PRIOR PRINTER'S NO. 754 PRINTER'S NO. 1423
No. 660 Session of 2005
INTRODUCED BY GREENLEAF, O'PAKE, RAFFERTY, LEMMOND, FERLO AND
PILEGGI, APRIL 28, 2005
AS AMENDED ON SECOND CONSIDERATION, DECEMBER 13, 2005
AN ACT
1 Amending Title 20 (Decedents, Estates and Fiduciaries) of the
2 Pennsylvania Consolidated Statutes, adding the Uniform Trust
3 Act; ABOLISHING THE RULE AGAINST PERPETUITIES; making <--
4 conforming amendments; and making a RELATED repeal. <--
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Sections 723, 724 and 725 of Title 20 of the <--
8 Pennsylvania Consolidated Statutes are repealed.
9 Section 2. Sections 751(6) and 908(a) of Title 20 are
10 amended to read:
11 SECTION 1. SECTIONS 723, 724, 725, 751(6) AND 908(A) OF <--
12 TITLE 20 OF THE PENNSYLVANIA CONSOLIDATED STATUTES ARE AMENDED
13 TO READ:
14 [§ 723. SITUS OF TESTAMENTARY TRUST.
15 THE SITUS OF A TESTAMENTARY TRUST SHALL BE IN THE COUNTY
16 WHERE LETTERS WERE GRANTED TO THE PERSONAL REPRESENTATIVE, AND
17 IN THE ABSENCE OF SUCH LETTERS, THEN IN A COUNTY WHERE SUCH
18 LETTERS COULD HAVE BEEN GRANTED, AND IF NO SUCH LETTERS COULD
1 HAVE BEEN GRANTED, THEN IN A COUNTY IN WHICH ANY TRUSTEE RESIDES
2 OR IS LOCATED.
3 § 724. SITUS OF INTER VIVOS TRUST.
4 (A) WHEN PROVIDED FOR IN TRUST INSTRUMENT.--IF THE TRUST
5 INSTRUMENT EXPRESSLY PROVIDES FOR THE SITUS OF THE INTER VIVOS
6 TRUST, ITS SITUS SHALL BE AT THE PLACE WITHIN OR WITHOUT THE
7 COMMONWEALTH WHICH IS IN ACCORD WITH SUCH PROVISION.
8 (B) NOT PROVIDED FOR IN TRUST INSTRUMENT.--IF THE TRUST
9 INSTRUMENT DOES NOT EXPRESSLY PROVIDE FOR THE SITUS OF THE INTER
10 VIVOS TRUST, ITS SITUS SHALL BE:
11 (1) RESIDENT SETTLOR.--IN THE CASE OF AN INTER VIVOS
12 TRUST WHOSE SETTLOR IS DOMICILED IN THE COMMONWEALTH:
13 (I) IN THE SETTLOR'S LIFETIME, EITHER IN THE COUNTY
14 OF HIS PRINCIPAL RESIDENCE OR IN THE COUNTY IN WHICH ANY
15 OF THE TRUSTEES RESIDES OR HAS A PLACE OF BUSINESS; AND
16 (II) AFTER THE SETTLOR'S DEATH, EITHER IN THE COUNTY
17 IN WHICH LETTERS HAVE BEEN GRANTED TO HIS PERSONAL
18 REPRESENTATIVE, OR IN A COUNTY IN WHICH LETTERS COULD
19 HAVE BEEN GRANTED, OR IN A COUNTY WHICH IS THE PRINCIPAL
20 PLACE OF THE TRUST'S ADMINISTRATION IN WHICH ANY TRUSTEE
21 RESIDES OR HAS A PLACE OF BUSINESS.
22 (2) NONRESIDENT SETTLOR.--IN THE CASE OF AN INTER VIVOS
23 TRUST WHOSE SETTLOR:
24 (I) IS NOT DOMICILED IN THE COMMONWEALTH AT THE TIME
25 WHEN DURING HIS LIFETIME THE FIRST APPLICATION IS MADE TO
26 A COURT CONCERNING THE TRUST; OR
27 (II) WAS NOT DOMICILED IN THE COMMONWEALTH AT HIS
28 DEATH IF THE FIRST APPLICATION TO A COURT CONCERNING THE
29 TRUST WAS MADE THEREAFTER,
30 IN A COUNTY WHICH IS THE PRINCIPAL PLACE OF THE TRUST'S
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1 ADMINISTRATION OR IN WHICH ANY TRUSTEE RESIDES OR HAS A PLACE
2 OF BUSINESS AND IF THERE IS NO SUCH TRUSTEE, THEN IN A COUNTY
3 WHERE PROPERTY OF THE TRUST IS LOCATED.
4 § 725. CHANGE OF SITUS; ORDER OF COURT.
5 A COURT HAVING JURISDICTION OF A TESTAMENTARY OR INTER VIVOS
6 TRUST, ON APPLICATION OF A TRUSTEE OR OF ANY PARTY IN INTEREST,
7 AFTER SUCH NOTICE TO ALL PARTIES IN INTEREST AS IT SHALL DIRECT
8 AND AIDED IF NECESSARY BY THE REPORT OF A MASTER, AND AFTER SUCH
9 ACCOUNTING AND SUCH PROVISION TO INSURE THE PROPER PAYMENT OF
10 ALL TAXES TO THE COMMONWEALTH AND ANY POLITICAL SUBDIVISION
11 THEREOF AS THE COURT SHALL REQUIRE, MAY DIRECT, NOTWITHSTANDING
12 ANY OF THE OTHER PROVISIONS OF THIS CHAPTER, THAT THE SITUS OF
13 THE TRUST SHALL BE CHANGED TO ANY OTHER PLACE WITHIN OR WITHOUT
14 THE COMMONWEALTH IF THE COURT SHALL FIND THE CHANGE NECESSARY OR
15 DESIRABLE FOR THE PROPER ADMINISTRATION OF THE TRUST. UPON SUCH
16 CHANGE OF SITUS BECOMING EFFECTIVE BY THE ASSUMPTION OF
17 JURISDICTION BY ANOTHER COURT, THE JURISDICTION OF THE COURT AS
18 TO THE TRUST SHALL CEASE AND THEREUPON THE SITUS OF THE TRUST
19 FOR ALL PURPOSES SHALL BE AS DIRECTED BY THE COURT.]
20 § 751. Appointment; purpose.
21 The orphans' court division may appoint:
22 * * *
23 (6) Representation of parties in interest.--Persons
24 interested in an estate [or trust] as beneficiary or heir, if
25 minors or otherwise legally incapacitated, and possible
26 unborn or unascertained persons, may be represented in a
27 judicial proceeding by a guardian or trustee ad litem if the
28 court deems necessary. The court may dispense with the
29 appointment of a guardian or trustee ad litem for a person
30 who is a minor or otherwise legally incapacitated, unborn or
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1 unascertained if there is a living person sui juris having a
2 similar interest or if such person is or would be issue of a
3 living ancestor sui juris and interested in the estate [or
4 trust] whose interest is not adverse to his. If the
5 whereabouts of any beneficiary or heir is unknown or if there
6 is doubt as to his existence, the court shall provide for
7 service of notice and representation in the judicial
8 proceeding as it deems proper.
9 § 908. Appeals.
10 (a) When allowed.--Any party in interest seeking to
11 challenge the probate of a will or who is otherwise aggrieved by
12 a decree of the register, or a fiduciary whose estate or trust
13 is so aggrieved, may appeal therefrom to the court within one
14 year of the decree: Provided, That the executor designated in an
15 instrument shall not by virtue of such designation be deemed a
16 party in interest who may appeal from a decree refusing probate
17 of it. The court, upon petition of a party in interest, may
18 limit the time for appeal to three months.
19 * * *
20 Section 3 2. Title 20 is amended by adding sections to read: <--
21 § 3384.1. Notice after settlor of revocable trust has died.
22 No later than 30 days after the date on which the trustee of
23 a revocable trust learns that a personal representative has been
24 appointed for the deceased settlor's estate, the trustee shall
25 send to the settlor's personal representative the notice
26 described in section 7780.3(i) (relating to duty to inform and
27 report).
28 § 3534.1. Cost of distribution of tangible personal property.
29 Except as otherwise provided in the will, if any, the
30 personal representative shall pay as an expense of
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1 administration the reasonable expenses of storage, insurance,
2 packing and delivery of tangible personal property to a
3 beneficiary.
4 Section 4. Sections 3543, 3702(h) and 6101 of Title 20 are <--
5 SECTION 3. SECTIONS 3543, 3702(H), 6101, 6102, 6104(D), 6106 <--
6 AND 6107 OF TITLE 20 ARE amended to read:
7 § 3543. [Interest or income] Income on distributive shares.
8 (a) Pecuniary legacy.--A pecuniary legacy bequeathed in
9 trust shall [bear interest] be entitled to income at the rate of
10 5% per annum from the death of the decedent until the payment of
11 the legacy, and when not in trust [shall bear interest at the
12 rate of 5% per annum] from one year after the death of the
13 decedent until the payment of the legacy.
14 (b) Specific legacy or devise.--A specific legatee or
15 devisee shall be entitled to the net income from property given
16 to him accrued from the date of the death of the decedent.
17 (c) Demonstrative legacy.--A demonstrative legacy shall
18 [bear interest] be entitled to income from the death of the
19 decedent until the payment of the legacy at the rate earned by
20 the property out of which it is primarily payable, and to the
21 extent that it is not paid from that source, [shall bear
22 interest] at the rate of 5% per annum from one year after the
23 death of the decedent until the payment of the legacy.
24 (d) Residuary legacy or devise.--All income from real and
25 personal estate earned during the period of administration and
26 not payable to others pursuant to the governing instrument or
27 this section shall be distributed pro rata among the income
28 beneficiaries of any trust created out of the residuary estate
29 and the other persons entitled to the residuary estate.
30 (e) Future date.--A legacy payable at a future date, unless
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1 earlier set aside as a separate trust, shall not begin to bear
2 [interest or] income until three months after the date fixed for
3 payment or delivery.
4 (f) Relationship.--[Interest or income] Income shall be paid
5 on distributive shares with no distinction because of the
6 relationship of the distributee to the decedent.
7 (g) Testamentary provisions.--All rules set forth in this
8 section are subject to the provisions of the decedent's will.
9 § 3702. Equitable apportionment of Federal estate tax.
10 * * *
11 (h) Interest and penalties.--Interest and penalties shall be
12 apportioned in the same manner as the principal amount of the
13 Federal estate tax unless the court finds it inequitable to do
14 so by reason of special circumstances in which case the court
15 may direct a different apportionment of interest and penalties.
16 To the extent the interest or penalties are apportioned to or
17 are payable out of a residuary estate or a trust, they shall be
18 paid from income or principal in the same manner as the Federal
19 estate tax, subject to a fiduciary's power to adjust under
20 Chapter 81 (relating to principal and income).
21 * * *
22 § 6101. Definitions.
23 The following words and phrases, when used in this chapter,
24 unless the context clearly indicates otherwise, shall have the
25 meanings ascribed to them in this section:
26 ["Charity" or "charitable purposes." Includes but is not
27 limited to the relief of poverty, the advancement of education,
28 the advancement of religion, the promotion of health,
29 governmental or municipal purposes, and other purposes the
30 accomplishment of which is beneficial to the community.]
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1 "Conveyance." An act by which it is intended to create an
2 interest in real or personal property whether the act is
3 intended to have inter vivos or testamentary operation. It shall
4 include an act by which a power of appointment whenever given is
5 exercised.
6 Section 5. Section 6102 of Title 20 is repealed. <--
7 Section 6. Sections 6104(b) and 6106(b) of Title 20 are
8 amended to read:
9 § 6104. Rule against perpetuities.
10 * * *
11 (b) Void interest; exceptions.--Upon the expiration of the
12 period allowed by the common law rule against perpetuities as
13 measured by actual rather than possible events, any interest not
14 then vested and any interest in members of a class the
15 membership of which is then subject to increase shall be void.
16 This subsection shall not apply to:
17 (1) Interest exempt at common law.--Interests which
18 would not have been subject to the common law rule against
19 perpetuities.
20 (2) Cemetery trusts.--Interests which are directed to be
21 used for the maintenance, care, or adornment of any cemetery,
22 churchyard, or other place for the burial of the dead, or any
23 portion thereof, or any grave therein or any improvement on
24 or about the same, and which are subject to no condition
25 precedent at the end of the period described in subsection
26 (b).
27 (3) Pension or profit-sharing plans.--Interests created
28 by a bona fide trust inter vivos primarily for the benefit of
29 business employees, their families or appointees, under a
30 stock bonus, pension, disability or death benefit, profit-
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1 sharing or other employee-benefit plan.
2 (4) Administrative powers.--Powers which contribute to
3 the effective management of trust assets, including powers to
4 sell, mortgage, or lease trust assets, powers relating to
5 investment of trust assets, powers to determine what is
6 principal and what is income, and powers to name successor
7 trustees.
8 (5) One hundred fifty years.--Interests that vest not
9 more than 150 years after the date provided in subsection
10 (c).
11 * * *
12 § 6106. Income accumulations; when valid.
13 * * *
14 (b) Void accumulations; exceptions.--Upon the later of the
15 expiration of the period allowed by the common law rule against
16 perpetuities as measured by actual rather than possible events
17 and the expiration of 150 years from the date at which one
18 person who while living had the unrestricted power to transfer
19 to himself the entire legal and beneficial interest in the
20 property from which the income is derived, any direction or
21 authorization to accumulate income shall be void. This
22 subsection shall not apply to:
23 (1) Directions or authorizations to accumulate income in
24 a trust for any charitable purpose or purposes.
25 (2) Directions or authorizations to accumulate income in
26 a bona fide trust inter vivos primarily for the benefit of
27 business employees, their families or appointees, under a
28 stock bonus, pension, disability or death benefit, profit-
29 sharing or other employee-benefit plan.
30 * * *
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1 Section 7. Sections 6110 and 6112 of Title 20 are repealed.
2 Section 8. Section 6114 of Title 20 is amended to read:
3 [§ 6102. TERMINATION OF TRUSTS. <--
4 (A) FAILURE OF ORIGINAL PURPOSE.--THE COURT HAVING
5 JURISDICTION OF A TRUST HERETOFORE OR HEREAFTER CREATED,
6 REGARDLESS OF ANY SPENDTHRIFT OR SIMILAR PROVISION THEREIN, IN
7 ITS DISCRETION MAY TERMINATE SUCH TRUST IN WHOLE OR IN PART, OR
8 MAKE AN ALLOWANCE FROM PRINCIPAL TO ONE OR MORE BENEFICIARIES
9 PROVIDED THE COURT AFTER HEARING IS SATISFIED THAT THE ORIGINAL
10 PURPOSE OF THE CONVEYOR CANNOT BE CARRIED OUT OR IS IMPRACTICAL
11 OF FULFILLMENT AND THAT THE TERMINATION, PARTIAL TERMINATION, OR
12 ALLOWANCE MORE NEARLY APPROXIMATES THE INTENTION OF THE
13 CONVEYOR, AND NOTICE IS GIVEN TO ALL PARTIES IN INTEREST OR TO
14 THEIR DULY APPOINTED FIDUCIARIES.
15 (B) DISTRIBUTION OF TERMINATED TRUST.--WHENEVER THE COURT
16 SHALL DECREE TERMINATION OR PARTIAL TERMINATION OF A TRUST UNDER
17 THE PROVISIONS OF THIS SECTION, IT SHALL THEREUPON ORDER SUCH
18 DISTRIBUTION OF THE PRINCIPAL AND UNDISTRIBUTED INCOME AS IT
19 DEEMS PROPER AND AS NEARLY AS POSSIBLE IN CONFORMITY WITH THE
20 CONVEYOR'S INTENTION.
21 (C) OTHER POWERS.--NOTHING IN THIS SECTION SHALL LIMIT ANY
22 POWER OF THE COURT TO TERMINATE OR REFORM A TRUST UNDER EXISTING
23 LAW.]
24 § 6104. RULE AGAINST PERPETUITIES.
25 * * *
26 (D) APPLICABILITY.--THE PROVISIONS OF THIS SECTION AND OF
27 SECTION 6105 (RELATING TO RULE AGAINST PERPETUITIES; DISPOSITION
28 WHEN INVALIDITY OCCURS) SHALL APPLY TO ALL INTERESTS [HERETOFORE
29 OR HEREAFTER] CREATED BEFORE JANUARY 1, 2007.
30 § 6106. INCOME ACCUMULATIONS; WHEN VALID.
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1 (A) GENERAL.--[NO] EXCEPT AS SET FORTH IN SECTION 6107.1
2 (RELATING TO APPLICABILITY OF RULE AGAINST PERPETUITIES), NO
3 DIRECTION OR AUTHORIZATION TO ACCUMULATED INCOME SHALL BE VOID,
4 EXCEPT AS HEREIN PROVIDED.
5 (B) VOID ACCUMULATIONS; EXCEPTIONS.--[UPON] EXCEPT AS SET
6 FORTH IN SECTION 6107.1, UPON THE EXPIRATION OF THE PERIOD
7 ALLOWED BY THE COMMON LAW RULE AGAINST PERPETUITIES AS MEASURED
8 BY ACTUAL RATHER THAN POSSIBLE EVENTS, ANY DIRECTION OR
9 AUTHORIZATION TO ACCUMULATE INCOME SHALL BE VOID. THIS
10 SUBSECTION SHALL NOT APPLY TO:
11 (1) DIRECTIONS OR AUTHORIZATIONS TO ACCUMULATE INCOME IN
12 A TRUST FOR ANY CHARITABLE PURPOSE OR PURPOSES.
13 (2) DIRECTIONS OR AUTHORIZATIONS TO ACCUMULATE INCOME IN
14 A BONA FIDE TRUST INTER VIVOS PRIMARILY FOR THE BENEFIT OF
15 BUSINESS EMPLOYEES, THEIR FAMILIES OR APPOINTEES, UNDER A
16 STOCK BONUS, PENSION, DISABILITY OR DEATH BENEFIT, PROFIT-
17 SHARING OR OTHER EMPLOYEE-BENEFIT PLAN.
18 (C) TIME FOR BEGINNING PERIOD.--[THE] EXCEPT AS SET FORTH IN
19 SECTION 6107.1, THE PERIOD ALLOWED BY THE COMMON LAW RULE
20 AGAINST PERPETUITIES UNDER SUBSECTION (B) OF THIS SECTION SHALL
21 BE MEASURED FROM THE EXPIRATION OF ANY TIME DURING WHICH ONE
22 PERSON WHILE LIVING HAS THE UNRESTRICTED POWER TO TRANSFER TO
23 HIMSELF THE ENTIRE LEGAL AND BENEFICIAL INTEREST IN THE
24 PROPERTY.
25 § 6107. INCOME ACCUMULATIONS; DISPOSITION WHEN INVALIDITY
26 OCCURS.
27 [INCOME] EXCEPT AS SET FORTH IN SECTION 6107.1 (RELATING TO
28 APPLICABILITY OF RULE AGAINST PERPETUITIES), INCOME SUBJECT TO A
29 VOID DIRECTION OR AUTHORIZATION TO ACCUMULATE SHALL BE
30 DISTRIBUTED TO THE PERSON OR PROPORTIONATELY TO THE PERSONS IN
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1 WHOM THE RIGHT TO SUCH INCOME HAS VESTED BY THE TERMS OF THE
2 INSTRUMENT OR BY OPERATION OF LAW.
3 SECTION 3.1. TITLE 20 IS AMENDED BY ADDING A SECTION TO
4 READ:
5 § 6107.1. APPLICABILITY OF RULE AGAINST PERPETUITIES.
6 (A) TRADITIONAL RULE.--SECTIONS 6104 (RELATING TO RULE
7 AGAINST PERPETUITIES), 6105 (RELATING TO RULE AGAINST
8 PERPETUITIES; DISPOSITION WHEN INVALIDITY OCCURS), 6106
9 (RELATING TO INCOME ACCUMULATIONS; WHEN VALID) AND 6107
10 (RELATING TO INCOME ACCUMULATIONS; DISPOSITION WHEN INVALIDITY
11 OCCURS):
12 (1) SHALL APPLY TO EVERY INTEREST CREATED BEFORE JANUARY
13 1, 2007; BUT
14 (2) SHALL NOT APPLY TO ANY INTEREST CREATED AFTER
15 DECEMBER 31, 2006.
16 (B) MODERN RULE.--ALL OF THE FOLLOWING APPLY TO EVERY
17 INTEREST CREATED AFTER DECEMBER 31, 2006:
18 (1) NO INTEREST SHALL BE VOID AS A PERPETUITY.
19 (2) NO DIRECTION OR AUTHORIZATION TO ACCUMULATED INCOME
20 SHALL BE VOID AS A PERPETUITY.
21 SECTION 3.2. SECTIONS 6110, 6112 AND 6114 OF TITLE 20 ARE
22 AMENDED TO READ:
23 [§ 6110. ADMINISTRATION OF CHARITABLE INTERESTS.
24 (A) GENERAL RULE.--EXCEPT AS OTHERWISE PROVIDED BY THE
25 CONVEYOR, IF THE CHARITABLE PURPOSE FOR WHICH AN INTEREST SHALL
26 BE CONVEYED OUTRIGHT OR IN A TESTAMENTARY OR INTER VIVOS TRUST
27 SHALL BE OR BECOME INDEFINITE OR IMPOSSIBLE OR IMPRACTICAL OF
28 FULFILLMENT, OR IF IT SHALL NOT HAVE BEEN CARRIED OUT FOR WANT
29 OF A TRUSTEE OR BECAUSE OF THE FAILURE OF A TRUSTEE TO DESIGNATE
30 SUCH PURPOSE, THE COURT MAY, ON APPLICATION OF THE TRUSTEE OR OF
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1 ANY INTERESTED PERSON OR OF THE ATTORNEY GENERAL, AFTER PROOF OF
2 NOTICE TO THE ATTORNEY GENERAL WHEN HE IS NOT THE PETITIONER,
3 ORDER AN ADMINISTRATION OR DISTRIBUTION OF THE INTEREST FOR A
4 CHARITABLE PURPOSE IN A MANNER AS NEARLY AS POSSIBLE TO FULFILL
5 THE INTENTION OF THE CONVEYOR, WHETHER HIS CHARITABLE INTENT BE
6 GENERAL OR SPECIFIC.
7 (B) ADMINISTRATIVE TERMINATION OF SMALL CHARITABLE TRUSTS.--
8 A TRUST HELD SOLELY FOR CHARITABLE PURPOSES WITH ASSETS NOT
9 EXCEEDING $10,000, WHETHER HERETOFORE OR HEREAFTER CREATED, MAY
10 BE TERMINATED BY THE TRUSTEE AT ITS INCEPTION OR AT ANY TIME
11 THEREAFTER WITH THE CONSENT OF THE ATTORNEY GENERAL AND ALL
12 CHARITABLE ORGANIZATIONS WHICH ARE DESIGNATED BY NAME IN THE
13 CONVEYANCE AS BENEFICIARIES. UPON SUCH TERMINATION THE ASSETS,
14 SUBJECT TO THE APPROVAL OF THE ATTORNEY GENERAL, SHALL BE
15 DELIVERED TO THE ORGANIZATIONS, IF ANY, DESIGNATED IN THE TRUST
16 INSTRUMENT OR, IF NONE, TO ORGANIZATIONS SELECTED BY THE
17 TRUSTEE, IN EITHER CASE TO BE HELD AND APPLIED FOR SUCH GENERAL
18 OR SPECIFIC CHARITABLE PURPOSES AND ON SUCH TERMS AS WILL, IN
19 THE TRUSTEE'S DISCRETION, FULFILL AS NEARLY AS POSSIBLE THE
20 CONVEYOR'S INTENTION.
21 (C) JUDICIAL TERMINATION OF CHARITABLE TRUSTS.--IF THE
22 SEPARATE EXISTENCE OF A TRUST SOLELY FOR CHARITABLE PURPOSES,
23 WHETHER HERETOFORE OR HEREAFTER CREATED, RESULTS OR WILL RESULT
24 IN ADMINISTRATIVE EXPENSE OR OTHER BURDENS UNREASONABLY OUT OF
25 PROPORTION TO THE CHARITABLE BENEFITS, THE COURT MAY, UPON
26 APPLICATION OF THE TRUSTEE OR ANY INTERESTED PERSON AND AFTER
27 NOTICE TO THE ATTORNEY GENERAL, TERMINATE THE TRUST, EITHER AT
28 ITS INCEPTION OR AT ANY TIME THEREAFTER, AND AWARD THE ASSETS
29 OUTRIGHT, FREE OF THE TRUST, TO THE CHARITABLE ORGANIZATIONS, IF
30 ANY, DESIGNATED IN THE CONVEYANCE OR, IF NONE, TO CHARITABLE
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1 ORGANIZATIONS SELECTED BY THE COURT, IN EITHER CASE FOR SUCH
2 PURPOSES AND ON SUCH TERMS AS THE COURT MAY DIRECT TO FULFILL AS
3 NEARLY AS POSSIBLE THE CONVEYOR'S INTENTIONS OTHER THAN ANY
4 INTENT TO CONTINUE THE TRUST, IF THE COURT IS SATISFIED THAT THE
5 CHARITABLE ORGANIZATIONS WILL PROPERLY USE OR ADMINISTER THE
6 ASSETS.
7 § 6112. SPENDTHRIFT TRUSTS.
8 INCOME OF A TRUST SUBJECT TO SPENDTHRIFT OR SIMILAR
9 PROVISIONS SHALL NEVERTHELESS BE LIABLE FOR THE SUPPORT OF
10 ANYONE WHOM THE INCOME BENEFICIARY SHALL BE UNDER A LEGAL DUTY
11 TO SUPPORT.]
12 § 6114. Rules of interpretation.
13 [In] (a) General rule.--Except as provided in subsection
14 (b), in the absence of a contrary intent appearing therein,
15 conveyances shall be construed, as to real and personal estate,
16 in accordance with the following rules:
17 (1) Meaning of "heirs" and "next of kin," etc.; time of
18 ascertaining class.--A conveyance of real or personal
19 property, whether directly or in trust, to the conveyor's or
20 another designated person's "heirs" or "next of kin" or
21 "relatives" or "family" or to "the persons thereunto entitled
22 under the intestate laws," or to persons described by words
23 of similar import, shall mean those persons, including the
24 spouse, who would take under the intestate laws if such
25 conveyor or other designated person were to die intestate at
26 the time when such class is to be ascertained, a resident of
27 the Commonwealth, and owning the property so conveyed:
28 Provided, That the share of a spouse other than the spouse of
29 the conveyor, shall not include the allowance under the
30 intestate laws. The time when such class is to be ascertained
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1 shall be when the conveyance to the class is to take effect
2 in enjoyment.
3 (2) Time for ascertaining class.--In construing a
4 conveyance to a class other than a class described in
5 paragraph (1) of this section, the class shall be ascertained
6 at the time the conveyance is to take effect in enjoyment,
7 except that the issue then living of any member of the class
8 who is then dead shall take per stirpes the share which their
9 deceased ancestor would have taken if he had then been
10 living.
11 (3) Meaning of "die without issue" and similar
12 phrases.--In any conveyance of real or personal estate, the
13 words "die without issue," "die without leaving issue," "have
14 no issue," or other words importing either a want or failure
15 of issue of any person in his lifetime or at the time of his
16 death, or an indefinite failure of his issue, shall be
17 construed to mean a want or failure of issue in his lifetime
18 or at his death, and not an indefinite failure of his issue.
19 (4) Adopted children.--In construing a conveyance to a
20 person or persons described by relationship to the conveyor
21 or to another, any adopted person shall be considered the
22 child of his adopting parent or parents, except that, in
23 construing the conveyance of a conveyor who is not the
24 adopting parent, an adopted person shall not be considered
25 the child of his adopting parent or parents unless the
26 adoption occurred during the adopted person's minority or
27 reflected an earlier parent-child relationship that existed
28 during the child's minority. An adopted person who is
29 considered the child of his adopting parent or parents under
30 this paragraph shall not be considered as continuing to be
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1 the child of his natural parents except in construing the
2 conveyance of a natural kin, other than the natural parent,
3 who has maintained a family relationship with the adopted
4 person. If a natural parent shall have married the adopting
5 parent, the adopted person shall also be considered the child
6 of such natural parent.
