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ENGROSSED SENATE AMENDMENT
TO
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 2 024; defining terms; providing
for applicability;***providing for court approval of
nonjudicial settlement agreements; providing for
noncodification; providing for codification; and
providing an effective date.
AMENDMENT NO. 1. Page 1, strike the titl e, enacting clause and
entire bill and insert
“An Act relating to trusts; creating the Oklahoma
Trust Reform Act of 2024; providing short title;
creating the Oklahoma Uniform Directed Trust Act of
2024; providing short title; defining terms;
providing for applicability; providing 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; providing
duties and liabilities of a trust 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 cotrustee; providing limitation of
action against a trust director; providing defenses
for a suit against a trust director; providing
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jurisdiction over a trust director; providing that
unless the term of a trust provides otherwise, the
rules applicable to a trustee shall apply to a trust
director in certain matters; providing relation to
electronic signature laws; creating the Oklahoma
Qualified Dispositions into Trust Act; providing
short title; defining terms; defining trust
instrument; defining quali fied person; providing
requirements to be considered a qualified person;
providing for persons and entities not to be
considered a qualified person; providing for the
appointment, removal, or replacement of cotrustee,
trust advisor, or trust protector; pro viding who may
serve as an investment trust advisor; providing that
a transferor may not serve as a fiduciary; providing
for successor qualified person; providing for
disposition to more than one trustee; providing that
for dispositions to more than one tr ustee, a
qualified disposition may not be treated as other
than a qualified disposition solely because not all
of the trustees are qualified persons; providing
powers and rights of a transferor and its effect on a
qualified disposition; limiting actions of creditors
to transfers with the intent to defraud; providing
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 certain
action against trustee, advisor, or preparer of
trust; providing court jurisdiction; 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; providing for
discretionary interest; providing that the rules
against perpetuities sha ll not apply to trusts;
providing intent to allow trust to have perpetual
durations; providing for nonjudicial settlement
agreements for trusts; providing when nonjudicial
settlement agreements are valid; clarifying what
matters may be solved by a nonjudic ial settlement
agreement; providing for court approval of
nonjudicial settlement agreements; amending 60 O.S.
2021, Sections 175.24, 175.47, and 175.57, which
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relate to powers of trustee, power of alienation, and
breach of trust; authorizing payment of cer tain costs
and fees by trustee; providing for creation of
attorney-client relationship under certain
circumstances; providing exception; providing for
confidentiality of certain communications;
authorizing perpetual duration of certain trusts;
defining term; establishing requirements for approval
of certain accountings; providing limitation on
certain action; updating statutory language; making
language gender neutral; providing for
noncodification; providing for codification; and
providing an effective dat e.
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”.
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 follows:
Sections 2 through 18 of this ac t 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:
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1. “Breach of trust” means a violation by a trust 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” me ans 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 corpo ration, government or governmental subdivision,
agency, or instrumentality, or other legal entity;
5. “Power of direction” means a power over a trust granted 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
trust property or other matters of trust administration. The term
excludes the powers described in subsection B of Section 6 of this
act;
6. “Settlor” means a person, including a testator, that creates
or contributes property to a trust. If more than one person creates
or contributes property to a trust, each person is a settlor 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;
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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 pos session 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 instrument, or
(2) established by other evidence 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
(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 trustee. The
person is a trust director whether or not the t erms of the trust
refer to the person as a trust director 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 cotrustee.
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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 a dministration 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 is
changed to this state 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 establish a sufficient
connection with the designated jurisdiction in a directed trust, the
terms of the trust which designate the principal place of
administration of the trust are valid and controlling if:
1. A trustee’s principal place of business is located in or a
trustee is a resident of the designated jurisdiction;
2. A trust director’s principal place of business is located in
or a trust director is a resident of the designated jurisdiction; or
3. All or part of the administration occurs in the des ignated
jurisdiction.
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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, reads as follows:
The common law and principle s of equity supplement this act,
except to the extent modified by this act or by other laws of this
state other than this act.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1205 of Ti tle 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;
3. Power of a settlor over a trust to the extent the settlor
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
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b. another beneficiary represented by the beneficiary
with respect to the exercise or none xercise of the
power; or
5. Power over a trust, if:
a. the terms of the trust provide that the power is held
in a nonfiduciary capacity, and
b. the power must be held in a nonfiduciary 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 otherwise, a power
granted to a person to designate a recipient of an ownership
interest in or power of appointment ov er 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 Statutes as Sect ion 1206 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. Subject to Section 8 of this act, the terms of a trust may
grant a power of direction 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
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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 numbering, reads as follows:
A trust director is subject to the same rules as a tru stee in a
like position and under 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 necessar y to
comply with the reimbursement requirements of Medicaid law in
Section 1917 of the Social Security Act, 42 U.S.C., Section
1396p(d)(4)(A), as amended, and regulations issued thereunder, as
amended; and
2. A charitable interest in the trust, includ ing providing
notice regarding the interest to the Attorney General.
