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ENGROSSED HOUSE
BILL NO. 3962 By: Echols and Kane of the
House
and
Pugh of the Senate
An Act relating to trusts; enacting the Oklahoma Trust
Reform Act of 2024; enacting the Oklahoma Uniform
Directed Trust Act of 2024; defining terms; providing
for applicability; providin g for principal place of
administration; providing for when common law and
principals of equity control; providing for
exclusions; providing the powers of a trust director;
providing limitations on trust director; provi ding
duties and liabilities of a trus t director; providing
duties and liabilities of directed trustees; providing
a duty to provide certain information to a trust
director or trustee; providing that there is no duty
to monitor, inform, or advise; providing application
to co-trustee; providing limitation of action against
a trust director; providing defenses for a suit
against a trust director; providing jurisdiction over
a trust director; providing that unless the ter m of a
trust provides otherwise, the rul es applicable to a
trustee shall apply to a trust director in certain
matters; providing relation to electronic signature
laws; enacting the Oklahoma Qualified Dispositions
into Trust Act; defining terms; defining trust
instrument; defining qualified person; providing
requirements to be considered a qu alified person;
providing for persons and entities not to be
considered a qualified person; providing for the
appointment, removal, or replacement of co -trustee,
trust advisor, or trust protec tor; providing who may
serve as an investment trust advisor; pro viding that a
transferor may not serve as a fiduciary; providing f or
successor qualified person; providing for disp osition
to more than one trustee; providing that for
dispositions to more tha n one trustee, a qualified
disposition may not be treated as oth er than a
qualified disposition solely because not all of the
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trustees are qualified persons; providing powers and
rights of a transferor and its effect on a qualified
disposition; limiting ac tions of creditors to
transfers with the intent to defraud; prov iding
requirements for bringing claim for fraudulent
transfer of settlor's assets; providing for
disposition by transferor who is a trustee;
prohibiting certain actions against a trustee,
advisor, or trust preparer; prohibiting an action
against trustee, advisor, or preparer of trust
prohibited if action by creditor in c ertain
circumstances; providing court jurisdictio n; providing
for the collection attorney fees and costs in certain
circumstances; providing for when multiple qualified
dispositions in same trust instrument; providing
certain exceptions to application of this act under
certain events and circumstances; providing for
avoidance of a qualified disposition; p roviding for
discretionary interest; providing that the rules
against perpetuities shal l not apply to trusts;
providing intent to allow trust to have per petual
durations; providing for nonjudicial settlement
agreements for trusts; providing when nonjudicial
settlement agreements are valid; clarifying what
matters that may be solved by a nonj udicial settlement
agreement; providing for court ap proval of nonjudicial
settlement agreements; providing for noncodification;
providing for codification; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
This act shall be known and may be cited as the "Oklahoma Trust
Reform Act of 2024".
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SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1201 of Title 60, unless there
is created a duplication in numbering, reads as follow s:
Sections 2 through 19 of this act shall be known and may be
cited as the "Oklahoma Uniform Directed Trust Act of 2024".
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1202 of Title 60, unless there
is created a duplication in numbering, reads as follows:
As used in the Oklahoma Uniform Directed Trust A ct of 2024:
1. "Breach of trust" means a violation by a tru st director or
trustee of a duty imposed on that director or trustee by the terms
of the trust, this act, or laws of this state other than this act
pertaining to trusts ;
2. "Directed trust" means a trust for which the terms of the
trust grant a power of direction;
3. "Directed trustee" means a trustee that is subject to a
trust director's power of direction;
4. "Person" means an individual, estate, business or nonprofit
entity, public corporation, government or governmental subdivision,
agency, or instrumentality, or other legal entity;
5. "Power of direction" means a power over a trust gr anted to a
person by the terms of the trust to the extent the power is
exercisable while the person is not serving as a trustee. The term
includes a power over the investment, management, or distribution of
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trust property or other matters of trust administration. The term
excludes the powers desc ribed in subsection B of Section 6 of this
act;
6. "Settlor" means a person, including a testator, that crea tes
or contributes property to a trust. If more than one person creates
or contributes property to a trust, each person is a se ttlor of the
portion of the trust property attributable to that person's
contribution except to the extent another person has the power to
revoke or withdraw that portion;
7. "State" means a state of the United States, the District of
Columbia, Puerto Rico , the United States Virgin Islands, or any
other territory or possession subject to the jurisdiction of the
United States;
8. "Terms of a trust" means:
a. except as otherwise provided in subparagraph b of this
paragraph, the manifestation of the settlor 's intent
regarding a trust's provisions as:
(1) expressed in the trust instrume nt, or
(2) established by other evide nce that would be
admissible in a judicial proceeding, or
b. the trust's provisions as established, determined, or
amended by:
(1) a trustee or trust director in accordance with
applicable law, or
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(2) a court order;
9. "Trust director" means a person that is granted a power of
direction by the terms of a trust to the extent the power is
exercisable while the person is not serving as a trus tee. The
person is a trust director whether or not the terms of the trust
refer to the person as a trust directo r and whether or not the
person is a beneficiary or settlor of the trust ; and
10. "Trustee" means an original, additional, and successor
trustee, and a co-trustee.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1203 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. This act applies to a trust, whenever created, that has its
principal place of administration in this state and is subject to
the following rules:
1. If the trust was created before the effective date of this
act, this act applies only to a decision or action occurring on or
after the effective date of this act; and
2. If the principal place of administration of the trust i s
changed to this stat e on or after the effective date of this act,
this act applies only to a decision or action occurring on or after
the date of the change.
