HLS 10RS-817 ORIGINAL
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Regular Session, 2010
HOUSE BILL NO. 856
BY REPRESENTATIVE TIM BURNS
(On Recommendation of the Louisiana State Law Institute)
TRUSTS: Provides for the revision of the La. Trust Code
AN ACT1
To amend and reenact R.S. 9:1725(5), 1893, 1895(A), 1971, 2004(2), 2011, 2025, and 20452
and to enact R.S. 9:1973(C), 2031, and 2235, relative to the Louisiana Trust Code;3
to provide for the definition of "proper court"; to provide for class trusts; to provide4
for the interests of beneficiaries; to provide for the correction of cross references; to5
provide relative to the shifting of the interest of a principal beneficiary; to provide6
for the delegation of the right to terminate, modify, or amend certain trust provisions;7
to provide for the delegation of the right to revoke a trust; and to provide for related8
matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 9:1725(5), 1893, 1895(A), 1971, 2004(2), 2011, 2025, and 2045 are11
hereby amended and reenacted and R.S. 9:1973(C), 2031, and 2235 are hereby enacted to12
read as follows: 13
§1725. Definitions14
Except when the context clearly indicates otherwise, as used in this Code:15
* * *16
(5) "Proper court" in the case of an inter vivos trust means the district court17
of the parish designated by the settlor, or if no designation is made, the district court18
of the parish of the trustee's domicile when only one trustee is named, or when more19
than one trustee is named, or when the trustee is a nonresident, the district court of20 HLS 10RS-817 ORIGINAL
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the parish where the principal trust property is located, but if the settlor has named1
two or more trustees in the trust instrument and they are domiciled in the same2
parish, the district court of the trustee's domicile shall be the proper court. If the3
settlor designates the court, he shall designate: (a) the district court of the parish of4
the domicile of the trustee; (b) the district court of the parish of the domicile of the5
settlor; or (c) the district court of the parish where the principal trust property is6
located. "Proper court" in the case of a testamentary trust means the district court7
having jurisdiction of the settlor's succession. "Proper court" means the court as8
determined by the provisions of R.S. 9:2235.9
* * *10
§1893. Income and principal designations11
A class trust may be created with respect to all of or a portion of income or12
principal, or both, but the members of the class must always be the sole beneficiaries13
of the interest affected, whether income, principal, or both of the portion of the trust14
of which they are beneficiaries. Subject to R.S. 9:2068, the trustee may invade15
principal for the benefit of one or more individual income beneficiaries or one or16
more members of any class of income beneficiaries, even though such income17
beneficiary may not be a member of the class of principal beneficiaries. 18
* * *19
§1895. Effect of death of class member during the term of the trust 20
A. An interest of a member of the class who dies during the term of the trust21
vests in his heirs or legatees, but unless the trust instrument may provide provides22
any one of the following:23
(1) That that the interest of a member of the class who dies intestate and24
without descendants during the term of the trust vests in the other members of the25
class, or,.26
(2) Except except as to the legitime in trust, that the interest of a member of27
the class who dies without descendants during the term of the trust or at its28
termination vests in the other members of the class.29 HLS 10RS-817 ORIGINAL
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(3) Except as to the legitime in trust, that the interest of a member of the1
class who dies leaving one or more descendants vests in the beneficiary's descendant2
heirs.3
* * *4
§1971. Time of acquisition of interest5
The interest of a principal beneficiary is acquired immediately upon the6
creation of a trust, subject to the exceptions provided in this Code and in Civil Code7
Article 1521(A)(2).8
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§1973. Shifting interest in principal10
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C. The trust instrument may provide that the interest of a designated12
principal beneficiary of a revocable trust shifts to another person or persons, if the13
substitution occurs no later than the date when the trust becomes irrevocable.14
* * *15
§2004. Seizure by creditor; general rule16
A creditor may seize only:17
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(2) A beneficiary's interest in income and principal, to the extent that the19
beneficiary has donated property to the trust, directly or indirectly. A beneficiary20
will not be deemed to have donated property to a trust merely because he fails to21
exercise a right of withdrawal from the trust.22