SECTION 9. NEW LAW A new section of law to be codified
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 further power under paragraph 1 of subsection
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:
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a. if the power is held individually, as a sole trustee
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 cotrustee 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 similar
circumstances.
B. Unless the terms of a trust provide otherwise, if a trust
director is licensed, certified, or otherwise 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 that capacity, the
director has no duty or liability under this act.
C. The terms of a trust may impose a duty or 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 follows:
A. Subject to subsection B of this section, a directed trustee
shall take reasonable action to comply with a trust director’s
exercise or nonexercise of a power of direction or further power
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under paragraph 1 of subsection B of Section 7 of this act, and the
trustee is not liable for the action.
B. A directed trustee must not comply 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 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 is not effective if:
1. The breach involved the trustee’s or other director’s
willful misconduct;
2. The release was induced by improper conduct of the trustee
or other director in procuring the release; or
3. At the time of the release, the trust director did not know
the material facts relating to the breach.
D. A directed trustee that has reasonable d oubt 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 duties 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 numbering, reads as follows:
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A. Subject to Section 12 of this act, a trustee shall provide
information to a trust director to the extent the 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 trustee or other director.
C. A trustee that acts in reliance on informatio n 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 misconduct.
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 willful
misconduct.
SECTION 12. NEW LAW A new secti on 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:
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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 have 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 paragrap h
1 of this subsection.
B. Unless the terms of a trust provide otherwise:
1. A trust director does not have a duty to:
a. monitor a trustee or another 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 have acted
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 cotrustee from duty and
liability with respect to another cotrustee’s exercise or
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nonexercise of a power of the other cotrustee to the same extent
that in a directed trust a dir ected 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 effect 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
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 trus tee.
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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 trust direc tor 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 preclude 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, reads as follows:
Unless the terms of a trust p rovide otherwise, the rules
applicable to a trustee apply to a trust director regarding the
following matters:
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 numbering, reads as follows:
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This act modifies, lim its, or supersedes the Electronic
Signatures in Global and 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 o f 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 codified
in the Oklahoma Statutes as Section 1301 of Title 60, unless there
is created a duplicatio n 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 into Trust Act:
1. “Claim” means a right to payment, whether 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 person who
has a claim;
3. “Debt” means liability on a claim;
4. “Disposition” means a transfer, conveyance, or assignment of
property, including a change in the legal ownership of property
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occurring upon the substitution of one trustee for another or the
addition of one or more new trustees, or the exercise of a power so
as to cause a transfer of property to a trustee or trustees. The
term does not include the release or relinquishment of an interest
in property that theretofore was the subject of a qualified
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 market value, by means of a
trust instrument;
7. “Spouse” and “former spouse” mean only persons to whom the
transferor was married at, or before, the time the qualified
disposition was made; and
8. “Transferor” means any person as an owner of property or as
a holder of a power of appointment which autho rizes the holder to
appoint in favor of the holder, the holder’s creditors, the holder’s
estate, or the creditors of the holder’s estate or as a trustee,
directly or indirectly, who makes a disposition or causes a
disposition to be made.
B. The terms transferor and beneficiary may be any individual,
corporation, partnership, limited liability company, association,
joint stock company, business trust, trust, unincorporated
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organization, or two or 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 Section 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 property that is the
subject of a disposition, which instrument:
1. Expressly incorporates the law of this state to govern the
validity, constructio n, and administration of the trust;
2. Is irrevocable, but a trust instrument may not be deemed
revocable on account of its inclusion of one or more of the
following:
a. a transferor’s power to veto a distribution from the
trust,
b. an inter vivos power o f appointment, other than an
inter vivos power exercisable solely by the transferor
in favor of the transferor, the transferor’s
creditors, the transferor’s estate, or the creditors
of the transferor’s estate,
c. a testamentary power of appointment,
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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 charitable remainder unitrust or
charitable remainder annui ty trust as such terms are
defined in Section 664 of the Internal Revenue Code of
1986, 26 U.S.C., Section 664, as of January 1, 2009,
f. the transferor’s receipt each year of a percentage of
the value as determined from time to time pursuant to
the trust instrument, but not exceeding the amount
that may be defined as income under Section 643(b) of
the Internal Revenue Code of 1986, 26 U.S.C. , Section
643(b), as of January 1, 2009,
g. the transferor’s receipt each year of a percentage of
the value as determined from time to time pursuant to
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,
h. the transferor’s potential or a ctual 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 direction
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of a trust advisor described in this act, acting
either in the qualifie d person’s sole discretion or
pursuant to an ascertainable standard contained in the
trust instrument,
i. 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 truste e who
is a related or subordinate party 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 January 1, 2009,
j. the transferor’s potential or actual use of real
property held under a qualified personal residence
trust within the meaning of such term as described in
the regulations promulgated under Section 2702(c) of
the Internal Revenue Code of 1986, 26 U.S.C. , Section
2702(c), as of January 1, 2009,
k. a pour-back provision that pours back to the
transferor’s will or revocable trust all or part of
the trust assets,
l. the transferor’s potential or actual receipt of income
or principal to pay, in whole or in part, income taxes
due on income of the trust if the potential o r actual
receipt of income or principal is pursuant to a
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provision in the trust instrument that 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 instrument or acting
at the direction of a trust advisor described in
Section 24 of this act,
m. 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
tax imposed on or with respect to the transferor’s
estate,
n. 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 principal, or
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o. a transferor’s enjoyment of a power to reacquire the
trust corpus by substituting other property o f 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 income from the trust
property may not be transferred, assigned, pledged, or mortgaged,
whether voluntarily or involuntarily, before the qualified person
distributes the property or income from the property to the
beneficiary, and such provision of the tru st instrument constitutes
a restriction on the transfer of the transferor’s beneficial
interest in the trust that 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.
