130 - oregon state legislature · 130.100 utc 301. representation; basic effect 130.105 utc 302....

Chapter 1302011 EDITION

Uniform Trust Code

GENERAL PROVISIONS ANDDEFINITIONS

130.001 UTC 101. Short title130.005 UTC 102. Scope130.010 UTC 103. Definitions130.015 UTC 104. Knowledge130.020 UTC 105. Default and mandatory rules130.022 UTC 108. Principal place of administration130.025 UTC 106. Common law of trusts; principles

of equity130.030 UTC 107. Governing law130.035 UTC 109. Methods of giving notice; waiver

of notice130.040 UTC 110. Other persons treated as quali-

fied beneficiaries130.045 UTC 111. Nonjudicial settlement agree-

ments

JUDICIAL PROCEEDINGS130.050 UTC 201. Role of court in administration

of trust130.055 UTC 202. Jurisdiction over trustee and

beneficiary130.060 UTC 203. Subject-matter jurisdiction130.065 UTC 204. Venue

REPRESENTATION130.100 UTC 301. Representation; basic effect130.105 UTC 302. Representation by holder of tes-

tamentary power of appointment130.110 UTC 303. Representation by fiduciaries

and parents130.115 UTC 304. Representation by person having

substantially identical interest130.120 UTC 305. Appointment of special repre-

sentative

CREATION, VALIDITY, MODIFICATIONAND TERMINATION OF TRUST

130.150 UTC 401. Methods of creating trust130.155 UTC 402. Requirements for creation130.160 UTC 403. Trusts created in other states,

countries or jurisdictions130.165 UTC 404. Trust purposes130.170 UTC 405. Charitable purposes; enforce-

ment130.175 UTC 406. Creation of trust induced by

fraud, duress or undue influence130.180 UTC 407. Evidence of oral trust130.185 UTC 408. Pet trust130.190 UTC 409. Noncharitable trust without as-

certainable beneficiary130.195 UTC 410. Modification or termination of

trust; proceedings for approval or disap-proval

130.200 UTC 411. Modification or termination ofirrevocable trust by consent

130.205 UTC 412. Modifications or termination be-cause of unanticipated circumstances orinability to administer trust effectively

130.210 UTC 413. Cy pres130.215 UTC 414. Modification or termination of

uneconomic trust130.220 UTC 415. Reformation to correct mistakes130.225 UTC 416. Modification to achieve settlor’s

tax objectives130.230 UTC 417. Combination and division of

trusts130.235 In terrorem clause130.240 Marital deduction gifts

CREDITOR’S CLAIMS; SPENDTHRIFTAND DISCRETIONARY TRUSTS

130.300 UTC 501. Rights of beneficiary’s creditoror assignee

130.305 UTC 502. Spendthrift provision130.310 UTC 503. Exceptions to spendthrift pro-

visions130.315 UTC 505. Creditor’s claim against settlor130.320 UTC 506. Overdue distribution130.325 UTC 507. Personal obligations of trustee

CLAIMS AGAINST TRUST BASED ONDEBTS OF SETTLOR

130.350 Statute of limitations130.355 Commencement of proceeding130.360 Limitation on presentation of claims when

notice to claimants given130.365 Publication of notice130.370 Notice to individual claimants130.375 Form of claim; evidence in support130.380 Claim based on debt due or judgment130.385 Claim on debts not yet due130.390 Claim on secured debt that is due130.395 Claim on contingent or unliquidated debt130.400 Allowance and disallowance of claims130.405 Creditor may obtain order for payment130.410 Evidence required to allow court approval

of claim disallowed by trustee130.415 Waiver of statute of limitations130.420 Tolling of statute of limitations on claim130.425 Priority of claims130.430 Applicability of time limitations to public

bodies130.435 Applicability of time limitations to certain

claims based on liens against property andliability of settlor or trustee

130.440 Petition to close case130.445 Dismissal for want of prosecution130.450 Consolidation of proceedings

REVOCABLE TRUSTS130.500 UTC 601. Revocable trusts generally

Title 13 (2011 Edition)

PROTECTIVE PROCEEDINGS; POWERS OF ATTORNEY; TRUSTS

130.505 UTC 602. Revocation or amendment ofrevocable trust

130.510 UTC 603. Settlor’s powers; powers ofwithdrawal

130.515 UTC 604. Limitation on action contestingvalidity of revocable trust; distribution oftrust property

RULES GOVERNING REVOCABLETRUSTS

130.520 Definition for ORS 130.520 to 130.575130.525 Applicability of ORS 130.520 to 130.575130.530 Effect of marriage130.535 Revocation by divorce or annulment130.540 Contract of sale of property not revoca-

tion130.545 Encumbrance or disposition of property

after trust instrument executed130.550 When trust assets pass to descendants of

beneficiary; class gifts130.555 Children born or adopted after execution

of trust instrument130.560 Failure of specific distribution130.565 Effect of failure of specific distribution130.570 Advancement against share of trust130.575 Effect of advancement on distribution

OFFICE OF TRUSTEE130.600 UTC 701. Acceptance or rejection of

trusteeship130.605 UTC 702. Trustee’s bond130.610 UTC 703. Cotrustees130.615 UTC 704. Vacancy in trusteeship; appoint-

ment of successor130.620 UTC 705. Resignation of trustee130.625 UTC 706. Removal of trustee130.630 UTC 707. Delivery of property by former

trustee130.635 UTC 708. Compensation of trustee130.640 UTC 709. Reimbursement of expenses

DUTIES AND POWERS OF TRUSTEE130.650 UTC 801. Duty to administer trust130.655 UTC 802. Duty of loyalty130.660 UTC 803. Impartiality130.665 UTC 804. Prudent administration130.670 UTC 805. Costs of administration130.675 UTC 806. Trustee’s skills130.680 UTC 807. Delegation by trustee130.685 UTC 808. Powers to direct130.690 UTC 809. Control and protection of trust

property

130.695 UTC 810. Recordkeeping and identificationof trust property

130.700 UTC 811. Enforcement and defense ofclaims

130.705 UTC 812. Collecting trust property130.710 UTC 813. Duty to inform and report130.715 UTC 814. Discretionary powers; tax

savings130.720 UTC 815. General powers of trustee130.725 UTC 816. Specific powers of trustee130.730 UTC 817. Distribution upon termination

ADVISERS130.735 Appointment of adviser; liability of trus-

tee

UNIFORM PRUDENT INVESTOR ACT130.750 Trustee’s duty to comply with prudent

investor rule130.755 Prudent investor rule130.760 Diversification of trust investments130.765 Trustee duty130.770 Determination of compliance with pru-

dent investor rule130.775 Trust language authorizing investments

permitted under prudent investor rule

LIABILITY OF TRUSTEES AND RIGHTSOF PERSONS DEALING WITH TRUSTEE

130.800 UTC 1001. Remedies for breach of trust130.805 UTC 1002. Damages for breach of trust130.810 UTC 1003. Damages in absence of breach130.815 UTC 1004. Attorney fees and costs130.820 UTC 1005. Limitation of action against

trustee130.825 UTC 1006. Reliance on trust instrument130.830 UTC 1007. Event affecting administration

or distribution130.835 UTC 1008. Exculpation of trustee130.840 UTC 1009. Beneficiary’s consent, release

or ratification130.845 UTC 1010. Limitation on personal liability

of trustee130.850 UTC 1011. Interest as general partner130.855 UTC 1012. Protection of person dealing

with trustee130.860 UTC 1013. Certification of trust

MISCELLANEOUS PROVISIONS130.900 Uniformity of application and construc-

tion130.905 UTC 1102. Electronic records and signa-

tures130.910 UTC 1106. Application


UNIFORM TRUST CODE 130.010

GENERAL PROVISIONS ANDDEFINITIONS

130.001 UTC 101. Short title. Thischapter may be cited as the Oregon UniformTrust Code. [2005 c.348 §1]

130.005 UTC 102. Scope. (1) Except asprovided in subsection (2) of this section, thischapter applies to express trusts, whethercharitable or noncharitable, and to trustscreated pursuant to a statute or a judgmentthat requires that the trust be administeredin the manner of an express trust.

(2) This chapter does not apply to:(a) A trust that is part of an employee

benefit arrangement or an individual retire-ment account.

(b) A trust account established under aqualified tuition savings program pursuant toORS 348.841 to 348.873.

(c) Trust accounts maintained on behalfof clients or customers by licensed serviceprofessionals, including trust accounts main-tained by attorneys pursuant to rules of pro-fessional conduct adopted under ORS 9.490and by licensed real estate property manag-ers or principal real estate brokers pursuantto ORS 696.241.

(d) An endowment care fund establishedby a cemetery authority pursuant to ORS97.810.

(e) Funds maintained by a public body,as defined in ORS 174.109, or other govern-mental entities.

(f) Trust funds held for a single businesstransaction or an escrow arrangement.

(g) Trusts created by a depository agree-ment with a financial institution.

(h) Trusts created by an account agree-ment with a regulated financial services en-tity.

(i) An account maintained under the Or-egon Uniform Transfers to Minors Act as setforth in ORS 126.805 to 126.886.

(j) A fund maintained pursuant to courtorder in conjunction with a bankruptcy pro-ceeding or business liquidation.

(k) A business trust as described in ORS128.560.

(L) A voting trust as described in ORS60.254.

(m) Funds maintained to manage pro-ceeds from class actions.

(n) A trust deed as defined in ORS 86.705or any other trust created solely to securethe performance of an obligation.

(o) A trust established on behalf of aresident of a residential facility under ORS443.880.

(p) A trust managed by a nonprofit asso-ciation for persons with disabilities under 42U.S.C. 1396p(d)(4)(C), as in effect on January1, 2006, and under the rules of the Depart-ment of Human Services.

(q) A resulting or constructive trust.(r) A trust fund established for a pur-

chaser who enters into a prearrangementsales contract, as defined in ORS 97.923, ora preconstruction sales contract, as definedin ORS 97.923. [2005 c.348 §2; 2007 c.70 §32; 2011c.158 §5; 2011 c.712 §3]

130.010 UTC 103. Definitions. For thepurposes of this chapter:

(1) “Ascertainable standard” means anascertainable standard relating to anindividual’s health, education, support ormaintenance within the meaning of section2041(b)(1)(A) or 2514(c)(1) of the Internal Re-venue Code, as in effect on January 1, 2006.

(2) “Beneficiary” means a person that:(a) Has a present or future beneficial in-

terest in a trust, whether vested or contin-gent; or

(b) Holds a power of appointment overtrust property in a capacity other than thatof trustee.

(3) “Charitable trust” means a trust, orportion of a trust, described in ORS 130.170(1).

(4) “Conservator” means a person ap-pointed by a court to administer the estateof a minor or adult individual.

(5) “Environmental law” means a federal,state or local law, rule, regulation or ordi-nance relating to protection of the environ-ment.

(6) “Financial institution” has the mean-ing given that term in ORS 706.008.

(7) “Financially incapable” has themeaning given that term in ORS 125.005.“Financially capable” means not financiallyincapable.

(8) “Guardian” means a person appointedby a court to make decisions regarding thesupport, care, education, health and welfareof a minor or adult individual. “Guardian”does not include a guardian ad litem.

(9) “Interests of the beneficiaries” meansthe beneficial interests provided in the termsof a trust.

(10) “Permissible distributee” means abeneficiary who is currently eligible to re-ceive distributions of trust income or princi-pal, whether the distribution is mandatory ordiscretionary.

(11) “Person” means an individual, cor-poration, business trust, partnership, limitedliability company, association, joint venture,


130.015 PROTECTIVE PROCEEDINGS; POWERS OF ATTORNEY; TRUSTS

public body as defined in ORS 174.109 or anyother legal or commercial entity.

(12) “Power of withdrawal” means apresently exercisable general power of ap-pointment, other than a power exercisable bya trustee that is limited by an ascertainablestandard or that is exercisable by anotherperson only upon consent of the trustee or aperson holding an adverse interest.

(13) “Property” means anything that maybe the subject of ownership, whether real orpersonal, legal or equitable, or any interesttherein.

(14) “Qualified beneficiary” means a ben-eficiary who:

(a) Is a permissible distributee on thedate the beneficiary’s qualification is deter-mined;

(b) Would be a permissible distributee ifthe interests of all permissible distributeesdescribed in paragraph (a) of this subsectionterminated on the date the beneficiary’squalification is determined; or

(c) Would be a permissible distributee ifthe trust terminated on the date thebeneficiary’s qualification is determined.

(15) “Revocable trust” means a trust thatcan be revoked by the settlor without theconsent of the trustee or a person holding anadverse interest.

(16) “Settlor” means a person, includinga testator, who creates a trust or contributesproperty to a trust. If more than one personcreates or contributes property to a trust,each person is a settlor of the portion of thetrust property attributable to that person’scontribution and of the portion as to whichthat person has the power to revoke orwithdraw.

(17) “Spendthrift provision” means a termof a trust that restrains both voluntary andinvoluntary transfer of a beneficiary’s inter-est.

(18) “State” means a state of the UnitedStates, the District of Columbia, Puerto Rico,the United States Virgin Islands or any ter-ritory or insular possession subject to thejurisdiction of the United States. “State” in-cludes an Indian tribe or band recognized byfederal law or formally acknowledged by astate.

(19) “Terms of a trust” means the man-ifestation of the settlor’s intent regarding atrust’s provisions as expressed in the trustinstrument or as may be established by otherevidence that would be admissible in a judi-cial proceeding.

(20) “Trust instrument” means an instru-ment executed by a settlor that contains

terms of the trust, including any amendmentsto the instrument.

(21) “Trustee” means an original trustee,an additional trustee, a successor trustee ora cotrustee. [2005 c.348 §3; 2009 c.275 §1; 2009 c.294§16]

130.015 UTC 104. Knowledge. (1) Sub-ject to subsection (2) of this section, a personhas knowledge of a fact if the person:

(a) Has actual knowledge of the fact;(b) Has received a notice or notification

of the fact; or(c) From all the facts and circumstances

known to the person at the time in question,has reason to know the fact.

(2) An organization that conducts activ-ities through employees has notice or know-ledge of a fact involving a trust only fromthe time the information was received by anemployee having responsibility to act for thetrust, or would have been brought to theemployee’s attention if the organization hadexercised reasonable diligence. An organiza-tion exercises reasonable diligence if the or-ganization maintains reasonable routines forcommunicating significant information to theemployee having responsibility to act for thetrust and there is reasonable compliancewith the routines. Reasonable diligence doesnot require an employee of the organizationto communicate information unless the com-munication is part of the employee’s regularduties or the employee knows a matter in-volving the trust would be materially af-fected by the information. [2005 c.348 §4]

130.020 UTC 105. Default and manda-tory rules. (1) Except as otherwise providedin the terms of the trust, this chapter gov-erns the duties and powers of a trustee, re-lations among trustees, and the rights andinterests of a beneficiary.

(2) The terms of a trust prevail over theprovisions of this chapter except:

(a) The requirements of ORS 130.150 to130.190 governing the creation of a trust.

(b) The duty of a trustee to act in goodfaith and in accordance with the purposes ofthe trust.

(c) The requirement that a trust and theterms of a trust be for the benefit of thetrust beneficiaries, and that the trust have apurpose that is lawful, not contrary to publicpolicy and possible to achieve.

(d) The power of the court to modify orterminate a trust under ORS 130.195 to130.225.

(e) The effect of a spendthrift provisionand the rights of creditors and assignees toreach interests in a trust as provided in ORS130.300 to 130.325.



(f) The power of the court under ORS130.605 to require, dispense with, modify orterminate a bond.

(g) The power of the court under ORS130.635 (2) to adjust a trustee’s compensationspecified in the terms of the trust if thecompensation is unreasonably low or high.

(h) Subject to subsection (3) of this sec-tion, the duty under ORS 130.710 (2)(b) and(c) to notify qualified beneficiaries of anirrevocable trust of the existence of thetrust, of the identity of the trustee and oftheir right to request trustee reports.

(i) Subject to subsection (3) of this sec-tion, the duty under ORS 130.710 (1) to re-spond to the request of a qualifiedbeneficiary of an irrevocable trust for trusteereports and other information reasonably re-lated to the administration of a trust.

(j) The effect of an exculpatory term un-der ORS 130.835.

(k) The rights under ORS 130.845,130.850, 130.855 and 130.860 of a person otherthan a trustee or beneficiary.

(L) Periods of limitation for commencinga judicial proceeding.

(m) The power of the court to take suchaction and exercise such jurisdiction as maybe necessary in the interests of justice.

(n) The subject-matter jurisdiction of thecourt and venue for commencing a proceed-ing as provided in ORS 130.060 and 130.065.

(3) Except as provided in subsection (4)of this section, the settlor, in the trust in-strument or in another writing delivered tothe trustee, may waive or modify the dutiesof a trustee under ORS 130.710 to give no-tice, information and reports to qualifiedbeneficiaries by:

(a) Waiving or modifying those dutiesduring the period that either the settlor isalive and financially capable, or the settlor’sspouse, if a qualified beneficiary, is alive andfinancially capable; or

(b) Designating a person or persons toact in good faith to protect the interests ofqualified beneficiaries and to receive any no-tice, information or reports required underORS 130.710 (1), (2)(b) to (d) and (3) in lieuof providing the notice, information or re-ports to the qualified beneficiaries.

(4) All reports under ORS 130.710 (3) thatcontain information relating to terminationof the trust must be provided to the qualifiedbeneficiaries and to any person or personsdesignated under subsection (3)(b) of thissection. [2005 c.348 §5; 2009 c.275 §2]

130.022 UTC 108. Principal place ofadministration. (1) Terms of a trust desig-

nating the principal place of administrationare valid and controlling if:

(a) A trustee’s principal place of businessis located in the designated state, country orother jurisdiction, or the trustee is a residentof the designated state, country or other ju-risdiction;

(b) All or part of the administration oc-curs in the designated state, country or otherjurisdiction; or

(c) Other means exist for establishing asufficient connection with the designatedstate, country or other jurisdiction.

