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SB 59 - This act modifies the Uniform Trust Code. The act allows certain trustees to move trust assets from the original trust to another trust. By moving the trust assets to a new trust, the trust can be modified without a court's approval. This second trust may only have beneficiaries that were eligible to receive property under the first trust, or may in the future receive property from the first trust. Generally, a trustee may not move the trust assets to the second trust if the trustee is a beneficiary of the first trust, or if the trustee of the first trust can be replaced by a beneficiary with a person who is related to that beneficiary. Generally, a trustee is prohibited from moving the trust assets to a second trust if it would increase the distributions to the trustee or to a beneficiary who could replace the trustee, or if it would remove restrictions that were in the document creating the first trust. The act also restricts how the second trust can operate for certain types of property and trusts, based on federal tax law. A provision in the original trust document that prohibits amendment or revocation of the trust will not prevent the trustee from moving the trust assets to a new trust. The trustee is required to notify people who might get property from the second trust of the decision to distribute the property to the second trust. The act specifies that a trustee does not have a duty to move trust assets to a second trust. (Section 456.4-419) The act specifies that creditors of a person who creates a trust may not reach the person's interest in that trust, regardless of whether the person retains the ability to dispose of their interest through a testamentary power of appointment. (Section 456.5-505) The act also prohibits creditors of certain beneficiaries of a trust from reaching certain property of the trust to satisfy the beneficiary's debts. (Section 456.5-508) EMILY KALMER
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