B. A disposition by a trustee that is not a qualified person to
a trustee that is a qualified person may not be treated as other
than a qualified disposition solely because the trust instrument
fails to meet the requirements of pa ragraph 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:
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A. For the purposes of the Oklahoma Qualified Dispositions 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, resi des 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;
2. A trust company that is organized under state law or und er
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 Feder al Deposit Insurance
Corporation.
B. A qualified person must meet the requirements as provided 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 duplication in numbering, reads as follows:
A. Except as expressly provided by the terms of a governing
instrument or by a court order, a general law or a state
jurisdiction provision stating that the laws of this state govern is
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valid, effective, and conclusive for the trust if all of the
following are true:
1. Some or all of the trust assets are deposited 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 account or deposit that is located in this
state, including Oklahoma i nvestments;
2. A trustee is a qualified person who is designated as a
trustee under the governing instrument or a successor trusteeship,
or designated by a court having jurisdiction over the trust; and
3. The administration, including physically maintain ing trust
records in this state, and 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, occurs wholly or
partly in this state.
B. The courts of this state hav e jurisdiction over a trust
created in a foreign jurisdiction if the administration of the trust
meets the criteria of 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 conclusive state
jurisdiction provision.
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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, rea ds as follows:
Neither the transferor nor any other natural person who is a
nonresident of this state nor an entity that is not authorized by
the laws of this state to act as a trustee or whose activities are
not subject to supervision as provided in Secti on 22 of this act may
be considered a qualified person. However, nothing in this act
precludes a transferor from appointing, removing, or replacing one
or more cotrustees, trust advisors, or trust protectors, regardless
of whether or not such trust adviso r 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 qualified
disposition, but a transferor may not otherwise serve as a fiduciary
under a trust instrument except as stated in paragraph 2 of
subsection A of Secti on 21 of this act. While serving as an
investment trust advisor of the trust, the person may have all
powers authorized by statute or by the trust instrument, including
the power to vote by proxy any stock owned by the trust.
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SECTION 26. NEW LAW A new section of law to be codified
in the Oklahoma Statutes 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 deemed to have
resigned as of the time of such cessation, and thereupon the
successor qualified person 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 disposition to more than one trustee, a
disposition that is othe rwise a qualified disposition may not be
treated as other than a qualified disposition solely because not all
of the trustees are qualified persons.
SECTION 28. NEW LAW A new section of law to be codified
in the Oklahoma Statutes a s 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 transferor’s retention of any or all of
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the powers and rights desc ribed 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 conferred by the trust instrument.
Except as permitted by Sections 21 and 25 of this act, a transferor
has no rights or authority with respect to the property that is the
subject of a qualified disposition or the income therefrom, and any
agreement or understanding purporting to grant or permit the
retention of any greater rights 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
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
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purpose of guaranteeing a loan prior to the assets being subject to
a qualified disposition.
SECTION 30. NEW LAW A new section 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 settlor before the settlor’s assets are
transferred to the trust and the action under Section 29 of this act
is brought within the later of:
a. two (2) years after the transfer is made, or
b. six (6) months after the transfer is or reasona bly
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
(2) files another action, other than an action 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
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the action described in this subparagraph is
filed within two (2) years after the transfer; or
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 convincing 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 other
transfer instrument regarding personal property.
D. The filing of a bill of sale or other transfer instrument
which conveys personal property to a trust which is governed by thi s
act shall be filed in the applicable public filing office determined
as follows:
1. If the transferor is a natural person and is a resident of
this state, the personal property transfer instrument shall be
recorded in the county in this state where 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
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trustee of the trust maintains a principal residence or principal
place of business.
