts if the corporate trustee
(1) pays into the trust for the deposit the interest the corporate trustee is required by state or federal law to pay on uninvested trust funds or, if there is not a state or federal law requiring the payment of interest, at the same rate of interest the corporate trustee pays on similar nontrust deposits; and
(2) maintains in its trust department as security for the deposit a separate fund consisting of securities that are legal for trust investments and that are at all times equal in total market value to the amount of the deposit, except that the security is not required to the extent that the deposit is insured or given a preference by state or federal law.
(b) The separate fund of securities required by (a)(2) of this section shall be marked as a separate fund for (a)(2) of this section. Withdrawals from or additions to the separate fund may be made from time to time, as long as the required value is maintained. The income of the securities in the separate fund belongs to the corporate trustee. In the statements of its financial condition published or delivered to the division of banking, securities, and corporations in the Department of Commerce, Community, and Economic Development, the corporate trustee shall show as separate items the amount of trust funds that it has deposited with itself and the amount of securities that it holds as security for the payment of the deposits.
(a) When an interest in real property is conveyed by deed to a person in a trust that is unenforceable under AS 09.25.010 - 09.25.020 and the intended trustee or the trustee's successor in interest holds title but refuses to carry out the trust because of AS 09.25.010 - 09.25.020, the intended trustee or the trustee's successor in interest, except to the extent that the successor in interest is a bona fide purchaser of a legal interest in the real property, shall convey the interest in real property to the settlor or the settlor's successor in interest. A court having jurisdiction may prescribe the conditions for conveying the interest to the settlor or the settlor's successor in interest.
(b) If the intended trustee of an unenforceable trust under (a) of this section transfers part or all of the trustee's interest and the interest is transferred to a bona fide purchaser, the intended trustee is liable to the settlor or the settlor's successor in interest for the value, at the time of the transfer, of the interest transferred, less any offsets that a court determines to be equitable.
(a) A trust that is revocable by the settlor may be modified or revoked in whole or in part by
(1) substantial compliance with a method of modification or revocation provided in the trust instrument; or
(2) a writing, other than a will, signed by the settlor and delivered to the trustee during the lifetime of the settlor, except that, if the trust instrument expressly makes the method of revocation provided in the trust instrument the exclusive method of revocation, the trust may not be revoked under this paragraph.
(b) Unless otherwise provided in the trust instrument, if a trust that is revocable by the settlor is created by or funded by more than one settlor,
(1) the trust may be modified or revoked as provided in AS 34.77.100 to the extent the trust consists of community property under AS 34.77 (Alaska Community Property Act);
(2) each settlor may modify or revoke the trust as to the portion of the trust property contributed by that settlor that is not community property under AS 34.77.
(c) A revocable trust may not be modified or revoked by an attorney-in-fact under a power of attorney unless the modification or revocation is expressly permitted by the trust instrument.
(a) The settlor of a trust affected by AS 13.36.105 - 13.36.220 may, by provision in the instrument creating the trust if the trust is created by a writing, by oral statement to the trustee at the time of the creation of the trust if the trust is created orally, or by an amendment of the trust if the settlor reserved the power to amend the trust,
(1) relieve the trustee from any or all of the duties, restrictions, and liabilities that would otherwise be imposed on the trustee by AS 13.36.105 - 13.36.220;
(2) alter or deny to the trustee any or all of the privileges and powers conferred on the trustee by AS 13.36.105 - 13.36.220; or
(3) add duties, restrictions, liabilities, privileges, or powers, to those imposed or granted by AS 13.36.105 - 13.36.295.
(b) Notwithstanding (a) of this section, an act of the settlor may not relieve a trustee from the duties, restrictions, and liabilities imposed on the trustee by AS 13.36.140 , 13.36.145, or 13.36.150.
(a) Except as otherwise provided by this section, on petition by a trustee, settlor, or beneficiary, a court may modify or terminate an irrevocable trust if all of the beneficiaries consent and if continuation of the trust on the existing terms of the trust is not necessary to further a material purpose of the trust. However, the court, in its discretion, may determine that the reason for modifying or terminating the trust under the circumstances outweighs the interest in accomplishing the material purposes of the trust. The inclusion of a restriction on the voluntary or involuntary transfer of trust interests under AS 34.40.110 may constitute a material purpose of the trust under this subsection, but is not presumed to constitute a material purpose of the trust under this subsection.
