Bill Text: MS SB2403 | 2010 | Regular Session | Introduced
Bill Title: Mississippi Trust Code of 2010; enact.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2010-02-11 - Died On Calendar [SB2403 Detail]
Download: Mississippi-2010-SB2403-Introduced.html
MISSISSIPPI LEGISLATURE
2010 Regular Session
To: Judiciary, Division A
By: Senator(s) Fillingane
Senate Bill 2403
AN ACT TO CREATE THE MISSISSIPPI UNIFORM TRUST CODE; TO CREATE NEW SECTION 91-23-101, MISSISSIPPI CODE OF 1972, TO ENACT A SHORT TITLE; TO CREATE NEW SECTION 91-23-102, MISSISSIPPI CODE OF 1972, TO SPECIFY THE SCOPE OF THE ACT; TO CREATE NEW SECTION 91-23-103, MISSISSIPPI CODE OF 1972, TO ENACT DEFINITIONS; TO CREATE NEW SECTION 91-23-105, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE DUTIES AND POWERS OF TRUSTEE RELATIONS AMONG TRUSTEES AND THE RIGHTS AND INTERESTS OF A BENEFICIARY DEFAULT TO THE ACT IN ABSENCE OF EXPRESS PROVISION TO THE CONTRARY; TO CREATE NEW SECTION 91-23-301, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE REPRESENTATION OF ANOTHER PERSON UNDER THE ACT; TO CREATE NEW SECTION 91-23-304, MISSISSIPPI CODE OF 1972, TO ALLOW REPRESENTATION BY A PERSON HAVING A NEARLY IDENTICAL INTEREST; TO CREATE NEW SECTION 91-23-411, MISSISSIPPI CODE OF 1972, TO ALLOW MODIFICATION OR TERMINATION OF A NONCHARITABLE IRREVOCABLE TRUST BY CONSENT; TO CREATE NEW SECTION 91-23-414, MISSISSIPPI CODE OF 1972, TO ALLOW MODIFICATION OR TERMINATION OF AN UNECONOMIC TRUST; TO CREATE NEW SECTION 91-23-801, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO ACT IN GOOD FAITH; TO CREATE NEW SECTION 91-23-802, MISSISSIPPI CODE OF 1972, TO PRESCRIBE A TRUSTEE'S DUTY OF LOYALTY; TO CREATE NEW SECTION 91-23-803, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE'S IMPARTIALITY; TO CREATE NEW SECTION 91-23-804, MISSISSIPPI CODE OF 1972, TO REQUIRE PRUDENT ADMINISTRATION OF THE PART OF A TRUSTEE; TO CREATE NEW SECTION 91-23-805, MISSISSIPPI CODE OF 1972, TO LIMIT A TRUSTEE TO INCUR ONLY REASONABLE COSTS; TO CREATE NEW SECTION 91-23-806, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO USE ANY SPECIAL SKILLS HE MAY POSSESS; TO CREATE NEW SECTION 91-23-807, MISSISSIPPI CODE OF 1972, TO SPECIFY IN WHAT WAY A TRUSTEE MAY DELEGATE POWERS; TO CREATE NEW SECTION 91-23-808, MISSISSIPPI CODE OF 1972, TO PROVIDE IN WHAT WAY A TRUSTEE MAY BE DIRECTED; TO CREATE NEW SECTION 91-23-809, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO PROTECT TRUST PROPERTY; TO CREATE NEW SECTION 91-23-810, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO KEEP RECORDS; TO CREATE NEW SECTION 91-23-811, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO ENFORCE AND DEFEND CLAIMS AS APPROPRIATE; TO CREATE NEW SECTION 91-23-812, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO COLLECT TRUST PROPERTY; TO CREATE NEW SECTION 91-23-813, MISSISSIPPI CODE OF 1972, TO REQUIRE A TRUSTEE TO INFORM BENEFICIARIES AS APPROPRIATE; TO CREATE NEW SECTION 91-23-814, MISSISSIPPI CODE OF 1972, TO GRANT CERTAIN DISCRETIONARY POWERS TO TRUSTEES; TO CREATE NEW SECTION 91-23-815, MISSISSIPPI CODE OF 1972, TO SPECIFY A TRUSTEE'S GENERAL POWERS; TO CREATE NEW SECTION 91-23-816, MISSISSIPPI CODE OF 1972, TO SPECIFY A TRUSTEE'S SPECIFIC POWERS; TO CREATE NEW SECTION 91-23-817, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR DISTRIBUTION UPON TERMINATION; TO CREATE NEW SECTION 91-23-1001, MISSISSIPPI CODE OF 1972, TO PROVIDE REMEDIES FOR BREACH OF TRUST; TO CREATE NEW SECTION 91-23-1002, MISSISSIPPI CODE OF 1972, TO PROVIDE DAMAGES FOR BREACH OF TRUST; TO CREATE NEW SECTION 91-23-1003, MISSISSIPPI CODE OF 1972, TO PROVIDE DAMAGES IN ABSENCE OF BREACH; TO CREATE NEW SECTION 91-23-1004, MISSISSIPPI CODE OF 1972, TO ALLOW COURT TO AWARD ATTORNEY'S FEES AND COSTS IN CERTAIN CIRCUMSTANCES; TO CREATE NEW SECTION 91-23-1005, MISSISSIPPI CODE OF 1972, TO PRESCRIBE CERTAIN LIMITATIONS OF ACTION AGAINST A TRUSTEE; TO CREATE NEW SECTION 91-23-1006, MISSISSIPPI CODE OF 1972, TO IMMUNIZE A TRUSTEE ACTING IN REASONABLE RELIANCE ON THE TRUST DOCUMENT; TO CREATE NEW SECTION 91-23-1007, MISSISSIPPI CODE OF 1972, TO IMMUNIZE A TRUSTEE ACTING WITH REASONABLE CARE; TO CREATE NEW SECTION 91-23-1008, MISSISSIPPI CODE OF 1972, TO SPECIFY EXCULPATION OF A TRUSTEE; TO CREATE NEW SECTION 91-23-1009, MISSISSIPPI CODE OF 1972, TO IMMUNIZE A TRUSTEE ACTING WITH THE CONSENT OF A BENEFICIARY; TO CREATE NEW SECTION 91-23-1010, MISSISSIPPI CODE OF 1972, TO LIMIT A TRUSTEE'S PERSONAL LIABILITY; TO CREATE NEW SECTION 91-23-1011, MISSISSIPPI CODE OF 1972, TO SPECIFY THE RESPONSIBILITY OF