E. This section and Sections 29, 31, 32, and 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 are applied to a cl aim 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 follows:
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 qualified disposition
was originally transferred to the transferor, or any predecessor
trustee, making the qualified 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 a pply to
determine the date the transfer is deemed to have been made,
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
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reconveyed to the trust within one hundred eighty (180) days of
recording the mortgage or deed of trust, the transfer is disregar ded
and the reconveyance relates back to the date the property was
originally transferred to the trust. The mortgage or deed of trust
on the property is enforceable 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, including a
creditor whose claim arose before or after a qualified di sposition,
or any other person has only such rights with respect to a qualified
disposition as are provided in Sections 29 through 36 of this act,
and no such creditor nor any other person has any claim or cause of
action against the trustee or advisor, de scribed 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 addi tion to the provisions of Section
37 of this act, at no time is a qualified person personally liable
to a creditor of a transferor or any other person for distributions
made by the qualified person, before the creditor or person notified
the qualified person, in writing, 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
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the 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 section 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 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 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, 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 over an
action brought under a claim for relief that is based on a transfer
of property to a trust that is the subject of this section. A court
of this state may award attorney fees and costs to the prevailing
party in such an action. In any action described in this section,
the burden to prove the matter by clear and convincing e vidence is
upon the creditor.
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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 qual ified disposition is made by means of the
same trust instrument:
1. The making of a subsequent qualified disposition shall be
disregarded in determining whether a creditor’s claim with respect
to a prior qualified disposition is extinguished as provided i n
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 follows:
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 A ct 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 alimony in favor of the transferor’s spouse,
former spouse, or children, or for a division or distribution of
property in favor of the transferor’s spouse or former spouse, to
the extent of the debt.
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B. If the transferor is married at the time of the transfer,
the provisions of Sections 29 through 34 of this act, apply to:
1. Any of the transferor’s separate property transferred to the
trust; and
2. Any marital property transferred to the trust if the spouse
or former spouse was provided with notice in the form set forth in
subsection C of this section, or executed a written co nsent to the
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 trust pursuant to the Oklahoma Qualified
Dispositions into Trust Act:
1. Shall also contain the following 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
DOCUMENT. IF YOU HAVE ANY QUESTIONS, YOU SHOULD IMMEDIATELY SEEK
INDEPENDENT LEGAL ADVICE. IF YOU FAIL TO OBJECT WITHIN THE REQUIRED
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TIME PERIOD, YOU WILL HAVE CONSENTED TO THE TRANSF ER OF PROPERTY
INTO THIS TRUST;
2. Shall contain a description of the property being
transferred to the trust and the name of the trust;
3. May require that any person who is eligible to receive
information pursuant to this section be bound by the duty o f
confidentiality that binds the trustee before receiving such
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 b efore 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 after the date the property is
transferred, the period to commence an action pursu ant to Section 30
of this act commences running on the date the notice is provided.
E. The exception contained in subsection A of this section does
not apply to any claim for forced 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:
A qualified disposition is avoided only to the extent necessary
to satisfy the transferor’s debt to th e creditor at whose insistence
the disposition had been avoided, together with such costs,
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including attorney fees, as the court may allow. If any qualified
disposition is avoided as provided in this section, then:
1. If the court is satisfied that a qua lified person has not
acted in bad faith in accepting or administering the property that
is the subject of the qualified disposition:
a. such qualified person has a first and paramount lien
against the property that is the subject of the
qualified disposition in an amount equal to the entire
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 property, and
b. the qualified disposition is avoided subject to the
proper fees, costs, preexisting rights, claims, and
interests of such qualified person, 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 beneficiary to retain any
distribution made upon the exercise of a trust power or discr etion
vested in the qualified person or qualified persons of such trust,
which power or discretion was properly exercised prior to the
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creditor’s commencement of an action to avoid 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 accepting a
distribution made in accordance with the terms of the trust.
SECTION 37. NEW LAW A new section of law to b e 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 provisions apply only to discretionary
interests:
1. A discretionary interest is neither a property in terest 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 only
if the trustee:
a. acts dishonestly,
b. acts with an improper motive, or
c. fails, if under a duty to do so, to act.
B. A reasonableness standard may not be applied to the exercise
of discretion by the trustee with regard to a discretionary
interest. Other than for the circumstances listed in this section,
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a court has no jurisdiction to review the trustee’s discretion or to
force a distribution.
C. Absent express l anguage to the contrary, in the event that
the distribution language in a discretionary interest permits
unequal distributions between beneficiaries or distributions to the
exclusion of other beneficiaries, the trustee may distribute all of
the accumulated, accrued, or undistributed income and principal to
one beneficiary in the trustee’s discretion.
D. Regardless of whether a beneficiary has any outstanding
creditors, a trustee of a discretionary interest may directly pay
any expense on behalf of such ben eficiary and may exhaust the income
and principal of the trust for the benefit of such beneficiary. No
trustee is liable to any creditor for paying the expenses of a
beneficiary of a discretionary interest.