B. Without precluding other means to es tablish a sufficient
connection with the designated jurisdiction in a dire cted trust, the
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terms of the trust which designate the principal place of
administration of the trus t are valid and controlling if:
1. A trustee's principal place of business is located in or a
trustee is a resident of the designat ed jurisdiction;
2. A trust director's principal place of business is located in
or a trust director is a resident of t he designated jurisdiction; or
3. All or part of the administration occurs in the designated
jurisdiction.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1204 of Title 60, unless there
is created a duplication in numbering, read s as follows:
The common law and principles of equity supplement this act,
except to the extent modified b y this act or by other laws of this
state other than this act.
SECTION 6. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Section 1205 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. In this section, "power of appointment" means a power that
enables a person acting in a nonfiduciary capacity to designate a
recipient of an ownership interest in or another power of
appointment over trust property.
B. This act does not apply to a:
1. Power of appointment;
2. Power to appoint or remove a trustee or trust director;
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3. Power of a settlor over a trust to the extent the se ttlor
has a power to revoke the trust;
4. Power of a beneficiary over a trust to the extent the
exercise or nonexercise of the power affects the beneficial interest
of:
a. the beneficiary, or
b. another beneficiary represented by the beneficiary
with respect to the exer cise or nonexercise of the
power; or
5. Power over a trust, if:
a. the terms of the tru st provide that the power is held
in a nonfiduciary capacity, and
b. the power must be held in a nonf iduciary capacity to
achieve the settlor's tax objectives under the United
States Internal Revenue Code of 1986 , as amended, and
regulations issued thereunder, as amended.
C. Unless the terms of a trust provide otherwis e, a power
granted to a person to designate a recipient of an ownership
interest in or power of ap pointment over trust property which is
exercisable while the person is not serving as a trustee is a power
of appointment and not a power of direction.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Stat utes as Section 1206 of Title 60, unless there
is created a duplication in numbering, reads as follows:
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A. Subject to Section 8 of this act, the terms of a trust may
grant a power of directio n to a trust director.
B. Unless the terms of a trust provide otherwise:
1. A trust director may exercise any further power appropriate
to the exercise or nonexercise of a power of direction granted to
the director under subsection A of this section; and
2. Trust directors with joint powers must act by majority
decision.
SECTION 8. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1207 of Title 60, unless there
is created a duplication in number ing, reads as follows:
A trust director is subject to the same rules as a trustee in a
like position and un der similar circumstances in the exercise or
nonexercise of a power of direction or further power under paragraph
1 of subsection B of Section 7 of this act regarding:
1. A payback provision in the terms of a trust necessary to
comply with the reimburse ment requirements of Medicaid law in
Section 1917 of the Social Sec urity Act, 42 U.S.C. , Section
1396p(d)(4)(A), as amended, and regulations issue d thereunder, as
amended; and
2. A charitable interest in the trust, including providing
notice regarding the inter est to the Oklahoma Attorney General.
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SECTION 9. NEW LAW A new section of law to be codif ied
in the Oklahoma Statutes as Section 1208 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. Subject to subsection B of this section, with respect to a
power of direction or furth er power under paragraph 1 of subsect ion
B of Section 7 of this act:
1. A trust director has the same fiduciary duty and liability
in the exercise or nonexercise of the power:
a. if the power is held individually, as a sole tr ustee
in a like position and under similar circumstances, or
b. if the power is held jointly with a trustee or another
trust director, as a co -trustee in a like position and
under similar circumstances; and
2. The terms of the trust may vary the director 's duty or
liability to the same extent the terms of the trust could vary the
duty or liability of a trustee in a like position and under simila r
circumstances.
B. Unless the terms of a trust provide othe rwise, if a trust
director is licensed, certified, or other wise authorized or
permitted by law other than this act to provide health care in the
ordinary course of the director's business or practice of a
profession, to the extent the director acts in th at capacity, the
director has no duty or liability under this act.
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C. The terms of a trust may impose a duty o r liability on a
trust director in addition to the duties and liabilities under this
section.
SECTION 10. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1209 of Title 60, unless there
is created a duplication in numbering, reads as follo ws:
A. Subject to subsection B of this section, a directed trustee
shall take reasonable action to c omply with a trust director's
exercise or nonexercise of a power of direction or further power
under paragraph 1 of subsection B of Section 7 of this act, and the
trustee is not liable for t he action.
B. A directed trustee must not comply with a trust di rector's
exercise or nonexercise of a power of direction or further power
under paragraph 1 of subsection B of Section 7 of this act to the
extent that by complying, the trustee would engage in willful
misconduct.