* * *23
§2011. General rule 24
A revocable trust instrument need not designate the beneficiaries upon the25
creation of the trust but may instead provide a method whereby they are determined26
at a later time date, but no later than the time date when the trust becomes27
irrevocable. A beneficiary thus determined may be a person who is not in being28
when the trust is created, as long as he is in being when the beneficiaries are29 HLS 10RS-817 ORIGINAL
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determined. If beneficiaries are thus determined, any provision in this Code that1
refers to persons in existence at the creation of the trust shall be deemed to refer to2
persons in existence at the time when the beneficiaries are determined under the trust3
instrument. The interest of the beneficiary may be conditioned upon the beneficiary4
surviving the settlor for a period of time permitted by Civil Code Article 1521(A)(2).5
* * *6
§2025. Delegation of right to terminate or to modify administrative provisions7
A settlor may delegate to another person the right to terminate a trust, or to8
modify the administrative provisions of a trust, but the right to modify other9
provisions of a trust may not be delegated except as provided in R.S. 9:2031.10
* * *11
§2031. Delegation of right to amend12
A trust instrument may authorize a person other than the settlor to modify the13
provisions of the trust instrument in order to add or remove beneficiaries, or modify14
their rights, if all of the affected beneficiaries are descendants of the person given the15
power to modify.16
Comment17
A power to amend granted under this Section will not be allowed to the18
extent that the exercise of the power would impinge on a beneficiary’s legitime held19
in the trust. See R.S. 9:1841.20
* * *21
§2045. Delegation of right to revoke22
A settlor who has reserved the right to revoke a trust may delegate that the23
right. only by an express statement in the trust instrument or in a power of attorney24
executed in authentic form referring to the trust. The delegation may be25
accomplished only by an express statement in the trust instrument or in a power of26
attorney executed by authentic act referring to the trust. The right to amend may not27
be delegated except as provided in R.S. 9:2025 and 2031.28
* * *29 HLS 10RS-817 ORIGINAL
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§2235. Proper court1
The proper court for an action under this Chapter shall be determined as2
follows:3
A.(1) In the case of an inter vivos trust, the proper court shall be the district4
court of any parish that the trust instrument effectively designates as the proper5
court.6
(2) If the trust instrument fails to designate a proper court for an inter vivos7
trust, any of the following are proper courts:8
(a) The district court of the parish in which a settlor was domiciled when the9
trust was created.10
(b) If the trust has a trustee domiciled in Louisiana, the district court of the11
parish in which a trustee is domiciled.12
(c) If the trust has no trustee domiciled in Louisiana, the district court in13
which the agent for service of process of any nonresident trustee is domiciled.14
(3) If the trust instrument fails to designate a proper court for an inter vivos15
trust, and none of the courts specified in Paragraph (2) of this Subsection are16
available, the proper court shall be the Nineteenth Judicial District Court.17
B. In the case of a testamentary trust, the proper court shall be the district18
court of the parish having jurisdiction over the settlor's succession, which shall19
continue as the proper court unless the settlor in the trust instrument has designated20
a proper court. In that event, the settlor's designation shall be effective after the21
trustee is put into possession of the entire legacy.22
C. The foregoing notwithstanding, in the case of a testamentary trust after23
the trustee is put into possession of the entire legacy, and in the case of any inter24
vivos trust, the proper court shall be any court agreed to by all trustees, beneficiaries,25
and living settlors.26
D. Once a matter regarding an inter vivos trust has been litigated in a district27
court, that court shall continue as the sole proper court absent the agreement28
described in Subsection C of this Section.29 HLS 10RS-817 ORIGINAL
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E. Amendments to a trust instrument that attempt to designate a proper court1
after institution of an action shall have no effect on the selection of the proper court.2
Section 2. The provisions of this Act shall apply to all trusts, whether created before3
or after the effective date of this Act, but R.S. 9:1895(A)(3) shall apply only to substitutions4
occurring after the effective date of this Act.5
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Tim Burns HB No. 856
Abstract: Provides for the revision of the La. Trust Code.