SECTION 38. NEW LAW A n ew 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 t he intent that trusts
created in this state may have perpetual duration if a timing
provision or limit is not specified in the trust document.
SECTION 39. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sect ion 1402 of Title 60, unless there
is created a duplication in numbering, reads as follows:
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A. Except as otherwise provided in subsection B of this
section, the trustee and the qualified beneficiaries may enter into
a binding nonjudicial settlement agreem ent with respect to any
matter involving a trust.
B. A nonjudicial settlement agreement 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 nonjudicial settlement
agreement include, but are not limited to:
1. The interpretation or construction of the 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 grant to a trustee of any necessary or
desirable power;
4. The resignation or appointment of a trustee and the
determination of a trustee’s compensation;
5. Transfer of a trust ’s principal place of administration;
6. Liability of a trustee for an action relating to the trust;
7. The extent or waiver of bond of a trustee;
8. The governing law of the trust;
9. The criteria for distribution to a beneficiary where the
trustee is given discretion;
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10. The resignation, appointment, and establishment of the
powers and duties of trust protectors or trust advisors; and
11. The approval of an investment decision, 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 have
properly approved.
SECTION 40. AMENDATORY 60 O.S. 2021, Section 175.24, is
amended to read as follows:
Section 175.24. A. In the absence of contrary or limiting
provisions in the trust agreement or a subsequent order or decree of
a court of competent jurisdiction, the trustee of an express trust
is authorized:
1. To exchange, reexchange, subdivide, develop, improve,
dedicate to public use, make or vacate public plats, adjust
boundaries, or partition real property, and to adjust differences in
valuation by giving o r receiving money or money’s worth. Easements
may be dedicated to public use without consideration if deemed by
the trustee to be for the best interest of the trust;
2. To grant options and to sell real or personal property at
public auction or at privat e sale for cash, or upon credit secured
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by lien upon the property sold or upon such property or a part
thereof or other property;
3. To grant or take leases of real property and of all rights
and privileges above or below the surface of real property for any
term or terms, including exploration for and removal of oil, gas,
and other minerals, with or without options of purchase, and with or
without covenants as to erection of buildings or as to renewals
thereof, though through the term of the lease or rene wals thereof,
or of such options extend beyond the term of the trust;
4. To raze existing party walls or buildings or erect new party
walls or buildings alone or jointly with owners of adjacent
property. To make ordinary repairs and in addition thereto s uch
extraordinary alterations in buildings or other structures which are
necessary to make the property productive. To effect and keep in
force, fire, rent, title, liability, casualty, or other insurance of
any nature, in any form and in any amount;
5. To compromise, contest, arbitrate, or settle any and all
claims of or against the trust estate or the trustee as such. To
abandon property deemed by the trustee burdensome or valueless;
6. To pay calls, assessments, and any other sums chargeable or
accruing against, or on account of shares of stock or other
securities in the hands of the trustee where such payment may be
legally enforceable against the trustee or any property of the
trust, or the trustee deems payment expedient and for the best
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interest of the trust. To sell or exercise stock subscription or
conversion rights, participate in foreclosures, reorganizations,
consolidations, mergers, liquidations, pooling agreements and voting
trusts; to assent to corporate sales, leases, and encumbrances, and
in general, except as limited by the particular trust agreement,
have and exercise all powers of an absolute owner in respect of such
securities. In the exercise of the foregoing powers the trustee
shall be authorized, where he or she deems such course expedient, to
deposit stocks, bonds, or other securities with any protective or
other committee formed by or at the instance of persons holding
similar securities, under such terms and conditions respecting the
deposit thereof as the trustee may approve. A ny stock or other
securities obtained by conversion, reorganization, consolidation,
merger, liquidation, or the exercise of subscription rights shall be
free, unless the trust agreement provides otherwise, from any
restrictions on sale or otherwise contain ed in the trust agreement
relative to the securities originally held;
7. To make such investment directly or in the form of
securities of, or other interests in, any open -end or closed-end
management type investment company or investment trust registered
under the Investment Company Act of 1940, 15 U.S.C.A. , Section 80a-1
et seq.; provided, that the portfolio of such investment company or
investment trust is limited to United States Government government
obligations and to repurchase agreements fully colla teralized by
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such United States Government government obligations, and provided
further, that any such investment company or investment trust shall
take delivery of such collateral, either directly or through an
authorized custodian;
8. To borrow money or create an indebtedness or obligation
including any bond indebtedness or obligation, except as limited by
the provisions of the Oklahoma Trust Act ;, and generally to execute
any deed or other instrument and to do all things in relation to
such trust necessary or desirable for carrying out any of the above
powers or incident to the purposes of such trust; and
9. To employ attorneys, accountants, agents, and brokers
reasonably necessary in the administration of the trust estate;
permit real estate held in tr ust to be occupied by a surviving
spouse or minor child of the trustor and, where reasonably necessary
for the maintenance of the surviving wife spouse or minor child or
children, invest trust funds in real property to be used for a home
by such beneficiary; make any contracts pertaining to oil, gas, or
other natural resources as are customary in the community where the
real property held in trust is situated; in the trustee’s dis cretion
pay funeral expenses of any beneficiary actually receiving benefits
from the trust estate at the time of the death of the beneficiary.