7 (5) Persons born out of wedlock.--In construing a
8 conveyance to a person or persons described by relationship
9 to the conveyor or to another, a person born out of wedlock
10 shall be considered the child of the natural mother and also
11 of the natural father if the paternity of the natural father
12 has been determined according to the provisions of section
13 2107 (relating to persons born out of wedlock).
14 (6) Inheritance tax.--The inheritance tax imposed by the
15 Inheritance and Estate Tax Act of 1961 upon the conveyance of
16 any estate, income or interest, for a term of years, for
17 life, or for other limited period, shall be paid out of the
18 principal of the property by which the estate, income or
19 interest is supported.
20 (7) Employee benefits.--Benefits received by a trust
21 under a Federally qualified profit sharing, pension or stock
22 bonus plan shall not be available for the payment of
23 obligations of the decedent or of his estate.
24 (8) Corporate fiduciaries.--Provisions authorizing or
25 restricting investment in the securities or common trust
26 funds of a corporate fiduciary or the exercise of voting
27 rights in its securities shall also apply to the securities
28 or common trust funds of any corporation which is an
29 affiliate of the corporate fiduciary within the meaning of
30 section 1504 of the Internal Revenue Code of 1986 (Public Law
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1 99-514, 26 U.S.C. § 1504).
2 (b) Exception.--This section does not apply to trusts under
3 Chapter 77 (relating to trusts).
4 Section 9. Chapter 71 of Title 20 is repealed. <--
5 SECTION 4. CHAPTER 71 HEADING, SUBCHAPTER A HEADING, <--
6 SECTIONS 7101, 7103, 7104 AND 7105, SUBCHAPTER B HEADING,
7 SECTIONS 7111 AND 7112, SUBCHAPTER C HEADING, SECTION 7121,
8 SUBCHAPTER D HEADING, SECTIONS 7131, 7132, 7133, 7134, 7135 AND
9 7136, SUBCHAPTER E HEADING, SECTIONS 7141, 7142, 7143, 7144 AND
10 7145, SUBCHAPTER F HEADING, SECTIONS 7181, 7182, 7183, 7184,
11 7185, 7186, 7187 AND 7188, SUBCHAPTER G HEADING, SECTIONS 7191
12 AND 7192 OF TITLE 20 ARE AMENDED TO READ:
13 [CHAPTER 71
14 TRUST ESTATES
15 * * *
16 SUBCHAPTER A
17 APPOINTMENT OF TRUSTEES
18 * * *
19 § 7101. TO FILL VACANCY.
20 THE COURT, AFTER SUCH NOTICE TO PARTIES IN INTEREST AS IT
21 SHALL DIRECT, MAY APPOINT A TRUSTEE TO FILL A VACANCY IN THE
22 OFFICE OF TRUSTEE, SUBJECT TO THE PROVISIONS, IF ANY, OF THE
23 TRUST INSTRUMENT.
24 § 7103. RESIDENT CO-TRUSTEE.
25 WHEN NO TRUSTEE SHALL BE A RESIDENT OF THE COMMONWEALTH, THE
26 COURT, AFTER SUCH NOTICE AS IT SHALL DIRECT, MAY APPOINT ONE OR
27 MORE ADDITIONAL TRUSTEES RESIDENT WITHIN THE COMMONWEALTH TO
28 SERVE WITH THE NONRESIDENT TRUSTEE OR TRUSTEES.
29 § 7104. POWER OF TRUSTEE TO RESIGN.
30 (A) COURT APPROVAL.--ANY TRUSTEE MAY RESIGN WITH COURT
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1 APPROVAL.
2 (B) WITHOUT COURT APPROVAL IF AUTHORIZED BY GOVERNING
3 INSTRUMENT.--ANY TRUSTEE MAY RESIGN WITHOUT COURT APPROVAL IF
4 AUTHORIZED TO RESIGN BY THE GOVERNING INSTRUMENT.
5 (C) WHEN INDIVIDUAL TRUSTEE MAY RESIGN WITHOUT COURT
6 APPROVAL AND WITHOUT AUTHORIZATION IN GOVERNING INSTRUMENT.--
7 UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN THE GOVERNING
8 INSTRUMENT, AN INDIVIDUAL TRUSTEE MAY RESIGN WITHOUT COURT
9 APPROVAL AND WITHOUT AUTHORIZATION IN THE GOVERNING INSTRUMENT
10 IF:
11 (1) CONSENTED TO IN WRITING BY ALL CO-TRUSTEES, IF THERE
12 ARE ONE OR MORE CO-TRUSTEES; AND
13 (2) CONSENTED TO IN WRITING BY ALL THE SUI JURIS
14 BENEFICIARIES CURRENTLY ELIGIBLE TO RECEIVE INCOME AND BY ALL
15 THE SUI JURIS BENEFICIARIES WHO WOULD RECEIVE, IF NO POWERS
16 OF APPOINTMENT WERE EXERCISED, A DISTRIBUTION OF PRINCIPAL IF
17 THE TRUST WERE TO TERMINATE IMMEDIATELY PRIOR TO THE
18 RESIGNATION, PROVIDED THAT NO SUCH RESIGNATION SHALL BE
19 EFFECTIVE UNLESS THERE IS AT LEAST ONE SUCH INCOME
20 BENEFICIARY AND AT LEAST ONE SUCH REMAINDERMAN.
21 THIS SUBSECTION SHALL NOT AUTHORIZE THE SOLE TRUSTEE OF A TRUST
22 TO RESIGN UNLESS THE GOVERNING INSTRUMENT NAMES A SUCCESSOR
23 TRUSTEE OR PROVIDES A METHOD FOR APPOINTING A SUCCESSOR TRUSTEE,
24 AND IN EITHER CASE THE RESIGNATION SHALL NOT BE EFFECTIVE UNTIL
25 THE SUCCESSOR TRUSTEE ACCEPTS IN WRITING HIS APPOINTMENT.
26 (D) LIABILITY.--THE RESIGNATION OF A TRUSTEE SHALL NOT BY
27 ITSELF RELIEVE THE RESIGNING TRUSTEE OF LIABILITY IN CONNECTION
28 WITH THE ADMINISTRATION OF THE TRUST.
29 (E) DEFINITION.--AS USED IN THIS SECTION, THE TERM "SUI
30 JURIS BENEFICIARY" INCLUDES A GUARDIAN FOR AN INCAPACITATED
20050S0660B1423 - 17 -
1 BENEFICIARY, AN AGENT ACTING UNDER A DURABLE POWER OF ATTORNEY
2 FOR AN INCOMPETENT BENEFICIARY AND A COURT-APPOINTED GUARDIAN OF
3 A MINOR'S ESTATE OR, IF NONE, THE MINOR'S PARENTS.
4 § 7105. FILING RESIGNATIONS AND APPOINTMENTS.
5 A RESIGNATION OF A TRUSTEE, AN APPOINTMENT OF A TRUSTEE AND
6 AN ACCEPTANCE OF AN APPOINTMENT OF A TRUSTEE MAY BE FILED WITH
7 THE CLERK OF THE ORPHANS' COURT DIVISION HAVING JURISDICTION
8 OVER THE TRUST.
9 SUBCHAPTER B
10 BOND OF TRUSTEES
11 * * *
12 § 7111. NECESSITY, FORM AND AMOUNT.
13 (A) WHEN REQUIRED.--EXCEPT AS HEREINAFTER PROVIDED, THE
14 COURT, IN ITS DISCRETION, MAY REQUIRE ANY TRUSTEE, WHETHER OR
15 NOT A RESIDENT OF THE COMMONWEALTH, TO EXECUTE AND FILE A BOND
16 WHICH SHALL BE IN THE NAME OF THE COMMONWEALTH, WITH SUFFICIENT
17 SURETY, IN SUCH AMOUNT AS THE COURT CONSIDERS NECESSARY HAVING
18 REGARD TO THE VALUE OF THE PERSONAL ESTATE IN THE CONTROL OF THE
19 TRUSTEE.
20 (B) WHEN NOT REQUIRED.--
21 (1) WHEN NAMED IN OR PROVIDED FOR IN TRUST INSTRUMENT.--
22 NO BOND SHALL BE REQUIRED OF A TRUSTEE, WHETHER OR NOT A
23 RESIDENT OF THE COMMONWEALTH, WHO IS NAMED IN OR WHOSE
24 APPOINTMENT IS TO BE MADE IN A MANNER SPECIFIED BY THE TRUST
25 INSTRUMENT, UNLESS SUCH INSTRUMENT REQUIRES A BOND OR THE
26 COURT, FOR CAUSE SHOWN, DEEMS IT ADVISABLE.
27 (2) CORPORATE TRUSTEE.--NO BOND SHALL BE REQUIRED OF A
28 BANK AND TRUST COMPANY OR TRUST COMPANY INCORPORATED IN THE
29 COMMONWEALTH, OR OF A NATIONAL BANK HAVING ITS PRINCIPAL
30 OFFICE IN THE COMMONWEALTH, UNLESS THE COURT, FOR CAUSE
20050S0660B1423 - 18 -
1 SHOWN, DEEMS IT ADVISABLE.
2 (C) CONDITION.--
3 (1) WHEN ONE TRUSTEE.--THE CONDITION OF THIS OBLIGATION
4 IS, THAT IF THE SAID TRUSTEE SHALL WELL AND TRULY ADMINISTER
5 THE TRUST ACCORDING TO LAW, THIS OBLIGATION SHALL BE VOID;
6 BUT OTHERWISE, IT SHALL REMAIN IN FORCE.
7 (2) WHEN TWO OR MORE TRUSTEES.--THE CONDITION OF THIS
8 OBLIGATION IS, THAT IF THE SAID TRUSTEES OR ANY OF THEM SHALL
9 WELL AND TRULY ADMINISTER THE TRUST ACCORDING TO LAW, THIS
10 OBLIGATION SHALL BE VOID AS TO THE TRUSTEE OR TRUSTEES WHO
11 SHALL SO ADMINISTER THE TRUST; BUT OTHERWISE, IT SHALL REMAIN
12 IN FORCE.
13 § 7112. REQUIRING OR CHANGING AMOUNT OF BOND.
14 THE COURT, FOR CAUSE SHOWN, AND AFTER SUCH NOTICE, IF ANY, AS
15 IT SHALL DIRECT, MAY REQUIRE A SURETY BOND, OR INCREASE OR
16 DECREASE THE AMOUNT OF THE EXISTING BOND, OR REQUIRE MORE OR
17 LESS SECURITY THEREFOR.
18 SUBCHAPTER C
19 REMOVAL AND DISCHARGE
20 * * *
21 § 7121. GROUNDS AND PROCEDURE.
22 THE GROUNDS AND THE PROCEDURE FOR THE REMOVAL OR DISCHARGE OF
23 A TRUSTEE AND HIS SURETY AND THE EFFECT OF SUCH REMOVAL OR
24 DISCHARGE SHALL BE THE SAME AS ARE SET FORTH IN THE FOLLOWING
25 PROVISIONS OF THIS TITLE RELATING TO THE REMOVAL AND DISCHARGE
26 OF A PERSONAL REPRESENTATIVE AND HIS SURETY:
27 SECTION 3182 (RELATING TO GROUNDS FOR REMOVAL).
28 SECTION 3183 (RELATING TO PROCEDURE FOR AND EFFECT OF
29 REMOVAL).
30 SECTION 3184 (RELATING TO DISCHARGE OF PERSONAL
20050S0660B1423 - 19 -
1 REPRESENTATIVE AND SURETY).
2 SUBCHAPTER D
3 POWERS, DUTIES AND LIABILITIES
4 * * *
5 § 7131. POSSESSION OF REAL AND PERSONAL PROPERTY.
6 EXCEPT AS OTHERWISE PROVIDED IN THE TRUST INSTRUMENT, THE
7 TRUSTEE, UNTIL IT IS DISTRIBUTED OR SOLD, SHALL HAVE THE RIGHT
8 TO AND SHALL TAKE POSSESSION OF, MAINTAIN AND ADMINISTER EACH
9 REAL AND PERSONAL ASSET OF THE TRUST, COLLECT THE RENTS AND
10 INCOME FROM IT, AND MAKE ALL REASONABLE EXPENDITURES NECESSARY
11 TO PRESERVE IT. HE SHALL ALSO HAVE THE RIGHT TO MAINTAIN ANY
12 ACTION WITH RESPECT TO REAL OR PERSONAL PROPERTY OF THE TRUST.
13 § 7132. ABANDONMENT OF PROPERTY.
14 WHEN ANY PROPERTY IS SO BURDENSOME OR IS SO ENCUMBERED OR IS
15 IN SUCH CONDITION THAT IT IS OF NO VALUE TO THE TRUST, THE
16 TRUSTEE MAY ABANDON IT. WHEN SUCH PROPERTY CANNOT BE ABANDONED
17 WITHOUT TRANSFER OF TITLE TO ANOTHER OR WITHOUT A FORMAL
18 RENUNCIATION, THE COURT MAY AUTHORIZE THE TRUSTEE TO TRANSFER OR
19 RENOUNCE IT WITHOUT CONSIDERATION IF IT SHALL FIND THAT THIS
20 WILL BE FOR THE BEST INTERESTS OF THE TRUST.
21 § 7133. POWERS, DUTIES AND LIABILITIES IDENTICAL WITH PERSONAL
22 REPRESENTATIVES.
23 THE PROVISIONS CONCERNING THE POWERS, DUTIES AND LIABILITIES
24 OF A TRUSTEE SHALL BE THE SAME AS THOSE SET FORTH IN THE
25 FOLLOWING PROVISIONS OF THIS TITLE FOR THE ADMINISTRATION OF A
26 DECEDENT'S OR A MINOR'S ESTATE:
27 SECTION 3313 (RELATING TO LIABILITY INSURANCE).
28 SECTION 3314 (RELATING TO CONTINUATION OF BUSINESS).
29 SECTION 3315 (RELATING TO INCORPORATION OF ESTATE'S
30 BUSINESS).
20050S0660B1423 - 20 -
1 SECTION 3317 (RELATING TO CLAIMS AGAINST CO-FIDUCIARY).
2 SECTION 3318 (RELATING TO REVIVAL OF JUDGMENTS AGAINST
3 PERSONAL REPRESENTATIVE).
4 SECTION 3319 (RELATING TO POWER OF ATTORNEY; DELEGATION
5 OF POWER OVER SUBSCRIPTION RIGHTS AND FRACTIONAL SHARES;
6 AUTHORIZED DELEGATIONS).
7 SECTION 3320 (RELATING TO VOTING STOCK BY PROXY).
8 SECTION 3321 (RELATING TO NOMINEE REGISTRATION; CORPORATE
9 FIDUCIARY AS AGENT; DEPOSIT OF SECURITIES IN A CLEARING
10 CORPORATION; BOOK-ENTRY SECURITIES).
11 SECTION 3322 (RELATING TO ACCEPTANCE OF DEED IN LIEU OF
12 FORECLOSURE).
13 SECTION 3323 (RELATING TO COMPROMISE OF CONTROVERSIES).
14 SECTION 3324 (RELATING TO DEATH OR INCAPACITY OF
15 FIDUCIARY).
16 SECTION 3327 (RELATING TO SURVIVING OR REMAINING PERSONAL
17 REPRESENTATIVES).
18 SECTION 3328 (RELATING TO DISAGREEMENT OF PERSONAL
19 REPRESENTATIVES).
20 SECTION 3331 (RELATING TO LIABILITY OF PERSONAL
21 REPRESENTATIVE ON CONTRACTS).
22 SECTION 3332 (RELATING TO INHERENT POWERS AND DUTIES).
23 SECTION 3353 (RELATING TO ORDER OF COURT).
24 SECTION 3354 (RELATING TO POWER GIVEN IN GOVERNING
25 INSTRUMENT).
26 SECTION 3355 (RELATING TO RESTRAINT OF SALE).
27 SECTION 3356 (RELATING TO PURCHASE BY PERSONAL
28 REPRESENTATIVE).
29 SECTION 3358 (RELATING TO COLLATERAL ATTACK).
30 SECTION 3359 (RELATING TO RECORD OF PROCEEDINGS; COUNTY
20050S0660B1423 - 21 -
1 WHERE REAL ESTATE LIES).
2 SECTION 3360 (RELATING TO CONTRACTS, INADEQUACY OF
3 CONSIDERATION OR BETTER OFFER; BROKERS' COMMISSIONS).
4 SECTION 5147 (RELATING TO PROCEEDINGS AGAINST GUARDIAN).
5 § 7134. INVESTMENTS.
6 SUBJECT ONLY TO THE PROVISIONS OF A GOVERNING INSTRUMENT, IF
7 ANY, A TRUSTEE MAY ACCEPT, HOLD, INVEST IN AND RETAIN
8 INVESTMENTS AS PROVIDED BY CHAPTER 72 (RELATING TO PRUDENT
9 INVESTOR RULE).
10 § 7135. SUBSTITUTED OR SUCCEEDING TRUSTEE.
11 A SUBSTITUTED OR SUCCEEDING TRUSTEE, EXCEPT AS OTHERWISE
12 PROVIDED BY THE TRUST INSTRUMENT, SHALL HAVE ALL THE POWERS,
13 DUTIES AND LIABILITIES OF THE ORIGINAL TRUSTEE. HE SHALL HAVE
14 THE POWER TO RECOVER THE ASSETS OF THE TRUST FROM HIS
15 PREDECESSOR IN ADMINISTRATION OR FROM THE FIDUCIARY OF SUCH
16 PREDECESSOR AND, EXCEPT AS OTHERWISE PROVIDED BY THE GOVERNING
17 INSTRUMENT, SHALL STAND IN THE PREDECESSOR'S STEAD FOR ALL
18 PURPOSES, EXCEPT THAT HE SHALL NOT BE PERSONALLY LIABLE FOR THE
19 ACTS OF HIS PREDECESSOR.
20 § 7136. EFFECT OF REMOVAL, OR OF PROBATE OF LATER WILL OR
21 CODICIL.
22 NO ACT OF ADMINISTRATION PERFORMED BY A TESTAMENTARY TRUSTEE
23 IN GOOD FAITH SHALL BE IMPEACHED BY THE SUBSEQUENT REVOCATION OF
24 THE PROBATE OF THE WILL FROM WHICH HE DERIVES HIS AUTHORITY, OR
25 BY THE SUBSEQUENT PROBATE OF A LATER WILL OR OF A CODICIL, OR BY
26 THE SUBSEQUENT DISMISSAL OF THE TRUSTEE: PROVIDED, THAT
27 REGARDLESS OF THE GOOD OR BAD FAITH OF THE TESTAMENTARY TRUSTEE,
28 NO PERSON WHO DEALS IN GOOD FAITH WITH A TESTAMENTARY TRUSTEE
29 SHALL BE PREJUDICED BY THE SUBSEQUENT OCCURRENCE OF ANY OF THESE
30 CONTINGENCIES.
20050S0660B1423 - 22 -
1 SUBCHAPTER E
2 SALES, PLEDGES, MORTGAGES, LEASES, OPTIONS
3 AND EXCHANGES
4 * * *
5 § 7141. POWER TO SELL.
6 EXCEPT AS OTHERWISE PROVIDED BY THE TRUST INSTRUMENT, THE
7 TRUSTEE, FOR ANY PURPOSE OF ADMINISTRATION OR DISTRIBUTION, MAY
8 SELL, AT PUBLIC OR PRIVATE SALE, ANY REAL OR PERSONAL PROPERTY
9 OF THE TRUST. WHEN THE TRUSTEE HAS BEEN REQUIRED TO GIVE BOND,
10 NO PROCEEDS OF REAL ESTATE SHALL BE PAID TO HIM UNTIL THE COURT
11 HAS MADE AN ORDER EXCUSING HIM FROM ENTERING ADDITIONAL SECURITY
12 OR REQUIRING ADDITIONAL SECURITY, AND IN THE LATTER EVENT, ONLY
13 AFTER HE HAS ENTERED THE ADDITIONAL SECURITY.
14 § 7142. POWER TO LEASE.
15 EXCEPT AS OTHERWISE PROVIDED BY THE TRUST INSTRUMENT, THE
16 TRUSTEE MAY LEASE ANY REAL OR PERSONAL PROPERTY OF THE TRUST FOR
17 A TERM NOT EXCEEDING FIVE YEARS AFTER ITS EXECUTION, UNLESS A
18 LONGER TERM IS APPROVED BY THE COURT.
19 § 7143. TITLE OF PURCHASER.
20 IF THE TRUSTEE HAS GIVEN SUCH BOND, IF ANY, AS SHALL BE
21 REQUIRED IN ACCORDANCE WITH THIS TITLE, ANY SALE, PLEDGE,
22 MORTGAGE, OR EXCHANGE BY A TRUSTEE, WHETHER PURSUANT TO A DECREE
23 OR TO THE EXERCISE OF A POWER CONFERRED BY THE TRUST INSTRUMENT
24 OR OF A POWER UNDER THIS TITLE, SHALL PASS THE FULL TITLE OF THE
25 TRUST THEREIN, UNLESS OTHERWISE SPECIFIED. PERSONS DEALING WITH
26 THE TRUSTEE SHALL HAVE NO OBLIGATION TO SEE TO THE PROPER
27 APPLICATION OF THE CASH OR OTHER ASSETS GIVEN IN EXCHANGE FOR
28 THE PROPERTY OF THE TRUST. ANY SALE OR EXCHANGE BY A TRUSTEE
29 PURSUANT TO A DECREE UNDER SECTION 3353 (RELATING TO ORDER OF
30 COURT) SHALL HAVE THE EFFECT OF A JUDICIAL SALE AS TO THE
20050S0660B1423 - 23 -
1 DISCHARGE OF LIENS, BUT THE COURT MAY DECREE A SALE OR EXCHANGE
2 FREED AND DISCHARGED FROM THE LIEN OF ANY MORTGAGE OTHERWISE
3 PRESERVED FROM DISCHARGE BY EXISTING LAW, IF THE HOLDER OF SUCH
4 MORTGAGE SHALL CONSENT BY WRITING FILED IN THE PROCEEDING. NO
5 SUCH SALE, MORTGAGE, EXCHANGE, OR CONVEYANCE SHALL BE PREJUDICED
6 BY THE SUBSEQUENT DISMISSAL OF THE TRUSTEE NOR SHALL ANY SUCH
7 SALE, MORTGAGE, EXCHANGE, OR CONVEYANCE BY A TESTAMENTARY
8 TRUSTEE BE PREJUDICED BY THE TERMS OF ANY WILL OR CODICIL
9 THEREAFTER PROBATED, IF THE PERSON DEALING WITH THE TRUSTEE DID
10 SO IN GOOD FAITH.
11 § 7144. REPORTS FOR SCHOOL DISTRICT TRUSTEES.
12 (A) SCOPE.--THIS SECTION APPLIES IF A SCHOOL DISTRICT IS A
13 TRUSTEE OF LAND IN ACCORDANCE WITH ALL OF THE FOLLOWING:
14 (1) THE LAND IS HELD FOR THE BENEFIT OF THE PUBLIC.
15 (2) THE LAND IS NOT USED DIRECTLY FOR SCHOOL PURPOSES.
16 (B) REQUIREMENT.--
17 (1) BY JANUARY 30, THE SCHOOL DISTRICT SHALL PREPARE A
18 REPORT FOR THE PRIOR YEAR CONCERNING THE TRUST.
19 (2) THE REPORT SHALL DETAIL ALL OF THE FOLLOWING:
20 (I) REVENUES GENERATED.
21 (II) EXPENSES INCURRED.
22 (III) BALANCE OF FUNDS HELD BY THE SCHOOL DISTRICT
23 AS TRUSTEE.
24 (IV) A STATEMENT REGARDING THE ACTIVITIES TAKEN BY
25 THE TRUSTEE DURING THE PRIOR YEAR TO ADVANCE THE PURPOSES
26 OF THE TRUST.
27 (3) THE REPORT MUST BE CERTIFIED AS CORRECT BY THE
28 DISTRICT SUPERINTENDENT.
29 (4) THE REPORT SHALL BE MADE PUBLIC AS FOLLOWS:
30 (I) THE REPORT SHALL BE PUBLISHED IN 14-POINT TYPE
20050S0660B1423 - 24 -
1 IN A NEWSPAPER OF GENERAL CIRCULATION IN EACH COUNTY IN
2 WHICH THE LAND IS LOCATED.
3 (II) THE REPORT SHALL BE AVAILABLE DURING BUSINESS
4 HOURS FOR INSPECTION AND COPYING AT THE OFFICE OF THE
5 DISTRICT SUPERINTENDENT. A REASONABLE FEE MAY BE CHARGED
6 FOR COPYING.
7 § 7145. JURISDICTION.
8 NOTWITHSTANDING 42 PA.C.S. § 931 (RELATING TO ORIGINAL
9 JURISDICTION AND VENUE), JURISDICTION OVER AN ACTION INVOLVING
10 LAND REFERRED TO IN SECTION 7144 (RELATING TO REPORTS FOR SCHOOL
11 DISTRICT TRUSTEES) SHALL BE VESTED IN THE COURT OF COMMON PLEAS
12 IN THE JUDICIAL DISTRICT WHERE:
13 (1) ALL OF THE LAND IS LOCATED; OR
14 (2) MORE THAN 50% OF THE LAND IS LOCATED.
15 SUBCHAPTER F
16 ACCOUNTS, AUDITS, REVIEWS AND DISTRIBUTION
17 * * *
18 § 7181. WHEN ACCOUNT FILED.
19 A TRUSTEE SHALL FILE AN ACCOUNT OF HIS ADMINISTRATION
20 WHENEVER DIRECTED TO DO SO BY THE COURT AND MAY FILE AN ACCOUNT
21 AT ANY OTHER TIME.
22 § 7182. WHERE ACCOUNTS FILED.
23 ALL ACCOUNTS OF TRUSTEES SHALL BE FILED IN THE OFFICE OF THE
24 CLERK.
25 § 7183. NOTICE, AUDITS, REVIEWS, AND DISTRIBUTION.
26 THE PROVISIONS CONCERNING ACCOUNTS, AUDITS, REVIEWS,
27 DISTRIBUTIONS AND RIGHTS OF DISTRIBUTEES IN TRUST ESTATES SHALL
28 BE THE SAME AS THOSE SET FORTH IN THE FOLLOWING PROVISIONS OF
29 THIS TITLE FOR THE ADMINISTRATION OF A DECEDENT'S ESTATE:
30 SECTION 3503 (RELATING TO NOTICE TO PARTIES IN INTEREST).
20050S0660B1423 - 25 -
1 SECTION 3504 (RELATING TO REPRESENTATION OF PARTIES IN
2 INTEREST).
3 SECTION 3511 (RELATING TO AUDITS IN COUNTIES HAVING
4 SEPARATE ORPHANS' COURT DIVISION).
5 SECTION 3512 (RELATING TO AUDITS IN COUNTIES HAVING NO
6 SEPARATE ORPHANS' COURT DIVISION).
7 SECTION 3513 (RELATING TO STATEMENT OF PROPOSED
8 DISTRIBUTION).
9 SECTION 3514 (RELATING TO CONFIRMATION OF ACCOUNT AND
10 APPROVAL OF PROPOSED DISTRIBUTION).
11 SECTION 3521 (RELATING TO REHEARING; RELIEF GRANTED).
12 SECTION 3532(C) (RELATING TO AT RISK OF PERSONAL
13 REPRESENTATIVE).
14 SECTION 3533 (RELATING TO AWARD UPON FINAL CONFIRMATION
15 OF ACCOUNT).
16 SECTION 3534 (RELATING TO DISTRIBUTION IN KIND).
17 SECTION 3536 (RELATING TO RECORDING AND REGISTERING
18 DECREES AWARDING REAL ESTATE).
19 SECTION 3538 (RELATING TO DISTRIBUTIONS INVOLVING PERSONS
20 BORN OUT OF WEDLOCK).
21 SECTION 3539 (RELATING TO CHANGE IN LAW AFTER PATTERN OF
22 DISTRIBUTION ESTABLISHED).
23 SECTION 3540 (RELATING TO ABSENTEE AND ADDITIONAL
24 DISTRIBUTEES).
25 SECTION 3541 (RELATING TO ORDER OF ABATEMENT).
26 SECTION 3544 (RELATING TO LIABILITY OF PERSONAL
27 REPRESENTATIVE FOR INTEREST).
28 SECTION 3545 (RELATING TO TRANSCRIPTS OF BALANCES DUE BY
29 PERSONAL REPRESENTATIVE).
30 § 7184. DISPOSITION OF INCOME.