(2) A trustee is under a continuing dutyto administer the trust at a place appropriateto the trust’s purposes, the trust’s adminis-tration and the interests of the beneficiaries.Absent a substantial change of circum-stances, the trustee may assume that the or-iginal place of administration is also theappropriate place of administration. The dutyto administer the trust at an appropriateplace may prevent a trustee from moving theplace of administration.

(3)(a) A trustee may transfer the trust’sprincipal place of administration to anotherstate, country or other jurisdiction if thetransfer is in furtherance of the duty im-posed by subsection (2) of this section.

(b) A trustee shall notify qualified bene-ficiaries of the trust of a proposed transferof the trust’s principal place of administra-tion not fewer than 60 days before initiatingthe transfer. The notice of proposed transfermust include all of the following:

(A) The name of the state, country orother jurisdiction to which the principalplace of administration is to be transferred.

(B) The address and telephone number atthe new location at which the trustee can becontacted.

(C) An explanation of the reasons for theproposed transfer.

(D) The date on which the proposedtransfer is anticipated to occur.

(E) The date by which the qualified ben-eficiary must notify the trustee of an ob-jection to the proposed transfer. The date fornotifying a trustee of an objection may notbe fewer than 60 days after the date onwhich the notice is given.

(c) The authority of a trustee under thissubsection to transfer a trust’s principalplace of administration terminates if a quali-fied beneficiary notifies the trustee of an ob-jection to the proposed transfer on or beforethe date specified in the notice.

(d) The trustee may transfer some or allof the trust property to a successor trusteedesignated in the terms of the trust or ap-



pointed pursuant to ORS 130.615 in con-nection with a transfer of the trust’sprincipal place of administration. [2005 c.348§8]

130.025 UTC 106. Common law oftrusts; principles of equity. The commonlaw of trusts and principles of equity supple-ment this chapter, except to the extent mod-ified by this chapter or other law. [2005 c.348§6]

130.030 UTC 107. Governing law. Themeaning and effect of the terms of a trustare determined by:

(1) The law of the state, country or otherjurisdiction designated in the terms of thetrust unless the designation of the law ofthat state, country or other jurisdiction iscontrary to a strong public policy of thestate, country or other jurisdiction havingthe most significant relationship to the mat-ter at issue; or

(2) In the absence of a controlling desig-nation in the terms of the trust, the law ofthe state, country or other jurisdiction hav-ing the most significant relationship to thematter at issue. [2005 c.348 §7]

130.035 UTC 109. Methods of givingnotice; waiver of notice. (1) If any pro-vision of this chapter requires that a trusteeor other person give notice or requires thatthe trustee or other person send a document,the trustee or other person must give thenotice or send the document in a mannerreasonably suitable under the circumstancesand likely to result in receipt of the noticeor document. Permissible methods of givingnotice and sending documents under thischapter include first class mail, personal de-livery, delivery to a person’s last knownplace of residence or place of business, orproperly directed electronic mail.

(2) If any provision of this chapter re-quires that a trustee or other person givenotice or requires that the trustee or otherperson send a document to another person,the trustee or other person need not give thenotice or send the document to any personwhose identity or location is unknown andnot reasonably ascertainable. If the trusteeor other person cannot give notice or send adocument, the trustee or other person shallprepare an affidavit setting forth the effortsmade to find the person. The trustee mustfile the affidavit in any pending court pro-ceeding or hold the affidavit as part of thetrust records if a court proceeding is notpending.

(3) Any person entitled to receive a no-tice or a document under this chapter maywaive receipt of the notice or document.

(4) Subsections (1) to (3) of this sectiondo not apply to notices of judicial pro-

ceedings. Except as provided in subsection(5) of this section, notice of a judicial pro-ceeding shall be given in the manner re-quired by statute for the approval of the finalaccount in a decedent’s estate. Notice of ajudicial proceeding must be given by the pe-titioner to the following persons:

(a) To the trustee and all persons whoseinterests are affected by the requested actionor relief.

(b) If a person who is entitled to noticeis a minor, to the minor’s conservator or toanother appropriate representative underORS 130.100 to 130.120 if the minor does nothave a conservator. If the minor is 14 yearsof age or older, notice must also be given tothe minor.

(c) If a person who is entitled to noticeis financially incapable, to the person and tothe person’s conservator or another appro-priate representative under ORS 130.100 to130.120 if the person does not have a conser-vator.

(d) To any other person the court re-quires.

(5) A judicial proceeding to contest thevalidity of a revocable trust must be com-menced by the service of a summons in themanner required by ORCP 7. Notice of anyother judicial proceeding must be given inthe manner prescribed by subsection (4) ofthis section. [2005 c.348 §9; 2009 c.275 §4]

130.040 UTC 110. Other personstreated as qualified beneficiaries. (1) Acharitable organization expressly designatedto receive distributions under the terms of acharitable trust has the rights of a qualifiedbeneficiary under this chapter if the charita-ble organization is otherwise a qualified ben-eficiary as defined in ORS 130.010.

(2) A person appointed to enforce a trustcreated for the care of an animal or anothernoncharitable purpose as provided in ORS130.185 or 130.190 has the rights of a quali-fied beneficiary under this chapter.

(3) The Attorney General has the rightsof a qualified beneficiary with respect to acharitable trust having its principal place ofadministration in Oregon. [2005 c.348 §10; 2009c.275 §5]

130.045 UTC 111. Nonjudicial settle-ment agreements. (1) For purposes of thissection, “interested persons” means anysettlor of a trust who is living, all benefici-aries of the trust who have an interest in thesubject of the agreement, any acting trusteeof the trust, and the Attorney General if thetrust is a charitable trust subject to the en-forcement or supervisory powers of the stateor the Attorney General under the provisionsof ORS 128.610 to 128.750.



(2) Except as otherwise provided in sub-section (3) of this section, interested personsmay enter into a binding nonjudicial settle-ment agreement with respect to any matterinvolving a trust.

(3) A nonjudicial settlement agreement isvalid only to the extent the agreement doesnot violate a material purpose of the trustand includes terms and conditions that couldbe properly approved by the court under thischapter or other applicable law.

(4) Matters that may be resolved by anonjudicial settlement agreement include:

(a) The interpretation or construction ofthe terms of the trust or other writings thataffect the trust.

(b) The approval of a trustee’s report oraccounting.

(c) Direction to a trustee to refrain fromperforming a particular act or the grant toa trustee of any necessary or desirablepower.

(d) The resignation or appointment of atrustee and the determination of a trustee’scompensation.

(e) Transfer of a trust’s principal placeof administration.

(f) Liability of a trustee for an action orfailure to act relating to the trust.

(g) Determining classes of creditors, ben-eficiaries, heirs, next of kin or other persons.

(h) Resolving disputes arising out of theadministration or distribution of the trust.

(i) Modifying the terms of the trust, in-cluding extending or reducing the periodduring which the trust operates.

(5)(a) Any interested person may file asettlement agreement entered into under thissection, or a memorandum summarizing theprovisions of the agreement, with the circuitcourt for any county where trust assets arelocated or where the trustee administers thetrust.

(b) After collecting the fee provided forin subsection (7) of this section, the clerkshall enter the agreement or memorandumof record in the court’s register.

(c) Within five days after the filing of anagreement or memorandum under this sub-section, the person making the filing mustserve a notice of the filing and a copy of theagreement or memorandum on each personinterested in the trust whose address isknown at the time of the filing. Service maybe made personally, or by registered or cer-tified mail, return receipt requested. The no-tice of filing shall be substantially in thefollowing form:

__________________________________________

CAPTION NOTICE OF FILING OFOF CASE SETTLEMENT AGREEMENT

OR MEMORANDUM OFSETTLEMENT AGREEMENT

You are hereby notified that the attacheddocument was filed by the undersigned in theabove entitled court on the dayof , . Unless you file objectionsto the agreement within 120 days after thatdate, the agreement will be approved andwill be binding on all persons interested inthe trust.

If you file objections within the 120-dayperiod, the court will fix a time and place fora hearing. At least 10 days before the dateof that hearing, you must serve a copy ofyour objections and give notice of the timeand place of the hearing to all persons in-terested in the trust. See ORS 130.045.

Signature__________________________________________

(d) Proof of mailing of the notices re-quired under this subsection must be filedwith the court. Proof of service may be madeby a certificate of service in the form pro-vided by ORCP 7 F, by a signed acceptanceof service or by a return receipt from thepostal authorities.

(e) If no objections are filed with thecourt within 120 days after the filing of theagreement or memorandum, the agreement iseffective and binding on all persons inter-ested in the trust.

(6)(a) If objections are filed with thecourt within 120 days after the filing of asettlement agreement or memorandum underthis section, the clerk of the court shall col-lect the fee provided in subsection (7) of thissection. Upon the filing of objections, thecourt shall fix a time and place for a hearing.The person filing the objections must servea copy of the objections on all persons inter-ested in the trust and give notice to thosepersons of the time and place fixed by thecourt for a hearing. Service must be made atleast 10 days before the date set by the courtfor the hearing. Service of the objectionsmay be made personally or by registered orcertified mail, return receipt requested.

(b) Proof of mailing of objections must befiled with the court. Proof of service may bemade by a certificate of service in the formprovided by ORCP 7 F, by a signed accept-ance of service or by a return receipt fromthe postal authorities.

(c) The court shall approve an agreemententered into under this section after a hear-



ing upon objections filed under this subsec-tion unless:

(A) The agreement does not reflect thesignatures of all persons required by thissection;

(B) The agreement is not authorized bythis section; or

(C) Approval of the agreement would notbe equitable.

(d) An agreement approved by the courtafter a hearing is binding on all persons in-terested in the trust.

(e) Persons interested in the trust maywaive the notice required under subsection(5) of this section. If all persons interested inthe trust waive the notice, the agreement iseffective and binding on all persons inter-ested in the trust upon filing of the agree-ment or memorandum with the court.

(7) The clerk of the circuit court shallcollect in advance the filing fees establishedunder ORS 21.135 for the filing of an agree-ment or memorandum of agreement undersubsection (5) of this section and for the fil-ing of objections under subsection (6) of thissection. [2005 c.348 §11; 2009 c.275 §6; 2011 c.595 §30]

JUDICIAL PROCEEDINGS130.050 UTC 201. Role of court in ad-

ministration of trust. (1) A court may in-tervene in the administration of a trust tothe extent the court’s jurisdiction is invokedby an interested person or as provided bylaw.

(2) A trust is not subject to continuingjudicial supervision unless ordered by acourt.

(3) A judicial proceeding may relate toany matter involving a trust’s administra-tion, including a request for instructions ora declaratory judgment action. [2005 c.348 §12]

130.055 UTC 202. Jurisdiction overtrustee and beneficiary. (1) By acceptingthe trusteeship of a trust having its principalplace of administration in Oregon or bymoving the principal place of administrationto this state, the trustee submits personallyto the jurisdiction of the courts of this stateregarding any matter involving the trust.

(2) The beneficiaries of a trust having itsprincipal place of administration in Oregonare subject to the jurisdiction of the courtsof Oregon regarding any matter involving thebeneficiaries’ interests in the trust. By ac-cepting a distribution from such a trust, therecipient submits personally to the jurisdic-tion of the courts of this state regarding anymatter involving the trust.

(3) This section does not preclude othermethods of obtaining jurisdiction over a

trustee, beneficiary or other person receivingproperty from the trust. [2005 c.348 §13]

130.060 UTC 203. Subject-matter juris-diction. Except as provided in ORS 130.355,the circuit court has jurisdiction of pro-ceedings in this state concerning the admin-istration of a trust. [2005 c.348 §14; 2009 c.275 §7]

130.065 UTC 204. Venue. (1) Except asotherwise provided in this section, venue fora judicial proceeding involving a trust is inthe county in which the trust’s principalplace of administration is or will be located.

(2) If a trust is created by will and theestate is not yet closed, venue for a judicialproceeding involving a trust is in the countyin which the decedent’s estate is being ad-ministered.

(3) If a trust has no trustee, venue for ajudicial proceeding for the appointment of atrustee is in a county in which a beneficiaryresides, in a county in which any trust prop-erty is located and, if the trust is created bywill, in the county in which the decedent’sestate was or is being administered. [2005 c.348§15]

REPRESENTATION130.100 UTC 301. Representation; basic

effect. (1) Notice to a person who may rep-resent and bind another person under ORS130.100 to 130.120 has the same effect as ifnotice were given directly to the other per-son. Notice to a representative must complywith ORS 130.035 (4).

(2) The consent of a person who mayrepresent and bind another person underORS 130.100 to 130.120 is binding on theperson represented unless the person repre-sented objects to the representation beforethe consent would otherwise have becomeeffective.

(3) Except as otherwise provided in ORS130.200 and 130.505, a person who is author-ized to represent a financially incapablesettlor under ORS 130.100 to 130.120 may re-ceive notice and give binding consent on thesettlor’s behalf.

(4) A settlor may not represent and binda beneficiary under ORS 130.100 to 130.120with respect to the termination or modifica-tion of an irrevocable trust under ORS130.200 (1). [2005 c.348 §16]

130.105 UTC 302. Representation byholder of testamentary power of appoint-ment. To the extent there is no conflict ofinterest between the holder of a testamen-tary power of appointment and the personsrepresented with respect to the particularquestion or dispute, the holder may representand bind persons whose interests are subjectto the power as permissible appointees, as



takers in default or by other reason. [2005c.348 §17; 2007 c.33 §1]

130.110 UTC 303. Representation byfiduciaries and parents. To the extentthere is no conflict of interest between therepresentative and the person represented oramong those being represented with respectto a particular question or dispute:

(1) A conservator may represent and bindthe estate that the conservator controls;

(2) An agent having authority to act withrespect to the particular question or disputemay represent and bind the principal;

(3) A trustee may represent and bind thebeneficiaries of the trust;

(4) A personal representative of adecedent’s estate may represent and bindpersons interested in the estate; and

(5) A parent may represent and bind theparent’s minor or unborn child if a conser-vator for the child has not been appointed.[2005 c.348 §18]

130.115 UTC 304. Representation byperson having substantially identical in-terest. Unless otherwise represented, a mi-nor, financially incapable individual orunborn individual, or a person whose identityor location is unknown and not reasonablyascertainable, may be represented by andbound by another person having a substan-tially identical interest with respect to theparticular question or dispute, but only tothe extent there is no conflict of interest be-tween the representative and the person rep-resented. [2005 c.348 §19]

130.120 UTC 305. Appointment of spe-cial representative. (1) If the court deter-mines that the interest of a person is notrepresented under ORS 130.100 to 130.120, orthat the otherwise available representationmight be inadequate, the court may appointa special representative to receive notice,give consent and otherwise represent, bindand act on behalf of a minor, financially in-capable individual or unborn individual, or aperson whose identity or location is un-known and not reasonably ascertainable. Aspecial representative may be appointed torepresent several persons or interests, if theinterests of the persons represented do notconflict.

(2) A special representative may act onbehalf of the individual represented with re-spect to any matter that the court has au-thorized, whether or not a judicialproceeding concerning the trust is pending.

(3) In making decisions, a special repre-sentative may consider general benefit ac-cruing to the living members of theindividual’s family.

(4) A person appointed as special repre-sentative must have appropriate skills andexperience necessary to adequately representthe individual in the matter for which thespecial representative is appointed. A specialrepresentative may not have an interest inthe trust that is the subject of the appoint-ment of the special representative. A specialrepresentative may not be related to a per-sonal representative of an estate with an in-terest in the trust, or to a trustee,beneficiary or other person with an interestin the trust.

(5) A person requesting the appointmentof a special representative must file a peti-tion with the court describing the proposedspecial representative, the need for a specialrepresentative, the qualifications of the spe-cial representative, the person or personswho will be represented, the actions that thespecial representative will take and the ap-proximate date or event when the authorityof the special representative will terminate.The person seeking to serve as special rep-resentative must file a consent to serve.

(6) A special representative appointedunder this section is entitled to reasonablecompensation for services. The trustee shallpay compensation to the special represen-tative from the principal of the trust that isattributable to those beneficiaries who arerepresented. If the beneficiaries who are rep-resented do not have principal that is attrib-utable to them, compensation is anadministrative expense of the trust.

(7) Upon completion of the responsibil-ities of the special representative, the specialrepresentative shall move the court for anorder discharging the special representative.Upon order of the court, a special represen-tative appointed under this section shall bedischarged from any further responsibilitywith respect to the trust. [2005 c.348 §20]

CREATION, VALIDITY,MODIFICATION

AND TERMINATION OF TRUST130.150 UTC 401. Methods of creating

trust. (1) A trust may be created:(a) By transfer of property to another

person as trustee during the settlor’s lifetimeor by will or other disposition taking effectupon the settlor’s death;

(b) By declaration by the owner of prop-erty that the owner holds identifiable prop-erty as trustee;

(c) By exercise of a power of appointmentin favor of a trustee;

(d) By an agent or attorney-in-fact undera power of attorney that expressly grantsauthority to create the trust; or



(e) Pursuant to a statute or judgmentthat requires property to be administered inthe manner of an express trust.

(2) The following apply to trusts fordeath benefits:

(a) A trustee may be named as benefici-ary of any death benefits, and the deathbenefits shall be paid to the trustee and beheld and disposed of by the trustee as pro-vided in a trust created by the designatorduring the lifetime of the designator. A trustis valid even though the trust does not havea trust corpus other than the right of thetrustee to receive death benefits as benefici-ary.