A TRUSTEE WHO IS ALSO A GENERAL PARTNER; TO CREATE NEW SECTION 91-23-1012, MISSISSIPPI CODE OF 1972, TO PROTECT CERTAIN PERSONS DEALING WITH A TRUSTEE; TO CREATE NEW SECTION 91-23-1013, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR CERTIFICATION OF A TRUST; TO CREATE NEW SECTION 91-23-1101, MISSISSIPPI CODE OF 1972, TO REQUIRE UNIFORMITY IN CONSTRUCTION; TO CREATE NEW SECTION 91-23-1102, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE INTERFACE BETWEEN THE ACT AND ELECTRONIC SIGNATURE LAWS; TO CREATE NEW SECTION 91-23-1106, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE APPLICATION OF THE ACT TO RELATIONSHIPS EXISTING ON THE EFFECTIVE DATE THEREOF; TO RESERVES SECTIONS 91-23-104, 91-23-106, 91-23-107, 91-23-108, 91-23-109, 91-23-110, 91-23-111, 91-23-112, 91-23-302, 91-23-303, 91-23-305, 91-23-401, 91-23-402, 91-23-403, 91-23-404, 91-23-405, 91-23-406, 91-23-407, 91-23-408, 91-23-409, 91-23-410, 91-23-412, 91-23-413, 91-23-415, 91-23-416, 91-23-417, 91-23-1104 AND 91-23-1105, MISSISSIPPI CODE OF 1972; TO RESERVE ARTICLES 2, 5, 6, 7 AND 9 OF TITLE 91, CHAPTER 23, MISSISSIPPI CODE OF 1972; TO REPEAL SECTIONS 91-9-101, 91-9-103, 91-9-105, 91-9-107, 91-9-109, 91-9-111, 91-9-113, 91-9-115, 91-9-117 AND 91-9-119, MISSISSIPPI CODE OF 1972, TO WHICH CONSTITUTE TITLE 91, CHAPTER 9, ARTICLE 3, UNIFORM TRUSTEE POWERS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
ARTICLE 1. GENERAL PROVISIONS AND DEFINITIONS
SECTION 1. The following shall be codified as Section 91-23-101, Mississippi Code of 1972:
91-23-101. Short title. This chapter shall be known and may be cited as the Mississippi Trust Code of 2010.
SECTION 2. Scope. The following shall be codified as Section 91-23-102, Mississippi Code of 1972:
91-23-102. This chapter applies to express trusts, charitable or noncharitable, and trusts created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust.
SECTION 3. The following shall be codified as Section 91-23-103, Mississippi Code of 1972:
91-23-103. Definitions. As used in this chapter unless the context otherwise requires:
(1) "Action," with respect to an act of a trustee, includes a failure to act.
(2) "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code of 1986, as in effect on July 1, 2010, or as later amended.
(3) "Beneficiary" means a person that:
(A) Has a present or future beneficial interest in a trust, vested or contingent; or
(B) In a capacity other than that of trustee, holds a power of appointment over trust property.
(4) [Reserved]
(5) "Conservator" means a person appointed by the court to administer the estate of a minor or adult individual.
(6) "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment.
(7) "Guardian" means a person appointed by the court, a parent, or a spouse to make decisions regarding the support, care, education, health, and welfare of a minor or adult individual. The term does not include a guardian ad litem.
(8) "Interests of the beneficiaries" means the beneficial interests provided in the terms of the trust.
(9) "Jurisdiction," with respect to a geographic area, includes a state or country.
(10) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation, or any other legal or commercial entity.
(11) [Reserved]
(12) "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.
(13) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's qualification is determined:
(A) Is a 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 distributees described in subparagraph (A) terminated on that date without causing the trust to terminate; or
(C) Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
(14) "Revocable," as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest.
(15) "Settlor" means a person, including a testator, who creates, or contributes property to, a trust. If more than one (1) 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.
(16) [Reserved]
(17) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.
(18) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.
(19) "Trust instrument" means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto.
(20) "Trustee" includes an original, additional, and successor trustee, and a cotrustee.
SECTION 4. The following shall be codified as Section 91-23-104, Mississippi Code of 1972:
91-23-104. Knowledge. [Reserved]
SECTION 5. The following shall be codified as Section 91-23-105, Mississippi Code of 1972:
91-23-105. Default and mandatory rules. (a) Except as otherwise provided in the terms of the trust, this chapter governs the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.