C. An exercise of a power of direction under which a trust
director may release a trustee or another trust director from
liability for breach of trust i s not effective if:
1. The breach involved the trustee's or other director's
willful misconduct;
2. The release was induced by improper c onduct of the trustee
or other director in procuring the release; or
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3. At the time of the release, the trust director did not know
the material facts rela ting to the breach.
D. A directed trustee that has reasonable doubt about its duty
under this section may petition the district court for instructions.
E. The terms of a trust may impose a duty or liability on a
directed trustee in addition to the duti es and liabilities under
this section.
SECTION 11. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1210 of Title 60, unless there
is created a duplication in n umbering, reads as follows:
A. Subject to Section 12 of this act, a trustee shall provide
information to a trust director to the extent t he information is
reasonably related both to:
1. The powers or duties of the trustee; and
2. The powers or duties of the director.
B. Subject to Section 12 of this act, a trust director shall
provide information to a trustee or another trust director to the
extent the information is reasonably related both to:
1. The powers or duties of the director; and
2. The powers or duties of the t rustee or other director .
C. A trustee that acts in reliance on information provided by a
trust director is not liable for a breach of trust to the extent the
breach resulted from the reliance, unless by so acting , the trustee
engages in willful miscon duct.
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D. A trust director that acts in reliance on information
provided by a trustee or another trust director is not liable for a
breach of trust to the extent the breach resulted from the reliance,
unless by so acting, the trust director engages in w illful
misconduct.
SECTION 12. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1211 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. Unless the terms of a trust provide otherwise:
1. A trustee does not have a duty to:
a. monitor a trust director , or
b. inform or give advice to a settlor, beneficiary,
trustee, or trust director concerning an instance in
which the trustee might ha ve acted differently than
the director; and
2. By taking an action described in paragraph 1 of this
subsection, a trustee does not assume the duty excluded by paragraph
1 of this subsection.
B. Unless the terms of a trust provid e otherwise:
1. A trust director does not have a duty to:
a. monitor a trustee or anot her trust director, or
b. inform or give advice to a settlor, beneficiary,
trustee, or another trust director concerning an
instance in which the director might hav e acted
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differently than a trustee or another trust director ;
and
2. By taking an action described in paragraph 1 of this
subsection, a trust director does not assume the duty excluded by
paragraph 1 of this subsection.
SECTION 13. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1212 of Title 60, unless there
is created a duplication in numbering, reads as follows:
The terms of a trust may relieve a co -trustee from duty and
liability with respect to another co-trustee's exercise or
nonexercise of a power of the other co-trustee to the same extent
that in a directed trust a directed trustee is relieved from duty
and liability with respect to a trust director's power of direction
under Sections 10 through 12 of this act.
SECTION 14. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1213 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. An action against a trust director for breach of trust must
be commenced within the same limitation period for an action for
breach of trust against a trustee in a like position and under
similar circumstances.
B. A report or accounting has the same e ffect on the limitation
period for an action against a trust director for breach of trust
that the report or accounting would have in an action for breach of
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trust against a trustee in a like position and under similar
circumstances.
SECTION 15. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1214 of Title 60, unless there
is created a duplication in numbering, reads as follows:
In an action against a trust director for breach of trust, the
director may assert the same defenses a trustee in a like position
and under similar circumstances could assert in an action for breach
of trust against the trustee.
SECTION 16. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1215 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. By accepting appointment as a t rust director of a trust
subject to this act, the director submits to personal jurisdiction
of the courts of this state regarding any matter related to a power
or duty of the director.
B. This section does not preclu de other methods of obtaining
jurisdiction over a trust director.
SECTION 17. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1216 of Title 60, unless there
is created a duplication in numbering, r eads as follows:
Unless the terms of a trust provide otherwise, the rules
applicable to a trustee apply to a trust director regarding the
following matters:
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1. Acceptance;
2. Giving of bond to secure performance ;
3. Reasonable compensation ;
4. Resignation;
5. Removal; and
6. Vacancy and appointment of a successor.
SECTION 18. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1217 of Title 60, unless there
is created a duplication in number ing, reads as follows:
This act modifies, limits, or supersedes the Electronic
Signatures in Global a nd National Commerce Act, 15 U.S.C. , Section
7001 et seq., but does not modify, limit, or supersede Section
101(c) of that act, 15 U.S.C. , Section 7001(c), or authorize
electronic delivery of any of the notices described in Section
103(b) of that act, 15 U.S.C ., Section 7003(b).
SECTION 19. NEW LAW A new section of law to be codi fied
in the Oklahoma Statutes as Section 1301 of Title 60, unless there
is created a duplication in numbering, reads as follows:
Sections 19 through 37 of this act shall be known and may be
cited as the "Oklahoma Qualified Dispositions into Trust Act".
