CHAPTER 55-18
VIRTUAL REPRESENTATION
55-18-1 Definitions.
55-18-2 Application of chapter to proceedings involving persons interested in trust.
55-18-3 Effect of provisions of chapter.
55-18-4 Conditions under which representative may not bind person represented.
55-18-5 Notice, service of process, and consent not required of certain persons.
55-18-6 Notice or consent respecting co-representatives.
55-18-7 Demand for notice.
55-18-8 Notice to Department of Social Services.
55-18-9 Persons who may bind others.
55-18-10 Disclosure of information regarding representatives.
55-18-11 Refusal to act as representative.
55-18-12 Petition for advance approval of action.
55-18-13 Representative with conflict of interest.
55-18-14 Disclosure of conflict of interest by representative.
55-18-15 Disclosure of conflict of interest by notifier.
55-18-16 Findings regarding conflict of interest in judicial and nonjudicial proceedings--Immunity of representative from liability.
55-18-17 Discretion of representative--Fiduciary status.
55-18-18 Compensation of representative.
55-18-19 Appointment of court representative.
55-18-20 Limitations on representation of settlor--Limitations on settlor's authority to bind beneficiary.
55-18-21 Limitations on trustee's authority to bind beneficiary.
55-18-22 Unauthorized practice of law not permitted.
55-18-23 Provisions of governing instrument.
55-18-24 Construction with chapter 29A-1.
55-18-25 Liability of notifier.
55-18-26 Liability of fiduciary.
55-18-1. Definitions.
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 effect 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:
(a) Any adversity, conflict or opposed interests substantially unrelated to the representative's interest in the trust;
(b) Any past situation which is not likely to re-occur; and
(c) 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 in accordance with § 55-2-24;
(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; and
(21) "Uninterested beneficiary," a beneficiary other than an interested beneficiary.
Source: SL 2017, ch 208, § 2; SL 2018, ch 275, § 31; SL 2019, ch 209, § 9; SL 2021, ch 207, § 3; SL 2023, ch 161, § 16.
55-18-2. Application of chapter to proceedings involving persons interested in trust.
Notwithstanding the provisions of § 15-6-17(c), the provisions of this chapter apply to any proceeding involving any person interested in a trust.
Source: SL 2017, ch 208, § 1.
55-18-3. Effect of provisions of chapter.
In any proceeding:
(1) Any notice, governing instrument, accounting, report, or other information which is provided to a representative has the same effect as if the same was given to the person represented;
(2) The consent of a representative has the same effect as if the person represented had consented;
(3) A representative may otherwise bind the person represented; and
(4) A finding, decree, judgment, ruling, or order in a judicial proceeding is binding and conclusive on all persons upon whom notice or service of process is not required pursuant to this chapter.
Source: SL 2017, ch 208, § 3.
55-18-4. Conditions under which representative may not bind person represented.
Notwithstanding the provisions of § 55-18-3, no representative may bind the person represented if, prior to the representative binding the person in the matter in question:
(1) The court finds that the person cannot be adequately represented pursuant to § 55-18-19;
(2) The representative refuses to act pursuant to § 55-18-11;
(3) The representative has been removed by a person with power to remove the representative; or
(4) The represented person notifies:
(a) The trustee;
(b) The notifier; and
(c) The representative, that the represented person will not be bound by the representative.
Source: SL 2017, ch 208, § 4.
55-18-5. Notice, service of process, and consent not required of certain persons.
Neither notice nor service of process on, nor consent to, any matter in any proceeding is required from:
(1) An unborn individual;
(2) An unascertained person;
(3) The potential appointee of a power of appointment;
(4) The potential taker in default of a general power of appointment;
(5) An uninterested beneficiary; and
(6) A person bound by a representative.
Notwithstanding subdivisions (1) and (2), if no interested beneficiary, or representative thereof, would otherwise receive notice or provide consent with respect to the matter in question, a representative of an unborn or unascertained person shall act pursuant to § 55-18-9.
Notwithstanding subdivision (5), with respect to the matter in question, notice is required to, or consent is required from, an uninterested beneficiary who does not have a substantially identical interest with one or more interested beneficiaries.
Source: SL 2017, ch 208, § 5; SL 2018, ch 275, § 32.
55-18-6. Notice or consent respecting co-representatives.