(b) The terms of a trust prevail over any provision of this chapter except:
(1) [Reserved]
(2) The duty of a trustee to act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries;
(3) [Reserved]
(4) [Reserved]
(5) [Reserved]
(6) [Reserved]
(7) [Reserved]
(8) The duty under Section 91-23-813(b)(2) and (3) to notify qualified beneficiaries of an irrevocable trust who have attained twenty-five (25) years of age of the existence of the trust, of the identity of the trustee, and of their right to request trustee's reports;
(9) The duty under Section 91-23-813(a) to respond to the request of a qualified beneficiary of an irrevocable trust for trustee's reports and other information reasonably related to the administration of a trust;
(10) The effect of an exculpatory term under Section 91-23-1008;
(11) The rights under Sections 91-23-1010 through 91-23-1013 of a person other than a trustee or beneficiary;
(12) Periods of limitation for commencing a judicial proceeding;
(13) [Reserved]
(14) [Reserved]
SECTION 6. The following shall be codified as Section 91-23-106, Mississippi Code of 1972:
91-23-106. Common law of trusts; principles of equity. [Reserved]
SECTION 7. The following shall be codified as Section 91-23-107, Mississippi Code of 1972:
91-23-107. Governing law. [Reserved]
SECTION 8. The following shall be codified as Section 91-23-108, Mississippi Code of 1972:
91-23-108. Principal place of administration. [Reserved]
SECTION 9. The following shall be codified as Section 91-23-109, Mississippi Code of 1972:
91-23-109. Methods and waiver of notice. [Reserved]
SECTION 10. The following shall be codified as Section 91-23-110, Mississippi Code of 1972:
91-23-110. Others treated as qualified beneficiaries. [Reserved]
SECTION 11. The following shall be codified as Section 91-23-111, Mississippi Code of 1972:
91-23-111. Nonjudicial settlement agreements. [Reserved]
SECTION 12. The following shall be codified as Section 91-23-112, Mississippi Code of 1972:
91-23-112. Rules of construction. [Reserved]
ARTICLE 2. JUDICIAL PROCEEDINGS.
[Reserved]
ARTICLE 3. REPRESENTATION.
SECTION 13. The following shall be codified as Section 91-23-301, Mississippi Code of 1972:
91-23-301. Representation: basic effect. (a) Notice to a person who may represent and bind another person under this article has the same effect as if notice were given directly to the other person.
(b) The consent of a person who may represent and bind another person under this article is binding on the person represented unless the person represented objects to the representation before the consent would otherwise have become effective.
(c) Except as otherwise provided by law, a person who under this article may represent a settlor who lacks capacity may receive notice and give a binding consent on the settlor's behalf.
SECTION 14. The following shall be codified as Section 91-23-302, Mississippi Code of 1972:
91-23-302. Representation by holder of general testamentary power of appointment. [Reserved]
SECTION 15. The following shall be codified as Section 91-23-303, Mississippi Code of 1972:
91-23-303. Representation by fiduciaries and parents. [Reserved]
SECTION 16. The following shall be codified as Section 91-23-304, Mississippi Code of 1972:
91-23-304. Representation by person having substantially identical interest. (a) Unless otherwise represented, a minor, incapacitated, or unborn individual, or a person whose identity or location is unknown and not reasonably ascertainable, may be represented by and bound by another having a substantially identical interest with respect to the particular question or dispute, but only to the extent there is no conflict of interest between the representative and the person represented.
(b) A presumptive remainder beneficiary may represent contingent successor remainder beneficiaries with respect to matters in which there is no conflict of interest.
(c) Nothing in this section shall affect the court's authority to appoint a guardian ad litem pursuant to Section 9-5-89.
SECTION 17. The following shall be codified as Section 91-23-305, Mississippi Code of 1972:
91-23-305. Appointment of representative. [Reserved]
ARTICLE 4. CREATION, VALIDITY, MODIFICATION,
AND TERMINATION OF TRUST
SECTION 18. The following shall be codified as Section 91-23-401, Mississippi Code of 1972:
91-23-401. Methods of creating trust. [Reserved]
SECTION 19. The following shall be codified as Section 91-23-402, Mississippi Code of 1972:
91-23-402. Requirements for creation. [Reserved]
SECTION 20. The following shall be codified as Section 91-23-403, Mississippi Code of 1972:
91-23-403. Trusts created in other jurisdictions. [Reserved]
SECTION 21. The following shall be codified as Section 91-23-404, Mississippi Code of 1972:
91-23-404. Trust purposes. [Reserved]
SECTION 22. The following shall be codified as Section 91-23-405, Mississippi Code of 1972:
91-23-405. Charitable purposes; enforcement. [Reserved]
SECTION 23. The following shall be codified as Section 91-23-406, Mississippi Code of 1972:
91-23-406. Creation of trust induced by fraud, duress, or undue influence. [Reserved]
SECTION 24. The following shall be codified as Section 91-23-407, Mississippi Code of 1972:
91-23-407. Evidence of oral trust. [Reserved]
SECTION 25. The following shall be codified as Section 91-23-408, Mississippi Code of 1972:
91-23-408. Trust for care of animal. [Reserved]
SECTION 26. The following shall be codified as Section 91-23-409, Mississippi Code of 1972:
91-23-409. Noncharitable trust without ascertainable beneficiary. [Reserved]
SECTION 27. The following shall be codified as Section 91-23-410, Mississippi Code of 1972:
91-23-410. Modification or termination of trust; proceedings for approval or disapproval. [Reserved]
SECTION 28. The following shall be codified as Section 91-23-411, Mississippi Code of 1972:
91-23-411. Modification or termination of noncharitable irrevocable trust by consent. (a) If, upon petition, the court finds that the settlor and all beneficiaries consent to the modification or termination of an irrevocable trust, the court shall enter an order approving the modification or termination even if the modification or termination is inconsistent with a material purpose of the trust. A settlor's power to consent to a trust's modification or termination may be exercised by an agent under a power of attorney only to the extent expressly authorized by the power of attorney or the terms of the trust; by the settlor's conservator with the approval of the court supervising the conservatorship if an agent is not so authorized; or by the settlor's guardian with the approval of the court supervising the guardianship if an agent is not so authorized and a conservator has not been appointed.