B. 1. In the exercise of its authority under paragraph 9 of
subsection A of this section, a trustee may pay, fr om the assets of
the trust, reasonable compensation and costs incurred in conn ection
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with employment of attorneys, accountants, agents, and brokers
reasonably necessary in the administration of the trust estate.
2. In the event of any legal proceeding reg arding the trust, a
trustee may pay the costs or attorney fees incurred in any
proceeding from the assets of the trust without the approval of any
person and without court authorization unless otherwise ordered by
the court in such legal proceeding.
3. Unless expressly provided otherwise in a written employment
agreement, the creat ion of an attorney-client relationship between
an attorney and a person serving as a fiduciary shall not impose
upon the attorney any duties or obligations to other persons
interested in the estate, trust estate, or other fiduciary property,
even though fiduciary funds may be used to compensate the attorney
for legal services rendered to the fiduciary. This paragraph is
intended to be declaratory of the common law and governs
relationships in existence between attorneys and persons serving as
fiduciaries and any such relationship hereafter created.
4. Whenever an attorney -client relationship exists between an
attorney and a fiduciary, communications between the attorney and
the fiduciary shall be subject to attorney -client privilege unless
waived by the fiduciary, even though fiduciary funds may be used to
compensate the attorney for legal services rendered to the
fiduciary. The existence of a fiduciary relationship between a
fiduciary and a beneficiary does not constitute or give rise to any
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waiver of the privilege for communications between the attorney and
the fiduciary.
C. The following rules of administration shall be applicable to
all express trusts but such rules shall not be exclusive of those
otherwise imposed by law unless contrary to these rules :
1. Where a trustee is authorized to sell or dispose of land,
such authority shall include the right to sell or dispose of part
thereof, whether the division is horizontal, ver tical, or made in
any other way, or undivided interests therein;
2. Where a trustee is authorized by the trust agreement
creating the trust or by law to pay or apply capital money subject
to the trust for any purpose or in any manner, the trustee shall
have and shall be deemed always to have had power to raise the money
required by selling, converting, calling in, or mortgaging or
otherwise encumbering all or any part of the trust property for the
time being in possession;
3. A trustee shall have a lien a nd may be reimbursed with
interest for, or pay or discharge out of the trust p roperty, either
principal or income or both, all advances made for the benefit or
protection of the trust or its property and all expenses, losses,
and liabilities, not resulting from the negligence of the trustee,
incurred in or about the execution or pro tection of the trust or
because of the trustee holding or ownership of any property subject
thereto; and
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4. When the happening of any event, including marriage,
divorce, attainment of a certain age, performance of educational
requirements, death, or any o ther event, affects distribution of
income or principal of trust estates, the trustees shall not be
liable for mistakes of fact prior to the actual knowledge or written
notice of such fact.
C. D. The powers, duties, and responsibilities stated in the
Oklahoma Trust Act or the Oklahoma Uniform Prudent Investor Act
shall not be deemed to exclude other implied powers, duties, or
responsibilities not inconsistent herewith.
D. E. The trustee shall pay all taxes and assessments levied or
assessed against the tr ust estate or the trustee by governmental
taxing or assessing agencies.
E. F. No trustee shall be required to give bond unless the
instrument creating the trust, or a court of c ompetent jurisdiction
in its discretion upon the application of an interested party,
requires a bond to be given.
SECTION 41. AMENDATORY 60 O.S. 2021, Section 175.47, is
amended to read as follows:
Section 175.47. A. Except as otherwise provided in subsection
B of this section, the absolute power of aliena tion of real and
personal property, or either of them, shall not be suspended by any
limitations or conditions whatever for a longer period than during
the continuance of a life or lives of the beneficiaries in being at
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the creation of the estate and twent y-one (21) years thereafter.
The absolute power of alienation is not suspended if there is any
person in being who, alone or in combination with one or more
others, has the powe r to sell, exchange, or otherwise convey the
real or personal property. If th e terms of a trust do not suspend
the absolute power of alienation of any trust property beyond the
term permitted in this subsection, the trust may exist in
perpetuity.
B. The provisions of this section shall not apply when property
is given, granted, be queathed, or devised to:
1. A charitable use;
2. Literary, educational, scientific, religious, or charitable
corporations for their sole use and benefit;
3. Any cemetery corpo ration, society or association;
4. The Department of Mental Health and Substa nce Abuse Services
as provided in Section 2 -111 of Title 43A of the Oklahoma Statutes;
or
5. Gifts absolute, limited, or in trust, for the advancement of
medical science to an i ncorporated state society of physicians and
surgeons.
