An Act
ENROLLED HOUSE
BILL NO. 3962 By: Echols and Kane of the
House
and
Pugh of the Senate
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 dir ector; providing defenses
for a suit against a trust director; providing
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 qualified person; providing
requirements to be considered a qualified person;
providing for persons and enti ties not to be
considered a qualified perso n; providing for the
appointment, removal, or replacement of co trustee,
trust advisor, or trust protector; providing who may
serve as an investment trust advis or; providing that
a transferor may not serve as a fid uciary; providing
for successor qualified p erson; providing for
disposition to more than one trustee; prov iding that ENR. H. B. NO. 3962 Page 2
for dispositions to more than one trustee, a
qualified disposition may not be treated as other
than a qualified disposition solely because not all
of the trustees are qualified perso ns; providing
powers and rights of a transferor and its effect on a
qualified disposition; limiting actions of creditors
to transfers with the intent to defrau d; providing
requirements for bringing claim s with respect to
qualified disposition of a transferor'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 of 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 und er
certain events and circumstances; providing for
avoidance of a qualified disposition; providing for
discretionary interest; providing that the rules
against perpetuities shall not apply to trusts;
providing intent to allow trust to have perpetual
durations; providing for nonjudicial settlement
agreements for trusts; p roviding when nonjudicial
settlement agreements are valid; clarifying what
matters may be solved by a nonjudicial settlement
agreement; providing for co urt approval of
nonjudicial settlement agreements; amending 60 O.S.
2021, Sections 175.24, 175.4 7, and 175.57, which
relate to powers of trustee , power of alienation, and
breach of trust; authorizing payment of certain costs
and fees by trustee; providing for creation of
attorney-client relationship under certain
circumstances; providing exception; providing for
confidentiality of certain communic ations;
authorizing perpetual duration of certain trusts;
defining term; establishing requirements for approval
of certain accountings; providing limi tation on
certain action; updating statutory language; making
language gender neutral; providing for
noncodification; providing for codification; and
providing an effective date .
ENR. H. B. NO. 3962 Page 3
SUBJECT: Trusts
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 Statute s 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 sec tion of law to be codified
in the Oklahoma Statutes as Section 1201 of Ti tle 60, unless there
is created a duplication in nu mbering, reads as follows:
Sections 2 through 1 8 of this act shall be known and may be
cited as the "Oklahoma Uniform Directed Trust Act of 2024".
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1202 of Title 60, unless there
is created a duplication in numbering, reads as follow s:
As used in the Oklahoma Uniform Directed Trust A ct of 2024:
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" 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 granted to a
person by the terms of the trust to the extent the power is
exercisable while the pe rson 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 ENR. H. B. NO. 3962 Page 4
excludes the powers describe d 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;
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 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. T he
person is a trust director whether or not the terms 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.
ENR. H. B. NO. 3962 Page 5
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1203 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. This act applies to a trust, whenever created, that has its
principal place of administration in this state and is subject to
the following rules:
1. If the trust was created before the effective date of this
act, this act applies only to a decision or action occurring on or
after the effective date of this act; and
2. If the principal place of administration of the trust 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 establ ish 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 loc ated 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 t he designated
jurisdiction.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1204 of Title 60, unless there
is created a duplication in number ing, reads as follows:
The common law and p rinciples 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 codi fied
in the Oklahoma Statutes as Section 1 205 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 ENR. H. B. NO. 3962 Page 6
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
b. another beneficiary represented by t he beneficiary
with respect to the exercise or nonexercise 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, a s 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 o ver 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 Sec tion 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.
ENR. H. B. NO. 3962 Page 7
B. Unless the terms of a t rust 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 w ith 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 tr ustee 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:
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
ENR. H. B. NO. 3962 Page 8
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
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, th e 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 trust ee'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.
ENR. H. B. NO. 3962 Page 9
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:
A. Subject to Section 1 2 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 th is 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 direc tor.
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 otherwis e:
1. A trustee does not have a duty to: ENR. H. B. NO. 3962 Page 10
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
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 ENR. H. B. NO. 3962 Page 11
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 o f 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 Stat utes as Section 1214 o f 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 ci rcumstances could asser t in an action for breach
of trust against the trus tee.