When notice is made on, or consent obtained from, co-representatives, notice on, or consent from, all acting co-representatives is required except when the terms of the co-representatives' authority provide that the co-representatives may act independently or by other means.
However, when a representative is acting pursuant to subdivision 55-18-9(3), (4), or (7), consent from or notice to one representative is sufficient to bind the person represented.
Source: SL 2017, ch 208, § 6.
55-18-7. Demand for notice.
Following the commencement of a judicial proceeding, if a beneficiary timely files a demand for notice with the court, notice shall be given to the beneficiary unless otherwise ordered by the court.
Source: SL 2017, ch 208, § 7; SL 2018, ch 275, § 33.
55-18-8. Notice to Department of Social Services.
The Department of Social Services shall be provided with notice in any proceeding in which an interested beneficiary of a trust may owe a debt to the department pursuant to § 28-6-23. An interested beneficiary is not considered a person who may owe a debt to the department solely on account of the person's residence in this state.
Source: SL 2017, ch 208, § 8.
55-18-9. Persons who may bind others.
Persons who may bind others are as follows:
(1) Except as provided in subdivision 55-18-20(2), a conservator may bind a minor or protected person;
(2) A guardian may bind the minor or protected person if no conservator of the minor or protected person has been appointed;
(3) A parent may bind the parent's minor or unborn child if no conservator or guardian for the child has been appointed;
(4) A person who has assumed responsibility for a minor child's care or custody may bind the child if no conservator or guardian for the child has been appointed and neither parent is living;
(5) A trustee responsible for the management of all or a significant portion of the estate of an incapacitated individual other than a minor may bind the individual if no conservator or guardian for the individual has been appointed;
(6) A custodian under chapter 55-10A or equivalent provisions of another jurisdiction's laws who is responsible for all or a significant portion of the estate of a minor may bind the minor if no conservator or guardian for the minor has been appointed;
(7) An individual who has assumed responsibility for an incapacitated individual other than a minor, including a spouse of an incapacitated individual, may bind the individual if no conservator or guardian for the individual has been appointed and no agent has authority to act with respect to the matter in question, but an individual who is an employee of any assisted living, hospital, surgery center, nursing home, adult foster care, adult day care, or any other custodial care institution where the incapacitated person is residing or receiving services may not act as a representative pursuant to this subdivision;
(8) Except as provided in subdivision 55-18-20(1), an agent having authority to act with respect to the matter in question may bind the principal if the principal is incapacitated or not reasonably available;
(9) When a trust is a beneficiary of a trust, the trustee of the trust which is a beneficiary may bind the trust and the beneficiaries thereof without regard to whether the trust has yet been funded or the trustee has begun acting as trustee;
(10) When a decedent's estate is a beneficiary of a trust, the personal representative of the estate may bind the estate and the persons interested in the estate;
(11) Except as provided in § 55-18-23, a person designated in the governing instrument to represent another person or class of persons may bind that person or class of persons;
(12) Except as provided in § 55-18-23, if a fiduciary or other person is authorized by the terms of the governing instrument to appoint a representative and the authorized fiduciary or other person appoints a representative in writing, the representative may bind the person or class of persons identified in the appointment;
(13) Unless otherwise adequately represented pursuant to the foregoing provisions of this section, a minor, incapacitated individual, unborn individual, or a person who is not reasonably available, may be bound by a person having a substantially identical interest with respect to the matter in question;
(14) A person described in subsection 55-18-1(9)(a) may bind beneficiaries described in subsection 55-18-1(9)(b) and (c), if, with respect to the matter in question:
(a) The person agrees in writing to serve as a representative for the represented beneficiary either with regard to a particular matter, for a particular period of time, generally in any matter or future matter, or for an indefinite period of time;
(b) The interests of the person are substantially identical to the interests of the represented beneficiary; and
(c) The person does not have a conflict of interest;
(15) A person described in subsection 55-18-1(9)(d) may bind beneficiaries described in subsection 55-18-1(9)(e);
(16) A court representative appointed pursuant to § 55-18-19 may bind the person that the representative represents; and
(17) Without diminishing the authority of an attorney to act on behalf of the attorney's client, an attorney representing a person may bind the person that the attorney represents within the scope of the attorney's representation.
