N.D. Cent. Code § 59-04.2-28 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-28
59-04.2-28. (505) Income taxes
Status: in_force

59-04.2-28. (505) Income taxes

1. A tax required to be paid by a trustee based on receipts allocated to income must be

paid from income.

2. A tax required to be paid by a trustee based on receipts allocated to principal must be

paid from principal, even if the tax is called an income tax by the taxing authority.

3. A tax required to be paid by a trustee on the trust's share of an entity's taxable income

must be paid:

a. From income to the extent that receipts from the entity are allocated to income;

b. From principal to the extent that receipts from the entity are allocated only to

principal;

c. Proportionately from principal and income to the extent that receipts from the

entity are allocated to both income and principal; and

d. From principal to the extent that the tax exceeds the total receipts from the entity.

4. After applying subsections 1 through 3, the trustee shall adjust income or principal

receipts to the extent that the trust's taxes are reduced because the trust receives a

deduction for payments made to a beneficiary.
N.D. Cent. Code § 59-16.3-14 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-14
59-16.3-14. Chapter not applicable to charitable remainder unitrust
Status: in_force

59-16.3-14. Chapter not applicable to charitable remainder unitrust

This chapter does not apply to a charitable remainder unitrust as defined by section 664(d)

of the Internal Revenue Code.
N.D. Cent. Code § 59-12-15 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-15
59-12-15. (415) Reformation to correct mistakes
Status: in_force

59-12-15. (415) Reformation to correct mistakes

The court may reform the terms of a trust, even if unambiguous, to conform the terms to the

settlor's intention if it is proved by clear and convincing evidence that both the settlor's intent

and the terms of the trust were affected by a mistake of fact or law, whether in expression or

inducement.
N.D. Cent. Code § 59-22-06 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-06
59-22-06. (204) Recognition of electronic nontestamentary estate planning document and electronic signature
Status: in_force

59-22-06. (204) Recognition of electronic nontestamentary estate planning document

and electronic signature.

1. A nontestamentary estate planning document or a signature on a nontestamentary

estate planning document may not be denied legal effect or enforceability because the

document or signature is in electronic form.

2. If any other provision of law requires a nontestamentary estate planning document to

be in writing, an electronic record of the document satisfies the requirement.

3. If any other provision of law requires a signature on a nontestamentary estate planning

document, an electronic signature satisfies the requirement.
N.D. Cent. Code § 59-16.3-13 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-13
59-16.3-13. No duty to act created
Status: in_force

59-16.3-13. No duty to act created

This chapter does not create a duty to take action under this chapter, and a trustee is not

liable for not considering whether to take action or for choosing not to take action.
N.D. Cent. Code § 59-09-05 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-05
59-09-05. (105) Default and mandatory rules
Status: in_force

59-09-05. (105) Default and mandatory rules

1. Except as otherwise provided in the terms of the trust, this title governs the duties and

powers of a trustee, relations among trustees, and the rights and interests of a

beneficiary.

2. The terms of a trust prevail over any provision of this title except:

a. The requirements for creating a trust;

b. The duty of a trustee to act in good faith and in accordance with the purposes of

the trust;

c. The requirement that a trust and its terms be for the benefit of its beneficiaries,

and that the trust have a purpose that is lawful and possible to achieve;

d. The power of the court to modify or terminate a trust under sections 59-12-10,

59-12-11, 59-12-12, 59-12-13, 59-12-14, 59-12-15, and 59-12-16;

e. The effect of a spendthrift provision and the rights of certain creditors and

assignees to reach a trust as provided in chapter 59-13;

f. The power of the court under section 59-15-02 to require, dispense with, or

modify or terminate a bond;

g. The power of the court under subsection 2 of section 59-15-08 to adjust a

trustee's compensation specified in the terms of the trust which is unreasonably

low or high;

h. The effect of an exculpatory term under section 59-18-08;

i. The rights under sections 59-18-10, 59-18-11, 59-18-12, and 59-18-13 of a

person other than a trustee or beneficiary;

j. Periods of limitation for commencing a judicial proceeding;

k. The power of the court to take such action and exercise such jurisdiction as may

be necessary in the interests of justice; and

l. The subject matter jurisdiction of the court and venue for commencing a

proceeding as provided in section 59-10-04.
N.D. Cent. Code § 59-12-03 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-03
59-12-03. (403) Trusts created in other jurisdictions
Status: in_force

59-12-03. (403) Trusts created in other jurisdictions

A trust not created by will is validly created if its creation complies with the law of the

jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which at

the time of creation the settlor was domiciled, had a place of abode, or was a national; a trustee

was domiciled or had a place of business; or any trust property was located.
N.D. Cent. Code § 59-17-04 — ND Code / Title 59 / Chapter 59-17 / Section 59-17-04
59-17-04. Duties at inception of trusteeship
Status: in_force

59-17-04. Duties at inception of trusteeship

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee

shall review the trust assets and make and implement decisions concerning the retention and

disposition of assets, in order to bring the trust portfolio into compliance with the purposes,

terms, distribution requirements, and other circumstances of the trust and with the requirements

of this chapter.
N.D. Cent. Code § 59-16.3-05 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-05
59-16.3-05. Annual valuation of trust required
Status: in_force

59-16.3-05. Annual valuation of trust required

The fair market value of the trust must be determined at least annually, using the valuation

date, or dates, or averages of valuation dates as are deemed appropriate. Assets for which a

fair market value cannot be readily ascertained must be valued using valuation methods that are

deemed reasonable and appropriate. If all income received with respect to the assets is

distributed to the extent distributable in accordance with the terms of the governing instrument,

assets may be excluded from valuation.
N.D. Cent. Code § 59-04.2-24 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-24
59-04.2-24. (501) Disbursements from income
Status: in_force

59-04.2-24. (501) Disbursements from income

A trustee shall make the following disbursements from income to the extent that they are not

disbursements to which subdivision b or c of subsection 2 of section 59-04.2-04 applies:

1. One-half of the regular compensation of the trustee and of any person providing

investment advisory or custodial services to the trustee.

2. One-half of all expenses for accountings, judicial proceedings, or other matters that

involve both the income and remainder interests.

3. All of the other ordinary expenses incurred in connection with the administration,

management, or preservation of trust property and the distribution of income, including

interest, ordinary repairs, regularly recurring taxes assessed against principal, and

expenses of a proceeding or other matter that concerns primarily the income interest.

4. Recurring premiums on insurance covering the loss of a principal asset or the loss of

income from or use of the asset.
N.D. Cent. Code § 59-14-03 — ND Code / Title 59 / Chapter 59-14 / Section 59-14-03
59-14-03. (603) Settlor's powers - Powers of withdrawal
Status: in_force

59-14-03. (603) Settlor's powers - Powers of withdrawal

1. While a trust is revocable, rights of the beneficiaries are subject to the control of, and

the duties of the trustee are owed exclusively to, the settlor.

2. During the period the power may be exercised, the holder of a power of withdrawal

has the rights of a settlor of a revocable trust under this section to the extent of the

property subject to the power.
N.D. Cent. Code § 59-09-11 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-11
59-09-11. (111) Nonjudicial settlement agreements
Status: in_force

59-09-11. (111) Nonjudicial settlement agreements

1. For purposes of this section, "interested persons" means a trustee and persons whose

consent would be required in order to achieve a binding settlement were the

settlement to be approved by the court.

2. Except as otherwise provided in subsection 3, interested persons may enter into a

binding nonjudicial settlement agreement with respect to any matter involving a trust.

3. A nonjudicial settlement agreement is valid only to the extent it does not violate a

material purpose of the trust and includes terms and conditions that could be properly

approved by the court under chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15,

59-16, 59-17, 59-18, and 59-19 or other applicable law. A spendthrift provision in the

terms of a trust is presumed to constitute a material purpose of the trust.

4. Matters that may be resolved by a nonjudicial settlement agreement include the

interpretation or construction of the terms of the trust, the approval of a trustee's report

or accounting, direction to a trustee to refrain from performing a particular act or the

grant to a trustee of any necessary or desirable power, the resignation or appointment

of a trustee and the determination of a trustee's compensation, transfer of a trust's

principal place of administration, liability of a trustee for an action relating to the trust,

the extent or waiver of bond of a trustee, and the criteria for distribution to a

beneficiary where the trustee is given discretion.

5. Any interested person may request the court to approve a nonjudicial settlement

agreement to determine whether the representation as provided in chapter 59-11 was

adequate and to determine whether the agreement contains terms and conditions the

court could have properly approved.
N.D. Cent. Code § 59-16.2-02 — ND Code / Title 59 / Chapter 59-16.2 / Section 59-16.2-02
59-16.2-02. Definitions
Status: in_force

59-16.2-02. Definitions

For purposes of this chapter, unless the context otherwise requires:

1. "Directing party" means an investment trust advisor, distribution trust advisor, or trust

protector as provided in this chapter.

2. "Distribution trust advisor" means one or more persons given authority by the

governing instrument to direct, consent to, veto, or otherwise exercise all or a portion

of the distribution powers and discretion of the trust, including authority to make

discretionary distributions of income or principal.

3. "Excluded fiduciary" means a fiduciary that by the governing instrument is directed to

act in accordance with the exercise of specified powers by a directing party, in which

case the specified powers must be deemed granted not to the fiduciary but to the

directing party and the fiduciary must be deemed excluded from exercising the

specified powers.

a. If a governing instrument provides a fiduciary as to one or more specified matters

is to act, omit action, or make decisions only with the consent of a directing party,

the fiduciary is an excluded fiduciary with respect to those matters.

b. A person may be an excluded fiduciary even if the person participated in:

(1) The exercise of a power described in section 59-09-11 relating to nonjudicial

settlement agreements;

(2) A power described in chapter 59-16.1 relating to decanting;

(3) A permitted trustee amendment; or

(4) A similar power that invokes the provisions of this chapter with respect to

any new or existing trust.

4. "Fiduciary" means any person expressly given one or more fiduciary duties by the

governing instrument, including a trustee.

5. "Governing instrument" means the instrument stating the terms of a trust, including a

court order, or nonjudicial settlement agreement establishing, construing, or modifying

the terms of the trust in accordance with section 59-09-11, chapter 59-16.1, or other

applicable law.

6. "Investment trust advisor'' means one or more persons given authority by the

governing instrument to direct, consent to, or veto the exercise of all or a portion of the

investment powers of the trust.

7. "Power" means authority to take or withhold an action or decision, including an

expressly specified power, the implied power necessary to exercise a specified power,

and authority inherent in a general grant of discretion.

8. ''Trust protector'' means one or more persons given one or more of the powers

specified in section 59-16.2-05, whether or not designated with the title of trust

protector by the governing instrument.
N.D. Cent. Code § 59-18-09 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-09
59-18-09. (1009) Beneficiary's consent, release, or ratification
Status: in_force

59-18-09. (1009) Beneficiary's consent, release, or ratification

A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the

conduct constituting the breach, released the trustee from liability for the breach, or ratified the

transaction constituting the breach, unless the consent, release, or ratification of the beneficiary

was induced by improper conduct of the trustee or at the time of the consent, release, or

ratification, the beneficiary lacked capacity or did not know of the beneficiary's rights or of the

material facts relating to the breach.
N.D. Cent. Code § 59-16.2-06 — ND Code / Title 59 / Chapter 59-16.2 / Section 59-16.2-06
59-16.2-06. Duty and liability of directing party
Status: in_force

59-16.2-06. Duty and liability of directing party

1. A directing party is a fiduciary of the trust subject to the same duties and standards

applicable to a trustee of a trust as provided by applicable law unless the governing

instrument provides otherwise. However, the governing instrument may not relieve or

exonerate a directing party from the duty to act or withhold acting as the directing party

in good faith reasonably believes is in the best interests of the trust.

2. Each directing party must keep the excluded fiduciary and any other directing party

reasonably informed regarding the administration of the trust with respect to any

specific duty or function being performed by the directing party to the extent the duty or

function would normally be performed by the excluded fiduciary or to the extent

providing the information to the excluded fiduciary or other directing party is

reasonably necessary for the excluded fiduciary or other directing party to perform its

duties. The directing party shall provide the information reasonably requested by the

excluded fiduciary or other directing party.

3. Neither the performance nor the failure to perform of a directing party's duty to inform

as provided in this section affects the limitation on the liability of the excluded fiduciary

as provided in this section.

4. The directing party may be made a party to an action or proceeding if issues relate to

a decision or action of the directing party, even if investment advisory agreements or

other related agreement provide otherwise.
N.D. Cent. Code § 59-16.1-09 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-09
59-16.1-09. Current need to invade principal
Status: in_force

59-16.1-09. Current need to invade principal

An authorized trustee may exercise the power to appoint in favor of an appointed trust

under sections 59-6.1-04 and 59-16.1-05 whether or not there is a current need to invade

principal under the terms of the invaded trust.
N.D. Cent. Code § 59-16-13 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-13
59-16-13. (813) Duty to inform and report
Status: in_force

59-16-13. (813) Duty to inform and report

1. Subject to section 59-14-03, while a trust is revocable or to the extent that trust

property in an irrevocable trust is subject to a power of withdrawal, or to the extent that

the qualified beneficiary of an irrevocable trust is then unknown because a person

holds a power to change the qualified beneficiary, the duty of the trustee as set forth in

subsection 2, to inform and report are owed exclusively:

a. To the settlor, while a trust is revocable;

b. To the holder of the power of withdrawal to the extent the trust property is subject

to the power during the period in which the power may be executed; and

c. To the holder of the power to change the qualified beneficiary of an irrevocable

trust during the period in which the power may be exercised; and

d. To a qualified beneficiary when the qualified beneficiary is required by law or

regulation to provide that information to determine eligibility for benefits or to

verify continued eligibility for benefits under title 50.

2. With respect to trust property in an irrevocable trust which is not subject to a power of

withdrawal and which is not subject to a power to change the qualified beneficiary:

a. A trustee shall keep the qualified beneficiaries of the trust reasonably informed

about the administration of the trust and of the material facts necessary for them

to protect their interests. Unless unreasonable under the circumstances, a trustee

shall promptly respond to a beneficiary's request for information related to the

administration of the trust.

b. A trustee upon written request shall promptly furnish to a qualified beneficiary a

copy of the portion of the trust instrument which relates to the interest of a

qualified beneficiary.

c. A trustee within sixty days after accepting a trusteeship shall notify the qualified

beneficiaries of the acceptance and of the trustee's name, address, and

telephone number.

d. A trustee shall notify the qualified beneficiaries of the trust existence, of the

identity of the settlor, of the right to request a copy of the trust instrument, and of

the right of the trustee's report as provided in subdivision f within sixty days after

the date the trustee acquires knowledge:

(1) Of the creation of an irrevocable trust; or

(2) That a formerly revocable trust has become irrevocable.

e. A trustee shall notify the qualified beneficiaries of any change in the method or

rate of the trustee's compensation.

f. A trustee shall send to the distributees or permissible distributees of trust income

or principal, and to other qualified beneficiaries who request it, at least annually

and at the termination of the trust, a report of the trust property, liabilities,

receipts, and disbursements, including the source and amount of the trustee's

compensation, a listing of the trust assets and, if feasible, their respective market

values. Upon a vacancy in a trusteeship, unless a cotrustee remains in office, a

report must be sent to the qualified beneficiaries by the former trustee. A personal

representative, conservator, or guardian may send the qualified beneficiaries a

report on behalf of a deceased or incapacitated trustee.

g. A beneficiary may waive the right to a trustee's report or other information

otherwise required to be furnished under this section. A beneficiary, with respect

to future reports and other information, may withdraw a waiver previously given.

h. Subdivisions c and d do not apply to a trustee that accepts a trusteeship before

August 1, 2007, to an irrevocable trust created before August 1, 2007, or to a

revocable trust that becomes irrevocable before August 1, 2007.
N.D. Cent. Code § 59-21-06 — ND Code / Title 59 / Chapter 59-21 / Section 59-21-06
59-21-06. Compliance - Determination
Status: in_force

59-21-06. Compliance - Determination

Compliance with this chapter is determined in light of the facts and circumstances existing

at the time a decision is made or at the time action is taken, and not by hindsight.
N.D. Cent. Code § 59-18-03 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-03
59-18-03. (1003) Damages in absence of breach
Status: in_force

59-18-03. (1003) Damages in absence of breach

Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in

the value of trust property or for not having made a profit.
N.D. Cent. Code § 59-09-08 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-08
59-09-08. (108) Principal place of administration
Status: in_force

59-09-08. (108) Principal place of administration

1. Without precluding other means for establishing a sufficient connection with the

designated jurisdiction, terms of a trust designating the principal place of

administration are valid and controlling if a trustee's principal place of business is

located in or a trustee is a resident of the designated jurisdiction, or all or part of the

administration occurs in the designated jurisdiction.

2. A trustee is under a continuing duty to administer the trust at a place appropriate to its

purposes, its administration, and the interests of the beneficiaries.

3. Without precluding the right of the court to order, approve, or disapprove a transfer, the

trustee, in furtherance of the duty prescribed by subsection 2, may transfer the trust's

principal place of administration to another state or to a jurisdiction outside of the

United States.

4. The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's

principal place of administration or a proposed transfer of some or all of the trust

property to a successor trustee not less than sixty days before initiating the transfer.

The notice of proposed transfer must include the name of the jurisdiction to which the

principal place of administration is to be transferred; the address and telephone

number at the new location at which the trustee can be contacted; an explanation of

the reasons for the proposed transfer; the date on which the proposed transfer is

anticipated to occur; and the date, not less than sixty days after the giving of the

notice, by which the qualified beneficiary must notify the trustee of an objection to the

proposed transfer.

5. The authority of a trustee under this section to transfer a trust's principal place of

administration or a proposed transfer of some or all of the trust property to a successor

trustee terminates if a majority of the qualified beneficiaries notify the trustee of an

objection to the proposed transfer on or before the date specified in the notice.

6. In connection with a transfer of the trust's principal place of administration, the trustee

may transfer some or all of the trust property to a successor trustee designated in the

terms of the trust or appointed pursuant to section 59-15-04.
N.D. Cent. Code § 59-16.2-03 — ND Code / Title 59 / Chapter 59-16.2 / Section 59-16.2-03
59-16.2-03. Designation and powers of investment trust advisor
Status: in_force

59-16.2-03. Designation and powers of investment trust advisor

1. An investment trust advisor may be designated in the governing instrument of a trust.

The powers of an investment trust advisor may be exercised or not exercised in the

sole and absolute discretion of the investment trust advisor, and are binding on all

other persons, including each beneficiary, each fiduciary, each excluded fiduciary, and

any other party having an interest in the trust.

2. The governing instrument may use the title "investment trust advisor" or a similar

name or description demonstrating the intent to provide for the office and function of

an investment trust advisor.

