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ENGROSSED HOUSE
BILL NO. 3449 By: O'Donnell of the House
and
Daniels of the Senate
An Act relating to trusts; amending 60 O.S. 2021,
Section 175.23, which relates to district courts '
jurisdiction to construe trust instr uments; providing
that courts shall have the ability to modify or
terminate trusts created on or aft er November 1,
2022, for excessive administrative costs a nd for
failure of trust purpose; providing guidance to
courts modifying or terminating trusts; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 60 O.S. 2021, Section 175.23, is
amended to read as follows:
Section 175.23 A. The district court shall have orig inal
jurisdiction to construe the provisions of any trust instrument; to
determine the law applicable thereto ; the powers, duties, and
liability of trustee; the existence or nonexistence of facts
affecting the administration of the trust estate; to require
accounting by trustees; to surcharge trustee; and in its discretion
to supervise the administration of trust s; and all actions hereunder
are declared to be proceedings in rem.
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B. The venue of such actions shall be in the county where the
trustees or any cotrustee resides. Upon obtaining jurisdiction the
same shall not be divested by the removal of the trustee from the
county where the action is commenced.
C. Actions hereunder may be brought by a trustee, beneficiary,
or any person affected by the admini stration of the trust estate.
If the action is predicated upon any act or obligation of any
beneficiary, the beneficiary shall be a necessary party to the
proceedings. The only necessary parties to such actions shall be
those persons designated as benefi ciaries by name or class in the
instrument creating the trust and who have a vested interest in the
trust which is the subject of the action, those persons currently
serving as trustees of the trust, and any persons who may be
actually receiving distributi ons from the trust estate at the time
the action is filed. Contingent beneficiaries designated by name or
class shall not be necessary parties.
D. The provisions of the statutes governing civil procedure,
commencement of action, process, process by publi cation, appointment
of guardians ad litem, supersedeas and appeal, shall govern all
actions and proceedings b rought under provisions of this act.
E. A court of competent jurisdiction may, for cause shown and
upon notice to the beneficiaries, relieve a tru stee from any or all
of the duties and restrictions which would otherwise be placed upon
the trustee by this act, or wholly or partly excuse a trustee who
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has acted honestly and reasonably from liability for violations of
the provisions of this act.
F. For trusts created on or after November 1, 2022, a court,
upon application of a trustee or any qualified benefi ciary, may:
1. Modify or terminate a trust or remove the trus tee and
appoint a different trustee if the court determines that the value
of the trust property is insufficient to justify the cost of
administration.
Upon termination of a trust under this paragraph, the trustee
shall distribute the trust property in a m anner consistent with the
purposes of the trust. The trustee may enter into agreemen ts or
make such other provisions that the trustee deems necessary or
appropriate to protect the interests of the beneficiaries and the
trustee and to carry out the intent and purposes of the trust.
In the event of a dispute between a trustee or a beneficiary of
a trust, the court may determine the ultimate disposition of the
assets remaining in the trust.
This paragraph does not apply to an easement for conservation or
preservation; and
2. Modify the terms of an irrevocable trust if:
a. the purposes of the trust have been fulfilled or have
become illegal, impossible, wastef ul, or impracticable
to fulfill,
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b. because of circumstances not anticipated by the
settlor, compliance with the terms of the trust would
defeat or substantially impair the accomplishment of a
material purpose of the trust, or
c. a material purpose of the trust no longer exists.
G. In modifying or terminating a trust under subsection F of
this section, a court may:
1. Amend or change the terms of the trust, including terms
governing distribution of the trust income or principal or terms
governing administration of the trust;
2. Terminate the trust in whole or in part;
3. Direct or permit the trustee to perform acts that are not
authorized or that are prohibited by the terms of the trust ; or
4. Prohibit the trustee from performing acts that are permitted
or required by the terms of the trust.
In exercising discretion to modify a trust under subsection F of
this section, the court shall consider the terms and purposes of the
trust, the facts and circumstances surrounding the creation of the
trust, and extrinsic evidence relevant to the proposed modification.
SECTION 2. This act shall becom e effective November 1, 2022.
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Passed the House of Representatives the 15th day of March, 2022.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2022.
Presiding Officer of the Senate