(b) A trustee named by will may be des-ignated as beneficiary of death benefits if thedesignation is made in accordance with theprovisions of the policy, contract, plan, trustor other governing instrument. Upon probateof the will, or upon the filing of an affidavitunder ORS 114.515, the death benefits arepayable to the trustee to be held and dis-posed of under the terms of the designator’swill in the same manner as other testamen-tary trusts are administered. Unless other-wise provided by the designator, an obligormay make payment of death benefits to thepersonal representative of the designator, orto the persons who are otherwise entitled tothe death benefits, if a qualified trustee doesnot claim the death benefits within one yearafter the death of the designator, or if satis-factory evidence is furnished within the one-year period showing that there is no trusteewho can qualify to receive the death benefits.The obligor is discharged from any liabilityfor the death benefits upon making the pay-ment.

(c) Death benefits received by the trusteeare not subject to the debts of the designatoror to inheritance or estate taxes to anygreater extent than if the death benefitswere payable to the beneficiaries named inthe trust and not to the estate of the desig-nator.

(d) Death benefits held in trust may becommingled with any other assets that mayproperly become a part of the trust.

(3) As used in this section:(a) “Death benefits” means death benefits

of any kind, including proceeds of life insur-ance policies, payments under annuity or en-dowment contracts, and funds payable inconnection with pension, retirement, stockbonus or profit-sharing plans, or any trustadministered in connection with these ar-rangements.

(b) “Designator” means the person enti-tled to designate the beneficiary of deathbenefits upon the death of the person.

(c) “Obligor” means the insurer or otherperson obligated to pay death benefits. [2005c.348 §21; 2009 c.275 §8]

130.155 UTC 402. Requirements forcreation. (1) A trust is created only if all ofthe following requirements are met:

(a) The settlor has capacity to create atrust.

(b) The settlor indicates an intention tocreate the trust.

(c) The trust has a definite beneficiaryor is:

(A) A charitable trust;(B) A trust for the care of an animal, as

provided in ORS 130.185; or(C) A trust for a noncharitable purpose,

as provided in ORS 130.190.(d) The trustee has duties to perform.(e) The same person is not the sole trus-

tee and sole beneficiary.(2) A beneficiary is definite for the pur-

poses of subsection (1)(c) of this section ifthe beneficiary can be ascertained when thetrust is created or at any time thereafter,subject to any applicable rule againstperpetuities.

(3) A power of a trustee to select a ben-eficiary from an indefinite class is valid. Ifthe power is not exercised within a reason-able time, the power fails and the propertysubject to the power passes to the personswho would have taken the property had thepower not been conferred. [2005 c.348 §22]

130.160 UTC 403. Trusts created inother states, countries or jurisdictions.A trust not created by will is validly createdif the creation of the trust complies with thelaw of the state, country or other jurisdictionin which the trust instrument was executed,or the law of the state, country or other ju-risdiction in which, at the time of creation:

(1) The settlor was domiciled, had a placeof abode or was a national;

(2) A trustee was domiciled or had aplace of business; or

(3) Any trust property was located. [2005c.348 §23]

130.165 UTC 404. Trust purposes. Atrust may be created only to the extent thepurposes of the trust are lawful, not contraryto public policy and possible to achieve. Atrust and its terms must be for the benefitof the trust’s beneficiaries. [2005 c.348 §24]

130.170 UTC 405. Charitable purposes;enforcement. (1) A charitable trust is atrust created for the relief of poverty, theadvancement of education or religion, thepromotion of health, governmental or munic-ipal purposes, or other purposes beneficial to



the community. A trust is not a charitabletrust if the trust contains contingencies thatmake the charitable interest negligible.

(2) If the terms of a charitable trust donot indicate a particular charitable purposeor beneficiary, the court may select one ormore charitable purposes or beneficiaries.The selection must be consistent with thesettlor’s intention to the extent that intentcan be ascertained.

(3) The settlor of a charitable trust, inaddition to other persons authorized by lawor the trust instrument, may maintain a pro-ceeding to enforce the trust.

(4) A court may modify or terminate anytrust of property for charitable purposes onlyif the Attorney General is a party to theproceedings. [2005 c.348 §25; 2009 c.275 §9]

130.175 UTC 406. Creation of trust in-duced by fraud, duress or undue influ-ence. A trust is void to the extent thecreation of the trust was induced by fraud,duress or undue influence. [2005 c.348 §26]

130.180 UTC 407. Evidence of oraltrust. Except as required by a statute otherthan this chapter, a trust need not be evi-denced by a trust instrument. The creationof an oral trust, and the terms of an oraltrust, must be established by clear and con-vincing evidence. [2005 c.348 §27]

130.185 UTC 408. Pet trust. (1) A trustmay be created to provide for the care of oneor more animals that are alive during thesettlor’s lifetime. The trust terminates uponthe death of the animal or, if the trust wascreated to provide for the care of more thanone animal, upon the death of the last sur-viving animal. An oral or written declarationshall be liberally construed in favor of find-ing the creation of a trust under this section.There is a presumption against merelyprecatory or honorary disposition on behalfof an animal.

(2) A trust authorized by this section maybe enforced by a person appointed in theterms of the trust or, if a person is not ap-pointed in the terms of the trust, by a personappointed by the court. A person having aninterest in the welfare of the animal may re-quest the court to appoint a person to en-force the trust or to remove a personappointed. Reasonable compensation for aperson appointed by the court may be paidfrom the assets of the trust.

(3) Property of a trust authorized by thissection may be applied only to its intendeduse. Upon termination of the trust, propertyof the trust must be distributed to those per-sons designated in the trust. In the absenceof a designation, the property shall be dis-tributed to the settlor if the settlor is livingwhen the distribution is made, or to the

settlor’s successors in interest if the settloris not living when the distribution is made.

(4) Except as ordered by a circuit courtor required by the trust instrument, a trusteefor a trust authorized under this section neednot pay any fee or make any filing, report,registration, periodic accounting, separatemaintenance of funds or appointment by rea-son of the existence of the fiduciary re-lationship of the trustee. A person appointedto enforce the trust may request a reportunder ORS 130.710 (3). [2005 c.348 §28]

130.190 UTC 409. Noncharitable trustwithout ascertainable beneficiary. Exceptas otherwise provided in ORS 130.185 or byanother statute:

(1) A trust may be created for a non-charitable purpose without a definite or defi-nitely ascertainable beneficiary or for anoncharitable but otherwise valid purpose tobe selected by the trustee. The trust may notbe enforced for more than 90 years.

(2) A trust authorized by this section maybe enforced by a person appointed in theterms of the trust or, if a person is not ap-pointed in the terms of the trust, by a personappointed by the court.

(3) Property of a trust authorized by thissection may be applied only to its intendeduse, except to the extent the court deter-mines that the value of the trust propertyexceeds the amount required for the intendeduse. Trust property not required for the in-tended use must be distributed to those per-sons designated in the trust. In the absenceof a designation, the property shall be dis-tributed to the settlor if the settlor is livingwhen the distribution is made, or to thesettlor’s successors in interest if the settloris not living when the distribution is made.[2005 c.348 §29]

130.195 UTC 410. Modification or ter-mination of trust; proceedings for ap-proval or disapproval. (1) In addition to themethods of termination prescribed by ORS130.200, 130.205, 130.210 and 130.215, a trustterminates:

(a) To the extent the trust is revoked orexpires pursuant to the terms of the trust;

(b) If no purpose of the trust remains tobe achieved; or

(c) To the extent one or more of the pur-poses of the trust have become unlawful,contrary to public policy or impossible toachieve.

(2) A proceeding to approve or disapprovea proposed modification or termination underORS 130.045, 130.200, 130.205, 130.210,130.215, 130.220 and 130.225, or trust combi-nation or division under ORS 130.230, maybe commenced by a trustee or beneficiary. A



proceeding to approve or disapprove a pro-posed modification or termination under ORS130.200 may be commenced by the settlor.The settlor of a charitable trust may main-tain a proceeding to modify the trust underORS 130.210. [2005 c.348 §30; 2009 c.275 §10]

130.200 UTC 411. Modification or ter-mination of irrevocable trust by consent.(1) An irrevocable trust may be modified orterminated with approval of the court uponconsent of the settlor and all beneficiaries,even if the modification or termination is in-consistent with a material purpose of thetrust. The Attorney General must consentto any modification or termination of acharitable trust. A settlor’s power to consentto a trust’s modification or termination maybe exercised by:

(a) An agent or attorney-in-fact under apower of attorney only to the extent ex-pressly authorized by the terms of the trust;

(b) The settlor’s conservator with the ap-proval of the court supervising the conserva-torship if an agent or attorney-in-fact is notauthorized by the terms of the trust; or

(c) The settlor’s guardian with the ap-proval of the court supervising the guardian-ship if an agent or attorney-in-fact is notauthorized by the terms of the trust and aconservator has not been appointed.

(2) An irrevocable trust may be termi-nated upon consent of all of the beneficiariesif the court concludes that continuance ofthe trust is not necessary to achieve anymaterial purpose of the trust. An irrevocabletrust may be modified upon consent of all ofthe beneficiaries if the court concludes thatthe modification is not inconsistent with amaterial purpose of the trust. The AttorneyGeneral must consent to any modification ortermination of a charitable trust.

(3) For the purposes of subsections (1)and (2) of this section, a spendthrift provisionin the terms of the trust is rebuttably pre-sumed to constitute a material purpose of thetrust.

(4) Upon termination of a trust undersubsection (1) or (2) of this section, the trus-tee shall distribute the trust property asagreed to by the beneficiaries and, in thecase of a charitable trust requiring the At-torney General’s consent, as agreed to by theAttorney General.

(5) A proposed modification or termi-nation of the trust under subsection (1) or (2)of this section may be approved by the courtwithout the consent of all beneficiaries if thecourt finds that:

(a) If all of the beneficiaries had con-sented, the trust could have been modifiedor terminated under this section; and

(b) The interests of any beneficiary whodoes not consent will be adequately pro-tected.

(6) A binding nonjudicial settlementagreement relating to modification or termi-nation of a trust may be entered into by allinterested persons, as defined in ORS130.045. [2005 c.348 §31; 2007 c.129 §21; 2009 c.275 §11]

130.205 UTC 412. Modifications or ter-mination because of unanticipated cir-cumstances or inability to administertrust effectively. (1) The court may modifythe administrative or dispositive terms of atrust or terminate the trust if modificationor termination will further the purposes ofthe trust and the modification or terminationis requested by reason of circumstances notanticipated by the settlor. To the extentpracticable, the modification must be madein accordance with the settlor’s probable in-tention.

(2) The court may modify the administra-tive terms of a trust if continuation of thetrust on its existing terms would be imprac-ticable or wasteful, or would impair thetrust’s administration.

(3) A trustee may terminate a trust if:(a) Termination is appropriate by reason

of circumstances not anticipated by thesettlor;

(b) Termination will not be inconsistentwith the material purposes of the trust;

(c) All qualified beneficiaries have con-sented to the termination;

(d) The trustee is not a beneficiary of thetrust and has no duty of support for anybeneficiary of the trust; and

(e) In the case of a charitable trust, theAttorney General has consented to the ter-mination.

(4) Upon termination of a trust underthis section, the trustee shall distribute thetrust property in a manner consistent withthe purposes of the trust. [2005 c.348 §32; 2007c.515 §1; 2009 c.275 §12]

130.210 UTC 413. Cy pres. (1) Except asotherwise provided in subsection (2) of thissection, if a particular charitable purpose ofa trust becomes unlawful, impracticable, im-possible to achieve or wasteful:

(a) The trust does not fail, in whole or inpart;

(b) The trust property does not revert tothe settlor or the settlor’s successors in in-terest; and

(c) The court may apply cy pres to modifyor terminate the trust by directing that thetrust property be applied or distributed, inwhole or in part, in a manner consistentwith the settlor’s charitable purposes.



(2) If a provision in the terms of a chari-table trust would result in distribution of thetrust property to a noncharitable beneficiary,a court may not apply cy pres to modify orterminate the trust under subsection (1)(c)of this section if, when the provision takeseffect:

(a) The trust property is to revert to thesettlor and the settlor is still living; or

(b) Fewer than 50 years have elapsedsince the date of the trust’s creation. [2005c.348 §33; 2009 c.275 §13]

130.215 UTC 414. Modification or ter-mination of uneconomic trust. (1) Afternotice to the qualified beneficiaries, a trusteemay terminate a trust if the trustee con-cludes that the value of the trust property isinsufficient to justify the cost of administra-tion. A trustee may not terminate a trustunder this section if the trustee is a benefi-ciary of the trust or has a duty of support fora beneficiary of the trust.

(2) The court may modify or terminate atrust, or remove the trustee and appoint adifferent trustee, if the court finds that thevalue of the trust property is insufficient tojustify the cost of administration.

(3) Upon termination of a trust underthis section, the trustee shall distribute thetrust property in a manner consistent withthe purposes of the trust.

(4) This section does not apply to aneasement for conservation or preservation.[2005 c.348 §34]

130.220 UTC 415. Reformation to cor-rect mistakes. The court may reform theterms of a trust, even if unambiguous, toconform the terms to the settlor’s intentionif the person requesting reformation provesby clear and convincing evidence that boththe settlor’s intent and the terms of the trustwere affected by a mistake of fact or law,whether in expression or inducement. [2005c.348 §35]

130.225 UTC 416. Modification toachieve settlor’s tax objectives. The courtmay modify the terms of a trust to achievethe settlor’s tax objectives if the modificationis not contrary to the settlor’s probable in-tention. The court may provide that themodification has retroactive effect. [2005 c.348§36]

130.230 UTC 417. Combination and di-vision of trusts. After notice to all qualifiedbeneficiaries, a trustee may combine two ormore trusts into a single trust or divide atrust into two or more separate trusts, if theresult does not materially impair rights ofany beneficiary or adversely affect achieve-ment of the purposes of the trust. [2005 c.348§37]

130.235 In terrorem clause. (1) Exceptas provided in this section, an in terroremclause in a trust is valid and enforceable. Ifa beneficiary challenges a trust that containsan in terrorem clause that applies to thebeneficiary, the court shall enforce theclause against the beneficiary even thoughthe beneficiary establishes that there wasprobable cause for the challenge.

(2) The court shall not enforce an interrorem clause if the beneficiary challeng-ing the trust establishes that the beneficiaryhas probable cause to believe that the trustis a forgery or that the trust has been re-voked.

(3) The court shall not enforce an interrorem clause if the challenge is broughtby a fiduciary acting on behalf of a protectedperson under the provisions of ORS chapter125, a guardian ad litem appointed for a mi-nor or a guardian ad litem appointed for anincapacitated or financially incapable person.

(4) For the purposes of this section, “interrorem clause” means a provision in atrust that reduces or eliminates the interestof a beneficiary under the trust if the bene-ficiary challenges the validity of part or allof the trust. [2005 c.348 §38]

130.240 Marital deduction gifts. (1) Asused in this section:

(a) “Marital deduction” means the federalestate tax deduction allowed for transfersunder section 2056 of the Internal RevenueCode, as in effect on January 1, 2008, or thefederal gift tax deduction allowed for trans-fers under section 2523 of the Internal Re-venue Code, as in effect on January 1, 2008.

(b) “Marital deduction gift” means atransfer of property that the settlor intendedto qualify for the marital deduction.

(2) If a trust contains a marital deductiongift:

(a) The provisions of the trust, includingany power, duty or discretionary authoritygiven to a fiduciary, must be construed asnecessary to comply with the marital de-duction provisions of the Internal RevenueCode.

(b) The fiduciary may not take any actionor have any power that impairs the tax de-duction for the marital deduction gift.

(c) The marital deduction gift may besatisfied only with property that qualifies forthe tax deduction.

(3) If a trust executed before September12, 1981, indicates the settlor intended thata gift provide the maximum allowable mari-tal deduction, the trust gives the recipientan amount equal to the maximum amount ofthe marital deduction that would have beenallowed as of the date of the gift under fed-



eral law as it existed before September 12,1981, with adjustments for:

(a) The provisions of section 2056(c)(1)(B)and (C) of the Internal Revenue Code in ef-fect immediately before September 12, 1981.

(b) Reduction of the amount passing un-der the gift by the final federal estate taxvalues of any other property that passes un-der the trust, or by other means, that quali-fies for the marital deduction. Thisparagraph does not apply to qualified termi-nable interest property under section2056(b)(7) of the Internal Revenue Code, asin effect on January 1, 2008.

(4) If a marital deduction gift is made intrust:

(a) The settlor’s spouse is the only bene-ficiary of income or principal of the maritaldeduction property as long as the spouselives. Nothing in this paragraph prevents ex-ercise by the settlor’s spouse of a power ofappointment included in a trust that qualifiesas a general power of appointment maritaldeduction trust.

(b) Subject to paragraph (d) of this sub-section, the settlor’s spouse is entitled to allof the income of the marital deduction prop-erty at least once a year, as long as thespouse is alive.

(c) The settlor’s spouse has the right torequire that the trustee of the trust makeunproductive marital deduction property pro-ductive or convert it into productive propertywithin a reasonable time.

(d) Notwithstanding any provision ofORS chapter 129, upon the death of thesettlor’s spouse all remaining accrued or un-distributed income from qualified terminableinterest property under sections 2056(b)(7) or2523(f) of the Internal Revenue Code, as ineffect on January 1, 2008, passes to the es-tate of the settlor’s spouse, unless the trustprovides a different disposition that qualifiesfor the marital deduction.

(5)(a) Except as provided in paragraph (b)of this subsection, if a trust that makes amarital deduction gift includes a requirementthat the settlor’s spouse survive the settlorby a period of more than six months, or con-tains provisions that could result in a lossof the spouse’s interest in the trust if thespouse fails to survive the settlor by at leastsix months, the spouse need only survive thesettlor by six months to receive the maritaldeduction gift.