(b) Unless otherwise provided in the trust instrument, an irrevocable trust may not be modified or terminated under this section while a settlor is also a discretionary beneficiary of the trust.
(c) If a beneficiary other than a qualified beneficiary does not consent to a modification or termination of an irrevocable trust that is proposed by the trustee, settlor, or other beneficiaries, a court may approve the proposed modification or termination if the court determines
(1) if all the beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) the rights of a beneficiary who does not consent will be adequately protected or not significantly impaired.
(d) In (c) of this section, 'qualified beneficiary' means a beneficiary who
(1) on the date the beneficiary's qualification is determined, is entitled or eligible to receive a distribution of trust income or principal; or
(2) would be entitled to receive a distribution of trust income or principal if the event causing the trust's termination occurs.
(a) If a trustee or a predecessor of the trustee incurs personal liability for a tort committed in the course of the trustee's administration, the trustee in the trustee's representative capacity may be sued and collection made from the trust property if the court determines in the tort action that
(1) the trustee or the trustee's predecessor, or an officer or employee of the trustee or the trustee's predecessor, was not guilty of personal fault in incurring the liability; or
(2) although the tort does not fall under (1) of this subsection, the tort increased the value of the trust property.
(b) If the tort is within (a)(1) of this section, the full amount of proven damages may be collected from the trust property.
(c) If the tort is within (a)(2) of this section, collection may not be made from the trust property except to the extent of the increase in the value of the trust property.
(d) A beneficiary may intervene in an action under this section and contest the right of the plaintiff to recover.
(e) In an action against the trustee in the trustee's representative capacity under this section, the plaintiff is not required to prove that the trustee could have secured reimbursement from the trust fund if the trustee paid the plaintiff's claim.
(f) A judgment may not be rendered in favor of the plaintiff in an action under this section unless the trustee proves that within 30 days after the beginning of the action, or within another period set by the court and more than 30 days before obtaining the judgment, the trustee notifies each of the beneficiaries who is known to the trustee who then has a present interest in the existence and nature of the action. The notice shall be given by mailing copies of the notice with postage prepaid to the beneficiaries at their last known addresses. The trustee shall furnish the plaintiff with a list of names and address of the beneficiaries within 10 days after the plaintiff makes a written demand for the list. Notification of the persons on the list constitutes compliance with the duty placed on the plaintiff by this subsection.
(g) Nothing in this section may be construed to change the existing law with regard to the liability of trustees of charitable trusts for torts of the trustees or their employees.
(a) 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.
(b) A trustee's investment and management decisions respecting individual assets shall be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing trust assets are those of the following that are relevant to the trust or its beneficiaries:
(1) general economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences of investment decisions or strategies;
(4) the role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
(5) the expected total return from income and the appreciation of capital;
(6) other resources of the beneficiaries;
(7) needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(8) an asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
(d) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
(e) A trustee may invest in any kind of property or type of investment consistent with the standards of AS 13.36.225 - 13.36.290.
(f) A trustee who has special skills or expertise, or is named trustee in reliance on the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.
(a) Except as provided in AS 34.40.110 , a trust that is covered by AS 13.36.035(c) or that is otherwise governed by the laws of this state, or a property transfer to a trust that is covered by AS 13.36.035 (c) or that is otherwise governed by the laws of this state, is not void, voidable, liable to be set aside, defective in any fashion, or questionable as to the settlor's capacity, on the grounds that the trust or transfer avoids or defeats a right, claim, or interest conferred by law on a person by reason of a personal or business relationship with the settlor or by way of a marital or similar right.
(b) If a trust or a property transfer to a trust is voided or set aside under (a) of this section, then the trust or property transfer shall be voided or set aside only to the extent necessary to satisfy the settlor's debt to the creditor or other person at whose instance the trust or property transfer is voided or set aside and the costs and attorney fees allowed under the rules of court.