20050S0660B1423 - 26 -
1 EXCEPT AS OTHERWISE PROVIDED BY THE TRUST INSTRUMENT, THE
2 TRUSTEE WITH THE APPROVAL OF THE COURT, MAY PAY INCOME
3 DISTRIBUTABLE TO A MINOR OR INCOMPETENT BENEFICIARY FOR WHOSE
4 ESTATE NO GUARDIAN HAS BEEN APPOINTED DIRECTLY TO THE MINOR OR
5 INCOMPETENT, OR EXPEND AND APPLY IT FOR HIS MAINTENANCE OR
6 EDUCATION.
7 § 7185. COMPENSATION.
8 (A) WHEN ALLOWED.--THE COURT SHALL ALLOW SUCH COMPENSATION
9 TO THE TRUSTEE AS SHALL IN THE CIRCUMSTANCES BE REASONABLE AND
10 JUST, AND MAY TAKE INTO ACCOUNT THE MARKET VALUE OF THE TRUST AT
11 THE TIME OF THE ALLOWANCE, AND CALCULATE SUCH COMPENSATION ON A
12 GRADUATED PERCENTAGE.
13 (B) ALLOWED OUT OF PRINCIPAL OR INCOME.--THE FACT THAT A
14 FIDUCIARY'S SERVICE HAS NOT ENDED OR THE FACT THAT THE TRUST HAS
15 NOT ENDED OR THE FACT THAT THE TRUST IS PERPETUAL SHALL NOT BE A
16 BAR TO THE FIDUCIARY'S RECEIVING COMPENSATION FOR HIS SERVICES
17 OUT OF THE PRINCIPAL OF THE TRUST. WHENEVER IT SHALL APPEAR
18 EITHER DURING THE CONTINUANCE OF A TRUST OR AT ITS END, THAT A
19 FIDUCIARY HAS RENDERED SERVICES FOR WHICH HE HAS NOT BEEN FULLY
20 COMPENSATED, THE COURT HAVING JURISDICTION OVER HIS ACCOUNTS,
21 SHALL ALLOW HIM SUCH ORIGINAL OR ADDITIONAL COMPENSATION OUT OF
22 THE TRUST INCOME OR THE TRUST PRINCIPAL OR BOTH, AS MAY BE
23 NECESSARY TO COMPENSATE HIM FOR THE SERVICES THERETOFORE
24 RENDERED BY HIM. THE PROVISIONS OF THIS SECTION SHALL APPLY TO
25 ORDINARY AND EXTRAORDINARY SERVICES ALIKE.
26 (C) COMPENSATION PRESCRIBED BY WILL OR OTHER INSTRUMENT.--
27 WHERE THE COMPENSATION OF A FIDUCIARY IS EXPRESSLY PRESCRIBED
28 EITHER BY PROVISIONS OF A WILL OR DEED OF TRUST OR OTHER
29 INSTRUMENT UNDER WHICH HE IS ACTING OR BY PROVISIONS OF AN
30 AGREEMENT BETWEEN HIM AND THE CREATOR OF A TRUST, NOTHING IN
20050S0660B1423 - 27 -
1 THIS SECTION SHALL CHANGE IN ANY WAY THE RIGHTS OF ANY PARTY IN
2 INTEREST OR OF THE FIDUCIARY.
3 (D) CEMETERY LOTS.--THE PROVISIONS OF THIS SECTION SHALL NOT
4 APPLY TO TRUSTS CREATED BY CEMETERY LOT OWNERS AS ENDOWMENTS FOR
5 THE ENDOWED CARE AND MAINTENANCE OF BURIAL OR CEMETERY LOTS,
6 WHERE THE CORPUS OR PRINCIPAL SUM INVOLVED IS OR DOES NOT EXCEED
7 $5,000, IN ORDER THAT THE CORPUS OR PRINCIPAL SUM FOR SUCH
8 ENDOWMENTS SHOULD REMAIN UNDIMINISHED.
9 § 7186. FAILURE TO PRESENT CLAIM AT AUDIT.
10 (A) GENERAL RULE.--ANY PERSON WHO AT THE AUDIT OF A
11 TRUSTEE'S ACCOUNT HAS A CLAIM WHICH AROSE OUT OF THE
12 ADMINISTRATION OF TRUST PROPERTY, OR ARISES OUT OF THE
13 DISTRIBUTION OF SUCH PROPERTY UPON ANY INTERIM OR FINAL
14 ACCOUNTING OF THE TRUST, AND WHICH IS NOT REPORTED TO THE COURT
15 AS AN ADMITTED CLAIM, AND WHO SHALL FAIL TO PRESENT HIS CLAIM AT
16 THE CALL FOR AUDIT OR CONFIRMATION, SHALL BE FOREVER BARRED,
17 AGAINST:
18 (1) ANY TRUST PROPERTY DISTRIBUTED PURSUANT TO SUCH
19 AUDIT OR CONFIRMATION;
20 (2) ANY DISTRIBUTEE OF TRUST PROPERTY DISTRIBUTED
21 PURSUANT TO SUCH AUDIT OR CONFIRMATION; AND
22 (3) EXCEPT AS OTHERWISE PROVIDED IN SECTION 3521
23 (RELATING TO REHEARING; RELIEF GRANTED), ANY TRUST PROPERTY
24 AWARDED BACK UPON FURTHER TRUST PURSUANT TO SUCH AUDIT OR
25 CONFIRMATION.
26 (B) LIENS AND CHARGES UNIMPAIRED.--NOTHING IN THIS SECTION
27 SHALL BE CONSTRUED AS IMPAIRING ANY LIEN OR CHARGE ON REAL OR
28 PERSONAL ESTATE OF THE TRUST EXISTING AT THE TIME OF THE AUDIT.
29 § 7187. INTEREST OR INCOME ON DISTRIBUTIVE SHARES.
30 EXCEPT AS OTHERWISE PROVIDED BY THE TRUST INSTRUMENT OR BY
20050S0660B1423 - 28 -
1 THE PROVISIONS OF SECTION 3543 (RELATING TO INTEREST OR INCOME
2 ON DISTRIBUTIVE SHARES):
3 (1) PECUNIARY GIFT.--WHEN A SUM OF MONEY IS DIRECTED TO
4 BE SET ASIDE AT A SPECIFIED TIME AS A SEPARATE TRUST, IT
5 SHALL BEAR INTEREST AT THE RATE OF 5% PER ANNUM FROM THE DATE
6 IT WAS TO BE SET ASIDE UNTIL IT IS SET ASIDE. WHEN A SUM OF
7 MONEY IS DIRECTED TO BE PAID OUTRIGHT, IT SHALL BEAR INTEREST
8 AT THE RATE OF 5% PER ANNUM FROM THREE MONTHS AFTER IT BECAME
9 PAYABLE UNTIL IT IS PAID.
10 (2) SPECIFIC GIFT.--A DONEE OF A GIFT OF SPECIFIC REAL
11 OR PERSONAL PROPERTY DIRECTED TO BE DISTRIBUTED FROM A TRUST
12 SHALL BE ENTITLED TO THE NET INCOME FROM PROPERTY GIVEN TO
13 HIM ACCRUED FROM THE DATE IT BECAME DISTRIBUTABLE TO HIM.
14 (3) RESIDUARY GIFT.--ALL INCOME FROM REAL AND PERSONAL
15 PROPERTY EARNED DURING THE ADMINISTRATION OF A TRUST AND NOT
16 PAYABLE TO OTHERS SHALL BE DISTRIBUTED PRO RATA AMONG THE
17 INCOME BENEFICIARIES OF ANY CONTINUING TRUST OF A RESIDUARY
18 SHARE AND OTHER PERSONS ENTITLED TO RESIDUARY SHARES OF THE
19 TRUST.
20 § 7188. ANNEXATION OF ACCOUNT OF DISTRIBUTED ESTATE OR TRUST.
21 A TRUSTEE WHO HAS RECEIVED PROPERTY FROM A PERSONAL
22 REPRESENTATIVE OR FROM ANOTHER TRUSTEE IN DISTRIBUTION OF AN
23 ESTATE OR ANOTHER TRUST, MAY ANNEX A COPY OF AN ACCOUNT OF THE
24 ADMINISTRATION OF SUCH ESTATE OR OTHER TRUST TO AN ACCOUNT FILED
25 BY THE TRUSTEE COVERING THE ADMINISTRATION OF THE TRUST UNDER
26 HIS MANAGEMENT. IF NOTICE OF THE ANNEXATION OF THE ACCOUNT OF
27 THE ESTATE OR OTHER TRUST IS GIVEN TO THE PERSONS REQUIRED TO BE
28 NOTIFIED OF THE FILING OF THE TRUSTEE'S ACCOUNT OF THE PRINCIPAL
29 TRUST, CONFIRMATION OF THE PRINCIPAL ACCOUNT SHALL RELIEVE BOTH
30 THE TRUSTEE OF THE PRINCIPAL TRUST AND THE PERSONAL
20050S0660B1423 - 29 -
1 REPRESENTATIVE OR TRUSTEE OF THE DISTRIBUTED ESTATE OR OTHER
2 TRUST OF ALL LIABILITY TO BENEFICIARIES OF THE PRINCIPAL TRUST
3 FOR TRANSACTIONS SHOWN IN THE ACCOUNT SO ANNEXED TO THE SAME
4 EXTENT AS IF THE ANNEXED ACCOUNT HAD BEEN SEPARATELY FILED AND
5 CONFIRMED. WHEN THE FUND COVERED BY THE ANNEXED ACCOUNT HAS
6 ITSELF RECEIVED PROPERTY FROM ANOTHER SOURCE UNDER CIRCUMSTANCES
7 THAT WOULD HAVE PERMITTED ANNEXATION OF AN ACCOUNT UNDER THIS
8 SECTION OR UNDER SECTION 3501.2 (RELATING TO ANNEXATION OF
9 ACCOUNT OF TERMINATED TRUST, GUARDIANSHIP OR AGENCY), ACCOUNTS
10 FOR BOTH FUNDS MAY BE ANNEXED.
11 SUBCHAPTER G
12 SEPARATION AND COMBINATION OF TRUSTS
13 * * *
14 § 7191. SEPARATE TRUSTS.
15 (A) WITHOUT COURT APPROVAL.--A TRUSTEE MAY, WITHOUT COURT
16 APPROVAL, DIVIDE A TRUST INTO SEPARATE TRUSTS, ALLOCATING TO
17 EACH SEPARATE TRUST EITHER A FRACTIONAL SHARE OF EACH ASSET AND
18 EACH LIABILITY HELD BY THE ORIGINAL TRUST OR ASSETS HAVING AN
19 APPROPRIATE AGGREGATE FAIR MARKET VALUE AND FAIRLY REPRESENTING
20 THE APPRECIATION OR DEPRECIATION IN THE ASSETS OF THE ORIGINAL
21 TRUST AS A WHOLE. IF THE DIVISION REFLECTS DISCLAIMERS OR
22 DIFFERENT TAX ELECTIONS, THE DIVISION SHALL RELATE BACK TO THE
23 DATE TO WHICH THE DISCLAIMER OR TAX ELECTION RELATES.
24 (B) WITH COURT APPROVAL.--THE COURT, FOR CAUSE SHOWN, MAY
25 AUTHORIZE THE DIVISION OF A TRUST INTO TWO OR MORE SEPARATE
26 TRUSTS UPON SUCH TERMS AND CONDITIONS AND WITH SUCH NOTICE AS
27 THE COURT SHALL DIRECT.
28 (C) SEPARATE FUND.--A TRUSTEE MAY, WITHOUT COURT APPROVAL,
29 SET ASIDE PROPERTY IN A SEPARATE FUND PRIOR TO ACTUAL
30 DISTRIBUTION, AFTER WHICH INCOME EARNED ON THE SEPARATE FUND AND
20050S0660B1423 - 30 -
1 APPRECIATION OR DEPRECIATION OF THE PROPERTY SET-ASIDE SHALL
2 BELONG TO THE SEPARATE FUND.
3 § 7192. COMBINATION OF TRUSTS.
4 THE COURT, FOR CAUSE SHOWN, MAY AUTHORIZE THE COMBINATION OF
5 SEPARATE TRUSTS WITH SUBSTANTIALLY SIMILAR PROVISIONS UPON SUCH
6 TERMS AND CONDITIONS AND WITH SUCH NOTICE AS THE COURT SHALL
7 DIRECT NOTWITHSTANDING THAT THE TRUSTS MAY HAVE BEEN CREATED BY
8 SEPARATE INSTRUMENTS AND BY DIFFERENT PERSONS. IF NECESSARY TO
9 PROTECT POSSIBLY DIFFERENT FUTURE INTERESTS, THE ASSETS SHALL BE
10 VALUED AT THE TIME OF ANY SUCH COMBINATION AND A RECORD MADE OF
11 THE PROPORTIONATE INTEREST OF EACH SEPARATE TRUST IN THE
12 COMBINED FUND.]
13 Section 10 5. The definition of "mutual fund" in section <--
14 7201 of Title 20 is amended to read:
15 § 7201. Definitions.
16 The following words and phrases when used in this chapter
17 shall have the meanings given to them in this section unless the
18 context clearly indicates otherwise:
19 * * *
20 "Mutual fund." The securities of an [open-end or closed-end
21 management] investment company [or investment trust] registered
22 under the Investment Company Act of 1940 (54 Stat. 789, 15
23 U.S.C. § 80a-1 et seq.).
24 * * *
25 Section 11 6. Sections 7314.1 and 7503(b) of Title 20 are <--
26 amended to read:
27 § 7314.1. Mutual funds.
28 Notwithstanding that a bank or trust company or an affiliate
29 provides services to the investment company or investment trust,
30 including that of an investment advisor, custodian, transfer
20050S0660B1423 - 31 -
1 agent, registrar, sponsor, distributor or manager, and receives
2 reasonable compensation for those services and notwithstanding
3 any other provision of law, a bank or trust company acting as a
4 fiduciary, agent or otherwise may invest and reinvest in the
5 securities of an [open-end or closed-end management] investment
6 company [or investment trust] registered under the Investment
7 Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1 et seq.) if
8 the portfolio of the investment company or investment trust
9 consists substantially of investments not prohibited by the
10 governing instrument. With respect to any funds invested, the
11 basis upon which compensation is calculated, expressed as a
12 percentage of asset value or otherwise, shall be disclosed by
13 prospectus, account statement or otherwise to all persons to
14 whom statements of the account are rendered.
15 § 7503. Application of chapter.
16 * * *
17 (b) Exclusion.--This chapter shall not apply to:
18 (1) Any trust during the time that the trust is
19 revocable or amendable by its settlor.
20 (2) A spouse of a decedent or settlor where the spouse
21 is the trustee of a testamentary or inter vivos trust for
22 which a marital deduction has been allowed.
23 [(3) A trustee who possesses in his individual capacity
24 an unlimited right to withdraw the entire principal of the
25 trust or has a general testamentary power of appointment over
26 the entire principal of the trust.]
27 (4) A trust under a governing instrument that by
28 specific reference expressly rejects the application of this
29 chapter.
30 [(5) A trust created under governing instrument executed
20050S0660B1423 - 32 -
1 on or before March 21, 1999, if no part of the principal of
2 the trust would be included in the gross estate of the
3 trustee for Federal estate tax purposes if the trustee had
4 died on March 21, 1999, without having exercised the power
5 under the governing instrument to make discretionary
6 distributions of principal or income to or for the benefit of
7 the trustee, the trustee's estate or the creditors of
8 either.]
9 Section 12 7. Section 7504 of Title 20 is amended by adding <--
10 a subsection to read:
11 § 7504. Certain trustee powers not exercisable.
12 * * *
13 (c) Exceptions.--This section shall not apply to:
14 (1) A trustee who possesses in his individual capacity
15 an unlimited right to withdraw the entire principal of the
16 trust or has a general testamentary power of appointment over
17 the entire principal of the trust.
18 (2) A trust created under a governing instrument
19 executed on or before March 21, 1999, if no part of the
20 principal of the trust would have been included in the gross
21 estate of the trustee for Federal estate tax purposes if the
22 trustee had died on March 21, 1999, without having exercised
23 the power under the governing instrument to make
24 discretionary distributions of principal or income to or for
25 the benefit of the trustee, the trustee's estate or the
26 creditors of either.
27 Section 13 8. Section 7506 of Title 20 is amended to read: <--
28 § 7506. Certain powers of beneficiaries not exercisable.
29 (a) General rule.--No beneficiary of a trust in an
30 individual, trustee or other capacity may appoint himself or
20050S0660B1423 - 33 -
1 herself as trustee or remove a trustee and appoint in place of
2 the trustee so removed a trustee who is related or subordinate
3 to the beneficiary within the meaning of section 672(c) of the
4 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
5 672(c) [(relating to definitions and rules)]) in each case
6 unless:
7 (1) the trustee's discretionary power to make
8 distributions to or for the beneficiary is limited by an
9 ascertainable standard relating to the beneficiary's health,
10 education, support or maintenance within the meaning of
11 sections 2041 and 2514 of the Internal Revenue Code of 1986
12 (26 U.S.C. §§ 2041 [(relating to powers of appointment)] and
13 2514 [(relating to powers of appointment]);
14 (2) the trustee's discretionary power may not be
15 exercised to satisfy any of the beneficiary's legal
16 obligations for support or other purposes; and
17 (3) the trustee's discretionary power may not be
18 exercised to grant to the beneficiary a general power to
19 appoint property of the trust to the beneficiary, the
20 beneficiary's estate or the creditors [thereof] of either
21 within the meaning of section 2041 of the Internal Revenue
22 Code of 1986 (26 U.S.C. § 2041).
23 (b) [Exception] Exceptions.--This section shall not apply:
24 (1) if the appointment of the trustee by the beneficiary
25 may be made only in conjunction with another person having a
26 substantial interest in the property of the trust subject to
27 the power which is adverse to the exercise of the power in
28 favor of the beneficiary within the meaning of section
29 2041(b)(1)(C)(ii) of the Internal Revenue Code of 1986 (26
30 U.S.C. § 2041(b)(1)(C)(ii)) or the appointment is in
20050S0660B1423 - 34 -
1 conformity with a procedure governing appointments approved
2 by the court before December 21, 1998[.];
3 (2) to any beneficiary who possesses in an individual
4 capacity an unlimited right to withdraw the entire principal
5 of the trust or has a general testamentary power of
6 appointment over the entire principal of the trust; or
7 (3) to a trust created under a governing instrument
8 executed on or before March 21, 1999, if no part of the
9 principal of the trust would have been included in the gross
10 estate of the beneficiary for Federal estate tax purposes if
11 the beneficiary had died on March 21, 1999.
12 Section 14 9. Title 20 is amended by adding a chapter to <--
13 read:
14 CHAPTER 77
15 TRUSTS
16 Subchapter
17 A. General Provisions
18 B. Judicial Proceedings
19 C. Representation
20 D. Creation, Validity, Modification and Termination of Trust
21 E. Creditor's Claims; Spendthrift and Discretionary Trusts
22 F. Revocable Trusts
23 G. Office of Trustee
24 H. Duties and Powers of Trustee
25 I. Liability of Trustees and Rights of Persons Dealing with
26 Trustees
27 J. Miscellaneous Provisions
28 SUBCHAPTER A
29 GENERAL PROVISIONS
30 Sec.
20050S0660B1423 - 35 -
1 7701. Short title - UTC 101.
2 7702. Scope - UTC 102.
3 7703. Definitions - UTC 103.
4 7704. Knowledge - UTC 104.
5 7705. Trust instrument controls; mandatory rules - UTC 105.
6 7706. Common law of trusts; principles of equity - UTC 106.
7 7707. Governing law - UTC 107.
8 7708. Situs of trust.
9 7709. Methods and waiver of notice - UTC 109.
10 7710. Notice; others treated as beneficiaries - UTC 110.
11 7710.1. Nonjudicial settlement agreements - UTC 111.
12 7710.2. Rules of construction - UTC 112.
13 § 7701. Short title - UTC 101.
14 Subchapters A (relating to general provisions) through I
15 (relating to liability of trustees and rights of persons dealing
16 with trustees) shall be known and may be cited as the
17 Pennsylvania Uniform Trust Act. <--
18 § 7702. Scope - UTC 102.
19 This chapter applies to express trusts, charitable and
20 noncharitable, and trusts created pursuant to a statute,
21 judgment or decree that requires the trust to be administered in
22 the manner of an express trust.
23 § 7703. Definitions - UTC 103.
24 The following words and phrases when used in this chapter
25 shall have the meanings given to them in this section unless the
26 context clearly indicates otherwise:
27 "Action." With respect to an act of a trustee, includes a
28 failure to act.
29 "Beneficiary." A person that:
30 (1) has a present or future beneficial interest in a
20050S0660B1423 - 36 -
1 trust, vested or contingent; or
2 (2) in a capacity other than that of trustee or
3 protector, holds a power of appointment over trust property.
4 "Charitable trust." A trust, or portion of a trust, created
5 for a charitable purpose described in section 7735(a) (relating
6 to charitable purposes; enforcement - UTC 405).
7 "Current beneficiary." A person 18 years of age or older to
8 or for whom income or principal of a trust must be distributed
9 currently or a person 25 years of age or older to or for whom
10 income or principal of a trust may, in the trustee's discretion,
11 be distributed currently.
12 "Guardian." A person other than a guardian ad litem who is
13 appointed by the court to make decisions regarding the property
14 of an individual.
15 "Interests of the beneficiaries." The beneficial interests
16 provided in the trust instrument.
17 "Jurisdiction." With reference to a geographic area, a
18 country, state or county.
19 "Power of withdrawal." The unrestricted power of a
20 beneficiary, acting as a beneficiary and not as a trustee, to
21 transfer to himself or herself the entire legal and beneficial
22 interest in all or a portion of trust property. However, a power
23 to withdraw the greater of the amount specified in section
24 2041(b)(2), 2503(b) or 2514(e) of the Internal Revenue Code of
25 1986 (Public Law 99-514, 26 U.S.C. § 2041(b)(2), 2503(b) or
26 2514(e)), or any lesser amount determined by reference to one or
27 more of these provisions, may not be treated as a power of
28 withdrawal.
29 "Property." Anything that may be the subject of ownership,
30 whether real or personal, legal or equitable, or any interest
20050S0660B1423 - 37 -
1 therein.
2 "Qualified beneficiary." Assuming nonexercise of all
3 testamentary powers of appointment, a beneficiary who on the
4 date the beneficiary's qualification is determined:
5 (1) is a distributee or permissible distributee of trust
6 income or principal;
7 (2) would be a distributee or permissible distributee of
8 trust income or principal if the interests of the
9 distributees described in paragraph (1) terminated on that
10 date; or
11 (3) would be a distributee or permissible distributee of
12 trust income or principal if the trust terminated on that
13 date.
14 "Revocable trust." A trust is revocable to the extent the
15 settlor, immediately before the time as of which the
16 determination is made, had the power, acting without the consent
17 of the trustee or any person holding an interest adverse to
18 revocation, to prevent the transfer of the trust property at the
19 settlor's death by revocation or amendment of or withdrawal of
20 property from the trust.
21 "Settlor." A person, including a testator, who creates or
22 contributes property to a trust. If more than one person creates
23 or contributes property to a trust, each person is a settlor of
24 the portion of the trust property attributable to that person's
25 contribution except to the extent another person has the power
26 to revoke or withdraw that portion.
27 "Spendthrift provision." A provision in a trust instrument
28 that restrains both voluntary and involuntary transfer of a
29 beneficiary's interest.
30 "Trust instrument." A will or other written instrument
20050S0660B1423 - 38 -
1 executed by the settlor that contains trust provisions,
2 including any amendments thereto.
3 "Trustee." Includes an original, additional and successor
4 trustee and a cotrustee.
5 § 7704. Knowledge - UTC 104.
6 (a) When person has knowledge.--For the purposes of this
7 chapter and subject to subsection (b), a person has knowledge of
8 a fact involving a trust if the person has:
9 (1) actual knowledge of it;
10 (2) received a notice or notification of it; or
11 (3) reason to know it from all the facts and
12 circumstances known to the person at the time in question.
13 (b) Employees.--For the purposes of this chapter, an
14 organization that conducts activities through employees has
15 notice or knowledge of a fact involving a trust only from the
16 time the information was received by an employee having
17 responsibility to act for the trust, or would have been brought
18 to the employee's attention if the organization had exercised
19 reasonable diligence. An organization exercises reasonable
20 diligence if it maintains reasonable routines for communicating
21 significant information to the employee having responsibility to
22 act for the trust and there is reasonable compliance with the
23 routines. Reasonable diligence does not require an employee of
24 the organization to communicate information unless the
25 communication is part of the individual's regular duties or the
26 individual knows a matter involving the trust would be
27 materially affected by the information.
28 § 7705. Trust instrument controls; mandatory rules - UTC 105.
29 (a) Trust instrument controls.--Except as provided in
30 subsection (b), the provisions of a trust instrument prevail
20050S0660B1423 - 39 -
1 over any contrary provisions of this chapter.
2 (b) Mandatory rules.--Notwithstanding a contrary provision
3 in the trust instrument, the following rules apply:
4 (1) The requirements for creating a trust set forth in
5 section 7732 (relating to requirements for creation - UTC
6 402).
7 (2) The duty of a trustee to act in good faith and in
8 accordance with the purposes of the trust as set forth in
9 section 7771 (relating to duty to administer trust - UTC
10 801).
11 (3) The requirement in section 7734 (relating to trust
12 purposes - UTC 404) that a trust's purpose be lawful and not
13 contrary to public policy.
14 (4) The power of the court to modify or terminate a
15 trust under sections 7740 (relating to termination of trusts;
16 proceedings for termination or modification of trusts - UTC
17 410) through 7740.6 (relating to modification to achieve
18 settlor's tax objectives - UTC 416).
19 (5) The effect of a spendthrift provision and the rights
20 of certain creditors and assignees to reach a trust as
21 provided in Subchapter E (relating to creditor's claims;
22 spendthrift and discretionary trusts).
23 (6) The power of the court under section 7762 (relating
24 to trustee's bond - UTC 702).
25 (7) The power of the court under section 7768(b)
26 (relating to compensation of trustee - UTC 708) to adjust a
27 trustee's compensation specified in the trust instrument.
28 (8) The duty of a trustee under section 7780.3 (relating
29 to duty to inform and report).
30 (9) (Reserved).
20050S0660B1423 - 40 -
1 (10) The effect of an exculpatory term under section
2 7788 (relating to exculpation of trustee - UTC 1008).
3 (11) The rights under sections 7790 (relating to
4 limitation on personal liability of trustee - UTC 1010)
5 through 7790.3 (relating to certification of trust - UTC
6 1013) of a person other than a trustee or beneficiary.
7 (12) Periods of limitation for commencing a judicial
8 proceeding.
9 (13) The power of the court to take action and exercise
10 jurisdiction as may be necessary in the interests of justice.
11 (14) The subject matter jurisdiction of the court
12 described in Chapter 7 (relating to orphans' court divisions)
13 and venue for commencing a proceeding as provided in section
14 7714 (relating to venue - UTC 204).
15 § 7706. Common law of trusts; principles of equity - UTC 106.
16 The common law of trusts and principles of equity supplement
17 this chapter, except to the extent modified by this chapter or
18 another statute of this Commonwealth.
19 § 7707. Governing law - UTC 107.