3. Unless the terms of the governing instrument provide otherwise, the investment trust

advisor has the authority to:

a. Direct the trustee with respect to the retention, purchase, transfer, assignment,

sale, or encumbrance of trust property and the investment and reinvestment of

principal and income of the trust;

b. Direct the trustee with respect to all management, control, and voting powers

related directly or indirectly to trust assets, including voting proxies for securities

held in trust;

c. Select and determine reasonable compensation of one or more advisors,

managers, consultants, or counselors, including the trustee, and to delegate to

them any of the powers of the investment trust advisor in accordance with section

59-16-07; and

d. Determine the frequency and methodology for valuing an asset for which there is

no readily available market value.
N.D. Cent. Code § 59-09-13 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-13
59-09-13. Insurable interest of trustee
Status: in_force

59-09-13. Insurable interest of trustee

1. In this section, "settlor" means a person, including a person for which a fiduciary or

agent is acting, that executes the trust instrument.

2. A trustee of a trust has an insurable interest in the life of an individual insured under a

life insurance policy that is owned by the trustee of the trust acting in a fiduciary

capacity or that designates the trust itself as owner if, on the date the policy is issued:

a. The insured is a settlor of the trust or an individual in whom a settlor of the trust

has, or would have had if living at the time the policy was issued, an insurable

interest; and

b. The life insurance proceeds must be primarily for the benefit of trust beneficiaries

that have:

(1) An insurable interest in the life of the insured; or

(2) A substantial interest engendered by love and affection in the continuation of

the life of the insured. If the trust beneficiaries do not already have an

insurable interest under paragraph 1, the trust beneficiaries must be related

within the third degree or closer, as measured by the civil law system of

determining degrees of relation, either by blood or law, to the insured, or

must be stepchildren of the insured.

3. This section does not authorize any practice that is prohibited by chapter 26.1-33.4.
N.D. Cent. Code § 59-11-02 — ND Code / Title 59 / Chapter 59-11 / Section 59-11-02
59-11-02. (302) Representation by holder of general power of appointment
Status: in_force

59-11-02. (302) Representation by holder of general power of appointment

The holder of a presently exercisable general power of appointment and the persons

represented with respect to the particular question or dispute may represent and bind persons

whose interests, as permissible appointees, takers in default, or otherwise, are subject to the

power. The term "presently exercisable general power of appointment" includes a testamentary

general power of appointment having no conditions precedent to its exercise other than the

death of the holder, the validity of the holder's last will and testament, and the inclusion of a

provision in the will sufficient to exercise this power.
N.D. Cent. Code § 59-09-01 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-01
59-09-01. (101) Short title
Status: in_force

59-09-01. (101) Short title

Chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19

may be cited as the North Dakota Uniform Trust Code.
N.D. Cent. Code § 59-16.2-01 — ND Code / Title 59 / Chapter 59-16.2 / Section 59-16.2-01
59-16.2-01. Consistency with power of attorney provisions
Status: in_force

59-16.2-01. Consistency with power of attorney provisions

The provisions of this chapter relating to power of attorney are subject to other provisions of

law.
N.D. Cent. Code § 59-04.2-26 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-26
59-04.2-26. (503) Transfers from income to principal for depreciation
Status: in_force

59-04.2-26. (503) Transfers from income to principal for depreciation

1. In this section, "depreciation" means a reduction in value due to wear, tear, decay,

corrosion, or gradual obsolescence of a fixed asset having a useful life of more than

one year.

2. A trustee may transfer to principal a reasonable amount of the net cash receipts from a

principal asset that is subject to depreciation, but may not transfer any amount for

depreciation:

a. Of that portion of real property used or available for use by a beneficiary as a

residence or of tangible personal property held or made available for the personal

use or enjoyment of a beneficiary;

b. During the administration of a decedent's estate; or

c. Under this section if the trustee is accounting under section 59-04.2-11 for the

business or activity in which the asset is used.

3. An amount transferred to principal need not be held as a separate fund.
N.D. Cent. Code § 59-13-01 — ND Code / Title 59 / Chapter 59-13 / Section 59-13-01
59-13-01. (501) Rights of beneficiary's creditor or assignee
Status: in_force

59-13-01. (501) Rights of beneficiary's creditor or assignee

To the extent a beneficiary's interest is not subject to a spendthrift provision, the court may

authorize a creditor or assignee of the beneficiary to reach the beneficiary's interest by

attachment of present or future distributions to or for the benefit of the beneficiary or other

means. The court may limit the award to such relief as is appropriate under the circumstances.
N.D. Cent. Code § 59-12-10 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-10
59-12-10. (410) Modification or termination of trust - Proceedings for approval or disapproval
Status: in_force

59-12-10. (410) Modification or termination of trust - Proceedings for approval or

disapproval.

1. In addition to the methods of termination prescribed by sections 59-12-11, 59-12-12,

59-12-13, and 59-12-14, a trust terminates to the extent the trust is revoked or expires

pursuant to its terms, no purpose of the trust remains to be achieved, or the purposes

of the trust have become unlawful or impossible to achieve.

2. A proceeding to approve or disapprove a proposed modification or termination under

sections 59-12-11, 59-12-12, 59-12-13, 59-12-14, 59-12-15, and 59-12-16, or trust

combination or division under section 59-12-17, may be commenced by a trustee or

beneficiary. The settlor of a charitable trust may maintain a proceeding to modify the

trust under section 59-12-13.
N.D. Cent. Code § 59-14-02 — ND Code / Title 59 / Chapter 59-14 / Section 59-14-02
59-14-02. (602) Revocation or amendment of revocable trust
Status: in_force

59-14-02. (602) Revocation or amendment of revocable trust

1. Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor

may revoke or amend the trust. This subsection does not apply to a trust created

under an instrument executed before August 1, 2007.

2. If a revocable trust is created or funded by more than one settlor to the extent the trust

consists of community property, the trust may be revoked by either spouse acting

alone but may be amended only by joint action of both spouses; to the extent the trust

consists of property other than community property, each settlor may revoke or amend

the trust with regard to the portion of the trust property attributable to that settlor's

contribution; and upon the revocation or amendment of the trust by fewer than all of

the settlors, the trustee shall promptly notify the other settlors of the revocation or

amendment.

3. The settlor may revoke or amend a revocable trust by substantial compliance with a

method provided in the terms of the trust or, if the terms of the trust do not provide a

method or the method provided in the terms is not expressly made exclusive, by a

later will or codicil that expressly refers to the trust or any other method manifesting

clear and convincing evidence of the settlor's intent.

4. Upon revocation of a revocable trust, the trustee shall deliver the trust property as the

settlor directs.

5. A settlor's powers with respect to revocation, amendment, or distribution of trust

property may be exercised by an agent under a power of attorney only to the extent

expressly authorized by the terms of the trust or the power, exercised in writing and

delivered to the trustee.

6. A conservator of the settlor or, if no conservator has been appointed, a guardian of the

settlor may exercise a settlor's powers with respect to revocation, amendment, or

distribution of trust property only with the approval of the court supervising the

conservatorship or guardianship.

7. A trustee who does not know that a trust has been revoked or amended is not liable to

the settlor or settlor's successors in interest for distributions made and other actions

taken on the assumption that the trust had not been amended or revoked.
N.D. Cent. Code § 59-16.2-07 — ND Code / Title 59 / Chapter 59-16.2 / Section 59-16.2-07
59-16.2-07. Duty and liability of excluded fiduciary
Status: in_force

59-16.2-07. Duty and liability of excluded fiduciary

1. The excluded fiduciary shall act in accordance with the governing instrument and

comply with the directing party's exercise of the powers granted to the directing party

by the governing instrument.

2. Unless otherwise provided in the governing instrument, an excluded fiduciary has no

duty to monitor, review, inquire, investigate, recommend, evaluate, or warn with

respect to a directing party's exercise of or failure to exercise any power granted to the

directing party by the governing instrument, including, any power related to the

acquisition, disposition, retention, management, or valuation of any asset or

investment.

3. Except as otherwise provided in this chapter or the governing instrument, an excluded

fiduciary is not liable, either individually or as a fiduciary, for an action, inaction,

consent, or failure to consent by a directing party, including:

a. If a governing instrument provides an excluded fiduciary is to follow the direction

of a directing party and the excluded fiduciary acts in accordance with this

direction, except in cases of willful misconduct on the part of the excluded

fiduciary in complying with the direction of the directing party, the excluded

fiduciary is not liable for any loss resulting directly or indirectly from following the

direction, including compliance regarding the valuation of assets for which there

is no readily available market value.

b. If a governing instrument provides an excluded fiduciary is to act or omit to act

only with the consent of a directing party, except in cases of willful misconduct on

the part of the excluded fiduciary, the excluded fiduciary is not liable for any loss

resulting directly or indirectly from an act taken or omitted as a result of the

directing party's failure to provide consent after having been requested to do so

by the excluded fiduciary.

c. If a governing instrument so provides, or if for any reason, an excluded fiduciary

is required to assume the role or responsibilities of a directing party, or if the

excluded fiduciary appoints a directing party or successor to a directing party,

except in cases of willful misconduct on the part of the excluded fiduciary, the

excluded fiduciary is not liable for any loss resulting directly or indirectly from its

actions in carrying out the roles and responsibilities of the directing party.

4. An excluded fiduciary does not have an obligation to review or evaluate a direction

from a distribution trust advisor nor to perform investment or suitability reviews,

inquiries, or investigations, nor to make recommendations or evaluations with respect

to investments to the extent the directing party, custodial account owner, or authorized

designee of a custodial account owner had authority to direct the acquisition,

disposition, or retention of the investment. If the excluded fiduciary offers

communication to the directing party or an investment person selected by the

investment trust advisor, the action may not be deemed to constitute an undertaking

by the excluded fiduciary to monitor or otherwise participate in actions within the scope

of the advisor's authority or to constitute a duty to do so.

5. An excluded fiduciary does not have a duty to communicate with, warn, or apprise a

beneficiary or third party concerning instances in which the excluded fiduciary would or

may have exercised the excluded fiduciary's own discretion in a manner different from

the manner directed by the directing party.

6. Absent a contrary provision in the governing instrument, the actions of the excluded

fiduciary, including any communications with the directing party or others, or carrying

out, recording, or reporting actions taken at the directing party's direction pertaining to

matters within the scope of authority of the directing party, must be deemed to be

administrative actions taken by the excluded fiduciary solely to allow the excluded

fiduciary to perform those duties assigned to the excluded fiduciary under the

governing instrument. These administrative actions may not be deemed to constitute

an undertaking by the excluded fiduciary to monitor, participate, or otherwise take a

fiduciary responsibility for actions within the scope of authority of the directing party.

7. An excluded fiduciary may obtain and act upon an opinion of counsel on a matter

relevant to this section.
N.D. Cent. Code § 59-14-04 — ND Code / Title 59 / Chapter 59-14 / Section 59-14-04
59-14-04. (604) Limitation on action contesting validity of revocable trust - Distribution of trust property
Status: repealed

59-14-04. (604) Limitation on action contesting validity of revocable trust -

Distribution of trust property.

Repealed by S.L. 2017, ch. 416, § 11.
N.D. Cent. Code § 59-04.2-03.1 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-03.1
59-04.2-03.1. Judicial control of discretionary power
Status: in_force

59-04.2-03.1. Judicial control of discretionary power

1. The court may not order a fiduciary to change a decision to exercise or not to exercise

a discretionary power conferred by this chapter unless the court determines that the

decision was not made in good faith or was an abuse of the fiduciary's discretion. A

fiduciary's decision is not an abuse of discretion merely because the court would have

exercised the power in a different manner or would not have exercised the power.

2. The decisions to which subsection 1 applies include:

a. A decision under subsection 1 of section 59-04.2-03 as to whether and to what

extent an amount should be transferred from principal to income or from income

to principal.

b. A decision regarding the factors that are relevant to the trust and its beneficiaries,

the extent to which the factors are relevant, and the weight, if any, to be given to

those factors, in deciding whether and to what extent to exercise the discretionary

power conferred by subsection 1 of section 59-04.2-03.

3. If the court determines a fiduciary has abused the fiduciary's discretion, the court may

place the income and remainder beneficiaries in the positions they would have

occupied if the discretion had not been abused, according to the following rules:

a. To the extent the abuse of discretion has resulted in no distribution to a

beneficiary or in a distribution that is too small, the court shall order the fiduciary

to distribute from the trust to the beneficiary an amount that the court determines

will restore the beneficiary, in whole or in part, to the beneficiary's appropriate

position.

b. To the extent the abuse of discretion has resulted in a distribution to a beneficiary

which is too large, the court shall place the beneficiaries, the trust, or both, in

whole or in part, in their appropriate positions by ordering the fiduciary to withhold

an amount from one or more future distributions to the beneficiary who received

the distribution that was too large or ordering that beneficiary to return some or all

of the distribution to the trust.

c. To the extent the court is unable, after applying subdivisions a and b to place the

beneficiaries, the trust, or both, in the positions they would have occupied if the

discretion had not been abused, the court may order the fiduciary to pay an

appropriate amount from its own funds to one or more of the beneficiaries or the

trust or both.

4. Upon petition by the fiduciary, the court having jurisdiction over a trust or estate shall

determine whether a proposed exercise or nonexercise by the fiduciary of a

discretionary power conferred by this chapter will result in an abuse of the fiduciary's

discretion. If the petition describes the proposed exercise or nonexercise of the power

and contains sufficient information to inform the beneficiaries of the reasons for the

proposal, the facts upon which the fiduciary relies, and an explanation of how the

income and remainder beneficiaries will be affected by the proposed exercise or

nonexercise of the power, then a beneficiary who challenges the proposed exercise or

nonexercise has the burden of establishing that it will result in an abuse of discretion.
N.D. Cent. Code § 59-16.2-05 — ND Code / Title 59 / Chapter 59-16.2 / Section 59-16.2-05
59-16.2-05. Designation and powers of trust protector
Status: in_force

59-16.2-05. Designation and powers of trust protector

1. A trust protector may be designated in the governing instrument of a trust.

2. The powers of a trust protector may be exercised or not exercised in the sole and

absolute discretion of the trust protector, and are binding on all other persons,

including a beneficiary, an investment trust advisor, a distribution trust advisor, a

fiduciary, an excluded fiduciary, and any other person having an interest in the trust.

3. The governing instrument may use the title "trust protector" or a similar name or

description demonstrating the intent to provide for the office and function of a trust

protector.

4. The powers granted to a trust protector by the governing instrument may include

authority to do one or more of the following:

a. Modify or amend the governing instrument to achieve favorable tax status or

respond to changes in the Internal Revenue Code, federal laws, state laws, or the

rulings and regulations under those laws;

b. Increase, decrease, or modify the interests of a beneficiary or beneficiaries of the

trust;

c. Modify the terms of a power of appointment granted by the trust provided, the

modification or amendment does not grant a beneficial interest to any individual,

class of individuals, or other parties not specifically provided for under the trust

instrument;

d. Remove, or appoint, a trustee, investment trust advisor, distribution trust advisor,

another directing party, investment committee member, or distribution committee

member, including designation of a plan of succession for future holders of that

office;

e. Terminate the trust, including determination of how the trustee is to distribute the

trust property to be consistent with the purposes of the trust;

f. Change the situs of the trust, the governing law of the trust, or both;

g. Appoint one or more successor trust protectors, including designation of a plan of

succession for future trust protectors;

h. Interpret terms of the trust instrument at the request of the trustee;

i. Advise the trustee on matters concerning a beneficiary;

j. Amend or modify the governing instrument to take advantage of laws governing:

(1) Restraints on alienation;

(2) Distribution of trust property; or

(3) Improvement of the administration of the trust;

k. Veto or direct trust distributions; or

l. Provide direction regarding notification of qualified beneficiaries.

5. If a charity is a qualified beneficiary of the trust, a trust protector shall give notice to the

attorney general at least sixty days before taking any action authorized under

subdivisions b through f of subsection 4. The attorney general may waive this notice

requirement.
N.D. Cent. Code § 59-18-05 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-05
59-18-05. (1005) Limitation of action against trustee
Status: in_force

59-18-05. (1005) Limitation of action against trustee

1. A beneficiary may not commence a proceeding against a trustee for breach of trust

more than one year after the date the beneficiary or a representative of the beneficiary

was sent a report that adequately disclosed the existence of a potential claim for

breach of trust and informed the beneficiary in the report or in a separate notice

accompanying the report of the time allowed for commencing a proceeding.

2. A report adequately discloses the existence of a potential claim for breach of trust if it

provides sufficient information so that the beneficiary or representative knows of the

potential claim or should have inquired into its existence.

3. If subsection 1 does not apply, a judicial proceeding by a beneficiary against a trustee

for breach of trust must be commenced within five years after whichever occurs first:

the removal, resignation, or death of the trustee; the termination of the beneficiary's

interest in the trust; or the termination of the trust.
N.D. Cent. Code § 59-04.2-18 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-18
59-04.2-18. (410) Liquidating asset
Status: in_force

59-04.2-18. (410) Liquidating asset

1. In this section, "liquidating asset" means an asset whose value will diminish or

terminate because the asset is expected to produce receipts for a period of limited

duration. The term includes a leasehold, patent, copyright, royalty right, and right to

receive payments during a period of more than one year under an arrangement that

does not provide for the payment of interest on the unpaid balance. The term does not

include a payment subject to section 59-04.2-17, resources subject to section

59-04.2-19, timber subject to section 59-04.2-20, an activity subject to section

59-04.2-22, an asset subject to section 59-04.2-23, or any asset for which the trustee

establishes a reserve for depreciation under section 59-04.2-26.

2. A trustee shall allocate to income ten percent of the receipts from a liquidating asset

and the balance to principal.
N.D. Cent. Code § 59-16-02 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-02
59-16-02. (802) Duty of loyalty
Status: in_force

59-16-02. (802) Duty of loyalty

1. A trustee shall administer the trust solely in the interests of the beneficiaries.

2. Subject to the rights of persons dealing with or assisting the trustee as provided in

section 59-18-12, a sale, encumbrance, or other transaction involving the investment

or management of trust property entered into by the trustee for the trustee's own

personal account or which is otherwise affected by a conflict between the trustee's

fiduciary and personal interests is voidable by a beneficiary affected by the transaction

unless the transaction was authorized by the terms of the trust; the transaction was

approved by the court; the beneficiary did not commence a judicial proceeding within

the time allowed by section 59-18-05; the beneficiary consented to the trustee's

conduct, ratified the transaction, or released the trustee in compliance with section

59-18-09; or the transaction involves a contract entered into or claim acquired by the

trustee before the person became or contemplated becoming trustee.

3. A sale, encumbrance, or other transaction involving the investment or management of

trust property is presumed to be affected by a conflict between personal and fiduciary

interests if it is entered into by the trustee with the trustee's spouse; the trustee's

descendants, siblings, parents, or their spouses; an agent or attorney of the trustee; or

a corporation or other person or enterprise in which the trustee, or a person that owns

a significant interest in the trustee, has an interest that might affect the trustee's best

judgment.

4. A transaction between a trustee and a beneficiary that does not concern trust property

but that occurs during the existence of the trust or while the trustee retains significant

influence over the beneficiary and from which the trustee obtains an advantage is

voidable by the beneficiary unless the trustee establishes that the transaction was fair

to the beneficiary.

5. A transaction not concerning trust property in which the trustee engages in the

trustee's individual capacity involves a conflict between personal and fiduciary

interests if the transaction concerns an opportunity properly belonging to the trust.