SECTION 20. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1302 of Title 60, unless there
is created a duplication in numbering, reads as follows :
A. As used in Oklahoma Qualified Dispositions i nto Trust Act:
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1. "Claim" means a right to payment, w hether or not the right
is reduced to judgment liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured;
2. "Creditor" means, with respect to a transferor, a per son who
has a claim;
3. "Debt" means liability on a claim;
4. "Disposition" means a transfer, conveyance, or assig nment of
property, including a change in t he legal ownership of property
occurring upon the substitution of one trustee for another or the
addition of one or more n ew trustees, or the exercise of a power so
as to cause a transfer of property to a trustee o r trustees. The
term does not include the release or relinquishment of a n interest
in property that theretofore was the subject of a qualif ied
disposition;
5. "Property" means real property, personal property, and
interests in real or personal property;
6. "Qualified disposition " means a disposition by or from a
transferor to a qualified person or qualified persons, without
consideration or for less than fair mark et value, by means of a
trust instrument;
7. "Spouse" and "former spouse" mean only persons to whom the
transferor was married at, o r before, the time the qualifie d
disposition was made; and
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8. "Transferor" means any person as an owner of property as a
holder of a power of appointment which autho rizes the holder to
appoint in favor of the holde r, the holder's creditors, the holder 's
estate, or the creditors of the h older's estate or as a trustee,
directly or indirectly, makes a dis position or causes a dis position
to be made.
B. The terms transferor and beneficiary may be any individual,
corporation, partnership, limited liability compa ny, association,
joint stock company, business trust, trust, unincorporated
organization, or two o r more persons having a joint or common
interest.
SECTION 21. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as S ection 1303 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. For the purposes of the Oklahoma Qualified Dispositions into
Trust Act, a trust instrument is an instrument appointing a
qualified person or qualified persons for the proper ty that is the
subject of a disposition, which instrument:
1. Expressly incorporates the law of this state to govern the
validity, construction, and admini stration of the trust;
2. Is irrevocable, but a trust i nstrument may not be deemed
revocable on account of its inclusion of one or more of the
following:
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a. a transferor's power to veto a distribu tion from the
trust,
b. an inter vivos power of appointment , other than an
inter vivos power exercisable solely by the transferor
in favor of the transferor, t he transferor's
creditors, the transferor's estate, or the creditors
of the transferor's estate,
c. a testamentary power of appointment ,
d. the transferor's potential or actual receipt of
income, including rights to such income retained in
the trust instrument,
e. the transferor's potential or actual receipt of income
or principal from a cha ritable remainder unitrust or
charitable remainder annuity trust as s uch terms are
defined in Section 664 of the Internal Reven ue Code of
1986, 26 U.S.C. Section 664, as of January 1, 2009;
the transferor's receipt each year of a percentage of
the value as determine d from time to time pursuant to
the trust instrument, but not exceeding the amount
that may be defined as income unde r Section 643(b) of
the Internal Revenue C ode of 1986, 26 U.S. C. Section
643(b), as of January 1, 2009,
f. the transferor's receipt each year of a percentage of
the value as determined from time to time pursu ant to
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the trust instrument, but not exceeding the amount
that may be defined as income under Section 664 of the
Internal Revenue Code of 1986, 26 U.S.C., Section
643(b), as of January 1, 2009,
g. the transferor's potential or actual receipt or use of
principal if the potential or actual receipt or use of
principal would be the result of a qualified person,
including a qualified person acting at the direct ion
of a trust advisor described in this act, acting
either in the qualified person's sole discretion or
pursuant to an ascertainable stand ard contained in the
trust instrument,
h. the transferor's right to remove a trustee, protector,
or trust advisor and to appoint a new trustee,
protector, or trust advisor, other than a tru stee who
is a related or subordinate pa rty with respect to the
transferor within the meaning of Section 672(c) of the
Internal Revenue Code of 1986 , 26 U.S.C. Section
672(c), as of Januar y 1, 2009,
i. the transferor's potential or actual use of real
property held under a qualified personal resi dence
trust within the meaning of such ter m as described in
the regulations promulgated under Section 2702(c) of
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the Internal Revenue Code of 1986, 2 6 U.S.C. Section
2702(c), as of January 1, 2009,
j. a pour-back provision that pours back to the
transferor's will or revocable trust all or part of
the trust assets,
k. the transferor's potential or actual receipt of income
or principal to pay, in who le or in part, income taxes
due on income of the trust if the potential or actual
receipt of income or princip al is pursuant to a
provision in the trust instrument th at expressly
provides for the payment of the taxes and if the
potential or actual receipt of income or principal
would be the result of a qualified person's acting in
the qualified person 's discretion or pursuant to a
mandatory direction in the trust instr ument or acting
at the direction of a trust advisor described in
Section 24 of this act,
l. the ability, whether pursuant to discretion,
direction, or the grantor 's exercise of a testamentary
power of appointment, of a qualified person to pay,
after the death of the transferor, all or any part of
the debts of the transferor outstanding at the time of
the transferor's death, the expenses of administering
the transferor's estate, or any estate or inheritance
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tax imposed on or with respect to the transferor 's
estate,
m. a transferor's service as a noncontrolling member of a
distribution committee that functions as a
distribution trust advisor, which is a fiduciary given
authority by the instrument to exercise all or any
portions of the powers and discretions over any
discretionary distributions of income or principa l, or
n. a transferor's enjoyment of a powe r to reacquire the
trust corpus by substituting other property of an
equivalent value within the meaning of Section
675(4)(C) of the Internal Revenue Code of 1986, 26
U.S.C., Section 675(4)(C), as of January 1, 2021, and
3. Provides that the interest of the transferor or other
beneficiary in the trust property or the incom e from the trust
property may not be tr ansferred, assigned, pledged, or m ortgaged,
whether voluntarily or i nvoluntarily, before the qualified person
distributes the property or income from t he property to the
beneficiary, and such provision of the trust in strument constitutes
a restriction on the transfer of the transferor 's beneficial
interest in the trust tha t is enforceable under applicable
nonbankruptcy law within the meaning of Section 541(c)(2) of the
Bankruptcy Code, 11 U.S.C., Section 541(c)(2), as of January 1,
2009.
