55-4-1      Definition of terms.
55-4-2      Powers attached to the office of trustee.
55-4-3      Number of trustees for exercise of powers.
55-4-4      Liability of trustee not joining in exercise of power.
55-4-5      Cotrustee--Liability for maladministration of trust.
55-4-6      Voting of corporate stock owned by trustee.
55-4-7      Creation of trust--Bank account to pay special debts.
55-4-8      Trust to pay special debts--Failure of beneficiary to present claim for payment--Revocation of trust by depositor.
55-4-9      Holding stock in name of nominee.
55-4-10      Loan of trust funds.
55-4-11      Corporate trustee depositing trust funds with self--Interest.
55-4-12      Corporate trustee depositing trust funds with self--Maintenance of required value--Ownership of income--Items specified in statements of financial condition to Division of Banking.
55-4-13      Trustee not to buy from or sell to self--Exception.
55-4-14      Permitted sales between trusts held by same corporate trustee.
55-4-15      Corporate trustee buying its own stock.
55-4-16      Withdrawals from mingled trust funds.
55-4-17      Unenforceable oral trust created by deed--Duties of intended trustee--Conveyance of real property interest under oral trust.
55-4-18      Unenforceable oral trust created by deed--Liability of trustee to settlor for transfer of real property.
55-4-19      Action on contract against trustee in representative capacity--Execution against trust property--Intervention by beneficiary.
55-4-20      Action on contract against trustee--Notice to beneficiaries.
55-4-21      Action on contract against trustee--Personal liability of trustee.
55-4-22      Exoneration or reimbursement of trustee for tort committed in administration of trust.
55-4-23      Exoneration or reimbursement of trustee for tort--Increase in value of trust property.
55-4-24      Liability of trustees of charitable trust for torts not changed by provisions of law as to exoneration or reimbursement of trustee for tort.
55-4-25      Tort liability of trust estate--Action against trustee, amount of recovery, intervention by beneficiary.
55-4-26      Tort liability of trust estate--Action against trustee, proof as to reimbursement unnecessary.
55-4-27      Tort liability of trust estate--Action against trustee, notice to beneficiaries.
55-4-28      Personal liability for tort committed by trustee.
55-4-29      Existing law as to charitable immunity not changed by law as to tort liability of trust estate.
55-4-30      Power of settlor of trust.
55-4-31      Trustee not liable if beneficiary consents to conduct or releases trustee from liability or ratifies transaction.
55-4-32      Relieving trustee of duties--Power of the court.
55-4-33      Liabilities for violations of chapter.
55-4-34      Application of chapter to testamentary trust.

55-4-1. Definition of terms.

Terms used in this chapter mean:

(1)    "Affiliate," any person directly or indirectly controlling or controlled by another person, or any person under direct or indirect common control with another person. It includes any person with whom a trustee has an express or implied agreement regarding the purchase of trust investments by each from the other, directly or indirectly, except a broker or stock exchange;

(2)    "Person," an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a business trust, a trust, an unincorporated organization, or two or more persons having a joint or common interest;

(3)    "Relative," a spouse, ancestor, descendant, brother, or sister;

(4)    "Trust," an express trust only;

(5)    "Trustee," includes trustees, a corporate as well as a natural person and a successor or substitute trustee.

Source: SL 1943, ch 308, § 1; SDC Supp 1960, § 59.0501; SL 1998, ch 282, § 41; SL 2015, ch 240, § 19.

55-4-2. Powers attached to the office of trustee.

Unless it is otherwise provided by the trust instrument, or an amendment thereof, or by court order, all powers of a trustee shall be attached to the office and shall not be personal.

Source: SL 1943, ch 308, § 10; SDC Supp 1960, § 59.0510.

55-4-3. Number of trustees for exercise of powers.

Unless it is otherwise provided by the trust instrument, or an amendment thereof, or by court order, any power vested in three or more trustees may be exercised by a majority of such trustees and any power vested in two trustees shall be exercised by both of such trustees.

Source: SL 1943, ch 308, § 11; SDC Supp 1960, § 59.0511 (1); SL 2011, ch 212, § 14.

55-4-4. Liability of trustee not joining in exercise of power.