(b) If a trust that makes a marital de-duction gift includes a requirement that thesettlor’s spouse survive a common disasterthat results in the death of the settlor, thespouse need only survive until the final auditof the federal estate tax return for the

settlor’s estate, if any, to receive the maritaldeduction gift.

(6) A trustee is not liable for a good faithdecision whether to make any election re-ferred to in sections 2056(b)(7) or 2523(f) ofthe Internal Revenue Code, as in effect onJanuary 1, 2008.

(7) Subsections (4) and (6) of this sectiondo not apply to a trust that qualifies for themarital deduction under 26 U.S.C. 2056, asdescribed in 26 C.F.R. 2056(c)-2(b)(1), as ineffect on January 1, 2008. [Formerly 128.398; 2009c.275 §14]

CREDITOR’S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS130.300 UTC 501. Rights of

beneficiary’s creditor or assignee. To theextent a beneficiary’s interest is not pro-tected by a spendthrift provision, the courtmay authorize a creditor or assignee of thebeneficiary to reach the beneficiary’s interestby garnishment or other execution againstpresent or future distributions to or for thebenefit of the beneficiary or by other means.The court may limit the award to such reliefas is appropriate under the circumstances.[2005 c.348 §39]

130.305 UTC 502. Spendthrift pro-vision. (1) A spendthrift provision is validonly if the provision restrains both voluntaryand involuntary transfer of a beneficiary’sinterest.

(2) A term of a trust providing that theinterest of a beneficiary is held subject to aspendthrift trust, or words of similar import,is sufficient to restrain both voluntary andinvoluntary transfer of the beneficiary’s in-terest.

(3) A beneficiary may not transfer an in-terest in a trust in violation of a validspendthrift provision. Except as otherwiseprovided in ORS 130.300 to 130.325, a credi-tor or assignee of a beneficiary may notreach the interest of a beneficiary or a dis-tribution by the trustee before the distrib-ution is received by the beneficiary. [2005 c.348§40]

130.310 UTC 503. Exceptions tospendthrift provisions. (1) As used in thissection, “child” means any individual forwhose benefit a judgment, court order or ad-ministrative order for child support has beenentered in any state, country or other juris-diction.

(2) Even if a trust contains a spendthriftprovision, the holder of a judgment, courtorder or administrative order against a ben-eficiary for support or maintenance of thebeneficiary’s child, spouse or former spouseor a judgment creditor who has providedservices for the protection of a beneficiary’s



interest in the trust, may obtain an orderfrom a court of this state authorizing gar-nishment or other execution against presentor future distributions to or for the benefitof the beneficiary. The court may issue anorder authorizing execution against suchamount as the court determines to be equi-table under the circumstances but not morethan the amount the trustee would have beenrequired to distribute to or for the benefit ofthe beneficiary. Distributions subject to ex-ecution under this subsection include dis-tributions required by the express terms ofthe trust, such as mandatory payments of in-come, and distributions the trustee has oth-erwise decided to make, such as through theexercise of discretion.

(3) A spendthrift provision is unenforce-able against a claim of this state or theUnited States to the extent a statute of thisstate or federal law so provides. [2005 c.348 §41]

130.315 UTC 505. Creditor’s claimagainst settlor. (1) Whether or not theterms of a trust contain a spendthrift pro-vision:

(a) During the lifetime of the settlor, theproperty of a revocable trust is subject toclaims of the settlor’s creditors.

(b) A creditor or assignee of the settlorof an irrevocable trust may reach the maxi-mum amount that can be distributed to or forthe settlor’s benefit. If an irrevocable trusthas more than one settlor, the amount thecreditor or assignee of a particular settlormay reach may not exceed the settlor’s in-terest in the portion of the trust attributableto that settlor’s contribution.

(c) If a trust was revocable at thesettlor’s death, the property of the trust be-comes subject to creditors’ claims as pro-vided in ORS 130.350 to 130.450 when thesettlor dies. The payment of claims is subjectto the settlor’s right to direct the priority ofthe sources from which liabilities of thesettlor are to be paid.

(2) For the purpose of creditors’ claims,the holder of a power of withdrawal istreated in the same manner as the settlor ofa revocable trust to the extent property ofthe trust is subject to the power. The pro-visions of this subsection apply to the holderof a power of withdrawal only during theperiod that the power may be exercised.

(3) Upon the lapse, release or waiver ofa power of withdrawal, the property of thetrust that is the subject of the lapse, releaseor waiver becomes subject to claims of cred-itors of the holder of the power only to theextent the value of the property exceeds thegreater of the amount specified in section2041(b)(2) or 2514(e) of the Internal RevenueCode, as in effect on January 1, 2006, or

section 2503(b) of the Internal Revenue Code,as in effect on January 1, 2006.

(4) Subsections (2) and (3) of this sectiondo not apply to a person other than a settlorwho is a beneficiary of a revocable or irrev-ocable trust and who is also a trustee of thetrust, if the power to withdraw for theperson’s own benefit is limited by an ascer-tainable standard. [2005 c.348 §42]

130.320 UTC 506. Overdue distribution.Whether or not a trust contains a spendthriftprovision, a creditor or assignee of a benefi-ciary may reach a mandatory distribution ofincome or principal, including a distributionupon termination of the trust, if the trusteehas not made the distribution to the benefi-ciary within a reasonable time after the des-ignated distribution date. [2005 c.348 §43]

130.325 UTC 507. Personal obligationsof trustee. Trust property is not subject topersonal obligations of the trustee, even ifthe trustee becomes insolvent or bankrupt.[2005 c.348 §44]

CLAIMS AGAINST TRUST BASED ON DEBTS OF SETTLOR

130.350 Statute of limitations. (1)Claims against a trust described in subsec-tion (2) of this section that are not presentedwithin the time limitations established underORS 130.360 or within the statute of limita-tions applicable to the claim, whichever isearlier, are barred from payment from thetrust estate.

(2) ORS 130.350 to 130.450 apply only if:(a) A claim is made against assets of a

trust;(b) The trust came into existence during

the settlor’s lifetime and was a revocabletrust at any time after the trust was createdand before the death of the settlor;

(c) The claim is based on the debts or li-abilities of the settlor; and

(d) The claim is made against the assetsof the trust after the death of the settlor.

(3) ORS 130.350 to 130.450 apply to allclaims against a trust described in subsection(2) of this section, without regard to whetherthe claims are contingent, unliquidated ornot yet due. [Formerly 128.256]

130.355 Commencement of proceeding.(1) At any time after the death of a settlorof a trust described in ORS 130.350 (2), atrustee of the trust may petition the probatecourt to determine the claims of creditors ofthe settlor. A petition under this sectionmust include all of the following informationto the extent known by the trustee:

(a) The settlor’s name, the settlor’s dateof birth, the settlor’s date and place of death



and the last four digits of the settlor’s SocialSecurity number.

(b) The name of the trustee.(c) The address at which claims must be

presented.(d) The name of the trust, if any, and the

date of the trust, including the dates of anyamendments.

(e) The facts establishing venue in thecounty where the petition is being filed.

(2) The clerk of the court shall chargeand collect in advance from the trustee thefiling fee required from a plaintiff under ORS21.135.

(3) A proceeding under this section maybe brought only:

(a) In the county where the settlor haddomicile or a place of abode at the time ofdeath;

(b) In any county where assets of thetrust were located at the time of death or arelocated at the time the proceeding is com-menced; or

(c) In the county where the settlor died.(4) The court has personal jurisdiction

over a trustee that files a petition under thissection, whether the trustee is a resident ornonresident of this state, for the purposes ofany proceeding relating to the trust that maybe instituted by an interested person.[Formerly 128.258; 2009 c.363 §1; 2010 c.107 §§43,44; 2011c.595 §131]

130.360 Limitation on presentation ofclaims when notice to claimants given.Not later than four months after a petitionunder ORS 130.355 is entered in the registerof the court, the trustee of the trust shallgive notice to persons with claims againstthe trust estate in the manner provided byORS 130.365 and 130.370. All claims againstthe trust estate are barred unless thoseclaims are submitted before the later of:

(1) Four months after the date of firstpublication of notice to claimants in themanner provided by ORS 130.365; or

(2) If the trustee delivers or mails a no-tice to a claimant under ORS 130.370, 30days after a notice meeting the requirementsof ORS 130.370 is delivered or mailed to thelast-known address of the person having orasserting the claim. [Formerly 128.262]

130.365 Publication of notice. After fil-ing a petition under ORS 130.355, a trusteemust cause a notice to claimants to be pub-lished once in each of three consecutiveweeks in a newspaper of general circulationpublished in the county in which the petitionis filed. The notice must include:

(1) The name of the settlor;

(2) The name of the trustee and the ad-dress at which claims must be presented;

(3) The date of the first publication of thenotice; and

(4) A statement that claims against thetrust estate may be barred unless presentedto the trustee at the address specified in thenotice within four months after the date ofthe first publication of the notice. [Formerly128.264]

130.370 Notice to individual claimants.(1) Within three months after a petition isentered in the register of the court underORS 130.355, or within such longer time asthe court allows, a trustee must make rea-sonably diligent efforts to investigate the fi-nancial records and affairs of the settlor andto take such further actions as are reason-ably necessary to ascertain the identity andaddress of each person who has or asserts aclaim against the trust estate. The courtshall allow the trustee as much time as re-quested by the trustee for the purpose of de-termining the claims against the trust estate.The trustee must thereafter cause to be de-livered or mailed a notice containing the in-formation required in subsection (2) of thissection to the Department of Human Ser-vices and the Oregon Health Authority, oras otherwise provided by rule adopted by theauthority, and to each person known by thetrustee to have or to assert a claim againstthe trust estate. Notice under this section isnot required for any claim that has alreadybeen presented, accepted or paid in full or onaccount of a claim that is merely conjec-tural.

(2) The notice required by this sectionmust include:

(a) The name of the settlor and the lastfour digits of the settlor’s Social Securitynumber;

(b) The name of the trustee and the ad-dress at which claims must be presented;

(c) A statement that claims against thetrust estate that are not presented to thetrustee within 30 days after the date of thenotice may be barred;

(d) The date of the notice, which shall bethe date on which the notice is delivered ormailed; and

(e) A copy of the settlor’s death certif-icate. [Formerly 128.266; 2009 c.363 §2; 2009 c.595 §90;2011 c.720 §63]

130.375 Form of claim; evidence insupport. (1) A claim presented under ORS130.350 to 130.450 must:

(a) Be in writing.(b) Describe the nature and the amount

of the claim, if ascertainable.



(c) State the name and address of theclaimant and any attorney for the claimant.

(2) A defect of form of a claim timelypresented may be waived by the trustee orby the court.

(3) Upon demand of a trustee, a claimantmust produce any written evidence support-ing a claim made under ORS 130.350 to130.450 and account for any written evidencesupporting a claim that is not produced.[Formerly 128.268]

130.380 Claim based on debt due orjudgment. (1) If a claim on a debt due ispresented and allowed, allowance shall be inthe amount of the debt remaining unpaid onthe date of allowance.

(2) If a judgment was entered on a claimprior to the death of the settlor, the claimshall be presented under ORS 130.350 to130.450 in the same manner as if no judg-ment had been entered, and a copy of thejudgment shall be attached to the claim. Theclaim may be disallowed only if the judgmentwas void or voidable, or if the judgmentcould have been set aside on the date of thesettlor’s death, or if the claim is not pre-sented within the time required by ORS130.350. If the judgment was a lien againstthe property of the trust estate on the dateof the settlor’s death, the judgment shall betreated as a claim on a debt due for whichthe creditor holds security. In all other re-spects, a claim that has been reduced tojudgment shall have the same priority underORS 130.425 as a claim that has not beenreduced to judgment. [Formerly 128.272]

130.385 Claim on debts not yet due. Aclaim on a debt not due, whether or not thecreditor holds security for the claim, may bepresented under ORS 130.350 to 130.450 as aclaim on a debt due. If the claim is allowed,allowance shall be in an amount equal to thevalue of the debt on the date of allowance.The creditor, after allowance of the claim,may withdraw the claim without prejudice toother remedies. Payment on the basis of theamount allowed discharges the debt and thesecurity, if any, held by the creditor for theclaim. [Formerly 128.274]

130.390 Claim on secured debt that isdue. (1) A claim on a debt due for which thecreditor holds security may be presented un-der ORS 130.350 to 130.450 as a claim on anunsecured debt due, or the creditor may electto rely entirely on the security withoutpresentation of the claim.

(2) If the claim is presented under thissection, the claim shall describe the security.If the security is an encumbrance that is re-corded, the encumbrance may be describedby reference to the book, page, date andplace of recording.

(3) If a claim is presented and allowedunder this section, payment shall be on thebasis of the amount of the debt remainingunpaid on the date that the claim is allowed.

(4) If the creditor surrenders the securityfor a claim presented and allowed under thissection, payment shall be on the basis of theamount allowed.

(5)(a) If the creditor does not surrenderthe security for a claim presented and al-lowed under this section, and the creditorexhausts the security before receiving pay-ment on the claim, payment shall be on thebasis of the amount allowed less the amountrealized on exhausting the security unlessotherwise provided by law.

(b) If the creditor does not surrender thesecurity for a claim presented and allowedunder this section, and the creditor does notexhaust the security before receiving pay-ment or does not have the right to exhaustthe security, payment shall be on the basisof the amount allowed less the value of thesecurity determined by agreement or as thecourt may order.

(6) The trustee may convey the securedproperty to the creditor in consideration ofthe satisfaction or partial satisfaction of theclaim. [Formerly 128.276]

130.395 Claim on contingent or unliq-uidated debt. (1) A claim on a contingentor unliquidated debt shall be presented underORS 130.350 to 130.450 in the same manneras other claims. If the debt becomes absoluteor liquidated before distribution of the trustestate, the claim shall be paid in the samemanner as a claim on an absolute or liqui-dated debt.

(2) If a contingent or unliquidated debtdoes not become absolute or liquidated beforedistribution of the trust estate, the trusteemay provide for payment of the claim by anyof the following methods:

(a) The creditor and trustee may deter-mine, by agreement, arbitration or compro-mise, the value of the debt and the claimmay be allowed and paid in the same manneras a claim on an absolute or liquidated debt.

(b) The trustee may distribute the trustestate, but retain sufficient funds to pay theclaim if and when the debt becomes absoluteor liquidated. Distribution of trust assetsmay not be delayed under this paragraph formore than two years after distribution wouldotherwise be required by the terms of thetrust. If the debt does not become absoluteor liquidated within that time, the funds re-tained, after payment therefrom of any ex-penses accruing during that time, shall bedistributed to the beneficiaries.



(3) A court may order the trustee tomake distribution of the trust estate asthough the claim did not exist.

(4) If after distribution under subsection(2)(b) or (3) of this section the debt becomesabsolute or liquidated, the beneficiaries areliable to the creditor to the extent of thetrust estate received by them. Payment ofthe debt may be arranged by creating a trust,giving a mortgage, securing a bond from adistributee or by other method. [Formerly128.278]

130.400 Allowance and disallowance ofclaims. (1) The trustee may compromise aclaim against the trust estate.

(2) A claim presented to a trustee underORS 130.350 to 130.450 shall be consideredallowed as presented unless within 60 daysafter the date of presentment of the claimthe trustee mails or delivers a notice of dis-allowance of the claim in whole or in part tothe claimant and to the attorney of theclaimant if the claimant has an attorney.

(3) A notice of disallowance of a claimshall inform the claimant that the claim hasbeen disallowed in whole or in part and, tothe extent disallowed, will be barred unlessthe claimant requests a summary determi-nation or brings an action in the mannerprovided by subsection (4) of this section.

(4) If a trustee disallows a claim submit-ted under ORS 130.350 to 130.450 in wholeor in part, the claimant, within 30 days afterthe date of mailing or delivery of the noticeof disallowance, may:

(a) File a request for summary determi-nation of the claim in the probate court, withproof of service of a copy of the request uponthe trustee or the attorney of the trustee; or

(b) Commence a separate action againstthe trustee on the claim in the probate court.

(5) If the claimant fails either to requesta summary determination or commence aseparate action as provided in subsection (4)of this section, the claim is barred to theextent the claim has been disallowed by thetrustee.

(6) If a claimant prevails in a proceedingor action under subsection (4) of this section,the claim shall be allowed or judgment en-tered in the full amount determined to bedue to the claimant. The claim or judgmentshall be paid from the assets of the trust es-tate only to the extent that funds are avail-able after payment of other claims withhigher priority under ORS 130.425.

(7) If the claimant files a request forsummary determination of a claim undersubsection (4) of this section, the trustee maynotify the claimant in writing that the

claimant must commence a separate actionagainst the trustee on the claim within 60days after the claimant receives the notice.Notice under this subsection must be givenby the trustee within 30 days after the re-quest for summary determination is servedon the trustee or the attorney of the trustee.If the claimant fails to commence a separateaction within the time allowed, the claim isbarred to the extent the claim has been dis-allowed by the trustee.

(8) In a proceeding for summary determi-nation under this section:

(a) The trustee shall make response tothe claim as though the claim were a com-plaint filed in an action.

(b) The court shall hear the matter with-out a jury, after notice to the claimant andtrustee. The court shall determine the claimin a summary manner, and shall make anorder allowing or disallowing the claim inwhole or in part.

(c) No appeal may be taken from the or-der of the court made in a proceeding forsummary determination under this section.

(9) If a civil action is commenced undersubsection (4) of this section, a trustee, orbeneficiary, may petition the court to ap-prove a proposed disposition of claims or toprovide instructions on the treatment ofclaims.

