Regular Session 2023-2024 Senate Bill 1231 P.N. 1666

PRINTER'S NO. 1666

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1231

Session of

2024

INTRODUCED BY BAKER, TARTAGLIONE, PENNYCUICK, J. WARD, COSTA,

MILLER AND SANTARSIERO, MAY 31, 2024

REFERRED TO JUDICIARY, MAY 31, 2024

AN ACT

Amending Title 20 (Decedents, Estates and Fiduciaries) of the

Pennsylvania Consolidated Statutes, in trusts, further

providing for definitions - UTC 103, for trust instrument

controls and mandatory rules - UTC 105, for governing law -

UTC 107, for situs of trust, for nonjudicial settlement

agreements - UTC 111, for charitable purposes; enforcement -

UTC 405, for trust for care of animal - UTC 408, for

noncharitable trust without ascertainable beneficiary - UTC

409, for reformation to correct mistakes - UTC 415, for

modification to achieve settlor's tax objectives - UTC 416,

for spendthrift provision - UTC 502, for creditor's claim

against settlor - UTC 505(a), for overdue distribution - UTC

506, for revocation or amendment of revocable trust - UTC

602, for trustee's duties and powers of withdrawal - UTC 603,

for accepting or declining trusteeship - UTC 701, for

trustee's bond - UTC 702, for cotrustees - UTC 703, for

vacancy in trusteeship and appointment of successor - UTC

704, for resignation of trustee and filing resignation, for

compensation of trustee - UTC 708, for duty to administer

trust - UTC 801, for duty of loyalty - UTC 802, for powers to

direct - UTC 808, for duty to inform and report, for

discretionary powers and for powers of trustees - UTC 815,

providing for directed trusts, further providing for remedies

for breach of trust--UTC 1001, providing for nonjudicial

account settlement and further providing for reliance on

trust instrument - UTC 1006, for exculpation of trustee - UTC

1008, for certification of trust - UTC 1013 and for title of

purchaser.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "interests of the

beneficiaries" and "spendthrift provision" in section 7703 of

Title 20 of the Pennsylvania Consolidated Statutes are amended

and the section is amended by adding definitions to read:

§ 7703. Definitions - UTC 103.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Breach of trust." A violation by a trustee or trust

director of a duty that the trustee or trust director owes to a

beneficiary of the trust.

* * *

"Interests of the beneficiaries." The beneficial interests

provided in the [trust instrument] terms of a trust.

* * *

"Power of appointment." A power given to a person by the

terms of a trust, exercisable in a nonfiduciary capacity, to

grant and define a beneficial interest in trust property or to

grant a power of appointment over the trust property.

* * *

"Spendthrift provision." A [provision in a trust instrument]

term of a trust that restrains both voluntary and involuntary

transfer of a beneficiary's interest.

"Terms of a trust." Either of the following:

(1) Except as otherwise provided in paragraph (2), the

manifestation of the settlor's intent expressed in the trust

instrument.

(2) The trust's provisions, as established, determined

or amended by a trustee or other person in accordance with

applicable law, by a court order or by a nonjudicial

20240SB1231PN1666 - 2 -

settlement agreement under section 7710.1 (relating to

nonjudicial settlement agreements - UTC 111) or rules of

construction.

* * *

Section 2. Sections 7705 heading, (a), (b) introductory

paragraph, (2) and (7), 7707, 7708(a), (b) heading and

introductory paragraph and (f), 7710.1(b) and (d)(1), 7735(b)

and (c), 7738(b) and (c), 7739(2) and (3), 7740.5, 7740.6,

7742(b), 7745 introductory paragraph, 7746(b) and 7752(a), (c)

and (e) of Title 20 are amended to read:

§ 7705. Trust [instrument] controls; mandatory rules - UTC 105.

(a) Trust [instrument] controls.--Except as provided in

subsection (b), the [provisions] terms of a trust [instrument]

prevail over any contrary provisions of this chapter.

(b) Mandatory rules.--Notwithstanding a contrary provision

in the terms of the trust [instrument], the following rules

apply:

* * *

(2) [The] Subject to sections 7780.20 (relating to duty

and liability of directed trustee - UDTA 9), 7780.22

(relating to no duty to monitor, inform or advise - UDTA 11)

and 7780.23 (relating to application of cotrustee - UDTA 12),

the duty of a trustee to act in good faith and in accordance

with the terms and purposes of the trust as set forth in

section 7771 (relating to duty to administer trust - UTC

801).

* * *

(7) The power of the court under section 7768(b)

(relating to compensation of trustee - UTC 708) to adjust a

trustee's compensation specified in the terms of the trust

20240SB1231PN1666 - 3 -

[instrument].

* * *

§ 7707. Governing law - UTC 107.

The meaning and effect of the [provisions] terms of a trust

[instrument] shall be determined by:

(1) the law of the jurisdiction designated in the terms

of the trust [instrument], but the mandatory rules of section

7705(b) (relating to trust [instrument] controls; mandatory

rules - UTC 105) shall govern if different from the law of

the designated jurisdiction [designated in the trust

instrument]; or

(2) in the absence of an effective designation in the

terms of the trust [instrument], the law of the jurisdiction

in which the settlor is domiciled when the trust becomes

irrevocable.

§ 7708. Situs of trust.

(a) Specified in trust [instrument].--Without precluding

other means for establishing a sufficient connection with the

designated jurisdiction, [provisions] the terms of a trust

[instrument] designating the situs of the trust are valid and

controlling if:

(1) a trustee's principal place of business is located

in or a trustee is a resident of the designated jurisdiction;

(2) all or part of the trust administration occurs in

the designated jurisdiction; [or]

(3) one or more of the beneficiaries resides in the

designated jurisdiction[.]; or

(4) a trust director's principal place of business is

located in or a trust director is a resident of the

designated jurisdiction.