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B. A disposition by a trustee that is not a qualified person to
a trustee that is a qualified perso n may not be treated as other
than a qualified disposition solely because the trust instrument
fails to meet the requirements of paragraph 1 of subsection A of
this section.
SECTION 22. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1304 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. For the purposes of the Oklahoma Qualified Di spositions into
Trust Act, a qualified person is:
1. 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 h ave a present
intention of moving from this state, and who has the intention o f
returning to this state when away;
2. A trust company that is organized under Oklahoma state law
or under federal law and that has its principal place of business in
this state; or
3. A bank or savings association that possesses and exercises
trust powers, has its principal place of business in this state, and
the deposits of which are insured by the Federal Deposit Insurance
Corporation.
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B. A qualified person must meet the requirements as provi ded in
Section 23 of this act.
SECTION 23. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1305 of Title 60, unless there
is created a duplica tion in numbering, reads as follows:
A. Except as expressly provided by the terms of a governing
instrument or by a court order, or a state law stating that the laws
of this state govern is valid, effective, and conclusiv e for the
trust if all of the following are true:
1. Some or all of the trust assets are depos ited in this state
or physical evidence of such assets is held in this state and the
trust is being administered by a qualified person. 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 accoun t or deposit that is located in this
state, including Oklahoma investments;
2. A trustee is a qualified p erson who is designated as a
trustee under the governing inst rument or a successor trusteeship,
or designated by a court h aving jurisdiction over the tru st; and
3. The administration, including physically maintaining trust
records in the State of Oklahoma, and preparing or arranging for the
preparation of, on an exclusive basis or a nonexclus ive basis, an
income tax return that must be filed by the trust, occurs w holly or
partly in this state.
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B. The state courts of Oklahoma have jurisdiction over a trust
created in a foreign jurisdiction if the administration of the trust
meets paragraphs 1 through 3 of subsection A of this section .
C. Nothing in this section may be construed to be the exclusive
means of providing a valid effective and co nclusive state
jurisdiction provision.
SECTION 24. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1306 of Title 60, unless there
is created a duplication in numbering , reads as follows:
Neither the transferor nor an y other natural person who is a
nonresident of this state nor an entity that is not auth orized by
the laws of this state to act as a trustee or whose activities are
not subject to supervision as provided in Section 22 of this act may
be considered a qualifi ed person. However, nothing in this act
precludes a transferor from appointing, rem oving, or replacing one
or more co-trustees, trust advisors, or trust pr otectors, regardless
of whether or not such trust advisor or trust protector is a
fiduciary.
SECTION 25. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1307 of Title 60, unless there
is created a duplication in numbering, reads as follows:
Any person may serve as an investment trust advisor ,
notwithstanding that the person is the transferor of the q ualified
disposition, but a trans feror may not otherwise serve as a fiduciary
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under a trust instrument except as stated in paragraph 2 of
subsection A of Section 21 of this act. While serving as an
investment trust advisor of the trust, the person may have all
powers authorized by statu te or by the trust instrument, including
the power to vote by proxy any stock owned by the trust.
SECTION 26. NEW LAW A new section of law to be codified
in the Oklahoma Statu tes as Section 1308 of Title 60, unless there
is created a duplication in numbering, reads as follows:
If a qualified person of a trust ceases to meet the requirements
of Section 22 of this act and there remains no trustee that meets
such requirements, such qualified person shall be d eemed to have
resigned as of the time of such cessation, and thereupon the
successor qualified pe rson provided for in the trust instrument
shall become a qualified person of the trust, or in the absence of
any successor qualified person provided for in the trust instrument,
the circuit court shall, upon application of any interested party,
appoint a successor qualified person.
SECTION 27. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1309 of Title 60, unless there
is created a duplication in numbering, reads as follows:
In the case of a disposi tion to more than one trustee, a
disposition that is otherwise a qualified disposition may not be
treated as other than a qualified disposition so lely because not all
of the trustees are qu alified persons.