6. An investment by a trustee in securities of an investment company or investment trust

to which the trustee, or its affiliate, provides services in a capacity other than as trustee

is not presumed to be affected by a conflict between personal and fiduciary interests if

the investment complies with the prudent investor rule of chapter 59-17. In addition to

its compensation for acting as trustee, the trustee may be compensated by the

investment company or investment trust for providing those services out of fees

charged to the trust. If the trustee receives compensation from the investment

company or investment trust for providing investment advisory or investment

management services, the trustee at least annually shall notify the persons entitled

under section 59-16-13 to receive a copy of the trustee's annual report of the rate and

method by which that compensation was determined.

7. In voting shares of stock or in exercising powers of control over similar interests in

other forms of enterprise, the trustee shall act in the best interests of the beneficiaries.

If the trust is the sole owner of a corporation or other form of enterprise, the trustee

shall elect or appoint directors or other managers who will manage the corporation or

enterprise in the best interests of the beneficiaries.

8. If fair to the beneficiaries, an agreement between a trustee and a beneficiary relating

to the appointment or compensation of the trustee; payment of reasonable

compensation to the trustee; a transaction between a trust and another trust,

decedent's estate, or conservatorship of which the trustee is a fiduciary or in which a

beneficiary has an interest; a deposit of trust money in a regulated financial service

institution operated by the trustee; or an advance by the trustee of money for the

protection of the trust is not precluded by this section.

9. The court may appoint a special fiduciary to make a decision with respect to any

proposed transaction that might violate this section if entered into by the trustee.
N.D. Cent. Code § 59-10.1-04 — ND Code / Title 59 / Chapter 59-10.1 / Section 59-10.1-04
59-10.1-04. Findings
Status: in_force

59-10.1-04. Findings

If the court finds the settlor has executed the trust instrument and had the requisite capacity,

the court shall declare the trust to be valid. An adjudication that a trust is valid is binding on the

parties. If the court finds a trust or amendment to be invalid, the challenged trust or amendment

is ineffective as of a date and to the extent determined by the court.
N.D. Cent. Code § 59-18-07 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-07
59-18-07. (1007) Event affecting administration or distribution
Status: in_force

59-18-07. (1007) Event affecting administration or distribution

If the happening of an event, including marriage, divorce, performance of educational

requirements, or death, affects the administration or distribution of a trust, a trustee who has

exercised reasonable care to ascertain the happening of the event is not liable for a loss

resulting from the trustee's lack of knowledge.
N.D. Cent. Code § 59-10-02 — ND Code / Title 59 / Chapter 59-10 / Section 59-10-02
59-10-02. (202) Jurisdiction over trustee and beneficiary
Status: in_force

59-10-02. (202) Jurisdiction over trustee and beneficiary

1. By accepting the trusteeship of a trust having its principal place of administration in

this state or by moving the principal place of administration to this state, the trustee

submits personally to the jurisdiction of the courts of this state regarding any matter

involving the trust.

2. With respect to their interests in the trust, the beneficiaries of a trust having its

principal place of administration in this state are subject to the jurisdiction of the courts

of this state regarding any matter involving the trust. By accepting a distribution from

the trust, the recipient submits personally to the jurisdiction of the courts of this state

regarding any matter involving the trust.

3. This section does not preclude other methods of obtaining jurisdiction over a trustee,

beneficiary, or other person receiving property from the trust.
N.D. Cent. Code § 59-16.3-10 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-10
59-16.3-10. Spouse may compel reconversion to income trust for certain trusts - Written instrument required
Status: in_force

59-16.3-10. Spouse may compel reconversion to income trust for certain trusts -

Written instrument required.

In the case of a trust for which a marital deduction has been taken for federal tax purpose

under sections 2056 and 2523 of the Internal Revenue Code, the spouse otherwise entitled to

receive the net income of the trust, by written instrument delivered to the trustee, may compel

the reconversion during the spouse's lifetime of the trust from a total return unitrust to an income

trust, notwithstanding contrary provisions in this chapter.
N.D. Cent. Code § 59-18-11 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-11
59-18-11. (1011) Interest as general partner
Status: in_force

59-18-11. (1011) Interest as general partner

1. Except as otherwise provided in subsection 3 or unless personal liability is imposed in

the contract, a trustee who holds an interest as a general partner in a general or

limited partnership is not personally liable on a contract entered into by the partnership

after the trust's acquisition of the interest if the fiduciary capacity was disclosed:

a. In the contract;

b. In a registration of the partnership as a limited liability partnership filed pursuant

to chapter 45-22 in which the trustee is listed as a managing partner; or

c. In a certificate of limited liability limited partnership filed pursuant to chapter 45-23

in which the trustee is listed as a general partner.

2. Except as otherwise provided in subsection 3, a trustee who holds an interest as a

general partner is not personally liable for torts committed by the partnership or for

obligations arising from ownership or control of the interest unless the trustee is

personally at fault.

3. The immunity provided by this section does not apply if an interest in the partnership is

held by the trustee in a capacity other than that of trustee or is held by the trustee's

spouse or one or more of the trustee's descendants, siblings, or parents, or the spouse

of any of them.

4. If the trustee of a revocable trust holds an interest as a general partner, the settlor is

personally liable for contracts and other obligations of the partnership as if the settlor

were a general partner.
N.D. Cent. Code § 59-18-01 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-01
59-18-01. (1001) Remedies for breach of trust
Status: in_force

59-18-01. (1001) Remedies for breach of trust

1. A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.

2. To remedy a breach of trust that has occurred or may occur, the court may compel the

trustee to perform the trustee's duties; enjoin the trustee from committing a breach of

trust; compel the trustee to redress a breach of trust by paying money, restoring

property, or other means; order a trustee to account; appoint a special fiduciary to take

possession of the trust property and administer the trust; suspend the trustee; remove

the trustee as provided in section 59-15-06; reduce or deny compensation to the

trustee; subject to section 59-18-12, void an act of the trustee, impose a lien or a

constructive trust on trust property, or trace trust property wrongfully disposed of and

recover the property or its proceeds; or order any other appropriate relief.
N.D. Cent. Code § 59-16.3-11 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-11
59-16.3-11. Applicability of chapter
Status: in_force

59-16.3-11. Applicability of chapter

This chapter must be construed as pertaining to the administration of a trust and must be

available to a trust that is administered in the state under state law unless:

1. The governing instrument reflects an intention that the current beneficiary or

beneficiaries are to receive an amount other than a reasonable current return from the

trust;

2. One or more persons to whom the trustee could distribute income have a power of

withdrawal over the trust which is not subject to an ascertainable standard under

sections 2041 and 2514 of the Internal Revenue Code, or which can be exercised to

discharge a duty of support the person possesses; or

3. The governing instrument expressly prohibits use of this chapter by specific reference

to the chapter. A provision in the governing instrument that "the provisions of this

chapter, or any corresponding provision of future law, may not be used in the

administration of this trust" are sufficient to preclude use of this chapter.
N.D. Cent. Code § 59-11-04 — ND Code / Title 59 / Chapter 59-11 / Section 59-11-04
59-11-04. (304) Representation by person having substantially identical interest
Status: in_force

59-11-04. (304) Representation by person having substantially identical interest

Unless otherwise represented, a minor, incapacitated or unborn individual, or a person

whose identity or location is unknown and not reasonably ascertainable, may be represented by

and bound by another having a substantially identical interest with respect to the particular

question or dispute, but only to the extent there is no conflict of interest between the

representative and the person represented with respect to the particular question or dispute.
N.D. Cent. Code § 59-13-06 — ND Code / Title 59 / Chapter 59-13 / Section 59-13-06
59-13-06. (506) Overdue distribution
Status: in_force

59-13-06. (506) Overdue distribution

1. In this section, "mandatory distribution" means a distribution of income or principal

which the trustee is required to make to a beneficiary under the terms of the trust,

including a distribution upon termination of the trust. The term does not include a

distribution subject to the exercise of the trustee's discretion even if:

a. The discretion is expressed in the form of a standard of distribution; or

b. The terms of the trust authorizing a distribution couple language of discretion with

language of direction.

2. Whether or not a trust contains a spendthrift provision, a creditor or assignee of a

beneficiary may reach a mandatory distribution of income or principal, including a

distribution upon termination of the trust, if the trustee has not made the distribution to

the beneficiary within a reasonable time after the designated distribution date.
N.D. Cent. Code § 59-13-03 — ND Code / Title 59 / Chapter 59-13 / Section 59-13-03
59-13-03. (503) Exceptions to spendthrift provision
Status: in_force

59-13-03. (503) Exceptions to spendthrift provision

1. In this section, "child" includes any person for whom an order or judgment for child

support has been entered by a court of competent jurisdiction.

2. A spendthrift provision is unenforceable against:

a. A beneficiary's child, spouse, or former spouse who has a judgment or court

order against the beneficiary for support or maintenance;

b. A judgment creditor who has provided services for the protection of a

beneficiary's interest in the trust; and

c. A claim of this state or the United States to the extent a statute of this state or

federal law so provides.

3. The exceptions contained in subsection 2 do not apply to a self-settled special needs

trust or a third-party special needs trust under chapter 59-08 nor to any trust that

meets the qualifications of 42 U.S.C. 1396p(d).

4. A claimant against which a spendthrift provision cannot be enforced may obtain from a

court an order attaching present or future distributions to or for the benefit of the

beneficiary. The court may limit the award to such relief as is appropriate under the

circumstances. If there is more than one permissible distributee, the court may grant

such relief as is equitable.
N.D. Cent. Code § 59-14-01 — ND Code / Title 59 / Chapter 59-14 / Section 59-14-01
59-14-01. (601) Capacity of settlor of revocable trust
Status: repealed

59-14-01. (601) Capacity of settlor of revocable trust

Repealed by S.L. 2017, ch. 416, § 11.
N.D. Cent. Code § 59-16.3-12 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-12
59-16.3-12. Trustee acting in good faith not liable - Remedy
Status: in_force

59-16.3-12. Trustee acting in good faith not liable - Remedy

A trustee or disinterested person who in good faith takes or fails to take any action under

this chapter is not liable to any person affected by that action or inaction, regardless of whether

the person received written notice as provided in this chapter and regardless of whether the

person was under a legal disability at the time of the delivery of the notice. The person's

exclusive remedy is to obtain an order of the court directing the trustee to convert an income

trust to a total return unitrust, to reconvert from a total return unitrust to an income trust, or to

change the percentage used to calculate the unitrust amount.
N.D. Cent. Code § 59-08-03 — ND Code / Title 59 / Chapter 59-08 / Section 59-08-03
59-08-03. Self-settled special needs trusts
Status: in_force

59-08-03. Self-settled special needs trusts

The district court may authorize the creation and funding of self-settled special needs trusts.
N.D. Cent. Code § 59-16.3-03 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-03
59-16.3-03. Interested trustee's authority over actions enumerated in chapter 59-16.3
Status: in_force

59-16.3-03. Interested trustee's authority over actions enumerated in chapter 59-16.3

If there is not a trustee of the trust other than an interested trustee, the interested trustee, or

if two or more persons are acting as trustee and are interested trustees, a majority of those

interested trustees, without the approval of a court, may take such action as provided in so long

as the trustee appoints a disinterested person who, in its sole discretion, but acting in a fiduciary

capacity, determines for the trustee:

1. The percentage to be used to calculate the unitrust amount;

2. The method to be used in determining the fair market value of the trust;

3. Which assets, if any, are to be excluded in determining the unitrust amount; and

4. Complies with subsections 1 through 4 of section 59-16.3-02.
N.D. Cent. Code § 59-22-13 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-13
59-22-13. (401) Uniformity of application and construction
Status: in_force

59-22-13. (401) Uniformity of application and construction

In applying and construing this chapter, a court shall consider the promotion of uniformity of

the law among the states that enact it.
N.D. Cent. Code § 59-09-10 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-10
59-09-10. (110) Others treated as qualified beneficiaries
Status: in_force

59-09-10. (110) Others treated as qualified beneficiaries

1. A charitable organization expressly designated to receive distributions under the terms

of a charitable trust has the rights of a qualified beneficiary under chapters 59-09,

59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19 if the

charitable organization, on the date the charitable organization's qualification is being

determined:

a. Is a permissible distributee of trust income or principal;

b. Would be a permissible distributee of trust income or principal upon the

termination of the interests of other distributees or permissible distributees then

receiving or eligible to receive distributions; or

c. Would be a permissible distributee of trust income or principal if the trust

terminated on that date.

2. A person appointed to enforce a trust created for the care of an animal or another

noncharitable purpose as provided in section 59-12-08 or 59-12-09 has the rights of a

qualified beneficiary under chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15,

59-16, 59-17, 59-18, and 59-19.

3. The attorney general of this state has the rights of a qualified beneficiary with respect

to a charitable trust having its principal place of administration in this state.
N.D. Cent. Code § 59-12-06 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-06
59-12-06. (406) Creation of trust induced by fraud, duress, or undue influence
Status: in_force

59-12-06. (406) Creation of trust induced by fraud, duress, or undue influence

A trust is void or subject to reformation by the court to the extent its creation was induced by

fraud, duress, or undue influence.
N.D. Cent. Code § 59-16-01 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-01
59-16-01. (801) Duty to administer trust
Status: in_force

59-16-01. (801) Duty to administer trust

Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in

accordance with its purposes and in accordance with chapters 59-09, 59-10, 59-11, 59-12,

59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19.
N.D. Cent. Code § 59-16-17 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-17
59-16-17. (817) Distribution upon termination
Status: in_force

59-16-17. (817) Distribution upon termination

1. Upon termination or partial termination of a trust, the trustee may send to the

beneficiaries, and the attorney general in the case of a charitable trust, a proposal for

distribution. The right of any beneficiary, or the attorney general in the case of a

charitable trust, to object to the proposed distribution terminates if the beneficiary, or

the attorney general in the case of a charitable trust, does not notify the trustee of an

objection within thirty days after the proposal was sent, but only if the proposal

informed the beneficiary, or the attorney general in the case of a charitable trust, of the

right to object and of the time allowed for objection.

2. Upon the occurrence of an event terminating or partially terminating a trust, the trustee

shall proceed expeditiously to distribute the trust property to the persons entitled to it,

subject to the right of the trustee to retain a reasonable reserve for the payment of

debts, expenses, and taxes.

3. A release by a beneficiary of a trustee from liability for breach of trust is invalid to the

extent it was induced by improper conduct of the trustee or the beneficiary, at the time

of the release, did not know of the beneficiary's rights or of the material facts relating to

the breach.
N.D. Cent. Code § 59-16.1-11 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-11
59-16.1-11. Subsequently discovered assets
Status: in_force

59-16.1-11. Subsequently discovered assets

Unless the authorized trustee provides otherwise:

1. The appointment of all the assets comprising the principal of the invaded trust to an

appointed trust must include subsequently discovered assets of the invaded trust and

undistributed principal of the invaded trust acquired after the appointment to the

appointed trust; and

2. The appointment of part but not all of the assets comprising the principal of the

invaded trust to an appointed trust may not include subsequently discovered assets

belonging to the invaded trust and principal paid to or acquired by the invaded trust

after the appointment to the appointed trust. These assets must remain the assets of

the invaded trust.
N.D. Cent. Code § 59-15-08 — ND Code / Title 59 / Chapter 59-15 / Section 59-15-08
59-15-08. (708) Compensation of trustee
Status: in_force

59-15-08. (708) Compensation of trustee

1. If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to

compensation that is reasonable under the circumstances.

2. If the terms of a trust specify the trustee's compensation, the trustee is entitled to be

compensated as specified, but the court may allow more or less compensation if the

duties of the trustee are substantially different from those contemplated when the trust

was created or the compensation specified by the terms of the trust would be

unreasonably low or high.
N.D. Cent. Code § 59-04.2-16 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-16
59-04.2-16. (408) Insubstantial allocations not required
Status: reserved

59-04.2-16. (408) Insubstantial allocations not required

Reserved.
N.D. Cent. Code § 59-17-02 — ND Code / Title 59 / Chapter 59-17 / Section 59-17-02
59-17-02. Standard of care - Portfolio strategy - Risk and return objectives
Status: in_force

59-17-02. Standard of care - Portfolio strategy - Risk and return objectives

1. A trustee shall invest and manage trust assets as a prudent investor would, by

considering the purposes, terms, distribution requirements, and other circumstances of

the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill,

and caution.

2. A trustee's investment and management decisions respecting individual assets must

be evaluated not in isolation but in the context of the trust portfolio as a whole and as a

part of an overall investment strategy having risk and return objectives reasonably

suited to the trust.

3. Among circumstances a trustee shall consider in investing and managing trust assets

are any of the following that are relevant to the trust or its beneficiaries:

a. General economic conditions;

b. The possible effect of inflation or deflation;

c. The expected tax consequences of investment decisions or strategies;

d. The role that each investment or course of action plays within the overall trust

portfolio, which may include financial assets, interests in closely held enterprises,

tangible and intangible personal property, and real property;

e. The expected total return from income and the appreciation of capital;

f. Other resources of the beneficiaries;

g. Needs for liquidity, regularity of income, and preservation or appreciation of

capital; and

h. An asset's special relationship or special value, if any, to the purposes of the trust

or to one or more of the beneficiaries.

4. A trustee shall make a reasonable effort to verify facts relevant to the investment and

management of trust assets.

5. A trustee may invest in any kind of property or type of investment consistent with the

standards of this title.
N.D. Cent. Code § 59-16.3-04 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-04
59-16.3-04. Trustee may petition court - Appointment of disinterested person
Status: in_force

59-16.3-04. Trustee may petition court - Appointment of disinterested person

If a trustee desires to convert an income trust to a total return unitrust, reconvert a total

return unitrust to an income trust, or change the percentage used to calculate the unitrust

amount and the method used to determine the fair market value of the trust, but does not have

the ability to, or elects not to do it under sections 59-16.3-02 and 59-16.3-03, or if the trustee

receives a written objection within the applicable period, the trustee may petition the court for

such order as the trustee deems appropriate. If there is only one trustee of such trust and the

trustee is an interested trustee, or if there are two or more trustees of such trust and a majority

of them are interested trustees, the court, or on the petition of the trustee or trustees, or any

person interested in the trust, may appoint a disinterested person who, acting in a fiduciary

capacity, shall present the information to the court as is necessary to enable the court to make

its determination.
N.D. Cent. Code § 59-16.1-06 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-06
59-16.1-06. Special power of appointment
Status: in_force

59-16.1-06. Special power of appointment

An exercise of the power to invade trust principal under this chapter is considered to be the

exercise of a special power of appointment.
N.D. Cent. Code § 59-15-07 — ND Code / Title 59 / Chapter 59-15 / Section 59-15-07
59-15-07. (707) Delivery of property by former trustee
Status: in_force

59-15-07. (707) Delivery of property by former trustee

1. Unless a cotrustee remains in office or the court otherwise orders, and until the trust

property is delivered to a successor trustee or other person entitled to it, a trustee who

has resigned or been removed has the duties of a trustee and the powers necessary

to protect the trust property.

