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59-14 Revocable Trusts

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CHAPTER 59-14REVOCABLE TRUSTS59-14-01. (601) Capacity of settlor of revocable trust. The capacity required to create,amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a<br>revocable trust, is the same as that required to make a will.59-14-02. (602) Revocation or amendment of revocable trust.1.Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor<br>may revoke or amend the trust. This subsection does not apply to a trust created<br>under an instrument executed before August 1, 2007.2.If a revocable trust is created or funded by more than one settlor to the extent the<br>trust consists of community property, the trust may be revoked by either spouse<br>acting alone but may be amended only by joint action of both spouses; to the extent<br>the trust consists of property other than community property, each settlor may<br>revoke or amend the trust with regard to the portion of the trust property attributable<br>to that settlor's contribution; and upon the revocation or amendment of the trust by<br>fewer than all of the settlors, the trustee shall promptly notify the other settlors of the<br>revocation or amendment.3.The settlor may revoke or amend a revocable trust by substantial compliance with a<br>method provided in the terms of the trust or, if the terms of the trust do not provide a<br>method or the method provided in the terms is not expressly made exclusive, by a<br>later will or codicil that expressly refers to the trust or any other method manifesting<br>clear and convincing evidence of the settlor's intent.4.Upon revocation of a revocable trust, the trustee shall deliver the trust property as<br>the settlor directs.5.A settlor's powers with respect to revocation, amendment, or distribution of trust<br>property may be exercised by an agent under a power of attorney only to the extent<br>expressly authorized by the terms of the trust or the power, exercised in writing and<br>delivered to the trustee.6.A conservator of the settlor or, if no conservator has been appointed, a guardian of<br>the settlor may exercise a settlor's powers with respect to revocation, amendment,<br>or distribution of trust property only with the approval of the court supervising the<br>conservatorship or guardianship.7.A trustee who does not know that a trust has been revoked or amended is not liable<br>to the settlor or settlor's successors in interest for distributions made and other<br>actions taken on the assumption that the trust had not been amended or revoked.59-14-03. (603) Settlor's powers - Powers of withdrawal.1.While a trust is revocable, rights of the beneficiaries are subject to the control of, and<br>the duties of the trustee are owed exclusively to, the settlor.2.During the period the power may be exercised, the holder of a power of withdrawal<br>has the rights of a settlor of a revocable trust under this section to the extent of the<br>property subject to the power.59-14-04.(604) Limitation on action contesting validity of revocable trust -Distribution of trust property.1.A person shall commence a judicial proceeding to contest the validity of a trust that<br>was revocable immediately before the settlor's death within the earlier of three yearsPage No. 1after the settlor's death or one hundred twenty days after the trustee sent the person<br>a copy of the trust instrument and a notice informing the person of the trust's<br>existence, of the trustee's name and address, and of the time allowed for<br>commencing a proceeding.2.Upon the death of the settlor of a trust that was revocable immediately before the<br>settlor's death, the trustee may proceed to distribute the trust property in accordance<br>with the terms of the trust. The trustee is not subject to liability for doing so unless<br>the trustee knows of a pending judicial proceeding contesting the validity of the trust<br>or a potential contestant has notified the trustee of a possible judicial proceeding to<br>contest the trust and a judicial proceeding is commenced within sixty days after the<br>contestant sent the notification.3.A beneficiary of a trust that is determined to have been invalid is liable to return any<br>distribution received.4.This section does not impose a duty upon the trustee to give notice under this<br>section unless the notice is expressly required in the trust agreement.Page No. 2Document Outlinechapter 59-14 revocable trusts