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 i n numbering, reads as fo llows:
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 number ing, 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; ENR. H. B. NO. 3962 Page 12
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:
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., Sectio n 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 13 01 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 the 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
occurring upon the substitution of on e 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 ENR. H. B. NO. 3962 Page 13
term does not include the release or relinquishment of an interest
in property that theretofo re was the subject of a qualified
disposition;
5. "Property" means real property, personal prop erty, and
interests in real or personal property;
6. "Qualified disposition " means a disposition by or from a
transferor to a qualified person or qualified p ersons, 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 prope rty or as
a holder of a power of appointment which a uthorizes 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, tr ust, unincorporated
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 disposit ion, which instrument:
1. Expressly incorporates t he law of this state to govern the
validity, construction, 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 mo re of the
following:
ENR. H. B. NO. 3962 Page 14
a. a transferor's power to veto a distribution 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, the 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 rec eipt 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 a nnuity 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 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 direction
of a trust advisor described in this act, acting
either in the qualified person's sole discretion or
pursuant to an ascertainable standard contained in the
trust instrument,
ENR. H. B. NO. 3962 Page 15
i. the transferor's right to remove a trustee, protector,
or trust advisor and to appoint a new t rustee,
protector, or trust advisor, other than a tr ustee who
is a related or subordinate party with respect to the
transferor within the meaning of Section 672(c) of the
Internal Revenue Code o f 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 Sectio n 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, in come taxes
due on income of the trust if the potenti al or actual
receipt of income or principal is pursuant to a
provision in the trust instrument that expressly
provides for the payment of t he taxes and if the
potential or actual receipt of income or prin cipal
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 trus t advisor described in
Section 24 of this act,
m. the ability, whether pursuant to discretion,
direction, or the gran tor'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 g iven ENR. H. B. NO. 3962 Page 16
authority by the instrument to exercise all or any
portions of the powers and discretions over any
discretionary distributions of in come or principal, or
o. a transferor's enjoyment of a power to rea cquire the
trust corpus by substituting other proper ty 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 trans feror 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, befor e the qualified person
distributes the property or income from the pr operty to the
beneficiary, and such provision of the trust instrument constitutes
a restriction on the transfer of the transferor 's beneficial
interest in the trust that is enforceable un der 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 t he trust instrument
fails to meet the requirements o f paragraph 1 of subsection A of
this section.
SECTION 22. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1304 of Title 60, unless there
is created a duplication in numbering, reads as follows:
A. For the purposes of the Oklahoma Qualified Dispositions into
Trust Act, a qualified person is:
1. An individual who, except for br ief 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 have a present
intention of moving from this st ate, and who has the intention of
returning to this state when away;
2. A trust company that is organized under state law or under
federal law and that has its principal place of business in this
state; or ENR. H. B. NO. 3962 Page 17
3. A bank or savings association that possesse s and exercises
trust powers, has its principal place of business in this s tate, and
the deposits of which are insured by the F ederal 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 codif ied
in the Oklahoma Statutes as Section 1305 of Titl e 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 gov ern is
valid, effective, and conclusive for the trust if all of the
following are true:
1. Some or all of the trust assets a re deposited in this state
or physical evidence of such assets is held in this state and the
trust is being administered by a quali fied person. "Deposited in
this state" includes being held in a checking account, time deposit,
certificate of deposit, brok erage account, trust company fiduciary
account, or other similar account or dep osit that is located in this
state, including Oklaho ma investments;
2. A trustee is a qualified person who is designated as a
trustee under the governing instrument or a succe ssor trusteeship,
or designated by a court having jurisdiction over the trust; a nd
3. The administration, including physically main taining trust
records in this state, and preparing or arranging for the
preparation of, on an exclusive basis or a nonexclu sive basis, an
income tax return that must be filed by the trust, occurs wholly o r
partly in this state.