(b) A noncharitable irrevocable trust may be terminated upon consent of all of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust. A noncharitable irrevocable trust may be modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.
(c) A spendthrift provision in the terms of the trust is not presumed to constitute a material purpose of the trust. This subsection applies only to irrevocable trusts created on or after July 1, 2010, and to revocable trusts which become irrevocable on or after July 1, 2010.
(d) Upon termination of a trust under subsection (a) or (b), the trustee shall distribute the trust property as agreed by the beneficiaries.
(e) If not all of the beneficiaries consent to a proposed modification or termination of the trust under subsection (a) or (b), then the modification or termination may be approved by the court if the court is satisfied that:
(1) If all of the beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) The interests of a beneficiary who does not consent will be adequately protected.
SECTION 29. The following shall be codified as Section 91-23-412, Mississippi Code of 1972:
91-23-412. Modification or termination because of unanticipated circumstances or inability to administer trust effectively. [Reserved]
SECTION 30. The following shall be codified as Section 91-23-413, Mississippi Code of 1972:
91-23-413. Cy pres. [Reserved]
SECTION 31. The following shall be codified as Section 91-23-414, Mississippi Code of 1972:
91-23-414. Modification or termination of uneconomic trust. (a) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust property having a total value less than Fifty Thousand Dollars ($50,000.00) may terminate the trust if the trustee concludes that the value of the trust property is insufficient to justify the cost of administration.
(b) The court may modify or terminate a trust or remove the trustee and appoint a different trustee if it determines that the value of the trust property is insufficient to justify the cost of administration.
(c) Upon termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.
(d) This section does not apply to an easement for conservation or preservation.
SECTION 32. The following shall be codified as Section 91-23-415, Mississippi Code of 1972:
91-23-415. Reformation to correct mistakes. [Reserved].
SECTION 33. The following shall be codified as Section 91-23-416, Mississippi Code of 1972:
91-23-416. Modification to achieve settlor's tax objectives. [Reserved]
SECTION 34. The following shall be codified as Section 91-23-417, Mississippi Code of 1972:
91-23-417. Combination and division of trusts. [Reserved]
ARTICLE 5. CREDITOR'S CLAIMS; SPENDTHRIFT
AND DISCRETIONARY TRUSTS.
[Reserved]
ARTICLE 6. REVOCABLE TRUSTS.
[Reserved]
ARTICLE 7. OFFICE OF TRUSTEE.
[Reserved]
ARTICLE 8. DUTIES AND POWERS OF TRUSTEE
SECTION 35. The following shall be codified as Section 91-23-801, Mississippi Code of 1972:
91-23-801. Duty to administer trust. Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with this chapter.
SECTION 36. The following shall be codified as Section 91-23-802, Mississippi Code of 1972:
91-23-802. Duty of loyalty. (a) A trustee shall administer the trust solely in the interests of the beneficiaries.
(b) Subject to the rights of persons dealing with or assisting the trustee as provided in Section 91-23-1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or which is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless:
(1) The transaction was authorized by the terms of the trust;
(2) The transaction was approved by the court;
(3) The beneficiary did not commence a judicial proceeding within the time allowed by Section 91-23-1005;
(4) The beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with Section 91-23-1009; or
(5) The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.
(c) A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:
(1) The trustee's spouse;
(2) The trustee's descendants, siblings, parents, or their spouses;
(3) An agent or attorney of the trustee; or
(4) A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment.
(d) A transaction between a trustee and a beneficiary that does not concern trust property but that occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary and from which the trustee obtains an advantage is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.
(e) A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.
(f) An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests of the trustee if the investment complies with the prudent investor rule codified at Section 91-9-601. The trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust if the trustee at least annually notifies the persons entitled under Section 91-23-813 to receive a copy of the trustee's annual report of the rate and method by which the compensation was determined.
(g) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.
(h) This section does not preclude the following transactions, if fair to the beneficiaries:
(1) An agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee;
(2) Payment of reasonable compensation to the trustee;
(3) A transaction between a trust and another trust, decedent's estate, or conservatorship of which the trustee is a fiduciary or in which a beneficiary has an interest;
(4) A deposit of trust money in a regulated financial-service institution operated by the trustee; or
(5) An advance by the trustee of money for the protection of the trust.
(i) The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this section if entered into by the trustee.
SECTION 37. The following shall be codified as Section 91-23-803, Mississippi Code of 1972:
91-23-803. Impartiality. If a trust has two (2) or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to the beneficiaries' respective interests.
SECTION 38. The following shall be codified as Section 91-23-804, Mississippi Code of 1972:
91-23-804. Prudent administration. A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
SECTION 39. The following shall be codified as Section 91-23-805, Mississippi Code of 1972:
91-23-805. Costs of administration. In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee.
SECTION 40. The following shall be codified as Section 91-23-806, Mississippi Code of 1972:
91-23-806. Trustee's skills. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, shall use those special skills or expertise.
SECTION 41. The following shall be codified as Section 91-23-807, Mississippi Code of 1972:
91-23-807. Delegation by trustee. (a) A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(3) Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(b) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
(c) A trustee who complies with subsection (a) is not liable to the beneficiaries or to the trust for an action of the agent to whom the function was delegated.
