Bill Summary for S 434 (2011-2012)
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GOVERNING THE LIABILITY OF DIRECTED TRUSTEES.Intro. by Hartsell.
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Amends GS 36C-8-808(a), adding that the settlor of a revocable trust has the power to direct or consent to the actions of the trustee whether or not the power is conferred upon the settlor by the trust. Adds that the trustee is not liable, individually or as a fiduciary, for any loss resulting from compliance with the settlor’s directive or for any loss resulting from the trustee’s failure to take action requiring the settlor’s consent, as detailed. Makes a conforming change. Amends GS 36C-8-808(b), clarifying that the terms of the trust may confer the power to take certain actions on a person other than the settlor of a revocable trust including the power to (1) direct or consent to actions regarding three listed issues; (2) modify or amend the trust as specified; (3) remove and appoint trustees, advisors, trust committee members, and trust protectors; (4) increase or decrease the interests of any beneficiary; (5) grant, modify, or terminate a power of appointment as described, and (6) change the governing law of the trust. Amends GS 36C-8-808(c), enumerating four duties and liabilities of the trustee, when the trust confers the power to take actions under GS 36C-8-808(b) on a person other than the settlor of a revocable trust. Clarifies that a person other than the settlor of a revocable trust authorized to take actions under GS 36C-8-808(b) is required to act in good faith with regard to the trust and the interests of the beneficiaries, except that the beneficiary is not a fiduciary with respect to three specified powers if the beneficiary is a person with a power authorized under GS 36C-8-808(b). Clarifies that the holder of a power under GS 36C-8-808(b) is liable for any loss resulting from a breach of fiduciary duty resulting from the exercise or nonexercise of the power.
Enacts new subsection (e1) to GS 36C-7-703, which concerns cotrustees, detailing applicable conditions when the terms of a trust confers upon a cotrustee the power to take certain actions with respect to the trust, to the exclusion of another cotrustee.
Deletes the provisions of GS 32-72(d) and instead lists provisions applicable to an instrument creating a fiduciary relationship other than a trust instrument under GS Chapter 36C and to a fiduciary other than a trustee.
Applies to trusts and other instruments created before, on, or after October 1, 2011.