RÉSUMÉ DIGEST
ACT 219 (HB 439) 2015 Regular Session Nancy Landry
Existing law (R.S. 9:1783) provides for those who may serve as a trustee of a trust.
New law provides that a nonprofit corporation or trust for educational, charitable, or religious
purposes that is designated as income or principal beneficiary may serve as trustee of a trust
for mixed private and charitable purposes.
Existing law (R.S. 9:1821) provides that a testamentary trust is created at the moment of the
settlor's death without need for the trustee's acceptance of the trust.
New law clarifies that a testamentary trust is created at the moment of the settlor's death.
Existing law (R.S. 9:1822) provided that an inter vivos trust was created upon execution of
the trust instrument without need for the trustee's acceptance.
New law clarifies that an inter vivos trust is created upon execution of the trust instrument.
Existing law (R.S. 9:1891) provides that a testator can create a trust in favor of a class
consisting of some or all of his children, grandchildren, great-grandchildren, nieces,
nephews, grandnieces, grandnephews, and great-grandnieces and great-grandnephews, or any
combination thereof, although some members of the class are not yet in being at the time of
the creation of the trust so long as at least one member of the class is then in being.
New law specifies that a testator can create an inter vivos or testamentary trust in favor of
a class consisting of some or all of the children, grandchildren, great-grandchildren, nieces,
nephews, grandnieces, grandnephews, and great-grandnieces and great-grandnephews of the
settlor or of the settlor's current, former, or predeceased spouse.
New law further provides that if the class includes such members who are not also related
to the settlor, the interests of those members shall be determined as if they were related to
the settlor in the same manner as they are related to the settlor's current, former, or
predeceased spouse, unless the trust instrument provides otherwise. Unless the trust
instrument provides otherwise, the interests of the class members shall be determined that
if the class consists solely of descendants of the same degree, the interests of the members
of the class shall be determined by roots before the application of R.S. 9:1894. For all other
cases, the interests of the members of the class shall be determined by heads.
Existing law (R.S. 9:1894) provides that if a person dies before the creation of the trust in
which he would have been a member of a class if he had not died, his descendants shall be
considered members of the class by representation unless the instrument provides otherwise.
New law provides that in all cases where representation is permitted, the division is made by
roots. If one root has produced several branches, the subdivision is also made by roots in
each branch, and the members of the same branch take by heads.
Existing law (R.S. 9:1904) provides the general rule that if the members of one class of the
settlor's children or grandchildren are designated beneficiaries of income and members of a
different class of his children or grandchildren are designated as beneficiaries of principal,
the class of beneficiaries of income shall be governed by R.S. 9:1899 through 1901 and the
class of beneficiaries of principal shall be governed by R.S. 9:1902 and 1903.
New law clarifies that if members of one class are designated beneficiaries of income and
members of a different class are designated as beneficiaries of principal, the class of
beneficiaries of income are governed by R.S. 9:1899 through 1901 and the class of
beneficiaries of principal are governed by R.S. 9:1902 and 1903.
Existing law (R.S. 9:1905) provides that if members of the same class of the settlor's children
or grandchildren are designated beneficiaries of both income and principal, interests in
income before the class closes shall be governed by R.S. 9:1899 through 1901.
Page 1 of 3 New law clarifies that if members of the same class are designated beneficiaries of both
income and principal, interests in income before the class closes shall be governed by R.S.
9:1899 through 1901.
Existing law (R.S. 9:1953) provides for the assignment of interest in trust and termination
of trust for mixed private and charitable purposes.
New law provides that unless the trust instrument provides otherwise or specifically contains
a special needs provision, a private beneficiary of a trust for mixed private and charitable
purposes may at any time assign to a charitable principal beneficiary of the trust a fraction
or all of the private beneficiary's interest in the trust. An interest in a spendthrift trust may
be assigned only gratuitously. Also, if the trust instrument provides for the termination of
the trust at the end of the specified term of the private interests, the trust may be terminated
early by the charitable principal beneficiary as to the portion of the trust that no longer has
a private beneficiary.