When more than one class of persons may act as a representative, such as where persons may act under different subdivisions of this section, the notifier has discretion in selecting which class of representatives bind the person represented, except as otherwise provided in the governing instrument. The governing instrument may provide that representatives acting pursuant to subdivisions (11) and (12) may act to the exclusion of any other class or classes of representatives, in certain circumstances, or in all circumstances, other than representatives acting pursuant to subdivisions (l6) and (17).
Source: SL 2017, ch 208, § 9; SL 2018, ch 275, § 34.
55-18-10. Disclosure of information regarding representatives.
In a judicial proceeding, the petitioner shall set forth information with respect to each representative, each person the representative represents, and the authority by which each representative acts under this chapter.
In a nonjudicial proceeding, the notifier shall set forth information with respect to each representative, each person the representative represents, the authority by which each representative acts under the provisions of this chapter, and a notification that a representative may decline to act pursuant to § 55-18-11.
No information need to be set forth regarding any person described in subdivisions (1) to (5), inclusive, of § 55-18-5 unless a representative is acting for those persons.
Source: SL 2017, ch 208, § 10; SL 2018, ch 275, § 35.
55-18-11. Refusal to act as representative.
Any representative may decline to act as a representative as to the matter in question by timely expressing the representative's refusal to the notifier.
A notifier may specify a time of not less than three days in which the representative may decline to act as a representative.
The governing instrument may specify a time in which the representative may decline to act as a representative.
A representative may waive in writing the representative's right to decline to act in the matter in question.
Source: SL 2017, ch 208, § 11.
55-18-12. Petition for advance approval of action.
A representative may petition the court for an order approving the representative's actions prior to or in advance of the representative's action, upon such notice as the court may order.
Source: SL 2017, ch 208, § 12.
55-18-13. Representative with conflict of interest.
A representative with a conflict of interest with respect to the matter in question may bind the person that the representative represents notwithstanding any cause of action that the represented person may have against a representative who acts knowingly.
Source: SL 2017, ch 208, § 13.
55-18-14. Disclosure of conflict of interest by representative.
If a representative knows that the representative has a conflict of interest with respect to the matter in question, the representative shall timely disclose the nature of the conflict of interest:
(1) In a judicial proceeding to the interested parties and the court; or
(2) Otherwise to the notifier and the trustee.
Source: SL 2017, ch 208, § 14.
55-18-15. Disclosure of conflict of interest by notifier.
Unless notice of a conflict of interest has been carried out pursuant to § 55-18-14, if the notifier knows that a representative has a conflict of interest with respect to the matter in question, the notifier shall timely disclose the nature of the conflict of interest:
(1) In a judicial proceeding to the interested parties and the court; or
(2) Otherwise, to the representative, the trustee, and, to the extent the person represented can be reasonably notified, to the person represented along with notification that that person may elect not to be bound pursuant to subdivision 55-18-4(4).
Source: SL 2017, ch 208, § 15; SL 2018, ch 275, § 36.
55-18-16. Findings regarding conflict of interest in judicial and nonjudicial proceedings--Immunity of representative from liability.
In a judicial proceeding, if the court has been notified of a representative's conflict of interest or potential conflict of interest, the court may find that the representative conflict of interest or potential conflict of interest is immaterial in view of the facts and circumstances and order that the representative may act as a representative notwithstanding the conflict of interest or potential conflict of interest.
The court's findings pursuant to this section are binding and conclusive with regard to the matter in question and, to the extent ordered by the court, absolve the representative of liability.
In a nonjudicial proceeding, unless otherwise provided in the governing instrument, the trustee may find that a representative's conflict of interest or potential conflict of interest is immaterial in view of the facts and circumstances and direct the representative to act as a representative notwithstanding the conflict of interest or potential conflict of interest.
The trustee's findings pursuant to this section are binding and conclusive with regard to the matter in question and, to the extent provided by the trustee in writing, absolve the representative of liability.
Source: SL 2017, ch 208, § 16; SL 2018, ch 275, § 37.
55-18-17. Discretion of representative--Fiduciary status.
A representative may make a decision with broad discretion and no representative is liable for an action or omission unless the representative:
(1) Acts dishonestly;
(2) Acts with an improper motive; or
(3) Fails, if under a duty to do so, to act.