20240SB1231PN1666 - 4 -

(b) Unspecified in trust [instrument].--If the terms of a

trust [instrument does] do not specify a situs:

* * *

(f) Successor trustee.--In connection with a transfer of the

trust's situs, the trustee may transfer some or all of the trust

property to a successor trustee designated in the terms of a

trust [instrument] or appointed pursuant to section 7764

(relating to vacancy in trusteeship; appointment of successor -

UTC 704).

* * *

§ 7710.1. Nonjudicial settlement agreements - UTC 111.

* * *

(b) General rule.--Except as otherwise provided in

subsection (c), all beneficiaries [and trustees of], all

trustees and other persons, if any, who have an interest in a

matter relating to a trust may enter into a binding nonjudicial

settlement agreement with respect to [any matter involving the

trust] the matter. The rules of Subchapter C (relating to

representation) shall apply to a settlement agreement under this

section. Persons having interests in the matter shall be the

same as indispensable parties to a court action seeking the same

result.

* * *

(d) Matters that may be resolved.--Matters that may be

resolved by a nonjudicial settlement agreement include the

following:

(1) The interpretation or construction of the

[provisions] terms of a trust [instrument].

* * *

§ 7735. Charitable purposes; enforcement - UTC 405.

20240SB1231PN1666 - 5 -

* * *

(b) Selection by court.--If the [provisions] terms of a

charitable trust [instrument] do not indicate or authorize the

trustee to select a particular charitable purpose or

beneficiary, the court may select one or more charitable

purposes or beneficiaries. The selection must be consistent with

the settlor's intention to the extent it can be ascertained.

charitable trust may be brought by the settlor during the

settlor's lifetime or at any time by the Attorney General, a

charitable organization expressly named in the terms of the

trust [instrument] to receive distributions from the trust or

any other person who has standing to do so.

§ 7738. Trust for care of animal - UTC 408.

* * *

(b) Enforcement.--A trust authorized by this section may be

enforced by a person appointed in the terms of the trust

[instrument] or, if no person is so appointed, by a person

appointed by the court. A person having an interest in the

welfare of the animal may request the court to appoint a person

to enforce the trust or to remove a person appointed.

section may be applied only to its intended use, except to the

extent the court determines that the value of the trust property

exceeds the amount required for the intended use. Except as

otherwise provided in the terms of the trust [instrument],

property not required for the intended use must be distributed

to the settlor if then living, otherwise to the settlor's

successors in interest.

§ 7739. Noncharitable trust without ascertainable beneficiary -

20240SB1231PN1666 - 6 -

UTC 409.

Except as otherwise provided in section 7738 (relating to

trust for care of animal - UTC 408) or by another statute:

* * *

(2) A trust authorized by this section may be enforced

by a person appointed in the terms of the trust [instrument]

or, if no person is so appointed, by a person appointed by

the court.

(3) Property of a trust authorized by this section may

be applied only to its intended use, except to the extent the

court determines that the value of the trust property exceeds

the amount required for the intended use. Except as otherwise

provided in the terms of the trust [instrument], property not

required for the intended use must be distributed to the

settlor if then living, otherwise to the settlor's successors

in interest.

§ 7740.5. Reformation to correct mistakes - UTC 415.

The court may reform the terms of a trust [instrument], even

if unambiguous, to conform to the settlor's probable intention

if it is proved by clear and convincing evidence that both the

settlor's intent [as expressed in] and the terms of the trust

[instrument was] were affected by a mistake of fact or law,

whether in expression or inducement. The court may provide that

the modification have retroactive effect.

§ 7740.6. Modification to achieve settlor's tax objectives -

UTC 416.

The court may modify the terms of a trust [instrument] in a

manner that is not contrary to the settlor's probable intention

in order to achieve the settlor's tax objectives. The court may

provide that the modification have retroactive effect.

20240SB1231PN1666 - 7 -

§ 7742. Spendthrift provision - UTC 502.

* * *

(b) Creation.--A term of a trust [instrument] providing that

the interest of a beneficiary is held subject to a "spendthrift

trust," or words of similar import, is sufficient to restrain

both voluntary and involuntary transfer of the beneficiary's

interest.

* * *

§ 7745. Creditor's claim against settlor - UTC 505(a).

Whether or not the terms of a trust [instrument contains]

contain a spendthrift provision and notwithstanding section 7744

(relating to discretionary trusts; effect of standard - UTC

504):

* * *

§ 7746. Overdue distribution - UTC 506.

* * *

(b) Definition.--As used in this section, the term

"mandatory distribution" means a distribution of income or

principal that the trustee is required by the terms of the trust

[instrument] to make to a beneficiary, including a distribution

upon the termination of the trust. The term excludes a

distribution that is subject to the exercise of the trustee's

discretion regardless of whether the terms of the trust

[instrument includes] include a support or other standard to

guide the trustee in making distribution decisions or provides

that the trustee "may" or "shall" make discretionary

distributions, including distributions pursuant to a support or

other standard.

§ 7752. Revocation or amendment of revocable trust - UTC 602.

(a) Power to revoke or amend.--The settlor may revoke or

20240SB1231PN1666 - 8 -

amend a trust unless the terms of the trust [instrument]

expressly [provides] provide that the trust is irrevocable.

* * *

a revocable trust only:

(1) by substantial compliance with a method provided in

the terms of the trust [instrument]; or

(2) if the terms of the trust [instrument does] do not

provide a method or the method provided in the terms of the

trust [instrument] is not expressly made exclusive, by a

later writing, other than a will or codicil, that is signed

by the settlor and expressly refers to the trust or

specifically conveys property that would otherwise have

passed according to the terms of the trust [instrument].