(d) By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.
SECTION 42. The following shall be codified as Section 91-23-808, Mississippi Code of 1972:
91-23-808. Powers to direct. (a) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.
(b) If the terms of a trust confer upon a person other than the settlor of a revocable trust power to direct certain actions of the trustee, the trustee shall act in accordance with an exercise of the power unless the attempted exercise is manifestly contrary to the terms of the trust or the trustee knows the attempted exercise would constitute a serious breach of a fiduciary duty that the person holding the power owes to the beneficiaries of the trust.
(c) The terms of a trust may confer upon a trustee or other person a power to direct the modification or termination of the trust.
(d) A person, other than a beneficiary, who holds a power to direct is presumptively a fiduciary who, as such, is required to act in good faith with regard to the purposes of the trust and the interests of the beneficiaries. The holder of a power to direct is liable for any loss that results from breach of a fiduciary duty.
SECTION 43. The following shall be codified as Section 91-23-809, Mississippi Code of 1972:
91-23-809. Control and protection of trust property. A trustee shall take reasonable steps to take control of and protect the trust property.
SECTION 44. The following shall be codified as Section 91-23-810, Mississippi Code of 1972:
91-23-810. Recordkeeping and identification of trust property. (a) A trustee shall keep adequate records of the administration of the trust.
(b) A trustee shall keep trust property separate from the trustee's own property.
(c) Except as otherwise provided in subsection (d), a trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.
(d) If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of two or more separate trusts.
SECTION 45. The following shall be codified as Section 91-23-811, Mississippi Code of 1972:
91-23-811. Enforcement and defense of claims. A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust.
SECTION 46. The following shall be codified as Section 91-23-812, Mississippi Code of 1972:
91-23-812. Collecting trust property. A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee, and to redress a breach of trust known to the trustee to have been committed by a former trustee.
SECTION 47. The following shall be codified as Section 91-23-813, Mississippi Code of 1972:
91-23-813. Duty to inform and report. (a) Subject to subsection (e), a trustee shall keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless unreasonable under the circumstances, a trustee shall promptly respond to a beneficiary's request for information related to the administration of the trust.
(b) Subject to subsection (e), a trustee:
(1) Upon request of a beneficiary, shall promptly furnish to the beneficiary a copy of the trust instrument;
(2) Within sixty (60) days after accepting a trusteeship, shall notify the qualified beneficiaries of the acceptance and of the trustee's name, address, and telephone number;
(3) Within sixty (60) days after the date the trustee acquires knowledge of the creation of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified beneficiaries of the trust's existence, of the identity of the settlor or settlors, of the right to request a copy of the trust instrument, and of the right to a trustee's report as provided in subsection (c); and
(4) Shall notify the qualified beneficiaries in advance of any change in the method or rate of the trustee's compensation.
(c) Subject to subsection (e), a trustee shall send to the distributees or permissible distributees of trust income or principal, and to other qualified or nonqualified beneficiaries who request it, at least annually and at the termination of the trust, a report of the trust property, liabilities, receipts, and disbursements, including the source and amount of the trustee's compensation, a listing of the trust assets and, if feasible, their respective market values. Upon a vacancy in a trusteeship, unless a cotrustee remains in office, a report must be sent to the qualified beneficiaries by the former trustee. A personal representative, conservator, or guardian may send the qualified beneficiaries a report on behalf of a deceased or incapacitated trustee.
(d) A beneficiary may waive the right to a trustee's report or other information otherwise required to be furnished under this section. A beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.
(e) Unless otherwise provided by the trust instrument, a trustee shall notify, keep informed, or provide an annual report to only to those beneficiaries who received a distribution from the trust during the preceding calendar year. A trustee shall have no obligation whatsoever under this section to a beneficiary who receives only a specific bequest.
(f) Subsections (b)(2) and (3) do not apply to a trustee who accepts a trusteeship before July 1, 2010, to an irrevocable trust created before July 1, 2010, or to a revocable trust that becomes irrevocable before July 1, 2010.
SECTION 48. The following shall be codified as Section 91-23-814, Mississippi Code of 1972:
91-23-814. Discretionary powers; tax savings. (a) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as "absolute", "sole", or "uncontrolled", the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
(b) Subject to subsection (d), and unless the terms of the trust expressly indicate that a rule in this subsection does not apply:
(1) A person other than a settlor who is a beneficiary and trustee of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee's personal benefit may exercise the power only in accordance with an ascertainable standard; and
(2) A trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.
(c) A power whose exercise is limited or prohibited by subsection (b) may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.
(d) Subsection (b) does not apply to:
(1) A power held by the settlor's spouse who is the trustee of a trust for which a marital deduction, as defined in Section 2056(b)(5) or 2523(e) of the Internal Revenue Code of 1986, as in effect on July 1, 2010, or as later amended, was previously allowed;
(2) Any trust during any period that the trust may be revoked or amended by its settlor; or
(3) A trust if contributions to the trust qualify for the annual exclusion under Section 2503(c) of the Internal Revenue Code of 1986, as in effect on July 1, 2010, or as later amended.
SECTION 49. The following shall be codified as Section 91-23-815, Mississippi Code of 1972:
91-23-815. General powers of trustee. (a) A trustee, without authorization by the court, may exercise:
(1) Powers conferred by the terms of the trust; and
(2) Except as limited by the terms of the trust:
(A) All powers over the trust property which an unmarried competent owner has over individually owned property;
(B) Any other powers appropriate to achieve the proper investment, management, and distribution of the trust property; and
(C) Any other powers conferred by this chapter.