(10) A claimant filing a request for sum-mary determination of a claim under subsec-tion (4) of this section must pay the filing feerequired of a defendant or respondent underORS 21.135 and other fees applicable to civilactions in circuit court. [Formerly 128.280; 2009c.275 §15; 2010 c.107 §§46,47; 2011 c.595 §133]

130.405 Creditor may obtain order forpayment. A creditor whose claim has beenallowed or established by summary determi-nation or separate action, and who has notreceived payment within six months after thedate of the first publication of notice to in-terested persons, may apply to the court foran order directing the trustee to pay theclaim. The trustee may recover amounts ow-ing under the claim from any beneficiarywho received a distribution from the trustestate. The right of recovery is limited to theextent the beneficiary’s distribution wouldhave been reduced by timely payment of allallowed or established claims. [Formerly 128.282]

130.410 Evidence required to allowcourt approval of claim disallowed bytrustee. A claim that has been disallowedby a trustee under ORS 130.350 to 130.450may not be allowed by any court except uponsome competent, satisfactory evidence otherthan the testimony of the claimant. [Formerly128.284]



130.415 Waiver of statute of limita-tions. A claim subject to ORS 130.350 to130.450 that is barred by a statute of limita-tions may not be allowed by the trustee orby any court except upon the written direc-tion or consent of those interested personswho would be adversely affected by allow-ance of the claim. [Formerly 128.286]

130.420 Tolling of statute of limita-tions on claim. If a claim is not barred bythe statute of limitations on the date ofdeath of the settlor, the claim is not barredby any statute of limitations until at leastone year after the date of death. [Formerly128.288]

130.425 Priority of claims. (1) Claimsallowed against the trust estate under ORS130.350 to 130.450 must be paid by the trus-tee in the following order of priority:

(a) Expenses of administering the trustestate.

(b) Expenses of a plain and decent fu-neral and disposition of the remains of thesettlor.

(c) Debts and taxes with preference un-der federal law.

(d) Reasonable and necessary medical andhospital expenses of the last illness of thesettlor, including compensation of personsattending the settlor.

(e) Taxes with preference under the lawsof this state that are due and payable whilepossession of the trust estate of the settloris retained by the trustee.

(f) Debts owed employees of the settlorfor labor performed within 90 days imme-diately preceding the date of death of thesettlor.

(g) Child support arrearages.(h) Claims of the Department of Human

Services and the Oregon Health Authorityfor the net amount of public assistance, asdefined in ORS 411.010.

(i) Claims of the Department of HumanServices and the Oregon Health Authorityfor the care and maintenance of any settlorwho was a patient at a state institution un-der ORS 179.610 to 179.770.

(j) All other claims against the trust es-tate.

(2) If the assets of the trust estate areinsufficient to pay in full all expenses orclaims of any one class specified in subsec-tion (1) of this section, each expense or claimof that class shall be paid only in proportionto the amount thereof. [Formerly 128.290; 2009c.595 §91; 2011 c.720 §64]

130.430 Applicability of time limita-tions to public bodies. NotwithstandingORS 12.250, all statutes of limitations and

other time limitations imposed under ORS130.350 to 130.450 apply to actions brought inthe name of the state, or brought in thename of any county or public corporation,and to actions brought for the benefit of thestate or for the benefit of any county orpublic corporation. [Formerly 128.292]

130.435 Applicability of time limita-tions to certain claims based on liensagainst property and liability of settloror trustee. The statutes of limitations andtime limitations provided by ORS 130.350 to130.450 do not affect:

(1) Any proceeding to enforce a mort-gage, pledge or other lien upon property ofthe trust estate;

(2) Any proceeding to quiet title or re-form any instrument with respect to title toproperty; or

(3) To the limits of the insurance pro-tection only, any proceeding to establish li-ability of the settlor or the trustee for whichthe settlor or trustee is protected by liabilityinsurance at the time the proceeding is com-menced. [Formerly 128.294]

130.440 Petition to close case. (1) Notearlier than four months after the publica-tion of notice to claimants, or the date onwhich all claims against the trust estatehave been resolved, whichever is later, atrustee that has filed a petition under ORS130.355 must file a petition to close the casewith a statement that all claims received bythe trustee have been paid in full or other-wise resolved in the manner required by ORS130.350 to 130.450. The trustee must attachto the petition an affidavit attesting to com-pliance with ORS 130.365 and 130.370. Thetrustee must attach to the affidavit a copyof the notice published under ORS 130.365and a copy of any notice delivered or mailedunder ORS 130.370. The affidavit must attestto the date on which each notice was deliv-ered or mailed, and the name and address ofthe person to whom each notice was deliv-ered or mailed.

(2) Upon the filing of the petition to closethe case in compliance with the provisionsof this section, the court shall enter an orderclosing the case. [Formerly 128.296]

130.445 Dismissal for want of prose-cution. (1) If the trustee does not file a pe-tition to close the case under ORS 130.440within one year after filing a petition underORS 130.355, the court clerk shall mail anotice to the trustee, or the attorney for thetrustee if the trustee is represented by coun-sel, informing the trustee that a judgment ofdismissal will be entered in the case for wantof prosecution unless an application for acontinuance is made to the court and goodcause is shown within 60 days after the date



of the notice. Good cause for a continuanceincludes the pendency of a separate actionunder ORS 130.400 (4).

(2) If an application for a continuance isnot made under this section, or the courtfails to find good cause for a continuance,the court shall enter a judgment of dismissalof the proceeding without prejudice. The dis-missal does not bar a claimant’s right topursue claims against a trustee, and aclaimant shall have the same rights as if thetrustee filed no proceeding. [Formerly 128.298]

130.450 Consolidation of proceedings.If the proceeding to determine claims againsta deceased settlor is pending under ORS130.350 to 130.450 at the same time as pro-bate proceedings under ORS chapter 115,upon motion of any party or upon the court’sown motion, any of the courts conductingproceedings may:

(1) Order a joint hearing or trial on thecommon claims;

(2) Order that the proceedings be consol-idated; or

(3) Make orders concerning the pro-ceedings to avoid unnecessary costs for de-lays. [Formerly 128.300]

REVOCABLE TRUSTS130.500 UTC 601. Revocable trusts

generally. (1) A person who has capacity tomake a will has capacity to create, amend,revoke or add property to a revocable trust,or to direct the actions of the trustee of arevocable trust.

(2) A revocable trust remains a revocabletrust for the purposes of ORS 130.520 to130.575 even though the trust cannot be re-voked because:

(a) The settlor becomes financially inca-pable; or

(b) An event occurs that by the terms ofthe trust prevents the revocation of thetrust. [2005 c.348 §45; 2009 c.275 §16]

130.505 UTC 602. Revocation oramendment of revocable trust. (1) Unlessthe terms of a trust expressly provide thatthe trust is irrevocable, the settlor of thetrust may revoke or amend the trust.

(2) Unless the trust expressly providesotherwise, if a revocable trust is created orfunded by more than one settlor:

(a) To the extent the trust consists ofcommunity property, the trust may be re-voked by either spouse acting alone but maybe amended only by joint action of bothspouses;

(b) To the extent the trust consists ofproperty other than community property,each settlor may revoke or amend the trust

as to the portion of the trust property at-tributable to that settlor’s contribution; and

(c) Upon the revocation or amendmentof the trust by fewer than all of the settlors,the trustee shall promptly notify the othersettlors of the revocation or amendment.

(3) The settlor may revoke or amend arevocable trust:

(a) By substantial compliance with amethod provided in the terms of the trust; or

(b) If the terms of the trust do not pro-vide a method, by any other method, exceptfor execution of a will or codicil, manifestingclear and convincing evidence of the settlor’sintent.

(4) Upon revocation of a revocable trust,the trustee shall deliver the trust propertyas the settlor directs.

(5) A settlor’s powers with respect to re-vocation, amendment or distribution of trustproperty may be exercised by an agent orattorney-in-fact under a power of attorneyonly to the extent expressly authorized bythe terms of the trust.

(6) The settlor’s conservator, or thesettlor’s guardian if a conservator has notbeen appointed for the settlor, may exercisea settlor’s powers with respect to revocation,amendment or distribution of trust propertyonly with the approval of the court supervis-ing the conservatorship or guardianship.

(7) A trustee who does not know that atrust has been revoked or amended is not li-able to the settlor or settlor’s successors ininterest for distributions made and other ac-tions taken on the assumption that the trusthad not been amended or revoked. [2005 c.348§46]

Note: Section 47, chapter 348, Oregon Laws 2005,provides:

Sec. 47. Section 46 (1) of this 2005 Act [130.505 (1)]does not apply to a trust created under an instrumentexecuted before the effective date of this 2005 Act[January 1, 2006]. [2005 c.348 §47]

130.510 UTC 603. Settlor’s powers;powers of withdrawal. (1) While the settlorof a revocable trust is alive, rights of thebeneficiaries are subject to the control of thesettlor, and the duties of the trustee areowed exclusively to the settlor. Beneficiariesother than the settlor have no right to re-ceive notice, information or reports underthis chapter.

(2) The rights of the beneficiaries withrespect to property that is subject to a powerof withdrawal are subject to the control ofthe holder of the power during the periodthat the power may be exercised, and theduties of the trustee are owed exclusively tothe holder of a power of withdrawal with re-spect to the property that is subject to thepower. [2005 c.348 §48; 2009 c.275 §17]



130.515 UTC 604. Limitation on actioncontesting validity of revocable trust;distribution of trust property. (1) A personmust commence a judicial proceeding tocontest the validity of a trust that wasrevocable at the settlor’s death in the man-ner prescribed by ORS 12.020 within theearlier of:

(a) Three years after the settlor’s death;or

(b) Four months after the trustee sendsthe person a copy of the trust instrumentand notice informing the person of the trust’sexistence, of the trustee’s name and addressand of the time allowed for commencing aproceeding.

(2) Upon the death of the settlor of atrust that was revocable at the settlor’sdeath, the trustee may proceed to distributethe trust property in accordance with theterms of the trust. The trustee is not subjectto liability for distribution of the propertyunless:

(a) The trustee knows of a pending judi-cial proceeding contesting the validity of thetrust; or

(b) Any person has notified the trustee inwriting that the person might commence ajudicial proceeding to contest the trust anda judicial proceeding is commenced by theperson within 60 days after the person givesthe notification.

(3) If a trust is determined to be invalid,any beneficiary who received a distributionfrom the trust is liable to the person entitledto the distributed property for the amount orvalue of the distribution. [2005 c.348 §49]

RULES GOVERNING REVOCABLE TRUSTS

130.520 Definition for ORS 130.520 to130.575. For the purposes of ORS 130.520 to130.575, “specific distribution” means a dis-tribution of specific property to a specificbeneficiary that is required under the termsof a trust instrument. [Formerly 128.370]

130.525 Applicability of ORS 130.520 to130.575. ORS 130.520 to 130.575 apply only toa trust, or a portion of a trust, that comesinto existence during the settlor’s lifetimeand is a revocable trust at any time after thetrust was created and before the death of thesettlor. [2005 c.348 §110]

130.530 Effect of marriage. Unless oth-erwise provided by the terms of the trust in-strument, a trust is not revoked by themarriage of the settlor after the trust in-strument is executed. [Formerly 128.375]

130.535 Revocation by divorce or an-nulment. (1) Unless otherwise provided by

the terms of the trust instrument, a settlor’sdivorce or the annulment of the settlor’smarriage, after the trust instrument is exe-cuted:

(a) Revokes all provisions of the trust infavor of the former spouse of the settlor;

(b) Revokes all powers of appointment,general or nongeneral, in the trust that areexercisable by the former spouse; and

(c) Revokes any provision in the trustnaming the former spouse as trustee.

(2) Unless otherwise provided by theterms of the trust instrument, a trust shallbe construed as though the former spousepredeceased the settlor if, after the trust in-strument is executed, the settlor divorces thespouse or the marriage of the settlor to thespouse is annulled. [Formerly 128.378]

130.540 Contract of sale of propertynot revocation. Unless otherwise providedby the terms of the trust instrument, a con-tract of sale made by a trustee to conveyproperty that is the subject of a specific dis-tribution is not a revocation of the specificdistribution. If all or part of the propertythat is the subject of the contract of sale hasnot been delivered at the time set in thetrust instrument for the specific distribution,the property passes by the specific distrib-ution but is subject to the terms of the con-tract of sale. [Formerly 128.380]

130.545 Encumbrance or disposition ofproperty after trust instrument executed.Unless otherwise provided by the terms ofthe trust instrument:

(1) A disposition of a portion of propertythat is subject to a specific distribution doesnot affect the operation of the trust upon theremaining portion of the property; and

(2) If property subject to a specific dis-tribution is encumbered, the property passesunder the specific distribution but is subjectto the encumbrance. [Formerly 128.382]

130.550 When trust assets pass to de-scendants of beneficiary; class gifts. Un-less otherwise provided by the terms of thetrust instrument, when property is to be dis-tributed under the trust to any beneficiarywho is related by blood or adoption to thesettlor, and the beneficiary dies leavinglineal descendants either before the settlordies or before the time set in the trust in-strument for distribution, the descendantstake by right of representation the propertythe beneficiary would have taken if the ben-eficiary had not died. Unless otherwise pro-vided by the terms of the trust instrument,this section applies to a beneficiary who isentitled to receive property under a class giftif the beneficiary dies after the trust instru-ment is executed. [Formerly 128.385]



130.555 Children born or adopted afterexecution of trust instrument. (1) As usedin this section, “pretermitted child” means achild of a settlor who is born or adopted af-ter the execution of the trust instrument,who is not provided for in the trust or men-tioned in the trust instrument and who sur-vives the settlor.

(2) If a settlor has one or more childrenliving when the settlor executes a trust in-strument and no provision is made in thetrust for any of those children, apretermitted child is not entitled to anyshare of the trust estate.

(3) If a settlor has one or more childrenliving when the settlor executes a trust in-strument and provision is made in the trustfor any of those children, a pretermittedchild is entitled to share in the trust estateas follows:

(a) The pretermitted child may share onlyin the portion of the trust estate intended tobenefit living children.

(b) The share of each pretermitted childis equal to the total value of the portion ofthe trust estate intended to benefit the livingchildren divided by the number ofpretermitted children plus the number of liv-ing children for whom provision, other thannominal provision, is made in the trust.

(c) To the extent possible, the interest ofeach pretermitted child in the trust estateshall be of the same character, whether eq-uitable or legal, as the interest the settlorgave to the living children under the trust.

(4) If a settlor has no child living whenthe settlor executes a trust instrument, apretermitted child is entitled to a share ofthe trust estate as though the settlor haddied intestate and had not executed the trustinstrument.

(5) A pretermitted child may recover theshare of the trust estate to which the childis entitled as follows:

(a) If the pretermitted child is entitled toa share of the trust estate under subsection(3) of this section, the share must be recov-ered from the other children.

(b) If the pretermitted child is entitled toa share of the trust estate under subsection(4) of this section, the share must be recov-ered from the beneficiaries on a pro rata ba-sis, out of the portions of the trust estatepassing to those persons under the trust.

(c) In reducing the shares of the benefi-ciaries under this subsection, the characterof the dispositive plan adopted by the settlorin the trust must be preserved to the extentpossible. [Formerly 128.388]

130.560 Failure of specific distribution.(1) Subject to this section, a specific distrib-ution does not fail by reason of the de-struction, damage, sale, condemnation orchange in form of the property that is thesubject of the specific distribution unless:

(a) The trust instrument provides thatthe specific distribution fails under the par-ticular circumstances; or

(b) The settlor, during the lifetime of thesettlor, or the trustee gives property to thebeneficiary of the specific distribution withthe intent of satisfying the specific distrib-ution.

(2) If part of the property that is thesubject of a specific distribution is destroyed,damaged, sold or condemned, the remaininginterest in the property passes pursuant tothe specific distribution. The part of theproperty that is destroyed, damaged, sold orcondemned is subject to subsections (3) to (6)of this section if the property would havebeen adeemed under the common law had theproperty been subject to probate in thesettlor’s estate.

(3) If property that is the subject of aspecific distribution is insured and the prop-erty is destroyed or damaged, the beneficiaryof the specific distribution is entitled to re-ceive the following amounts, less any amountexpended or incurred by the settlor or trustestate in restoration or repair of the prop-erty:

(a) Any insurance proceeds for the de-stroyed or damaged property unpaid at thetime set in the trust instrument for the spe-cific distribution; and

(b) An amount equal to all insurancepayments paid to the settlor, and such pro-ceeds or awards paid to the trustee for thedestroyed or damaged property, during thesix-month period immediately preceding thetime set in the trust instrument for the spe-cific distribution.

(4) If property that is the subject of aspecific distribution is sold by the settlor orthe trustee, the beneficiary of the specificdistribution is entitled to receive:

(a) Any balance of the purchase priceunpaid at the time set in the trust instru-ment for the specific distribution, includingany security interest in the property and in-terest accruing before the time set in thetrust instrument for the specific distribution;and

(b) An amount equal to all payments paidto the settlor or the trustee for the propertyduring the six-month period immediately pre-ceding the time set in the trust instrumentfor the specific distribution. Acceptance of apromissory note of the purchaser or a thirdparty is not considered payment under this



paragraph, but payment on the note is pay-ment on the purchase price.

(5) If property that is the subject of aspecific distribution is taken by condemna-tion before the time set in the trust instru-ment for the specific distribution, thebeneficiary of the specific distribution is en-titled to receive:

(a) Any amount of the condemnationaward unpaid at the time set in the trust in-strument for the specific distribution; and

(b) An amount equal to the sums paidunder the condemnation award to the settloror the trustee during the six-month periodimmediately preceding the time set in thetrust instrument for the specific distribution.

(6) If securities as defined in ORS 59.015are the subject of a specific distribution, andafter the execution of the trust instrumentother securities of the same or another en-tity are distributed to the trustee or trustestate by reason of a partial liquidation,stock dividend, stock split, merger, consol-idation, reorganization, recapitalization, re-demption, exchange or any other similartransaction, the specific distribution includesthe additional or substituted securities.