* * *

(e) Agent.--A settlor's powers with respect to revocation or

amendment of the nondispositive provisions of or withdrawal of

property from a trust may be exercised by an agent under a power

of attorney only to the extent expressly authorized by the terms

of the trust [instrument] or the power. The agent under a power

of attorney that expressly authorizes the agent to do so may

amend the dispositive provisions of a revocable trust as the

court may direct.

* * *

Section 3. Section 7753(a) of Title 20 is amended and the

section is amended by adding a subsection to read:

§ 7753. Trustee's duties; powers of withdrawal - UTC 603.

(a) Power of settlor.--Regardless of the legal capacity of

the settlor, the rights of the beneficiaries are subject to the

control of, and the duties of the trustee are owed exclusively

20240SB1231PN1666 - 9 -

to, the settlor [while] to the extent a trust is revocable.

* * *

revocable, the trustee may follow a written direction of the

settlor that is contrary to the terms of the trust. To the

extent a trust is revocable by a settlor in conjunction with

other persons, the trustee may follow a written direction from

the settlor and those persons that is contrary to the terms of

the trust.

Section 4. Sections 7761(a), 7762(a) and (c), 7763(a.1), (c)

and (g), 7764(b), (c)(1) and (d)(1), 7765(a.1)(2), 7768(a) and

(b), 7771, 7772(b)(1) and 7778 of Title 20 are amended to read:

§ 7761. Accepting or declining trusteeship - UTC 701.

(a) Accepting trusteeship.--Except as otherwise provided in

subsection (c), a person designated as trustee accepts the

trusteeship:

(1) by substantially complying with a method of

acceptance provided in the terms of the trust [instrument];

(2) if the terms of the trust [instrument does] do not

provide a method or the method provided in the terms of the

trust [instrument] is not expressly made exclusive, by

accepting delivery of the trust property, exercising powers

or performing duties as trustee or by otherwise indicating

acceptance of the trusteeship.

* * *

§ 7762. Trustee's bond - UTC 702.

(a) When required.--A trustee shall give bond to secure

performance of the trustee's duties only if the court finds that

a bond is needed to protect the interests of the beneficiaries

20240SB1231PN1666 - 10 -

or is required by the [provisions] terms of the trust

[instrument] and the court has not dispensed with the

requirement.

* * *

trust business in this Commonwealth need not give bond even if

required by the terms of the trust [instrument].

§ 7763. Cotrustees - UTC 703.

* * *

(a.1) When no majority.--When a dispute arises among

trustees as to the exercise or nonexercise of any of their

powers and there is no agreement by a majority of them, unless

otherwise provided by the terms of the trust [instrument], the

court in its discretion, upon petition filed by any of the

trustees or any party in interest, aided if necessary by the

report of a master, may direct the exercise or nonexercise of

the power as it deems necessary for the best interest of the

trust.

* * *

to application to cotrustee - UDTA 12), a cotrustee shall

participate in the performance of a trustee's function unless

the cotrustee is unavailable to perform the function because of

absence, illness, disqualification under the law or other reason

or the cotrustee has properly delegated the performance of the

function to another trustee.

* * *

(g) Reasonable care.--[Each] Subject to section 7780.23,

each trustee shall exercise reasonable care to:

(1) prevent a cotrustee from committing a breach of

20240SB1231PN1666 - 11 -

trust involving fraud or self-dealing; and

(2) compel a cotrustee to redress a breach of trust

involving fraud or self-dealing.

* * *

§ 7764. Vacancy in trusteeship; appointment of successor - UTC

704.

* * *

(b) Filling of vacancy.--A vacancy in a trusteeship need not

be filled if one or more cotrustees remain in office and the

terms of the trust [instrument does] do not require that it be

filled. A vacancy shall be filled if the trust has no remaining

trustee.

trusteeship of a noncharitable trust that is required to be

filled shall be filled in the following order of priority:

(1) by a person designated in or pursuant to the

[provisions] terms of the trust [instrument] to act as

successor trustee;

* * *

(d) Filling vacancy for charitable trust.--A vacancy in a

trusteeship of a charitable trust that is required to be filled

shall be filled in the following order of priority:

(1) by a person designated in or [under] pursuant to the

[provisions] terms of the trust [instrument] to act as

successor trustee;

* * *

§ 7765. Resignation of trustee; filing resignation.

(a.1) General rule.--A trustee may resign:

* * *

(2) without court approval if authorized to resign by

20240SB1231PN1666 - 12 -

the terms of the trust [instrument]; or

* * *

§ 7768. Compensation of trustee - UTC 708.

(a) If unspecified.--If neither the terms of a trust

[instrument] nor a separate written agreement signed by the

settlor or anyone who is authorized by the terms of the trust

[instrument] to do so specifies the trustee's compensation, the

trustee is entitled to compensation that is reasonable under the

circumstances. Neither a compensation provision in the terms of

a trust [instrument] nor a fee agreement governs compensation

payable from trust principal unless it explicitly so provides.

(b) If specified; adjustment.--If the terms of a trust

[instrument] or written fee agreement signed by the settlor or

anyone who is authorized by the terms of the trust [instrument]

to do so specifies a trustee's compensation, the trustee is

entitled to the specified compensation. The court may allow

reasonable compensation that is more or less than that specified

if:

(1) the duties of the trustee have become substantially

different from those contemplated when the trust was created

or when the fee agreement was executed;

(2) the compensation specified in the terms of the trust

[instrument] or fee agreement would be unreasonable; or

(3) the trustee performed extraordinary services, and

the [trust instrument or fee agreement does not specify the]

trustee's compensation for those services is not specified in

the terms of the trust or fee agreement.