No trustee who has not joined in exercising a power shall be liable to the beneficiaries or to others for the consequences of such exercise, nor shall a dissenting trustee be liable for the consequences of an act in which he joins at the direction of the majority trustees, if he expressed his dissent in writing to any of his cotrustees at or before the time of such joinder.

Source: SL 1943, ch 308, § 11; SDC Supp 1960, § 59.0511 (1).

55-4-5. Cotrustee--Liability for maladministration of trust.

Nothing in § 55-4-3 or 55-4-4 shall excuse a cotrustee from liability for inactivity in the administration of the trust nor for failure to attempt to prevent a breach of trust.

Source: SL 1943, ch 308, § 11; SDC Supp 1960, § 59.0511 (2).

55-4-6. Voting of corporate stock owned by trustee.

A trustee owning corporate stock may vote it by proxy, but shall be liable for any loss resulting to the beneficiaries from a failure to use reasonable care in deciding how to vote the stock and in voting it.

Source: SL 1943, ch 308, § 8; SDC Supp 1960, § 59.0508.

55-4-7. Creation of trust--Bank account to pay special debts.

Whenever a bank account shall, by entries made on the books of the depositor and the bank at the time of the deposit, be created exclusively for the purpose of paying dividends, interest or interest coupons, salaries, wages, or pensions or other benefits to employees, and the depositor at the time of opening such account does not expressly otherwise declare, the depositor shall be deemed a trustee of such account for the creditors to be paid therefrom, subject to such power of revocation as the depositor may have reserved by agreement with the bank.

Source: SL 1943, ch 308, § 2; SDC Supp 1960, § 59.0502 (1).

55-4-8. Trust to pay special debts--Failure of beneficiary to present claim for payment--Revocation of trust by depositor.

If any beneficiary for whom a trust is created pursuant to § 55-4-7 does not present his claim to the bank for payment within one year after it is due, the depositor who created such trust may revoke it as to such creditor.

Source: SL 1943, ch 308, § 2; SDC Supp 1960, § 59.0502 (2).

55-4-9. Holding stock in name of nominee.

A trustee owning any stocks, bonds, notes, debentures, or other written obligations of any public or private corporation may hold the same in the name of a nominee, without mention of the trust in the records of such corporation or in the stock certificate or stock registration book of such corporation; provided that

(1)    The trust records and all reports or accounts rendered by the trustee clearly show the ownership of such stocks, bonds, notes, debentures, or other written obligations of such public or private corporation by the trustee and the facts regarding its holding; and

(2)    The nominee shall deposit with the trustee a signed statement showing the trust ownership, shall endorse the stock certificate or other said instrument in blank, and shall not have possession of the stock certificate or other said instrument or access thereto except under the immediate supervision of the trustee.

The trustee shall be personally liable for any loss to the trust resulting from any act of such nominee in connection with stocks, bonds, notes, debentures, or other written obligations of any public or private corporation so held.

Source: SL 1943, ch 308, § 9; SDC Supp 1960, § 59.0509; SL 1967, ch 338.

55-4-10. Loan of trust funds.

Except as provided in §§ 55-4-11 and 55-4-12, or except as may be expressly authorized by a court order, by the written consent of all qualified beneficiaries which may be given notwithstanding the provisions of § 55-4-31, by the written authorization from or direction by a trust protector, or by the terms of the governing instrument, which may be given by the settlor notwithstanding the provisions of § 55-4-30:

(1)    No corporate trustee may lend trust funds to itself or an affiliate, or to any director, officer, or employee of itself or of an affiliate;

(2)    No noncorporate trustee may lend trust funds to himself or herself, or to any relative, employer, employee, partner, or other business associate.

Source: SL 1943, ch 308, § 3; SDC Supp 1960, § 59.0503; SL 2017, ch 204, § 20.

55-4-11. Corporate trustee depositing trust funds with self--Interest.

A corporate trustee which is subject to regulation and supervision by state or federal authorities may deposit with itself trust funds which are being held necessarily pending investment, distribution, or the payment of debts, provided it pays into the trust for such deposit such interest as it is required by statute to pay on uninvested trust funds, or, if there be no such statute, the same rate of interest it pays upon similar nontrust deposits, and maintains in its trust department as security for all such deposits a separate fund consisting of securities legal for trust investments and at all times equal in total market value to the amount of the deposits. But no such security shall be required to the extent that the deposit is insured or given a preference by any state or federal law.