20 The meaning and effect of the provisions of a trust
21 instrument shall be determined by:
22 (1) the law of the jurisdiction designated in the trust
23 instrument, but the mandatory rules of section 7705(b)
24 (relating to trust instrument controls; mandatory rules - UTC
25 105) shall govern if different from the law of the
26 jurisdiction designated in the trust instrument; or
27 (2) in the absence of an effective designation in the
28 trust instrument, the law of the jurisdiction in which the
29 settlor is domiciled when the trust becomes irrevocable.
30 § 7708. Situs of trust.
20050S0660B1423 - 41 -
1 (a) Specified in trust instrument.--Without precluding other
2 means for establishing a sufficient connection with the
3 designated jurisdiction, provisions of a trust instrument
4 designating the situs of the trust are valid and controlling if:
5 (1) a trustee's principal place of business is located
6 in or a trustee is a resident of the designated jurisdiction;
7 (2) all or part of the trust administration occurs in
8 the designated jurisdiction; or
9 (3) one or more of the beneficiaries resides in the
10 designated jurisdiction.
11 (b) Unspecified in trust instrument.--If the trust
12 instrument does not specify a situs:
13 (1) The situs of a testamentary trust shall be:
14 (i) in the county where letters were granted to the
15 personal representative;
16 (ii) if letters under subparagraph (i) have not been
17 granted, in a county where the letters might have been
18 granted; or
19 (iii) if letters under subparagraph (i) have not
20 been granted and are not subject to being granted, in a
21 county in which any trustee resides or has a place of
22 business.
23 (2) The situs of an inter vivos trust whose settlor is
24 domiciled in this Commonwealth when the trust becomes
25 irrevocable or, in the case of a revocable trust, when the
26 first application is made to a court concerning the trust
27 shall be:
28 (i) during the settlor's lifetime, either in the
29 county of the settlor's principal residence or in the
30 county in which any of the trustees resides or has a
20050S0660B1423 - 42 -
1 place of business; and
2 (ii) after the settlor's death:
3 (A) in the county in which letters have been
4 granted to the settlor's personal representative;
5 (B) in a county in which letters might have been
6 granted;
7 (C) in a county which is the principal place of
8 the trust's administration; or
9 (D) in a county in which any trustee resides or
10 has a place of business.
11 (3) The situs of an inter vivos trust, whose settlor
12 either is living and not domiciled in this Commonwealth at
13 the time when the first application is made to a court
14 concerning the trust or was not domiciled in this
15 Commonwealth at the settlor's death after which the first
16 application to a court concerning the trust is made
17 thereafter, shall be in a county where:
18 (i) a trustee's principal place of business is
19 located or a trustee is a resident;
20 (ii) all or part of the trust administration occurs;
21 or
22 (iii) one or more of the beneficiaries reside.
23 (c) Transfer.--By complying with subsections (d) and (e),
24 the trustee may transfer the trust's situs to another
25 jurisdiction if either immediately before or immediately after
26 the proposed transfer:
27 (1) a trustee's principal place of business is located
28 in or a trustee is a resident of the proposed jurisdiction;
29 (2) all or part of the trust administration occurs in
30 the proposed jurisdiction; or
20050S0660B1423 - 43 -
1 (3) one or more of the beneficiaries reside in the
2 proposed jurisdiction.
3 (d) Notice of transfer.--The trustee shall notify the
4 qualified beneficiaries of a proposed transfer of a trust's
5 situs at least 60 days before the date as of which the trustee
6 intends to change the situs. The notice of proposed transfer
7 must include the following:
8 (1) The name of the jurisdiction to which the situs is
9 to be transferred.
10 (2) The address and telephone number at the new location
11 at which the trustee can be contacted.
12 (3) The reasons for the proposed transfer.
13 (4) The date on which the proposed transfer is
14 anticipated to occur.
15 (5) A statement that if the situs is changed as the
16 trustee proposes, venue will thereafter be in the county of
17 the new situs consistent with section 7714 (relating to venue
18 - UTC 204).
19 (6) The name and address of the court before which
20 judicial actions involving the trust will be heard after the
21 situs is changed as the trustee proposes.
22 (7) A statement that the change in situs will occur only
23 if all qualified beneficiaries of the trust consent in
24 writing to the change.
25 (e) Consent to transfer.--A trustee may transfer a trust's
26 situs under this section without court approval if all the
27 qualified beneficiaries of the trust consent in writing to the
28 change.
29 (f) Successor trustee.--In connection with a transfer of the
30 trust's situs, the trustee may transfer some or all of the trust
20050S0660B1423 - 44 -
1 property to a successor trustee designated in the trust
2 instrument or appointed pursuant to section 7764 (relating to
3 vacancy in trusteeship; appointment of successor - UTC 704).
4 (g) Court-directed change in situs.--A court having
5 jurisdiction of a testamentary or inter vivos trust, on
6 application of a trustee or any party in interest, after notice
7 as the court shall direct and aided if necessary by the report
8 of a master, and after accounting as the court shall require,
9 may direct, notwithstanding any other provision of this chapter,
10 that the situs of the trust shall be changed to any other place
11 within or without this Commonwealth if the court shall find the
12 change necessary or desirable for the proper administration of
13 the trust.
14 (h) Claims not discharged.--A change in situs under this
15 section does not discharge any claim against the trustee.
16 § 7709. Methods and waiver of notice - UTC 109.
17 (a) Notice generally.--Notice to a person under this chapter
18 or the sending of a document to a person under this chapter must
19 be accomplished in a manner reasonably suitable under the
20 circumstances and likely to result in receipt of the notice or
21 document. Permissible methods of notice or for sending a
22 document include first-class mail, personal delivery, delivery
23 to the person's last known place of residence or place of
24 business and a properly directed electronic message.
25 (b) Unknown identity or location.--Notice otherwise required
26 under this chapter or a document otherwise required to be sent
27 under this chapter need not be provided to a person whose
28 identity or location is unknown to and not reasonably
29 ascertainable by the trustee, but the trustee shall create and
30 maintain indefinitely a written record of the steps the trustee
20050S0660B1423 - 45 -
1 took to identify or locate the person.
2 (c) Waiver.--Notice under this chapter or the sending of a
3 document under this chapter may be waived in writing by the
4 person to be notified or sent the document.
5 (d) Notice of judicial proceeding.--Notice of a judicial
6 proceeding must be given as provided in the applicable rules of
7 court.
8 § 7710. Notice; others treated as beneficiaries - UTC 110.
9 (a) Notice.--Whenever notice to qualified or current
10 beneficiaries of a trust is required under this chapter, the
11 trustee must also give notice to any other beneficiary who has
12 sent the trustee a written request for notice.
13 (b) Enforcement by charitable organization expressly named
14 in instrument.--A charitable organization expressly named in the
15 trust instrument to receive distributions from the trust has the
16 rights of a beneficiary under this chapter.
17 (c) Enforcement by others.--A person appointed to enforce a
18 trust created for the care of an animal or another noncharitable
19 purpose as provided in section 7738 (relating to trust for care
20 of animal - UTC 408) or 7739 (relating to noncharitable trust
21 without ascertainable beneficiary - UTC 409) has the rights of a
22 beneficiary under this chapter.
23 (d) Office of Attorney General.--The Office of Attorney
24 General has the rights of a charitable organization expressly
25 named in the trust instrument to receive distributions from a
26 trust having its situs in this Commonwealth.
27 § 7710.1. Nonjudicial settlement agreements - UTC 111.
28 (a) (Reserved).
29 (b) General rule.--Except as otherwise provided in
30 subsection (c), all beneficiaries and trustees of a trust may
20050S0660B1423 - 46 -
1 enter into a binding nonjudicial settlement agreement with
2 respect to any matter involving the trust. The rules of
3 Subchapter C (relating to representation) shall apply to a
4 settlement agreement under this section.
5 (c) Exception.--A nonjudicial settlement agreement is valid
6 only to the extent it does not violate a material purpose of the
7 trust and includes terms and conditions that could be properly
8 approved by the court under this chapter or other applicable
9 law.
10 (d) Matters that may be resolved.--Matters that may be
11 resolved by a nonjudicial settlement agreement include the
12 following:
13 (1) The interpretation or construction of the provisions
14 of a trust instrument.
15 (2) The approval of a trustee's report or accounting or
16 waiver of the preparation of a trustee's report or
17 accounting.
18 (3) Direction to a trustee to perform or refrain from
19 performing a particular act.
20 (4) The resignation or appointment of a trustee and the
21 determination of a trustee's compensation.
22 (5) Transfer of a trust's situs.
23 (6) Liability or release from liability of a trustee for
24 an action relating to the trust.
25 (7) The grant to a trustee of any necessary or desirable
26 power.
27 (8) The exercise or nonexercise of any power by a
28 trustee.
29 (9) Questions relating to the property or an interest in
30 property held as part of a trust.
20050S0660B1423 - 47 -
1 (10) An action or proposed action by or against a trust
2 or trustee.
3 (11) The modification or termination of a trust.
4 (12) An investment decision, policy, plan or program of
5 a trustee.
6 (13) Any other matter concerning the administration of a
7 trust.
8 (e) Request of court.--Any beneficiary or trustee of a trust
9 may request the court to approve a nonjudicial settlement
10 agreement to determine whether the representation as provided in
11 Subchapter C was adequate or whether the agreement contains
12 terms and conditions the court could have properly approved.
13 § 7710.2. Rules of construction - UTC 112.
14 The rules of construction that apply in this Commonwealth to
15 the provisions of testamentary trusts also apply as appropriate
16 to the provisions of inter vivos trusts.
17 SUBCHAPTER B
18 JUDICIAL PROCEEDINGS
19 Sec.
20 7711. Role of court in administration of trust - UTC 201.
21 7712. Jurisdiction over trustee and beneficiary - UTC 202.
22 7713. (Reserved).
23 7714. Venue - UTC 204.
24 § 7711. Role of court in administration of trust - UTC 201.
25 (a) Judicial intervention.--The court may intervene in the
26 administration of a trust to the extent its jurisdiction is
27 invoked by an interested person or as provided by law.
28 (b) Judicial supervision.--A trust is not subject to
29 continuing judicial supervision unless ordered by the court.
30 (c) Scope of proceeding.--A judicial proceeding involving a
20050S0660B1423 - 48 -
1 trust may relate to any matter involving the trust's
2 administration, including a request for declaratory judgment.
3 § 7712. Jurisdiction over trustee and beneficiary - UTC 202.
4 (a) Personal jurisdiction over trustee.--By accepting the
5 trusteeship of a trust having its situs in this Commonwealth or
6 by moving the situs to this Commonwealth, the trustee submits
7 personally to the jurisdiction of the courts of this
8 Commonwealth regarding any matter involving the trust.
9 (b) Personal jurisdiction over beneficiary.--With respect to
10 their interests in the trust, the beneficiaries of a trust
11 having its situs in this Commonwealth are subject to the
12 jurisdiction of the courts of this Commonwealth regarding any
13 matter involving the trust. By not releasing or disclaiming the
14 beneficiary's beneficial interest in the trust, a beneficiary of
15 a trust having its situs in this Commonwealth submits personally
16 to the jurisdiction of the courts of this Commonwealth regarding
17 any matter involving the trust.
18 (c) Additional jurisdictional methods.--This section does
19 not preclude other methods of obtaining jurisdiction over a
20 trustee, beneficiary or other person receiving property from the
21 trust.
22 § 7713. (Reserved).
23 § 7714. Venue - UTC 204.
24 (a) General rule.--Except as otherwise provided in
25 subsection (b), venue for a judicial proceeding involving a
26 trust is in the county of this Commonwealth in which the trust's
27 situs is located and, if the trust is created by will and the
28 estate is not yet closed, in the county in which the decedent's
29 estate is being administered.
30 (b) Exceptions.--
20050S0660B1423 - 49 -
1 (1) If a trust has no trustee, venue for a judicial
2 proceeding for the appointment of a trustee is in:
3 (i) any county in which a beneficiary resides;
4 (ii) any county in which trust property is located;
5 or
6 (iii) if the trust is created by will, the county in
7 which the decedent's estate was or is being administered.
8 (2) The venue of proceedings that are pending on the
9 effective date of this section shall not be disturbed.
10 SUBCHAPTER C
11 REPRESENTATION
12 Sec.
13 7721. Scope; definition of trust matter.
14 7722. Representation of parties in interest in general.
15 7723. Representatives and persons represented.
16 7724. Appointment of representative.
17 7725. Notice of representation.
18 7726. Representation ineffective if person objects.
19 § 7721. Scope; definition of trust matter.
20 (a) Scope.--This subchapter shall apply to this entire
21 chapter unless the context clearly specifies the contrary.
22 (b) Definition.--As used in this subchapter, the term "trust
23 matter" includes a judicial proceeding and a nonjudicial
24 settlement, agreement or act pertaining to any matter listed in
25 section 7710.1(d) (relating to nonjudicial settlement agreements
26 - UTC 111).
27 § 7722. Representation of parties in interest in general.
28 (a) Judicial proceeding.--In a judicial proceeding involving
29 a trust matter, an order or decree of the court that binds the
30 representative or representatives is binding upon a person,
20050S0660B1423 - 50 -
1 class of persons or both represented in accordance with section
2 7723 (relating to representatives and persons represented) if
3 the trustee notifies the representatives in writing whom they
4 represent, they do not decline the representation as provided in
5 section 7725 (relating to notice of representation) and they act
6 in good faith.
7 (b) Nonjudicial resolution.--In a nonjudicial resolution of
8 a trust matter, notice to, the consent or approval of or the
9 waiver or release by the representative or representatives is
10 binding upon a person, class of persons or both represented in
11 accordance with section 7723 if the trustee notifies the
12 representatives in writing whom they represent, they do not
13 decline the representation as provided in section 7725 and they
14 act in good faith.
15 (c) Permissible consideration.--In making decisions, a
16 representative may consider general benefit accruing to the
17 living members of the family of the person represented.
18 § 7723. Representatives and persons represented.
19 The following rules except as set forth in paragraph (7)
20 apply to the extent there is no conflict of interest with
21 respect to the matter at issue between the representative and
22 the person or persons represented that might affect the
23 impartiality of the representative and, if two or more persons
24 are being represented, to the extent there is no conflict of
25 interest with respect to the matter at issue between or among
26 the persons represented that might affect the impartiality of
27 the representative:
28 (1) A plenary guardian represents the person whose
29 estate the guardian supervises, and a limited guardian
30 represents the person whose estate the guardian supervises
20050S0660B1423 - 51 -
1 within the scope of authority prescribed by the court order
2 that defines the guardian's authority.
3 (2) An agent under a general power of attorney
4 represents the agent's principal, and an agent under a
5 limited power of attorney represents the principal within the
6 scope of the agent's authority under the power of attorney.
7 (3) Where property or an interest in property is vested
8 in a class of persons, the living sui juris class members
9 represent the class members who are minors, unborn, unknown
10 or unascertained.
11 (4) Where property or an interest in property will pass
12 to a class of persons upon the occurrence of a future event,
13 the living sui juris class members represent the class
14 members who are minors, unborn, unknown or unascertained. The
15 class members entitled to represent other class members or
16 potential class members are the persons who would take the
17 property or interest in property if the future event had
18 occurred immediately before the commencement of the judicial
19 proceeding relating to the property or interest in property
20 or immediately before the effective date of the nonjudicial
21 resolution of the matter.
22 (5) Where property or an interest in property will pass
23 to a person, class of persons or both upon the occurrence of
24 a future event, but the property or interest in property will
25 pass to another person, class of persons or both upon the
26 occurrence of an additional future event, the person, class
27 of persons or both who would take upon the occurrence of the
28 first event represents the person, class of persons or both
29 who would take upon the occurrence of the additional event,
30 provided their interests are identical or substantially
20050S0660B1423 - 52 -
1 similar for purposes of the particular trust matter. If a
2 class of persons would take upon the occurrence of the first
3 event, paragraph (4) applies to representation between or
4 among the class.
5 (6) A person represents all minors or unborn individuals
6 and persons whose identity or location is unknown and not
7 reasonably ascertainable, to the extent such persons are not
8 otherwise represented, if the interests of the person and the
9 person represented are substantially identical with respect
10 to the particular question or dispute involved.
11 (7) Whether or not there is a conflict of interest
12 described in this section, the sole holder or all coholders
13 of a presently exercisable or testamentary power of
14 appointment represent all potential appointees and all takers
15 in default of exercise of the power of appointment if the
16 holder may appoint to:
17 (i) the holder's estate, the holder's creditors or
18 the creditors of the holder's estate; or
19 (ii) anyone other than the holder's estate, the
20 holder's creditors and the creditors of the holder's
21 estate.
22 (8) The sole holder or all coholders of a presently
23 exercisable or testamentary power of appointment not
24 described in paragraph (7) represent all potential appointees
25 and all takers in default of exercise of the power who are
26 also potential appointees.
27 (9) Except as provided in paragraph (1), a person
28 represents the person's minor and unborn descendants.
29 § 7724. Appointment of representative.
30 Notwithstanding any other provision of this subchapter, if in
20050S0660B1423 - 53 -
1 any judicial proceeding involving a trust matter the court
2 determines that the representation provided by section 7723
3 (relating to representatives and persons represented) is or
4 might be inadequate, the court may appoint a guardian ad litem
5 or trustee ad litem to represent the inadequately represented
6 person, class of persons or both.
7 § 7725. Notice of representation.
8 A person representing another must be given written notice by
9 the trustee that the person is representing the other person.
10 The person to whom the notice is given may decline the
11 representation by a writing that is given to the trustee no
12 later than 60 days after receipt of the trustee's notice.
13 § 7726. Representation ineffective if person objects.
14 Notwithstanding the provisions of this subchapter, a person
15 may not represent another who is sui juris and files a written
16 objection to representation with the trustee.
17 SUBCHAPTER D
18 CREATION, VALIDITY, MODIFICATION
19 AND TERMINATION OF TRUST
20 Sec.
21 7731. Creation of trust - UTC 401.
22 7732. Requirements for creation - UTC 402.
23 7733. Written trusts created in other jurisdictions - UTC
24 403.
25 7734. Trust purposes - UTC 404.
26 7735. Charitable purposes; enforcement - UTC 405.
27 7736. Creation of trust induced by fraud, duress or undue
28 influence - UTC 406.
29 7737. Oral trusts unenforceable.
30 7738. Trust for care of animal - UTC 408.
20050S0660B1423 - 54 -
1 7739. Noncharitable trust without ascertainable beneficiary -
2 UTC 409.
3 7740. Termination of trusts; proceedings for termination or
4 modification of trusts - UTC 410.
5 7740.1. Modification or termination of noncharitable
6 irrevocable trust by consent - UTC 411.
7 7740.2. Modification or termination of noncharitable
8 irrevocable trust by court - UTC 412.
9 7740.3. Charitable trusts - UTC 413.
10 7740.4. Modification or termination of noncharitable trust -
11 UTC 414.
12 7740.5. Reformation to correct mistakes - UTC 415.
13 7740.6. Modification to achieve settlor's tax objectives - UTC
14 416.
15 7740.7. Division of trusts.
16 7740.8. Combination of trusts.
17 § 7731. Creation of trust - UTC 401.
18 A trust may be created by:
19 (1) transfer of property under a written instrument to
20 another person as trustee during the settlor's lifetime or by
21 will or other written disposition taking effect upon the
22 settlor's death;
23 (2) written declaration, signed by or on behalf and at
24 the direction of the owner of property as required by section
25 7732 (relating to requirements for creation - UTC 402), that
26 the owner holds identifiable property as trustee; or
27 (3) written exercise of a power of appointment in favor
28 of a trustee.
29 § 7732. Requirements for creation - UTC 402.
30 (a) Requirements.--A trust is created only if:
20050S0660B1423 - 55 -
1 (1) the settlor has capacity to create a trust;
2 (2) the settlor signs a writing that indicates an
3 intention to create the trust and contains provisions of the
4 trust;
5 (3) the trust has a definite beneficiary or is:
6 (i) a charitable trust;
7 (ii) a trust for the care of an animal, as provided
8 in section 7738 (relating to trust for care of animal -
9 UTC 408); or
10 (iii) a trust for a noncharitable purpose, as
11 provided in section 7739 (relating to noncharitable trust
12 without ascertainable beneficiary - UTC 409);
13 (4) the trustee has duties to perform; and
14 (5) the same person is not the sole trustee and sole
15 beneficiary of the trust.
16 (b) (Reserved).
17 (b.1) Signature by mark or another.--A trust instrument
18 other than a will may be signed by mark or by a person other
19 than the settlor on behalf of and at the direction of the
20 settlor in the same manner as a power of attorney under Chapter
21 56 (relating to powers of attorney).
22 (c) Power to select beneficiary from indefinite class.--A
23 power in a trustee to select a beneficiary from an indefinite
24 class is valid. If the power is not exercised within a
25 reasonable time, the power fails and the property subject to the
26 power passes to the persons who would have taken the property
27 had the power not been conferred.
28 (d) Definition.--As used in this section, the term "definite
29 beneficiary" means a beneficiary that can be ascertained now or
30 in the future, subject to any applicable rule against
20050S0660B1423 - 56 -
1 perpetuities.
2 § 7733. Written trusts created in other jurisdictions - UTC
3 403.
4 A written trust not created by will is validly created if its
5 creation complies with the law of the jurisdiction in which the
6 trust instrument was executed or the law of the jurisdiction in
7 which, at the time of creation:
8 (1) the settlor was domiciled, had a residence or was a
9 national;
10 (2) a trustee was domiciled or had a place of business;
11 or
12 (3) any trust property was located.
13 § 7734. Trust purposes - UTC 404.
14 A trust may be created only to the extent its purposes are
15 lawful and not contrary to public policy.
16 § 7735. Charitable purposes; enforcement - UTC 405.
17 (a) Purposes.--A charitable trust may be created for the
18 relief of poverty, the advancement of education or religion, the
19 promotion of health, governmental or municipal purposes, or
20 other purposes the achievement of which is beneficial to the
21 community.
22 (b) Selection by court.--If the provisions of a charitable
23 trust instrument do not indicate or authorize the trustee to
24 select a particular charitable purpose or beneficiary, the court
25 may select one or more charitable purposes or beneficiaries. The
26 selection must be consistent with the settlor's intention to the
27 extent it can be ascertained.
28 (c) Proceeding to enforce trust.--A proceeding to enforce a
29 charitable trust may be brought by the settlor during the
30 settlor's lifetime or at any time by the Attorney General, a
20050S0660B1423 - 57 -
1 charitable organization expressly named in the trust instrument
2 to receive distributions from the trust or any other person who
3 has standing to do so.
4 § 7736. Creation of trust induced by fraud, duress or undue
5 influence - UTC 406.
6 A trust or an amendment to a trust is voidable to the extent
7 its creation was induced by fraud, duress or undue influence.
8 § 7737. Oral trusts unenforceable.
9 Oral trusts are unenforceable in this Commonwealth.
10 § 7738. Trust for care of animal - UTC 408.
11 (a) Creation and termination.--A trust may be created to
12 provide for the care of an animal alive during the settlor's
13 lifetime. The trust terminates upon the death of the animal or,
14 if the trust was created to provide for the care of more than
15 one animal alive during the settlor's lifetime, upon the death
16 of the last surviving animal.
17 (b) Enforcement.--A trust authorized by this section may be
18 enforced by a person appointed in the trust instrument or, if no
19 person is so appointed, by a person appointed by the court. A
20 person having an interest in the welfare of the animal may
21 request the court to appoint a person to enforce the trust or to
22 remove a person appointed.
23 (c) Limitation.--Property of a trust authorized by this
24 section may be applied only to its intended use, except to the
25 extent the court determines that the value of the trust property
26 exceeds the amount required for the intended use. Except as
27 otherwise provided in the trust instrument, property not
28 required for the intended use must be distributed to the settlor
29 if then living, otherwise to the settlor's successors in
30 interest.
20050S0660B1423 - 58 -
1 § 7739. Noncharitable trust without ascertainable beneficiary -
2 UTC 409.
3 Except as otherwise provided in section 7738 (relating to
4 trust for care of animal - UTC 408) or by another statute:
5 (1) A trust may be created for a noncharitable purpose
6 without a definite or definitely ascertainable beneficiary or
7 for a noncharitable but otherwise valid purpose to be
8 selected by the trustee. The trust may not be enforced for
9 more than 21 years.
10 (2) A trust authorized by this section may be enforced
11 by a person appointed in the trust instrument or, if no
12 person is so appointed, by a person appointed by the court.
13 (3) Property of a trust authorized by this section may
14 be applied only to its intended use, except to the extent the
15 court determines that the value of the trust property exceeds
16 the amount required for the intended use. Except as otherwise
17 provided in the trust instrument, property not required for
18 the intended use must be distributed to the settlor if then
19 living, otherwise to the settlor's successors in interest.
20 § 7740. Termination of trusts; proceedings for termination or
21 modification of trusts - UTC 410.
22 (a) Termination.--A trust terminates to the extent it is
23 revoked or expires pursuant to its terms, no purpose of the
24 trust remains to be achieved or the purposes of the trust have
25 become unlawful or contrary to public policy. In addition, a
26 trust may be terminated by the methods prescribed by sections
27 7740.1 (relating to modification or termination of noncharitable
28 irrevocable trust by consent - UTC 411) through 7740.4 (relating
29 to modification or termination of noncharitable trust - UTC
30 414).
20050S0660B1423 - 59 -
1 (b) Proceedings for termination or modification.--The
2 settlor, the trustee or a beneficiary may commence a proceeding
3 to approve or disapprove a proposed modification or termination
4 under sections 7740.1 through 7740.6 (relating to modification
5 to achieve settlor's tax objectives - UTC 416), the division of
6 a trust under section 7740.7 (relating to division of trusts) or
7 the combination of trusts under section 7740.8 (relating to
8 combination of trusts). The settlor of a charitable trust may
9 commence a proceeding to modify the trust under section 7740.3
10 (relating to charitable trusts - UTC 413).
11 § 7740.1. Modification or termination of noncharitable
12 irrevocable trust by consent - UTC 411.
13 (a) Consent by settlor and beneficiaries.--A noncharitable
14 irrevocable trust may be modified or terminated upon consent of
15 the settlor and all beneficiaries even if the modification or
16 termination is inconsistent with a material purpose of the
17 trust. A settlor's power to consent to a trust's modification or
18 termination may be exercised by a guardian, an agent under the
19 settlor's general power of attorney or an agent under the
20 settlor's limited power of attorney that specifically authorizes
21 that action. Notwithstanding Subchapter C (relating to
22 representation), the settlor may not represent a beneficiary in
23 the modification or termination of a trust under this
24 subsection.
25 (b) Consent by beneficiaries with court approval.--A
26 noncharitable irrevocable trust may be modified upon the consent
27 of all the beneficiaries only if the court concludes that the
28 modification is not inconsistent with a material purpose of the
29 trust. A noncharitable irrevocable trust may be terminated upon
30 consent of all the beneficiaries only if the court concludes
20050S0660B1423 - 60 -
1 that continuance of the trust is not necessary to achieve any
2 material purpose of the trust.
3 (b.1) Spendthrift provision.--A spendthrift provision in a
4 trust instrument is presumed to constitute a material purpose of
5 the trust.
6 (c) Distribution upon termination.--Upon termination of a
7 trust under subsection (a) or (b), the trustee shall distribute
8 the trust property as agreed by the beneficiaries.
9 (d) Consent by some beneficiaries with court approval.--If
10 not all the beneficiaries consent to a proposed modification or
11 termination of the trust under subsection (a) or (b), the
12 modification or termination may be approved by the court only if
13 the court is satisfied that:
14 (1) if all the beneficiaries had consented, the trust
15 could have been modified or terminated under this section;
16 and
17 (2) the interests of a beneficiary who does not consent
18 will be adequately protected.
19 § 7740.2. Modification or termination of noncharitable
20 irrevocable trust by court - UTC 412.
21 (a) Unanticipated circumstances.--The court may modify the
22 administrative or dispositive provisions of a noncharitable
23 irrevocable trust, make an allowance from the principal of the
24 trust or terminate the trust if, because of circumstances that
25 apparently were not anticipated by the settlor, modification,
26 allowance or termination will further the purposes of the trust.