* * *

§ 7771. Duty to administer trust - UTC 801.

Upon acceptance of a trusteeship, the trustee shall

20240SB1231PN1666 - 13 -

administer the trust in good faith, in accordance with its

[provisions] terms and purposes and the interests of the

beneficiaries and in accordance with applicable law.

§ 7772. Duty of loyalty - UTC 802.

* * *

(b) Effect of conflict of interest.--Subject to the rights

of persons dealing with or assisting the trustee as provided in

section 7790.2 (relating to protection of person dealing with

trustee - UTC 1012), a sale, purchase, exchange, encumbrance or

other disposition of property between a trust and either the

trustee in the trustee's individual capacity or one of the

persons identified in subsection (c) is voidable by a court upon

application by a beneficiary affected by the transaction unless:

(1) the transaction was authorized by the terms of the

trust [instrument];

* * *

§ 7778. Powers to direct [- UTC 808].

[(a) Direction of settlor.--While a trust is revocable, the

trustee may follow a written direction of the settlor that is

contrary to the trust instrument.

(b) Compliance with power.--If a trust instrument confers

upon a person other than the settlor of a revocable trust power

to direct certain actions of the trustee, the trustee shall act

in accordance with a written exercise of the power unless the

attempted exercise is manifestly contrary to the trust

instrument or the trustee knows the attempted exercise would

constitute a serious breach of a fiduciary duty that the person

holding the power owes to the beneficiaries of the trust.

instrument may confer upon a trustee or other person a power to

20240SB1231PN1666 - 14 -

modify or terminate the trust.

(d) Fiduciary relationship.--A person other than a

beneficiary who holds a power to direct certain actions of a

trustee is presumptively a fiduciary who, as such, is required

to act in good faith with regard to the purposes of the trust

and the interests of the beneficiaries. The holder of a power to

direct is liable for any loss that results from breach of the

holder's fiduciary duty.]

(e) Directed trust.--If the terms of a trust provide that a

person who is not a trustee may direct a trustee to take or not

take certain actions, or that a person who is not a trustee may

change the terms of the trust, Subchapter H.1 (relating to

directed trusts) applies.

Section 5. Section 7780.3(a) and (k) introductory paragraph

of Title 20 are amended and subsection (i) is amended by adding

a paragraph to read:

§ 7780.3. Duty to inform and report.

(a) Duty to respond to requests.--A trustee shall promptly

respond to a reasonable request by the settlor of a trust or by

a beneficiary of an irrevocable trust for information related to

the trust's administration. A trustee shall promptly respond to

the Department of [Public Welfare's] Human Services' reasonable

request for information related to the trust's administration

when a settlor or beneficiary is a resident in a State-owned

facility or an applicant for or recipient of cash or medical

assistance from the Commonwealth and the department certifies in

writing that it has obtained a currently valid consent for the

disclosure of such information from the settlor or beneficiary

of the trust. A trustee may rely upon the department's

certification without investigating its accuracy.

20240SB1231PN1666 - 15 -

* * *

(i) Contents of notice.--Except as provided in subsection

(g), any notice under this section shall be written and convey

the following information:

* * *

(6) The name, address and telephone number of each trust

director.

* * *

(k) Notice to settlor's appointee.--The terms of a trust may

provide that the settlor [of a trust] may [in the trust

instrument] appoint one or more persons or a succession of

persons to receive, on behalf of one or more named current

beneficiaries of the trust, the notices required by this

section. The trustee giving the notice required by this section

to that appointee satisfies the trustee's duty to give to the

named current beneficiary the notice required by this section

if:

* * *

Section 6. Sections 7780.4 and 7780.5(a) of Title 20 are

amended to read:

§ 7780.4. Discretionary powers.

The trustee shall exercise a discretionary power in good

faith and in accordance with the [provisions] terms and purposes

of the trust and the interests of the beneficiaries,

notwithstanding the breadth of discretion granted to a trustee

[in] by the terms of the trust [instrument], including the use

of such terms as "absolute," "sole" or "uncontrolled."

§ 7780.5. Powers of trustees - UTC 815.

(a) Exercise of power.--Except as otherwise provided in the

terms of the trust [instrument] or in other provisions of this

20240SB1231PN1666 - 16 -

title, a trustee has all the powers over the trust property that

an unmarried competent owner has over individually owned

property and may exercise those powers without court approval

from the time of creation of the trust until final distribution

of the assets of the trust.

* * *

Section 7. Chapter 77 of Title 20 is amended by adding a

subchapter to read:

SUBCHAPTER H.1

DIRECTED TRUSTS

Sec.

7780.11. Short title of subchapter.

7780.12. Definitions - UDTA 2.

7780.13. Application - UDTA 3.

7780.14. Exclusions - UDTA 5.

7780.15. Powers of trust director and shared powers - UDTA 6.

7780.16. Trust director for investments.

7780.17. Trust protector.

7780.18. Limitations on powers of trust director - UDTA 7.

7780.19. Duty and liability of trust director - UDTA 8.

7780.20. Duty and liability of directed trustee - UDTA 9.

7780.21. Duty to provide information to trust director or

directed trustee - UDTA 10.

7780.22. No duty to monitor, inform or advise - UDTA 11.

7780.23. Application to cotrustee - UDTA 12.

7780.24. Limitation of action against trust director - UDTA 13.

7780.25. Defenses in action against trust director - UDTA 14.

7780.26. Jurisdiction over trust director - UDTA 15.

7780.27. Office of trust director - UDTA 16.

§ 7780.11. Short title of subchapter.

20240SB1231PN1666 - 17 -

This subchapter shall be known and may be cited as the

Directed Trust Act.