Source: SL 1943, ch 308, § 4; SDC Supp 1960, § 59.0504 (1).

55-4-12. Corporate trustee depositing trust funds with self--Maintenance of required value--Ownership of income--Items specified in statements of financial condition to Division of Banking.

The separate fund of securities required by § 55-4-11 shall be marked as such. Withdrawals from or additions to it may be made from time to time, as long as the required value is maintained. The income of such securities shall belong to the corporate trustee. In all statements of its financial condition published, or delivered to the Division of Banking, such corporate trustee shall show as separate items the amount of trust funds which it has deposited with itself and the amount of securities which it holds as security for the payment of such deposits.

Source: SL 1943, ch 308, § 4; SDC Supp 1960, § 59.0504 (2).

55-4-13. Trustee not to buy from or sell to self--Exception.

No trustee, unless expressly authorized by the trust instrument, shall directly or indirectly lease, buy or sell any property for the trust from or to itself or an affiliate; or from or to a director, officer, or employee of such trustee or of an affiliate; or from or to a relative, employer, partner, or other business associate. Notwithstanding this provision or any statute to the contrary, a trustee may lease, purchase or sell property from or to the trust he represents as trustee if specifically authorized to do so in a decedent's will or the instrument creating the trustee relationship, including the establishment of a trust service office as provided by chapter 51A-5.

Source: SL 1943, ch 308, § 5; SDC Supp 1960, § 59.0505; SL 1980, ch 343; SL 1981, ch 354, § 2; SL 1984, ch 314, § 7.

55-4-14. Permitted sales between trusts held by same corporate trustee.

A corporate trustee may sell stocks, bonds and other securities listed on all exchange supervised by the securities and exchange commission as well as obligations of the U.S. treasury and obligations of U.S. government agencies held by it in one account to itself as trustee of another account if the transaction is fair to both accounts and if such transaction is not prohibited by the instruments creating the trustee relationships.

Source: SL 1943, ch 308, § 6; SDC Supp 1960, § 59.0506; SL 1979, ch 337.

55-4-15. Corporate trustee buying its own stock.

No corporate trustee, unless expressly authorized by the trust instrument, may purchase for a trust shares of its own stock, or its bonds, or other securities, or the stock, bonds, or other securities of an affiliate.

Source: SL 1943, ch 308, § 7; SDC Supp 1960, § 59.0507; SL 2006, ch 243, § 4.

55-4-16. Withdrawals from mingled trust funds.

Where a person who is a trustee of two or more trusts has mingled the funds of two or more trusts in the same aggregate of cash, or in the same bank or brokerage account or other investment, and a withdrawal is made therefrom by the trustee for his own benefit, or for the benefit of a third person not a beneficiary or creditor of one or more of the trusts, or for an unknown purpose, such a withdrawal shall be charged first to the amount of cash, credit, or other property of the trustee in the mingled fund, if any, and after the exhaustion of the trustee's cash, credit, or other property, then to the several trusts in proportion to their several interests in the cash, credit, or other property at the time of the withdrawal.

Source: SL 1943, ch 308, § 15; SDC Supp 1960, § 59.0515.

55-4-17. Unenforceable oral trust created by deed--Duties of intended trustee--Conveyance of real property interest under oral trust.

When an interest in real property is conveyed by deed to a person on a trust which is unenforceable on account of the statute of frauds and the intended trustee or his successor in interest still holds title but refuses to carry out the trust on account of the statute of frauds, the intended trustee or his successor in interest, except to the extent that the successor in interest is a bona fide purchaser of a legal interest in the real property in question, shall be under a duty to convey the interest in real property to the settlor or his successor in interest. A court having jurisdiction may prescribe the conditions upon which the interest shall be conveyed to the settlor or his successor in interest.

Source: SL 1943, ch 308, § 16; SDC Supp 1960, § 59.0516 (1).

55-4-18. Unenforceable oral trust created by deed--Liability of trustee to settlor for transfer of real property.