B. The courts of this state have 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 secti on may be construed to be the exclusive
means of providing a valid effective and conclusive state
jurisdiction provision. ENR. H. B. NO. 3962 Page 18
SECTION 24. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1306 of Title 60, unless there
is created a duplication in numbering, reads as follows:
Neither the transferor nor 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 activi ties are
not subject to supervision as provided in S ection 22 of this act may
be considered a qualified person. However, nothing in this act
precludes a transferor from a ppointing, removing, or replacing one
or more cotrustees, trust advisors, or trust pr otectors, regardless
of whether or not such trust ad visor or trust protector is a
fiduciary.
SECTION 25. NEW LAW A new section of law to be codif ied
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 Section 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.
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 per son 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 in strument,
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, unles s there
is created a duplication in numbering, reads as follows: ENR. H. B. NO. 3962 Page 19
In the case of a disposit ion to more than one trustee, a
disposition that is otherwise 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 Statut es 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 transferor '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 ar e 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 t hat 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, except as set forth
in Section 30 of this act, no action of any kin d, 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 wi th
the intent to defraud that specific creditor. Th is protection,
however, only applies to qualified d ispositions up to, but not
exceeding, Ten Million Dollars ($10,000,000.00).
SECTION 30. NEW LAW A new section of law to be codif ied
in the Oklahoma Statutes as Section 1312 of Titl e 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
qualified disposition of a transferor's assets under Section 29 of
this act is extinguished unless the action under Sect ion 29 of this ENR. H. B. NO. 3962 Page 20
act may only be brought by a creditor of the transferor who meets
one of the following requi rements:
1. Is a creditor of the settlor before the settlor 's assets are
transferred to the trus t; or
2. Becomes a creditor subsequent to the tran sfer into trust,
and the asset was listed on a financial statement provided to a bank
or financial institu tion by or on behalf of the transferor for the
purpose of obtaining credit as a borrower, guarantor, surety,
pledgor, or otherwise.
B. Any action under Section 29 of this act may be filed at any
time, but in any event not later than five (5) years after the
creditor has obtained a final, unappealable judgment aga inst the
transferor. In such action, the credi tor may proceed against the
transferred property or recover the value thereof in an amount up to
the amount of such judgment against the transferor.
C. This section and Section s 29, 31, 32, and 33 of this act are
inseparably interwoven with substantive rig hts 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 6 0, 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 me ets the
requirements of paragraphs 2 and 3 of subsec tion 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 t rust originally
within or outside of the jurisdictio n of Oklahoma.
If property transferred to a spendthrift trust is conveyed to
the settlor or to a beneficiary for the purpose of obtaining a loan
secured by a mortgage or deed of trust on the property and then
reconveyed to the trust within one hundred eigh ty (180) days of ENR. H. B. NO. 3962 Page 21
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 d eed 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 an y 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 involv ed in the counseling, drafting,
preparation, executi on, 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 tr ansferor 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 beneficia ry during
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 l aw
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 i s 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 jurisdict ion 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 ENR. H. B. NO. 3962 Page 22
of this state may award attorney fees and costs to the prevailing
party in such an action. In any action d escribed in this section,
the burden to prove the matter by clear and convincing e vidence is
upon the creditor.
SECTION 34. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1316 of Title 60, unless th ere
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 shal l 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 quali fied 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 provision s 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 deb t.
B. If the transferor is married at the time of t he 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 i f the spouse
or former spouse was provided with noti ce in the form set forth in
subsection C of this section, or executed a written consent to the
transfer after being provided the information set forth in the
notice. ENR. H. B. NO. 3962 Page 23
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 RE QUEST TO
THE TRUSTEE AT THE ADDRESS BELOW, BE FURNISHED A COPY OF THE TRUST
DOCUMENT. IF YOU HAVE ANY QUESTIONS, YOU SHOULD IM MEDIATELY SEEK
INDEPENDENT LEGAL ADVICE. IF YOU FAI L TO OBJECT WITHIN THE REQUIRED
TIME PERIOD, YOU WILL HAVE CONSENTED TO THE T RANSFER OF PROPERTY
INTO THIS TRUST;
2. Shall contain a description of the property being
transferred to the trust and the nam e of the trust;
3. May require that any person who is eligible to receive
information pursuant to this section be bound by the duty of
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 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 after the date the property is
transferred, the period to commence an act ion pursuant to Section 30
of this act commences running on the date the notice is provided.