(7) The amount that a beneficiary of aspecific distribution receives under this sec-tion must be reduced by any expenses of thesale or of the collection of the proceeds ofinsurance, sale or condemnation award andby any amount by which income is increasedby reasons of items provided for in this sec-tion. Expenses subject to this subsection in-clude attorney fees. [Formerly 128.390]

130.565 Effect of failure of specificdistribution. If a specific distribution, otherthan a specific distribution that governs theresidue of the trust estate, fails for any rea-son, the property that is the subject of thespecific distribution becomes part of the res-idue and must be distributed as provided bythe terms of the trust instrument for theresidue. [Formerly 128.392]

130.570 Advancement against share oftrust. Property that the settlor gives duringthe settlor’s lifetime to a beneficiary of thetrust is an advancement against thebeneficiary’s share of the trust only if eitherthe settlor makes a written statement thatthe property constitutes an advancement orthe beneficiary makes a written statementacknowledging that the property constitutesan advancement. For purposes of applyingthe property against the beneficiary’s shareof the trust, the property must be valued asof the time the beneficiary takes possessionor enjoyment of the property, or as of thetime of death of the settlor, whichever oc-curs first. [Formerly 128.395]

130.575 Effect of advancement on dis-tribution. (1) If the value of an advancementmade to a beneficiary under ORS 130.570 ex-ceeds the beneficiary’s share in the trust es-tate, the beneficiary shall be excluded fromany further share of the trust estate, but thebeneficiary is not required to refund any partof the advancement. If the value of thebeneficiary’s share in the trust estate isgreater than the value of all property re-ceived as advancements, the beneficiary isentitled to receive from the trust estate thebalance of the share owing to the beneficiaryafter deducting all amounts received as ad-vancements.

(2) For the purpose of determining theshares of the beneficiaries of either aresiduary gift or a class gift under a trust,the value of all advancements made by thesettlor to beneficiaries of such gift shall beadded to the value of the total property dis-tributed pursuant to the gift, the sum thendivided among all beneficiaries of the gift,and the value of the advancement then de-ducted from the share of the beneficiary towhom the advancement was made. [Formerly128.397]

OFFICE OF TRUSTEE130.600 UTC 701. Acceptance or re-

jection of trusteeship. (1) Except as other-wise provided in subsection (3) or (4) of thissection, a person designated as trustee ac-cepts the trusteeship:

(a) By substantially complying with amethod of acceptance provided in the termsof the trust; or

(b) If the terms of the trust do not pro-vide a method of acceptance, or the methodprovided in the terms of the trust is not ex-pressly made exclusive, by knowingly accept-ing delivery of the trust property, knowinglyexercising powers or performing duties astrustee, or otherwise indicating acceptanceof the trusteeship.

(2) A person designated as trustee whohas not yet accepted the trusteeship may re-ject the trusteeship. A designated trusteewho does not accept the trusteeship withina reasonable time after knowing of the des-ignation is deemed to have rejected thetrusteeship.

(3) A person designated as trustee mayact to preserve the trust property withoutaccepting the trusteeship. The person mustsend a rejection of the trusteeship to thesettlor within a reasonable time after takingthe action. If the settlor is dead or is finan-cially incapable, the person must send therejection to a qualified beneficiary within areasonable time after taking the action.



(4) A person designated as trustee mayinspect or investigate trust property to de-termine potential liability under environ-mental or other law, or for any otherpurpose, without accepting the trusteeship.[2005 c.348 §50]

130.605 UTC 702. Trustee’s bond. (1) Atrustee shall acquire a bond to secure per-formance of the trustee’s duties only if abond is required by the terms of the trust orif a court finds that a bond is needed to pro-tect the interests of the beneficiaries. Acourt may waive a bond required by theterms of a trust if the court finds that a bondis not needed to protect the interests of thebeneficiaries.

(2) The court may specify the amount andterms of a bond. The court may modify orterminate any requirement for a bond at anytime.

(3) A trust company as defined in ORS706.008 need not give a bond, even if requiredby the terms of the trust. [2005 c.348 §51]

130.610 UTC 703. Cotrustees. (1)Cotrustees who are unable to reach a unani-mous decision may act by majority decision.

(2) If a vacancy occurs in a cotrusteeship,the remaining cotrustee or cotrustees mayact for the trust.

(3) A cotrustee must participate in theperformance of a trustee’s function unless:

(a) The cotrustee is unavailable to per-form the function because of absence, illnessor disqualification under other law;

(b) The cotrustee is unavailable to per-form the function because the cotrustee istemporarily financially incapable; or

(c) The cotrustee has properly delegatedthe performance of the function to anothertrustee.

(4) If a cotrustee is unavailable to per-form duties because of absence, illness, dis-qualification under other law or temporaryfinancial incapability, and prompt action isnecessary to achieve the purposes of thetrust or to avoid injury to the trust property,the remaining cotrustee or a majority of theremaining cotrustees may act for the trust.

(5) Except as prohibited in the terms ofthe trust, a cotrustee may delegate to acotrustee the performance of a function. Un-less a delegation was irrevocable, a cotrusteemay revoke any delegation.

(6) Except as otherwise provided in sub-section (7) of this section, a cotrustee whodoes not join in an action of anothercotrustee is not liable for the action.

(7) Each cotrustee shall exercise reason-able care to:

(a) Prevent a cotrustee from committinga serious breach of trust; and

(b) Compel a cotrustee to redress a seri-ous breach of trust.

(8) A dissenting cotrustee who joins inan action at the direction of the majority ofthe cotrustees and who notified anycotrustee of the dissent at or before the timeof the action is not liable for the action un-less the action is a serious breach of trust.[2005 c.348 §52]

130.615 UTC 704. Vacancy intrusteeship; appointment of successor. (1)A vacancy in a trusteeship occurs if:

(a) A person designated as trustee rejectsthe trusteeship;

(b) A person designated as trustee cannotbe identified, cannot be located or does notexist;

(c) A trustee resigns;(d) A trustee is disqualified or removed;(e) A trustee dies; or(f) A guardian or conservator is ap-

pointed for an individual serving as trustee.(2) If one or more cotrustees remain in

office, a vacancy in a trusteeship need notbe filled. A vacancy in a trusteeship must befilled if the trust has no remaining trustee.

(3) A vacancy in a trusteeship of a non-charitable trust that is required to be filledmust be filled in the following order of pri-ority:

(a) By a person designated in the termsof the trust to act as successor trustee;

(b) By a person appointed by unanimousagreement of the qualified beneficiaries; or

(c) By a person appointed by the court.(4) A vacancy in a trusteeship of a char-

itable trust that is required to be filled mustbe filled in the following order of priority:

(a) By a person designated in the termsof the trust to act as successor trustee;

(b) By a person appointed by unanimousagreement of the charitable organizationsexpressly designated to receive distributionsunder the terms of the trust, all noncharita-ble qualified beneficiaries and the AttorneyGeneral; or

(c) By a person appointed by the court.(5) Whether or not a vacancy in a

trusteeship exists or is required to be filled,the court may appoint an additional trusteeor special fiduciary whenever the court con-siders the appointment necessary for the ad-ministration of the trust. [2005 c.348 §53]

130.620 UTC 705. Resignation of trus-tee. (1) A trustee may resign:

(a) After at least 30 days’ notice to the



qualified beneficiaries, the settlor, if living,and all cotrustees; or

(b) At any time with the approval of acourt.

(2) If a court approves a resignation, thecourt may issue orders and impose conditionsreasonably necessary for the protection ofthe trust property.

(3) Any liability of a resigning trustee orof any sureties on the trustee’s bond for actsor omissions of the trustee is not dischargedor affected by the trustee’s resignation. [2005c.348 §54]

130.625 UTC 706. Removal of trustee.(1) The settlor, a cotrustee or a beneficiarymay request that a court remove a trustee,or a trustee may be removed by a court onits own motion.

(2) A court may remove a trustee if thecourt finds:

(a) The trustee has committed a seriousbreach of trust;

(b) Lack of cooperation among cotrusteessubstantially impairs the administration ofthe trust;

(c) Removal of the trustee best serves theinterests of the beneficiaries because thetrustee is unfit or unwilling, or haspersistently failed to administer the trust ef-fectively; or

(d) Removal of the trustee best serves theinterests of all of the beneficiaries and:

(A) There has been a substantial changeof circumstances or removal has been re-quested by all of the qualified beneficiaries;

(B) Removal is not inconsistent with amaterial purpose of the trust; and

(C) A suitable cotrustee or successortrustee is available.

(3) Pending a final decision on a requestto remove a trustee, or in lieu of or in addi-tion to removing a trustee, the court mayorder such appropriate relief under ORS130.800 (2) as may be necessary to protectthe trust property or the interests of thebeneficiaries. [2005 c.348 §55]

130.630 UTC 707. Delivery of propertyby former trustee. (1) Unless a cotrusteeremains in office or the court otherwise or-ders, a trustee who has resigned or been re-moved has the duties of a trustee and thepowers necessary to protect the trust prop-erty until the trust property is delivered toa successor trustee or other person who isentitled to the property.

(2) A trustee who has resigned or beenremoved shall proceed expeditiously to de-liver any trust property in the trustee’s pos-session to the cotrustee, successor trustee or

other person who is entitled to the property.[2005 c.348 §56]

130.635 UTC 708. Compensation oftrustee. (1) If the terms of a trust do notspecify the trustee’s compensation, a trusteeis entitled to compensation that is reasonableunder the circumstances.

(2) If the terms of a trust specify thetrustee’s compensation, the trustee is enti-tled to be compensated as specified, but thecourt may allow more or less compensationif:

(a) The duties of the trustee are substan-tially different from those contemplatedwhen the trust was created; or

(b) The compensation specified by theterms of the trust would be unreasonably lowor high. [2005 c.348 §57]

130.640 UTC 709. Reimbursement ofexpenses. (1) A trustee is entitled to be re-imbursed out of the trust property, with rea-sonable interest if appropriate, for:

(a) Expenses that were properly incurredin the administration of the trust; and

(b) To the extent necessary to preventunjust enrichment of the trust, expenses thatwere not properly incurred in the adminis-tration of the trust.

(2) A trustee is entitled to be reimbursedout of the trust property or from propertythat has been distributed from the trust, withreasonable interest, for an advance of moneymade by the trustee for the protection of thetrust. [2005 c.348 §58]

DUTIES AND POWERS OF TRUSTEE130.650 UTC 801. Duty to administer

trust. Upon acceptance of a trusteeship, thetrustee shall administer the trust in goodfaith, in accordance with its terms and pur-poses and the interests of the beneficiaries,and in accordance with this chapter. [2005c.348 §59]

130.655 UTC 802. Duty of loyalty. (1) Atrustee shall administer the trust solely inthe interests of the beneficiaries.

(2) Subject to the rights of persons deal-ing with or assisting the trustee as providedin ORS 130.855, a sale, encumbrance or othertransaction involving the investment ormanagement of trust property entered intoby the trustee for the trustee’s own personalaccount or that is otherwise affected by aconflict between the trustee’s fiduciary andpersonal interests is voidable by a benefici-ary affected by the transaction unless:

(a) The transaction was authorized by theterms of the trust;

(b) The transaction was approved by acourt;



(c) The beneficiary did not commence ajudicial proceeding within the time allowedby ORS 130.820;

(d) The beneficiary consented to thetrustee’s conduct, ratified the transaction orreleased the trustee in the manner providedby ORS 130.840; or

(e) The transaction involves a contractentered into or claim acquired by the trusteebefore the person became or contemplatedbecoming trustee.

(3) A sale, encumbrance or other trans-action involving the investment or manage-ment of trust property is presumed to beaffected by a conflict between the personaland fiduciary interests of the trustee if it isentered into by the trustee with:

(a) The trustee’s spouse;(b) The trustee’s descendants, siblings or

parents, or their spouses;(c) An agent or attorney of the trustee;

or(d) A corporation or other person or en-

terprise in which the trustee, or a personthat owns a significant interest in the trus-tee, has an interest that might affect thetrustee’s best judgment.

(4) Unless a trustee can establish thatthe transaction was fair to the beneficiary,a transaction between a trustee and a bene-ficiary that does not concern trust propertybut from which the trustee obtains an ad-vantage is voidable by the beneficiary if thetransaction occurs during the existence ofthe trust or while the trustee retains signif-icant influence over the beneficiary.

(5) A transaction not concerning trustproperty in which the trustee engages in thetrustee’s individual capacity involves a con-flict between personal and fiduciary interestsif the transaction concerns an opportunityproperly belonging to the trust.

(6) An investment by a trustee in securi-ties of an investment company or an invest-ment trust to which the trustee, or anaffiliate of the trustee, provides services ina capacity other than as trustee is not pre-sumed to be affected by a conflict betweenpersonal and fiduciary interests if the in-vestment otherwise complies with the pru-dent investor rule of ORS 130.750 to 130.775.In addition to compensation for acting astrustee, the trustee may be compensated bythe investment company or investment trustfor providing those services out of feescharged to the trust. If the trustee receivescompensation from the investment companyor investment trust for providing investmentadvisory or investment management services,the trustee at least annually shall give noticeof the rate and method by which that com-

pensation was determined to the persons en-titled under ORS 130.710 to receive a copyof the trustee’s annual report.

(7) In voting shares of stock of a corpo-ration or in exercising powers of control oversimilar interests in other forms of businessentities, the trustee shall act in the best in-terests of the beneficiaries. If the trust is thesole owner of a corporation or other form ofbusiness entity, the trustee shall elect or ap-point directors or other managers who willmanage the corporation or entity in the bestinterests of the beneficiaries.

(8) This section does not preclude thefollowing transactions, if fair to the benefici-aries:

(a) An agreement between a trustee anda beneficiary relating to the appointment orcompensation of the trustee;

(b) Payment of reasonable compensationto the trustee;

(c) A transaction between a trust andanother trust, decedent’s estate,custodianship or conservatorship of whichthe trustee is a fiduciary or in which a ben-eficiary has an interest;

(d) A deposit of trust money in a finan-cial institution operated by the trustee;

(e) An advance by the trustee of moneyfor the protection of the trust;

(f) An advance by the trustee of moneyto the trust for the payment of expenses,losses or liabilities sustained by the trusteein the administration of the trust or by rea-son of owning or possessing any trust assets;or

(g) A loan to the trustee for the pro-tection of the trust, or for the payment ofexpenses, losses or liabilities sustained bythe trustee in the administration of the trustor by reason of owning or possessing anytrust assets. A loan under this paragraphmay be from a lender operated by, or affil-iated with, the trustee.

(9) The court may appoint a specialfiduciary to make a decision with respect toany proposed transaction that might violatethis section if entered into by the trustee.[2005 c.348 §60; 2007 c.515 §2]

130.660 UTC 803. Impartiality. If a trusthas two or more beneficiaries, the trusteeshall act impartially in investing, managingand distributing the trust property, givingdue regard to the beneficiaries’ respectiveinterests. [2005 c.348 §61]

130.665 UTC 804. Prudent administra-tion. A trustee shall administer the trust asa prudent person would, by considering thepurposes, terms, distributional requirementsand other circumstances of the trust. In sat-isfying this standard, the trustee shall exer-



cise reasonable care, skill and caution. [2005c.348 §62]

130.670 UTC 805. Costs of administra-tion. In administering a trust, the trusteemay incur only costs that are reasonable inrelation to the trust property, the purposesof the trust and the skills of the trustee. [2005c.348 §63]

130.675 UTC 806. Trustee’s skills. Atrustee who has special skills or expertise,or is named trustee in reliance upon thetrustee’s representation that the trustee hasspecial skills or expertise, shall use thosespecial skills or expertise in administeringthe trust. [2005 c.348 §64]

130.680 UTC 807. Delegation by trus-tee. (1) A trustee may delegate duties andpowers that a prudent trustee of comparableskills could properly delegate under the cir-cumstances. The trustee shall exercise rea-sonable care, skill and caution in:

(a) Selecting an agent;(b) Establishing the scope and terms of

the delegation, consistent with the purposesand terms of the trust; and

(c) Periodically reviewing the agent’s ac-tions in order to monitor the agent’s per-formance and compliance with the terms ofthe delegation.

(2) In performing a delegated function, anagent owes a duty to the trust to exercisereasonable care to comply with the terms ofthe delegation.

(3) A trustee who complies with subsec-tion (1) of this section is not liable to thebeneficiaries or to the trust for an action ofthe agent.

(4) By accepting a delegation of powersor duties from the trustee of a trust that issubject to this state’s law, an agent submitsto the jurisdiction of the courts of this state.[2005 c.348 §65]

130.685 UTC 808. Powers to direct. (1)While a trust is revocable, the trustee mayfollow a direction of the settlor that is con-trary to the terms of the trust.

(2) If the terms of a trust confer upon aperson other than the settlor of a revocabletrust power to direct certain actions of thetrustee, the trustee shall act in accordancewith an exercise of the power unless the ex-ercise is manifestly contrary to the terms ofthe trust or the trustee knows the attemptedexercise would constitute a serious breachof a fiduciary duty that the person holdingthe power owes to the beneficiaries of thetrust.

(3) The terms of a trust may confer upona trustee or other person a power to directthe modification or termination of the trust.

(4) A person other than a beneficiarywho holds a power to direct is rebuttablypresumed to be a fiduciary and is required toact in good faith with regard to the purposesof the trust and the interests of the benefici-aries. The holder of a power to direct is lia-ble for any loss that results from breach ofa fiduciary duty. [2005 c.348 §66]

130.690 UTC 809. Control and pro-tection of trust property. A trustee shalltake reasonable steps to take control of andprotect the trust property. [2005 c.348 §67]

130.695 UTC 810. Recordkeeping andidentification of trust property. (1) Atrustee shall keep adequate records of theadministration of the trust.

(2) A trustee shall keep trust propertyseparate from the trustee’s own property.

