Section 700.7809 - Trust protector; exercise of powers.
ESTATES AND PROTECTED INDIVIDUALS CODE (EXCERPT)
Act 386 of 1998
700.7809 Trust protector; exercise of powers.
Sec. 7809.
(1) A trust protector, other than a trust protector who is a beneficiary of the trust, is subject to all of the following:
(a) Except as provided in subsection (2), the trust protector is a fiduciary to the extent of the powers, duties, and discretions granted to him or her under the terms of the trust.
(b) In exercising or refraining from exercising any power, duty, or discretion, the trust protector shall act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
(c) The trust protector is liable for any loss that results from the breach of his or her fiduciary duties.
(2) The terms of a trust may provide that a trust protector to whom powers of administration described in section 675(4) of the internal revenue code, 26 USC 675, have been granted may exercise those powers in a nonfiduciary capacity. However, the terms of the trust shall not relieve the trust protector from the requirement under subsection (1)(b) that he or she exercise or refrain from exercising any power, duty, or discretion in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
(3) Except as otherwise provided in subsection (4), the trustee shall act in accordance with a trust protector's exercise of the trust protector's specified powers and is not liable for so acting.
(4) If either of the following applies to a trust protector's attempted exercise of a specified power, the trustee shall not act in accordance with the attempted exercise of the power unless the trustee receives prior direction from the court:
(a) The exercise is contrary to the terms of the trust.
(b) The exercise would constitute a breach of any fiduciary duty that the trust protector owes to the beneficiaries of the trust.
(5) A trustee is not liable for any loss that results from any of the following:
(a) The trustee's compliance with a direction of a trust protector, unless the attempted exercise was described in subsection (4).
(b) The trustee's failure to take any action that requires a prior authorization of the trust protector if the trustee timely sought but failed to receive the authorization.
(c) Seeking a determination from the court regarding the trust protector's actions or directions.
(d) The trustee's refraining from action pursuant to subsection (4).
(6) The terms of a trust may confer upon a trustee or other person a power to direct the modification or termination of the trust.
(7) By accepting an appointment to serve as a trust protector of a trust registered in this state or having its principal place of administration in this state, the trust protector submits to the jurisdiction of the courts of this state even if investment advisory agreements or other related agreements provide otherwise, and the trust protector may be made a party to any action or proceeding relating to a decision, action, or inaction of the trust protector.
(8) A term of a trust that relieves a trust protector from liability for breach of his or her fiduciary duties is unenforceable to the extent that either of the following applies:
(a) The term relieves the trust protector of liability for acts committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the trust beneficiaries.
(b) The term was inserted as the result of an abuse by the trust protector of a fiduciary or confidential relationship to the settlor.
History: Add. 2009, Act 46, Eff. Apr. 1, 2010
Popular Name: EPIC