(c) If a trust or a property transfer to a trust is voided or set aside under (a) of this section, and if the court is satisfied that the trustee has not acted in bad faith in accepting or administering the property that is the subject of the trust,
(1) the trustee has a first and paramount lien against the property that is the subject of the trust in an amount equal to the entire cost, including attorney fees, properly incurred by the trustee in a defense of the action or proceedings to void or set aside the trust or the property transfer;
(2) the trust or property transfer that is voided or set aside is subject to the proper fees, costs, preexisting rights, claims, and interest of the trustee and any predecessor trustee that have not acted in bad faith; and
(3) the beneficiary, including the settlor, may retain a distribution made by exercising a trust power or discretion vested in the trustee of the trust, if the power or discretion was properly exercised before the commencement of the action or proceeding to void or set aside the trust or property transfer.
(a) When a trustee makes a contract that is within the trustee's powers as trustee or when a predecessor trustee has made a contract within the predecessor trustee's powers as trustee and a cause of action arises on the contract, the party in whose favor the cause of action has accrued may collect the judgment by execution on the trust property.
(b) In an action under this section, the plaintiff is not required to prove that the trustee could have been reimbursed from the trust fund if the trustee had paid the plaintiff's claim.
(c) A beneficiary or, in the case of a charitable trust, the attorney general and a corporation that is a beneficiary or agent in the performance of the charitable trust, may intervene in an action under this section and contest the right of the plaintiff to recover.
(d) A judgment may not be rendered in favor of the plaintiff in an action under this section unless the plaintiff proves that, within 30 days after the beginning of the action or within another period set by the court and more than 30 days before obtaining the judgment, the plaintiff has notified each of the beneficiaries who is known to the trustee and who then has a present interest in the existence and nature of the action, or, in the case of a charitable trust, the attorney general of this state and a corporation that is a beneficiary or agent in the performance of the charitable trust. The notice shall be given by mailing copies of the notice with postage prepaid to the beneficiaries at their last known addresses. The trustee shall furnish the plaintiff with a list of names and addresses of the beneficiaries within 10 days after the plaintiff makes a written demand for the list. Notification of the persons on the list constitutes compliance with the duty placed on the plaintiff by this section.
(e) The plaintiff in an action under this section may also hold the trustee who made the contract personally liable on the contract if the contract does not exclude the trustee's personal liability. In a contract action under this section, the addition of the word 'trustee' or the words 'as trustee' after the signature of a trustee to a contract creates a presumption, which may only be rebutted by clear and convincing evidence otherwise, of an intent to exclude the trustee from personal liability, and, unless the presumption is rebutted, the trustee is not personally liable under the contract.
In this chapter,
(1) 'party in interest' means, if the trust is
(A) revocable and if the settlor is incapacitated, the settlor's legal representative under applicable law or the settlor's agent under a durable power of attorney; or
(B) irrevocable,
(i) each trustee serving at the time;
(ii) each beneficiary entitled to receive a mandatory distribution of income or principal from a trust or, if a beneficiary entitled to receive a mandatory distribution of income or principal from a trust is not 19 years of age or is incapacitated, the beneficiary's legal representative under applicable law or the beneficiary's agent under a durable power of attorney; and
(iii) each vested remainder beneficiary in existence at the time or, if a vested remainder beneficiary is not 19 years of age or is incapacitated, the vested remainder beneficiary's legal representative under applicable law or the vested remainder beneficiary's agent under a durable power of attorney.
(2) 'qualified person' means
(A) an individual who, except for brief intervals, military service, attendance at an educational or training institution, or for absences for good cause shown, resides in this state, whose true and permanent home is in this state, who does not have a present intention of moving from this state, and who has the intention of returning to this state when away;
(B) a trust company that is organized under AS 06.26 and that has its principal place of business in this state; or
(C) a bank that is organized under AS 06.05, or a national banking association that is organized under 12 U.S.C. 21 - 216d, if the bank or national banking association possesses and exercises trust powers and has its principal place of business in this state;
(3) 'settlor' means a person who transfers property in trust and includes a person who furnishes the property transferred to a trust even if the trust is created by another person.
(4) 'state jurisdiction provision' means a provision that the laws of this state govern the validity, construction, and administration of a trust and that the trust is subject to the jurisdiction of this state.
(a) The trustee shall keep the beneficiaries of the trust reasonably informed of the trust and its administration. In addition:
(1) within 30 days after acceptance of the trust, the trustee shall inform in writing the current beneficiaries and if possible, one or more persons who under AS 13.06.120 may represent beneficiaries with future interests, of the court in which the trust is registered and of the trustee's name and address;
(2) upon reasonable request, the trustee shall provide the beneficiary with a copy of the terms of the trust which describe or affect the beneficiary's interest and with relevant information about the assets of the trust and the particulars relating to the administration;
(3) upon reasonable request, a beneficiary is entitled to a statement of the accounts of the trust annually and on termination of the trust or change of the trustee.
