22-3-105 - Judicial control of discretionary power.
22-3-105. Judicial control of discretionary power.
(1) The court may not order a fiduciary to change a decision to exercise or not to exercisea discretionary power conferred by this chapter unless it determines that the decision was anabuse of the fiduciary's discretion. A fiduciary's decision is not an abuse of discretion merelybecause the court would have exercised the power in a different manner or would not haveexercised the power.
(2) The decisions to which Subsection (1) applies include:
(a) A decision under Subsection 22-3-104(1) as to whether and to what extent an amountshould be transferred from principal to income or from income to principal.
(b) A decision regarding the factors that are relevant to the trust and its beneficiaries, theextent to which the factors are relevant, and the weight, if any, to be given to those factors, indeciding whether and to what extent to exercise the discretionary power conferred by Subsection22-3-104(1).
(3) If the court determines that a fiduciary has abused the fiduciary's discretion, the courtmay place the income and remainder beneficiaries in the positions they would have occupied ifthe discretion had not been abused, according to the following rules:
(a) To the extent that the abuse of discretion has resulted in no distribution to abeneficiary or in a distribution that is too small, the court shall order the fiduciary to distributefrom the trust to the beneficiary an amount that the court determines will restore the beneficiary,in whole or in part, to the beneficiary's appropriate position.
(b) To the extent that the abuse of discretion has resulted in a distribution to a beneficiarywhich is too large, the court shall place the beneficiaries, the trust, or both, in whole or in part, intheir appropriate positions by ordering the fiduciary to withhold an amount from one or morefuture distributions to the beneficiary who received the distribution that was too large or orderingthat beneficiary to return some or all of the distribution to the trust.
(c) To the extent that the court is unable, after applying Subsections (3)(a) and (b), toplace the beneficiaries, the trust, or both, in the positions they would have occupied if thediscretion had not been abused, the court may order the fiduciary to pay an appropriate amountfrom its own funds to one or more of the beneficiaries or the trust or both.
(4) Upon petition by the fiduciary, the court having jurisdiction over a trust or estate shalldetermine whether a proposed exercise or nonexercise by the fiduciary of a discretionary powerconferred by this chapter will result in an abuse of the fiduciary's discretion. If the petitiondescribes the proposed exercise or nonexercise of the power and contains sufficient informationto inform the beneficiaries of the reasons for the proposal, the facts upon which the fiduciaryrelies, and an explanation of how the income and remainder beneficiaries will be affected by theproposed exercise or nonexercise of the power, a beneficiary who challenges the proposedexercise or nonexercise has the burden of establishing that it will result in an abuse of discretion.
Enacted by Chapter 285, 2004 General Session