C. Except as provided i n this section, the common law rule
against perpetuities shall not apply to a trust subject to the trust
laws of this state. A trust created in this state or subject to the
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trust laws of this state may have a perpetual duration if a timing
provision or limit is not specified in the trust document.
SECTION 42. AMENDATORY 60 O.S. 2021, Section 175.57, is
amended to read as follows:
Section 175.57. A. A vi olation by a trustee of a duty the
trustee owes a beneficiary is a breach of t rust.
B. To remedy a breach of trust that has occurred or may occur,
the court may:
1. Compel the trustee to perform the trustee’s duties;
2. Enjoin the trustee from committin g a breach of trust;
3. Compel the trustee to redress a breach of trust by pa yment
of money or otherwise;
4. Order a trustee to account;
5. Appoint a receiver or temporary trustee to take possession
of the trust property and administer the trust;
6. Suspend or remove the trustee;
7. Reduce or deny compensation to the trustee;
8. Subject to subsection I of this section, void an act of the
trustee, impose an equitable lien or a constructive trust on trust
property, or trace trust property wrongfully dis posed of and recover
the property or its proceeds; or
9. Grant any other appr opriate remedy.
C. A beneficiary may charge a trustee who commits a breach of
trust with the amount required to restore the value of the trust
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property and trust distributions t o what they would have been had
the breach not occurred, or, if greater, the p rofit that the trustee
made by reason of the breach.
D. In a judicial proceeding involving a trust, the court may in
its discretion, as justice and equity may require, award cos ts and
expenses, including reasonable attorney’s attorney fees, to any
party, to be paid by another party or from the trust which is the
subject of the controversy.
E. 1. Unless previously barred by adjudication, consent, or
other limitation, a claim aga inst a trustee for breach of trust is
barred as to a beneficiary who has recei ved from the trustee a
report or other statement adequately disclosing the existence of the
claim unless:
a. a judicial proceeding to assert the claim is commenced
within two (2) years after receipt of the report or
statement or, if no report or statement is received,
within two (2) years after the termination of the
trust relationship between the beneficiary and that
particular trustee, and
b. the report or other statement inform s the beneficiary
of this time limitation.
A report or statement adequately di scloses the existence of a
claim if it provides sufficient information so that the beneficiary
knows of the claim or reasonably should have inquired into its
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existence. A claim this barred does not include an action to
recover for fraud or misrepresentati on related to the report or
other statement For purposes of this subsection, “accounting” means
any interim or final report or other statement provided by a trustee
reflecting all transactions, receipts, and disbursements during the
reporting period and a list of assets as of the end of the period
covered by the report or statement.
2. For any trust that is before a district court under
subsection A of Section 175.23 of this titl e, the trustee may submit
an accounting and seek approval of the accounting by the court.
Such accounting and the final approval by a district court, whether
or not such accounting is contested, shall be conclusive against all
persons interested in the tr ust, and the trustee, absent fraud,
intentional misrepresentation, or material omission, shall be
released and discharged from any and all liability as to all matters
set forth in the accounting.
3. If a trust is not before a district court under subsecti on A
of Section 175.23 of this title and if no objection has been made by
a beneficiary who is an eligible distributee or permissible
distributee of the trust’s income or principal within one hundred
eighty (180) days after a copy of the trustee’s accounti ng has been
provided to such beneficiaries together with written notice of the
provisions of this section, the distribution beneficiary is deemed
to have approved such accounting of the trustee, and the trustee,
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absent fraud, intentional misrepresentation, or material omission,
shall be released and discharged from any and all liabi lity to all
beneficiaries of the trust as to all matters set forth in such
accounting.
4. If paragraphs 2 and 3 of this subsection do not apply,
absent fraud, intentional misrep resentation, or material omission,
an action to recover for breach of trust ag ainst a trustee who is a
resident of this state or who has its principal place of business in
this state, or an officer, director, or employee of such trustee may
be commenced only within two (2) years of a trustee’s accounting for
the period of the breach . In the case of fraud, intentional
misrepresentation, or material omission, the limitation period shall
not commence until discovery of the breach of trust .
2. 5. For the purpose of paragraph 1 of this subsection, a
beneficiary is deemed to have receive d a report or other statement:
a. in the case of an adult, if it is received by the
adult personally, or if the adult lacks capacity, if
it is received by the adult’s conservator , guardian,
or agent with authority, or
b. in the case of a minor, if it is re ceived by the
minor’s guardian or conservator or, if the minor does
not have a guardian or conservator, if it is received
by a parent of the minor who does not have a conflict
of interest.