§ 7780.12. Definitions - UDTA 2.

The following words and phrases when used in this subchapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Directed trust." A trust for which the terms of the trust

grant a power of direction.

"Directed trustee." A trustee that is subject to a trust

director's power of direction.

"Power of direction." As follows:

(1) A power over a trust granted to a person by the

terms of the trust to the extent the power is exercisable

while the person is not serving as a trustee.

(2) The term includes a power over the investment,

management or distribution of trust property or other matters

of trust administration and, in the case of a trust

protector, may include powers to modify the terms of the

trust.

(3) A power of direction includes incidental powers that

are appropriate and necessary to the exercise or nonexercise

of the power of direction. The rules specified in this

subchapter govern the exercise of such incidental powers.

"Trust director." As follows:

(1) A person that is granted a power of direction by the

terms of a trust to the extent the power is exercisable while

the person is not serving as a trustee.

(2) A beneficiary or settlor of a trust may serve as a

trust director of the trust.

"Trust protector." A trust director authorized by the terms

20240SB1231PN1666 - 18 -

of a trust to modify one or more terms of the trust.

"Willful misconduct." As follows:

(1) Intentional conduct that is malicious, designed to

defraud or unconscionable.

(2) Mere negligence, gross negligence and recklessness

do not constitute "willful misconduct."

§ 7780.13. Application - UDTA 3.

(a) General rule.--This subchapter applies to a trust,

whenever and wherever created, that is governed by Pennsylvania

law.

(b) Exclusion.--This subchapter has no application to

decisions or actions that occurred before the effective date of

this subchapter.

§ 7780.14. Exclusions - UDTA 5.

This subchapter does not apply to:

(1) A power of appointment.

(2) A power held by the settlor or a beneficiary of a

trust to appoint or remove a trustee or a trust director

unless the terms of the trust provide that the power is

exercisable by the settlor or beneficiary acting as a trust

director.

(3) A settlor's power over a trust to the extent the

settlor may revoke the trust.

(4) A power of a beneficiary over a trust to the extent

the exercise or nonexercise of the power affects the

beneficial interest of:

(i) the beneficiary; or

(ii) another beneficiary who is represented by the

beneficiary under Subchapter C (relating to

representation) with respect to the exercise or

20240SB1231PN1666 - 19 -

nonexercise of the power.

(5) A power over a trust that must be held in a

nonfiduciary capacity to achieve the settlor's tax objectives

under 26 U.S.C. (relating to Internal Revenue Code), as

amended, and regulations issued thereunder, as amended.

§ 7780.15. Powers of trust director and shared powers - UDTA 6.

(a) Grant of powers.--The terms of a trust may grant a power

of direction to one or more trust directors. A power of

direction may extend to any one or more of a trustee's powers,

subject to section 7780.18 (relating to limitations on powers of

trust director - UDTA 7).

(b) Shared powers.--Trust directors that share powers may

act by majority decision unless the terms of the trust provide

otherwise.

§ 7780.16. Trust director for investments.

The explicit appointment by the terms of a trust of a "trust

director for investments," accompanied by a citation to this

section, grants to the trust director the following powers

unless the terms of the trust provide otherwise:

(1) To direct the trustee, or veto the trustee's

recommendations, as to the investment of the trust's assets.

(2) To direct the trustee, or veto the trustee's

recommendations, as to the voting of proxies and the exercise

of other voting powers associated with the trust's assets.

(3) To select, change and determine reasonable

compensation of one or more investment advisors or managers,

and authorize or engage them to perform any of the investment

duties of a trustee or trust director.

(4) To determine the frequency and methodology for

valuing trust assets.

20240SB1231PN1666 - 20 -

(5) To exercise, or veto the trustee's exercise of, any

other investment power the trustee has or might have.

(6) To perform other acts relating to the investment of

the trust's assets as the terms of the trust specify.

§ 7780.17. Trust protector.

(a) General rule.--The terms of a trust may expressly grant

to a trust director powers, alone or together with powers to

direct a trustee's actions, to modify the terms of a trust. In

that event, the trust director is a trust protector.

(b) Illustrative powers.--Among the powers the terms of a

trust may grant explicitly to a trust protector are the

following:

(1) To increase, decrease or otherwise modify what is

distributable to one or more beneficiaries of the trust.

(2) To terminate the trust and direct how the trustee

shall distribute the trust property to or in further trust

for any one or more of the beneficiaries.

(3) To expand, modify, limit or terminate a power of

appointment, and to grant a power of appointment to a

beneficiary of the trust on terms as the trust protector

specifies.

(4) The powers described in section 8104 (relating to

trustee's power to adjust) to adjust between income and

principal and to convert the trust to a unitrust in

accordance with section 8105 (relating to power to convert to

unitrust).

(5) To convert a trust in whole or in part to a special

needs trust, or provide that a special needs trust shall

arise or be established at a specific time or upon the

occurrence of an event with respect to some or all of the

20240SB1231PN1666 - 21 -

trust's assets.

(6) To appoint or remove trustees, investment advisors

and investment managers, and prescribe a plan of succession

for future holders of any of these offices.

(7) To appoint or remove trust directors, specify their

powers and modify the powers of a trust director.

(8) To appoint one or more successor trust protectors,

and prescribe a plan of succession for future holders of that

office.

(9) To renounce, release, limit or modify any power

given to a trustee by the terms of the trust or by law.

(10) To resolve disagreements among trustees.

(11) To change the trust's situs or governing law, or

both.

(12) To apply to a court of competent jurisdiction to

interpret any terms of the trust or pass upon an action that

the trust protector, another trust director or a trustee

proposes to take or not take.