Where the intended trustee has transferred part or all of his interest and it has come into the hands of a bona fide purchaser, the intended trustee shall be liable to the settlor or his successor in interest for the value of the interest thus transferred at the time of its transfer, less such offsets as the court may deem equitable.

Source: SL 1943, ch 308, § 16; SDC Supp 1960, § 59.0516 (2).

55-4-19. Action on contract against trustee in representative capacity--Execution against trust property--Intervention by beneficiary.

Whenever a trustee shall make a contract which is within his powers as trustee, or a predecessor trustee shall have made such a contract, and a cause of action shall arise thereon, the party in whose favor the cause of action has accrued may sue the trustee in his representative capacity, and any judgment rendered in such action in favor of the plaintiff shall be collectible by execution out of the trust property. In such an action the plaintiff need not prove that the trustee could have secured reimbursement from the trust fund if he had paid the plaintiff's claim. Any beneficiary, or in the case of charitable trusts the attorney general and any corporation which is a beneficiary or agency in the performance of such charitable trust, may intervene in such action and contest the right of the plaintiff to recover.

Source: SL 1943, ch 308, § 12; SDC Supp 1960, § 59.0512 (1), (2).

55-4-20. Action on contract against trustee--Notice to beneficiaries.

No judgment shall be rendered in favor of the plaintiff in an action pursuant to § 55-4-19 unless he proves that within thirty days after the beginning of such action, or within such other time as the court may fix, and more than thirty days prior to obtaining the judgment, he notified each of the beneficiaries known to the trustee who then had a present interest, or in the case of a charitable trust the attorney general and any corporation which is a beneficiary or agency in the performance of such charitable trust, of the existence and nature of the action. Such notice shall be given by mailing copies thereof in postpaid envelopes addressed to the parties to be notified at their last known addresses. The trustee shall furnish the plaintiff a list of the parties to be notified, and their addresses, within ten days after written demand therefor, and notification of the persons on such list shall constitute compliance with the duty placed on the plaintiff by this section.

Source: SL 1943, ch 308, § 12; SDC Supp 1960, § 59.0512 (2).

55-4-21. Action on contract against trustee--Personal liability of trustee.

The plaintiff in an action pursuant to § 55-4-19 may also hold the trustee who made the contract personally liable on such contract, if the contract does not exclude such personal liability. The addition of the word "trustee" or the words "as trustee" after the signature of a trustee to a contract shall be deemed prima facie evidence of an intent to exclude the trustee from personal liability.

Source: SL 1943, ch 308, § 12; SDC Supp 1960, § 59.0512 (3).

55-4-22. Exoneration or reimbursement of trustee for tort committed in administration of trust.

A trustee who has incurred personal liability for a tort committed in the administration of the trust is entitled to exoneration therefor from the trust property if he has not discharged the claim, or to be reimbursed therefor out of trust funds if he has paid the claim, if:

(1)    the tort was a common incident of the kind of business activity in which the trustee was properly engaged for the trust, or

(2)    although the tort was not a common incident of such activity, neither the trustee nor any officer or employee of the trustee was guilty of personal fault in incurring the liability.

Source: SL 1943, ch 308, § 13; SDC Supp 1960, § 59.0513 (1).

55-4-23. Exoneration or reimbursement of trustee for tort--Increase in value of trust property.

If a trustee commits a tort which increases the value of the trust property, he shall be entitled to exoneration or reimbursement with respect thereto to the extent of such increase in value, even though he would not otherwise be entitled to exoneration or reimbursement.

Source: SL 1943, ch 308, § 13; SDC Supp 1960, § 59.0513 (2).

55-4-24. Liability of trustees of charitable trust for torts not changed by provisions of law as to exoneration or reimbursement of trustee for tort.

Nothing in § 55-4-22 or 55-4-23 shall be construed to change the existing law with regard to the liability of trustees of charitable trusts for torts of themselves or their employees.

Source: SL 1943, ch 308, § 13; SDC Supp 1960, § 59.0513 (3).

55-4-25. Tort liability of trust estate--Action against trustee, amount of recovery, intervention by beneficiary.