(b) The settlor of a trust may exempt a trustee from the duties under (a) of this section to provide notification or information regarding the trust to a beneficiary who is not entitled to a mandatory distribution of income or principal from the trust on an annual or more frequent basis. The settlor may provide the exemption by provision in the instrument creating the trust if the trust is created by a writing, by an amendment of the trust if the settlor reserved the power to amend the trust, or by a written document after the trust is created. The exemption may not exceed in duration the shorter of the settlor's lifetime or a judicial determination of the settlor's incapacity.
(c) If a settlor provides for an exemption under (b) of this section and a beneficiary with a future interest
(1) who is not a beneficiary entitled to a mandatory distribution of income or principal from the trust on an annual or more frequent basis receives a distribution, the trustee shall provide notification or information limited to the accounting period during which the distribution was made;
(2) becomes a beneficiary entitled to a mandatory distribution of income or principal from the trust on an annual or more frequent basis, the trustee shall provide notification and information as required under AS 13.16 and (a) of this section.
(a) Unless a governing instrument specifically refers to this section and provides otherwise, a trustee who makes an election under 26 U.S.C. 2056, 2056A, or 2523 (Internal Revenue Code), or who makes an allocation under 26 U.S.C. 2632 (Internal Revenue Code), may benefit personally from the election or allocation and is not required to reimburse another person interested in the election or allocation, to make an equitable adjustment, or to treat interested persons impartially with respect to the election or allocation.
(b) Unless a governing instrument specifically refers to this section and provides otherwise, if an election is made under 26 U.S.C. 2056, 2056A, or 2523 (Internal Revenue Code), if an allocation is made under 26 U.S.C. 2632 (Internal Revenue Code), or if division of a trust benefits the persons interested in the trust, the trustee may divide the trust into two or more separate trusts of equal or unequal value if the terms of the separate resulting trusts are substantially identical to the terms of the trust before the division. The allocation of assets must be based on the fair market value of the assets at the time of the division.
(c) Except as provided in (d) of this section, this section applies to
(1) a trust that is created on or after August 9, 2000; or
(2) the decisions and actions of a trust that is in existence on August 9, 2000 if the decisions are made or actions occur on or after August 9, 2000.
(d) The application provisions of (c) of this section do not apply if
(1) the terms of the trust, including the terms as amended, expressly provide that this section does not apply and either specifically refer to this section or otherwise clearly demonstrate the intent that this section does not apply; or
(2) the trust is irrevocable and all parties in interest elect not to be subject to the application of this section; an election under this paragraph must be made on or before January 1, 2003, or three years after the date on which the trust becomes irrevocable, whichever date is later; however, notwithstanding AS 13.36.080 , the trustee does not have a duty to inform the parties in interest of this election; the election allowed under this paragraph must be made by a written declaration delivered to the trustee.
(a) Except as specified in (b) of this section, in the administration of a trust that is a private foundation, as defined in Sec. 509 of the Internal Revenue Code of 1954, charitable trust, as described in Sec. 4947(a) (1) of the Internal Revenue Code of 1954, or split-interest trust, as described in Sec. 4947(a)(2) of the Internal Revenue Code of 1954, the trust instrument of the trust is considered to contain provisions prohibiting the trustee from
(1) engaging in an act of self-dealing, as defined in Sec. 4941(d) of the Internal Revenue Code of 1954, that would give rise to liability for the tax imposed by Sec. 4941(a) of the Internal Revenue Code of 1954;
(2) retaining excess business holdings, as defined in Sec. 4943(c) of the Internal Revenue Code of 1954, that would give rise to liability for the tax imposed by Sec. 4943(a) of the Internal Revenue Code of 1954;
(3) making an investment that would jeopardize the carrying out of any of the exempt purposes of the trust, within the meaning of Sec. 4944 of the Internal Revenue Code of 1954, so as to give rise to liability for the tax imposed by Sec. 4944(a) of the Internal Revenue Code of 1954; and
(4) making taxable expenditures, as defined in Sec. 4945(d) of the Internal Revenue Code of 1954, that would give rise to liability for the tax imposed by Sec. 4945(a) of the Internal Revenue Code of 1954.