A representative may represent any number of persons. A representative is not a fiduciary solely by reason of being a representative unless otherwise ordered by the court, expressly affirmed in writing by the representative, or provided in the governing instrument.
The provisions of this section do not expand or diminish the duties of an attorney.
Source: SL 2017, ch 208, § 17.
55-18-18. Compensation of representative.
A representative is entitled to reasonable compensation as determined by the trustee except as otherwise provided in the governing instrument.
Source: SL 2017, ch 208, § 18.
55-18-19. Appointment of court representative.
In a judicial proceeding, if the court determines that a person cannot be adequately represented by a representative, the court may order that the person be provided notice or may order the appointment of a court representative or a replacement court representative to bind the person. The basis for a finding that representation is inadequate shall be set forth specifically in an order and may include, by way of example, a finding that a representative has a material conflict of interest or acted with hostility to the interest of the person represented.
A trustee, a beneficiary, or, if authorized by the governing instrument, a fiduciary other than a trustee, may petition the court for the appointment of a court representative. A court representative has the authority to act as a representative in any proceeding unless otherwise ordered by the court.
Notwithstanding § 55-18-5, the court may appoint a court representative to bind uninterested beneficiaries, unborn persons, unascertained persons, or the potential appointees or the takers in default of a power of appointment.
Notwithstanding § 55-18-20, the court may appoint a court representative to bind a settlor.
Source: SL 2017, ch 208, § 19; SL 2018, ch 275, § 38.
55-18-20. Limitations on representation of settlor--Limitations on settlor's authority to bind beneficiary.
A settlor may be represented by a representative in amending, terminating, or revoking an inter vivos revocable trust only when the representative is:
(1) An agent under a written power of attorney when the settlor is incapacitated or not reasonably available and to the extent expressly authorized by the power of attorney with specific reference to the trust and expressly authorized by the terms of the governing instrument; or
(2) A conservator only to the extent authorized or approved by order of the court pursuant to § 29A-5-420 or equivalent provisions of another jurisdiction's laws.
In other respects, a settlor may be represented by a representative only pursuant to subdivisions 55-18-9(5), (11), (16), and (17) and pursuant to subdivision 55-18-9(1) to the extent authorized or approved by the court.
A settlor may not bind a beneficiary with respect to a trust termination pursuant to § 55-3-24 or 55-3-30 or a trust modification pursuant to § 55-3-24 or 55-3-30 where the ability to bind the beneficiary to the proposed trust modification would constitute a retained interest pursuant to 26 U.S.C. § 2036, as of January 1, 2017, or a revocable transfer pursuant to 26 U.S.C. § 2038 as of January 1, 2017.
Source: SL 2017, ch 208, § 20; SL 2018, ch 275, § 39.
55-18-21. Limitations on trustee's authority to bind beneficiary.
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).
Source: SL 2017, ch 208, § 21; SL 2019, ch 209, § 10.
55-18-22. Unauthorized practice of law not permitted.
Nothing in this chapter, permits the unauthorized practice of law or diminishes the provisions of § 16-16-19.
Source: SL 2017, ch 208, § 22.
55-18-23. Provisions of governing instrument.
A governing instrument may require additional notification or consent than otherwise required by law. Unless expressly authorized by the governing instrument, a person designated by a governing instrument to represent another person or class of persons may not represent such person or class of persons while that designee is serving as a trustee or co-trustee of such trust.
A governing instrument which authorizes a person or fiduciary to appoint a representative may also identify or describe a person, several persons, a class of persons, or a description of persons who may not be appointed as representatives as to all or certain represented persons or matters or during a period of time.
Source: SL 2017, ch 208, § 23.
55-18-24. Construction with chapter 29A-1.
With regard to a testamentary trust proceeding governed by title 29A, in the event of any conflict between this chapter, and chapter 29A-1, the provisions of this chapter, shall prevail.
Source: SL 2017, ch 208, § 24.
55-18-25. Liability of notifier.
No notifier is liable for undertaking any additional notification or seeking additional consent than required by law or the governing instrument.
Source: SL 2017, ch 208, § 25.
55-18-26. Liability of fiduciary.
No fiduciary is liable for reliance on the outcome or resolution of any proceeding conducted under this chapter, unless the fiduciary knowingly disregarded the lack of a representative's authority to act with regard to the matter in question.
Source: SL 2017, ch 208, § 26.