Where a trustee or his predecessor has incurred personal liability for a tort committed in the course of his administration, the trustee in his representative capacity may be sued and collection had from the trust property, if the court shall determine in such action:

(1)    that the tort was a common incident of the kind of business activity in which the trustee or his predecessor was properly engaged for the trust; or

(2)    that, although the tort was not a common incident of such activity, neither the trustee nor his predecessor, nor any officer or employee of the trustee or his predecessor, was guilty of personal fault in incurring the liability; or

(3)    that, although the tort did not fall within classes (1) or (2) above, it increased the value of the trust property.

If the tort is within classes (1) or (2) above, collection may be had of the full amount of damage proved; and if the tort is within class (3) above, collection may be had only to the extent of the increase in the value of the trust property.

Any beneficiary may intervene in such action and contest the right of the plaintiff to recover.

Source: SL 1943, ch 308, § 14; SDC Supp 1960, § 59.0514 (1), (3).

55-4-26. Tort liability of trust estate--Action against trustee, proof as to reimbursement unnecessary.

In an action against the trustee in his representative capacity under § 55-4-25 the plaintiff need not prove that the trustee could have secured reimbursement from the trust fund if he had paid the plaintiff's claim.

Source: SL 1943, ch 308, § 14; SDC Supp 1960, § 59.0514 (2).

55-4-27. Tort liability of trust estate--Action against trustee, notice to beneficiaries.

No judgment shall be rendered in favor of the plaintiff in an action pursuant to § 55-4-25 unless he proves that within thirty days after the beginning of the action, or within such other period as the court may fix and more than thirty days prior to obtaining the judgment, he notified each of the beneficiaries known to the trustee who then had a present interest of the existence and nature of the action. Such notice shall be given by mailing copies thereof in postpaid envelopes addressed to such beneficiaries at their last known addresses. The trustee shall furnish the plaintiff a list of such beneficiaries and their addresses, within ten days after written demand therefor, and notification of the persons on such list shall constitute compliance with the duty placed on the plaintiff by this section.

Source: SL 1943, ch 308, § 14; SDC Supp 1960, § 59.0514 (3).

55-4-28. Personal liability for tort committed by trustee.

The trustee may also be held personally liable for any tort committed by him, or by his agents or employees in the course of their employments, subject to the rights of exoneration or reimbursement provided in §§ 55-4-22 and 55-4-23.

Source: SL 1943, ch 308, § 14; SDC Supp 1960, § 59.0514 (4).

55-4-29. Existing law as to charitable immunity not changed by law as to tort liability of trust estate.

Nothing in §§ 55-4-25 to 55-4-28, inclusive, shall be construed to change the existing law with regard to the liability of trustees of charitable trusts for torts of themselves or their employees.

Source: SL 1943, ch 308, § 14; SDC Supp 1960, § 59.0514.

55-4-30. Power of settlor of trust.

Subject to the final paragraph below, the settlor of any trust affected by this chapter may:

(1)    By provision in the instrument creating the trust if the trust was created by a writing;

(2)    By oral statement to the trustee at the time of the creation of the trust if the trust was created orally; or

(3)    By an amendment of the trust, if the settlor reserved the power to amend the trust, relieve the trustee from any or all of the duties, restrictions, and liabilities which would otherwise be imposed upon the trustee by this chapter; or alter or deny to the trustee any or all of the privileges and powers conferred upon the trustee by this chapter; or add duties, restrictions, liabilities, privileges, or powers, to those imposed or granted by this chapter. However, no act of the settlor relieves a trustee from the duties, restrictions, and liabilities imposed upon the trustee by §§ 55-4-10 to 55-4-12, inclusive.

A provision of a trust instrument relieving a trustee of liability for breach of trust is unenforceable to the extent that it relieves the trustee of liability for breach of trust committed in bad faith or as a result of gross negligence.

Source: SL 1943, ch 308, § 17; SDC Supp 1960, § 59.0517; SL 2000, ch 229, § 1; SL 2007, ch 247, § 10.

55-4-31. Trustee not liable if beneficiary consents to conduct or releases trustee from liability or ratifies transaction.

A trustee is not liable to a beneficiary, as defined under this title or Title 29A, for breach of trust from any or all of the duties, restrictions, and liabilities which would otherwise be imposed on the trustee, except as to the duties, restrictions, and liabilities imposed by §§ 55-4-10 to 55-4-12, inclusive, if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach, unless:

(1)    The consent, release, or ratifications of the beneficiary were induced by improper conduct of the trustee; or

(2)    At the time of the consent, release, or ratification, the beneficiary did not have knowledge of the beneficiary's rights or of the material facts relating to the breach.