Existing law (R.S. 9:2026) provides that the proper court may order the termination or
modification of a trust, in whole or in part, if the continuance of the trust unchanged would
defeat or substantially impair the purposes of the trust. It also provides that if a trustee has
determined that the market value of a trust is less than $100,000 and that, in relation to the
costs of administration of the trust, the continuance of the trust unchanged would defeat or
substantially impair the purposes of the trust. In such a case, the court may provide for the
distribution of the trust property, including principal and undistributed income, to the
beneficiaries in a manner which conforms as nearly as possible to the intention of the settlor,
and the court shall make appropriate provisions for the appointment of a tutor in the case of
a minor beneficiary. In the event of the termination or modification of a trust under the
provisions of this Paragraph, the trustee shall not be subject to liability for such termination
or modification.
New law retains existing law, in part, and provides that after obtaining the consent of all
beneficiaries or their legal representatives, a trustee may terminate a trust if the market value
of the trust is less than $100,000, and that a natural tutor, without need for a formal tutorship
proceeding and concurrence of an undertutor, can consent to the termination of a trust on
behalf of a minor. In the event of the termination or modification of a trust, the trustee shall
not be subject to liability for such termination or modification.
Existing 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 remove
beneficiaries, or modify their rights, if all of the affected beneficiaries are descendants of the
person given the power to modify.
New law specifies that a trust instrument can authorize a person who is in being on the date
of the creation of the trust to modify the provisions of the trust instrument to add or remove
beneficiaries, or modify their rights if all of the affected beneficiaries are descendants of the
person given the power to modify. New law further provides that a beneficiary added can
be a person who is not in being when the trust is created, provided the individual is in being
at the time the power to add is exercised.
New law (R.S. 9:2047) provides that a divorce of the settlor revokes every provision that
may be revoked or modified by the settlor in an inter vivos trust designating or appointing
the settlor's former spouse unless expressly provided otherwise in the trust instrument or in
a judgment or a property settlement agreement. A trustee with no actual knowledge of the
divorce, judgment, or property settlement agreement is not liable for actions taken in good
faith regarding the settlor's former spouse.
Prior law (R.S. 9:2087) provided for a trustee's delegation of his duties. Further provided
that the recitation by the trustee in a power of attorney that he had approved the specific
terms of the transaction was sufficient to demonstrate the delegation of the performance of
a ministerial duty.
New law provides that a trustee may, by power of attorney, delegate the performance of acts
that he could not reasonably be required to perform personally and the performance of
Page 2 of 3 ministerial duties. A power of attorney granted by a trustee authorizing a mandatary to
alienate, acquire, lease, or encumber specifically described property at a specified price is
permitted. New law further provides that a trustee's recitation in a power of attorney that he
has approved the specific terms of a transaction sufficiently demonstrates that the trustee has
delegated the performance of a ministerial duty.
Existing law (R.S. 9:2096) provides that if there are two or more trustees, each shall
participate in the administration of the trust and use reasonable care to prevent a co-trustee
from committing a breach of trust and shall compel him to redress a breach of trust.
New law clarifies that if there are two or more trustees with the same powers, each shall
participate in the administration of the trust and use reasonable care to prevent a co-trustee
from committing a breach of trust and shall compel him to redress a breach of trust.
New law (R.S. 9:2114.1) provides that a trust instrument may confer different powers upon
different trustees and each trustee acts independently with respect to those powers conferred
upon him. For those powers he does not have, the trustee shall have no duties or liabilities
as to the actions or inactions of the other trustees.
Existing law (R.S. 9:2158) provides that a trustee may make an adjustment between principal
and income when the interest of one or more beneficiaries is defined by reference to the
"income" of a trust, and the trustee determines, after taking into account the allocations for
the year, that the adjustment is necessary in order for the trustee to satisfy his duty to be fair
and reasonable to all the beneficiaries, taking into account the purposes of the trust.
New law provides that when income is distributed during the year, the income can be
determined based on the adjustment to be made for the year. The adjustment to be made can
be determined in a way that causes the total amount distributed to the income beneficiary
during the year to be equal to a percentage of the value of the trust property at the end of the
prior year or at the end of an average of up to three prior years.
New law (R.S. 9:2263) provides for the creation of a trust for the care of an animal.
Effective August 1, 2015.
(Amends R.S. 9:1783(B), 1821, 1822, 1891, 1894, 1904, 1905, 1953, 2026, 2028, 2031,
2087(B), 2096, and 2158; Adds R.S. 9:2047, 2114.1, and 2263)
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