27 To the extent practicable, the modification or allowance shall
28 approximate the settlor's probable intention.
29 (b) Inability to administer effectively.--The court may
30 modify the administrative provisions of a noncharitable
20050S0660B1423 - 61 -
1 irrevocable trust if adherence to the existing provisions would
2 be impracticable or wasteful or impair the trust's
3 administration.
4 (c) Distribution of property.--Upon termination of a trust
5 under this section, the trustee shall distribute the trust
6 property in a manner consistent with the purposes of the trust.
7 § 7740.3. Charitable trusts - UTC 413.
8 (a) General rule.--Except as otherwise provided in
9 subsection (b), if a particular charitable purpose becomes
10 unlawful, impracticable or wasteful:
11 (1) the trust does not fail, in whole or in part;
12 (2) the trust property does not revert to the settlor or
13 the settlor's successors in interest; and
14 (3) the court shall apply cy pres to fulfill as nearly
15 as possible the settlor's charitable intention, whether it be
16 general or specific.
17 (b) Exception.--A provision in the terms of a charitable
18 trust that would result in distribution of the trust property to
19 a noncharitable beneficiary prevails over the power of the court
20 under subsection (a) to apply cy pres.
21 (c) Administrative deviation.--A court may modify an
22 administrative provision of a charitable trust only to the
23 extent necessary to preserve the trust.
24 (d) Administrative termination of small charitable trusts.--
25 A trust solely for charitable purposes having assets of less
26 than $100,000 may be terminated at its inception or at any time
27 thereafter by the trustee with the consent of the Attorney
28 General and all charitable organizations that are designated as
29 beneficiaries by name in the trust instrument. Upon termination,
30 the assets, subject to the approval of the Attorney General,
20050S0660B1423 - 62 -
1 shall be delivered to the organizations, if any, designated in
2 the trust instrument or, if none, to organizations selected by
3 the trustee, in either case to be held and applied for the
4 general or specific charitable purposes and on the terms that
5 will, in the trustee's discretion, fulfill as nearly as possible
6 the settlor's intention.
7 (e) Judicial termination of charitable trusts.--If the
8 separate existence of a trust, whenever created, solely for
9 charitable purposes results or will result in administrative
10 expense or other burdens unreasonably out of proportion to the
11 charitable benefits, the court may, upon application of the
12 trustee or any interested person and after notice to the
13 Attorney General, terminate the trust, either at its inception
14 or at any time thereafter, and award the assets outright, free
15 of the trust, to the charitable organizations, if any,
16 designated in the trust instrument or, if none, to charitable
17 organizations selected by the court, in either case for the
18 purposes and on the terms that the court may direct to fulfill
19 as nearly as possible the settlor's intentions other than any
20 intent to continue the trust, if the court is satisfied that the
21 charitable organizations will properly use or administer the
22 assets.
23 § 7740.4. Modification or termination of noncharitable trust -
24 UTC 414.
25 (a) Trustee's authority.--A trustee of a noncharitable trust
26 may terminate the trust if the trustee concludes that the value
27 of the trust property is insufficient to justify the cost of
28 administration, the trustee has given written notice to the
29 qualified beneficiaries at least 60 days before the proposed
30 termination and no qualified beneficiary provides the trustee
20050S0660B1423 - 63 -
1 with a written objection to the proposed termination on or
2 before the date specified in the notice.
3 (b) Court authority.--The court may modify or terminate a
4 noncharitable trust, or remove the trustee and appoint a
5 different trustee, if it determines that the value of the trust
6 property is insufficient to justify the cost of administration.
7 (c) Distribution of trust property.--Upon termination of a
8 trust under this section, the trustee shall distribute the trust
9 property in a manner consistent with the purposes of the trust.
10 § 7740.5. Reformation to correct mistakes - UTC 415.
11 The court may reform a trust instrument, even if unambiguous,
12 to conform to the settlor's probable intention if it is proved
13 by clear and convincing evidence that the settlor's intent as
14 expressed in the trust instrument was affected by a mistake of
15 fact or law, whether in expression or inducement. The court may
16 provide that the modification have retroactive effect.
17 § 7740.6. Modification to achieve settlor's tax objectives -
18 UTC 416.
19 The court may modify a trust instrument in a manner that is
20 not contrary to the settlor's probable intention in order to
21 achieve the settlor's tax objectives. The court may provide that
22 the modification have retroactive effect.
23 § 7740.7. Division of trusts.
24 (a) Without court approval.--A trustee may, without court
25 approval, divide a trust into separate trusts, allocating to
26 each separate trust either a fractional share of each asset and
27 each liability held by the original trust or assets having an
28 appropriate aggregate fair market value and fairly representing
29 the appreciation or depreciation in the assets of the original
30 trust as a whole. The beneficiaries of the separate trusts may
20050S0660B1423 - 64 -
1 be different so long as their rights are not impaired. If the
2 division reflects disclaimers or different tax elections, the
3 division shall relate back to the date to which the disclaimer
4 or tax election relates.
5 (b) With court approval.--The court, for cause shown, may
6 authorize the division of a trust into two separate trusts upon
7 such terms and conditions and with notice as the court shall
8 direct.
9 (c) Separate fund.--A trustee may, without court approval,
10 set aside property in a separate fund prior to actual
11 distribution, after which income earned on the separate fund and
12 appreciation or depreciation of the fund set-aside shall belong
13 to the separate fund.
14 § 7740.8. Combination of trusts.
15 (a) With court approval.--The court, for cause shown, may
16 authorize the combination of separate trusts with substantially
17 similar provisions upon terms and conditions and with notice as
18 the court shall direct notwithstanding that the trusts may have
19 been created by separate instruments and by different persons.
20 If necessary to protect possibly different future interests, the
21 assets shall be valued at the time of the combination and a
22 record made of the proportionate interest of each separate trust
23 in the combined fund.
24 (b) Without court approval.--A trustee may, without court
25 approval, combine trusts that were created under the same or
26 different instruments if the trusts have identical provisions,
27 tax attributes and trustees.
28 SUBCHAPTER E
29 CREDITOR'S CLAIMS; SPENDTHRIFT AND
30 DISCRETIONARY TRUSTS
20050S0660B1423 - 65 -
1 Sec.
2 7741. Rights of beneficiary's creditor or assignee - UTC 501.
3 7742. Spendthrift provision - UTC 502.
4 7743. Exceptions to spendthrift provision - UTC 503.
5 7744. Discretionary trusts; effect of standard - UTC 504.
6 7745. Creditor's claim against settlor - UTC 505(a).
7 7746. Overdue distribution - UTC 506.
8 7747. Personal obligations of trustee - UTC 507.
9 7748. Property subject to power of withdrawal - UTC 505(b).
10 § 7741. Rights of beneficiary's creditor or assignee - UTC 501.
11 A judgment creditor or assignee of the beneficiary may reach
12 the beneficiary's interest by attachment of present or future
13 distributions to or for the benefit of the beneficiary or other
14 means to the extent the beneficiary's interest is not subject to
15 a spendthrift provision.
16 § 7742. Spendthrift provision - UTC 502.
17 (a) Validity.--A spendthrift provision is valid only if it
18 restrains both voluntary and involuntary transfer of a
19 beneficiary's interest.
20 (b) Creation.--A trust instrument providing that the
21 interest of a beneficiary is held subject to a "spendthrift
22 trust," or words of similar import, is sufficient to restrain
23 both voluntary and involuntary transfer of the beneficiary's
24 interest.
25 (c) Effect.--A beneficiary may not transfer an interest in a
26 trust in violation of a valid spendthrift provision. Except as
27 otherwise provided in this subchapter, a creditor or assignee of
28 the beneficiary of a spendthrift trust may not reach the
29 interest or a distribution by the trustee before its receipt by
30 the beneficiary.
20050S0660B1423 - 66 -
1 § 7743. Exceptions to spendthrift provision - UTC 503.
2 (a) (Reserved).
3 (b) Who may override.--A spendthrift provision is
4 unenforceable against:
5 (1) a beneficiary's child who has a judgment or court
6 order against the beneficiary for support or maintenance, to
7 the extent of the beneficiary's interests in the income and
8 principal of the trust;
9 (2) any other person who has a judgment or court order
10 against the beneficiary for support or maintenance, to the
11 extent of the beneficiary's interest in the trust's income;
12 (3) a judgment creditor who has provided services for
13 the protection of the beneficiary's interest in the trust;
14 and
15 (4) a claim of the United States or the Commonwealth to
16 the extent Federal law or a statute of this Commonwealth
17 provides.
18 (c) Remedy if unenforceable.--A claimant against whom a
19 spendthrift provision cannot be enforced may obtain from a court
20 an order attaching present or future distributions to or for the
21 benefit of the beneficiary. The court may limit the award to
22 such relief as is appropriate under the circumstances.
23 (d) Definition.--As used in this section, the term "child"
24 includes any person for whom an order or judgment for child
25 support has been entered in this Commonwealth or another state.
26 § 7744. Discretionary trusts; effect of standard - UTC 504.
27 (a) (Reserved).
28 (b) Distribution not compelled.--Except as otherwise
29 provided in subsection (c), whether or not a trust contains a
30 spendthrift provision, a creditor of a beneficiary may not
20050S0660B1423 - 67 -
1 compel a distribution that is subject to the trustee's
2 discretion, even if:
3 (1) the discretion is expressed in the form of a
4 standard of distribution;
5 (2) the trustee has abused the discretion; or
6 (3) the beneficiary is the trustee or a cotrustee of the
7 trust.
8 (c) Exception.--To the extent a trustee has not complied
9 with a standard of distribution or has abused a discretion:
10 (1) a distribution from the trust's income, principal or
11 both may be ordered by the court to satisfy a judgment or
12 court order against the beneficiary for support or
13 maintenance of the beneficiary's child to the extent of the
14 beneficiary's interests in the trust's income, principal or
15 both, and the court shall direct the trustee to pay the child
16 from the trust an amount as is equitable under the
17 circumstances, but not more than the amount the trustee would
18 have been required to distribute to or for the benefit of the
19 beneficiary had the trustee complied with the standard or not
20 abused the discretion; and
21 (2) a distribution from trust income may be ordered by
22 the court to satisfy a judgment or court order against the
23 beneficiary for support or maintenance of any person other
24 than the beneficiary's child to the extent of the
25 beneficiary's interest in the income of the trust, and the
26 court shall direct the trustee to pay the person an amount
27 from the income of the trust as is equitable under the
28 circumstances, but not more than the amount of income the
29 trustee would have been required to distribute to or for the
30 benefit of the beneficiary had the trustee complied with the
20050S0660B1423 - 68 -
1 standard or not abused the discretion.
2 (d) Proceeding against trustee.--This section does not limit
3 the right of a beneficiary to maintain a judicial proceeding
4 against a trustee for an abuse of discretion or failure to
5 comply with a standard for distribution.
6 (e) (Reserved).
7 (f) Definition.--As used in this section, the term "child"
8 includes any person for whom an order or judgment for child
9 support has been entered in this Commonwealth or another state.
10 § 7745. Creditor's claim against settlor - UTC 505(a).
11 Whether or not a trust instrument contains a spendthrift
12 provision and notwithstanding section 7744 (relating to
13 discretionary trusts; effect of standard - UTC 504):
14 (1) During the lifetime of the settlor, the property of
15 a revocable trust is subject to claims of the settlor's
16 creditors.
17 (2) A judgment creditor or assignee of the settlor of an
18 irrevocable trust may reach the maximum amount that can be
19 distributed to or for the settlor's benefit. If a trust has
20 more than one settlor, the creditor or assignee of a
21 particular settlor may reach the portion of the trust
22 attributable to that settlor's contribution.
23 (3) After the death of the settlor and subject to the
24 settlor's right to direct the source from which liabilities
25 will be paid, the property of a revocable trust is subject to
26 claims of the settlor's creditors, costs of administration of
27 the settlor's estate, the expenses of the settlor's funeral
28 and disposal of remains and the family exemption to the
29 extent the settlor's probate estate is inadequate to satisfy
30 those claims, costs, expenses and exemption and no other
20050S0660B1423 - 69 -
1 statute specifically exempts the property from those claims.
2 § 7746. Overdue distribution - UTC 506.
3 (a) Distribution not made within reasonable time.--Whether
4 or not the interest of the beneficiary in the trust is subject
5 to a spendthrift provision, a creditor or assignee of a
6 beneficiary may reach a mandatory distribution of income or
7 principal, including a distribution upon termination of the
8 trust, if the trustee has not made the distribution to the
9 beneficiary within a reasonable time after the mandated
10 distribution date.
11 (b) Definition.--As used in this section, the term
12 "mandatory distribution" means a distribution of income or
13 principal that the trustee is required by the trust instrument
14 to make to a beneficiary, including a distribution upon the
15 termination of the trust. The term excludes a distribution that
16 is subject to the exercise of the trustee's discretion
17 regardless of whether the trust instrument includes a support or
18 other standard to guide the trustee in making distribution
19 decisions or provides that the trustee "may" or "shall" make
20 discretionary distributions, including distributions pursuant to
21 a support or other standard.
22 § 7747. Personal obligations of trustee - UTC 507.
23 Trust property is not subject to personal obligations of the
24 trustee, even if the trustee becomes insolvent or bankrupt.
25 § 7748. Property subject to power of withdrawal - UTC 505(b).
26 Trust property that is subject to a power of withdrawal,
27 during the period the power may be exercised and after its
28 lapse, release or waiver, may be reached by a creditor or an
29 assignee of the holder of the power whether or not the interest
30 of the holder in the trust is subject to a spendthrift
20050S0660B1423 - 70 -
1 provision.
2 SUBCHAPTER F
3 REVOCABLE TRUSTS
4 Sec.
5 7751. Capacity of settlor of revocable trust - UTC 601.
6 7752. Revocation or amendment of revocable trust - UTC 602.
7 7753. Trustee's duties; powers of withdrawal - UTC 603.
8 7754. Actions contesting validity of revocable trust.
9 7755. Claims and distribution after settlor's death.
10 § 7751. Capacity of settlor of revocable trust - UTC 601.
11 The capacity required to create, amend, revoke or add
12 property to a revocable trust or to direct the actions of the
13 trustee of a revocable trust is the same as that required to
14 make a will.
15 § 7752. Revocation or amendment of revocable trust - UTC 602.
16 (a) Power to revoke or amend.--The settlor may revoke or
17 amend a trust unless the trust instrument expressly provides
18 that the trust is irrevocable.
19 (b) More than one settlor.--If a revocable trust is created
20 or funded by more than one settlor:
21 (1) to the extent the trust consists of community
22 property, either spouse alone who notifies the other spouse
23 may revoke the trust, but the trust may be amended only by
24 joint action of both spouses;
25 (2) to the extent the trust consists of property other
26 than community property, each settlor may revoke or amend the
27 trust with respect to the portion of the trust property
28 attributable to that settlor's contribution upon notice to
29 each other settlor; and
30 (3) upon the revocation or amendment of the trust by
20050S0660B1423 - 71 -
1 fewer than all the settlors, the trustee shall promptly
2 notify the other settlors of the revocation or amendment.
3 (c) How to revoke or amend.--The settlor may revoke or amend
4 a revocable trust only:
5 (1) by substantial compliance with a method provided in
6 the trust instrument; or
7 (2) if the trust instrument does not provide a method or
8 the method provided in the trust instrument is not expressly
9 made exclusive, by a later writing, other than a will or
10 codicil, that is signed by the settlor and expressly refers
11 to the trust or specifically conveys property that would
12 otherwise have passed according to the trust instrument.
13 (d) Delivery of property.--Upon revocation of a revocable
14 trust, the trustee shall deliver the trust property as the
15 settlor directs.
16 (e) Agent.--A settlor's powers with respect to revocation or
17 amendment of the nondispositive provisions of or withdrawal of
18 property from a trust may be exercised by an agent under a power
19 of attorney only to the extent expressly authorized by the trust
20 instrument or the power. The agent under a power of attorney
21 that expressly authorizes the agent to do so may amend the
22 dispositive provisions of a revocable trust as the court may
23 direct.
24 (f) Guardian.--A guardian of the settlor's estate may
25 exercise the settlor's powers with respect to revocation or
26 amendment of or withdrawal of property from a revocable trust as
27 the court may direct.
28 (g) Liability.--A trustee who does not know that a trust has
29 been revoked or amended is not liable to the settlor, the
30 settlor's successors in interest or the beneficiaries for
20050S0660B1423 - 72 -
1 distributions made and other actions taken on the assumption
2 that the trust had not been amended or revoked.
3 § 7753. Trustee's duties; powers of withdrawal - UTC 603.
4 (a) Power of settlor.--Regardless of the legal capacity of
5 the settlor, the rights of the beneficiaries are subject to the
6 control of, and the duties of the trustee are owed exclusively
7 to, the settlor while a trust is revocable.
8 (b) Holder of power of withdrawal.--The holder of a power of
9 withdrawal has the rights of a settlor of a revocable trust
10 under this section to the extent of the property subject to the
11 power during the period the power may be exercised.
12 § 7754. Actions contesting validity of revocable trust.
13 (a) How action may be commenced.--A person having standing
14 to do so may contest the validity of a revocable trust by filing
15 a petition with the court.
16 (b) Time limit.--The petition described in subsection (a)
17 must be filed no later than one year after the date on which the
18 trustee gave the notice required by section 7780.3(c) (relating
19 to duty to inform and report). The court, upon petition of a
20 party in interest and with such notice as the court may direct,
21 may limit the time by which a petition under this section must
22 be filed to six months after the date on which the trustee gave
23 the notice required by section 7780.3(c).
24 (c) Grounds for contest.--The grounds for contesting the
25 validity of a revocable trust shall be the same as those for
26 contesting the validity of a will.
27 § 7755. Claims and distribution after settlor's death.
28 (a) Creditors' rights.--Creditors of the settlor of a
29 revocable trust shall have the same rights against the trust
30 assets determined immediately before the settlor's death as they
20050S0660B1423 - 73 -
1 have against the settlor's estate, but the assets of the
2 settlor's estate shall be applied first toward satisfaction of
3 the creditors' claims. This subsection shall not expose to
4 creditors' claims trust assets for which other provisions of
5 substantive law provide exemption from the claims of the
6 settlor's creditors.
7 (b) Enforcement of claim against revocable trust.--A
8 creditor may make a claim against a revocable trust by notifying
9 the settlor's personal representative as provided in section
10 3384 (relating to notice of claim) or, if no personal
11 representative has been appointed, by notifying the trustee
12 according to the methods set forth in section 3384. A personal
13 representative who receives notice shall within 20 days notify
14 the trustee in writing and upon doing so shall have no liability
15 under this section to the creditor.
16 (c) No personal representative.--If no personal
17 representative is appointed within 90 days after the settlor's
18 death, the trustee shall advertise the trust's existence and the
19 name and address of the trustee in the manner set forth in
20 section 3162 (relating to advertisement of grant of letters).
21 (d) Liability of personal representative.--A personal
22 representative who has received the notice required by section
23 7780.3(c) (relating to duty to inform and report) and does not
24 notify the trustee of a revocable trust of a creditor's claim
25 known to the personal representative within one year after the
26 first complete advertisement of the grant of letters to the
27 personal representative shall be liable to the creditor to the
28 extent the creditor's interest is prejudiced thereby. A personal
29 representative shall have no liability under this section to a
30 creditor whose claim is not known to the personal representative
20050S0660B1423 - 74 -
1 within one year after the first complete advertisement of the
2 grant of letters to the personal representative. The provisions
3 of this section shall not affect the liability of the settlor's
4 personal representative under other provisions of law.
5 (e) Liability to any creditor.--At the trustee's own risk
6 and without the filing, audit or confirmation of the trustee's
7 account, a trustee of a revocable trust who has either given the
8 settlor's personal representative the notice required by section
9 7780.3(c) or given the notice required by subsection (c) may
10 distribute real or personal property of the revocable trust.
11 That distribution shall be without liability to any creditor of
12 the settlor unless the claim of that creditor is known to the
13 trustee within 13 months after the first complete advertisement
14 of the grant of letters to the personal representative or, if no
15 personal representative has been appointed, within one year
16 after the first complete advertisement under subsection (c).
17 (f) Rights of creditors against distributed property.--
18 (1) No creditor shall have any claim against personal
19 property distributed by the trustee of a revocable trust at
20 the trustee's own risk under subsection (e) unless the claim
21 of the creditor is known to the trustee within 13 months
22 after the first complete advertisement of the grant of
23 letters to the personal representative or, if no personal
24 representative has been appointed, within one year after the
25 first complete advertisement of the trust under subsection
26 (c).
27 (2) No creditor shall have any claim against real
28 property distributed by the trustee of a revocable trust at
29 the trustee's own risk under subsection (e) unless the
30 creditor, within one year after the settlor's death, files a
20050S0660B1423 - 75 -
1 written notice of claim with the clerk. The claim against
2 real property shall expire at the end of five years after the
3 settlor's death unless within that time the trustee files an
4 account or the creditor files a petition to compel an
5 accounting.
6 (g) Judicial principles.--In any proceeding by a creditor
7 against a trustee or beneficiary of a revocable trust, the court
8 shall apply principles analogous to:
9 (1) section 3387 (relating to claims not due; certain to
10 become due);
11 (2) section 3388 (relating to claims not certain to
12 become due);
13 (3) section 3392 (relating to classification and order
14 of payment); and
15 (4) section 3393 (relating to notice to Commonwealth and
16 political subdivisions).
17 SUBCHAPTER G
18 OFFICE OF TRUSTEE
19 Sec.
20 7761. Accepting or declining trusteeship - UTC 701.
21 7762. Trustee's bond - UTC 702.
22 7763. Cotrustees - UTC 703.
23 7764. Vacancy in trusteeship; appointment of successor - UTC
24 704.
25 7765. Resignation of trustee; filing resignation.
26 7766. Removal of trustee - UTC 706.
27 7767. Delivery of property by former trustee - UTC 707.
28 7768. Compensation of trustee - UTC 708.
29 7769. Reimbursement of expenses - UTC 709.
30 7770. Liability of successor trustee.
20050S0660B1423 - 76 -
1 § 7761. Accepting or declining trusteeship - UTC 701.
2 (a) Accepting trusteeship.--Except as otherwise provided in
3 subsection (c), a person designated as trustee accepts the
4 trusteeship:
5 (1) by substantially complying with a method of
6 acceptance provided in the trust instrument; or
7 (2) if the trust instrument does not provide a method or
8 the method provided in the trust instrument is not expressly
9 made exclusive, by accepting delivery of the trust property,
10 exercising powers or performing duties as trustee or by
11 otherwise indicating acceptance of the trusteeship.
12 (b) Rejecting trusteeship.--A person designated as trustee
13 who has not yet accepted the trusteeship may reject the
14 trusteeship. A designated trustee who does not accept the
15 trusteeship within a reasonable time after knowing of the
16 designation is deemed to have rejected the trusteeship.
17 (c) Actions not constituting acceptance of trusteeship.--A
18 person designated as trustee, without accepting the trusteeship,
19 may:
20 (1) act to preserve the trust property if, within a
21 reasonable time after acting, the person sends a written
22 rejection of the trusteeship to the settlor or, if the
23 settlor is dead or lacks capacity, to a qualified
24 beneficiary; and
25 (2) inspect or investigate trust property to determine
26 potential liability under environmental or other law or for
27 any other purpose.
28 § 7762. Trustee's bond - UTC 702.
29 (a) When required.--A trustee shall give bond to secure
30 performance of the trustee's duties only if the court finds that
20050S0660B1423 - 77 -
1 a bond is needed to protect the interests of the beneficiaries
2 or is required by the provisions of the trust instrument and the
3 court has not dispensed with the requirement.
4 (b) Judicial authority.--The court may specify the amount of
5 a bond, its liabilities and whether sureties are necessary. The
6 court may modify or terminate a bond at any time.
7 (c) Institutional trustees.--An institution qualified to do
8 trust business in this Commonwealth need not give bond even if
9 required by the trust instrument.
10 § 7763. Cotrustees - UTC 703.
11 (a) Majority decision.--Cotrustees who do not reach a
12 unanimous decision may act by majority decision.
13 (a.1) When no majority.--When a dispute arises among
14 trustees as to the exercise or nonexercise of any of their
15 powers and there is no agreement by a majority of them, unless
16 otherwise provided by the trust instrument, the court in its
17 discretion, upon petition filed by any of the trustees or any
18 party in interest, aided if necessary by the report of a master,
19 may direct the exercise or nonexercise of the power as it deems
20 necessary for the best interest of the trust.
21 (b) Vacancy.--If a vacancy occurs in a cotrusteeship, the
22 remaining cotrustees may act for the trust.
23 (c) Performance.--A cotrustee shall participate in the
24 performance of a trustee's function unless the cotrustee is
25 unavailable to perform the function because of absence, illness,
26 disqualification under the law or other reason or the cotrustee
27 has properly delegated the performance of the function to
28 another trustee.
29 (d) Unavailability.--If a cotrustee is unavailable to
30 perform duties and prompt action is necessary to achieve the
20050S0660B1423 - 78 -
1 purposes of the trust or to avoid injury or loss to the trust
2 property, the remaining cotrustee or a majority of the remaining
3 cotrustees may act for the trust.
4 (e) (Reserved).
5 (f) Liability.--Except as otherwise provided in subsection
6 (g), a trustee who does not join in an action of another trustee
7 is not liable for the action.
8 (g) Reasonable care.--Each trustee shall exercise reasonable
9 care to:
10 (1) prevent a cotrustee from committing a breach of
11 trust involving fraud or self-dealing; and
12 (2) compel a cotrustee to redress a breach of trust
13 involving fraud or self-dealing.
14 (h) Dissenting trustee.--A dissenting trustee shall join the
15 majority to carry out a majority decision requiring affirmative
16 action and may be ordered to do so by the court. A dissenting
17 trustee who joins in an action at the direction of the majority
18 of the trustees and who notified any cotrustee of the dissent at
19 or before the time of the action is not liable for the action
20 unless the action is a breach of trust involving fraud or self-
21 dealing.
22 § 7764. Vacancy in trusteeship; appointment of successor - UTC
23 704.
24 (a) When vacancy occurs.--A vacancy in a trusteeship occurs
25 if:
26 (1) a person designated as trustee rejects the
27 trusteeship;
28 (2) a person designated as trustee cannot be identified
29 or does not exist;
30 (3) a trustee resigns;
20050S0660B1423 - 79 -
1 (4) a trustee is disqualified or removed;
2 (5) a trustee dies; or
3 (6) a trustee is determined by the court to be
4 incapacitated pursuant to section 5511 (relating to petition
5 and hearing; independent evaluation).
6 (b) Filling of vacancy.--A vacancy in a trusteeship need not
7 be filled if one or more cotrustees remain in office and the
8 trust instrument does not require that it be filled. A vacancy
9 shall be filled if the trust has no remaining trustee.
10 (c) Filling vacancy for noncharitable trust.--A vacancy in a
11 trusteeship of a noncharitable trust that is required to be
12 filled shall be filled in the following order of priority:
13 (1) by a person designated in or pursuant to the
14 provisions of the trust instrument to act as successor
15 trustee;
16 (2) by a person appointed by unanimous written agreement
17 of the qualified beneficiaries; or
18 (3) by a person appointed by the court.
19 (d) Filling vacancy for charitable trust.--A vacancy in a
20 trusteeship of a charitable trust that is required to be filled
21 shall be filled in the following order of priority:
22 (1) by a person designated in or under the provisions of
23 the trust instrument to act as successor trustee;
24 (2) by a person selected by unanimous written agreement
25 of the qualified beneficiaries if the Office of Attorney
26 General concurs in the selection; or
27 (3) by a person appointed by the court.
28 (e) Appointment by court.--Whether or not a vacancy in a
29 trusteeship exists or is required to be filled, the court may
30 appoint an additional trustee or special fiduciary if the court
20050S0660B1423 - 80 -
1 considers the appointment desirable for the administration of
2 the trust.
