AN ACT
ENTITLED, An Act to revise certain provisions regarding trusts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 55-3-16 be amended to read:
55-3-16. The office of a trustee is vacated:
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 55-3-16 be amended to read:
55-3-16. The office of a trustee is vacated:
(1) By its death;
(2) By its discharge; or
(3) By its resignation.
Section 2. That chapter 55-3 be amended by adding a NEW SECTION to read:
Section 2. That chapter 55-3 be amended by adding a NEW SECTION to read:
In addition to the provisions included in the governing instrument, a fiduciary may resign:
(1) In the case of a revocable trust:
(a) Without court approval upon at least thirty days' notice to the settlor, all fiduciaries,
all designated successors to the resigning fiduciary's office and all those who have
authority to appoint a successor to replace the resigning fiduciary; or
(b) With court approval;
(2) In the case of an irrevocable trust:
(a) Without court approval upon at least thirty days' notice to the settlor, if living, all
fiduciaries, all designated successors to the resigning fiduciary's office, all those
who have authority to appoint a successor to replace the resigning fiduciary and to
those qualified beneficiaries who are known to the resigning fiduciary other than
those who are restricted from receiving notice or have elected not to receive notice
pursuant to the governing instrument, § 55-2-13 or chapter 55-18; or
(b) With court approval.
In approving a resignation under subdivision (1)(b) or (2)(b), the court may issue orders and
impose conditions reasonably necessary for the protection of the trust property.
Any liability of a resigning fiduciary or of any sureties on the fiduciary's bond for its acts or
omissions is not discharged or affected by the fiduciary's resignation unless the court orders
otherwise.
Following resignation, a successor fiduciary may be appointed pursuant to the terms set forth in
the governing instrument or under § 21-22-12.
Nothing in this section may be construed to be the exclusive means of resignation by a fiduciary.
Section 3. That § 21-22-12 be amended to read:
21-22-12. In case of the vacancy of the office of trustee, unless the instrument creating the trust names the successor, or allows the resigning trustee or another person to appoint its successor, the successor shall be appointed by the court upon hearing and notice as provided in this chapter. In case of necessity the court may appoint a temporary trustee pending a permanent appointment.
Section 3. That § 21-22-12 be amended to read:
21-22-12. In case of the vacancy of the office of trustee, unless the instrument creating the trust names the successor, or allows the resigning trustee or another person to appoint its successor, the successor shall be appointed by the court upon hearing and notice as provided in this chapter. In case of necessity the court may appoint a temporary trustee pending a permanent appointment.
If the office of trustee remains vacant for more than thirty days, then any resigned trustee in
possession of trust property may petition the court for the appointment of a successor trustee. If no
successor trustee can be secured within ninety days following a hearing held of the resigned trustee's
petition, the resigned trustee shall deliver the trust property within its possession to any other
fiduciary or other persons, as ordered by the court.
The resigned trustee shall be held harmless from any liability, absent the resigned trustee's gross
negligence or willful misconduct, for any action taken pursuant to this section.
The resigned trustee is entitled to reimbursement for advances it has made on behalf of the trust
and for reasonable compensation for the performance of its duties as trustee. Such advances and
compensation shall act as a lien on trust assets under § 55-1A-34.
Following a trustee's resignation, the resigned trustee shall be deemed to be serving only as a
custodian of the documents and assets of the trust then in its possession and shall be relieved of its
fiduciary and administrative duties under the terms of the trust instrument and pursuant to state law.
The resigned trustee is entitled to reimbursement for advances it has made on behalf of the trust and
for reasonable compensation as a custodian. Such advances and compensation shall act as a lien on
trust assets under § 55-1A-34.
The relief afforded to the trustee under this section does not limit other relief that may be
requested or authorized under this chapter.
Section 4. That § 55-1A-41 be amended to read:
55-1A-41. Unless specifically restricted by the governing instrument, a trustee may appoint an individual or a corporate fiduciary as a co-trustee. The appointed co-trustee may serve only as long as the appointing trustee serves, or as long as the last to serve if more than one trustee appointed the co-trustee. The appointed co-trustee may not become a successor trustee upon the death, resignation, or incapacity of the appointing trustee, unless appointed under the terms of the governing instrument or unless no other successor trustee, or method for appointing a successor trustee, is provided in the governing instrument.