Any such beneficiary may release the trustee from liability to such beneficiary for past violations of any of the provisions of this chapter. No consideration is required for the consent, release, or ratification to be valid.

Source: SL 1943, ch 308, § 18; SDC Supp 1960, § 59.0518; SL 2000, ch 229, § 2; SL 2012, ch 233, § 14; SL 2014, ch 226, § 4.

55-4-32. Relieving trustee of duties--Power of the court.

A court of competent jurisdiction may, for cause shown and upon notice to the beneficiaries, relieve a trustee from any or all of the duties and restrictions which would otherwise be placed upon him by this chapter, or wholly or partly excuse a trustee who has acted honestly and reasonably from liability for violations of the provisions of this chapter.

Source: SL 1943, ch 308, § 19; SDC Supp 1960, § 59.0519.

55-4-33. Liabilities for violations of chapter.

If a trustee violates any of the provisions of this chapter, he may be removed and denied compensation in whole or in part; and any beneficiary, cotrustee, or successor trustee may treat the violation as a breach of trust.

Source: SL 1943, ch 308, § 20; SDC Supp 1960, § 59.0520.

55-4-34. Application of chapter to testamentary trust.

This chapter shall apply only to testamentary trusts created by wills or codicils executed after July 1, 1943 and to nontestamentary trusts created after July 1, 1943.

Source: SL 1943, ch 308, § 25; SDC Supp 1960, § 59.0523.

55-4-35. Uniformity of interpretation.

This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.

Source: SL 1943, ch 308, § 21; SDC Supp 1960, § 59.0521.

55-4-36. Citation of chapter.

This chapter may be cited as the Uniform Trusts Act.

Source: SL 1943, ch 308, § 22; SDC Supp 1960, § 59.0522.

55-4-37. Liability for fiduciary's partnership interest limited.

If permitted by the trust instrument or will under which a fiduciary serves, or by order of a court having jurisdiction of the estate or trust, a fiduciary may enter into a partnership agreement or arrangement with others or accept the assignment of, or otherwise acquire, hold, and dispose, of an interest in a partnership, and in so doing may become either a general or a limited partner. If the fiduciary becomes a partner, as to creditors of, or claimants against, the partnership and as to the other members of the partnership, the liability, if any, of the fiduciary for the debts and other liabilities of the partnership, whether arising under contract, tort, or otherwise, are limited to the assets of the trust or estate, or so much thereof as may be necessary to discharge such debts and liabilities.

Source: SL 1996, ch 285.

55-4-38. Limitation on trustee's power to make distributions to his or her benefit.

Unless the terms of the trust refer to this section and provide otherwise, a power, including the power to make a distribution to another trust under § 55-2-15, that is exercisable by or attributable to a person, other than the settlor, in such person's capacity as a trustee to make discretionary distribution of either principal or income:

(1)    To or for the benefit of himself or herself is exercisable by the person only for the person's health, education, maintenance, and support in the person's accustomed manner of living; or

(2)    To or for the benefit of others, is not exercisable to discharge any of the person's own legal obligations.

Source: SL 2000, ch 229, § 4; SL 2007, ch 281, § 8.

55-4-39. "Trustee" construed broadly.

The reference to trustee in § 55-4-38 includes any person who is deemed to have any power of a trustee, whether because such person has the right to remove or replace any trustee, or because a reciprocal trust or power doctrine applies, or otherwise.

Source: SL 2000, ch 229, § 5.

55-4-40. Applicability of §§ 55-4-38 and 55-4-39.

The provisions of §§ 55-4-38 and 55-4-39 apply to any trust established before or after July 1, 2000.

Source: SL 2000, ch 229, § 6.

55-4-41. Certain trustees exempted from §§ 55-4-38 to 55-4-40, inclusive.

The provisions of §§ 55-4-38 to 55-4-40, inclusive, do not apply to a decedent's or settlor's spouse who is the trustee of a testamentary trust or an inter vivos trust for which a marital deduction is allowable.

Source: SL 2000, ch 229, § 7.