3 (f) Filing appointment.--An appointment of a trustee and an
4 acceptance of an appointment of a trustee may be filed with the
5 clerk of court having jurisdiction over the trust.
6 § 7765. Resignation of trustee; filing resignation.
7 (a) Court approval.--A trustee may resign with court
8 approval.
9 (b) Without court approval if authorized by trust
10 instrument.--A trustee may resign without court approval if
11 authorized to resign by the trust instrument.
12 (c) Without court approval and without authorization in
13 trust instrument.--
14 (1) Unless expressly provided to the contrary in the
15 trust instrument, an individual trustee may resign without
16 court approval and without authorization in the trust
17 instrument if:
18 (i) there is at least one cotrustee and all
19 cotrustees consent in writing to the resignation; and
20 (ii) all the qualified beneficiaries consent in
21 writing to the resignation.
22 (2) This subsection shall not authorize the sole trustee
23 of a trust to resign unless the trust instrument names a
24 successor trustee or provides a method for appointing a
25 successor trustee, and in either case the resignation shall
26 not be effective until the successor trustee accepts the
27 appointment in writing.
28 (d) Liability.--The resignation of a trustee shall not by
29 itself relieve the resigning trustee of liability in connection
30 with the administration of the trust.
20050S0660B1423 - 81 -
1 (e) Filing resignation.--A resignation of a trustee may be
2 filed with the clerk of the court having jurisdiction over the
3 trust.
4 § 7766. Removal of trustee - UTC 706.
5 (a) Request to remove trustee; court authority.--The
6 settlor, a cotrustee or a beneficiary may request the court to
7 remove a trustee or a trustee may be removed by the court on its
8 own initiative.
9 (b) When court may remove trustee.--The court may remove a
10 trustee if it finds that removal of the trustee best serves the
11 interests of the beneficiaries of the trust and is not
12 inconsistent with a material purpose of the trust, a suitable
13 cotrustee or successor trustee is available and:
14 (1) the trustee has committed a serious breach of trust;
15 (2) lack of cooperation among cotrustees substantially
16 impairs the administration of the trust;
17 (3) the trustee has not effectively administered the
18 trust because of the trustee's unfitness, unwillingness or
19 persistent failures; or
20 (4) there has been a substantial change of
21 circumstances.
22 (c) Court remedies.--Pending a final decision on a request
23 to remove a trustee, or in lieu of or in addition to removing a
24 trustee, the court may order appropriate relief under section
25 7781(b) (relating to remedies for breach of trust - UTC 1001) as
26 may be necessary to protect the trust property or the interests
27 of the beneficiaries.
28 (d) Procedure.--The procedure for removal and discharge of a
29 trustee and the effect of removal and discharge shall be the
30 same as that set forth in sections 3183 (relating to procedure
20050S0660B1423 - 82 -
1 for and effect of removal) and 3184 (relating to discharge of
2 personal representative and surety).
3 § 7767. Delivery of property by former trustee - UTC 707.
4 (a) Duties and powers of trustee.--Unless a cotrustee
5 remains in office or the court otherwise orders, a trustee who
6 has resigned or been removed has the duties of a trustee and the
7 powers necessary to protect the trust property until the trust
8 property is delivered to a successor trustee or other person
9 entitled to it.
10 (b) Delivery of trust property.--A trustee who has resigned
11 or been removed shall proceed expeditiously to deliver the trust
12 property within the trustee's possession to the cotrustee,
13 successor trustee or other person entitled to it.
14 § 7768. Compensation of trustee - UTC 708.
15 (a) If unspecified.--If neither the trust instrument nor a
16 separate written agreement signed by the settlor or anyone who
17 is authorized by the trust instrument to do so specifies the
18 trustee's compensation, the trustee is entitled to compensation
19 that is reasonable under the circumstances. Neither a
20 compensation provision in a trust instrument nor a fee agreement
21 governs compensation payable from trust principal unless it
22 explicitly so provides.
23 (b) If specified; adjustment.--If a trust instrument or
24 written fee agreement signed by the settlor or anyone who is
25 authorized by the trust instrument to do so specifies a
26 trustee's compensation, the trustee is entitled to the specified
27 compensation. The court may allow reasonable compensation that
28 is more or less than that specified if:
29 (1) the duties of the trustee have become substantially
30 different from those contemplated when the trust was created
20050S0660B1423 - 83 -
1 or when the fee agreement was executed;
2 (2) the compensation specified in the trust instrument
3 or fee agreement would be unreasonable; or
4 (3) the trustee performed extraordinary services, and
5 the trust instrument or fee agreement does not specify the
6 trustee's compensation for those services.
7 (c) Entitlement not barred.--None of the following shall bar
8 a trustee's entitlement to compensation from the income or
9 principal of the trust:
10 (1) The trust is perpetual or for any other reason has
11 not yet terminated.
12 (2) The trustee's term of office has not yet ended.
13 (3) The trustee of a testamentary trust also acted as a
14 personal representative of the settlor and was or might have
15 been compensated for services as a personal representative
16 from the principal of the settlor's estate.
17 (d) Court authority.--In determining reasonable
18 compensation, the court may consider, among other facts, the
19 market value of the trust and may determine compensation as a
20 fixed or graduated percentage of the trust's market value. The
21 court may allow compensation from principal, income or both and
22 determine the frequency with which compensation may be
23 collected. COMPENSATION AT LEVELS THAT ARISE IN A COMPETITIVE <--
24 MARKET SHALL BE PRESUMED TO BE REASONABLE IN THE ABSENCE OF
25 COMPELLING EVIDENCE TO THE CONTRARY.
26 (e) Cemetery lots.--The authority in this section to pay
27 compensation from trust principal shall not apply to trusts
28 created by cemetery lot owners as endowments for the endowed
29 care and maintenance of burial or cemetery lots if the principal
30 sum involved is less than $20,000. Compensation shall be paid
20050S0660B1423 - 84 -
1 exclusively from the income of such trusts.
2 § 7769. Reimbursement of expenses - UTC 709.
3 (a) Reimbursement from trust property.--A trustee is
4 entitled to be reimbursed out of the trust property, with
5 interest as appropriate, for:
6 (1) expenses that were properly incurred in the
7 administration of the trust; and
8 (2) to the extent necessary to prevent unjust enrichment
9 of the trust, expenses that were not properly incurred in the
10 administration of the trust.
11 (b) Advance.--An advance by the trustee of money for the
12 protection of the trust gives rise to a lien against trust
13 property to secure reimbursement with reasonable interest.
14 § 7770. Liability of successor trustee.
15 A successor trustee shall not be personally liable for the
16 acts or omissions of the trustee's predecessor and shall have no
17 duty to investigate the acts or omissions of the predecessor.
18 SUBCHAPTER H
19 DUTIES AND POWERS OF TRUSTEE
20 Sec.
21 7771. Duty to administer trust - UTC 801.
22 7772. Duty of loyalty - UTC 802.
23 7773. Impartiality - UTC 803.
24 7774. Prudent administration - UTC 804.
25 7775. Costs of administration - UTC 805.
26 7776. Trustee's skills - UTC 806.
27 7777. Delegation by trustee.
28 7778. Powers to direct - UTC 808.
29 7779. Control and protection of trust property - UTC 809.
30 7780. Recordkeeping and identification of trust property -
20050S0660B1423 - 85 -
1 UTC 810.
2 7780.1. Enforcement and defense of claims - UTC 811.
3 7780.2. (Reserved).
4 7780.3. Duty to inform and report.
5 7780.4. Discretionary powers.
6 7780.5. Powers of trustees - UTC 815.
7 7780.6. Illustrative powers of trustee.
8 7780.7. Distribution upon termination.
9 § 7771. Duty to administer trust - UTC 801.
10 Upon acceptance of a trusteeship, the trustee shall
11 administer the trust in good faith, in accordance with its
12 provisions and purposes and the interests of the beneficiaries
13 and in accordance with applicable law.
14 § 7772. Duty of loyalty - UTC 802.
15 (a) Duty of trustee.--A trustee shall administer the trust
16 solely in the interests of the beneficiaries.
17 (b) Effect of conflict of interest.--Subject to the rights
18 of persons dealing with or assisting the trustee as provided in
19 section 7790.2 (relating to protection of person dealing with
20 trustee - UTC 1012), a sale, purchase, exchange, encumbrance or
21 other disposition of property between a trust and either the
22 trustee in the trustee's individual capacity or one of the
23 persons identified in subsection (c) is voidable by a court upon
24 application by a beneficiary affected by the transaction unless:
25 (1) the transaction was authorized by the trust
26 instrument;
27 (2) the transaction was approved by the court;
28 (3) the beneficiary did not commence a judicial
29 proceeding within the time allowed by section 7785 (relating
30 to limitation of action against trustee);
20050S0660B1423 - 86 -
1 (4) the beneficiary consented to the trustee's conduct,
2 ratified the transaction or released the trustee in
3 compliance with section 7789 (relating to beneficiary's
4 consent, release or ratification - UTC 1009); or
5 (5) the transaction involves a contract entered into or
6 claim acquired by the trustee before the person became or
7 contemplated becoming a trustee.
8 (c) What constitutes conflict of interest.--A sale,
9 purchase, exchange, encumbrance or other disposition of property
10 is presumed to be affected by a conflict between personal and
11 fiduciary interests if it is entered into by the trustee with:
12 (1) the trustee's spouse;
13 (2) the trustee's parent or a spouse of the parent;
14 (3) a descendant of the trustee's parent or a spouse of
15 the descendant;
16 (4) an agent of the trustee unless the trustee is a
17 corporation and the agent is an affiliate of the corporation
18 or the transaction is authorized by section 7209 (relating to
19 mutual funds);
20 (5) a corporation or other person or enterprise in which
21 the trustee or a person that owns a significant interest in
22 the trustee has an interest that might affect the trustee's
23 judgment, but this paragraph does not apply to an affiliate
24 of a corporate trustee or to a transaction authorized by
25 section 7209; or
26 (6) the trustee personally.
27 (d) Transactions between trustee and beneficiary.--A
28 transaction between a trustee and a beneficiary that does not
29 concern trust property but that occurs during the existence of
30 the trust or while the trustee retains significant influence
20050S0660B1423 - 87 -
1 over the beneficiary and from which the trustee obtains an
2 advantage is voidable by a court upon application by the
3 beneficiary unless the trustee establishes that the transaction
4 was fair to the beneficiary.
5 (e) Conflict regarding trust opportunity.--A transaction not
6 concerning trust property in which the trustee engages in the
7 trustee's individual capacity involves a conflict between
8 personal and fiduciary interests if the transaction concerns an
9 opportunity properly belonging to the trust.
10 (f) (Reserved).
11 (g) Business enterprises.--In voting shares of stock or in
12 exercising powers of control over similar interests in other
13 forms of business enterprise, the trustee shall act in the best
14 interests of the beneficiaries. If the trust is the sole owner
15 of a corporation or other form of enterprise, the trustee shall
16 elect or appoint directors or other managers who will manage the
17 corporation or business enterprise in the best interests of the
18 beneficiaries.
19 (h) Permissible transactions.--This section does not
20 preclude the following transactions if fair to the
21 beneficiaries:
22 (1) an agreement between a trustee and a beneficiary
23 relating to the appointment or compensation of the trustee;
24 (2) payment of reasonable compensation to the trustee
25 and payment of reasonable compensation to affiliates of a
26 corporate trustee if the compensation is disclosed to the
27 current beneficiaries;
28 (3) a transaction between a trust and another trust,
29 decedent's estate or guardianship, of which the trustee is a
30 fiduciary or in which a beneficiary has an interest;
20050S0660B1423 - 88 -
1 (4) a deposit of trust money in a regulated financial-
2 service institution operated by the trustee;
3 (5) an advance by the trustee of money for the
4 protection of the trust; or
5 (6) a transaction authorized by section 7209.
6 (i) (Reserved).
7 § 7773. Impartiality - UTC 803.
8 If a trust has two or more beneficiaries, the trustee shall
9 act impartially in investing, managing and distributing the
10 trust property, giving due regard to the beneficiaries'
11 respective interests in light of the purposes of the trust. The
12 duty to act impartially does not mean that the trustee must
13 treat the beneficiaries equally. Rather, the trustee must treat
14 the beneficiaries equitably in light of the purposes of the
15 trust.
16 § 7774. Prudent administration - UTC 804.
17 A trustee shall administer the trust as a prudent person
18 would, by considering the purposes, provisions, distributional
19 requirements and other circumstances of the trust and by
20 exercising reasonable care, skill and caution.
21 § 7775. Costs of administration - UTC 805.
22 In administering a trust, the trustee may incur only costs
23 that are reasonable in relation to the trust property, the
24 purposes of the trust and the skills of the trustee.
25 § 7776. Trustee's skills - UTC 806.
26 A trustee who has special skills or expertise relevant to a
27 trust or who is named trustee in reliance upon the trustee's
28 representation that the trustee has special skills or expertise
29 relevant to a trust shall use those special skills or expertise
30 in the administration of the trust.
20050S0660B1423 - 89 -
1 § 7777. Delegation by trustee.
2 (a) Standards for delegation.--A trustee may delegate duties
3 and powers that a prudent trustee of comparable skills might
4 delegate under the circumstances. The trustee shall exercise
5 reasonable care, skill and caution in:
6 (1) selecting an agent;
7 (2) establishing the scope and specific terms of the
8 delegation, consistent with the purposes and provisions of
9 the trust; and
10 (3) reviewing periodically the agent's actions in order
11 to monitor the agent's performance and compliance with the
12 scope and specific terms of the delegation.
13 (b) Agent's duty.--The agent shall comply with the scope and
14 terms of the delegation and shall exercise the delegated duties
15 and powers with reasonable care, skill and caution and shall be
16 liable to the trust for failure to do so. An agent who
17 represents having special skills or expertise shall use those
18 special skills or that expertise.
19 (c) Liability.--A trustee who complies with subsection (a)
20 is not liable to the beneficiaries or to the trust for an action
21 of the agent to whom the function was delegated.
22 (d) Jurisdiction.--An agent who accepts the delegation of
23 duties or powers from a trustee who is subject to the
24 jurisdiction of a court of this Commonwealth shall be deemed to
25 have submitted to the jurisdiction of that court even if the
26 terms of the delegation provide for a different jurisdiction or
27 venue.
28 (e) When one trustee may delegate to another.--A trustee may
29 delegate duties and powers to another trustee if the delegating
30 trustee reasonably believes that the other trustee has greater
20050S0660B1423 - 90 -
1 skills than the delegating trustee with respect to those duties
2 and powers and the other trustee accepts the delegation. The
3 delegating trustee shall not be responsible for the decisions,
4 actions or inactions of the trustee to whom those duties and
5 powers have been delegated if the delegating trustee has
6 exercised reasonable care, skill and caution in establishing the
7 scope and specific terms of the delegation and in reviewing
8 periodically the performance of the trustee to whom the duties
9 and powers have been delegated and that trustee's compliance
10 with the scope and specific terms of the delegation.
11 § 7778. Powers to direct - UTC 808.
12 (a) Direction of settlor.--While a trust is revocable, the
13 trustee may follow a written direction of the settlor that is
14 contrary to the trust instrument.
15 (b) Compliance with power.--If a trust instrument confers
16 upon a person other than the settlor of a revocable trust power
17 to direct certain actions of the trustee, the trustee shall act
18 in accordance with a written exercise of the power unless the
19 attempted exercise is manifestly contrary to the trust
20 instrument or the trustee knows the attempted exercise would
21 constitute a serious breach of a fiduciary duty that the person
22 holding the power owes to the beneficiaries of the trust.
23 (c) Modification or termination of trust.--A trust
24 instrument may confer upon a trustee or other person a power to
25 modify or terminate the trust.
26 (d) Fiduciary relationship.--A person other than a
27 beneficiary who holds a power to direct certain actions of a
28 trustee is presumptively a fiduciary who, as such, is required
29 to act in good faith with regard to the purposes of the trust
30 and the interests of the beneficiaries. The holder of a power to
20050S0660B1423 - 91 -
1 direct is liable for any loss that results from breach of the
2 holder's fiduciary duty.
3 § 7779. Control and protection of trust property - UTC 809.
4 A trustee shall take reasonable steps to take control of and
5 protect the trust property.
6 § 7780. Recordkeeping and identification of trust property -
7 UTC 810.
8 (a) Records.--A trustee shall keep adequate records of the
9 administration of the trust.
10 (b) Commingling trust property prohibited.--A trustee shall
11 keep trust property separate from the trustee's own property.
12 (c) Designating trust property.--Except as otherwise
13 provided in subsection (d) and section 3321 (relating to nominee
14 registration; corporate fiduciary as agent; deposit of
15 securities in a clearing corporation; book-entry securities), a
16 trustee shall cause the trust property to be designated so that
17 the interest of the trust, to the extent feasible, appears in
18 records maintained by a party other than a trustee or
19 beneficiary.
20 (d) Investing property of separate trusts.--If the trustee
21 maintains records clearly indicating the respective interests, a
22 trustee may invest as a whole the property of two or more
23 separate trusts.
24 § 7780.1. Enforcement and defense of claims - UTC 811.
25 Except as provided in section 7770 (relating to liability of
26 successor trustee), a trustee shall take reasonable steps to
27 enforce claims of the trust and to defend claims against the
28 trust. When one of several trustees is individually liable to
29 the trust, the other trustee or trustees shall take any legal
30 action against that trustee necessary to protect the trust.
20050S0660B1423 - 92 -
1 § 7780.2. (Reserved).
2 § 7780.3. Duty to inform and report.
3 (a) Duty to respond to requests.--A trustee shall promptly
4 respond to a beneficiary's reasonable request for information
5 related to the trust's administration.
6 (b) Notice after settlor of revocable trust has been
7 adjudicated incapacitated.--No later than 30 days after the date
8 on which the trustee of a revocable trust learns that the
9 settlor has been adjudicated incapacitated, the trustee shall
10 send the notice described in subsection (i) to the settlor's
11 guardian.
12 (c) Notice after settlor of revocable trust has died.--No
13 later than 30 days after the date on which the trustee of a
14 revocable trust learns that the settlor has died, the trustee
15 shall send the notice described in subsection (i) to:
16 (1) the settlor's personal representative;
17 (2) the settlor's spouse or, if the settlor's spouse is
18 incapacitated, the spouse's guardian;
19 (3) each of the settlor's children who is sui juris and
20 the guardian, if any, of each child who is not sui juris; and
21 (4) the trust's current beneficiaries.
22 (d) Notice after settlor of irrevocable trust has been
23 adjudicated incapacitated.--No later than 30 days after the date
24 on which the trustee of an irrevocable trust learns that the
25 settlor has been adjudicated incapacitated, the trustee shall
26 send the notice described in subsection (i) to the trust's
27 current beneficiaries. A revocable trust shall not be deemed
28 irrevocable for the purposes of this subsection merely because
29 the settlor has been adjudicated incapacitated.
30 (e) Notice after settlor of irrevocable trust has died.--No
20050S0660B1423 - 93 -
1 later than 30 days after the date on which the trustee of an
2 irrevocable trust learns that the settlor has died, the trustee
3 shall send the notice described in subsection (i) to the trust's
4 current beneficiaries unless the settlor had been adjudicated
5 incapacitated and the trustee sent notices to the current
6 beneficiaries as required by subsection (d).
7 (f) Notice to current beneficiaries.--No later than 30 days
8 after the date on which the trustee of an irrevocable trust
9 learns that a person who did not previously receive the notice
10 described in subsection (i) is a current beneficiary of the
11 trust, the trustee shall send the notice described in subsection
12 (i) to the current beneficiary if, at that time, the trustee
13 knows that the settlor is then deceased or has been adjudicated
14 incapacitated.
15 (g) Change in trusteeship.--Apart from the other
16 requirements of this section, the trustee shall send the notice
17 described in subsection (i) to the current beneficiaries each
18 time there is a change in trusteeship.
19 (h) Trustee's notice to any beneficiary at any time.--Apart
20 from the requirements of this section, the trustee may send the
21 notice described in subsection (i) to any beneficiary of the
22 trust at any time.
23 (i) Contents of notice.--Any notice under this section shall
24 be written and convey the following information:
25 (1) The fact of the trust's existence.
26 (2) The identity of the settlor.
27 (3) The trustee's name, address and telephone number.
28 (4) The recipient's right to receive a copy of the trust
29 instrument.
30 (5) The recipient's right to receive, at least annually,
20050S0660B1423 - 94 -
1 a written report of the trust's assets and their market
2 values if feasible, the trust's liabilities and the trust's
3 receipts and disbursements since the date of the last such
4 report.
5 (j) Waiver.--Any beneficiary may waive in writing the right
6 to receive the notice described in subsection (i) and thereafter
7 may rescind in writing that waiver.
8 (k) Notice to settlor's appointee.--The settlor of a trust
9 may in the trust instrument appoint one or more persons or a
10 succession of persons to receive, on behalf of one or more named
11 current beneficiaries of the trust, the notices required by this
12 section. The trustee giving the notice required by this section
13 to that appointee satisfies the trustee's duty to give to the
14 named current beneficiary the notice required by this section
15 if:
16 (1) the trustee notifies the appointee that the notice
17 is being given to the appointee as representing the named
18 current beneficiary; and
19 (2) the appointee does not decline to receive the notice
20 in a writing that is given to the trustee no later than 60
21 days after receipt of the trustee's notice.
22 (l) Applicability.--
23 (1) If the death or adjudication of incapacity described
24 in subsection (b), (c), (d) or (e) occurs on or after (in
25 preparing this act for printing in the Laws of Pennsylvania
26 and the Pennsylvania Consolidated Statutes, the Legislative
27 Reference Bureau shall insert here, in lieu of this
28 statement, the effective date of this section), the time
29 limit for notice set forth in that subsection shall apply.
30 (2) If the death or adjudication of incapacity described
20050S0660B1423 - 95 -
1 in subsection (b), (c), (d) or (e) has occurred before (in
2 preparing this act for printing in the Laws of Pennsylvania
3 and the Pennsylvania Consolidated Statutes, the Legislative
4 Reference Bureau shall insert here, in lieu of this
5 statement, the effective date of this section), the time
6 limit for notice set forth in that subsection shall be (in
7 preparing this act for printing in the Laws of Pennsylvania
8 and the Pennsylvania Consolidated Statutes, the Legislative
9 Reference Bureau shall insert here, in lieu of this
10 statement, the date that is two years after the effective
11 date of this section).
12 (3) The notice under subsection (f) shall not be
13 required to be completed until two years after (in preparing
14 this act for printing in the Laws of Pennsylvania and the
15 Pennsylvania Consolidated Statutes, the Legislative Reference
16 Bureau shall insert here, in lieu of this statement, the
17 effective date of this section).
18 § 7780.4. Discretionary powers.
19 The trustee shall exercise a discretionary power in good
20 faith and in accordance with the provisions and purposes of the
21 trust and the interests of the beneficiaries, notwithstanding
22 the breadth of discretion granted to a trustee in the trust
23 instrument, including the use of such terms as "absolute,"
24 "sole" or "uncontrolled."
25 § 7780.5. Powers of trustees - UTC 815.
26 (a) Exercise of power.--Except as otherwise provided in the
27 trust instrument or in other provisions of this title, a trustee
28 has all the powers over the trust property that an unmarried
29 competent owner has over individually owned property and may
30 exercise those powers without court approval from the time of
20050S0660B1423 - 96 -
1 creation of the trust until final distribution of the assets of
2 the trust.
3 (b) (Reserved).
4 § 7780.6. Illustrative powers of trustee.
5 (a) Listing.--The powers which a trustee may exercise
6 pursuant to section 7780.5 (relating to powers of trustees - UTC
7 815) include the following powers:
8 (1) To accept, hold, invest in and retain investments as
9 provided in Chapter 72 (relating to prudent investor rule).
10 (2) To pay or contest a claim; settle a claim by or
11 against the trust by compromise, arbitration or otherwise;
12 and release, in whole or in part, any claim belonging to the
13 trust.
14 (3) To resolve a dispute regarding the interpretation of
15 the trust or the administration of the trust by mediation,
16 arbitration or other alternative dispute resolution
17 procedures.
18 (4) To prosecute or defend actions, claims or
19 proceedings for the protection of trust assets and of the
20 trustee in the performance of the trustee's duties.
21 (5) To abandon or decline to administer any property
22 which is of little or no value, transfer title to abandoned
23 property and decline to accept title to and administer
24 property which has or may have environmental or other
25 liability attached to it.
26 (6) To insure the assets of the trust against damage or
27 loss and, at the expense of the trust, protect the trustee,
28 the trustee's agents and the beneficiaries from liability to
29 third persons arising from the administration of the trust.
30 (7) To advance money for the protection of the trust and
20050S0660B1423 - 97 -
1 for all expenses, losses and liability sustained in the
2 administration of the trust or because of the holding or
3 ownership of any trust assets. The trustee has a lien on the
4 trust assets as against the beneficiary for an advance under
5 this paragraph, including interest on the advance.
6 (8) To pay taxes, assessments, compensation of the
7 trustee and employees and agents of the trustee and other
8 expenses incurred in the administration of the trust.
9 (9) To receive additions to the assets of the trust.
10 (10) To sell or exchange any real or personal property
11 at public or private sale, without obligation to repudiate an
12 otherwise binding agreement in favor of better offers. If the
13 trustee has been required to give bond, no proceeds of the
14 sale of real estate, including proceeds arising by the reason
15 of involuntary conversion, shall be paid to the trustee
16 until:
17 (i) the court has made an order excusing the trustee
18 from entering additional security; or
19 (ii) the court has made an order requiring
20 additional security and the trustee has entered the
21 additional security.
22 (11) To enter for any purpose into a lease as lessor or
23 lessee with or without option to purchase or renew for a term
24 within or extending beyond the term of the trust.
25 (12) To grant options for sales or leases of a trust
26 asset and acquire options for the acquisition of assets,
27 including options exercisable after the trust terminates.
28 (13) To join in any reorganization, consolidation,
29 merger, dissolution, liquidation, voting-trust plan or other
30 concerted action of security holders and to delegate
20050S0660B1423 - 98 -
1 discretionary duties with respect thereto.
2 (14) To vote a security, in person or by general or
3 limited proxy, with or without power of substitution.
4 (15) To borrow funds and mortgage or pledge trust assets
5 as security for repayment of the funds borrowed, including
6 repayments after the trust terminates.
7 (16) To make loans to and buy property from the personal
8 representatives of the settlor and the settlor's spouse.
9 Loans under this paragraph shall be adequately secured, and
10 the purchases under this paragraph shall be for fair market
11 value.
12 (17) To partition, subdivide, repair, improve or develop
13 real estate; enter into agreements concerning the partition,
14 subdivision, repair, improvement, development, zoning or
15 management of real estate; impose or extinguish restrictions
16 on real estate; dedicate land and easements to public use;
17 adjust boundaries; and do anything else regarding real estate
18 which is commercially reasonable or customary under the
19 circumstances.
20 (18) With respect to possible liability for violation of
21 environmental law:
22 (i) to inspect or investigate property the trustee
23 holds or has been asked to hold or property owned or
24 operated by an organization in which the trustee holds or
25 has been asked to hold an interest, for the purpose of
26 determining the application of environmental law with
27 respect to the property;
28 (ii) to take action to prevent, abate or otherwise
29 remedy any actual or potential violation of environmental
30 law affecting property held directly or indirectly by the
20050S0660B1423 - 99 -
1 trustee, whether taken before or after the assertion of a
2 claim or the initiation of governmental enforcement;
3 (iii) to decline to accept property into trust or
4 disclaim a power with respect to property that is or may
5 be burdened with liability for violation of environmental
6 law;
7 (iv) to compromise claims against the trust which
8 may be asserted for an alleged violation of environmental
9 law; and
10 (v) to pay the expense of inspection, review,
11 abatement or remedial action to comply with environmental
12 law.
13 (19) To operate, repair, maintain, equip and improve any
14 farm or farm operation; to purchase and sell livestock,
15 crops, feed and other property that is normally perishable;
16 and to purchase, use and dispose of farm equipment and employ
17 one or more farm managers and others in connection with farm
18 equipment and pay them reasonable compensation.