Section 4. That § 55-1A-41 be amended to read:
55-1A-41. Unless specifically restricted by the governing instrument, a trustee may appoint an individual or a corporate fiduciary as a co-trustee. The appointed co-trustee may serve only as long as the appointing trustee serves, or as long as the last to serve if more than one trustee appointed the co-trustee. The appointed co-trustee may not become a successor trustee upon the death, resignation, or incapacity of the appointing trustee, unless appointed under the terms of the governing instrument or unless no other successor trustee, or method for appointing a successor trustee, is provided in the governing instrument.
The powers and the responsibilities of the appointed co-trustee may be limited by the appointing
trustee in a writing signed by the appointing trustee at the time of the appointment. If the powers or
responsibilities are so limited, the powers or responsibilities of the co-trustee shall be limited as set
forth in writing. Unless the powers or responsibilities are so limited, the appointed co-trustee may
exercise all the powers of the appointing trustee. The combined powers of the appointed co-trustee
and the appointing trustee may not exceed the powers of the appointing trustee alone. The trustee
appointing a co-trustee may, in writing, revoke the appointment at any time, with or without cause.
If the governing instrument is silent concerning the trustee's power to appoint a co-trustee, the
trustee shall notify in writing, the trustor, if living, and all current income and principal beneficiaries
at least thirty days prior to the effective date of the trustee's exercise of the power granted under this
section. The notice, which shall include a copy of the proposed action, shall advise the trustor and
current beneficiaries that if they object to the trustee's appointment they need to file a written
objection with the trustee prior to the effective date set out in the notice of the proposed action. If
an objection is received by the trustee, prior to the effective date of the appointment, the trustee may
not appoint a co-trustee. However, this section does not limit the power of the trustee under law to
petition the court for approval of the appointment. If no objection has been timely made, the
proposed appointment shall go into effect on the later of the date set out in the notice or thirty days
after notice has been given. The notice shall be mailed, postage prepaid, to the last known address
of the trustor or current beneficiary.
The provisions of this section are effective for trusts created before, on, or after July 1, 2017,
except as otherwise directed by the trustor, trust protector, trust advisor, or other fiduciary designated
by the terms of the trust.
Section 5. That § 55-3-6 be amended to read:
55-3-6. Unless the terms of a trust expressly reserve a power to the settlor to revoke or modify a trust, a trust shall be irrevocable.
Section 6. That § 55-3-24 be amended to read:
55-3-24. An irrevocable trust may be modified or terminated upon the consent of all of the beneficiaries if continuance of the trust on its existing terms is not necessary to carry out a material purpose. Whether or not continuance of the trust on its existing terms is necessary to carry out a material purpose, an irrevocable trust may be modified or terminated upon the consent of the trustor and all of the beneficiaries. Upon termination of a trust under this section, the trustee shall distribute the trust property in accordance with the trustor's probable intention or in any other manner as agreed by all the beneficiaries. No person may be required to seek court affirmation of the trust's modification or termination made pursuant to this section. The provisions of chapter 55-18 apply to
Section 5. That § 55-3-6 be amended to read:
55-3-6. Unless the terms of a trust expressly reserve a power to the settlor to revoke or modify a trust, a trust shall be irrevocable.
Section 6. That § 55-3-24 be amended to read:
55-3-24. An irrevocable trust may be modified or terminated upon the consent of all of the beneficiaries if continuance of the trust on its existing terms is not necessary to carry out a material purpose. Whether or not continuance of the trust on its existing terms is necessary to carry out a material purpose, an irrevocable trust may be modified or terminated upon the consent of the trustor and all of the beneficiaries. Upon termination of a trust under this section, the trustee shall distribute the trust property in accordance with the trustor's probable intention or in any other manner as agreed by all the beneficiaries. No person may be required to seek court affirmation of the trust's modification or termination made pursuant to this section. The provisions of chapter 55-18 apply to
this section.