2. A trustee who has resigned or been removed shall proceed expeditiously to deliver the

trust property within the trustee's possession to the cotrustee, successor trustee, or

other person entitled to the property.

3. Title to all trust property must be owned by and vested in any successor trustee

without any conveyance, transfer, or assignment by the prior trustee.
N.D. Cent. Code § 59-18-10 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-10
59-18-10. (1010) Limitation on personal liability of trustee
Status: in_force

59-18-10. (1010) Limitation on personal liability of trustee

1. Except as otherwise provided in the contract, a trustee is not personally liable on a

contract properly entered into in the trustee's fiduciary capacity in the course of

administering the trust if the trustee in the contract disclosed the fiduciary capacity.

The addition of the phrase "trustee" or "as trustee" or a similar designation to the

signature of a trustee on a written contract is considered prima facie evidence of a

disclosure of a fiduciary capacity.

2. A trustee is personally liable for torts committed in the course of administering a trust

or for obligations arising from ownership or control of trust property, including liability

for violation of environmental law, only if the trustee is personally at fault.

3. A claim based on a contract entered into by a trustee in the trustee's fiduciary capacity,

on an obligation arising from ownership or control of trust property, or on a tort

committed in the course of administering a trust, may be asserted in a judicial

proceeding against the trustee in the trustee's fiduciary capacity, whether or not the

trustee is personally liable for the claim.

4. Whenever a trust instrument reserves to the settlor, or vests in an advisory or

investment committee, or in any other person, including one or more cotrustees to the

exclusion of the trustee or to the exclusion of one or more of several trustees, authority

to direct the making or retention of any investment, the excluded trustee or trustees

are not liable, either individually or as a fiduciary, for any loss resulting from the making

or retention of any investment pursuant to such direction.

5. In the absence of actual knowledge or information that would cause a reasonable

trustee to inquire further, a trustee may not be held liable for failure to take necessary

steps to compel the redress of any breach of trust or fiduciary duty by any predecessor

personal representative, trustee, or other fiduciary. This section may not be construed

to limit the fiduciary liability of any trustee for the acts or omissions of the trustee with

respect to the trust estate.
N.D. Cent. Code § 59-22-08 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-08
59-22-08. (206) Notarization and acknowledgment
Status: in_force

59-22-08. (206) Notarization and acknowledgment

If any other provision of law requires a signature or record to be notarized, acknowledged,

verified, or made under oath, the requirement is satisfied with respect to an electronic

nontestamentary estate planning document if an individual authorized to perform the

notarization, acknowledgment, verification, or oath attaches or logically associates the

individual's electronic signature on the document together with all other information required to

be included under law.
N.D. Cent. Code § 59-12-05 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-05
59-12-05. (405) Charitable purposes - Enforcement
Status: in_force

59-12-05. (405) Charitable purposes - Enforcement

1. A charitable trust may be created for the relief of poverty, the advancement of

education or religion, the promotion of health, governmental or municipal purposes, or

other purposes the achievement of which is beneficial to the community.

2. If the terms of a charitable trust do not indicate a particular charitable purpose or

beneficiary, the court may select one or more charitable purposes or beneficiaries. The

selection must be consistent with the settlor's intention to the extent it can be

ascertained.

3. The settlor of a charitable trust or the attorney general, among others, may maintain a

proceeding to enforce the trust.

4. Chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and

59-19 do not impair the rights and powers of the attorney general with respect to any

trust.

5. In all cases of charitable trusts, the attorney general and the state's attorney of the

county in which the trust is located are interested persons with respect to the trust

estate.
N.D. Cent. Code § 59-12-14 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-14
59-12-14. (414) Modification or termination of uneconomic trust
Status: in_force

59-12-14. (414) Modification or termination of uneconomic trust

1. After notice to the qualified beneficiaries, the trustee of a trust consisting of trust

property having a total value less than one hundred thousand dollars may terminate

the trust if the trustee concludes that the value of the trust property is insufficient to

justify the cost of administration.

2. The court may modify or terminate a trust or remove the trustee and appoint a different

trustee if the court determines that the value of the trust property is insufficient to justify

the cost of administration.

3. Upon termination of a trust under this section, the trustee shall distribute the trust

property in a manner consistent with the purposes of the trust.

4. This section does not apply to an easement for conservation or preservation.
N.D. Cent. Code § 59-18-02 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-02
59-18-02. (1002) Damages for breach of trust
Status: in_force

59-18-02. (1002) Damages for breach of trust

1. A trustee who commits a breach of trust is liable to the beneficiaries affected for the

greater of the amount required to restore the value of the trust property and trust

distributions to what they would have been had the breach not occurred or the profit

the trustee made by reason of the breach.

2. Except as otherwise provided in this subsection, if more than one trustee is liable to

the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other

trustee or trustees. A trustee is not entitled to contribution if the trustee was

substantially more at fault than another trustee or if the trustee committed the breach

of trust in bad faith or with reckless indifference to the purposes of the trust or the

interests of the beneficiaries. A trustee who received a benefit from the breach of trust

is not entitled to contribution from another trustee to the extent of the benefit received.
N.D. Cent. Code § 59-17-03 — ND Code / Title 59 / Chapter 59-17 / Section 59-17-03
59-17-03. Diversification
Status: in_force

59-17-03. Diversification

A trustee shall diversify the investments of the trust unless the trustee reasonably

determines that, because of special circumstances, the purposes of the trust are better served

without diversifying.
N.D. Cent. Code § 59-17-06 — ND Code / Title 59 / Chapter 59-17 / Section 59-17-06
59-17-06. Language invoking standard
Status: in_force

59-17-06. Language invoking standard

The following terms or comparable language in the provisions of a trust, unless otherwise

limited or modified, authorizes any investment or strategy permitted under this chapter:

investments permissible by law for investment of trust funds, legal investments, authorized

investments, using the judgment and care under the circumstances then prevailing that persons

of prudence, discretion, and intelligence exercise in the management of their own affairs, not in

regard to speculation but in regard to the permanent disposition of their funds, considering the

probable income as well as the probable safety of their capital, prudent man rule, prudent

trustee rule, prudent person rule, and prudent investor rule.
N.D. Cent. Code § 59-08-01 — ND Code / Title 59 / Chapter 59-08 / Section 59-08-01
59-08-01. Definitions
Status: in_force

59-08-01. Definitions

As used in this chapter, unless the context otherwise requires:

1. "Individual with a disability" means an individual who, before creation of a third-party

special needs trust or a self-settled special needs trust for that individual's benefit, is

considered to be an individual with a disability as defined in 42 U.S.C. 1382c(a)(3).

2. "Self-settled special needs trust" means a trust created by an individual with a

disability after August 10, 1993, which qualifies under 42 U.S.C. 1396p(d)(4).

3. "Third-party special needs trust" means a trust that does not make an individual with a

disability ineligible for publicly funded benefits while maintaining assets in that trust

and which is created for the benefit of an individual with a disability and funded by

someone other than the trust beneficiary, the beneficiary's spouse, a parent of a minor

beneficiary, or anyone obligated to pay any sum for damages or any other purpose to

or for the benefit of the trust beneficiary under the terms of a settlement agreement or

judgment.
N.D. Cent. Code § 59-09-09 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-09
59-09-09. (109) Methods and waiver of notice
Status: in_force

59-09-09. (109) Methods and waiver of notice

1. Notice to a person under chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15,

59-16, 59-17, 59-18, and 59-19 or the sending of a document to a person under

chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and

59-19 must be accomplished in a manner reasonably suitable under the

circumstances and likely to result in receipt of the notice or document. Permissible

methods of notice or for sending a document include first-class mail, personal delivery,

delivery to the person's last-known place of residence or place of business, or a

properly directed electronic message.

2. Notice otherwise required under chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14,

59-15, 59-16, 59-17, 59-18, and 59-19 or a document otherwise required to be sent

under chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18,

and 59-19 does not need to be provided to a person whose identity or location is

unknown to and not reasonably ascertainable by the trustee.

3. Notice under chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17,

59-18, and 59-19 or the sending of a document under chapters 59-09, 59-10, 59-11,

59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19 may be waived by the

person to be notified or sent the document.

4. Notice of a judicial proceeding must be given as provided in the applicable North

Dakota Rules of Civil Procedure or as provided under section 30.1-03-01.
N.D. Cent. Code § 59-04.2-27 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-27
59-04.2-27. (504) Transfers from income to reimburse principal
Status: in_force

59-04.2-27. (504) Transfers from income to reimburse principal

1. If a trustee makes or expects to make a principal disbursement described in this

section, the trustee may transfer an appropriate amount from income to principal in

one or more accounting periods to reimburse principal or to provide a reserve for

future principal disbursements.

2. Principal disbursements to which subsection 1 applies include the following, but only to

the extent that the trustee has not been and does not expect to be reimbursed by a

third party:

a. An amount chargeable to income but paid from principal because it is unusually

large, including extraordinary repairs;

b. A capital improvement to a principal asset, whether in the form of changes to an

existing asset or the construction of a new asset, including special assessments;

c. Disbursements made to prepare property for rental, including tenant allowances,

leasehold improvements, and broker's commissions;

d. Periodic payments on an obligation secured by a principal asset to the extent that

the amount transferred from income to principal for depreciation is less than the

periodic payments; and

e. Disbursements described in subdivision g of subsection 1 of section 59-04.2-25.

3. If the asset whose ownership gives rise to the disbursements becomes subject to a

successive income interest after an income interest ends, a trustee may continue to

transfer amounts from income to principal as provided in subsection 1.
N.D. Cent. Code § 59-09-04 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-04
59-09-04. (104) Knowledge
Status: in_force

59-09-04. (104) Knowledge

1. Subject to subsection 2, a person has knowledge of a fact if the person has actual

knowledge of a fact; has received a notice or notification of a fact; or from all the facts

and circumstances known to the person at the time in question, has reason to know a

fact.

2. An organization that conducts activities through employees has notice or knowledge of

a fact involving a trust only from the time the information was received by an employee

having responsibility to act for the trust, or would have been brought to the employee's

attention if the organization had exercised reasonable diligence. An organization

exercises reasonable diligence if the organization maintains reasonable routines for

communicating significant information to the employee having responsibility to act for

the trust and there is reasonable compliance with the routines. Reasonable diligence

does not require an employee of the organization to communicate information unless

the communication is part of the individual's regular duties or the individual knows a

matter involving the trust would be materially affected by the information.
N.D. Cent. Code § 59-09-02 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-02
59-09-02. (102) Scope
Status: in_force

59-09-02. (102) Scope

1. Except as provided in subsection 2, chapters 59-09, 59-10, 59-11, 59-12, 59-13,

59-14, 59-15, 59-16, 59-17, 59-18, and 59-19 apply to express trusts, whether

charitable or noncharitable and testamentary or inter vivos, and to trusts created

pursuant to a statute or a judgment or decree that requires the trust to be administered

in the manner of an express trust.

2. Chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and

59-19 do not apply to:

a. A trust account established under a qualified tuition savings program pursuant to

section 6-09-38.

b. Trust accounts maintained on behalf of clients or customers by licensed service

professionals, including trust accounts maintained by attorneys pursuant to the

North Dakota Rules of Professional Conduct and by real estate brokers pursuant

to chapter 43-23.

c. An endowment care fund established by a cemetery authority pursuant to chapter

23-21.

d. Funds maintained by public bodies as defined by chapter 1-07 or other

governmental unit entities.

e. Trust funds held for a single business transaction or an escrow arrangement.

f. Trusts created by a depository agreement with a financial institution.

g. An account maintained under the North Dakota Uniform Transfers to Minors Act

as contained in chapter 47-24.1.

h. A fund maintained pursuant to court order in conjunction with a bankruptcy

proceeding or a business liquidation.

i. A voting trust described in chapter 10-19.1.

j. Funds maintained to manage proceeds from class actions.

k. A trust created solely to secure the performance of an obligation.

l. A trust created on behalf of a resident of a residential facility.

m. A trust managed by a nonprofit association for disabled individuals under

42 U.S.C. 1396p(d)(4), as in effect on the effective date of chapters 59-09, 59-10,

59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19 and under the

rules adopted by the department of health and human services.

n. A resulting or constructive trust.
N.D. Cent. Code § 59-04.2-23 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-23
59-04.2-23. (415) Asset-backed securities
Status: in_force

59-04.2-23. (415) Asset-backed securities

1. In this section, "asset-backed security" means an asset whose value is based upon

the right it gives the owner to receive distributions from the proceeds of financial

assets that provide collateral for the security. The term includes an asset that gives the

owner the right to receive from the collateral financial assets only the interest or other

current return or only the proceeds other than interest or current return. The term does

not include an asset to which section 59-04.2-09 or 59-04.2-17 applies.

2. If a trust receives a payment from interest or other current return and from other

proceeds of the collateral financial assets, the trustee shall allocate to income the

portion of the payment which the payer identifies as being from interest or other

current return and shall allocate the balance of the payment to principal.

3. If a trust receives one or more payments in exchange for the trust's entire interest in an

asset-backed security in one accounting period, the trustee shall allocate the

payments to principal. If a payment is one of a series of payments that will result in the

liquidation of the trust's interest in the security over more than one accounting period,

the trustee shall allocate ten percent of the payment to income and the balance to

principal.
N.D. Cent. Code § 59-16.1-15 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-15
59-16.1-15. Power clarified
Status: in_force

59-16.1-15. Power clarified

A power authorized under sections 59-16.1-04 and 59-16.1-05 may be exercised subject to

the provisions of section 59-16.1-10, unless expressly prohibited by the terms of the governing

instrument or by the provisions of section 59-16.1-10, but a general prohibition of the

amendment or revocation of the invaded trust or a provision that constituting a spendthrift

clause does not preclude the exercise of a power under sections 59-16.1-04 and 59-16.1-05.
N.D. Cent. Code § 59-17-01 — ND Code / Title 59 / Chapter 59-17 / Section 59-17-01
59-17-01. Prudent investor rule
Status: in_force

59-17-01. Prudent investor rule

1. Except as otherwise provided in subsection 2, a trustee who invests and manages

trust assets owes a duty to the beneficiaries of the trust to comply with the prudent

investor rule set forth in sections 59-16-02, 59-16-03, 59-16-05, 59-16-06, and

59-16-07 and in this chapter.

2. The prudent investor rule, a default rule, may be expanded, restricted, eliminated, or

otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to

the extent that the trustee acted in reasonable reliance on the provisions of the trust.
N.D. Cent. Code § 59-17-05 — ND Code / Title 59 / Chapter 59-17 / Section 59-17-05
59-17-05. Reviewing compliance
Status: in_force

59-17-05. Reviewing compliance

Compliance with the prudent investor rule is determined in light of the facts and

circumstances existing at the time of a trustee's decision or action and not by hindsight.
N.D. Cent. Code § 59-04.2-15 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-15
59-04.2-15. (407) Insurance policies and similar contracts
Status: in_force

59-04.2-15. (407) Insurance policies and similar contracts

1. Except as otherwise provided in subsection 2, a trustee shall allocate to principal the

proceeds of a life insurance policy or other contract in which the trust or its trustee is

named as beneficiary, including a contract that insures the trust or its trustee against

loss for damage to, destruction of, or loss of title to a trust asset. The trustee shall

allocate dividends on an insurance policy to income if the premiums on the policy are

paid from income, and to principal if the premiums are paid from principal.

2. A trustee shall allocate to income proceeds of a contract that insures the trustee

against loss of occupancy or other use by an income beneficiary, loss of income, or,

subject to section 59-04.2-11, loss of profits from a business.

3. This section does not apply to a contract to which section 59-04.2-17 applies.
N.D. Cent. Code § 59-16-07 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-07
59-16-07. (807) Delegation by trustee
Status: in_force

59-16-07. (807) Delegation by trustee

1. A trustee may delegate duties and powers that a prudent trustee of comparable skills

could properly delegate under the circumstances. The trustee shall exercise

reasonable care, skill, and caution in selecting an agent; establishing the scope and

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

periodically reviewing the agent's actions in order to monitor the agent's performance

and compliance with the terms of the delegation.

2. In performing a delegated function, an agent owes a duty to the trust to exercise

reasonable care to comply with the terms of the delegation.

3. A trustee who complies with subsection 1 is not liable to the beneficiaries or to the trust

for an action of the agent to whom the function was delegated.

4. By accepting a delegation of powers or duties from the trustee of a trust that is subject

to the law of this state, an agent submits to the jurisdiction of the courts of this state.
N.D. Cent. Code § 59-22-01 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-01
59-22-01. (102) Definitions
Status: in_force

59-22-01. (102) Definitions

As used in this chapter:

1. "Electronic" means relating to technology having electrical, digital, magnetic, wireless,

optical, electromagnetic, or similar capabilities.

2. "Electronic record" means a record created, generated, sent, communicated, received,

or stored by electronic means.

3. "Electronic signature" means an electronic symbol or process attached to or logically

associated with a record and executed or adopted by a person with the intent to sign

the record.

4. "Information" includes data, text, images, codes, computer programs, software, and

databases.

5. "Nontestamentary estate planning document" means a record relating to estate

planning which is readable as text at the time of signing and is not a will or contained

in a will. The term:

a. Includes a record readable as text at the time of signing which creates, exercises,

modifies, releases, or revokes:

(1) A trust instrument;

(2) A trust power that under the terms of the trust requires a signed record;

(3) A certification of a trust under section 59-18-13;

(4) A durable power of attorney under chapter 30.1-30;

(5) An agent's certification of the validity of a power of attorney and the agent's

authority;

(6) A power of appointment;

(7) An advance directive, including a health care power of attorney, directive to

physicians, natural death statement, living will, and medical or physician

order for life-sustaining treatment;

(8) A record directing disposition of an individual's body after death;

(9) A nomination of a guardian for the signing individual;

(10) A nomination of a guardian for a minor child or disabled adult child;

(11) A mental health treatment declaration;

(12) A disclaimer as defined under section 30.1-10-01; and

(13) Any other record intended to carry out an individual's intent regarding

property or health care while incapacitated or on death.

b. Does not include a deed of real property, or certificate of title for a motor vehicle,

watercraft, or aircraft.

6. "Person" means an individual, estate, business or nonprofit entity, government or

governmental subdivision, agency or instrumentality, or other legal entity.

7. "Power of attorney" means a record that grants authority to an agent to act in place of

the principal, even if the term is not used in the record.

8. "Record" means information:

a. Inscribed on a tangible medium; or

b. Stored in an electronic or other medium and retrievable in perceivable form.

9. "Security procedure" means a procedure to verify an electronic signature, record, or

performance is of a specific person or to detect a change or error in an electronic

record. The term includes a procedure that uses an algorithm, code, identifying word

or number, encryption, or callback or other acknowledgment procedure.

10. "Settlor" means a person, including a testator, that creates or contributes property to a

trust.

11. "Sign" means with present intent to authenticate or adopt a record to:

a. Execute or adopt a tangible symbol; or

b. Attach to or logically associate with the record an electronic signature.

12. "State" means a state of the United States, the District of Columbia, Puerto Rico, the

United States Virgin Islands, or other territory or possession subject to the jurisdiction

of the United States. The term includes a federally recognized Indian tribe.