19 (20) To make ordinary or extraordinary repairs or
20 alterations in buildings or other structures; demolish
21 improvements; and raze existing or erect new party walls or
22 buildings.
23 (21) To enter into a lease or arrangements for
24 exploration and removal of minerals or other natural
25 resources or enter into a pooling or unitization agreement.
26 (22) To exercise all rights and incidents of ownership
27 of life insurance policies held by the trust, including
28 borrowing on policies, entering into and terminating split-
29 dollar plans, exercising conversion privileges and rights to
30 acquire additional insurance and selecting settlement
20050S0660B1423 - 100 -
1 options.
2 (23) To employ a custodian; hold property unregistered
3 or in the name of a nominee, including the nominee of any
4 institution employed as custodian, without disclosing the
5 fiduciary relationship and without retaining possession and
6 control of securities or other property so held or
7 registered; and pay reasonable compensation to the custodian.
8 (24) To apply funds distributable to a beneficiary who
9 is, in the trustee's opinion, disabled by illness or other
10 cause and unable properly to manage the funds directly for
11 the beneficiary's benefit or to pay such funds for
12 expenditure on the beneficiary's behalf to:
13 (i) the beneficiary;
14 (ii) a guardian of the beneficiary's estate;
15 (iii) an agent acting under a general power of
16 attorney for the beneficiary; or
17 (iv) if there is no agent or guardian, a relative or
18 other person having legal or physical custody or care of
19 the beneficiary.
20 (25) To pay funds distributable to a minor beneficiary
21 to the minor or to a guardian of the minor's estate or to
22 apply the funds directly for the minor's benefit.
23 (26) To do any of the following:
24 (i) Pay any funds distributable to a beneficiary who
25 is not 21 years of age or older to:
26 (A) the beneficiary;
27 (B) an existing custodian for the beneficiary
28 under Chapter 53 (relating to Pennsylvania Uniform
29 Transfers to Minors Act) or under any other state's
30 version of the Uniform Transfers to Minors Act;
20050S0660B1423 - 101 -
1 (C) an existing custodian for the beneficiary
2 under the former Pennsylvania Uniform Gifts to Minors
3 Act or under any other state's version of the Uniform
4 Gifts to Minors Act; or
5 (D) a custodian for the beneficiary appointed by
6 the trustee under Chapter 53.
7 (ii) Apply the funds for the beneficiary.
8 (27) To pay calls, assessments and other sums chargeable
9 or accruing against or on account of securities.
10 (28) To sell or exercise stock subscription or
11 conversion rights.
12 (29) To continue or participate in the operation of any
13 business or other enterprise and to effect incorporation,
14 merger, consolidation, dissolution or other change in the
15 form of the organization of the business or enterprise.
16 (30) To select a mode of payment under a qualified
17 employee benefit plan or a retirement plan payable to the
18 trustee and exercise rights under the plan.
19 (31) To distribute in cash or in kind or partly in each
20 and allocate particular assets in proportionate or
21 disproportionate shares.
22 (32) To appoint a trustee to act in another jurisdiction
23 with respect to trust property located in the other
24 jurisdiction, confer upon the appointed trustee all the
25 powers and duties of the appointing trustee, require that the
26 appointed trustee furnish security and remove the appointed
27 trustee.
28 (33) To execute and deliver instruments which will
29 accomplish or facilitate the exercise of the trustee's
30 powers.
20050S0660B1423 - 102 -
1 (b) Effect.--The trustee shall have no further
2 responsibility or liability for funds upon any of the following:
3 (1) Payment under subsection (a)(24).
4 (2) Payment under subsection (a)(25).
5 (3) Payment or application under subsection (a)(26).
6 § 7780.7. Distribution upon termination.
7 Upon the occurrence of an event terminating or partially
8 terminating a trust, the trustee shall proceed to distribute the
9 trust property within a reasonable time to the persons entitled
10 to it, subject to the right of the trustee to retain a
11 reasonable reserve for the payment of debts, expenses and taxes.
12 SUBCHAPTER I
13 LIABILITY OF TRUSTEES AND RIGHTS
14 OF PERSONS DEALING WITH TRUSTEES
15 Sec.
16 7781. Remedies for breach of trust - UTC 1001.
17 7782. Damages for breach of trust - UTC 1002.
18 7783. Damages in absence of breach - UTC 1003.
19 7784. (Reserved).
20 7785. Limitation of action against trustee.
21 7786. Reliance on trust instrument - UTC 1006.
22 7787. Event affecting administration or distribution - UTC
23 1007.
24 7788. Exculpation of trustee - UTC 1008.
25 7789. Beneficiary's consent, release or ratification - UTC
26 1009.
27 7790. Limitation on personal liability of trustee - UTC 1010.
28 7790.1. Interest as general partner - UTC 1011.
29 7790.2. Protection of person dealing with trustee - UTC 1012.
30 7790.3. Certification of trust - UTC 1013.
20050S0660B1423 - 103 -
1 § 7781. Remedies for breach of trust - UTC 1001.
2 (a) What constitutes breach of trust.--A violation by a
3 trustee of a duty the trustee owes to a beneficiary is a breach
4 of trust.
5 (b) Remedies.--To remedy a breach of trust that has occurred
6 or may occur, the court may order any appropriate relief,
7 including the following:
8 (1) Compelling the trustee to perform the trustee's
9 duties.
10 (2) Enjoining the trustee from committing a breach of
11 trust.
12 (3) Compelling the trustee to redress a breach of trust
13 by paying money, restoring property or other means.
14 (4) Ordering a trustee to file an account.
15 (5) Taking any action authorized by Chapter 43 (relating
16 to temporary fiduciaries).
17 (6) (Reserved).
18 (7) Removing the trustee as provided in section 7766
19 (relating to removal of trustee - UTC 706).
20 (8) Reducing or denying compensation to the trustee.
21 (9) Subject to section 7790.2 (relating to protection of
22 person dealing with trustee - UTC 1012):
23 (i) voiding an act of the trustee;
24 (ii) imposing a lien or a constructive trust on
25 trust property; or
26 (iii) tracing trust property wrongfully disposed of
27 and recovering the property or its proceeds.
28 (10) (Reserved).
29 § 7782. Damages for breach of trust - UTC 1002.
30 (a) Liability for breach of trust.--A trustee who commits a
20050S0660B1423 - 104 -
1 breach of trust is liable to the beneficiaries affected.
2 (b) Contribution.--
3 (1) Except as otherwise provided in this subsection, if
4 more than one trustee is liable to the beneficiaries for a
5 breach of trust, a trustee is entitled to contribution from
6 the other trustee or trustees.
7 (2) A trustee is not entitled to contribution if the
8 trustee:
9 (i) was substantially more at fault than another
10 trustee; or
11 (ii) committed the breach of trust in bad faith or
12 with reckless indifference to the purposes of the trust
13 or the interests of the beneficiaries.
14 (3) A trustee who received a benefit from the breach of
15 trust is not entitled to contribution from another trustee to
16 the extent of the benefit received.
17 § 7783. Damages in absence of breach - UTC 1003.
18 (a) Profit.--A trustee is accountable to an affected
19 beneficiary for any profit, excluding reasonable compensation,
20 made by the trustee arising from the administration of the
21 trust, even absent a breach of trust.
22 (b) Loss or depreciation.--Absent a breach of trust, a
23 trustee is not liable to a beneficiary for a loss or
24 depreciation in the value of trust property or for not having
25 made a profit.
26 § 7784. (Reserved).
27 § 7785. Limitation of action against trustee.
28 (a) Imposed by trustee's written reports.--
29 (1) A beneficiary may not challenge a transaction or
30 assert a claim against a trustee for breach of trust on the
20050S0660B1423 - 105 -
1 basis of a transaction if:
2 (i) the trustee provided the beneficiary with a
3 written report of the trust's assets and their market
4 values if feasible, the trust's liabilities and the
5 trust's receipts and disbursements for the year in which
6 the transaction occurred and for each of the four
7 subsequent calendar years;
8 (ii) the transaction was disclosed in the first of
9 the five reports to which subparagraph (i) refers;
10 (iii) the beneficiary did not notify the trustee in
11 writing within six months after receiving the fifth
12 annual report that the beneficiary objects to the
13 transaction and provide the basis in writing for that
14 objection; and
15 (iv) all reports were accompanied by a conspicuous
16 written statement describing the effect of this
17 paragraph.
18 (2) A claim not barred by paragraph (1) may nevertheless
19 be barred by subsection (b).
20 (b) Five-year absolute bar.--If not previously barred by
21 subsection (a) or section 7798 (relating to failure to present
22 claim at audit):
23 (1) Except as provided in paragraph (2) or (3), a claim
24 by a beneficiary against a trustee, including a claim
25 preserved by the beneficiary notifying the trustee in the
26 manner described in subsection (a), shall be barred five
27 years after the first to occur of the following events:
28 (i) the date after the removal, resignation or death
29 of the trustee on which the beneficiary was given the
30 notice required by section 7780.3(g) (relating to duty to
20050S0660B1423 - 106 -
1 inform and report);
2 (ii) the termination of the beneficiary's interest
3 in the trust; or
4 (iii) the termination of the trust.
5 (2) Except as set forth in paragraph (3), if the first
6 to occur of the events set forth in paragraph (1) occurred
7 before (in preparing this act for printing in the Laws of
8 Pennsylvania and the Pennsylvania Consolidated Statutes, the
9 Legislative Reference Bureau shall insert here, in lieu of
10 this statement, the effective date of this section), a claim
11 described in paragraph (1) shall be barred five years after
12 (in preparing this act for printing in the Laws of
13 Pennsylvania and the Pennsylvania Consolidated Statutes, the
14 Legislative Reference Bureau shall insert here, in lieu of
15 this statement, the effective date of this section).
16 (3) A claim described in paragraph (1) is not barred if,
17 prior to the respective date set forth in either paragraph
18 (1) or (2), the trustee has filed an account with the court
19 or the beneficiary has petitioned the court to compel the
20 trustee to file an account.
21 § 7786. Reliance on trust instrument - UTC 1006.
22 A trustee who acts in reasonable reliance on the express
23 provisions of the trust instrument is not liable to a
24 beneficiary for a breach of trust to the extent the breach
25 resulted from the reliance.
26 § 7787. Event affecting administration or distribution - UTC
27 1007.
28 If the happening of an event, including marriage, divorce,
29 performance of educational requirements, attaining a specific
30 age or death, affects the administration or distribution of a
20050S0660B1423 - 107 -
1 trust, a trustee who has exercised reasonable care to ascertain
2 the happening of the event is not liable for a loss resulting
3 from the trustee's lack of knowledge.
4 § 7788. Exculpation of trustee - UTC 1008.
5 (a) When exculpatory provision unenforceable.--A provision
6 of a trust instrument relieving a trustee of liability for
7 breach of trust is unenforceable to the extent that it:
8 (1) relieves the trustee of liability for breach of
9 trust committed in bad faith or with reckless indifference to
10 the purposes of the trust or the interests of the
11 beneficiaries; or
12 (2) was inserted as the result of an abuse by the
13 trustee of a fiduciary or confidential relationship to the
14 settlor.
15 (b) Exculpatory provision by trustee.--An exculpatory term
16 drafted or caused to be drafted by the trustee is invalid as an
17 abuse of a fiduciary or confidential relationship unless the
18 trustee proves that the exculpatory term is fair under the
19 circumstances and that its existence and contents were
20 adequately communicated to the settlor.
21 § 7789. Beneficiary's consent, release or ratification - UTC
22 1009.
23 A trustee is not liable to a beneficiary for breach of trust
24 if the beneficiary consented to the conduct constituting the
25 breach, released the trustee from liability for the breach or
26 ratified the transaction constituting the breach, unless the
27 consent, release or ratification of the beneficiary was induced
28 by improper conduct of the trustee.
29 § 7790. Limitation on personal liability of trustee - UTC 1010.
30 (a) When trustee not personally liable.--Except as otherwise
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1 provided in the contract, a trustee is not personally liable on
2 a contract properly entered into in the trustee's fiduciary
3 capacity in the course of administering the trust if the trustee
4 in the contract disclosed the fiduciary capacity.
5 (b) When trustee personally liable.--A trustee is personally
6 liable for torts committed in the course of administering a
7 trust or for obligations arising from ownership or control of
8 trust property, including liability for violation of
9 environmental law, only if the trustee is personally at fault.
10 (c) Assertion of claim.--A claim based on a contract entered
11 into by a trustee in the trustee's fiduciary capacity on an
12 obligation arising from ownership or control of trust property
13 or on a tort committed in the course of administering a trust
14 may be asserted in a judicial proceeding against the trustee in
15 the trustee's fiduciary capacity, whether or not the trustee is
16 personally liable for the claim.
17 § 7790.1. Interest as general partner - UTC 1011.
18 (a) Contractual liability.--Except as otherwise provided in
19 subsection (c) or unless personal liability is imposed in the
20 contract, a trustee who holds an interest as a general partner
21 in a general or limited partnership is not personally liable on
22 a contract entered into by the partnership after the trust's
23 acquisition of the interest if the fiduciary capacity was
24 disclosed in the contract or in a statement previously filed
25 pursuant to 15 Pa.C.S. Ch. 83 (relating to general partnerships)
26 or 85 (relating to limited partnerships).
27 (b) Tortious liability.--Except as otherwise provided in
28 subsection (c), a trustee who holds an interest as a general
29 partner is not personally liable for torts committed by the
30 partnership or for obligations arising from ownership or control
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1 of the interest unless the trustee is personally at fault.
2 (c) When immunity inapplicable.--The immunity provided by
3 this section does not apply if an interest in the partnership is
4 held by:
5 (1) the trustee in a capacity other than that of
6 trustee;
7 (2) the trustee's spouse; or
8 (3) the trustee's descendant, sibling or parent or the
9 spouse of a descendant, sibling or parent.
10 (d) Personal liability of settlor.--If the trustee of a
11 revocable trust holds an interest as a general partner, the
12 settlor is personally liable for contracts and other obligations
13 of the partnership as if the settlor were a general partner.
14 § 7790.2. Protection of person dealing with trustee - UTC 1012.
15 (a) (Reserved).
16 (a.1) Protection from liability.--Unless a person assisting
17 or dealing with a trustee has actual knowledge that the trustee
18 is committing a breach of trust or has knowledge of such facts
19 that the trustee's conduct amounts to bad faith, the person:
20 (1) may assume without inquiry the existence of trust
21 powers and their proper exercise by the trustee;
22 (2) is not bound to inquire whether the trustee has
23 power to act or is properly exercising the power; and
24 (3) is fully protected in dealing with the trustee as if
25 the trustee possessed and properly exercised the powers the
26 trustee purports to exercise.
27 (b) No requirement to inquire.--A person other than a
28 beneficiary who in good faith deals with a trustee is not
29 required to inquire into the extent of the trustee's powers or
30 the propriety of their exercise.
20050S0660B1423 - 110 -
1 (c) (Reserved).
2 (c.1) Ultra vires.--A trustee's act may not be set aside or
3 not specifically enforced because the trustee's act was not
4 authorized by section 7780.5 (relating to powers of trustees -
5 UTC 815) or 7780.6 (relating to illustrative powers of trustee)
6 or because the trustee's act was authorized but the authority
7 was improperly exercised. A court's power to set aside a
8 transaction for fraud, accident, mistake or self-dealing is
9 unaffected by this subsection.
10 (d) Former trustee.--A person other than a beneficiary who
11 in good faith assists a former trustee, or who in good faith and
12 for value deals with a former trustee, without knowledge that
13 the trusteeship has terminated is protected from liability as if
14 the former trustee were still a trustee.
15 (e) Effect of other laws.--Comparable protective provisions
16 of other laws relating to commercial transactions or transfer of
17 securities by fiduciaries prevail over the protection provided
18 by this section.
19 § 7790.3. Certification of trust - UTC 1013.
20 (a) Contents of certification.--Instead of furnishing a copy
21 of the trust instrument to a person other than a beneficiary,
22 the trustee may furnish to the person a certification of trust
23 containing the following information:
24 (1) The trust's existence and the date the trust
25 instrument was executed.
26 (2) The identity of the settlor.
27 (3) The identity and address of the currently acting
28 trustee.
29 (4) The powers of the trustee.
30 (5) The revocability or irrevocability of the trust and
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1 the identity of any person holding a power to revoke the
2 trust.
3 (6) The authority of cotrustees to sign or otherwise
4 authenticate and whether all or less than all are required in
5 order to exercise powers of the trustee.
6 (7) The trust's taxpayer identification number.
7 (8) The manner of taking title to trust property.
8 (b) Authentication.--A certification of trust may be signed
9 or otherwise authenticated by any trustee.
10 (c) Assurance of representations.--A certification of trust
11 must state that the trust has not been revoked, modified or
12 amended in a manner that would cause the representations
13 contained in the certification of trust to be incorrect.
14 (d) Dispositive trust provisions.--A certification of trust
15 need not contain the dispositive provisions of the trust
16 instrument.
17 (e) Provisions to be made available upon request.--A
18 recipient of a certification of trust may require the trustee to
19 furnish copies of those excerpts from the original trust
20 instrument and later amendments which designate the trustee and
21 confer upon the trustee the power to act in the pending
22 transaction.
23 (f) Reliance on certification.--A person who acts in
24 reliance upon a certification of trust without knowledge that
25 the representations contained in the certification are incorrect
26 is not liable to any person for so acting and may assume without
27 inquiry the existence of the facts contained in the
28 certification. Knowledge of the provisions of the trust
29 instrument may not be inferred solely from the fact that a copy
30 of all or part of the trust instrument is held by the person
20050S0660B1423 - 112 -
1 relying upon the certification.
2 (g) Enforcement.--A person who in good faith enters into a
3 transaction in reliance upon a certification of trust may
4 enforce the transaction against the trust property as if the
5 representations contained in the certification were correct.
6 (h) Liability.--A person making a demand for the trust
7 instrument in addition to a certification of trust or excerpts
8 is liable for damages if the court determines that the person
9 did not act in good faith in demanding the trust instrument.
10 (i) Applicability.--This section does not limit the right of
11 a person to obtain a copy of the trust instrument in a judicial
12 proceeding concerning the trust.
13 SUBCHAPTER J
14 MISCELLANEOUS PROVISIONS
15 Sec.
16 7791. Abandonment of property.
17 7792. Powers, duties and liabilities identical with personal
18 representatives.
19 7793. Effect of removal, or of probate of later will or
20 codicil.
21 7794. Title of purchaser.
22 7795. Reports for school district trustees.
23 7796. Jurisdiction.
24 7797. Filing accounts.
25 7798. Failure to present claim at audit.
26 7799. Income on distributive shares.
27 7799.1. Annexation of account of distributed estate or
28 trust.
29 7799.2. Accounts, audits and distributions.
30 7799.3. Pooled trusts for persons with disabilities.
20050S0660B1423 - 113 -
1 § 7791. Abandonment of property.
2 If any property is so burdensome or is so encumbered or is in
3 such condition that it is of no value to the trust, the trustee
4 may abandon it. If property without value cannot be abandoned
5 without transfer of title to another or without a formal
6 renunciation, the court may authorize the trustee to transfer or
7 renounce it without consideration if it finds that this will be
8 for the best interests of the trust.
9 § 7792. Powers, duties and liabilities identical with personal
10 representatives.
11 The provisions concerning the powers, duties and liabilities
12 of a trustee shall be the same as those set forth in the
13 following provisions of this title for the administration of a
14 decedent's or a minor's estate:
15 Section 3184 (relating to discharge of personal
16 representative and surety).
17 Section 3321(d) and (e) (relating to nominee
18 registration; corporate fiduciary as agent; deposit of
19 securities in a clearing corporation; book-entry securities).
20 Section 3323 (relating to compromise of controversies).
21 Section 3324 (relating to death or incapacity of
22 fiduciary).
23 Section 3332 (relating to inherent powers and duties).
24 Section 3353 (relating to order of court).
25 Section 3354 (relating to power given in governing
26 instrument).
27 Section 3355 (relating to restraint of sale).
28 Section 3356 (relating to purchase by personal
29 representative).
30 Section 3358 (relating to collateral attack).
20050S0660B1423 - 114 -
1 Section 3359 (relating to record of proceedings; county
2 where real estate lies).
3 § 7793. Effect of removal, or of probate of later will or
4 codicil.
5 (a) No impeachment.--No act of administration performed by a
6 testamentary trustee in good faith shall be impeached by the
7 subsequent:
8 (1) revocation of the probate of the will from which the
9 trustee derives authority;
10 (2) probate of a later will or of a codicil; or
11 (3) dismissal of the trustee.
12 (b) Good faith dealings.--Regardless of the good or bad
13 faith of the testamentary trustee, no person who deals in good
14 faith with a testamentary trustee shall be prejudiced by the
15 occurrence of any of the contingencies set forth in subsection
16 (a).
17 § 7794. Title of purchaser.
18 If the trustee has given a bond as required in accordance
19 with this title, any sale, pledge, mortgage or exchange by a
20 trustee, whether pursuant to a decree or to the exercise of a
21 power conferred by the trust instrument or of a power under this
22 title, shall pass the full title of the trust in the property,
23 unless otherwise specified. Persons dealing with the trustee
24 shall have no obligation to see to the proper application of the
25 cash or other assets given in exchange for the property of the
26 trust. A sale or exchange by a trustee pursuant to a decree
27 under section 3353 (relating to order of court) shall have the
28 effect of a judicial sale as to the discharge of liens, but the
29 court may decree a sale or exchange freed and discharged from
30 the lien of any mortgage otherwise preserved from discharge by
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1 existing law if the holder of the mortgage consents by writing
2 filed in the proceeding. No sale, mortgage, exchange or
3 conveyance shall be prejudiced by the subsequent dismissal of
4 the trustee. No sale, mortgage, exchange or conveyance by a
5 testamentary trustee shall be prejudiced by the terms of a will
6 or codicil thereafter probated if the person dealing with the
7 trustee did so in good faith.
8 § 7795. Reports for school district trustees.
9 (a) Scope.--This section applies if a school district is a
10 trustee of land in accordance with all of the following:
11 (1) The land is held for the benefit of the public.
12 (2) The land is not used directly for school purposes.
13 (b) Requirement.--
14 (1) By January 30, the school district shall prepare a
15 report for the prior year concerning the trust.
16 (2) The report shall detail all of the following:
17 (i) Revenues generated.
18 (ii) Expenses incurred.
19 (iii) Balance of funds held by the school district
20 as trustee.
21 (iv) A statement regarding the activities taken by
22 the trustee during the prior year to advance the purposes
23 of the trust.
24 (3) The report must be certified as correct by the
25 district superintendent.
26 (4) The report shall be made public as follows:
27 (i) The report shall be published in 14-point type
28 in a newspaper of general circulation in each county in
29 which the land is located.
30 (ii) The report shall be available during business
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1 hours for inspection and copying at the office of the
2 district superintendent. A reasonable fee may be charged
3 for copying.
4 § 7796. Jurisdiction.
5 Notwithstanding 42 Pa.C.S. § 931 (relating to original
6 jurisdiction and venue), jurisdiction over an action involving
7 land referred to in section 7795 (relating to reports for school
8 district trustees) shall be vested in the court of common pleas
9 in the judicial district where:
10 (1) all of the land is located; or
11 (2) more than 50% of the land is located.
12 § 7797. Filing accounts.
13 (a) When to file.--A trustee shall file an account of his
14 administration whenever directed to do so by the court and may
15 file an account at any other time.
16 (b) Where to file.--All accounts of trustees shall be filed
17 in the office of the clerk.
18 § 7798. Failure to present claim at audit.
19 (a) Applicability.--This section applies to a person that,
20 at the audit of a trustee's account, has a claim that:
21 (1) arose out of the administration of trust property or
22 arises out of the distribution of trust property upon any
23 interim or final accounting of the trust; and
24 (2) is not reported to the court as an admitted claim.
25 (b) Bar.--A person that fails, at the call for audit or
26 confirmation, to present a claim under subsection (a) shall be
27 forever barred from making a claim against:
28 (1) trust property distributed pursuant to the audit or
29 confirmation;
30 (2) a distributee of trust property distributed pursuant
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1 to the audit or confirmation; and
2 (3) except as otherwise provided in section 3521
3 (relating to rehearing; relief granted), trust property
4 awarded back upon further trust pursuant to the audit or
5 confirmation.
6 (c) Liens and charges unimpaired.--Nothing in this section
7 shall be construed as impairing any lien or charge on real or
8 personal estate of the trust existing at the time of the audit.
9 § 7799. Income on distributive shares.
10 Except as otherwise provided by the trust instrument or by
11 the provisions of section 3543 (relating to income on
12 distributive shares):
13 (1) If a sum of money is directed to be set aside at a
14 specified time as a separate trust, it shall be entitled to
15 income at the annual rate of 5% from the date it was to be
16 set aside until it is set aside. If a sum of money is
17 directed to be paid outright, it shall be entitled to income
18 at the annual rate of 5% from three months after it became
19 payable until it is paid.
20 (2) A donee of a gift of specific real or personal
21 property directed to be distributed from a trust shall be
22 entitled to the net income from property given to the donee
23 accrued from the date it became distributable.
24 (3) All income from real and personal property earned
25 during the administration of a trust and not payable to
26 others pursuant to the governing instrument or the provisions
27 of this section shall be distributed pro rata among the
28 income beneficiaries of a continuing trust and other persons
29 entitled to residuary shares of the trust.
30 § 7799.1. Annexation of account of distributed estate or trust.
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1 A trustee who has received property from a personal
2 representative or from another trustee in distribution of an
3 estate or another trust may annex a copy of an account of the
4 administration of the estate or other trust to an account filed
5 by the trustee covering the administration of the trust under
6 the trustee's management. If notice of the annexation of the
7 account of the estate or other trust is given to the persons
8 required to be notified of the filing of the trustee's account
9 of the principal trust, confirmation of the principal account
10 shall relieve both the trustee of the principal trust and the
11 personal representative or trustee of the distributed estate or
12 other trust of all liability to beneficiaries of the principal
13 trust for transactions shown in the account so annexed to the
14 same extent as if the annexed account had been separately filed
15 and confirmed. If the fund covered by the annexed account has
16 itself received property from another source under circumstances
17 that would have permitted annexation of an account under this
18 section or under section 3501.2 (relating to annexation of
19 account of terminated trust, guardianship or agency), accounts
20 for both funds may be annexed.
21 § 7799.2. Accounts, audits and distributions.
22 The provisions concerning accounts, audits and distributions
23 in trust estates shall be the same as those set forth in the
24 following provisions of this title for the administration of a
25 decedent's estate:
26 Section 3511 (relating to audits in counties having
27 separate orphans' court division).
28 Section 3512 (relating to audits in counties having no
29 separate orphans' court division).
30 Section 3513 (relating to statement of proposed
20050S0660B1423 - 119 -
1 distribution).
2 Section 3514 (relating to confirmation of account and
3 approval of proposed distribution).
4 Section 3521 (relating to rehearing; relief granted).
5 Section 3533 (relating to award upon final confirmation
6 of account).
7 Section 3536 (relating to recording and registering
8 decrees awarding real estate).
9 Section 3538 (relating to distributions involving persons
10 born out of wedlock).
11 Section 3539 (relating to change in law after pattern of
12 distribution established).
13 Section 3540 (relating to absentee and additional
14 distributees).
15 Section 3541 (relating to order of abatement).
16 Section 3545 (relating to transcripts of balances due by
17 personal representative).
18 § 7799.3. Pooled trusts for persons with disabilities.
19 (a) Scope.--This section relates to pooled trusts.
20 (b) Organization of pooled trust.--
21 (1) A pooled trust shall be administered by a trustee
22 governed by a board. The trust may employ persons as
23 necessary.
24 (2) The members of a board and employees of a trustee,
25 if any, shall stand in a fiduciary relationship to the
26 beneficiaries and the trustee regarding investment of the
27 trust and shall not profit, either directly or indirectly,
28 with respect to the investment.