(b) The provisions of (a) of this section do not apply either to those split-interest trusts or to amounts of them that are not subject to the prohibitions applicable to private foundations by reason of the provisions of Sec. 4947 of the Internal Revenue Code of 1954.
(c) The trust instrument of each trust specified in (a) of this section, except a split-interest trust, is considered to contain a provision requiring the trustee to distribute, for the purposes specified in the trust instrument, for each taxable year of the trust, amounts at least sufficient to avoid liability for the tax imposed by Sec. 4942(a) of the Internal Revenue Code of 1954.
(d) Nothing in this section limits the power of a person who creates a trust after August 23, 1971, or the power of a person who has retained or has been granted the right to amend a trust created before August 23, 1971, to include a specific provision in the trust instrument or an amendment to it that provides that some or all of the provisions of (a) and (b) of this section do not apply to the trust.
(e) In this section, references to provisions of the Internal Revenue Code of 1954 include future amendments to those provisions.
(a) Unless resolved or barred under (b) or (c) of this section, and notwithstanding the lack of adequate disclosure, all claims against a trustee who has issued a final report received by the beneficiary and who has informed the beneficiary of the location and availability of records for examination by the beneficiary are barred unless a proceeding to assert the claims is commenced within three years after the beneficiary's receipt of the final report.
(b) If a trustee petitions a court for an order approving a report that adequately discloses the existence of a potential claim, serves the report on all beneficiaries to be bound by the report, and gives the beneficiaries at least 90 days' notice of the court proceeding, all potential claims of the beneficiaries against the trustee are barred unless the claims are served on the trustee and filed with the court within 60 days after the beneficiaries receive the report, or during the proceeding.
(c) If a trustee serves a report on a beneficiary that adequately discloses the existence of a potential claim against the trustee, the trustee informs the beneficiary that a proceeding to assert any claim against the trustee must be commenced by the beneficiary within 24 months after receipt of the report if it is an interim report or within six months after receipt of the report if it is a final report, and the beneficiary fails to assert a claim against the trustee, all claims of the beneficiary are barred.
(d) A beneficiary is considered to have received a report if, being an adult, the report is received by the beneficiary personally, or, if the beneficiary is a person who may be represented and bound by another person under AS 13.06.120 , the report is received by the person who may represent the person under AS 13.06.120 .
(e) A report adequately discloses the existence of a potential claim against a trustee if it provides sufficient information for the beneficiary to know of the potential claim or to be expected to reasonably inquire into the existence of a claim with respect to the matter.
(f) This section does not apply to claims brought by a beneficiary against a trustee for fraud committed by the trustee.
(g) In this section,
(1) 'final report' is a report that informs the beneficiary that the trust administration is to be ended;
(2) 'report' means a final report or an interim report for a certain period, and includes an accounting.
(a) The court has exclusive jurisdiction of proceedings initiated by interested parties concerning the internal affairs of trusts, including trusts covered by (c) of this section. Except as provided in (c) and (d) of this section, proceedings that may be maintained under this section are those concerning the administration and distribution of trusts, the declaration of rights, and the determination of other matters involving trustees and beneficiaries of trusts. These include proceedings to
(1) appoint or remove a trustee;
(2) review trustees' fees and to review and settle interim or final accounts;
(3) ascertain beneficiaries, determine any question arising in the administration or distribution of any trust including questions of construction of trust instruments, instruct trustees, and determine the existence or nonexistence of any immunity, power, privilege, duty, or right; and
(4) release registration of a trust.
(b) Neither registration of a trust nor a proceeding under this section results in continuing supervisory proceedings. The management and distribution of a trust estate, submission of accounts and reports to beneficiaries, payment of trustee's fees and other obligations of a trust, acceptance and change of trusteeship, and other aspects of the administration of a trust shall proceed expeditiously consistently with the terms of the trust, free of judicial intervention and without order, approval or other action of any court, subject to the jurisdiction of the court as invoked by interested parties or as otherwise exercised as provided by law.