(b) The exercise of a power is subject to the fiduciary duties prescribed by this article.
SECTION 50. The following shall be codified as Section 91-23-816, Mississippi Code of 1972:
91-23-816. Specific powers of trustee. (a) Without limiting the authority conferred by Section 91-23-815, a trustee may:
(1) Collect trust property and accept or reject additions to the trust property from a settlor or any other person;
(2) Acquire or sell property, for cash or on credit, at public or private sale;
(3) Exchange, partition, or otherwise change the character of trust property;
(4) Deposit trust money in an account in a regulated financial-service institution;
(5) Borrow money, with or without security, and mortgage or pledge trust property for a period within or extending beyond the duration of the trust;
(6) With respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or property owners, including merging, dissolving, or otherwise changing the form of business organization or contributing additional capital;
(7) With respect to stocks or other securities, exercise the rights of an absolute owner, including the right to:
(A) Vote, or give proxies to vote, with or without power of substitution, or enter into or continue a voting trust agreement;
(B) Hold a security in the name of a nominee or in other form without disclosure of the trust so that title may pass by delivery;
(C) Pay calls, assessments, and other sums chargeable or accruing against the securities, and sell or exercise stock subscription or conversion rights; and
(D) Deposit the securities with a depositary or other regulated financial-service institution;
(8) With respect to an interest in real property, construct, or make ordinary or extraordinary repairs to, alterations to, or improvements in, buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate land to public use or grant public or private easements, and make or vacate plats and adjust boundaries;
(9) Enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust;
(10) Grant an option involving a sale, lease, or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired;
(11) Insure the property of the trust against damage or loss and insure the trustee, the trustee's agents, and beneficiaries against liability arising from the administration of the trust;
(12) Abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration;
(13) With respect to possible liability for violation of environmental law:
(A) Inspect or investigate property the trustee holds or has been asked to hold, or property owned or operated by an organization in which the trustee holds or has been asked to hold an interest, for the purpose of determining the application of environmental law with respect to the property;
(B) Take action to prevent, abate, or otherwise remedy any actual or potential violation of any environmental law affecting property held directly or indirectly by the trustee, whether taken before or after the assertion of a claim or the initiation of governmental enforcement;
(C) Decline to accept property into trust or disclaim any power with respect to property that is or may be burdened with liability for violation of environmental law;
(D) Compromise claims against the trust which may be asserted for an alleged violation of environmental law; and
(E) Pay the expense of any inspection, review, abatement, or remedial action to comply with environmental law;
(14) Pay or contest any claim, settle a claim by or against the trust, and release, in whole or in part, a claim belonging to the trust;
(15) Pay taxes, assessments, compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the administration of the trust;
(16) Exercise elections with respect to federal, state, and local taxes;
(17) Select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;
(18) Make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances, and the trustee has a lien on future distributions for repayment of those loans;
(19) Pledge trust property to guarantee loans made by others to the beneficiary;
(20) Appoint a trustee to act in another jurisdiction with respect to trust property located in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the appointing trustee, require that the appointed trustee furnish security, and remove any trustee so appointed;
(21) Pay an amount distributable to a beneficiary who is under a legal disability or who the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or applying it for the beneficiary's benefit, or by:
(A) Paying it to the beneficiary's conservator or, if the beneficiary does not have a conservator, the beneficiary's guardian;
(B) Paying it to the beneficiary's custodian under the Mississippi Uniform Transfers to Minors Act, Section 91-20-1 et seq., or custodial trustee, and, for that purpose, creating a custodianship or custodial trust;
(C) If the trustee does not know of a conservator, guardian, custodian, or custodial trustee, paying it to an adult relative or other person having legal or physical care or custody of the beneficiary, to be expended on the beneficiary's behalf; or
(D) Managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution;
(22) On distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the trust property for those purposes, and adjust for resulting differences in valuation;
(23) Resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution;
(24) Prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee's duties;
(25) Sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the trustee's powers;
(26) On termination of the trust, exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it; and
(27) To employ persons, including attorneys, auditors, investment advisors or agents, even if they are associated with the trustee; to advise or assist the trustee in the performance of his administrative duties; to act without independent investigation upon their recommendations; and instead of acting personally, to employ one or more agents to perform any act of administration, whether or not discretionary.
(b) If a trustee has determined that either (i) the market value of a trust is less than One Hundred Fifty Thousand Dollars ($150,000.00) and that, in relation to the costs of administration of the trust, the continuance of the trust pursuant to its existing terms will defeat or substantially impair the accomplishment of the purposes of the trust; or (ii) the trust no longer has a legitimate purpose or that its purpose is being thwarted with respect to any trust in any amount; then the trustee may seek court approval to terminate the trust and the court, in its discretion, may approve such termination. In such a case, the court may provide for the distribution of trust property, including principal and undistributed income, to the beneficiaries in a manner which conforms as nearly as possible to the intention of the settlor and the court shall make appropriate provisions for the appointment of a guardian in the case of a minor beneficiary.
(c) (1) Unless expressly provided to the contrary in the trust instrument, a trustee may consolidate two (2) or more trusts having substantially similar terms into a single trust; divide on a fractional basis a single trust into two (2) or more separate trusts for any reason; and may segregate by allocation to a separate account or trust a specific amount from, a portion of, or a specific asset included in the trust property of any trust to reflect a disclaimer, to reflect or result in differences in federal tax attributes, to satisfy any federal tax requirement, to make federal tax elections, to reduce potential generation-skipping transfer tax liability, or for any other tax planning purposes or other reasons.