29 (3) A trustee shall maintain a separate account for each
30 beneficiary of a pooled trust; but, for purposes of
20050S0660B1423 - 120 -
1 investment and management of funds, the trustee may pool
2 these accounts. The trustee shall have exclusive control and
3 authority to manage and invest the money in the pooled trust
4 in accordance with this section, subject, however, to the
5 exercise of that degree of judgment, skill and care under the
6 prevailing circumstances that persons of prudence, discretion
7 and intelligence who are familiar with investment matters
8 exercise in the management of their affairs, considering the
9 probable income to be derived from the investment and the
10 probable safety of their capital. The trustee may charge a
11 trust management fee to cover the costs of administration and
12 management of the pooled trust.
13 (4) A board member shall disclose and abstain from
14 participation in a discussion or voting on an issue if a
15 conflict of interest arises with the board member on a
16 particular issue or vote.
17 (5) No board member may receive compensation for
18 services provided as a member of the board. No fees or
19 commissions may be paid to a board member. A board member may
20 be reimbursed for necessary expenses incurred which are in
21 the best interest of the beneficiaries of the pooled trust as
22 a board member upon presentation of receipts.
23 (6) The trustee shall disburse money from a
24 beneficiary's account only on behalf of the beneficiary. A
25 disbursement from a beneficiary's account shall be in the
26 best interest of the beneficiary.
27 (c) Pooled trust fund.--All money received for pooled trust
28 funds shall be deposited with a court-approved corporate
29 fiduciary or with the State Treasury if no court-approved
30 corporate fiduciary is available to the trustee. The funds shall
20050S0660B1423 - 121 -
1 be pooled for investment and management. A separate account
2 shall be maintained for each beneficiary, and quarterly
3 accounting statements shall be provided to each beneficiary by
4 the trustee. The court-approved corporate fiduciary or the State
5 Treasury shall provide quarterly accounting statements to the
6 trustee. The court-approved corporate fiduciary or the State
7 Treasury may charge a trust management fee to cover the costs of
8 managing the funds in the pooled trust.
9 (d) Reporting.--
10 (1) In addition to reports required to be filed under 15
11 Pa.C.S. Pt. III (relating to partnerships and limited
12 liability companies), the trustee shall file an annual report
13 with the Office of Attorney General AND THE DEPARTMENT OF <--
14 PUBLIC WELFARE, along with an itemized statement which shows
15 the funds collected for the year, income earned, salaries
16 paid, other expenses incurred and the opening and final trust
17 balances. A copy of this statement shall be available to the
18 beneficiary, settlor or designee of the settlor upon request.
19 (2) The trustee shall prepare and provide each settlor
20 or the settlor's designee annually with a detailed individual
21 statement of the services provided to the settlor's
22 beneficiary during the previous 12 months and of the services
23 to be provided during the following 12 months. The trustee
24 shall provide a copy of this statement to the beneficiary
25 upon request.
26 (e) Coordination of services.--
27 (1) THE DEPARTMENT OF PUBLIC WELFARE SHALL REVIEW AND <--
28 APPROVE THE POOLED TRUST OF AN APPLICANT FOR MEDICAL
29 ASSISTANCE.
30 (1) (2) In the determination of eligibility for medical <--
20050S0660B1423 - 122 -
1 assistance benefits, the interest of a disabled beneficiary
2 in a pooled trust shall not be considered as a resource for
3 purposes of determining the beneficiary's eligibility for
4 medical assistance.
5 (2) (3) No State agency may reduce the benefits or <--
6 services available to an individual because that person is a
7 beneficiary of a pooled trust. The beneficiary's interest in
8 a pooled trust is not reachable in satisfaction of a claim
9 for support and maintenance of the beneficiary.
10 (f) Notice.--The Office of Attorney General AND THE <--
11 DEPARTMENT OF PUBLIC WELFARE shall make available information on
12 the treatment of pooled trusts for the persons with disabilities
13 in the medical assistance program.
14 (g) Applicability.--This section shall apply to all of the
15 following:
16 (1) Pooled trusts established after March 8, 2003.
17 (2) Accounts of individual beneficiaries established
18 after March 8, 2003, in pooled trusts created before March 9,
19 2003.
20 (h) Definitions.--As used in this section, the following
21 words and phrases shall have the meanings given to them in this
22 subsection:
23 "Beneficiary." An individual with a disability who has the
24 right to receive services and benefits of a pooled trust.
25 "Board." A group of persons vested with the management of
26 the business affairs of a trustee.
27 "Disability." A physical or mental impairment as defined in
28 section 1614 of the Social Security Act (49 Stat. 620, 42 U.S.C.
29 § 1382c).
30 "Pooled trust." A trust which meets all of the following:
20050S0660B1423 - 123 -
1 (1) The trust contains assets of more than one
2 beneficiary.
3 (2) Each beneficiary has a disability.
4 (3) The trust is managed by a nonprofit corporation.
5 (4) A separate account is maintained for each
6 beneficiary of the trust, but, for purposes of investment and
7 management of funds, the trust pools these accounts. Accounts
8 in the trust may be established by the parent, grandparent or
9 legal guardian of the individual with a disability, by the
10 individual with a disability or by a court.
11 (5) Upon the death of a beneficiary, amounts remaining <--
12 in the beneficiary's accounts are:
13 (i) retained by the trust for the benefit of other
14 beneficiaries or other individuals with disabilities; or
15 (ii) used to reimburse the Commonwealth in an amount
16 equal to the total amount of medical assistance paid on
17 behalf of the beneficiary.
18 (5) UPON THE DEATH OF A BENEFICIARY, OR UPON THE EARLIER <--
19 TERMINATION OF THE TRUST, AMOUNTS REMAINING IN THE
20 BENEFICIARY'S ACCOUNT MUST BE DISTRIBUTED IN ACCORDANCE WITH
21 ONE OF THE FOLLOWING:
22 (I) THE TRUST MAY RETAIN UP TO 50% OF THE REMAINING
23 BALANCE FOR THE BENEFIT OF OTHER BENEFICIARIES. THE
24 REMAINING 50% OF THE BALANCE MUST BE REIMBURSED TO THE
25 COMMONWEALTH AND ANY OTHER STATE THAT PROVIDED MEDICAL
26 ASSISTANCE UP TO AN AMOUNT EQUAL TO THE TOTAL AMOUNT OF
27 MEDICAL ASSISTANCE PAID ON BEHALF OF THE BENEFICIARY.
28 (II) THE AMOUNTS MUST BE USED TO REIMBURSE THE
29 COMMONWEALTH AND ANY OTHER STATE THAT PROVIDED MEDICAL
30 ASSISTANCE UP TO AN AMOUNT EQUAL TO THE TOTAL AMOUNT OF
20050S0660B1423 - 124 -
1 MEDICAL ASSISTANCE PAID ON BEHALF OF THE BENEFICIARY.
2 "Trustee." A nonprofit organization that manages a pooled
3 trust.
4 Section 15 10. The definitions of "principal" and "sui juris <--
5 beneficiary" in section 8102 of Title 20 are amended to read:
6 § 8102. Definitions.
7 The following words and phrases when used in this chapter
8 shall have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 * * *
11 "Principal." Property held in trust for distribution to a
12 remainder beneficiary when the trust terminates or property held
13 in trust in perpetuity.
14 * * *
15 "Sui juris beneficiary." Includes:
16 (1) a court-appointed guardian of an incapacitated
17 beneficiary;
18 (2) an agent for an incompetent beneficiary; and
19 (3) a court-appointed guardian of a minor beneficiary's
20 estate [or, if none, the parents of the minor beneficiary].
21 * * *
22 Section 16. Sections 8104(c)(4) and 8105 of Title 20 are <--
23 SECTION 11. SECTIONS 8104(C)(4), 8105 AND 8107 OF TITLE 20 <--
24 ARE amended to read:
25 § 8104. Trustee's power to adjust.
26 * * *
27 (c) Prohibited adjustments.--A trustee may not make an
28 adjustment under this section if any of the following apply:
29 * * *
30 (4) The adjustment is from any amount which is
20050S0660B1423 - 125 -
1 permanently set aside for charitable purposes under the
2 governing instrument and for which a Federal estate or gift
3 tax charitable deduction has been taken unless both income
4 and principal are so set aside.
5 * * *
6 § 8105. Power to convert to unitrust.
7 (a) Conversion.--Unless expressly prohibited by the
8 governing instrument, a trustee may release the power under
9 section 8104 (relating to trustee's power to adjust) and convert
10 a trust into a unitrust as described in this section if all of
11 the following apply:
12 (1) The trustee determines that the conversion will
13 enable the trustee to better carry out the intent of the
14 settlor or testator and the purposes of the trust.
15 (2) The trustee gives written notice of the trustee's
16 intention to release the power to adjust and to convert the
17 trust into a unitrust and of how the unitrust will operate,
18 including what initial decisions the trustee will make under
19 this section, to all the sui juris beneficiaries who:
20 (i) are currently eligible to receive income from
21 the trust; [and]
22 (ii) would be eligible to receive, if no powers of
23 appointment were exercised, income from the trust if the
24 interest of all those eligible to receive income under
25 subparagraph (i) were to terminate immediately prior to
26 the giving of notice; and
27 (iii) would receive, if no powers of appointment
28 were exercised, a distribution of principal if the trust
29 were to terminate immediately prior to the giving of
30 notice.
20050S0660B1423 - 126 -
1 (3) There is at least one sui juris beneficiary under
2 paragraph (2)(i) and at least one sui juris beneficiary under
3 either paragraph (2)(ii) or (iii).
4 (4) No sui juris beneficiary objects to the conversion
5 to a unitrust in a writing delivered to the trustee within 60
6 days of the mailing of the notice under paragraph (2).
7 (b) Judicially approved conversion.--
8 (1) The trustee may petition the court to approve the
9 conversion to a unitrust if any of the following apply:
10 (i) A beneficiary timely objects to the conversion
11 to a unitrust.
12 (ii) There are no sui juris beneficiaries under
13 subsection (a)(2)(i).
14 (iii) There are no sui juris beneficiaries under
15 either subsection (a)(2)(ii) or (iii).
16 (2) A beneficiary may request a trustee to convert to a
17 unitrust. If the trustee does not convert, the beneficiary
18 may petition the court to order the conversion.
19 (3) The court shall approve the conversion or direct the
20 requested conversion if the court concludes that the
21 conversion will enable the trustee to better carry out the
22 intent of the settlor or testator and the purposes of the
23 trust.
24 (c) Consideration.--In deciding whether to exercise the
25 power conferred by subsection (a), a trustee may consider, among
26 other things, all of the following:
27 (1) The size of the trust.
28 (2) The nature and estimated duration of the trust.
29 (3) The liquidity and distribution requirements of the
30 trust.
20050S0660B1423 - 127 -
1 (4) The needs for regular distributions and preservation
2 and appreciation of capital.
3 (5) The expected tax consequences of the conversion.
4 (6) The assets held in the trust; the extent to which
5 they consist of financial assets, interests in closely held
6 enterprises, tangible and intangible personal property or
7 real property; and the extent to which an asset is used by a
8 beneficiary.
9 (7) To the extent reasonably known to the trustee, the
10 needs of the beneficiaries for present and future
11 distributions authorized or required by the governing
12 instrument.
13 (8) Whether and to what extent the governing instrument
14 gives the trustee the power to invade principal or accumulate
15 income or prohibits the trustee from invading principal or
16 accumulating income and the extent to which the trustee has
17 exercised a power from time to time to invade principal or
18 accumulate income.
19 (9) The actual and anticipated effect of economic
20 conditions on principal and income and effects of inflation
21 and deflation.
22 (d) Post conversion.--After a trust is converted to a
23 unitrust, all of the following apply:
24 (1) The trustee shall follow an investment policy
25 seeking a total return for the investments held by the trust,
26 whether the return is to be derived:
27 (i) from appreciation of capital;
28 (ii) from earnings and distributions from capital;
29 or
30 (iii) from both.
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1 (2) The trustee shall make regular distributions in
2 accordance with the governing instrument construed in
3 accordance with the provisions of this section.
4 (3) The term "income" in the governing instrument shall
5 mean an annual distribution (the unitrust distribution) equal
6 to 4% (the payout percentage) of the net fair market value of
7 the trust's assets, whether such assets would be considered
8 income or principal under other provisions of this chapter,
9 averaged over the lesser of:
10 (i) the three preceding years; or
11 (ii) the period during which the trust has been in
12 existence.
13 (e) Discretion of trustee.--The trustee may, in the
14 trustee's discretion from time to time, determine all of the
15 following:
16 (1) The effective date of a conversion to a unitrust.
17 (2) The provisions for prorating a unitrust distribution
18 for a short year in which a beneficiary's right to payments
19 commences or ceases.
20 (3) The frequency of unitrust distributions during the
21 year.
22 (4) The effect of other payments from or contributions
23 to the trust on the trust's valuation.
24 (5) Whether to value the trust's assets annually or more
25 frequently.
26 (6) What valuation dates to use.
27 (7) How frequently to value nonliquid assets and whether
28 to estimate their value.
29 (8) Whether to omit from the calculations trust property
30 occupied or possessed by a beneficiary.
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1 (9) Any other matters necessary for the proper
2 functioning of the unitrust.
3 (f) Allocation.--
4 (1) Expenses which would be deducted from income if the
5 trust were not a unitrust may not be deducted from the
6 unitrust distribution.
7 (2) Unless otherwise provided by the governing
8 instrument, the unitrust distribution shall be considered to
9 have been paid from [net income as such term would be
10 determined if the trust were not a unitrust. To the extent
11 net income is insufficient, the unitrust distribution shall
12 be paid from net realized short-term capital gains. To the
13 extent income and net realized short-term capital gains are
14 insufficient, the unitrust distribution shall be paid from
15 net realized long-term capital gains. To the extent income
16 and net realized short-term and long-term capital gains are
17 insufficient, the unitrust distribution shall be paid from
18 the principal of the trust.] the following sources in order
19 of priority:
20 (i) net income determined as if the trust were not a
21 unitrust;
22 (ii) ordinary income for Federal income tax purposes
23 that is not allocable to net income under subparagraph
24 (i);
25 (iii) net realized short-term capital gains for
26 Federal income tax purposes;
27 (iv) net realized long-term capital gains for
28 Federal income tax purposes; and
29 (v) the principal of the trust estate.
30 (g) Court orders.--The trustee or, if the trustee declines
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1 to do so, a beneficiary may petition the court to:
2 (1) Select a payout percentage different than 4%.
3 (2) Provide for a distribution of net income, as would
4 be determined if the trust were not a unitrust, in excess of
5 the unitrust distribution if such distribution is necessary
6 to preserve a tax benefit.
7 (3) Average the valuation of the trust's net assets over
8 a period other than three years.
9 (4) Reconvert from a unitrust. Upon a reconversion, the
10 power to adjust under section 8104 shall be revived.
11 (g.1) Reconversion from unitrust.--A trustee may reconvert a
12 unitrust following the same procedures as in subsection (a) for
13 converting a trust into a unitrust with the exception that the
14 written notice shall state that the intent is to reconvert the
15 unitrust into a trust for which income is defined under this
16 chapter. Upon reconversion, the power to adjust under section
17 8104 shall be revived.
18 (h) Application.--A conversion to a unitrust does not affect
19 a provision in the governing instrument directing or authorizing
20 the trustee to distribute principal or authorizing a beneficiary
21 to withdraw a portion or all of the principal.
22 (i) Prohibited conversions.--A trustee may not convert a
23 trust into a unitrust in any of the following circumstances:
24 (1) If payment of the unitrust distribution would change
25 the amount payable to a beneficiary as a fixed annuity or a
26 fixed fraction of the value of the trust assets.
27 (2) If the unitrust distribution would be made from [any
28 amount] trust funds which [is] are permanently set aside for
29 charitable purposes under the governing instrument and for
30 which a Federal estate or gift tax charitable deduction has
20050S0660B1423 - 131 -
1 been taken, unless both income and principal are so set
2 aside. If both income and principal are so set aside, then
3 section 8113 (relating to charitable trusts) and not this
4 section shall be available.
5 (3) If:
6 (i) possessing or exercising the power to convert
7 would cause an individual to be treated as the owner of
8 all or part of the trust for Federal income tax purposes;
9 and
10 (ii) the individual would not be treated as the
11 owner if the trustee did not possess the power to
12 convert.
13 (4) If:
14 (i) possessing or exercising the power to convert
15 would cause all or part of the trust assets to be subject
16 to Federal estate or gift tax with respect to an
17 individual; and
18 (ii) the assets would not be subject to Federal
19 estate or gift tax with respect to the individual if the
20 trustee did not possess the power to convert.
21 (5) If the conversion would result in the disallowance
22 of a Federal estate tax or gift tax marital deduction which
23 would be allowed if the trustee did not have the power to
24 convert.
25 (6) If the trustee is a beneficiary of the trust.
26 (j) Permissible conversion when otherwise prohibited.--
27 (1) If subsection (i)(3), (4) or (6) applies to a
28 trustee and there is more than one trustee, a co-trustee to
29 whom the provision does not apply may convert the trust
30 unless the exercise of the power by the remaining trustee or
20050S0660B1423 - 132 -
1 trustees is prohibited by the governing instrument.
2 (2) If subsection (i)(3), (4) or (6) applies to all the
3 trustees, the trustees may petition the court to direct a
4 conversion.
5 (k) Release of the power to convert.--
6 (1) A trustee may release the power conferred by
7 subsection (a) to convert to a unitrust if any of the
8 following apply:
9 (i) The trustee is uncertain about whether
10 possessing or exercising the power will cause a result
11 described in subsection (i)(3), (4) or (5).
12 (ii) The trustee determines that possessing or
13 exercising the power will or may deprive the trust of a
14 tax benefit or impose a tax burden not described in
15 subsection (i).
16 (2) The release may be permanent or for a specified
17 period, including a period measured by the life of an
18 individual.
19 Section 17. Section 8107 of Title 20 is amended to read: <--
20 § 8107. [(Reserved).] Express trusts.
21 (a) General rule.--In the absence of a contrary intent
22 appearing in the governing instrument of an express unitrust,
23 the governing instrument shall be construed in accordance with
24 the following rules:
25 (1) The trustee shall follow an investment policy
26 seeking a total return for the investments held by the trust,
27 whether the return is to be derived from:
28 (i) appreciation of capital;
29 (ii) earnings and distributions from capital; or
30 (iii) both.
20050S0660B1423 - 133 -
1 (2) The unitrust distribution shall be an annual
2 distribution of an amount equal to 4% of the net fair market
3 value of the trust's assets, whether the assets would be
4 considered income or principal under other provisions of this
5 chapter, averaged over the lesser of:
6 (i) the three preceding years; or
7 (ii) the period during which the trust has been in
8 existence.
9 (3) The trustee may, in the trustee's discretion from
10 time to time, determine all of the following:
11 (i) The provisions for prorating a unitrust
12 distribution for a short year in which the beneficiary's
13 right to payments commences or ceases.
14 (ii) The frequency of unitrust distributions during
15 the year.
16 (iii) The effect of other payments from or
17 contributions to the trust on the trust's valuation.
18 (iv) Whether to value the trust's assets annually or
19 more frequently.
20 (v) What valuation dates to use.
21 (vi) How frequently to value nonliquid assets and
22 whether to estimate their value.
23 (vii) Whether to omit from the calculations
24 residential real estate, tangible personal property or
25 other trust property used, occupied or possessed by a
26 beneficiary.
27 (viii) Any other matters necessary for the proper
28 functioning of the unitrust.
29 (4) Expenses which would be deducted from income if the
30 trust were not a unitrust shall not be deducted from the
20050S0660B1423 - 134 -
1 unitrust distribution.
2 (5) The unitrust distribution shall be considered to
3 have been paid from the following sources in order of
4 priority:
5 (i) net income determined as if the trust were not
6 an express unitrust;
7 (ii) ordinary income for Federal income tax purposes
8 that is not allocable to net income under subparagraph
9 (i);
10 (iii) net realized short-term capital gains for
11 Federal income tax purposes;
12 (iv) net realized long-term capital gains for
13 Federal income tax purposes; and
14 (v) the principal of the trust estate.
15 (b) Definition.--As used in this section, the term "express
16 unitrust" shall mean a trust which by its governing instrument
17 creates a trust, other than a trust solely for charitable
18 purposes or a qualified charitable split interest trust under
19 section 664(d) or 170(f)(2)(B) of the Internal Revenue Code of
20 1986 (Public Law 99-514, 26 U.S.C. § 664(d) or 170(f)(2)(B)),
21 and provides for an annual distribution, the unitrust
22 distribution, equal to a fixed percentage of the net fair market
23 value of the trust's assets, valued at least annually, and
24 computed with reference to such value in one or more years. If
25 the fixed percentage is not less than 3% nor more than 5%, the
26 unitrust distribution shall be considered the income of the
27 trust for the purposes of this chapter.
28 Section 18 12. Section 8113(c) of Title 20 is amended and <--
29 the section is amended by adding a subsection to read:
30 § 8113. Charitable trusts.
20050S0660B1423 - 135 -
1 * * *
2 (c) Effect of election.--If an election is made to be
3 governed by this section, the term "income" shall mean a
4 percentage of the value of the trust. The trustee shall, in a
5 writing maintained as part of the permanent records of the
6 trust, [annually] select the percentage and determine that it is
7 consistent with the long-term preservation of the real value of
8 the principal of the trust, but in no event shall the percentage
9 be less than 2% nor more than 7% per year. The term "principal"
10 shall mean all other assets held by the trustee with respect to
11 the trust. The selection may be made either annually or subject
12 to change only when the trustee deems such change necessary and
13 prudent.
14 * * *
15 (f) Charitable organizations.--For a charitable organization
16 defined under the act of June 17, 1971 (P.L.181, No.23), known
17 as the Charitable Instruments Act of 1971, the provisions of
18 that act shall supersede subsection (c) if necessary to comply
19 with the minimum investment return requirements.
20 Section 19 13. Sections 8121(2) and 8141(c) and (d) of Title <--
21 20 are amended to read:
22 § 8121. Determination and distribution of net income.
23 After a decedent dies in the case of an estate or after an
24 income interest in a trust ends, the following rules apply:
25 * * *
26 (2) A fiduciary shall distribute to a beneficiary who
27 receives a pecuniary amount outright and shall allocate to a
28 pecuniary amount in trust the [interest, other] income or
29 other amount provided by the governing instrument or, in the
30 absence of any such provision, the income provided in section
20050S0660B1423 - 136 -
1 3543 (relating to [interest or] income on distributive
2 shares) or [7187] 7799 (relating to [interest or] income on
3 distributive shares) from net income determined under
4 paragraph (3) or from principal to the extent that net income
5 is insufficient.
6 * * *
7 § 8141. Character of receipts.
8 * * *
9 (c) When received in partial liquidation.--Money is received
10 in partial liquidation:
11 (1) to the extent that the entity, at or near the time
12 of a distribution, indicates that it is a distribution in
13 partial liquidation; or
14 (2) if the total amount of money and property [received]
15 distributed by the entity to its owners in [a] one
16 distribution or a series of related distributions is greater
17 than 20% of the entity's gross assets, as shown by the
18 entity's year-end financial statements immediately preceding
19 the initial receipt.
20 (d) When not received in partial liquidation.--Money is not
21 received in partial liquidation nor may it be taken into account
22 under subsection (c)(2) to the extent that it does not exceed
23 the amount of income tax that a [trustee or] trust beneficiary
24 must pay on taxable income of the entity that distributes the
25 money.
26 * * *
27 Section 20 14. The act of December 9, 2002 (P.L.1379, <--
28 No.168), known as the Pooled Trust Act, is repealed.
29 Section 21. The SECTION 15. (A) EXCEPT AS SET FORTH IN <--
30 SUBSECTION (B), THE addition of 20 Pa.C.S. § 7799.3 is a
20050S0660B1423 - 137 -
1 consolidation of the act of December 9, 2002 (P.L.1379, No.168),
2 known as the Pooled Trust Act. Any differences between 20
3 Pa.C.S. § 7799.3 and the Pooled Trust Act are intended only to
4 conform to the style of the Pennsylvania Consolidated Statutes
5 and are not intended to change or affect the legislative intent,
6 judicial construction or administration and implementation of
7 the Pooled Trust Act.
8 (B) SUBSECTION (A) DOES NOT APPLY TO THE ADDITION OF 20 <--
9 PA.C.S. § 7799.3(D)(1), (E)(1), (F) AND PARAGRAPH (5) OF THE
10 DEFINITION OF "POOLED TRUST" IN SUBSECTION (H).
11 Section 22 16. The following apply: <--
12 (1) The addition of 20 Pa.C.S. § 3534.1 shall apply to
13 the estates of decedents who die on or after the effective
14 date of this paragraph.
15 (2) The amendment of 20 Pa.C.S. § 3702(h) shall apply to
16 the estates of decedents who die on or after the effective
17 date of this paragraph.
18 (3) The amendments of 20 Pa.C.S. §§ 6104(b) and 6106(b) <--
19 shall apply to any trust that is not irrevocable on the
20 effective date of this paragraph.
21 (4) (3) Except as provided in paragraph (5) (4), the <--
22 addition of 20 Pa.C.S. Ch. 77 shall apply to all trusts
23 created before, on or after the effective date of this
24 paragraph.
25 (5) (4) The following apply: <--
26 (i) The addition of 20 Pa.C.S. § 7737 shall not
27 apply to oral trusts created before the effective date of
28 this paragraph.
29 (ii) The addition of 20 Pa.C.S. § 7752(a) shall not
30 apply to trusts created before the effective date of this
20050S0660B1423 - 138 -
1 paragraph.
2 Section 23 17. This act shall take effect as follows: <--
3 (1) The following provisions shall take effect in 60
4 days:
5 (i) The amendment of 20 Pa.C.S. § 908(a).
6 (ii) The addition of 20 Pa.C.S. § 3534.1.
7 (iii) The amendment of 20 Pa.C.S. § 3543.
8 (iv) The amendment of 20 Pa.C.S. § 7503(b).
9 (v) The addition of 20 Pa.C.S. § 7504(c).
10 (vi) The amendment of 20 Pa.C.S. § 7506.
11 (vii) The amendment of the definitions of
12 "principal" and "sui juris beneficiary" in 20 Pa.C.S. §
13 8102.
14 (viii) The amendment of 20 Pa.C.S. § 8104(c).
15 (ix) The amendment of 20 Pa.C.S. § 8105.
16 (x) The amendment of 20 Pa.C.S. § 8107.
17 (xi) The amendment of 20 Pa.C.S. § 8113.
18 (xii) The amendment of 20 Pa.C.S. § 8141.
19 (xiii) Section 22(1) 16(1) of this act. <--
20 (2) The following provisions shall take effect
21 immediately:
22 (i) The amendment of 20 Pa.C.S. § 3702(h).
23 (ii) The amendment of 20 Pa.C.S. § 6104(b). <--
24 (iii) The amendment of 20 Pa.C.S. § 6106(b).
25 (iv) The amendment of the definition of "mutual
26 fund" in 20 Pa.C.S. § 7201.
27 (v) The amendment of 20 Pa.C.S. § 7314.1.
28 (vi) Section 21 of this act.
29 (vii) Section 22(2) and (3) of this act.
30 (viii) This section.
20050S0660B1423 - 139 -
1 (II) THE AMENDMENT OF 20 PA.C.S. § 6104(D). <--
2 (III) THE AMENDMENT OF 20 PA.C.S. § 6106.
3 (IV) THE AMENDMENT OF 20 PA.C.S. § 6107.
4 (V) THE ADDITION OF 20 PA.C.S. § 6107.1.
5 (VI) THE AMENDMENT OF THE DEFINITION OF "MUTUAL
6 FUND" IN 20 PA.C.S. § 7201.
7 (VII) THE AMENDMENT OF 20 PA.C.S. § 7314.1.
8 (VIII) SECTION 15 OF THIS ACT.
9 (IX) SECTION 16(2) OF THIS ACT.
10 (X) THIS SECTION.
11 (3) The remainder of this act shall take effect in 120
12 days.
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