Thirty days prior to the effective date of a modification or termination of a trust under this
section, the trustor or beneficiaries shall provide notice in writing of the modification or termination,
including a copy of the modification or termination, to all fiduciaries as defined in
subdivision 21-22-1(3) serving as of the date of the notice. The modification or termination shall be
effective no earlier than thirty days after the notice is given, unless the notice is waived.
Section 7. That § 55-4-51.1 be amended to read:
55-4-51.1. A certificate of trust executed under § 55-4-51 may be recorded in the office of the register of deeds with respect to land described in the certificate of trust or any attachment to it. If it is recorded or filed in any county where real property is situated, or in the case of personal property, if it is presented to a third party, the certificate of trust serves to document the existence of the trust, the identity of the trustees, the powers of the trustees, and any limitations on those powers, and other matters the certificate of trust sets out, as though the full trust instrument had been recorded, filed, or presented. Until amended or revoked, or until the full trust instrument or will is recorded, filed, or presented, a certificate of trust is conclusive proof as to the matters contained in it and any party may rely upon the certificate, except a party who has actual knowledge of the facts to the contrary.
Section 8. That § 55-16-5 be amended to read:
55-16-5. Any person may serve as an investment trust advisor described in subdivision 55-1B-1(6), notwithstanding that the person is the transferor of the qualified disposition, but the person may not otherwise serve as a fiduciary of a trust that is a qualified disposition except with respect to the retention of the veto right permitted by subdivision 55-16-2(2). While serving as an 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 9. That § 55-18-1 be amended to read:
55-18-1. Terms used in this chapter mean:
Section 7. That § 55-4-51.1 be amended to read:
55-4-51.1. A certificate of trust executed under § 55-4-51 may be recorded in the office of the register of deeds with respect to land described in the certificate of trust or any attachment to it. If it is recorded or filed in any county where real property is situated, or in the case of personal property, if it is presented to a third party, the certificate of trust serves to document the existence of the trust, the identity of the trustees, the powers of the trustees, and any limitations on those powers, and other matters the certificate of trust sets out, as though the full trust instrument had been recorded, filed, or presented. Until amended or revoked, or until the full trust instrument or will is recorded, filed, or presented, a certificate of trust is conclusive proof as to the matters contained in it and any party may rely upon the certificate, except a party who has actual knowledge of the facts to the contrary.
Section 8. That § 55-16-5 be amended to read:
55-16-5. Any person may serve as an investment trust advisor described in subdivision 55-1B-1(6), notwithstanding that the person is the transferor of the qualified disposition, but the person may not otherwise serve as a fiduciary of a trust that is a qualified disposition except with respect to the retention of the veto right permitted by subdivision 55-16-2(2). While serving as an 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 9. That § 55-18-1 be amended to read:
55-18-1. Terms used in this chapter mean:
(1) "Bind" or "bound," to consent, receive notice or service of process, approve, agree, object,
resist, waive, or demand for or as a person with the same binding and conclusive effective
as if the person represented had;
(2) "Conflict of interest," a situation in which a representative's interest in the trust causes a
significant likelihood that a reasonable person would disregard a representative's duty to
a represented beneficiary. A conflict of interest, however, excludes (i) any adversity,
conflict or opposed interests substantially unrelated to the representative's interest in the
trust; (ii) any past situation which is not likely to re-occur; and (iii) any conflict of interest
which falls short of a material conflict of interest;
(3) "Co-representative," more than one simultaneously acting representative of the same class
pursuant to § 55-18-9, as when co-guardians are acting:
(4) "Conservator," a person appointed pursuant to chapter 29A-5 or equivalent provisions of
another jurisdiction's laws including a temporary conservator, a guardian ad litem, and a
limited conservator;
(5) "Fiduciary," a person defined by subdivision 21-22-1(3), except as used in § 55-18-17;
(6) "Guardian," a person appointed pursuant to chapter 29A-5 or equivalent provisions of