13. "Terms of the trust" means:

a. Except as provided under subdivision b, the manifestation of the settlor's intent

regarding a trust's provisions as:

(1) Expressed in the trust instrument; or

(2) Established by other evidence that would be admissible in a judicial

proceeding.

b. The trust's provisions as established, determined, or amended by:

(1) A trustee or other person in accordance with applicable law;

(2) A court order; or

(3) A nonjudicial settlement agreement under section 59-09-11.

14. "Trust instrument" means an instrument executed by the settlor which contains terms

of the trust, including any amendments.

15. "Will" includes a codicil and a testamentary instrument that appoints an executor,

revokes or revises another will, nominates a guardian, or expressly excludes or limits

the right of an individual or class to succeed to property of the decedent passing by

intestate succession.
N.D. Cent. Code § 59-16.1-16 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-16
59-16.1-16. Prohibitions
Status: in_force

59-16.1-16. Prohibitions

An authorized trustee may exercise a power authorized by this chapter to appoint a trust

that is a supplemental needs trust that conforms to chapter 59-08. However, an authorized

trustee may not exercise a power authorized by this chapter to effect the following:

1. To reduce, limit, or modify any beneficiary's current right to:

a. A mandatory distribution of income or principal;

b. A mandatory annuity or unitrust interest;

c. A current right to withdraw a percentage of the value of the trust; or

d. A current right to withdraw a specified dollar amount;

2. Notwithstanding subsection 2 of section 59-18-08, to decrease or indemnify against a

trustee's liability or exonerate a trustee from liability for failure to exercise reasonable

care, diligence, and prudence;

3. To alter or eliminate a provision granting another individual the right to remove or

replace the authorized trustee exercising the power under sections 59-16.1-04 or

59-16.1-05, unless notice has been provided to the persons under subsection 3 of

section 59-16.1-12, or approval is granted by a court having jurisdiction over the trust;

4. To make a binding and conclusive fixation of the value of an asset for purposes of

distribution, allocation, or otherwise;

5. To extend the term of the appointed trust beyond a permissible period of the rule

against perpetuities of the invaded trust, and an exercise of the power that extends the

term of the appointed trust beyond the permissible period of the rule against

perpetuities of the invaded trust voids the entire exercise of the power; or

6. To jeopardize:

a. The deduction or exclusion originally claimed with respect to a contribution to the

invaded trust that qualified for the annual exclusion under section 2503(b) of the

Internal Revenue Code; the marital deduction under section 2056(a) or 2523(a) of

the Internal Revenue Code; or the charitable deduction under section 170(a),

642(c), 2055(a), or 2522(a) of the Internal Revenue Code.

b. The qualification of a transfer as a direct skip under section 2642(c) of the

Internal Revenue Code; or

c. Any other specific tax benefit for which a contribution originally qualified for

income, gift, estate, or generation-skipping transfer tax purposes under the

Internal Revenue Code.
N.D. Cent. Code § 59-16.1-13 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-13
59-16.1-13. Rights of trustee
Status: in_force

59-16.1-13. Rights of trustee

This section does not abridge the right of a trustee to appoint property in further trust that

arises under the terms of the governing instrument of a trust or under any other provision of law

or under common law, or as directed by a court having jurisdiction over the trust.
N.D. Cent. Code § 59-04.2-13 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-13
59-04.2-13. (405) Rental property
Status: in_force

59-04.2-13. (405) Rental property

To the extent that a trustee accounts for receipts from rental property pursuant to this

section, the trustee shall allocate to income an amount received as rent of real or personal

property, including an amount received for cancellation or renewal of a lease. An amount

received as a refundable deposit, including a security deposit or a deposit that is to be applied

as rent for future periods, must be added to principal and held subject to the terms of the lease

and is not available for distribution to a beneficiary until the trustee's contractual obligations

have been satisfied with respect to that amount.
N.D. Cent. Code § 59-22-07 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-07
59-22-07. (205) Attribution and effect of electronic record and electronic signature
Status: in_force

59-22-07. (205) Attribution and effect of electronic record and electronic signature

1. An electronic nontestamentary estate planning document or electronic signature on an

electronic nontestamentary estate planning document is attributable to a person if it

was the act of the person. The act of the person may be shown in any manner,

including by showing the efficacy of a security procedure applied to determine the

person to which the electronic record or electronic signature was attributable.

2. The effect of attribution to a person under subsection 1 is determined from the context

and surrounding circumstances at the time the document or signature was created,

executed, or adopted, and as provided by law.
N.D. Cent. Code § 59-04.2-14 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-14
59-04.2-14. (406) Obligation to pay money
Status: in_force

59-04.2-14. (406) Obligation to pay money

1. An amount received as interest, whether determined at a fixed, variable, or floating

rate, on an obligation to pay money to the trustee, including an amount received as

consideration for prepaying principal, must be allocated to income without any

provision for amortization of premium.

2. A trustee shall allocate to principal an amount received from the sale, redemption, or

other disposition of an obligation to pay money to the trustee more than one year after

it is purchased or acquired by the trustee, including an obligation whose purchase

price or value when it is acquired is less than its value at maturity. If the obligation

matures within one year after it is purchased or acquired by the trustee, an amount

received in excess of its purchase price or its value when acquired by the trust must

be allocated to income.

3. This section does not apply to an obligation to which section 59-04.2-17, 59-04.2-18,

59-04.2-19, 59-04.2-20, 59-04.2-22, or 59-04.2-23 applies.
N.D. Cent. Code § 59-13-04 — ND Code / Title 59 / Chapter 59-13 / Section 59-13-04
59-13-04. (504) Discretionary trusts - Effect of standard
Status: in_force

59-13-04. (504) Discretionary trusts - Effect of standard

1. In this section, "child" includes any person for whom an order or judgment for child

support has been entered by a court of competent jurisdiction.

2. Except as otherwise provided in subsection 3, whether or not a trust contains a

spendthrift provision, a creditor of a beneficiary may not compel a distribution that is

subject to the trustee's discretion, even if the discretion is expressed in the form of a

standard of distribution, or the trustee has abused the discretion.

3. To the extent a trustee has not complied with a standard of distribution or has abused

a discretion, a distribution may be ordered by the court to satisfy a judgment or court

order against the beneficiary for support or maintenance of the beneficiary's child,

spouse, or former spouse and the court shall direct the trustee to pay the child,

spouse, or former spouse such amount as is equitable under the circumstances but

not more than the amount the trustee would have been required to distribute to or for

the benefit of the beneficiary had the trustee complied with the standard or not abused

the discretion.

4. This section does not limit the right of a beneficiary to maintain a judicial proceeding

against a trustee for an abuse of discretion or failure to comply with a standard for

distribution.

5. If the trustee's or cotrustee's discretion to make distributions for the trustee's or

cotrustee's own benefit is limited by an ascertainable standard, a creditor may not

reach or compel distribution of the beneficial interest except to the extent the interest

would be subject to the creditor's claim if the beneficiary was not acting as trustee or

cotrustee.
N.D. Cent. Code § 59-16-12 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-12
59-16-12. (812) Collecting trust property
Status: in_force

59-16-12. (812) Collecting trust property

A trustee shall take reasonable steps to compel a former trustee or other person to deliver

trust property to the trustee and to redress a breach of trust known to the trustee to have been

committed by a former trustee or other fiduciary.
N.D. Cent. Code § 59-16-10 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-10
59-16-10. (810) Recordkeeping and identification of trust property
Status: in_force

59-16-10. (810) Recordkeeping and identification of trust property

1. A trustee shall keep adequate records of the administration of the trust.

2. A trustee shall keep trust property separate from the trustee's own property.

3. Except as otherwise provided in subsection 4, a trustee, other than a trustee granted

trust or fiduciary powers from a federal or state authority, shall cause the trust property

to be designated so that the interest of the trust, to the extent feasible, appears in

records maintained by a party other than a trustee or beneficiary.

4. If the trustee maintains records clearly indicating the respective interests, a trustee

may invest as a whole the property of two or more separate trusts.
N.D. Cent. Code § 59-22-10 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-10
59-22-10. (208) Retention of electronic record - Original
Status: in_force

59-22-10. (208) Retention of electronic record - Original

1. Except as provided in subsection 2, if any other provision of law requires an electronic

nontestamentary estate planning document to be retained, transmitted, copied, or

filed, the requirement is satisfied by retaining, transmitting, copying, or filing an

electronic record that:

a. Accurately reflects the information in the document after the document was first

generated in final form as an electronic record or under section 59-22-11; and

b. Remains accessible to the extent required by the other law.

2. A requirement under subsection 1 to retain a record does not apply to information the

purpose of which is to enable the record to be sent, communicated, or received.

3. A person may satisfy subsection 1 by using the services of another person.

4. If any other provision of law requires a nontestamentary estate planning document to

be presented or retained in its original form, or provides consequences if a

nontestamentary estate planning document is not presented or retained in its original

form, an electronic record retained in accordance with subsection 1 satisfies the other

law.

5. This section does not preclude a governmental agency from specifying requirements

for the retention of a record subject to the agency's jurisdiction in addition to those in

this section.

6. As used in this section, "governmental agency" means an executive, legislative, or

judicial agency, department, board, commission, authority, institution, or instrumentality

of the federal government or of the state or of a county, municipality, or other political

subdivision of the state.
N.D. Cent. Code § 59-16-11 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-11
59-16-11. (811) Enforcement and defense of claims
Status: in_force

59-16-11. (811) Enforcement and defense of claims

A trustee shall take reasonable steps to enforce claims of the trust and to defend claims

against the trust.
N.D. Cent. Code § 59-18-01.1 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-01.1
59-18-01.1. Presumption against trustee
Status: in_force

59-18-01.1. Presumption against trustee

A transaction between a trustee and the trust's beneficiary during the existence of the trust

or while the influence acquired by the trustee remains by which the trustee obtains any

advantage from the trust's beneficiary is presumed to be entered by the trust's beneficiary

without sufficient consideration and under undue influence. This presumption is a rebuttable

presumption.
N.D. Cent. Code § 59-04.2-03 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-03
59-04.2-03. (104) Trustee's power to adjust
Status: in_force

59-04.2-03. (104) Trustee's power to adjust

1. A trustee may adjust between principal and income to the extent the trustee considers

necessary if the trustee invests and manages trust assets as a prudent investor, the

terms of the trust describe the amount that may or must be distributed to a beneficiary

by referring to the trust's income, and the trustee determines, after applying the rules

in subsection 1 of section 59-04.2-02 that the trustee is unable to comply with

subsection 1 of section 59-04.2-02.

a. The discretionary power of a trustee to adjust under this section may not be

interpreted to include an obligation to evaluate a trust for possible adjustment

between principal and income.

b. A trustee's inaction is presumed to be a good faith determination not to exercise

the power to adjust.

2. In deciding whether and to what extent to exercise the power conferred by

subsection 1, a trustee may consider all factors relevant to the trust and its

beneficiaries, including the following factors to the extent relevant:

a. The nature, purpose, size, and expected duration of the trust;

b. The intent of the settlor;

c. The identity and circumstances of the beneficiaries;

d. The needs for liquidity, regularity of income, and preservation and appreciation of

capital;

e. The assets held in the trust, the extent to which they consist of financial assets,

interests in closely held enterprises, tangible and intangible personal property, or

real property; the extent to which an asset is used by a beneficiary; and whether

an asset was purchased by the trustee or received from the settlor;

f. The net amount allocated to income under the other sections of this chapter and

the increase or decrease in the value of the principal assets, which the trustee

may estimate as to assets for which market values are not readily available;

g. Whether and to what extent the terms of the trust give the trustee the power to

invade principal or accumulate income or prohibit the trustee from invading

principal or accumulating income, and the extent to which the trustee has

exercised a power from time to time to invade principal or accumulate income;

h. The actual and anticipated effect of economic conditions on principal and income

and effects of inflation and deflation; and

i. The anticipated tax consequences of an adjustment.

3. A trustee may not make an adjustment:

a. That diminishes the income interest in a trust that requires all of the income to be

paid at least annually to a spouse and for which an estate tax or gift tax marital

deduction would be allowed, in whole or in part, if the trustee did not have the

power to make the adjustment;

b. That reduces the actuarial value of the income interest in a trust to which a

person transfers property with the intent to qualify for a gift tax exclusion;

c. That changes the amount payable to a beneficiary as a fixed annuity or a fixed

fraction of the value of the trust assets;

d. From an amount that is permanently set aside for charitable purposes under a will

or the terms of a trust unless both income and principal are so set aside;

e. If possessing or exercising the power to make an adjustment causes an individual

to be treated as the owner of all or part of the trust for income tax purposes, and

the individual would not be treated as the owner if the trustee did not possess the

power to make an adjustment;

f. If possessing or exercising the power to make an adjustment causes all or part of

the trust assets to be included for estate tax purposes in the estate of an

individual who has the power to remove a trustee or appoint a trustee, or both,

and the assets would not be included in the estate of the individual if the trustee

did not possess the power to make an adjustment;

g. If the trustee is a beneficiary of the trust; or

h. If the trustee is not a beneficiary, but the adjustment would benefit the trustee

directly or indirectly.

4. If subdivisions e, f, g, or h of subsection 3 apply to a trustee and there is more than

one trustee, a cotrustee to whom the provision does not apply may make the

adjustment unless the exercise of the power by the remaining trustee or trustees is not

permitted by the terms of the trust.

5. A trustee may release the entire power conferred by subsection 1 or may release only

the power to adjust from income to principal or the power to adjust from principal to

income if the trustee is uncertain about whether possessing or exercising the power

will cause a result described in subdivision a through f, or h of subsection 3 or if the

trustee determines that possessing or exercising the power will or may deprive the

trust of a tax benefit or impose a tax burden not described in subsection 3. The release

may be permanent or for a specified period, including a period measured by the life of

an individual.

6. Terms of a trust that limit the power of a trustee to make an adjustment between

principal and income do not affect the application of this section unless it is clear from

the terms of the trust that the terms are intended to deny the trustee the power of

adjustment conferred by subsection 1.
N.D. Cent. Code § 59-16.3-06 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-06
59-16.3-06. Calculation of unitrust amount
Status: in_force

59-16.3-06. Calculation of unitrust amount

The unitrust amount is determined as follows:

1. For the first three accounting periods of the trust, the unitrust amount for a current

valuation year of the trust may not be less than three percent, or more than five

percent, by the election of the trustee, the disinterested person, or the court, of the net

fair market value of the assets held in the trust on the valuation date of the current

valuation year;

2. Beginning with the fourth accounting period of the trust, the unitrust amount for a

current valuation year of the trust may not be less than three percent, or more than five

percent, by the election of the trustee, the disinterested person, or the court, of the

average of the net fair market value of the assets held in the trust on the valuation date

of the current valuation year and the net fair market value of the assets held in the

trust on the valuation date of each prior valuation year;

3. The percentage that may be elected by the trustee, the disinterested person, or the

court in determining the unitrust amount must be a reasonable current return from the

trust, taking into account the intentions of the settlor as expressed in the governing

instrument. However, the election by the trustee, the disinterested person, or the court

in determining the unitrust amount may not be less than three percent, or more than

five percent;

4. The unitrust amount for the current valuation year must be proportionately reduced for

any distribution, in whole or in part, other than distributions of the unitrust amount, and

for any payments of expenses, including debts, disbursements, and taxes, from the

trust within a current valuation year which the trustee determines to be material and

substantial, and must be proportionately increased for the receipt, other than a receipt

that represents a return on investment, of any additional property into the trust within a

current valuation year;

5. In the case of a short accounting period, the trustee shall prorate the unitrust amount

on a daily basis;

6. If the net fair market value of an asset held in the trust has been incorrectly determined

either in a current valuation year or in a prior valuation year, the unitrust amount must

be increased in the case of an undervaluation, or be decreased in the case of an

overvaluation, by an amount equal to the difference between the unitrust amount

determined based on the correct valuation of the asset and the unitrust amount

originally determined;

7. In determining the net fair market value of the assets held in trust, the determination

may not include the value of residential property or tangible personal property that, as

of the first business day of the current valuation year, one or more income

beneficiaries of the trust have or had the right to occupy, or have or had the right to

possess or control, other than in a capacity as trustee, and instead the right of

occupancy or the right of possession or control must be deemed to be the unitrust

amount with respect to the residential property or the tangible personal property; or

any asset to be distributed outright to a beneficiary during the valuation period under

the terms of the trust and the return on investment on that asset, which return on

investment must be distributed to the beneficiary.
N.D. Cent. Code § 59-16.1-01 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-01
59-16.1-01. Consistency with power of attorney provisions
Status: in_force

59-16.1-01. Consistency with power of attorney provisions

The provisions of this chapter relating to power of attorney are subject to other provisions of

law.
N.D. Cent. Code § 59-04.2-06 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-06
59-04.2-06. (301) When right to income begins and ends
Status: in_force

59-04.2-06. (301) When right to income begins and ends

1. An income beneficiary is entitled to net income from the date on which the income

interest begins. An income interest begins on the date specified in the terms of the

trust or, if no date is specified, on the date an asset becomes subject to a trust or

successive income interest.

2. An asset becomes subject to a trust:

a. On the date it is transferred to the trust in the case of an asset that is transferred

to a trust during the transferor's life;

b. On the date of a testator's death in the case of an asset that becomes subject to

a trust by reason of a will, even if there is an intervening period of administration

of the testator's estate; or

c. On the date of an individual's death in the case of an asset that is transferred to a

fiduciary by a third party because of the individual's death.

3. An asset becomes subject to a successive income interest on the day after the

preceding income interest ends, as determined under subsection 4, even if there is an

intervening period of administration to wind up the preceding income interest.

4. An income interest ends on the day before an income beneficiary dies or another

terminating event occurs, or on the last day of a period during which there is no

beneficiary to whom a trustee may distribute income.
N.D. Cent. Code § 59-18-08 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-08
59-18-08. (1008) Exculpation of trustee
Status: in_force

59-18-08. (1008) Exculpation of trustee

1. A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the

extent that the term relieves the trustee of liability for breach of trust committed in bad

faith or with reckless indifference to the purposes of the trust or was inserted as the

result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.

2. Unless the settlor was represented by an attorney not employed by the trustee with

respect to the trust containing the exculpatory term, an exculpatory term drafted or

caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential

relationship unless the trustee proves that the exculpatory term is fair under the

circumstances and that its existence and contents were adequately communicated to

the settlor.
N.D. Cent. Code § 59-22-02 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-02
59-22-02. (103) Construction
Status: in_force

59-22-02. (103) Construction

This chapter must be construed and applied to:

1. Facilitate electronic estate planning documents and signatures consistent with other

law; and

2. Be consistent with reasonable practices concerning electronic documents and

signatures and continued expansion of those practices.
N.D. Cent. Code § 59-16.3-08 — ND Code / Title 59 / Chapter 59-16.3 / Section 59-16.3-08
59-16.3-08. Administration of total return unitrust authority - Authority of trustee
Status: in_force

59-16.3-08. Administration of total return unitrust authority - Authority of trustee

The trustee, in administering a total return unitrust, may determine:

1. The effective date of the conversion;

2. The timing of distributions;

3. Whether distributions are to be made in cash, in kind, or partly in cash and partly in

kind;

4. Which assets are to be excluded in determining the unitrust amount;

5. If the trust is reconverted to an income trust, the effective date of the reconversion;

and

6. Any other administrative issues as may be necessary or appropriate to carry out the

purposes of this chapter.
N.D. Cent. Code § 59-10-04 — ND Code / Title 59 / Chapter 59-10 / Section 59-10-04
59-10-04. (204) Venue
Status: in_force

59-10-04. (204) Venue

1. Except as otherwise provided in subsection 2, venue for a judicial proceeding involving

a trust is in the county of this state in which the trust's principal place of administration

is or will be located and, if the trust is created by will and the estate is not yet closed, in

the county in which the decedent's estate is being administered.