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SECTION 28. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1310 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A qualified disposition is subject to Sections 29 through 34 of
this act, notwithstanding a tr ansferor's retention of any or all of
the powers and rights described in paragraph 2 of subsection A of
Section 21 of this act and the transferor's service as a trust
advisor pursuant to Section 25 of this act. The transferor has only
such powers and rights as are conferre d by the trust instrument.
Except as permitted by Section 21 and Section 25 of this act, a
transferor has no rig hts or authority with respect to the property
that is the subject of a qualifi ed disposition or the income
therefrom, and any agreement or unde rstanding purporting to grant or
permit the retention of any greater ri ghts or authority is void.
SECTION 29. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1311 of Title 60, unless there
is created a duplication in numbering, reads as follows:
Notwithstanding any other provision of law, no action of any
kind, including an action to enforce a judgment entered by a court
or other body having adjudicative authority, may be brought at law
or in equity for an attachment or other provisional remedy against
property that is the subject of a qualified disposition or for
avoidance of a qualified disposition unless the settlor 's transfer
of property was made with the intent to defraud that specific
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creditor. This protection, however, only applies to qualified
dispositions up to, but not exceeding, Ten Million Dollars
($10,000,000.00) and shall not apply to assets disclosed on a
financial statement to a bank or financial institution for the
purpose of guaranteeing a loan prior to the assets being subject to
a qualified disposition.
SECTION 30. NEW LAW A new sectio n of law to be codified
in the Oklahoma Statutes as Section 1312 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. A cause of action or claim for relief with respect to a
fraudulent transfer of a settlor 's assets under Section 29 of this
act is extinguished unless the action under Section 29 of this act
is brought by a creditor of the settlor who meets one of the
following requirements:
1. Is a creditor of the settl or before the settlor 's assets are
transferred to the t rust and the action under Section 29 of this act
is brought within the l ater of:
a. two (2) years after the transfer is made , or
b. six (6) months after the transfer is or reaso nably
could have been discovered by the creditor if the
creditor:
(1) can demonstrate that the creditor asserted a
specific claim against the settlor before the
transfer, or
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(2) files another action, other than an actio n under
Section 29 of this act, against the settlor that
asserts a claim based on an act or omission of
the settlor that occurred before the transfer and
the action described in this subparagraph is
filed within two (2) years after the transfer;
2. Becomes a creditor subsequent to the trans fer into trust,
and the action under Section 29 of this act is brought within two
(2) years after the transfer is made.
B. In any action described in Section 29 of this act, the
burden to prove the matter by clear and c onvincing evidence is upon
the creditor;
C. A person is deemed to have discovered a transfer at the time
a public record of the transfer is made, including the conveyance of
an interest in real property that is recorded in the appropriate
public filing office where the property is located, the filing of a
financing statement, or the filing of a bill of sale or oth er
transfer instrument regard ing personal property; or
D. The filing of a bill of sale or other transfer instrument
which conveys personal prope rty to a trust which is governed by this
act shall be filed in the applicable public filing office dete rmined
as follows:
1. If the transferor is a natural person and is a resident of
this state, the personal property transfer instrument shall be
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recorded in the county in this state wher e the transferor maintains
the transferor's principal residence ; and
2. In all other cases, the personal property transfer
instrument shall be recorded in the county in this state where the
trustee of the trust maintains a principal residence or principal
place of business.
E. This section and Section 29, Section 31, Section 32, and
Section 33 of this act are inseparably interwoven with substantive
rights that a deprivation of legal rights would result if another
jurisdiction's laws and regulations to the contrary ar e applied to a
claim or cause of action described therein.
SECTION 31. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1313 of Title 60, unless there
is created a duplication in numbering, reads as fol lows:
A qualified disposition that is made by means of a disposition
by a transferor who is a trustee is deemed to have been made as of
the time, whether before, on, or after the effective date of this
act, the property that is the subject of the qu alified disposition
was originally transferred to the transferor, or any predecessor
trustee, making the qualif ied disposition in a form that meets the
requirements of paragraphs 2 and 3 of subsection A of Section 21 of
this act. Further, the provisions of this section shall apply to
determine the date the transfer is deemed to have been made,
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notwithstanding that the original transfer was to a trust originally
within or outside of the jurisdiction of Oklahoma.
If property transferred to a spendthrift trust is conveyed to
the settlor or to a beneficiary for the purpose of obtaining a loan
secured by a mortgage or deed of trust on the property and then
reconveyed to the trust within one hundred eighty (180) days of
recording the mortgage or deed of trust , the transfer is disregarded
and the reconveyance relates back to th e date the property was
originally transferred to the trust. The mortgage or deed of trust
on the property is e nforceable against the trust.