another jurisdiction's laws including a temporary guardian and a limited guardian;
(7) "Incapacitated" or "incapacity," lacking the capacity to meaningfully understand the
matter in question because of a mental or physical impairment;
(8) "Interest," a beneficial interest as defined by subdivision 55-1-24(1) but including the
holder of a power of appointment, and any power to remove or replace a fiduciary or a
representative;
(9) "Interested beneficiary," a person who, on the date the person's qualification is
determined:
(a) Is a current distributee or permissible distributee of trust income or principal;
(b) Would be a distributee or permissible distributee of trust income or principal if the
interests of the current distributees terminated on that date;
(c) Would be a distributee or permissible distributee of trust income or principal if the
trust terminated on that date;
(d) Holds a power of appointment; or
(e) Would hold a power of appointment if the interests of the current distributees
terminated on that date or the interests of the persons currently holding a power of
appointment under this subdivision terminated on that date;
(10) "Knows" or "knowingly," actual knowledge of the fact in question;
(11) "Minor," any person who has not attained the age of eighteen. The term includes a minor
with an incapacity;
(12) "Nonjudicial settlement," an agreement, release, or other action whether or not approved
by a court, which may include, without limitation:
(a) The interpretation or construction of the terms of a trust;
(b) The approval of any fiduciary's report or accounting;
(c) Direction to any fiduciary to refrain from performing a particular act or the grant
to a fiduciary of any necessary or desirable power;
(d) The resignation or appointment of any fiduciary;
(e) The determination of a fiduciary or a representative's compensation;
(f) The transfer of a trust's principal place of administration or situs;
(g) The liability of any fiduciary's action or omission relating to a trust;
(h) Partial or final settlement agreements regarding a trust or its administration; or
(i) The modification, amendment, reformation, or termination of a trust;
(13) "Notice" or "notifies," notice provided personally, by mail, postage prepaid, addressed to
the person's last known post office address, or electronically in accordance with § 15-6-5(d);
(14) "Notifier," a person who is undertaking notice or proposing consent with regard to a
matter concerning a trust;
(15) "Power of appointment," a power defined by § 55-1-12;
(16) "Proceeding," any judicial or nonjudicial trust proceeding, accounting, termination,
modification, reformation, decanting, settlement, nonjudicial settlement, and any
proceeding conducted pursuant to chapter 21-22 or title 29A which concerns a trust;
(17) "Protected person," a person other than a minor for whom a guardian or conservator is
appointed;
(18) "Reasonably available," with respect to a person, that the person can be identified and
located with the exercise of reasonable diligence;
(19) "Representative," a person who may bind another person pursuant to § 55-18-9;
(20) "Trust," an express inter vivos or testamentary trust;
(21) "Uninterested beneficiary," a beneficiary other than an interested beneficiary.
Section 10. That § 55-18-21 be amended to read:
55-18-21. Without diminishing the powers of a trustee over the affairs of the trust or trust property, a trustee may not bind a beneficiary of the trustee's trust except as provided in subdivisions 55-18-9(5), (9), (11), and (16).
An Act to revise certain provisions regarding trusts.
Section 10. That § 55-18-21 be amended to read:
55-18-21. Without diminishing the powers of a trustee over the affairs of the trust or trust property, a trustee may not bind a beneficiary of the trustee's trust except as provided in subdivisions 55-18-9(5), (9), (11), and (16).
An Act to revise certain provisions regarding trusts.
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I certify that the attached Act originated in the
SENATE as Bill No. 51
____________________________
Secretary of the Senate ____________________________
President of the Senate
Attest:
____________________________
Secretary of the Senate
____________________________
Attest:
____________________________
Chief Clerk
Senate Bill No. 51 File No. ____ Chapter No. ______ |
Received at this Executive Office this _____ day of _____________ ,
20____ at ____________ M.
By _________________________
for the Governor
The attached Act is hereby
approved this ________ day of
______________ , A.D., 20___
____________________________
Governor STATE OF SOUTH DAKOTA, ss.
Office of the Secretary of State
Filed ____________ , 20___
____________________________ Secretary of State
By _________________________ |