(13) Any other or different power that the settlor

expressly grants to the trust protector.

provide otherwise, no trust protector may exercise a power in a

manner that would benefit the trust protector personally or vest

in the trust protector a taxable power of appointment described

in 26 U.S.C. § 2041 (relating to powers of appointment) or 2514

(relating to powers of appointment) , as amended, or the

corresponding provision of any later Federal tax statute.

(d) Notice to qualified beneficiaries.--A trust protector

shall notify the trustees and the qualified beneficiaries of the

trust in writing of the trust protector's exercise of a power

20240SB1231PN1666 - 22 -

with respect to the trust unless the terms of the trust

explicitly direct that no such notice be given.

(e) Conflicts.--If the terms of a trust grant the same power

to both a trust protector and a trust director that is not a

trust protector and do not provide a different rule, the trust

protector shall control the exercise of the power.

§ 7780.18. Limitations on powers of trust director - UDTA 7.

In the exercise or nonexercise of powers affecting the

following, a trust director is subject to the same rules as a

trustee that holds the same power regarding:

(1) A payback provision in the terms of a trust

necessary to comply with the reimbursement requirements of

Medicaid law in 42 U.S.C. § 1396p(d)(4)(A) (relating to

liens, adjustments and recoveries, and transfers of assets) ,

as amended, and regulations issued thereunder, as amended.

(2) A charitable interest in a trust, including notice

regarding the interest to the Office of Attorney General.

§ 7780.19. Duty and liability of trust director - UDTA 8.

(a) Scope.--Except as provided in subsections (b) and (c),

with respect to a power of direction, a trust director has the

same fiduciary duty and liability in the exercise or nonexercise

of the power if the power:

(1) may be exercised by only one trust director, as a

sole trustee in a like position and under similar

circumstances; or

(2) is shared with a trustee or another trust director,

as a cotrustee in a like position and under similar

circumstances.

(b) Licensed or certified trust directors.--If a trust

director is licensed, certified or otherwise authorized or

20240SB1231PN1666 - 23 -

permitted by law other than this subchapter to provide health

care in the ordinary course of the trust director's business or

practice of a profession, to the extent that the trust director

acts in that capacity, the trust director is not subject to duty

or liability under this subchapter unless the terms of the trust

provide otherwise.

vary a trust director's duty or liability to the same extent

that the terms of the trust may vary the duty or liability of a

trustee in a like position and under similar circumstances.

§ 7780.20. Duty and liability of directed trustee - UDTA 9.

(a) Duty to comply with power of direction.--Subject to

subsection (b), a directed trustee shall take reasonable action

to comply with a trust director's exercise or nonexercise of a

power of direction, and the directed trustee shall not be liable

for that action.

(b) Exception for willful misconduct.--A directed trustee

shall not comply with a trust director's exercise or nonexercise

of a power of direction to the extent that, by doing so, the

directed trustee would engage in willful misconduct.

a power of direction under which a trust director purports to

release a trustee or another trust director from liability for

breach of trust is ineffective:

(1) to the extent that it would relieve the trustee or

the other trust director of liability for a breach of trust

committed in bad faith or with reckless indifference to the

purposes of the trust or the interests of the beneficiaries;

(2) if the release was induced by improper conduct of

the trustee or the other trust director in procuring the

20240SB1231PN1666 - 24 -

release; or

(3) if, at the time of the release, the trust director

that exercised the power did not know of the material facts

relating to the breach.

(d) Petition for declaratory judgment.--A directed trustee

that has reasonable doubt about its duty under this section may

petition the court for a declaratory judgment.

(e) Additional duties and liabilities.--The terms of the

trust may impose a duty or liability on a directed trustee in

addition to the duties and liabilities prescribed by this

section.

§ 7780.21. Duty to provide information to trust director or

directed trustee - UDTA 10.

(a) Duty of directed trustee.--Subject to section 7780.22

(relating to no duty to monitor, inform or advise - UDTA 11), a

directed trustee shall provide information to a trust director

to the extent that the information is reasonably related to

powers or duties of the:

(1) directed trustee; and

(2) trust director, or the powers or duties of another

trust director over which the trust director may exercise

authority.

(b) Duty of trust director.--Subject to section 7780.22, a

trust director shall provide information to a directed trustee

or another trust director to the extent that the information is

reasonably related to the powers or duties of the:

(1) trust director; and

(2) directed trustee, or the other trust director or a

trust director over which the other trust director may

exercise authority.

20240SB1231PN1666 - 25 -

trustee that acts in reliance upon information provided by a

trust director is not liable for a breach of trust to the extent

that the breach resulted from the reliance unless the

information was outside the scope of the trust director's

authority or the directed trustee engages in willful misconduct

by doing so.

(d) Limitation on liability of trust director.--A trust

director that acts in reliance upon information provided by a

directed trustee or another trust director is not liable for a

breach of trust to the extent that the breach resulted from the

reliance unless the trust director engages in willful misconduct

by doing so.

§ 7780.22. No duty to monitor, inform or advise - UDTA 11.

(a) Directed trustee.--Unless the terms of the trust provide

otherwise:

(1) A directed trustee does not have a duty to:

(i) monitor a trust director; or

(ii) inform or advise a settlor, beneficiary,

cotrustee or trust director as to any matter on which the

directed trustee might not have acted as the trust

director acted or as to any matter on which the directed

trustee might have acted but the trust director did not

act.

(2) By taking an action described in paragraph (1), a

directed trustee does not thereby assume a duty that is

excluded by paragraph (1).

(b) Trust director.--Unless the terms of the trust provide

otherwise:

(1) A trust director does not have a duty to:

20240SB1231PN1666 - 26 -

(i) monitor a trustee or another trust director over

which the trust director has no authority; or

(ii) inform or advise a settlor, beneficiary,

cotrustee or other trust director as to any matter on

which the trust director might not have acted as a

trustee or other trust director acted or as to any matter

on which the trust director might have acted but the

trustee or another trust director did not act.