SECTION 32. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1314 of Title 60, unless there
is created a duplication in numbering, reads as follows:
Notwithstanding any law to the contrary, a creditor, includi ng a
creditor whose claim arose before or after a qualified disposition,
or any other person has only such rights with respect to a qualified
disposition as are provided in Sections 29 through Section 36 of
this act, and no such creditor nor any other person has any claim or
cause of action against the trustee or advisor, described in Section
24 of this act, of a trust that is the subject of a qualified
disposition, or against any person involved in the counseling,
drafting, preparation, execution, or funding of a trust that is the
subject of a qualified disposition. In addition to the provisions
of Section 37 of this act, at no time is a qualified person
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personally liable to a creditor of a transferor or any other person
for distributions made by the quali fied person, before the creditor
or person notified the qualified person, in writ ing, that a claim or
cause of action existed. This applies regardless of whether the
distributions are made to or for the benefit of the transferor or a
beneficiary during th e period in which a creditor or other person
could make a claim as provided in Section 30 of this act.
SECTION 33. NEW LAW A new se ction of law to be codified
in the Oklahoma Statutes as Section 1315 of Title 60, unless there
is created a duplication in numbering, reads as follows:
Notwithstanding any other provi sion of law, no action of any
kind, including an action to enforce a judgment entered by a court
or other body having adjudicative authority, may be brought at law
or in equity against the trustee or advisor, described in Section 24
of this act, of a trust that is the subject of a qual ified
disposition, or against any person involved in the counseling,
drafting, preparation, execution, or funding of a trust that is the
subject of a qualified disposition, if, as of the date such action
is brought, an action by a creditor with respect to such qualified
disposition would be barred under Sections 29 through 32 of this
act. A court of this state has exclusive jurisdiction ove r an
action brought under a claim for relief that is based on a transfer
of property to a trust that is the s ubject of this section. A court
of this state may award attorney fees and costs to the prevailing
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party in such an action. In any action descri bed in this section,
the burden to prove the matter by clear and convincing evid ence is
upon the creditor.
SECTION 34. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1316 of Title 60, unless there
is created a duplication in numbering, reads as follows:
If more than one qualifie d disposition is made by means of the
same trust instrument:
1. The making of a subsequent qualified dispositio n shall be
disregarded in determining whether a creditor 's claim with respect
to a prior qualified disposition is extinguished as provided in
Section 30 of this act; and
2. Any distribution to a beneficiary is deemed to have been
made from the latest such qualified disposition.
SECTION 35. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1317 of Title 60, unless there
is created a duplication in numbering, reads as fol lows:
A. Notwithstanding the provisions of Sections 29 through 34 of
this act, but subject to subsection B of this section, the Oklahoma
Qualified Dispositions into Trust Act does not apply in any respect
to any person to whom at the time of transfer the transferor is
indebted on account of an agreement or order of court for the
payment of support or alimo ny in favor of the transferor 's spouse,
former spouse, or children, or for a division or distribution of
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property in favor of the transferor's spouse or former spouse, to
the extent of the debt.
B. If the transferor is married at the time of the transfer,
the provisions of Sections 29 through Section 34 of this act, apply
to:
1. Any of the transferor's separate property transferred to th e
trust; and
2. Any marital property transferred to the trust if the spouse
or former spouse was provided with notice i n the form set forth in
subsection C of this section, or executed a written consent to t he
transfer after being provided the information set forth in the
notice.
C. For purposes of the application of this section, a notice of
transfer of property to a tru st pursuant to the Oklahoma Qualified
Dispositions into Trust Act:
1. Shall also contain the followi ng language in capital
letters, at or near the top of the notice: YOUR SPOUSE IS CREATING
A PERMANENT TRUST INTO WHICH PROPERTY IS BEING TRANSFERRED. YOUR
RIGHTS TO THIS PROPERTY MAY BE AFFECTED DURING YOUR MARRIAGE, UPON
DIVORCE (INCLUDING THE PAYMENT OF CHILD SUPPORT OR ALIMONY OR A
DIVISION OR DISTRIBUTION OF PROPERTY IN A DIVORCE), OR AT THE DEATH
OF YOUR SPOUSE. YOU HAVE A VERY LIMITED PERIOD OF TIME TO OBJECT TO
THE TRANSFER OF PROPERTY INTO THIS TRUST. YOU MAY, UPON REQUEST TO
THE TRUSTEE AT THE ADDRESS BELOW, BE FURNISHED A COPY OF THE TRUST
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DOCUMENT. IF YOU HAVE ANY QUESTIONS, YOU SHOULD IMMEDIATELY SEEK
INDEPENDENT LEGAL ADVICE. IF YOU FAIL TO OBJECT WITHIN THE REQUIRED
TIME PERIOD, YOU WILL HAVE CONSENTED TO THE TRANSFER OF PROPERTY
INTO THIS TRUST;
2. Shall contain a descrip tion of the property being
transferred to the trust and the name of the trust;
3. May require that any person who is e ligible to receive
information pursuant to this section be bound by the duty of
confidentiality that b inds the trustee before receiving su ch
information from the trustee; and
4. Shall be provided by the transferor, the transferor 's agent,
the trustee, or other fiduciary of the trust.
D. If a notice is provided under this section before the
property is transferred, the period to commence an action under
Section 30 of this act shall commence running on the date of the
transfer. If a notice is provided afte r the date the property is
transferred, the period t o commence an action pursuant to Section 30
of this act commences running on the date the n otice is provided.