2. If a trust has no trustee, venue for a judicial proceeding for the appointment of a

trustee is in a county of this state in which a beneficiary resides, in a county in which

any trust property is located, and if the trust is created by will, in the county in which

the decedent's estate was or is being administered.
N.D. Cent. Code § 59-20-01 — ND Code / Title 59 / Chapter 59-20 / Section 59-20-01
59-20-01. Private foundations - Charitable trusts - Split-interest trusts
Status: in_force

59-20-01. Private foundations - Charitable trusts - Split-interest trusts

1. Any will or trust instrument creating a trust that is a "private foundation", as defined in

section 509(a) of the Internal Revenue Code of 1954, or a "charitable trust", as defined

in section 4947(a)(1) of the Internal Revenue Code of 1954, or a "split-interest trust",

as defined in section 4947(a)(2) of the Internal Revenue Code of 1954, and any other

instrument governing the trustee of any such trust, or the use, retention, or disposition

of any of the income or property of such trust, may be deemed to have incorporated

within the will, trust instrument, or other governing instrument, with the same effect as

though such language were included in the will, trust instrument, or other governing

instrument, the following provisions with respect to the trust and the trustee thereof,

and, except as the contrary is provided in subsection 2, such provisions govern the

administration and distribution of any such trust, irrespective of any provisions of any

applicable will, trust instrument, or other governing instrument, statute, or law of this

state to the contrary:

a. The trustee shall distribute for each taxable year of the trust amounts at least

sufficient to avoid liability for the tax imposed by section 4942(a) of the Internal

Revenue Code of 1954, as now enacted or as hereafter amended.

b. The trustee may not engage in any act of "self-dealing", as defined in section

4941(d) of the Internal Revenue Code of 1954, which would give rise to any

liability for the tax imposed by section 4941(a) of the Internal Revenue Code of

1954.

c. The trustee may not retain any "excess business holdings", as defined in section

4943(c) of the Internal Revenue Code of 1954, which would give rise to any

liability for the tax imposed by section 4943(a) of the Internal Revenue Code of

1954.

d. The trustee may not make any investments that would jeopardize the carrying out

of any of the exempt purposes of the trust, within the meaning of section 4944 of

the Internal Revenue Code of 1954, so as to give rise to any liability for the tax

imposed by section 4944(a) of the Internal Revenue Code of 1954.

e. The trustee may not make any "taxable expenditure", as defined in section

4945(d) of the Internal Revenue Code of 1954, which would give rise to any

liability for the tax imposed by section 4945(a) of the Internal Revenue Code of

1954.

2. Subsection 1 does not apply to the extent that a court of competent jurisdiction

determines that application would be contrary to the terms of the will, trust instrument,

or other governing instrument described in subsection 1 and that such will, trust

instrument, or other governing instrument may not be changed to conform to

subsection 1.

3. As used in this section, "trustee" means a corporation, individual, or other legal entity

acting as an original, added, or successor trustee of a testamentary or inter vivos trust

estate. Any reference to a particular section of the Internal Revenue Code of 1954

includes, as now enacted or as hereafter amended, such section and any provision of

federal law as is or may hereafter be applicable, cognate to such section.

4. This section does not impair the rights and powers of the attorney general or the

courts of this state with respect to any trust.
N.D. Cent. Code § 59-22-12 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-12
59-22-12. (210) Admissibility in evidence
Status: in_force

59-22-12. (210) Admissibility in evidence

Evidence relating to an electronic nontestamentary estate planning document or an

electronic signature on the document may not be excluded in a proceeding solely because it is

in electronic form.
N.D. Cent. Code § 59-15-03 — ND Code / Title 59 / Chapter 59-15 / Section 59-15-03
59-15-03. (703) Cotrustees
Status: in_force

59-15-03. (703) Cotrustees

1. Cotrustees who are unable to reach a unanimous decision may act by majority

decision.

2. If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.

3. A cotrustee must participate in the performance of a trustee's function unless the

cotrustee is unavailable to perform the function because of absence, illness,

disqualification under other law, or other temporary incapacity or the cotrustee has

properly delegated the performance of the function to another trustee.

4. If a cotrustee is unavailable to perform duties because of absence, illness,

disqualification under other law, or other temporary incapacity, and prompt action is

necessary to achieve the purposes of the trust or to avoid injury to the trust property,

the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.

5. A trustee may delegate to a cotrustee the performance of any function other than a

function that the terms of the trust expressly require to be performed by the trustees

jointly. Unless a delegation was irrevocable, a trustee may revoke a delegation

previously made.

6. Except as otherwise provided in subsection 7, a trustee who does not join in an action

of another trustee is not liable for the action.

7. Each trustee shall exercise reasonable care to prevent a cotrustee from committing a

serious breach of trust and compel a cotrustee to redress a serious breach of trust.

8. A dissenting trustee who joins in an action at the direction of the majority of the

trustees and who notified any cotrustee of the dissent at or before the time of the

action is not liable for the action unless the action is a serious breach of trust.
N.D. Cent. Code § 59-04.2-09 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-09
59-04.2-09. (401) Character of receipts
Status: in_force

59-04.2-09. (401) Character of receipts

1. In this section, "entity" means a corporation, partnership, limited liability company,

regulated investment company, real estate investment trust, common trust fund, or any

other organization in which a trustee has an interest other than a trust or estate to

which section 59-04.2-10 applies, a business or activity to which section 59-04.2-11

applies, or an asset-backed security to which section 59-04.2-23 applies.

2. Except as otherwise provided in this section, a trustee shall allocate to income money

received from an entity.

3. A trustee shall allocate the following receipts from an entity to principal:

a. Property other than money.

b. Money received in one distribution or a series of related distributions in exchange

for part or all of a trust's interest in the entity.

c. Money received in total or partial liquidation of the entity.

d. Money received from an entity that is a regulated investment company or a real

estate investment trust if the money distributed is a capital gain dividend for

federal income tax purposes.

4. Money is received in partial liquidation:

a. To the extent that the entity, at or near the time of a distribution, indicates that it is

a distribution in partial liquidation; or

b. If the total amount of money and property received in a distribution or series of

related distributions is greater than twenty percent of the entity's gross assets, as

shown by the entity's year-end financial statements immediately preceding the

initial receipt.

5. Money is not received in partial liquidation, nor may it be taken into account under

subdivision b of subsection 4, to the extent that it does not exceed the amount of

income tax that a trustee or beneficiary must pay on taxable income of the entity that

distributes the money.

6. A trustee may rely upon a statement made by an entity about the source or character

of a distribution if the statement is made at or near the time of distribution by the

entity's board of directors or other person or group of persons authorized to exercise

powers to pay money or transfer property comparable to those of a corporation's board

of directors.
N.D. Cent. Code § 59-04.2-19 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-19
59-04.2-19. (411) Minerals, water, and other natural resources
Status: in_force

59-04.2-19. (411) Minerals, water, and other natural resources

1. To the extent that a trustee accounts for receipts from an interest in minerals or other

natural resources pursuant to this section, the trustee shall allocate them as follows:

a. If received as nominal delay rental or nominal annual rent on a lease, a receipt

must be allocated to income.

b. If received from a production payment, a receipt must be allocated to income if

and to the extent that the agreement creating the production payment provides a

factor for interest or its equivalent. The balance must be allocated to principal.

c. If an amount received as a royalty, shut-in-well payment, take-or-pay payment,

bonus, or delay rental is more than nominal, fifteen percent must be allocated to

principal and the balance to income.

d. If an amount is received from a working interest or any other interest not provided

for in subdivision a, b, or c, fifteen percent of the net amount received must be

allocated to principal and the balance to income.

2. An amount received on account of an interest in water that is renewable must be

allocated to income. If the water is not renewable, ninety percent of the amount must

be allocated to principal and the balance to income.

3. This chapter applies whether or not a decedent or donor was extracting minerals,

water, or other natural resources before the interest became subject to the trust.

4. If a trust has not received receipts from an interest in minerals, water, or other natural

resources before August 1, 2015, the trustee shall allocate receipts from interests in

minerals, water, or other natural resources as provided in this section.

5. If a trust has received receipts from an interest in minerals, water, or other natural

resources before August 1, 2015, the trustee shall allocate receipts from interests in

minerals, water, or other natural resources as follows:

a. If the trust acquired an interest in minerals, water, or other natural resources

before August 1, 1999, the trustee may allocate receipts in the manner used by

the trustee before August 1, 1999, or as required by law in effect on August 1,

1999.

b. If the trust acquired an interest in minerals, water, or other natural resources after

August 1, 1999, and before August 1, 2015, the trustee shall allocate receipts in

the manner required by law in effect on August 1, 1999.

6. The trustee may petition the court to permanently modify the manner used to allocate

receipts under this section. In deciding whether and to what extent to modify the

manner used to allocate receipts, the court may consider any factors relevant to the

trust and its beneficiaries; including the following factors to the extent they are

relevant:

a. The nature, purpose, and expected duration of the trust;

b. The intent of the settlor;

c. The identity and circumstances of the beneficiaries;

d. The need for liquidity, regularity of income, and preservation and appreciation of

capital;

e. The assets held in the trust; the extent to which they consist of financial assets,

interests in closely held enterprises, tangible and intangible personal property, or

real property; the extent to which an asset is used by a beneficiary; and whether

an asset was purchased by the trustee or received from the settlor;

f. The net amount allocated to income under the other sections of this chapter and

the increase or decrease in the value of the principal assets;

g. Whether and to what extent the terms of the trust give the trustee the power to

invade principal or accumulate income or prohibit the trustee from invading

principal or accumulating income, and the extent to which the trustee has

exercised a power from time to time to invade principal or accumulate income;

h. The actual and anticipated effect of economic conditions on principal and income

and effects of inflation and deflation; and

i. The anticipated tax consequences of a modification.
N.D. Cent. Code § 59-22-05 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-05
59-22-05. (203) Use of electronic record or signature not required
Status: in_force

59-22-05. (203) Use of electronic record or signature not required

1. This chapter does not require a nontestamentary estate planning document or

signature on a nontestamentary estate planning document to be created, generated,

sent, communicated, received, stored, or otherwise processed or used by electronic

means or in electronic form.

2. A person is not required to have a nontestamentary estate planning document in

electronic form or signed electronically even if the person previously created or signed

a nontestamentary estate planning document by electronic means.

3. A person may not waive the provisions of this section.
N.D. Cent. Code § 59-08-04 — ND Code / Title 59 / Chapter 59-08 / Section 59-08-04
59-08-04. Interpretation or enforcement - Reformation - Unenforceable trust provisions
Status: in_force

59-08-04. Interpretation or enforcement - Reformation - Unenforceable trust

provisions.

1. This chapter does not require the submission of a third-party special needs trust or a

self-settled special needs trust to a court for interpretation or enforcement.

2. A third-party special needs trust may not disqualify a recipient of publicly funded

benefits solely because a contingent beneficiary is named to receive the net balance

of the trust estate upon the death of a beneficiary with a disability, or upon other

termination of the trust.

3. The trustee or the grantor of any trust intended to be a third-party special needs trust

or a self-settled special needs trust may seek court reformation of the trust to

accomplish the purpose of a third-party special needs trust or a self-settled special

needs trust.

4. Except for self-settled special needs trusts and third-party special needs trusts, a

provision in a trust which provides for the suspension, termination, limitation, or

diversion of the principal, income, or beneficial interest of a beneficiary if the

beneficiary applies for, is determined eligible for, or receives publicly funded benefits is

unenforceable as against the public policy of this state, without regard to the

irrevocability of the trust or the purpose for which the trust was created.
N.D. Cent. Code § 59-04.2-20 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-20
59-04.2-20. (412) Timber
Status: in_force

59-04.2-20. (412) Timber

1. To the extent that a trustee accounts for receipts from the sale of timber and related

products pursuant to this section, the trustee shall allocate the net receipts:

a. To income to the extent that the amount of timber removed from the land does not

exceed the rate of growth of the timber during the accounting periods in which a

beneficiary has a mandatory income interest;

b. To principal to the extent that the amount of timber removed from the land

exceeds the rate of growth of the timber or the net receipts are from the sale of

standing timber;

c. To or between income and principal if the net receipts are from the lease of

timberland or from a contract to cut timber from land owned by a trust, by

determining the amount of timber removed from the land under the lease or

contract and applying the rules in subdivisions a and b; or

d. To principal to the extent that advance payments, bonuses, and other payments

are not allocated pursuant to subdivision a, b, or c.

2. In determining net receipts to be allocated pursuant to subsection 1, a trustee shall

deduct and transfer to principal a reasonable amount for depletion.

3. This chapter applies whether or not a decedent or transferor was harvesting timber

from the property before it became subject to the trust.

4. If a trust owns an interest in timberland on August 1, 1999, the trustee may allocate net

receipts from the sale of timber and related products as provided in this chapter or in

the manner used by the trustee before August 1, 1999. If the trust acquires an interest

in timberland after August 1, 1999, the trustee shall allocate net receipts from the sale

of timber and related products as provided in this chapter.
N.D. Cent. Code § 59-16-03 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-03
59-16-03. (803) Impartiality
Status: in_force

59-16-03. (803) Impartiality

If a trust has two or more beneficiaries, the trustee shall act impartially in investing,

managing, and distributing the trust property, giving due regard to the beneficiaries' respective

interests.
N.D. Cent. Code § 59-11-03 — ND Code / Title 59 / Chapter 59-11 / Section 59-11-03
59-11-03. (303) Representation by fiduciaries and parents
Status: in_force

59-11-03. (303) Representation by fiduciaries and parents

To the extent there is no conflict of interest between the representative and the person

represented or among those being represented with respect to a particular question or dispute:

1. A conservator may represent and bind the estate that the conservator controls to the

extent of the powers and authority conferred upon conservators generally or by court

order.

2. A guardian may represent and bind the ward if a conservator of the ward's estate has

not been appointed to the extent of the powers and authority conferred upon guardians

generally or by court order.

3. An agent under a power of attorney or having other written authority to act with respect

to the particular question or dispute may represent and bind the principal.

4. A trustee may represent and bind the beneficiaries of the trust.

5. A personal representative of a decedent's estate may represent and bind persons

interested in the estate.

6. A parent may represent and bind the parent's minor or unborn child if a conservator or

guardian for the child has not been appointed. If a disagreement arises between

parents seeking to represent the same minor child:

a. The parent who is a beneficiary of the trust that is the subject of the

representation is entitled to represent the minor child;

b. If both parents are beneficiaries of the trust that is the subject of the

representation, the parent who is a lineal descendant of the settlor is entitled to

represent the minor child;

c. If neither parent is a beneficiary of the trust that is the subject of the

representation, the parent who is a lineal descendant of the settlor is entitled to

represent the minor child; and

d. If neither parent is a beneficiary or a lineal descendant of the settlor of the trust

that is the subject of the representation, a guardian ad litem must be appointed to

represent the minor child.

7. A person may represent and bind that person's unborn issue.
N.D. Cent. Code § 59-09-04.1 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-04.1
59-09-04.1. Settlor's capacity
Status: reserved

59-09-04.1. Settlor's capacity

The capacity required of a settlor is the same as that required to make a will and is required

to create, amend, revoke, or add property to a trust, to direct the actions of the trustee where

permitted, and to exercise powers and rights, if any, reserved or granted to the settlor under the

terms of the trust or applicable law.
N.D. Cent. Code § 59-09-12 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-12
59-09-12. (112) Rules of construction
Status: in_force

59-09-12. (112) Rules of construction

The rules of construction that apply to the interpretation of and disposition of property by will

or other governing instrument provided for under chapter 30.1-09.1 also apply as appropriate to

the interpretation of the terms of a trust and the disposition of the trust property.
N.D. Cent. Code § 59-12-13 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-13
59-12-13. (413) Cy pres
Status: in_force

59-12-13. (413) Cy pres

1. Except as otherwise provided in subsection 2, if a particular charitable purpose

becomes unlawful, impracticable, impossible to achieve, or wasteful, the trust does not

fail, in whole or in part; the trust property does not revert to the settlor or the settlor's

successors in interest; and the court may apply cy pres to modify or terminate the trust

by directing that the trust property be applied or distributed, in whole or in part, in a

manner consistent with the settlor's charitable purposes.

2. A provision in the terms of a charitable trust that would result in distribution of the trust

property to a noncharitable beneficiary prevails over the power of the court under

subsection 1 to apply cy pres to modify or terminate the trust.
N.D. Cent. Code § 59-08-05 — ND Code / Title 59 / Chapter 59-08 / Section 59-08-05
59-08-05. Conflicts with other chapters
Status: in_force

59-08-05. Conflicts with other chapters

If any provision of this chapter conflicts with chapter 59-09, 59-10, 59-11, 59-12, 59-13,

59-14, 59-15, 59-16, 59-17, 59-18, or 59-19, the provision of this chapter takes precedence.
N.D. Cent. Code § 59-21-02 — ND Code / Title 59 / Chapter 59-21 / Section 59-21-02
59-21-02. Standard of conduct in managing and investing institutional fund
Status: in_force

59-21-02. Standard of conduct in managing and investing institutional fund

1. Subject to the intent of a donor expressed in a gift instrument, an institution, in

managing and investing an institutional fund, shall consider the charitable purposes of

the institution and the purposes of the institutional fund.

2. In addition to complying with the duty of loyalty imposed by law other than this chapter,

each person responsible for managing and investing an institutional fund shall manage

and invest the fund in good faith and with the care an ordinarily prudent person in a

like position would exercise under similar circumstances.

3. In managing and investing an institutional fund, an institution:

a. May incur only costs that are appropriate and reasonable in relation to the assets,

the purposes of the institution, and the skills available to the institution; and

b. Shall make a reasonable effort to verify facts relevant to the management and

investment of the fund.

4. An institution may pool two or more institutional funds for purposes of management

and investment.