E. The exception contained in subsect ion A of this section does
not apply to any claim fo r 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:
ENR. H. B. NO. 3962 Page 24
A qualified disposit ion is avoided only to the extent necessary
to satisfy the transferor 's debt to the creditor at whose insistence
the disposition had been avoided, together with such costs,
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 satisfi ed that a qualified person has not
acted in bad faith in accepting or administering the property that
is the subject of the qualified d isposition:
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 defe nse of the action or
proceedings to avoid the qualif ied 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, preex isting rights, claims, and
interests of such qualifi ed person, and of any
predecessor qualified person that has not act ed 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 qualifi ed disposition
is subject to the right of such benef iciary to retain any
distribution made upon the exercise of a trus t power or discretion
vested in the qualified person or qualified persons of such trust,
which power or discretion was properly exercised prior to the
creditor's commencement of an action to avoid the qualified
disposition. It is presumed that the benefic iary, 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 se ction 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 provisions apply only to discretionary
interests:
ENR. H. B. NO. 3962 Page 25
1. A discretionary interest is ne ither 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 trus tee to
exercise the trustee 's discretion to make a distributio n 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 st andard may not be applied to the exercise
of discretion by the trustee with regard to a discretionary
interest. Other than for the circumstances l isted in this section,
a court has no jurisdiction t o review the trustee's discretion or to
force a distribution.
C. Absent express language 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 distrib ute 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 beneficiary 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 new section of law to be codified
in the Oklahoma Statutes as Section 1401 of Title 60, unless there
is created a duplicati on 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. ENR. H. B. NO. 3962 Page 26
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:
A. Except as otherwise provid ed 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 properl y 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 no t 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 wa iver of bond of a trustee;
8. The governing law of the trust;
9. The criteria for distribu tion to a beneficiary where the
trustee is given discretion;
10. The resignation, appointment, and establishment of the
powers and duties of trust protectors or tr ust advisors; and
ENR. H. B. NO. 3962 Page 27
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 a dequate, and to determine whether the
agreement contains terms and conditions the court c ould 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 tru st 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, an d 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
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 purch ase, 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 ere ct new party
walls or buildings alone or jointly wit h 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 ef fect and keep in
force, fire, rent, title, liability , casualty, or other insurance of
any nature, in any form and in any amount;
ENR. H. B. NO. 3962 Page 28
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
interest of the trust. To sell or exercise stock subscription or
conversion rights, participate in foreclosures, reorganizations,
consolidations, mergers, liquidations, pooling agreeme nts 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 res pect of such
securities. In the exercise of the for egoing 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 instanc e of persons holding
similar securities, under such terms and conditions respecti ng the
deposit thereof as the trustee may approve. A ny stock or other
securities obtained by conversion, reorganization, consolidation,
merger, liquidation, or the exercise o f subscription rights shall be
free, unless the trus t agreement provides otherwis e, 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 investm ent company or
investment trust is limited to United States Government government
obligations and to repurchase agreements fully colla teralized by
such United States Government government obligations, and provided
further, that any such investment company or investment trust shall
take delivery of such coll ateral, either directly or t hrough 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 instrumen t 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 ENR. H. B. NO. 3962 Page 29
9. To employ attorneys, accountants, agents, and brokers
reasonably necessary in the administr ation 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 i n 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 discretion
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 , from the assets of
the trust, reasonable compensation and costs incurred in conn ection
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 regarding 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 pers on 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
waiver of the privilege for communications between the attorney and
the fiduciary. ENR. H. B. NO. 3962 Page 30
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, vertical, 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 sha ll
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 and 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 th e benefit or
protection of the trust or its property and all expenses, losses,
and liabilities, not res ulting 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 o f any property subject
thereto; and
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 esta tes, 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 agencie s.