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3. 6. Except as otherwise provided by the terms of a trust,
while the trust is revocable and the settlor has capacity to revoke,
the rights of the beneficiaries are held by, and the duties of the
trustee are owed exclusively to , the settlor; the rights to be held
by and owed to the beneficiaries arise only upon the settl or’s death
or incapacity. The trustee may follow a written direction of the
settlor, even if contrary to the terms of the trust. The holder of
a presently exercisable power of withdrawal or a testamentary
general power of appointment has the rights of a settlor of a
revocable trust under this section to the extent of the property
subject to the power.
F. 1. A term of the trust relieving a trustee of liability for
breach of trust is unenforceable to the extent that it:
a. relieves a trustee of liability for breach of trust
committed in bad faith or with reckless indifference
to the purposes of the trust or the interest of the
beneficiaries, or
b. was inserted as the result of an abuse by the trustee
of a fiduciary or confidential relationship to the
settlor.
2. An exculpatory term drafted by or on behalf of the trustee
is presumed to have been inserted as a result of an abuse of a
fiduciary or confidential relationship unless th e trustee proves
that the exculpatory term is fair under the circumstances and that
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its existence and contents were adequately communicated to the
settlor.
G. A beneficiary may not hold a trustee liable for a breach of
trust if the beneficiary, while havi ng capacity, consented to the
conduct constituting the breach, released the tr ustee from liability
for the breach, or ratified the transaction constituting the breach,
unless:
1. The beneficiary at the time of the consent, release, or
ratification did not know of the beneficiary’s rights and of the
material facts that the trustee k new, or with the exercise of
reasonable inquiry, the beneficiary should have known, and that the
trustee did not reasonably believe that the beneficiary knew; or
2. The consent, release, or ratification of the beneficiary was
induced by improper conduct o f the trustee.
H. 1. Except as otherwise agreed, a trustee is not personally
liable on a contract properly entered into in the trustee’s
fiduciary capacity in the course of adm inistration of the trust if
the trustee in the contract discloses the fiduciar y capacity.
2. A trustee is personally liable for obligations arising from
ownership or control of trust property, or for torts committed in
the course of administering a trust, only if the trustee is
personally at fault, whether negligently or intentiona lly.
3. A trustee who does not join in exercising a power held by
three or more trustees is not liable to third persons for the
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consequences of the exercise of the power. A dis senting trustee who
joins in an action at the direction of the majority cotrus tees is
not liable to third persons for the action if the dissenting trustee
expressed the dissent in writing to any other cotrustee at or before
the time the action was taken.
4. A claim based on a contract entered into by a trustee in the
trustee’s fiduciary capacity, on an obligation arising from
ownership or control of trust property, or on a tort committed in
the course of administering a trust, may be asserted against the
trust in a judicial proceeding against the trustee in the trustee’s
fiduciary capacity, whether or not the trustee is personally liable
on the claim.
I. 1. A person who in good faith assists a trustee or who in
good faith and for value deals with a truste e without knowledge that
the trustee is exceeding or improperly exercising the trustee’s
powers is protected from liability as if the trustee properly
exercised the power.
2. Dealing in good faith with another person with knowledge
that the other person i s a trustee does not place a third person on
notice to inquire into the extent of the trustee’s powers or the
propriety of their his or her exercise.
3. A person who in good faith deals with another person with
knowledge that the other person is a trustee is not solely on that
account placed on notice to inquire into the extent of the trustee’s
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powers or the propriety of their his or her exercise or to see to
the proper application of assets of the trust paid or delivered to a
trustee.
4. A person who in good faith assists a former trustee or who
for value and in good faith deals w ith a former trustee without
knowledge that the person is no longer a trustee is protected from
liability as if the former trustee were still a trustee.
5. The protection provid ed by this section to persons assisting
or dealing with a trustee is secondary to that provided under
comparable provisions of other laws relating to commercial
transactions or to the transfer of securities by fiduciaries.
SECTION 43. This act shall become effective November 1, 2024. ”
Passed the Senate the 16th da y of April, 2024.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2024.
Presiding Officer of the House
of Representatives
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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 s erve 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 so lely 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 cl aim 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 approval 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 44. 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 45. 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 46. 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 47. 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 48. 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 49. 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 50. 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 51. 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 52. 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 53. 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 54. 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 55. 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 56. 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 57. 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 58. 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 59. 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 60. 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 61. 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 62. 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 63. 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 64. 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 65. 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 66. 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 67. 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 68. 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 69. 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 70. 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 71. 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 72. 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 73. 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 reasonably
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 t ransfer 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 locat ed, 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 whe re 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 principa l
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 th e contrary are applied to a
claim or cause of action described therein.
SECTION 74. 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 numberin g, reads as follows:
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 o f the qualified 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 spendthr ift 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 t rust, 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 75. 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 76. 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 77. 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, r eads 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 dis position 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 78. NEW LAW A new section of law to be codifi ed
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 79. 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 80. 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 81. 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 82. 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 tru stee'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 distri bution 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 co uld have
properly approved.
SECTION 83. 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