5. Except as otherwise provided by a gift instrument, the following rules apply:

a. In managing and investing an institutional fund, the following factors, if relevant,

must be considered:

(1) General economic conditions;

(2) The possible effect of inflation or deflation;

(3) The expected tax consequences, if any, of investment decisions or

strategies;

(4) The role that each investment or course of action plays within the overall

investment portfolio of the fund;

(5) The expected total return from income and the appreciation of investments;

(6) Other resources of the institution;

(7) The needs of the institution and the fund to make distributions and to

preserve capital; and

(8) An asset's special relationship or special value, if any, to the charitable

purposes of the institution.

b. Management and investment decisions about an individual asset must be made

not in isolation but rather in the context of the institutional fund's portfolio of

investments as a whole and as a part of an overall investment strategy having

risk and return objectives reasonably suited to the fund and to the institution.

c. Except as otherwise provided by law other than this chapter, an institution may

invest in any kind of property or type of investment consistent with this section.

d. An institution shall diversify the investments of an institutional fund unless the

institution reasonably determines that, because of special circumstances, the

purposes of the fund are better-served without diversification.

e. Within a reasonable time after receiving property, an institution shall make and

carry out decisions concerning the retention or disposition of the property or to

rebalance a portfolio, in order to bring the institutional fund into compliance with

the purposes, terms, and distribution requirements of the institution as necessary

to meet other circumstances of the institution and the requirements of this

chapter.

f. A person that has special skills or expertise, or is selected in reliance upon the

person's representation that the person has special skills or expertise, has a duty

to use those skills or that expertise in managing and investing institutional funds.
N.D. Cent. Code § 59-11-01 — ND Code / Title 59 / Chapter 59-11 / Section 59-11-01
59-11-01. (301) Representation - Basic effect
Status: in_force

59-11-01. (301) Representation - Basic effect

1. Notice to a person who may represent and bind another person under this chapter has

the same effect as if notice were given directly to the other person. Notice of a hearing

on any petition for a judicial hearing must be given as provided in the North Dakota

Rules of Civil Procedure.

2. The consent of a person who may represent and bind another person under this

chapter is binding on the person represented unless the person represented objects to

the representation to the trustee or representative before the consent would otherwise

have become effective.

3. Except as otherwise provided in sections 59-12-11 and 59-14-02, a person who under

this chapter may represent a settlor who lacks capacity may receive notice and give a

binding consent on the settlor's behalf.

4. A settlor may not represent and bind a beneficiary under this chapter with respect to

the termination or modification of a trust under subsection 1 of section 59-12-11.
N.D. Cent. Code § 59-12-04 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-04
59-12-04. (404) Trust purposes
Status: in_force

59-12-04. (404) Trust purposes

A trust may be created only to the extent its purposes are lawful and possible to achieve. A

trust and its terms must be for the benefit of its beneficiaries.
N.D. Cent. Code § 59-18-12 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-12
59-18-12. (1012) Protection of person dealing with trustee
Status: in_force

59-18-12. (1012) Protection of person dealing with trustee

1. A person other than a beneficiary who in good faith assists a trustee, or who in good

faith and for value deals with a trustee, without knowledge that the trustee is

exceeding or improperly exercising the trustee's powers, is protected from liability as if

the trustee properly exercised the power.

2. A person other than a beneficiary who in good faith deals with a trustee is not required

to inquire into the extent of the trustee's powers or the propriety of their exercise.

3. A person who in good faith delivers assets to a trustee need not ensure their proper

application.

4. A person other than a beneficiary who in good faith assists a former trustee, or who in

good faith and for value deals with a former trustee, without knowledge that the

trusteeship has terminated, is protected from liability as if the former trustee were still a

trustee.

5. Comparable protective provisions of other laws relating to commercial transactions or

transfer of securities by fiduciaries prevail over the protection provided by this section.
N.D. Cent. Code § 59-15-01 — ND Code / Title 59 / Chapter 59-15 / Section 59-15-01
59-15-01. (701) Accepting or declining trusteeship
Status: in_force

59-15-01. (701) Accepting or declining trusteeship

1. Except as otherwise provided in subsection 3, a person designated as trustee accepts

the trusteeship by substantially complying with a method of acceptance provided in the

terms of the trust or, if the terms of the trust do not provide a method or the method

provided in the terms is not expressly made exclusive, by accepting delivery of the

trust property, exercising powers or performing duties as trustee, or otherwise

indicating acceptance of the trusteeship.

2. A person designated as trustee who has not yet accepted the trusteeship may decline

the trusteeship. A designated trustee who does not accept the trusteeship within a

reasonable time after knowing of the designation is deemed to have declined the

trusteeship.

3. A person designated as trustee, without accepting the trusteeship, may act to preserve

the trust property if, within a reasonable time after acting, the person sends a

declination of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to

a qualified beneficiary and inspect or investigate trust property to determine potential

liability under environmental or other law or for any other purpose.
N.D. Cent. Code § 59-10.1-02 — ND Code / Title 59 / Chapter 59-10.1 / Section 59-10.1-02
59-10.1-02. Parties - Process
Status: in_force

59-10.1-02. Parties - Process

A settlor who is not a plaintiff, a beneficiary named in the trust, and a settlor's present

intestate successors must be included as parties to the proceeding. For the purposes of this

chapter, a beneficiary named in the trust and the settlor's present intestate successors are

deemed to possess inchoate property rights. Service of process upon the parties to the

proceeding must be made in accordance with rule 4 of the North Dakota Rules of Civil

Procedure.
N.D. Cent. Code § 59-12-18 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-18
59-12-18. Requisites of trust relating to real property
Status: in_force

59-12-18. Requisites of trust relating to real property

A trust in relation to real property is not valid unless the trust is created or declared:

1. By a written instrument, subscribed by the trustee or by the trustee's agent thereto

authorized in writing;

2. By the instrument under which the trustee claims the estate affected; or

3. By operation of law.
N.D. Cent. Code § 59-21-05 — ND Code / Title 59 / Chapter 59-21 / Section 59-21-05
59-21-05. Release or modification of restrictions on management, investment, or purpose
Status: in_force

59-21-05. Release or modification of restrictions on management, investment, or

purpose.

1. If the donor consents in a record, an institution may release or modify, in whole or in

part, a restriction contained in a gift instrument on the management, investment, or

purpose of an institutional fund. A release or modification may not allow a fund to be

used for a purpose other than a charitable purpose of the institution.

2. The court, upon application of an institution, may modify a restriction contained in a gift

instrument regarding the management or investment of an institutional fund if the

restriction has become impracticable or wasteful, if it impairs the management or

investment of the fund, or if, because of circumstances not anticipated by the donor, a

modification of a restriction will further the purposes of the fund. The institution shall

notify the attorney general of the application. The court shall provide the attorney

general with the opportunity to be heard. To the extent practicable, any modification

must be made in accordance with the donor's probable intention.

3. If a particular charitable purpose or a restriction contained in a gift instrument on the

use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or

wasteful, the court, upon application of an institution, may modify the purpose of the

fund or the restriction on the use of the fund in a manner consistent with the charitable

purposes expressed in the gift instrument. The institution shall notify the attorney

general of the application, and the court shall provide the attorney general with the

opportunity to be heard.

4. If an institution determines that a restriction contained in a gift instrument on the

management, investment, or purpose of an institutional fund is unlawful, impracticable,

impossible to achieve, or wasteful, the institution, sixty days after notification to the

attorney general, may release or modify the restriction, in whole or part, if:

a. The institutional fund subject to the restriction has a total value of less than

twenty-five thousand dollars;

b. More than twenty years have elapsed since the fund was established; and

c. The institution uses the property in a manner consistent with the charitable

purposes expressed in the gift instrument.
N.D. Cent. Code § 59-16-09 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-09
59-16-09. (809) Control and protection of trust property
Status: in_force

59-16-09. (809) Control and protection of trust property

A trustee shall take reasonable steps to take control of and protect the trust property.
N.D. Cent. Code § 59-04.2-17 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-17
59-04.2-17. (409) Deferred compensation, annuities, and similar payments
Status: in_force

59-04.2-17. (409) Deferred compensation, annuities, and similar payments

1. In this section, "payment" means a payment that a trustee may receive over a fixed

number of years or during the life of one or more individuals because of services

rendered or property transferred to the payer in exchange for future payments. The

term includes a payment made in money or property from the payer's general assets

or from a separate fund created by the payer. For purposes of subsections 4, 5, 6, and

7, the term includes any payment from a separate fund, regardless of the reason for

the payment. In this section, "separate fund" includes a private or commercial annuity,

an individual retirement account, and a pension, profit-sharing, stock-bonus, or

stock-ownership plan.

2. To the extent that a payment is characterized as interest, a dividend, or a payment

made in lieu of interest or a dividend, a trustee shall allocate the payment to income.

The trustee shall allocate to principal the balance of the payment and any other

payment received in the same accounting period that is not characterized as interest,

a dividend, or an equivalent payment.

3. If no part of a payment is characterized as interest, a dividend, or an equivalent

payment, and all or part of the payment is required to be made, a trustee shall allocate

to income ten percent of the part that is required to be made during the accounting

period and the balance to principal. If no part of a payment is required to be made or

the payment received is the entire amount to which the trustee is entitled, the trustee

shall allocate the entire payment to principal. For purposes of this subsection, a

payment is not required to be made to the extent that it is made because the trustee

exercises a right of withdrawal.

4. Except as otherwise provided in subsection 5, subsections 6 and 7 apply, and

subsections 2 and 3 do not apply, in determining the allocation of a payment made

from a separate fund to a trust to which an election to qualify for marital deduction

under section 2056(b)(7) of the Internal Revenue Code of 1986, as amended, has

been made or to a trust that qualified for the marital deduction under section 2056(b)

(5) of the Internal Revenue Code of 1986, as amended.

5. Subsections 4, 6, and 7 do not apply if and to the extent that the series of payments

would, without application of subsection 4, qualify for the marital deduction under

section 2056(b)(7)(C) of the Internal Revenue Code of 1986, as amended.

6. A trustee shall determine the internal income of each separate fund for the accounting

period as if the separate fund were a trust subject to this chapter. Upon request of the

surviving spouse, the trustee shall demand of the persons administering the separate

fund that this internal income be distributed to the trust. The trustee shall allocate a

payment from the separate fund to income to the extent of the internal income of the

separate fund and distribute that amount to the surviving spouse. The trustee shall

allocate the balance to principal. Upon request of the surviving spouse, the trustee

shall allocate principal to income to the extent the internal income of the separate fund

exceeds payments made from the separate fund to the trust during the accounting

period.

7. If a trustee cannot determine the internal income of a separate fund but can determine

the value of a separate fund, the internal income of the separate fund is deemed to

equal four percent of the fund's value, according to the most recent statement of value

preceding the beginning of the accounting period. If the trustee can determine neither

the internal income of the separate fund nor the fund's value, the internal income of the

fund is deemed to equal the product of the interest rate and the present value of the

expected future payments, as determined under section 7520 of the Internal Revenue

Code of 1986, as amended, for the month preceding the accounting period for which

the computation is made.

8. This section does not apply to a payment to which section 59-04.2-18 applies.
N.D. Cent. Code § 59-10-01 — ND Code / Title 59 / Chapter 59-10 / Section 59-10-01
59-10-01. (201) Role of court in administration of trust
Status: in_force

59-10-01. (201) Role of court in administration of trust

1. The court may intervene in the administration of a trust to the extent its jurisdiction is

invoked by an interested person or as provided by law.

2. A trust is not subject to continuing judicial supervision unless ordered by the court.

3. A judicial proceeding involving a trust may relate to any matter involving the trust's

administration, including a request for instructions and an action to declare rights.
N.D. Cent. Code § 59-16.1-04 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-04
59-16.1-04. Authorized trustee with unlimited discretion
Status: in_force

59-16.1-04. Authorized trustee with unlimited discretion

1. An authorized trustee with unlimited discretion to invade trust principal may appoint

part or all of the principal to a trustee of an appointed trust for, and only for the benefit

of, one, more than one, or all of the current beneficiaries of the invaded trust, to the

exclusion of any one or more of the current beneficiaries. The successor and

remainder beneficiaries of the appointed trust may be none, one, more than one, or all

of the successor and remainder beneficiaries of the invaded trust.

2. An authorized trustee exercising the power under subsection 1 of section 59-16.1-04

may grant a discretionary power of appointment in the appointed trust to one or more

of the current beneficiaries of the invaded trust, provided that the beneficiary granted a

power to appoint may receive principal outright under the terms of the invaded trust.

3. If the authorized trustee grants a power of appointment, the class of permissible

appointees in favor of whom the beneficiary may exercise the power of appointment

granted in the appointed trust may be broader or otherwise different from the current,

successor, and remainder beneficiaries of the invaded trust.

4. If the beneficiary or beneficiaries of the invaded trust are described by a class, the

beneficiary or beneficiaries of the appointed trust may include present or future

members of the class.
N.D. Cent. Code § 59-13-05 — ND Code / Title 59 / Chapter 59-13 / Section 59-13-05
59-13-05. (505) Creditor's claim against settlor
Status: in_force

59-13-05. (505) Creditor's claim against settlor

1. The following rules apply whether or not the terms of a trust contain a spendthrift

provision. During the lifetime of the settlor, the property of a revocable trust is subject

to claims of the settlor's creditors to the extent that the property would be subject to

creditors' claims if the property had not been placed in the trust. With respect to an

irrevocable trust, other than a special needs trust, a creditor or assignee of the settlor

may reach the maximum amount that can be distributed to or for the settlor's benefit. If

a trust has more than one settlor, the amount the creditor or assignee of a particular

settlor may reach may not exceed the settlor's interest in the portion of the trust

attributable to that settlor's contribution. After the death of a settlor, and subject to the

settlor's right to direct the source from which liabilities will be paid, the property of a

trust that was revocable immediately before the settlor's death is subject to claims of

the settlor's creditors, costs of administration of the settlor's estate, the expenses of

the settlor's funeral and disposal of remains, and statutory allowances to a surviving

spouse and children to the extent the settlor's probate estate is inadequate to satisfy

those claims, costs, expenses, and allowances. For purposes of this section, "statutory

allowances" includes any homestead exception under chapter 47-18 and the

allowances included in title 30.1.

2. For purposes of this section during the period the power may be exercised, the holder

of a power of withdrawal is treated in the same manner as the settlor of a revocable

trust to the extent of the property subject to the power and, upon the lapse, release, or

waiver of the power, the holder is treated as the settlor of the trust only to the extent

the value of the property affected by the lapse, release, or waiver exceeds the greater

of the amount specified in section 2041(b)(2) or 2514(e) of the Internal Revenue Code

of 1986, or section 2503(b) of the Internal Revenue Code of 1986, or corresponding

future provisions of federal tax law.
N.D. Cent. Code § 59-21-03 — ND Code / Title 59 / Chapter 59-21 / Section 59-21-03
59-21-03. Appropriation for expenditure or accumulation of endowment fund - Rules of construction
Status: in_force

59-21-03. Appropriation for expenditure or accumulation of endowment fund - Rules

of construction.

1. Subject to the intent of a donor, as expressed in the gift instrument and subject to

subsection 4, an institution may appropriate for expenditure or accumulate so much of

an endowment fund as the institution determines is prudent for the uses, benefits,

purposes, and duration for which the endowment fund is established. Unless stated

otherwise in the gift instrument, the assets in an endowment fund are donor-restricted

assets until appropriated for expenditure by the institution. In making a determination

to appropriate or accumulate, the institution shall act in good faith, with the care that

an ordinarily prudent person in a like position would exercise under similar

circumstances, and shall consider, if relevant, the following factors:

a. The duration and preservation of the endowment fund;

b. The purposes of the institution and the endowment fund;

c. General economic conditions;

d. The possible effect of inflation or deflation;

e. The expected total return from income and the appreciation of investments;

f. Other resources of the institution; and

g. The investment policy of the institution.

2. To limit the authority to appropriate for expenditure or accumulate under subsection 1,

a gift instrument specifically must state the limitation.

3. Terms in a gift instrument designating a gift as an endowment, or a direction or

authorization in the gift instrument to use only income, interest, dividends, or rents,

issues, or profits, or to preserve the principal intact, or words of similar import create

an endowment fund of permanent duration unless other language in the gift instrument

limits the duration or purpose of the fund and do not otherwise limit the authority to

appropriate for expenditure or accumulate under subsection 1.

4. The appropriation for expenditure in any year of an amount greater than seven percent

of the fair market value of an endowment fund, calculated on the basis of market

values determined at least quarterly and averaged over a period of not less than three

years immediately preceding the year in which the appropriation for expenditure is

made, creates a rebuttable presumption of imprudence. For an endowment fund in

existence for fewer than three years, the fair market value of the endowment fund

must be calculated for the period the endowment fund has been in existence. This

subsection does not:

a. Apply to an appropriation for expenditure permitted under law other than this

chapter or by the gift instrument; or

b. Create a presumption of prudence for an appropriation for expenditure of an

amount less than or equal to seven percent of the fair market value of the

endowment fund.
N.D. Cent. Code § 59-16-04 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-04
59-16-04. (804) Prudent administration
Status: in_force

59-16-04. (804) Prudent administration

A trustee shall administer the trust as a prudent person would by considering the purposes,

terms, distributional requirements, and other circumstances of the trust. In satisfying this

standard, the trustee shall exercise reasonable care, skill, and caution.
N.D. Cent. Code § 59-16.1-17 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-17
59-16.1-17. Compensation - Commissions
Status: in_force

59-16.1-17. Compensation - Commissions

For the purposes of this section, unless a court otherwise directs:

1. An authorized trustee may not exercise a power authorized under sections 59-16.1-04

and 59-16.1-05 to change the provisions regarding the determination of the

compensation of a trustee. The commissions or other compensation payable to the

trustees of the invaded trust may continue to be paid to the trustees of the appointed

trust during the term of the appointed trust and must be determined in the same

manner as in the invaded trust.

2. A trustee may not receive a paying commission or other compensation for appointing

of property from the invaded trust to an appointed trust under sections 59-16.1-04 and

59-16.1-05.
N.D. Cent. Code § 59-12-09 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-09
59-12-09. (409) Noncharitable trust without ascertainable beneficiary
Status: in_force

59-12-09. (409) Noncharitable trust without ascertainable beneficiary

Except as otherwise provided in section 59-12-08 or by another statute, the following rules

apply:

1. A trust may be created for a noncharitable purpose without a definite or definitely

ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be

selected by the trustee.

2. A trust authorized by this section may be enforced by a person appointed in the terms

of the trust or, if no person is so appointed, by a person appointed by the court.

3. Property of a trust authorized by this section may be applied only to its intended use,

except to the extent the court determines that the value of the trust property exceeds

the amount required for the intended use. Except as otherwise provided in the terms of

the trust, property not required for the intended use must be distributed to the settlor, if

then living, otherwise to the settlor's successors in interest.
N.D. Cent. Code § 59-16-15 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-15
59-16-15. (815) General powers of trustee
Status: in_force

59-16-15. (815) General powers of trustee

A trustee, without authorization by the court, may exercise powers conferred by the terms of

the trust and, except as limited by the terms of the trust, all powers over the trust property which

an unmarried owner, who is not an incapacitated person, has over individually owned property,

any other powers appropriate to achieve the proper investment, management, and distribution

of the trust property, and any other powers conferred by chapters 59-09, 59-10, 59-11, 59-12,

59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19. The exercise of a power is subject to the

fiduciary duties prescribed by this chapter.
N.D. Cent. Code § 59-12-08 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-08
59-12-08. (408) Trust for care of animal
Status: in_force

59-12-08. (408) Trust for care of animal

1. A trust may be created to provide for the care of an animal alive during the settlor's

lifetime. The trust terminates upon the death of the animal or, if the trust was created to

provide for the care of more than one animal alive during the settlor's lifetime, upon the

death of the last surviving animal.