E. F. No trustee shall be required to give bond unless the
instrument creating the trust, or a court of competent jurisdiction ENR. H. B. NO. 3962 Page 31
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 s uspended 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
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 power 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, educatio nal, scientific, religious, or charitable
corporations for their sole use and benefit;
3. Any cemetery corporation, 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 O klahoma Statutes;
or
5. Gifts absolute, limited, or in trust, for the advancement of
medical science to an incorporated state society of physicians and
surgeons.
C. Except as provided i n this section, the common law rule
against perpetuities shall not ap ply to a trust subject to the trust
laws of this state. A trust created in this state or subject to the
trust laws of this state may have a perpetual duration if a timing
provision or limit is not specified in the trust document.
ENR. H. B. NO. 3962 Page 32
SECTION 42. AMENDATORY 60 O.S. 2021, Section 175.57, is
amended to read as follows:
Section 175.57. A. A violation 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 commi tting 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 a dminister 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 disposed 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
property and trust distributio ns to 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 costs 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.
ENR. H. B. NO. 3962 Page 33
E. 1. Unless previously barred by adjudication, consent , or
other limitation, a claim against 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 disclosin g the existence of the
claim unless:
a. a judicial proceeding to assert th e 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 in forms the beneficiary
of this time limitation.
A report or statement adequately di scloses the existence of a
claim if it provides sufficient informatio n so that the beneficiary
knows of the claim or reasonably should have i nquired into its
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 statemen t 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 s tatement.
2. For any trust that is before a district court under
subsection A of Section 175.23 of this title, the trustee may submit
an accounting and seek approval of the accounting by the court.
Such accounting and the final approval by a district cou rt, whether
or not such accounting is contested, shall be conclusive against all
persons interested in th e trust, and the trustee, absent fraud,
intentional misrepresentation, or material omission, shall be
released and discharged from any and all liabilit y as to all matters
set forth in the accounting.
3. If a trust is not before a district court under subs ection 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 accounting 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, ENR. H. B. NO. 3962 Page 34
absent fraud, intentional misrepresentat ion, 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 mi srepresentation, 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 princi pal place of business in
this state, or an officer, director, or empl oyee 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 o mission, 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 r eceived 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 conflic t
of interest.
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 relie ving a trustee of liability for
breach of trust is unenforceable to the extent that it:
ENR. H. B. NO. 3962 Page 35
a. relieves a trustee of liability for breach of trust
committed in bad faith or with reckless indiffere nce
to the purposes of the trust or the interest of the
beneficiaries, or
b. was inserted as the result o f 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 unles s the trustee proves
that the exculpatory term is fair under the circumstances and that
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 having capacity, consented to the
conduct constituting the breach, released the tr ustee from liability
for the breach, or ratified the transaction cons tituting the breach,
unless:
1. The beneficiary at the tim e 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 shou ld have known, and that the
trustee did not reasonably beli eve 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 p ersonally
liable on a contract properly entered into in t he trustee's
fiduciary capacity in the course of administration of the trust if
the trustee in the contract discloses the fiduciar y capacity.
2. A trustee is personally liable for obligations arisin g from
ownership or control of trust property, or for to rts committed in
the course of administering a tr ust, 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
consequences of the exercise of the power. A dissenting trustee who
joins in an action at the direction of the majority cotrus tees is ENR. H. B. NO. 3962 Page 36
not liable to third persons for the action if the dissenting trustee
expressed the dissent in writing to any other c otrustee at or before
the time the action was take n.
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 t he
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 truste e or who in
good faith and for value deals with a tr ustee without knowledge that
the trustee is exceeding or improperly exercising the trustee's
powers is protected from liability as if the trustee prope rly
exercised the power.
2. Dealing in good faith w ith another person with knowledge
that the other person is 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 anothe r person with
knowledge that the other person is a tru stee is not solely on that
account placed on notice to inquire into the extent of the trustee's
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 for mer trustee were still a trustee.
5. The protection pr ovided 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.
ENR. H. B. NO. 3962 Page 37
Passed the House of Representatives the 22nd day of May, 2024.
Presiding Officer of the House
of Representatives
Passed the Senate the 29th day of May, 2024.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _____ ____
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________