(2) A separate trust created by severance or segregation must be treated as a separate trust for all purposes from the effective date in which the severance or segregation is effective. The effective date of the severance or segregation may be retroactive. In managing, investing, administering and distributing the trust property of any separate account or trust and in making applicable tax elections, the trustee may consider the differences in federal tax attributes and all other factors the trustee believes pertinent and may make disproportionate distributions from the separate trusts or accounts created.
(3) A trust or account created by consolidation, severance or segregation under this subsection (c) must be held on terms and conditions that are substantially equivalent to the terms of the trust before consolidation, severance or segregation so that the aggregate interests of each beneficiary are substantially equivalent to the beneficiary's interests in the trust or trusts before consolidation, severance or segregation. In determining whether a beneficiary's aggregate interests are substantially equivalent, the trustee shall consider the economic value of those interests to the extent they can be valued, considering actuarial factors as appropriate. If a beneficiary's interest cannot be valued with any reasonable degree of certainty because of the nature of the trust property, the terms of the trust, or other reasons, the trustee shall base the determination upon such other factors as are reasonable and appropriate under the facts and circumstances applicable to that particular trust, including the purposes of the trust. Provided, however, the terms of any trust before consolidation, severance or segregation which permit qualification of that trust for an applicable federal tax deduction, exclusion, election, exemption, or other special federal tax status must remain identical in the consolidated trust or in each of the separate trusts or accounts created by severance or segregation.
(4) A trustee who acts in good faith is not liable to any person for taking into consideration differences in federal tax attributes and other pertinent factors in administering trust property of any separate account or trust, in making tax elections, and making distributions pursuant to the terms of the separate trust.
(5) Income earned on a consolidated or severed or segregated amount, portion, or specific asset after the consolidation or severance is effective passes with that amount, portion or specific asset.
(6) This subsection (c) applies to all trusts whenever created, whether before, on, or after July 1, 2010, and whether such trusts are inter vivos or testamentary, are created by the same or different instruments, by the same or different persons and regardless of where created or administered.
(7) This subsection (c) does not limit the right of a trustee acting in accordance with the applicable provisions of the governing instrument to divide or consolidate trusts.
(8) Nothing contained in this subsection (c) shall be construed as granting to any trustee a general power of appointment over any trust not otherwise expressly granted in the trust instrument.
SECTION 51. The following shall be codified as Section 91-23-817, Mississippi Code of 1972:
91-23-817. Distribution upon termination. (a) Upon termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within thirty (30) days after the proposal was sent but only if the proposal informed the beneficiary of the right to object and of the time allowed for objection.
(b) Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.
(c) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent:
(1) It was induced by improper conduct of the trustee; or
(2) The beneficiary, at the time of the release, did not know of the beneficiary's rights or of the material facts relating to the breach.
ARTICLE 9. UNIFORM PRUDENT INVESTMENT ACT.
[Reserved]
ARTICLE 10. LIABILITY OF TRUSTEES AND RIGHTS
OF PERSONS DEALING WITH TRUSTEE.
SECTION 52. The following shall be codified as Section 91-23-1001, Mississippi Code of 1972:
91-23-1001. Remedies for breach of trust. (a) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(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 committing a breach of trust;
(3) Compel the trustee to redress a breach of trust by paying money, restoring property, or other means;
(4) Order a trustee to account;
(5) Appoint a special fiduciary to take possession of the trust property and administer the trust;
(6) Suspend the trustee;
(7) Remove the trustee;
(8) Reduce or deny compensation to the trustee;
(9) Subject to Section 91-23-1012, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or
(10) Order any other appropriate relief.
SECTION 53. The following shall be codified as Section 91-23-1002, Mississippi Code of 1972:
91-23-1002. Damages for breach of trust. (a) A trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of:
(1) The amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or
(2) The profit the trustee made by reason of the breach.
(b) Except as otherwise provided in this subsection, if more than one (1) trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received.
SECTION 54. The following shall be codified as Section 91-23-1003, Mississippi Code of 1972:
91-23-1003. Damages in absence of breach. Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for not having made a profit.
SECTION 55. The following shall be codified as Section 91-23-1004, Mississippi Code of 1972:
91-23-1004. Attorney's fees and costs. In a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.
SECTION 56. The following shall be codified as Section 91-23-1005, Mississippi Code of 1972:
91-23-1005. Limitation of action against trustee. (a) A beneficiary may not commence a proceeding against a trustee for breach of trust more than one (1) year after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding.
(b) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.
(c) If subsection (a) does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within three (3) years after the first to occur of:
(1) The removal, resignation, or death of the trustee;
(2) The termination of the beneficiary's interest in the trust; or
(3) The termination of the trust.
SECTION 57. The following shall be codified as Section 91-23-1006, Mississippi Code of 1972:
91-23-1006. Reliance on trust instrument. A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.
SECTION 58. The following shall be codified as Section 91-23-1007, Mississippi Code of 1972:
91-23-1007. Event affecting administration or distribution. If the happening of an event, including marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of knowledge.
SECTION 59. The following shall be codified as Section 91-23-1008, Mississippi Code of 1972:
91-23-1008. Exculpation of trustee. (a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:
(1) Relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
(2) Was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.
(b) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.
SECTION 60. The following shall be codified as Section 91-23-1009, Mississippi Code of 1972:
91-23-1009. Beneficiary's consent, release, or ratification. A trustee is not liable to a beneficiary for breach of trust 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 ratification of the beneficiary was induced by improper conduct of the trustee; or
(2) At the time of the consent, release, or ratification, the beneficiary did not know of the beneficiary's rights or of the material facts relating to the breach.