(3) Except as otherwise provided in sub-section (4) of this section, a trustee shallcause the trust property to be designated sothat the interest of the trust, to the extentfeasible, appears in records maintained by aparty other than a trustee or beneficiary.

(4) If the trustee maintains recordsclearly indicating the respective interests ofthe different trusts, a trustee may invest asa whole the property of two or more separatetrusts. [2005 c.348 §68]

130.700 UTC 811. Enforcement and de-fense of claims. A trustee shall take rea-sonable steps to enforce claims of the trustand to defend claims against the trust. [2005c.348 §69]

130.705 UTC 812. Collecting trustproperty. A trustee shall take reasonablesteps to compel a former trustee or otherperson to deliver trust property to the trus-tee, and to remedy a breach of trust knownto the trustee to have been committed by aformer trustee. [2005 c.348 §70]

130.710 UTC 813. Duty to inform andreport. (1) A trustee shall keep the qualifiedbeneficiaries of the trust reasonably informedabout the administration of the trust and ofthe material facts necessary for those bene-ficiaries to protect their interests. If reason-able under the circumstances, a trustee mayrespond to a request for information relatedto the administration of the trust from abeneficiary who is not a qualified benefici-ary.

(2)(a) Upon request of a qualified benefi-ciary, a trustee shall promptly furnish to thequalified beneficiary a copy of the trust in-strument.

(b) Within a reasonable time after ac-cepting a trusteeship, a trustee shall notifyall qualified beneficiaries of the acceptanceand of the trustee’s name, address and tele-phone number.



(c) Except as provided in subsection (10)of this section, within a reasonable time af-ter the date the trustee acquires knowledgeof the creation of an irrevocable trust, or thedate the trustee acquires knowledge that aformerly revocable trust has become irrev-ocable, whether by the death of the settloror otherwise, the trustee shall notify thequalified beneficiaries of the trust’s exist-ence, of the identity of the settlor or settlors,of the right to request a copy of the trustinstrument and of the right to a trustee’s re-port as provided in subsection (3) of thissection.

(d) A trustee shall notify the qualifiedbeneficiaries in advance of any change in themethod or rate of the trustee’s compensation.

(3) Except as provided in subsection (10)of this section, a trustee shall send a trusteereport, at least annually and upon termi-nation of the trust, to the permissible dis-tributees of trust income or principal and toother qualified beneficiaries who request thereport. The report must include a listing oftrust property and liabilities, and must showthe market values of trust assets, if feasible.The report must reflect all receipts and dis-bursements of the trust, including the sourceand amount of the trustee’s compensation.Upon a vacancy in a trusteeship, unless acotrustee remains in office, a trustee reportmust be sent to the qualified beneficiaries bythe former trustee. A personal represen-tative, conservator or guardian may send thequalified beneficiaries a trustee report onbehalf of a deceased or financially incapabletrustee.

(4) A qualified beneficiary may waive theright to a trustee report or other informationotherwise required to be furnished under thissection. A qualified beneficiary may with-draw a waiver at any time for the purposeof future reports and other information.

(5) A trustee may charge a reasonable feeto a beneficiary for providing informationunder this section.

(6) A beneficiary’s request for any infor-mation under this section must be with re-spect to a single trust that is sufficientlyidentified to enable the trustee to locate thetrust’s records.

(7) If the trustee is bound by any confi-dentiality restrictions regarding a trust as-set, any beneficiary eligible under thissection to receive information about that as-set must agree to be bound by the same con-fidentiality restrictions before receiving theinformation.

(8) Despite any other provision of thissection, information, notice and reports re-quired by this section shall be given only tothe settlor’s spouse if:

(a) The spouse survives the settlor;(b) The spouse is financially capable;(c) The spouse is the only permissible

distributee of the trust; and(d) All of the other qualified beneficiaries

of the trust are descendants of the spouse.(9) Notwithstanding any other provision

of this section, while the settlor of arevocable trust is alive, beneficiaries otherthan the settlor have no right to receive no-tice, information or reports under this sec-tion.

(10) A trustee need not provide a quali-fied beneficiary with the notice of the rightto a trustee’s report under subsection (2)(c)of this section, and need not send trustee re-ports to the beneficiary under subsection (3)of this section, until six months after arevocable trust becomes irrevocable if thebeneficiary’s only interest in the trust is adistribution of a specific item of property ordistribution of a specific amount of money.The trustee must provide the notice of theright to a trustee’s report required by sub-section (2)(c) of this section at the end of thesix-month period if the beneficiary has notreceived distribution of the specific item ofproperty or specific amount of money beforethe end of the period. If notice is provided toa qualified beneficiary under this subsection,the trustee must thereafter send trustee re-ports to the beneficiary until distribution ofthe specific item of property or specificamount of money. [2005 c.348 §71; 2009 c.275 §18]


Sec. 72. (1) Section 71 (2)(b) of this 2005 Act[130.710 (2)(b)] applies only to a trustee who accepts atrusteeship on or after the effective date of this 2005Act [January 1, 2006].

(2) Section 71 (2)(c) of this 2005 Act [130.710 (2)(c)]applies only to irrevocable trusts created on or after theeffective date of this 2005 Act and to revocable truststhat become irrevocable on or after the effective dateof this 2005 Act. [2005 c.348 §72]


Sec. 19. The amendments to ORS 130.710 by section18 of this 2009 Act apply only to revocable trusts thatbecome irrevocable on or after the effective date of this2009 Act [January 1, 2010]. [2009 c.275 §19]

130.715 UTC 814. Discretionary pow-ers; tax savings. (1) A trustee shall exercisea discretionary power in good faith and in amanner that is in accordance with the termsand purposes of the trust and the interestsof the beneficiaries. The duty imposed by thissubsection is not affected by the grant ofdiscretion in the terms of the trust, eventhough the terms of the trust provide thatthe trustee has absolute, sole or uncontrolleddiscretion or use other words purporting toconvey broad discretion.



(2) Subject to subsection (4) of this sec-tion, and unless the terms of the trust ex-pressly provide otherwise:

(a) A person other than a settlor who isa beneficiary and trustee of a trust that con-fers on the trustee a power to make discre-tionary distributions to or for the trustee’spersonal benefit may exercise the power onlyin accordance with an ascertainable stan-dard; and

(b) A trustee may not exercise a powerto make discretionary distributions to satisfya legal obligation of support that the trusteepersonally owes another person.

(3) A power the exercise of which is lim-ited or prohibited by subsection (2) of thissection may be exercised by a majority of theremaining trustees whose exercise of thepower is not so limited or prohibited. If thepower of all trustees is so limited or prohib-ited, the court may appoint a specialfiduciary with authority to exercise thepower.

(4) Subsection (2) of this section does notapply to:

(a) A power held by the settlor’s spousewho is the trustee of a trust for which amarital deduction, as described in section2056(b)(5) or 2523(e) of the Internal RevenueCode, as in effect on January 1, 2006, waspreviously allowed;

(b) Any trust during any period that thetrust may be revoked or amended by itssettlor; or

(c) A trust if contributions to the trustqualify for the annual exclusion under sec-tion 2503(c) of the Internal Revenue Code, asin effect on January 1, 2006. [2005 c.348 §73]

130.720 UTC 815. General powers oftrustee. (1) A trustee, without authorizationby the court, may exercise powers conferredby the terms of the trust and, except as lim-ited by the terms of the trust:

(a) All powers over the trust propertythat an unmarried financially capable ownerhas over individually owned property;

(b) Any other powers appropriate toachieve the proper investment, managementand distribution of the trust property; and

(c) Any other powers conferred by thischapter.

(2) The exercise of a power is subject tothe fiduciary duties prescribed by ORS130.650 to 130.730. [2005 c.348 §74]

130.725 UTC 816. Specific powers oftrustee. Without limiting the authority con-ferred by ORS 130.720, a trustee may do anyof the following:

(1) Collect trust property and accept orreject additions to the trust property from asettlor or any other person.

(2) Acquire or sell property, for cash oron credit, at public or private sale.

(3) Exchange, partition or otherwisechange the character of trust property.

(4) Deposit trust money in an account ina financial institution, including a financialinstitution operated by the trustee, if the de-posit is adequately insured or secured.

(5) Borrow money, with or without secu-rity, to be repaid from trust assets or other-wise, and advance money for the protectionof the trust and for all expenses, losses andliabilities sustained in the administration ofthe trust or because of the holding or own-ership of any trust assets. Money may beborrowed under this subsection from anylender, including a financial institution oper-ated by or affiliated with the trustee. Atrustee is entitled to be reimbursed out ofthe trust property or from property that hasbeen distributed from the trust, with reason-able interest, for an advance of money underthis subsection. (6) Continue operation of anyproprietorship, partnership, limited liabilitycompany, business trust, corporation or otherform of business or enterprise in which thetrust has an interest, and take any actionthat may be taken by shareholders, membersor property owners, including merging, dis-solving or otherwise changing the form ofbusiness organization or contributing addi-tional capital.

(7) Exercise the rights of an absoluteowner of stocks and other securities, includ-ing the right to:

(a) Vote, or give proxies to vote, with orwithout power of substitution, or enter intoor continue a voting trust agreement;

(b) Hold a security in the name of anominee or in other form without disclosureof the trust so that title may pass by deliv-ery;

(c) Pay calls, assessments and other sumschargeable or accruing against the securi-ties, and sell or exercise stock subscriptionor conversion rights; and

(d) Deposit the securities with a deposi-tory or other financial institution.

(8) Construct, repair, alter or otherwiseimprove buildings or other structures on realproperty in which the trust has an interest,demolish improvements, raze existing orerect new party walls or buildings on realproperty in which the trust has an interest,subdivide or develop land, dedicate land topublic use or grant public or private ease-



ments, and make or vacate plats and adjustboundaries.

(9) Enter into a lease for any purpose aslessor or lessee, including a lease or otherarrangement for exploration and removal ofnatural resources, with or without the optionto purchase or renew, even though the periodof the lease extends beyond the duration ofthe trust.

(10) Grant an option involving a sale,lease or other disposition of trust propertyor acquire an option for the acquisition ofproperty, even though the option isexercisable after the trust is terminated, andexercise an option so acquired.

(11) Insure the property of the trustagainst damage or loss and insure the trus-tee, the trustee’s agents, and beneficiariesagainst liability arising from the administra-tion of the trust.

(12) Abandon or decline to administerproperty of no value or property of a valuethat is not adequate to justify its collectionor continued administration.

(13) Avoid possible liability for violationof environmental law by:

(a) Inspecting or investigating propertythe trustee holds or has been asked to hold,or property owned or operated by an organ-ization in which the trustee holds or hasbeen asked to hold an interest, for the pur-pose of determining the application of envi-ronmental law with respect to the property;

(b) Taking action to prevent, abate orotherwise remedy any actual or potential vi-olation of any environmental law affectingproperty held directly or indirectly by thetrustee, whether taken before or after theassertion of a claim or the initiation of gov-ernmental enforcement;

(c) Declining to accept property intotrust or disclaiming any power with respectto property that is or may be burdened withliability for violation of environmental law;

(d) Compromising claims against thetrust that may be asserted for an alleged vi-olation of environmental law; and

(e) Paying the expense of any inspection,review, abatement or remedial action tocomply with environmental law.

(14) Pay or contest any claim, settle aclaim by or against the trust, and release, inwhole or in part, a claim belonging to thetrust.

(15) Pay taxes, assessments, compensa-tion of the trustee and of employees andagents of the trust, and other expenses in-curred in the administration of the trust.

(16) Exercise elections available underfederal, state and local tax laws.

(17) Select a mode of payment under anyemployee benefit or retirement plan, annuityor life insurance payable to the trustee, ex-ercise rights under employee benefit or re-tirement plans, annuities or policies of lifeinsurance, including exercise of the right toindemnification for expenses and against li-abilities, and take appropriate action to col-lect the proceeds.

(18) Make loans out of trust property.The trustee may make a loan to a beneficiaryon terms and conditions the trustee consid-ers to be fair and reasonable under the cir-cumstances. The trustee may collect loansmade to a beneficiary by making deductionsfrom future distributions to the beneficiary.

(19) Pledge trust property to guaranteeloans made by others to the beneficiary.

(20) Appoint a trustee to act in anotherstate, country or other jurisdiction with re-spect to trust property located in the otherstate, country or other jurisdiction, conferupon the appointed trustee all of the powersand duties of the appointing trustee, requirethat the appointed trustee furnish securityand remove any trustee so appointed.

(21) Make a distribution to a beneficiarywho is under a legal disability or who thetrustee reasonably believes is financially in-capable, either:

(a) Directly;(b) By application of the distribution for

the beneficiary’s benefit;(c) By paying the distribution to the

beneficiary’s conservator or, if the benefici-ary does not have a conservator, thebeneficiary’s guardian;

(d) By creating a custodianship under theUniform Transfers to Minors Act by payingthe distribution to a custodian for the bene-ficiary;

(e) By paying the distribution to any ex-isting custodian under the Uniform Transfersto Minors Act;

(f) By paying the distribution to an adultrelative or other person having legal orphysical care or custody of the beneficiary,to be expended on the beneficiary’s behalf, ifthe trustee does not know of a conservator,guardian or custodian for the beneficiary; or

(g) By managing the distribution as aseparate fund held by the trustee on behalfof the beneficiary, subject to thebeneficiary’s continuing right to withdrawthe distribution.

(22) On distribution of trust property orthe division or termination of a trust, makedistributions in divided or undivided inter-ests, allocate particular assets in proportion-ate or disproportionate shares, value the



trust property for those purposes and adjustfor resulting differences in valuation.

(23) Resolve a dispute concerning the in-terpretation of the trust or the administra-tion of the trust by mediation, arbitration orother procedure for alternative dispute reso-lution.

(24) Prosecute or defend an action, claimor judicial proceeding in any state, countryor other jurisdiction to protect trust propertyand the trustee in the performance of thetrustee’s duties.

(25) Sign and deliver contracts and otherinstruments that are useful to achieve or fa-cilitate the exercise of the trustee’s powers.

(26) On termination of the trust, exercisethe powers appropriate to wind up the ad-ministration of the trust and distribute thetrust property to the persons entitled to theproperty.

(27) Allocate items of income or expenseto either trust income or principal, as pro-vided by law, including creation of reservesout of income for depreciation, obsolescenceor amortization, or for depletion in mineralor timber properties.

(28) Employ persons, including attorneys,auditors, investment advisors or agents, toadvise or assist the trustee in the perform-ance of administrative duties. A trustee mayact based on the recommendations of profes-sionals without independently investigatingthe recommendations.

(29) Apply for and qualify all or part ofthe property in the trust estate for specialgovernmental tax programs or other pro-grams that may benefit the trust estate orany of the beneficiaries.

(30) Deposit securities in a clearing cor-poration as provided in ORS 128.100. [2005c.348 §75; 2007 c.515 §3]

130.730 UTC 817. Distribution upontermination. (1) Upon termination or partialtermination of a trust, the trustee may sendto the beneficiaries a proposal for distrib-ution. The right of any beneficiary to objectto a distribution made pursuant to the pro-posal terminates if the beneficiary does notnotify the trustee of an objection within 30days after the proposal was sent, but only ifthe proposal informed the beneficiary of theright to object and the time allowed for ob-jection.

(2) Upon the occurrence of an event ter-minating or partially terminating a trust, thetrustee shall proceed expeditiously to dis-tribute the trust property to the persons en-titled to the property. The trustee may retaina reasonable reserve for the payment ofdebts, expenses and taxes.

(3) A release by a beneficiary of a trusteefrom liability for breach of trust is invalid tothe extent:

(a) The release was induced by improperconduct of the trustee; or

(b) The beneficiary, at the time of therelease, did not know of the beneficiary’srights or of the material facts relating to thebreach. [2005 c.348 §76]

ADVISERS130.735 Appointment of adviser; liabil-

ity of trustee. (1) A trust instrument mayappoint a person to act as an adviser for thepurpose of directing or approving decisionsmade by the trustee, including decisions re-lated to distribution of trust assets and tothe purchase, sale or exchange of trust in-vestments. The appointment must be madeby a provision of the trust that specificallyrefers to this section. An adviser shall exer-cise all authority granted under the trust in-strument as a fiduciary unless the trustinstrument provides otherwise. A person whoagrees to act as an adviser is subject to Or-egon law and submits to the jurisdiction ofthe courts of this state.

(2) If a trust instrument provides that atrustee is to follow the direction of an ad-viser, and that trustee acts in accordancewith the adviser’s directions, the trustee isnot liable for any loss resulting directly orindirectly from the trustee’s decision unlessthe decision constitutes reckless indifferenceto the purposes of the trust or the interestsof the beneficiaries.

(3) If a trust instrument provides that atrustee is to make decisions with the ap-proval of an adviser, and the adviser does notprovide approval within a reasonable timeafter the trustee has made a request for ap-proval of a decision, the trustee is not liablefor any loss resulting directly or indirectlyfrom the decision unless the decision consti-tutes reckless indifference to the purposes ofthe trust or the interests of the beneficiaries.

(4) Except to the extent specifically pro-vided by the trust instrument, a trustee hasno duty to monitor an adviser’s conduct,provide advice to the adviser, consult withthe adviser or give notice to any beneficiaryor third party about decisions made pursuantto the adviser’s direction that the trusteewould have decided differently.

(5) Absent clear and convincing evidenceto the contrary, all actions taken by a trus-tee for the purpose of implementing di-rections from an adviser, includingconfirming that the adviser’s directions havebeen carried out and recording and reportingactivities requested by the adviser, are pre-sumed to be administrative actions taken by



the trustee solely for the purpose of allowingthe trustee to perform the duties assigned tothe trustee under the trust instrument. Ad-ministrative actions taken by a trustee forthe purpose of implementing directions froman adviser do not constitute monitoring ofthe adviser or other participation in deci-sions that are within the scope of theadviser’s authority. [2009 c.275 §21]

UNIFORM PRUDENT INVESTOR ACT130.750 Trustee’s duty to comply with

prudent investor rule. (1) Except as other-wise provided in subsection (2) of this sec-tion, a trustee who invests and managestrust assets owes a duty to the beneficiariesof the trust to comply with the prudent in-vestor rule set forth in ORS 130.755.