(2) By taking an action described in paragraph (1), a

trust director does not thereby assume a duty that is

excluded by paragraph (1).

§ 7780.23. Application to cotrustee - UDTA 12.

The terms of a trust may assign different duties and

standards of care to different trustees and, in doing so,

relieve a trustee from liability with respect to a duty assigned

to another trustee to the same extent that, in a directed trust,

a directed trustee is relieved from duty and liability with

respect to a trust director's power of direction under sections

7780.20 (relating to duty and liability of directed trustee -

UDTA 9), 7780.21 (relating to duty to provide information to

trust director or directed trustee - UDTA 10) and 7780.22

(relating to no duty to monitor, inform or advise - UDTA 11).

§ 7780.24. Limitation of action against trust director - UDTA

13.

(a) Commencement of action.--An action against a trust

director for breach of trust must be commenced within the same

limitation period as under section 7785 (relating to limitation

of action against trustee) for an action for breach of trust

against a trustee in a like position and under similar

circumstances.

20240SB1231PN1666 - 27 -

(b) Effect of report or accounting.--A report or accounting

has the same effect on the limitation period for an action

against a trust director for breach of trust that the report or

accounting would have under section 7785 in an action for breach

of trust against a trustee in a like position and under similar

circumstances.

§ 7780.25. Defenses in action against trust director - UDTA 14.

In an action against a trust director for breach of trust,

the trust director may assert the same defenses that a trustee

in a like position and under similar circumstances could assert

in an action for breach of trust against the trustee.

§ 7780.26. Jurisdiction over trust director - UDTA 15.

(a) Effect of acceptance of appointment.--By accepting an

appointment as a trust director, the trust director submits to

personal jurisdiction of the courts of this Commonwealth

regarding any matter related to a power or duty of the trust

director.

(b) Other methods of obtaining jurisdiction.--This section

does not preclude other methods of obtaining jurisdiction over a

trust director.

§ 7780.27. Office of trust director - UDTA 16.

Unless the terms of the trust provide otherwise, the rules

applicable to a trustee apply to a trust director regarding the

following matters:

(1) Acceptance or declining under section 7761 (relating

to accepting or declining trusteeship - UTC 701), except that

if a trustee requests in writing that a person designated as

a trust director accept that role in writing and the person

does not do so in writing within 60 days after receipt of the

trustee's request, the person shall be deemed to have

20240SB1231PN1666 - 28 -

rejected the appointment to serve as a trust director.

(2) Giving of bond to secure performance under section

7762 (relating to trustee's bond - UTC 702).

(3) Reasonable compensation under section 7768 (relating

to compensation of trustee - UTC 708).

(4) Resignation under section 7765 (relating to

resignation of trustee; filing resignation), or upon at least

30 days' advance notice in writing to the qualified

beneficiaries of the trust, the settlor if sui juris and all

trustees.

(5) Removal under section 7766 (relating to removal of

trustee - UTC 706).

(6) Vacancy and appointment of a successor under section

7764 (relating to vacancy in trusteeship; appointment of

successor - UTC 704), except that if a trust director does

not accept an appointment or there is a vacancy in the

position, the powers and duties of the trustee or another

trust director shall be determined as if the office of the

nonaccepting trust director had not been created.

Section 8. Section 7781(a) of Title 20 is amended to read:

§ 7781. Remedies for breach of trust - UTC 1001.

[(a) What constitutes breach of trust.--A violation by a

trustee of a duty the trustee owes to a beneficiary is a breach

of trust.]

* * *

Section 9. Title 20 is amended by adding a section to read:

§ 7785.1. Nonjudicial account settlement.

(a) Election.--A trustee may elect to proceed under this

section to obtain a nonjudicial settlement of account when:

(1) the trust terminates in whole or in part;

20240SB1231PN1666 - 29 -

(2) the trustee ceases or intends to cease to serve for

any reason; or

(3) the trustee seeks discharge for an interim

accounting period when the trust is continuing.

(b) Mandatory notice.--Within a reasonable time after a

trustee elects to proceed under this section, the trustee shall

give notice of a request for nonjudicial account settlement in

the manner and to the extent required by section 7709(a), (b)

and (c) (relating to methods and waiver of notice - UTC 109) to:

(1) the qualified beneficiaries of the trust;

(2) any other beneficiary who has sent the trustee a

written request for notice;

(3) any person who has the notification rights of a

beneficiary under section 7710 (relating to notice; others

treated as beneficiaries - UTC 110); and

(4) any cotrustee, trust director or similar fiduciary

or successor trustee.

to any other person who the trustee reasonably believes may have

an interest in the trust.

(d) Representation.--Whether notice is mandatory or

permissive, the trustee may give notice to a representative in

accordance with Subchapter C (relating to representation). The

time period for the presumption of the representative's

acceptance of the representation shall be deemed to run

concurrently with the notice period provided under this section.

(e) Contents of notice.--The notice under subsection (b) or

(1) The reason for providing notice under this section.

(2) To the extent applicable, the proposed distribution

20240SB1231PN1666 - 30 -

of the net assets of the trust, including the distributees

and proportions to be distributed.

(3) To the extent applicable, an estimate of

disbursements anticipated to be made prior to distribution,

including legal fees and trustee fees, if any.

(4) Trust account statements showing all transactions,

the fair market value of all assets and realized and

unrealized gains and losses on assets held in the account for

30 months prior to the date a trust terminates, the cessation

of the trustee's service or statement of intent to cease to

serve, or the end of the interim accounting period, or for

the entire term of the trust if the term of the trust is

shorter than the 30-month period.