Present law (R.S. 9:1725(5)) provides that for an inter vivos trust, the "proper court" means
the district court of the parish designated by the settlor.
Proposed law (R.S. 9:2235(A)) provides that for an inter vivos trust, the proper court is the
district court of the parish designated by the trust instrument.
Present law (R.S. 9:1725(5)) provides that if the settlor has not designated the proper court
for an inter vivos trust, the proper court is the district court of the domicile of the resident
trustee or the parish where the property is located.
Proposed law (R.S. 9:2235(A)) provides that if the settlor has not designated the proper court
for an inter vivos trust, the proper court is any of the following: (a) the district court of the
parish in which a settlor was domiciled when the trust was created, (b) if the trust has a
trustee domiciled in La., the district court of the parish in which a trustee is domiciled, and
(c) if the trust has no trustee domiciled in La., the district court in which the agent for service
of process of any nonresident trustee is domiciled.
Present law (R.S. 9:1725(5)) provides that for a testamentary trust, the proper court means
the district court having jurisdiction of the settlor's succession.
Proposed law (R.S. 9:2235(A)) retains present law, but also provides that the settlor can
designate the proper court and that all of the trustees, beneficiaries, and living settlers can
agree to a proper court after the trustee has been put into possession of the entire legacy.
Proposed law (R.S. 9:2235(E)) provides that amendments to a trust instrument after an
action has been filed shall have no effect on the designation of the proper court.
Present law (R.S. 9:1893) provides that a class trust may be created with respect to income
or principal, or both, but the members of the class must always be the sole beneficiaries of
the interest affected, whether income, principal, or both.
Proposed law (R.S. 9:1893) provides that a class trust may be created with respect to all or
a portion of principal, or both, and that the members of the class must always be the sole
beneficiaries of the portion of the trust of which they are beneficiaries. HLS 10RS-817 ORIGINAL
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Present law (R.S. 9:1895) provides that an interest of a member of a class trust who dies
during the term of the trust may vest in the other members of the class if the member died
without descendants and the trust instrument so provides.
Proposed law (R.S. 9:1895) retains present law, but also provides that the trust instrument
may provide that, except as to the legitime in trust, the interest of a member of the class
who dies leaving one or more descendants vests in the beneficiary's descendant heirs.
Proposed law (R.S. 9:1973(C)) provides that the trust instrument may provide that the
interest of a designated principal beneficiary of a revocable trust shifts to another person or
persons, if the substitution occurs no later than the date when the trust becomes irrevocable.
Present law (R.S. 9:2004) provides the general rule for seizure by a creditor of a
beneficiary's interest in income or principal.
Proposed law (R.S. 9:2004) retains present law, but also provides that a beneficiary will not
be deemed to have donated property to a trust merely because he fails to exercise a right of
withdrawal from the trust.
Present law (R.S. 9:2025) provides the limits for the delegation of authority to terminate or
modify the provisions of a trust.
Proposed law (R.S. 9:2025) retains present law, but also adds the exception that the authority
to modify the provisions of a trust can be delegated in accordance with R.S. 9:2031.
Proposed law (R.S. 9:2031) provides that a trust instrument may authorize a person other
than the settlor to modify the provisions of the trust instrument in order to add or subtract
beneficiaries, or modify their rights, if all of the affected beneficiaries are descendants of the
person given the power to modify.
Present law (R.S. 9:2045) provides that the right to revoke a trust can be delegated.
Proposed law (R.S. 9:2045) retains present law, but also adds that the right to amend may
not be delegated except as provided in R.S. 9:2025 and 2031.
(Amends R.S. 9:1725(5), 1893, 1895(A), 1971, 2004(2), 2011, 2025, and 2045; Adds R.S.
9:1973(C), 2031, and 2235)