(2) The prudent investor rule is a defaultrule that may be expanded, restricted, elimi-nated or otherwise altered by the provisionsof a trust. A trustee is not liable to a bene-ficiary to the extent that the trustee acted inreasonable reliance on the provisions of thetrust. [2005 c.348 §77]

130.755 Prudent investor rule. (1) Atrustee shall invest and manage trust assetsas a prudent investor would, by consideringthe purposes, terms, distribution require-ments and other circumstances of the trust.In satisfying this standard, the trustee shallexercise reasonable care, skill and caution.

(2) A trustee’s investment and manage-ment decisions respecting individual assetsare not evaluated in isolation, but in thecontext of the trust portfolio as a whole andas a part of the overall investment strategyhaving risk and return objectives reasonablysuited to the trust.

(3) A trustee shall consider all relevantcircumstances in investing and managingtrust assets, including any of the followingthat are relevant to the trust or the benefi-ciaries of the trust:

(a) General economic conditions;(b) The possible effect of inflation or

deflation;(c) The expected tax consequences of in-

vestment decisions or strategies;(d) The role that each investment or

course of action plays within an overall trustportfolio, which may include financial assets,interests in closely held enterprises, tangibleand intangible personal property, and realproperty;

(e) The expected total return from in-come and the appreciation of capital;

(f) Other resources of the beneficiaries;

(g) Needs for liquidity, regularity of in-come and preservation or appreciation ofcapital; and

(h) An asset’s special relationship or spe-cial value, if any, to the purposes of the trustor to one or more of the beneficiaries.

(4) A trustee shall make a reasonable ef-fort to verify facts relevant to the investmentand management of trust assets.

(5) A trustee may invest in any kind ofproperty or type of investment consistentwith the standards of ORS 130.750 to 130.775.

(6) A trustee who has special skills orexpertise, or is named trustee in relianceupon the trustee’s representation that thetrustee has special skills or expertise, has aduty to use those special skills or expertisein investing and managing trust assets. [2005c.348 §78]

130.760 Diversification of trust invest-ments. A trustee shall diversify the invest-ments of the trust unless the trusteereasonably determines that, because of spe-cial circumstances, the purposes of the trustare better served without diversifying. [2005c.348 §79]

130.765 Trustee duty. Within a reason-able time after accepting a trusteeship or re-ceiving trust assets, a trustee shall reviewthe trust assets and make and implement de-cisions concerning the retention and disposi-tion of assets in order to bring the trustportfolio into compliance with the require-ments of ORS 130.750 to 130.775 and with thepurposes, terms, distribution requirementsand other circumstances of the trust. [2005c.348 §80]

130.770 Determination of compliancewith prudent investor rule. Compliancewith the prudent investor rule is determinedin light of the facts and circumstances exist-ing at the time of a trustee’s decision or ac-tion and not by hindsight. [2005 c.348 §81]

130.775 Trust language authorizing in-vestments permitted under prudent in-vestor rule. Unless otherwise limited ormodified, the following terms or comparablelanguage in the provisions of a trust author-ize any investment or strategy permitted un-der ORS 130.750 to 130.775: “investmentspermissible by law for investment of trustfunds,” “legal investments,” “authorized in-vestments,” “using the judgment and careunder the circumstances then prevailing thatpersons of prudence, discretion and intelli-gence exercise in the management of theirown affairs, not in regard to speculation butin regard to the permanent disposition oftheir funds, considering the probable incomeas well as the probable safety of their capi-tal,” “prudent man rule,” “prudent trustee



rule” and “prudent investor rule.” [2005 c.348§82]

LIABILITY OF TRUSTEE AND RIGHTS OF PERSONS DEALING WITH TRUSTEE

130.800 UTC 1001. Remedies for breachof trust. (1) A violation by a trustee of aduty the trustee owes to a beneficiary is abreach of trust. A breach of trust may occurby reason of an action or by reason of afailure to act.

(2) To remedy a breach of trust that hasoccurred or to prevent a breach of trust, thecourt may:

(a) Compel the trustee to perform thetrustee’s duties;

(b) Enjoin the trustee from committing abreach of trust;

(c) Compel the trustee to pay money orrestore property;

(d) Order a trustee to account;(e) Appoint a special fiduciary to take

possession of the trust property and adminis-ter the trust;

(f) Suspend the trustee;(g) Remove the trustee as provided in

ORS 130.625;(h) Reduce or deny compensation to the

trustee;(i) Subject to ORS 130.855, void an act of

the trustee, impose a lien or a constructivetrust on trust property, or trace trust prop-erty wrongfully disposed of and recover theproperty or its proceeds; or

(j) Order any other appropriate relief.[2005 c.348 §83]

130.805 UTC 1002. Damages for breachof trust. (1) A trustee who commits a breachof trust is liable to the beneficiaries affectedfor the greater of:

(a) The amount of damages caused by thebreach;

(b) The amount required to restore thevalue of the trust property and trust distrib-utions to what they would have been had thebreach not occurred; or

(c) The profit the trustee made by reasonof the breach.

(2) Except as otherwise provided in thissubsection, if more than one trustee is liableto the beneficiaries for a breach of trust, atrustee is entitled to contribution from theother trustee or trustees. In determining theamount of contribution, the court shall con-sider the degree of fault of each trustee andwhether any trustee or trustees acted in badfaith or with reckless indifference to thepurposes of the trust or the interests of the

beneficiaries. A trustee who received a bene-fit from the breach of trust is not entitled tocontribution from another trustee to the ex-tent of the benefit received. [2005 c.348 §84]

130.810 UTC 1003. Damages in absenceof breach. (1) Except as provided by ORS130.725 (4) and (15) or 709.175 or other lawof this state, a trustee is accountable to anaffected beneficiary for any profit made bythe trustee arising from the administrationof the trust, without regard to whether theprofit resulted from a breach of trust.

(2) Unless there is a breach of trust, atrustee is not liable to a beneficiary for aloss or depreciation in the value of trustproperty or for not having made a profit.[2005 c.348 §85]

130.815 UTC 1004. Attorney fees andcosts. In a judicial proceeding involving thevalidity or administration of a trust, thecourt may award costs and expenses andreasonable attorney’s fees to any party, to bepaid by another party or from the trust. [2005c.348 §86]

130.820 UTC 1005. Limitation of actionagainst trustee. (1) Notwithstanding ORSchapter 12 or any other provision of law, butsubject to subsection (2) of this section, acivil action against a trustee based on anyact or omission of the trustee, whether basedin tort, contract or other theory of recovery,must be commenced within six years afterthe date the act or omission is discovered,or six years after the date the act or omis-sion should have been discovered, whicheveris earlier.

(2) A beneficiary may not commence aproceeding against a trustee more than oneyear after the date the beneficiary or a rep-resentative of the beneficiary is sent a reportby certified or regular mail that adequatelydiscloses the existence of a potential claimand that informs the beneficiary of the timeallowed for commencing a proceeding. Acopy of this section must be attached to thereport. The report must provide sufficientinformation so that the beneficiary or repre-sentative knows of the potential claim orshould have inquired into its existence.

(3) If subsections (1) and (2) of this sec-tion do not apply, a judicial proceedingagainst a trustee must be commenced within10 years from the date of the act or omissioncomplained of, or two years from the termi-nation of any fiduciary account establishedunder the trust, whichever is later. [2005 c.348§87]

130.825 UTC 1006. Reliance on trustinstrument. A trustee who acts in reason-able reliance on the terms of the trust asexpressed in the trust instrument is not lia-ble to a beneficiary for a breach of trust to



the extent the breach resulted from the reli-ance. [2005 c.348 §88]

130.830 UTC 1007. Event affecting ad-ministration or distribution. A trustee isnot liable for failing to determine whether amarriage, a divorce, a death, the performanceof educational requirements or another eventaffecting the administration or distributionof a trust has occurred if the trustee has ex-ercised reasonable care in attempting to de-termine whether the event has occurred.[2005 c.348 §89]

130.835 UTC 1008. Exculpation of trus-tee. (1) A term of a trust relieving a trusteeof liability for breach of trust is unenforce-able to the extent that the term:

(a) Relieves the trustee of liability forbreach of trust committed in bad faith orwith reckless indifference to the purposes ofthe trust or the interests of the beneficiaries;or

(b) Was inserted as the result of an abuseby the trustee of a fiduciary or confidentialrelationship to the settlor.

(2) An exculpatory term drafted orcaused to be drafted by the trustee is invalidas an abuse of a fiduciary or confidential re-lationship unless:

(a) The settlor is represented by an inde-pendent counsel who reviewed the term; or

(b) The trustee proves that theexculpatory term is fair under the circum-stances and that the term’s existence andcontents were adequately communicated tothe settlor. [2005 c.348 §90]

130.840 UTC 1009. Beneficiary’s con-sent, release or ratification. If a benefici-ary consents to conduct of a trustee thatconstitutes a breach of trust, releases atrustee from liability for a breach of trust orratifies a transaction entered into by a trus-tee that constitutes a breach of trust, thetrustee is not liable to the beneficiary for thebreach of trust unless:

(1) The consent, release or ratification ofthe beneficiary was induced by improperconduct of the trustee; or

(2) At the time of the consent, release orratification, the beneficiary did not know ofthe beneficiary’s rights or know of the mate-rial facts relating to the breach. [2005 c.348 §91]

130.845 UTC 1010. Limitation on per-sonal liability of trustee. (1) Except asotherwise provided in the contract, a trusteeis not personally liable on a contract prop-erly entered into in the trustee’s fiduciarycapacity in the course of administering thetrust if the trustee disclosed the trustee’sfiduciary capacity in the contract.

(2) A trustee is personally liable for tortscommitted in the course of administering a

trust or for obligations arising from owner-ship or control of trust property, includingliability for violation of environmental law,only if the trustee is personally at fault.

(3) The following claims may be assertedin a judicial proceeding against the trusteein the trustee’s fiduciary capacity, whetheror not the trustee is personally liable for theclaim:

(a) A claim based on a contract enteredinto by a trustee in the trustee’s fiduciarycapacity.

(b) A claim based on an obligation aris-ing from ownership or control of trust prop-erty.

(c) A claim based on a tort committed inthe course of administering a trust.

(4) This section does not impose personalliability on a trustee solely because the trus-tee holds property under an instrument thatshows title in the name of the trustee butdoes not state that the trustee holds theproperty in a representative capacity. [2005c.348 §92]

130.850 UTC 1011. Interest as generalpartner. (1) Except as otherwise provided insubsection (3) of this section or unless per-sonal liability is imposed in the contract, atrustee who holds an interest as a generalpartner in a general or limited partnershipis not personally liable on a contract enteredinto by the partnership after the trust’s ac-quisition of the interest if the trustee’sfiduciary capacity is disclosed.

(2) Except as otherwise provided in sub-section (3) of this section, a trustee whoholds an interest as a general partner is notpersonally liable for torts committed by thepartnership or for obligations arising fromownership or control of the interest unlessthe trustee is personally at fault.

(3) The immunity provided by this sectiondoes not apply if an interest in a partnershipis held by the trustee in a capacity otherthan that of trustee.

(4) If the trustee of a revocable trustholds an interest as a general partner, thesettlor is personally liable for contracts andother obligations of the partnership to thesame extent that the settlor would be liableif the settlor were a general partner. [2005c.348 §93]

130.855 UTC 1012. Protection of persondealing with trustee. (1) A person otherthan a beneficiary who in good faith assistsa trustee, or who in good faith and for valuedeals with a trustee, is not liable for acts ofthe trustee that exceed the trustee’s powersor for the improper exercise of the trustee’spowers, unless the person knows that the



trustee has exceeded the trustee’s powers orimproperly exercised those powers.

(2) A person other than a beneficiarywho deals with a trustee in good faith is notrequired to inquire about the extent of thetrustee’s powers or about the propriety of thetrustee’s exercise of those powers.

(3) A person who in good faith deliversassets to a trustee need not ensure that theassets are properly applied.

(4) Any person other than a beneficiarywho in good faith assists a former trustee,or who in good faith and for value deals witha former trustee, without knowledge that thetrusteeship has terminated, is not liablesolely because the former trustee is nolonger a trustee.

(5) Comparable protective provisions ofother laws relating to commercial transac-tions or transfer of securities by fiduciariesprevail over the protection provided by thissection. [2005 c.348 §94]

130.860 UTC 1013. Certification oftrust. (1) A person who is not a beneficiaryand who proposes to deal with the trustee ofa trust may require that all trustees executeand furnish to the person a certification oftrust.

(2) The certification of trust shall containthe following information:

(a) That the trust exists and the date thetrust instrument was executed;

(b) The identity of the settlor;(c) The identity and address of the cur-

rently acting trustee;(d) The powers of the trustee;(e) The revocability or irrevocability of

the trust and the identity of any personholding a power to revoke the trust;

(f) The existence or nonexistence of anypower to modify or amend the trust and theidentity of any person holding a power tomodify or amend the trust;

(g) The authority of cotrustees to sign orotherwise authenticate and whether allcotrustees or fewer than all are required inorder to exercise powers of the trustee;

(h) The last four digits of the settlor’sSocial Security number, or the trust’s em-ployer identification number;

(i) The manner of taking title to trustproperty; and

(j) The state, country or other jurisdic-tion under the laws of which the trust wasestablished.

(3) A certification of trust must be signedor otherwise authenticated by all the trus-tees.

(4) A certification of trust must statethat the trust has not been revoked, modifiedor amended in any manner that would causethe representations contained in the certi-fication of trust to be incorrect.

(5) A certification of trust need not con-tain the dispositive terms of a trust.

(6) A recipient of a certification of trustmay not require the trustee to furnish theentire trust instrument, but may require thetrustee to furnish copies of excerpts from theoriginal trust instrument and later amend-ments that designate the trustee and conferupon the trustee the power to act in thepending transaction.

(7) A person may require that the certi-fication of trust:

(a) Include facts other than those listedin this section that are reasonably related tothe administration of the trust;

(b) Be executed by one or more of thesettlors;

(c) Be executed by one or more of thebeneficiaries if the certification is reasonablyrelated to a pending or contemplated trans-action with the person; and

(d) Be adapted to the person’s own stan-dard form, which may be incorporated in anaccount signature agreement or other ac-count document.

(8) A certification of trust may containthe identity of any successor trustee or trus-tees and the circumstances under which anysuccessor trustee or trustees will assumetrust powers.

(9)(a) A person who acts in reliance upona certification of trust without actual know-ledge that the representations contained inthe certification are incorrect is not liable toany person for so acting and may assumewithout inquiry the existence of the factscontained in the certification. A person doesnot have actual knowledge that the repres-entations contained in the certification areincorrect solely by reason of having a copyof all or part of the trust instrument.

(b) Any transaction, and any lien createdby that transaction, is enforceable against atrust if the transaction is entered into by aperson acting in reliance on a certificationof trust containing the information set forthin this section without actual knowledge thatthe representations contained in the certi-fication are incorrect.

(c) If a person has actual knowledge thatthe trustee or trustees are acting outside thescope of the trust, and the actual knowledgewas acquired by the person before enteringinto the transaction or making a bindingcommitment to do so, the transaction is notenforceable against the trust.



(10) A person is not liable for acting inreliance on a certification of trust solely be-cause the certification fails to contain all theinformation required in this section.

(11) This section does not limit the rightsof the beneficiaries of the trust against atrustee.

(12) A person’s failure to demand or re-fusal to accept and rely solely upon a certi-fication of trust does not affect theprotection provided the person by ORS130.855, and no inference as to whether theperson has acted in good faith may be drawnfrom the failure to demand or the refusal toaccept and rely solely upon a certification.

(13) This section applies to all trusts,whether established under the laws of thisstate or under the law of another state,country or other jurisdiction. [2005 c.348 §95;2009 c.363 §3]

MISCELLANEOUS PROVISIONS130.900 Uniformity of application and

construction. In applying and construingORS chapter 130, consideration must begiven to the need to promote uniformity ofthe law with respect to trusts among statesthat enact the Uniform Trust Code. [2005 c.348§96]

Note: 130.900 to 130.910 were enacted into law bythe Legislative Assembly but were not added to or madea part of ORS chapter 130 or any series therein by leg-islative action. See Preface to Oregon Revised Statutesfor further explanation.

130.905 UTC 1102. Electronic recordsand signatures. The legal effect, validity orenforceability of electronic records or elec-tronic signatures under ORS chapter 130,and of contracts formed or performed withthe use of such records or signatures, aregoverned by ORS 84.001 to 84.061. [2005 c.348§97]

Note: See note under 130.900.

130.910 UTC 1106. Application. (1) Ex-cept as otherwise provided in ORS chapter130:

(a) ORS chapter 130 applies to all trustscreated before, on or after January 1, 2006.

(b) ORS chapter 130 does not apply tojudicial, administrative and other pro-ceedings concerning trusts commenced be-fore January 1, 2006.

(c) Any rule of construction or presump-tion provided in ORS chapter 130 applies totrust instruments executed before January 1,2006, unless there is a clear indication of acontrary intent in the terms of the trust.

(d) An act done before January 1, 2006,is not affected by ORS chapter 130.

(2) If a right is acquired, extinguished orbarred upon the expiration of a prescribedperiod that has commenced to run under anyother statute before January 1, 2006, thatstatute continues to apply to the right evenif it has been repealed or superseded. [2005c.348 §98]

Note: See note under 130.900.


130 - oregon state legislature · 130.100 utc 301. representation; basic effect 130.105 utc 302....

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