SECTION 61. The following shall be codified as Section 91-23-1010, Mississippi Code of 1972:
91-23-1010. Limitation on personal liability of trustee. (a) Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.
(b) A trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.
(c) 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 in a judicial proceeding against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for the claim.
SECTION 62. The following shall be codified as Section 91-23-1011, Mississippi Code of 1972:
91-23-1011. Interest as general partner. (a) Except as otherwise provided in subsection (c) or unless personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in a statement previously filed pursuant to the Uniform Partnership Act, Section 79-13-101 et seq., or the Mississippi Limited Partnership Act, Section 79-14-101 et seq.
(b) Except as otherwise provided in subsection (c), a trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.
(c) The immunity provided by this section does not apply if an interest in the partnership is held by the trustee in a capacity other than that of trustee or is held by the trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or the spouse of any of them.
(d) If the trustee of a revocable trust holds an interest as a general partner, the settlor is personally liable for contracts and other obligations of the partnership as if the settlor were a general partner.
SECTION 63. The following shall be codified as Section 91-23-1012, Mississippi Code of 1972:
91-23-1012. Protection of person dealing with trustee. (a) A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers is protected from liability as if the trustee properly exercised the power.
(b) A person other than a beneficiary who in good faith deals with a trustee is not required to inquire into the extent of the trustee's powers or the propriety of their exercise.
(c) A person who in good faith delivers assets to a trustee need not ensure their proper application.
(d) A person other than a beneficiary who in good faith assists a former trustee, or who in good faith and for value deals with a former trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.
(e) Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section.
SECTION 64. The following shall be codified as Section 91-23-1013, Mississippi Code of 1972:
91-23-1013. Certification of trust. (a) Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information:
(1) That the trust exists and the date the trust instrument was executed;
(2) The identity of the settlor;
(3) The identity and address of the currently acting trustee;
(4) The powers of the trustee;
(5) The revocability or irrevocability of the trust and the identity of any person holding a power to revoke the trust;
(6) The authority of cotrustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee;
(7) The trust's taxpayer identification number; and
(8) The manner of taking title to trust property.
(b) A certification of trust may be signed or otherwise authenticated by any trustee.
(c) A certification of trust must state that the trust has not been revoked, modified, or amended in any manner that would cause the representations contained in the certification of trust to be incorrect.
(d) A certification of trust need not contain the dispositive terms of a trust.
(e) A recipient of a certification of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments which designate the trustee and confer upon the trustee the power to act in the pending transaction.
(f) A person who acts in reliance upon a certification of trust without knowledge that the representations contained therein are incorrect is not liable to any person for so acting and may assume without inquiry the existence of the facts contained in the certification. Knowledge of the terms of the trust may not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying upon the certification.
(g) A person who in good faith enters into a transaction in reliance upon a certification of trust may enforce the transaction against the trust property as if the representations contained in the certification were correct.
(h) A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages if the court determines that the person did not act in good faith in demanding the trust instrument.
(i) This section does not limit the right of a person to obtain a copy of the trust instrument in a judicial proceeding concerning the trust.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
SECTION 65. The following shall be codified as Section 91-23-1101, Mississippi Code of 1972:
91-23-1101. Uniformity of application and construction. In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
SECTION 66. The following shall be codified as Section 91-23-1102, Mississippi Code of 1972:
91-23-1102. Electronic records and signatures. The provisions of this chapter governing the legal effect, validity, or enforceability of electronic records or electronic signatures, and of contracts formed or performed with the use of such records or signatures, conform to the requirements of Section 102 of the Electronic Signatures in Global and National Commerce Act (15 USC, Section 7002) and supersede, modify, and limit the requirements of the Electronic Signatures in Global and National Commerce Act.
SECTION 67. The following shall be codified as Section 91-23-1103, Mississippi Code of 1972:
91-23-1103. Severability clause. If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.
SECTION 68. The following shall be codified as Section 91-23-1104, Mississippi Code of 1972:
91-23-1104. [Reserved]
SECTION 69. The following shall be codified as Section 91-23-1105, Mississippi Code of 1972:
91-23-1105. [Reserved]
SECTION 70. The following shall be codified as Section 91-23-1106, Mississippi Code of 1972:
91-23-1106. Application to existing relationships. (a) Except as otherwise provided in this chapter, on July 1, 2010:
(1) This chapter applies to all trusts created before, on, or after July 1, 2010;
(2) This chapter applies to all judicial proceedings concerning trusts commenced on or after July 1, 2010;
(3) This chapter applies to judicial proceedings concerning trusts commenced before July 1, 2010, unless the court finds that application of a particular provision of this chapter would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of this chapter does not apply and the superseded law applies;
(4) Any rule of construction or presumption provided in this chapter applies to trust instruments executed before July 1, 2010, unless there is a clear indication of a contrary intent in the terms of the trust; and
(5) An act done before July 1, 2010 is not affected by this chapter.
(b) If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run under any other statute before July 1, 2010, that statute continues to apply to the right even if it has been repealed or superseded.
SECTION 71. Sections 91-9-101, 91-9-103, 91-9-105, 91-9-107, 91-9-109, 91-9-111, 91-9-113, 91-9-115, 91-9-117 and 91-9-119, Mississippi Code Of 1972, which constitute Title 91, Chapter 9, Article 3, Uniform Trustees' Powers, and provide generally for the powers of trustees as conferred by trust, law, in that article; the delegation of a trustee's powers; the power of a court to rule on a trustee's powers; how the powers of joint trustees are to be exercised; and the protection of third persons in dealing with a trustee, are repealed.
SECTION 72. This act shall take effect and be in force from and after July 1, 2010.