(c) A provision that the laws of this state govern the validity, construction, and administration of the trust and that the trust is subject to the jurisdiction of this state is valid, effective, and conclusive for the trust if
(1) some or all of the trust assets are deposited in this state and are being administered by a qualified person; in this paragraph, 'deposited in this state' includes being held in a checking account, time deposit, certificate of deposit, brokerage account, trust company fiduciary account, or other similar account or deposit that is located in this state;
(2) a trustee is a qualified person who is designated as a trustee under the governing instrument or by a court having jurisdiction over the trust;
(3) the powers of the trustee identified under (2) of this subsection include or are limited to
(A) maintaining records for the trust on an exclusive basis or a nonexclusive basis; and
(B) preparing or arranging for the preparation of, on an exclusive basis or a nonexclusive basis, an income tax return that must be filed by the trust; and
(4) part or all of the administration occurs in this state, including physically maintaining trust records in this state.
(d) The validity, construction, and administration of a trust with a state jurisdiction provision are determined by the laws of this state, including the
(1) capacity of the settlor;
(2) powers, obligations, liabilities, and rights of the trustees and the appointment and removal of the trustees; and
(3) existence and extent of powers, conferred or retained, including a trustee's discretionary powers, the powers retained by a beneficiary of the trust, and the validity of the exercise of a power.
(e) [Repealed, Sec. 22 ch 105 SLA 1998].
(a) Notwithstanding AS 13.36.107 , a trustee who is not an independent trustee may not exercise a power to make or cause to be made a discretionary distribution of either principal or income
(1) to or for the direct or indirect benefit of the trustee individually or to any person holding a power to remove and replace the trustee, except to the extent that the power is exercised in accordance with an ascertainable standard that relates to the health, education, maintenance, or support of the trustee or person;
(2) to satisfy a legal obligation that is owed by the trustee individually or by any person holding a power to remove and replace this trustee; or
(3) if the distribution would constitute a taxable gift from the trustee individually or from a person holding a power to remove and replace the trustee.
(b) The prohibitions of (a) of this section apply to a trustee even if the governing instrument states that the trustee may make distributions in the trustee's uncontrolled, absolute, or total discretion, or that distributions are not subject to review by a court, or the governing instrument otherwise indicates that distributions by the trustee are not subject to reasonableness when the trustee exercises discretion.
(c) If a trustee is prohibited by (a) of this section from exercising a power and if one or more other trustees are not prohibited by (a) of this section from exercising the power, the other trustees may exercise the power. If there is not a trustee who can exercise a power prohibited under (a) of this section, a party in interest may apply to the superior court to appoint an independent trustee to exercise the power.
(d) The provisions of (a) of this section do not prohibit a trustee from making payments, including reimbursement of and compensation of an independent trustee appointed under (c) of this section, for the protection of the trust or the assets of the trust, or for the expenses, losses, or liabilities incurred in the collection, care, administration, or protection of the trust or the assets of the trust.
(e) Except as provided in (f) of this section, this section applies to
(1) a trust that is created on or after August 9, 2000; or
(2) the decisions and actions of a trust that is in existence on August 9, 2000, if the decisions are made, or the actions occur, on or after August 9, 2000.
(f) The application provisions of (e) of this section do not apply if
(1) the terms of the trust, including the terms as amended, expressly provide that this section does not apply and either specifically refer to this section or otherwise clearly demonstrate the intent that this section does not apply; or
(2) the trust is irrevocable and all parties in interest elect under (g) of this section not to be subject to the application of this section; an election under this paragraph must be made on or before January 1, 2003, or three years after the date on which the trust becomes irrevocable, whichever date is later; however, notwithstanding AS 13.36.080 , the trustee does not have a duty to inform the parties in interest of this election.
(g) The election allowed under (f) of this section shall be made by a written declaration that is delivered to the trustee.
(h) The prohibitions of (a) of this section do not apply to a trustee with respect to trust property, including income from the trust property, if the trust property would, upon the death of the trustee, be included, for any reason other than the exercise of a power prohibited by (a) of this section, in the gross estate of the trustee for federal estate tax purposes.
(i) This section does not create a new cause of action, or impair a cause of action existing before August 9, 2000, if the new or existing cause of action relates to the exercise of a power prohibited by (a) of this section that was exercised before August 9, 2000.
(j) In this section, 'independent trustee' means a trustee that is not related or subordinate, as defined in 26 U.S.C. 672(c), to the person having the power to remove the trustee or to any beneficiary.