E. The exception contained in subsection A of this section does
not apply to any claim for fo rced heirship or legitime .
SECTION 36. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1318 of Title 60, unless there
is created a duplication in numbering, reads as follows:
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A qualified disposition is avoided only to the e xtent necessary
to satisfy the transferor 's debt to the creditor at whose ins istence
the disposition had been avoided, together with such costs,
including attorney fees, as the court may allow. If any qualified
disposition is avoid ed as provided in this se ction, then:
1. If the court is satisfied that a qualified person has not
acted in bad faith in accepting or administering the property that
is the subject of the qualif ied disposition:
a. such qualified person has a first and par amount lien
against the property that is the subject of the
qualified disposition in an amount equal to the e ntire
cost, including attorney fees, properly incurred by
such qualified person in the defense of the action or
proceedings to avoid the qualified disposition. It is
presumed that such qualified person did not act in bad
faith merely by accepting such p roperty, and
b. the qualified disposition is avoided subj ect to the
proper fees, costs, preexisting rights, claims, and
interests of such qualified p erson, and of any
predecessor qualified person that has not acted in bad
faith; and
2. If the court is satisfied that a beneficiary of a trust has
not acted in bad faith, the avoidance of the qualified disposition
is subject to the right of such benefici ary to retain any
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distribution made upon the exercise of a trust power or discretion
vested in the qualif ied person or qualified persons of such trust,
which power or discretion was properly ex ercised prior to the
creditor's commencement of an action to av oid the qualified
disposition. It is presumed that the beneficiary, including a
beneficiary who is also a transferor of the trust, did not act in
bad faith merely by creating the trust or by a ccepting a
distribution made in accordance with the terms of th e trust.
SECTION 37. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1319 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. The following provisio ns apply only to discretionary
interests:
1. A discretionary interest is neither a property interest nor
an enforceable right. It is a mere expectancy;
2. No creditor may force a distribution with regard to a
discretionary interest. No creditor may require the trustee to
exercise the trustee 's discretion to make a distribution with regard
to a discretionary interest; and
3. A court may review a trustee's distribution discretion onl y
if the trustee:
a. acts dishonestly,
b. acts with an improper motive , or
c. fails, if under a duty to do so, to act.
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B. A reasonableness standard may not be applied to the exercise
of discretion by the trustee with regard to a discre tionary
interest. Other than for the circumstances listed in this section,
a court has no jurisdiction to r eview the trustee's discretion or to
force a distribution.
C. Absent express language to the contrar y, in the event that
the distribution language in a discretionary interest permits
unequal distributions between beneficiaries or dis tributions to the
exclusion of other benefi ciaries, the trustee may distribute all of
the accumulated, accrued, or undistri buted income and principal to
one beneficiary in the trustee's discretion.
D. Regardless of whether a beneficiary has any outstandin g
creditors, a trustee of a discretionary in terest may directly pay
any expense on behalf of such beneficiary and may exhaus t the income
and principal of the trus t for the benefit of such beneficiary. No
trustee is liable to any creditor for paying the exp enses of a
beneficiary of a discretionary i nterest.
SECTION 38. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1401 of Title 60, unless there
is created a duplication in numbering, reads as follows:
For all trusts created under this title, the rules against
perpetuities shall not apply, it being the intent that trusts
created in Oklahoma may have perpetual durat ion if a timing
provision or limit is not speci fied in the trust document.
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SECTION 39. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1402 of Title 60, unless there
is created a duplication in numbering, reads as f ollows:
A. Except as otherwise provided in subsection B of this
section, the trustee and the q ualified beneficiaries may enter into
a binding nonjudicial settlement agreement with respect to any
matter involving a trust.
B. A nonjudicial settlement agree ment is valid only to the
extent it does not violate a material purpose of the trust and
includes terms and conditions that could be properly approved by the
court under this act or other applicable law.
C. Matters that may be resolved by a nonjudicia l settlement
agreement include, but are not limited to:
1. The interpretation or construction of t he terms of the
trust;
2. The approval of a trustee 's report or accounting;
3. Direction to a trustee to refrain from performing a
particular act or the gr ant to a trustee of any necessary or
desirable power;
4. The resignation or appointment of a trust ee and the
determination of a trust ee's compensation;
5. Transfer of a trust's principal place of administration;
6. Liability of a trustee for an action r elating to the trust;
7. The extent or waiver of bond of a trustee;
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8. The governing law of the t rust;
9. The criteria for distribution to a beneficiary whe re the
trustee is given discretion;
10. The resignation, appointment, and establishment of the
powers and duties of trust protectors or trust advisors; and
11. The approval of an investment deci sion, delegation, policy,
plan, or program.
D. Any qualified beneficiary or trustee may request the court
to approve a nonjudicial settlement agreement, to determine whether
the representation was adequate, and to determine whether the
agreement contains terms and conditions the court could ha ve
properly approved.
SECTION 40. This act shall become effective November 1, 2024.
Passed the House of Representatives the 14th day of March, 2024.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2024.
Presiding Officer of the Senate