(5) A statement that the trustee seeks settlement of the

account of the trust, including the period of time for which

the trustee seeks discharge of the account of the trust, and

that clearly and conspicuously states that claims against a

trustee under Subchapter I (relating to liability of trustees

and rights of persons dealing with trustees) and section 7754

(relating to actions contesting validity of revocable trust),

if applicable, will be forever barred if no objections are

received within the time period described in subsection (g).

(6) The name and mailing address of the trustee.

(7) The name and telephone number of a person who may be

contacted for additional information.

(f) Distributions.--To the extent applicable, distributions

from a terminating trust, and any fees and expenses due or

anticipated as of the date that the settlement of account is

requested, may be held by or on behalf of the trustee until the

settlement of account is approved or deemed approved as provided

20240SB1231PN1666 - 31 -

by this section.

(g) Objection.--A person provided notice under subsection

(b) or (c) may object to the settlement of account by giving

written notice to the trustee within 60 days after the notice

was sent. If a person given notice under subsection (b) or (c)

makes timely objections to the settlement of account, the

trustee or the person making the objections may:

(1) submit the written objection to the court and

commence a proceeding for its resolution; or

(2) resolve the objection by nonjudicial settlement

agreement under section 7710.1 (relating to nonjudicial

settlement agreements - UTC 111) or otherwise.

(h) Approval.--If no timely objections are raised under

subsection (g), or objections are resolved as provided by

subsection (g), the settlement of account shall be deemed

approved and any assets held in trust shall, within a reasonable

time thereafter, be distributed subject to payment of expenses

as provided in subsection (f) or shall continue to be

administered in trust subject to payment of expenses.

(i) Reliance.--The trustee may rely upon the written

statement of a person receiving notice that the person does not

object.

(j) Limitation of action and preclusive effect.--

(1) When a settlement of account is deemed approved

under this section for a terminated trust or with respect to

the duties of a trustee who ceased to serve or stated an

intent to cease to serve, each person who was sent notice as

provided by subsection (b) or (c) is barred from bringing a

claim against the trustee or challenging the distribution of

assets of the trust to the same extent and with the same

20240SB1231PN1666 - 32 -

preclusive effect as if the court had entered a final,

unappealable order approving the trustee's final account.

(2) When a settlement of account for a trustee seeking

final settlement of an interim trust account is deemed

approved under this section, each person who was sent notice

as provided by subsection (b) or (c) is barred from bringing

a claim against the trustee for the period of the interim

trust account to the same extent and with the same preclusive

effect as if the court had entered a final, unappealable

order approving the trustee's interim trust account.

(k) Representation.--The provisions of Subchapter C shall

apply to an account settlement under this section.

(l) Filing account.--Nothing in this section shall preclude

a trustee from proceeding under section 7797 (relating to filing

accounts) or 7710.1.

Section 10. Sections 7786, 7788(a) introductory paragraph,

7790.3(d) and (f) and 7794 of Title 20 are amended to read:

§ 7786. Reliance on trust instrument - UTC 1006.

A trustee who acts in reasonable reliance on the [express

provisions] terms of the trust as expressed in the trust

instrument is not liable to a beneficiary for a breach of trust

to the extent the breach resulted from the reliance.

§ 7788. Exculpation of trustee - UTC 1008.

(a) When exculpatory provision unenforceable.--A [provision]

term of a trust [instrument] relieving a trustee of liability

for breach of trust is unenforceable to the extent that it:

* * *

§ 7790.3. Certification of trust - UTC 1013.

* * *

(d) Dispositive trust provisions.--A certification of trust

20240SB1231PN1666 - 33 -

need not contain the dispositive [provisions] terms of the trust

[instrument].

* * *

(f) Reliance on certification.--A person who acts in

reliance upon a certification of trust without knowledge that

the representations contained in the certification are incorrect

is not liable to any person for so acting and may assume without

inquiry the existence of the facts contained in the

certification. Knowledge of the [provisions] terms of the trust

[instrument] may not be inferred solely from the fact that a

copy of all or part of the trust instrument is held by the

person relying upon the certification.

* * *

§ 7794. Title of purchaser.

If the trustee has given a bond as required in accordance

with this title, any sale, pledge, mortgage or exchange by a

trustee, whether pursuant to a decree or to the exercise of a

power conferred by the terms of a trust [instrument] or of a

power under this title, shall pass the full title of the trust

in the property, unless otherwise specified. Persons dealing

with the trustee shall have no obligation to see to the proper

application of the cash or other assets given in exchange for

the property of the trust. A sale or exchange by a trustee

pursuant to a decree under section 3353 (relating to order of

court) shall have the effect of a judicial sale as to the

discharge of liens, but the court may decree a sale or exchange

freed and discharged from the lien of any mortgage otherwise

preserved from discharge by existing law if the holder of the

mortgage consents by writing filed in the proceeding. No sale,

mortgage, exchange or conveyance shall be prejudiced by the

20240SB1231PN1666 - 34 -

subsequent dismissal of the trustee. No sale, mortgage, exchange

or conveyance by a testamentary trustee shall be prejudiced by

the terms of a will or codicil thereafter probated if the person

dealing with the trustee did so in good faith.

Section 11. The letters "UTC" in section headings refer to

the Uniform Trust Code. The letters "UDTA" in section headings

refer to the Uniform Directed Trust Act. The number that follows

these letters refers to a particular section of the applicable

uniform act. If a section in 20 Pa.C.S. has these references,

that section shall be construed and applied consistent with 1

Pa.C.S. §§ 1927 and 1939.

Section 12. This act shall take effect in 90 days.

20240SB1231PN1666 - 35 -