Except as otherwise provided by this chapter, in addition to the powers conferred by the terms of the trust, a trustee may perform all actions necessary to accomplish the proper management, investment, and distribution of the trust property, including the power
(1) to collect, hold, and retain trust property received from a settlor or another person; the property may be retained even if it includes property in which the trustee is personally interested;
(2) to accept additions to the property of the trust from a settlor or another person;
(3) to continue or to participate in the operation of a business or other enterprise that is part of the trust property and to effect an incorporation, dissolution, or other change in the form of the organization of the business or enterprise;
(4) to acquire or dispose of property, for cash or on credit, at public or private sale or by exchange;
(5) to manage, control, divide, develop, improve, exchange, partition, change the character of, or abandon trust property;
(6) to encumber, mortgage, or pledge trust property for a term within or extending beyond the term of the trust in connection with the exercise of a power vested in the trustee;
(7) to make ordinary or extraordinary repairs, alterations, or improvements in buildings or other trust property; to demolish improvements; and to raze existing or erect new party walls or buildings;
(8) to subdivide or develop land; to dedicate land to public use; to make or obtain the vacation of plats and to adjust boundaries; to adjust differences in valuation on exchange or partition by giving or receiving consideration; and to dedicate easements to public use without consideration;
(9) to enter into a lease for any purpose as lessor or lessee with or without the option to purchase or renew and for a term within or extending beyond the term of the trust;
(10) to enter into a lease or arrangement for exploration and removal of gas, oil, or other minerals or geothermal energy; and to enter into a community oil lease, a pooling agreement, or a unitization agreement;
(11) to grant an option involving disposition of trust property or to take an option for the acquisition of property, including an option that is exercisable beyond the duration of the trust;
(12) with respect to shares of stock of a domestic or foreign corporation, a membership in a nonprofit corporation, or other property, to
(A) vote in person and to give proxies to exercise any voting rights with respect to the shares, memberships, or property;
(B) waive notice of a meeting or to give consent to the holding of a meeting; and
(C) authorize, ratify, approve, or confirm an action that could be taken by shareholders, members, or property owners;
(13) to pay calls, assessments, and other sums chargeable to or accruing against or on a securities account;
(14) to sell or exercise stock subscription or conversion rights;
(15) to consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise; to participate in voting trusts, pooling arrangements, and foreclosures; and, in connection with a reorganization, consolidation, merger, dissolution, liquidation, voting trust, pooling arrangement, or foreclosure, to deposit securities with, transfer title, and delegate discretion to a protective or other committee as the trustee considers advisable;
(16) to deposit securities in a securities depository;
(17) to insure the property of the trust against damage or loss and to insure the trustee against liability with respect to third persons;
(18) to borrow money for a trust purpose to be repaid from trust property;
(19) to pay or contest a claim, to settle a claim by or against the trust by compromise, arbitration, or otherwise, and to release, in whole or in part, a claim belonging to the trust;
(20) to pay taxes, assessments, reasonable compensation of the trustee, employees, and agents of the trust, and other expenses incurred in the collection, care, administration, and protection of the trust;
(21) to make loans out of trust property to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances and to guarantee loans to the beneficiary by encumbrances on trust property;
(22) to pay an amount distributable to a beneficiary, whether or not the beneficiary is under a legal disability, by paying the amount to the beneficiary or by paying the amount to another person for the use or benefit of the beneficiary;
(23) to make a distribution of property and money in divided or undivided interests, pro rata or otherwise, and to adjust resulting differences in valuation;
(24) to employ accountants, attorneys, investment advisers, appraisers, or other persons, even if they are associated or affiliated with the trustee, to advise or assist the trustee in the performance of administrative duties;
(25) to inspect or investigate property that the trustee has been asked to hold or property owned or operated by an entity in which the trustee holds or has been asked to hold an interest for the purpose of determining the application of environmental law to the property and to take action to prevent, abate, or otherwise remedy an actual or potential violation of an environmental law affecting property held directly or indirectly by the trustee;
(26) to establish for an asset a reserve for depreciation, depletion, or obsolescence, and to decide, under law, how and in what proportions a receipt or disbursement is to be credited, charged, or apportioned between principal and income;
(27) to execute and deliver instruments that are useful to accomplish or facilitate the exercise of the trustee's powers; and
(28) to prosecute or defend an action, claim, or proceeding in order to protect trust property and the trustee in the performance of the trustee's duties.
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