2. A trust authorized by this section may be enforced by a person appointed in the terms

of the trust or, if no person is so appointed, by a person appointed by the court. A

person having an interest in the welfare of the animal may request the court to appoint

a person to enforce the trust or to remove a person appointed.

3. Property of a trust authorized by this section may be applied only to its intended use,

except to the extent the court determines that the value of the trust property exceeds

the amount required for the intended use. Except as otherwise provided in the terms of

the trust, property not required for the intended use must be distributed to the settlor, if

then living, otherwise to the settlor's successors in interest.
N.D. Cent. Code § 59-21-04 — ND Code / Title 59 / Chapter 59-21 / Section 59-21-04
59-21-04. Management and investment functions - Delegation
Status: in_force

59-21-04. Management and investment functions - Delegation

1. Except as otherwise provided in a gift instrument or by law other than this chapter, an

institution may delegate to an external agent the management and investment of an

institutional fund to the extent that an institution could prudently delegate under the

circumstances. An institution shall act in good faith, with the care that an ordinarily

prudent person in a like position would exercise under similar circumstances, in:

a. Selecting an agent;

b. Establishing the scope and terms of the delegation, consistent with the purposes

of the institution and the institutional fund; and

c. Periodically reviewing the agent's actions in order to monitor the agent's

performance and compliance with the scope and terms of the delegation.

2. In performing a delegated function, an agent owes a duty to the institution to exercise

reasonable care to comply with the scope and terms of the delegation.

3. An institution that complies with subsection 1 is not liable for the decisions or actions

of an agent to which the function was delegated.

4. By accepting delegation of a management or investment function from an institution

that is subject to the laws of this state, an agent submits to the jurisdiction of the courts

of this state in all proceedings arising from or related to the delegation or the

performance of the delegated function.

5. An institution may delegate management and investment functions to its committees,

officers, or employees as authorized by law.
N.D. Cent. Code § 59-16-16 — ND Code / Title 59 / Chapter 59-16 / Section 59-16-16
59-16-16. (816) Specific powers of trustee
Status: in_force

59-16-16. (816) Specific powers of trustee

Without limiting the authority conferred by section 59-16-15, a trustee may:

1. Collect trust property and accept or reject additions to the trust property from a settlor

or any other person.

2. Acquire or sell property, for cash or on credit, at public or private sale.

3. Exchange, partition, or otherwise change the character of trust property.

4. Deposit or invest trust money in a regulated financial institution, including one

operated by the trustee or an affiliate of the trustee.

5. Borrow money, with or without security from any financial institution, including a

financial institution that is serving as a trustee or one of its affiliates, and mortgage or

pledge trust property for a period within or extending beyond the duration of the trust.

6. With respect to an interest in a proprietorship, partnership, limited liability company,

business trust, corporation, or other form of business or enterprise, continue the

business or other enterprise and take any action that may be taken by shareholders,

members, or property owners, including merging, dissolving, or otherwise changing

the form of business organization or contributing additional capital.

7. With respect to stocks or other securities, exercise the rights of an absolute owner,

including the right to vote, or give proxies to vote, with or without power of substitution,

or enter into or continue a voting trust agreement; hold a security in the name of a

nominee or in other form without disclosure of the trust so that title may pass by

delivery; pay calls, assessments, and other sums chargeable or accruing against the

securities, and sell or exercise stock subscription or conversion rights; and deposit the

securities with a depository or other regulated financial service institution.

8. With respect to an interest in real property, construct or make ordinary or extraordinary

repairs to, alterations to, or improvements in, buildings or other structures, demolish

improvements, raze existing or erect new party walls or buildings, subdivide or develop

land, dedicate land to public use or grant public or private easements, and make or

vacate plats and adjust boundaries.

9. Enter into a lease for any purpose as lessor or lessee, including a lease or other

arrangement for exploration and removal of natural resources, with or without the

option to purchase or renew, for a period within or extending beyond the duration of

the trust.

10. Grant an option involving a sale, lease, or other disposition of trust property or acquire

an option for the acquisition of property, including an option exercisable beyond the

duration of the trust, and exercise an option so acquired.

11. Insure the property of the trust against damage or loss and insure the trustee, the

trustee's agents, and beneficiaries against liability.

12. Abandon, distribute, or decline to administer property of no value or of insufficient

value to justify its collection or continued administration.

13. With respect to possible liability for violation of environmental law, inspect or

investigate property the trustee holds or has been asked to hold, or property owned or

operated by an organization in which the trustee holds or has been asked to hold an

interest for the purpose of determining the application of environmental law with

respect to the property; take action to prevent, abate, or otherwise remedy any actual

or potential violation of any environmental law affecting property held directly or

indirectly by the trustee, whether taken before or after the assertion of a claim or the

initiation of governmental enforcement; decline to accept property into trust or disclaim

any power with respect to property that is or may be burdened with liability for violation

of environmental law; compromise claims against the trust which may be asserted for

an alleged violation of environmental law; and pay the expense of any inspection,

review, abatement, or remedial action to comply with environmental law.

14. Pay or contest any claim, settle a claim by or against the trust, and release, in whole or

in part, a claim belonging to the trust.

15. Pay taxes, assessments, compensation of the trustee and of employees and agents of

the trust, and other expenses incurred in the administration of the trust.

16. Exercise elections with respect to federal, state, and local taxes.

17. Select a mode of payment under any employee benefit or retirement plan, annuity, or

life insurance payable to the trustee, exercise rights thereunder, including exercise of

the right to indemnification for expenses and against liabilities, and take appropriate

action to collect the proceeds.

18. Make loans out of trust property, including loans to a beneficiary on terms and

conditions the trustee considers to be fair and reasonable under the circumstances,

and the trustee has a lien on future distributions for repayment of those loans.

19. Pledge trust property to guarantee loans made by others to the beneficiary.

20. Appoint a trustee to act in another jurisdiction with respect to trust property located in

the other jurisdiction, confer upon the appointed trustee all of the powers and duties of

the appointing trustee, require that the appointed trustee furnish security, and remove

any trustee so appointed.

21. Pay an amount distributable to a beneficiary who is under a legal disability or who the

trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or

applying it for the beneficiary's benefit, or by paying it to the beneficiary's conservator

or, if the beneficiary does not have a conservator, the beneficiary's guardian; paying it

to the beneficiary's custodian under chapter 47-24.1 and for that purpose, creating a

custodianship or custodial trust; if the trustee does not know of a conservator,

guardian, custodian, or custodial trustee, paying it to an adult relative or other person

having legal or physical care or custody of the beneficiary, to be expended on the

beneficiary's behalf; or managing it as a separate fund on the beneficiary's behalf,

subject to the beneficiary's continuing right to withdraw the distribution.

22. On distribution of trust property or the division or termination of a trust, make

distributions in divided or undivided interests, allocate particular assets in

proportionate or disproportionate shares, value the trust property for those purposes,

and adjust for resulting differences in valuation.

23. Resolve a dispute concerning the interpretation of the trust of the trust's administration

by mediation, arbitration, or other procedure for alternative dispute resolution.

24. Prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to

protect trust property and the trustee in the performance of the trustee's duties.

25. Sign and deliver contracts and other instruments that are useful to achieve or facilitate

the exercise of the trustee's powers.

26. Purchase and pay from trust principal the premiums on life insurance.

27. Allocate items of income or expense to either trust income or principal, as provided by

law, including creation of reserves out of income for depreciation, obsolescence, or

amortization or for depletion in mineral or timber properties.

28. a. With respect to the administration of trust assets as one or more trusts to:

(1) Receive and administer additional property as part of the trust estate or as a

separate trust having terms identical to the terms of the existing trust;

(2) Sever any trust estate on a fractional basis, before or after a trust is funded,

into two or more separate trusts for any reason;

(3) Segregate by allocation to a separate account or trust a specific amount or

gift made from any trust to reflect a partial disclaimer, to reflect or result in

differences in federal tax attributes, to satisfy any federal tax requirements

or elections, or to reduce potential generation, skipping transfer tax liability,

in a manner consistent with the rules governing disclaimers, such federal tax

attributes, such requirements or elections, or any applicable tax rules or

regulations, and any income earned on a segregated amount or gift after

segregation occurs passes to the designated taker of such amount or gift;

and

(4) Consolidate two or more trusts having substantially similar terms into a

single trust.

b. In managing, investing, administering, and distributing the trust property of any

separate account or trust and in making applicable tax elections, consider the

differences in federal tax attributes and all other factors the trustee believes

pertinent and may make disproportionate distributions from the separate trusts

created. A separate account or trust created by severance or segregation must be

treated as a separate trust for all purposes from and after the date on which the

severance or segregation is effective. The trustee shall hold such separate

account or trust on terms and conditions that are substantially equivalent to the

terms of the trust from which it was severed or segregated so that the aggregate

interests of each beneficiary in the several trusts are substantially equivalent to

the beneficiary's interests in the trust before severance or segregation; provided,

however, that any terms of the trust before severance that would affect

qualification of the trust for any federal tax deduction, exclusion, election,

exemption, or other special federal tax status must remain identical in each of the

separate trusts created.

29. Employ persons, including attorneys, auditors, investment advisers or agents, to

advise or assist the trustee in the performance of administrative duties. A trustee may

act based on the recommendations of professionals without independently

investigating the recommendations.

30. Deal with the personal representative, trustee, or other representative of any other

trust or estate in which a beneficiary of the trust estate has an interest, notwithstanding

the fact that the trustee is a personal representative, trustee, or other representative of

the other trust or estate.

31. On termination of the trust, exercise the powers appropriate to wind up the

administration of the trust and distribute the trust property to the persons entitled to the

property.
N.D. Cent. Code § 59-16.1-08 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-08
59-16.1-08. Unlimited discretion governs
Status: in_force

59-16.1-08. Unlimited discretion governs

If an authorized trustee has unlimited discretion to invade the principal of a trust, and the

same trustee or another trustee has the power to invade principal under the trust instrument and

the power is not subject to unlimited discretion, then the authorized trustee having unlimited

discretion may exercise the power of appointment under section 59-16.1-04.
N.D. Cent. Code § 59-16.1-07 — ND Code / Title 59 / Chapter 59-16.1 / Section 59-16.1-07
59-16.1-07. Term of appointed trust
Status: in_force

59-16.1-07. Term of appointed trust

The appointed trust to which an authorized trustee appoints the assets of the invaded trust

may have a term that is longer than the term set forth in the invaded trust, including, a term

measured by the lifetime of a current beneficiary.
N.D. Cent. Code § 59-09-03 — ND Code / Title 59 / Chapter 59-09 / Section 59-09-03
59-09-03. (103) Definitions
Status: in_force

59-09-03. (103) Definitions

Any term not specifically defined in this section has the meaning provided in title 30.1.

Unless the context otherwise requires, in chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14,

59-15, 59-16, 59-17, 59-18, and 59-19:

1. "Action", with respect to an act of a trustee, includes a failure to act.

2. "Ascertainable standard" means a standard relating to an individual's health,

education, support, or maintenance within the meaning of section 2041(b)(1)(A) or

2514(c)(1) of the Internal Revenue Code.

3. "Beneficiary" means a person that:

a. Has a present or future beneficial interest in a trust, vested or contingent,

including the owner of an interest by assignment or transfer; or

b. In a capacity other than that of a trustee, holds a power of appointment over trust

property.

4. "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose

described in subsection 1 of section 59-12-05.

5. "Conservator" is as defined in section 30.1-01-06.

6. "Distributee" means any person who receives property of a trust from a trustee, other

than as a creditor or purchaser.

7. "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance

relating to protection of the environment.

8. "Guardian" is as defined in section 30.1-01-06.

9. "Interests of the beneficiaries" means the beneficial interests provided in the terms of

the trust.

10. "Internal Revenue Code" means the Internal Revenue Code of 1986, or corresponding

future provisions of federal tax law.

11. "Irrevocable" means if used in reference to a trust, a trust that is not revocable,

including a formerly revocable trust that has become irrevocable, whether by the death

of a settlor or otherwise.

12. "Jurisdiction", with respect to a geographic area, includes a state or country.

13. "Permissible distributee" means a beneficiary who is currently eligible to receive

distributions of trust income or principal, whether the distribution is mandatory or

discretionary.

14. "Power of withdrawal" means a presently exercisable general power of appointment

other than a power:

a. Exercisable by a trustee and limited by an ascertainable standard; or

b. Exercisable by another person only upon consent of the trustee or a person

holding an adverse interest.

15. "Property" means anything that may be the subject of ownership, whether real or

personal, legal or equitable, or any interest therein.

16. "Qualified beneficiary":

a. Means a beneficiary who, on the date the beneficiary's qualification is

determined:

(1) Is a permissible distributee of trust income or principal;

(2) Would be a permissible distributee of trust income or principal if the interests

of the distributees described in paragraph 1 terminated on that date without

causing the trust to terminate; or

(3) Would be a permissible distributee of trust income or principal if the trust

terminated on that date.

b. Does not include a contingent distributee or a contingent permissible distributee

of trust income or principal whose interest in the trust is not reasonably expected

to vest.

17. "Record" means information that is enshrined on a tangible medium or which is stored

in an electronic or other medium and is retrievable in perceivable form.

18. "Revocable", as applied to a trust, means revocable by the settlor without the consent

of the trustee or a person holding an adverse interest.

19. "Settlor" means a person, including a testator, that creates, or contributes property to a

trust and if more than one person creates or contributes property to a trust, each

person is a settlor of the portion of the trust property attributable to that person's

contribution except to the extent another person has the power to revoke or withdraw

that portion.

20. "Signed" means:

a. That the signature of a person, which may be a facsimile affixed, engraved,

printed, placed, stamped with indelible ink, transmitted by a facsimile

telecommunication or electronically, or in any other manner reproduced on the

record, is placed on a record or instrument with the present intention to

authenticate the record or instrument.

b. With respect to a record or instrument required by this chapter to be filed with the

clerk of court, that:

(1) The record or instrument has been signed by a person authorized to do so

by this chapter or by the trust instrument; and

(2) The signature and the record or instrument are communicated by a method

or medium acceptable to the clerk of court.

21. "Special needs trust" means special needs trust as defined in section 59-08-01.

22. "Spendthrift provision" means a term of a trust which restrains either the voluntary or

involuntary or both the voluntary and involuntary transfer of a beneficiary's interest and

does not include or prevent a disclaimer of an interest of a beneficiary.

23. "State" means a state of the United States, the District of Columbia, Puerto Rico, the

United States Virgin Islands, or any territory or insular possession subject to the

jurisdiction of the United States.

24. "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's

provisions as expressed in the trust instrument or as may be established by other

evidence that would be admissible in a judicial proceeding.

25. "Trust instrument" means a record signed by the settlor that contains terms of the trust,

including any amendments to the record and any modifications permitted by court

order or by binding nonjudicial settlement agreement.

26. "Trustee" includes an original, additional, and successor trustee, and a cotrustee,

whether or not appointed or confirmed by a court.
N.D. Cent. Code § 59-08-02 — ND Code / Title 59 / Chapter 59-08 / Section 59-08-02
59-08-02. Third-party special needs trusts under state law
Status: in_force

59-08-02. Third-party special needs trusts under state law

1. A third-party special needs trust must provide for the living expenses and other needs

of an individual with a disability when publicly funded benefits are not sufficient to

provide adequately for those needs. A third-party special needs trust must limit

distributions in a manner and for purposes that supplement or complement publicly

funded benefits for an individual with a disability. A third-party special needs trust may

not have the effect of replacing, reducing, or substituting for publicly funded benefits

otherwise available to a beneficiary with a disability or rendering a beneficiary with a

disability ineligible for publicly funded benefits.

2. This section applies to any third-party special needs trust that complies with the

requirements of this chapter, regardless of the date on which the trust was created or

funded. Notwithstanding any other provision of the law, this chapter does not disqualify

any beneficiary of a third-party special needs trust from receiving publicly funded

benefits if the trust did not disqualify that individual under previous law.
N.D. Cent. Code § 59-12-02 — ND Code / Title 59 / Chapter 59-12 / Section 59-12-02
59-12-02. (402) Requirements for creation
Status: in_force

59-12-02. (402) Requirements for creation

1. A trust is created only if the settlor has capacity to create a trust, the settlor indicates

an intention to create the trust, the trust has a definite beneficiary or is a charitable

trust, a trust for the care of an animal, as provided in section 59-12-08, or a trust for a

noncharitable purpose, as provided in section 59-12-09; the trustee has duties to

perform; and the same person is not the sole trustee and sole beneficiary.

2. A beneficiary is definite if the beneficiary can be ascertained now or in the future,

subject to any applicable rule against perpetuities.

3. A power in a trustee to select a beneficiary from an indefinite class is valid. If the

power is not exercised within a reasonable time, the power fails and the property

subject to the power passes to the persons who would have taken the property had

the power not been conferred.
N.D. Cent. Code § 59-22-14 — ND Code / Title 59 / Chapter 59-22 / Section 59-22-14
59-22-14. (402) Relation to Electronic Signatures in Global and National Commerce Act
Status: in_force

59-22-14. (402) Relation to Electronic Signatures in Global and National Commerce

Act.

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and

National Commerce Act, [15 U.S.C. Section 7001 et seq.] but does not modify, limit, or

supersede 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices

described in 15 U.S.C. Section 7003(b).
N.D. Cent. Code § 59-18-06 — ND Code / Title 59 / Chapter 59-18 / Section 59-18-06
59-18-06. (1006) Reliance on trust instrument
Status: in_force

59-18-06. (1006) Reliance on trust instrument

A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust

instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted

from the reliance.
N.D. Cent. Code § 59-15-06 — ND Code / Title 59 / Chapter 59-15 / Section 59-15-06
59-15-06. (706) Removal of trustee
Status: in_force

59-15-06. (706) Removal of trustee

1. The settlor, a cotrustee, or a beneficiary may request the court to remove a trustee, or

a trustee may be removed by the court on its own initiative.

2. The court may remove a trustee if the trustee has committed a serious breach of trust;

if lack of cooperation among cotrustees substantially impairs the administration of the

trust; if because of unfitness, unwillingness, or persistent failure of the trustee to

administer the trust effectively, the court determines that removal of the trustee best

serves the interests of the beneficiaries; or if there has been a substantial change of

circumstances or removal is requested by all of the qualified beneficiaries, the court

finds that removal of the trustee best serves the interests of all of the beneficiaries and

is not inconsistent with a material purpose of the trust, and a suitable cotrustee or

successor trustee is available.

3. Pending a final decision on a request to remove a trustee, or in lieu of or in addition to

removing a trustee, the court may order such appropriate relief under subsection 2 of

section 59-18-01 as may be necessary to protect the trust property or the interests of

the beneficiaries.
N.D. Cent. Code § 59-04.2-22 — ND Code / Title 59 / Chapter 59-04.2 / Section 59-04.2-22
59-04.2-22. (414) Derivatives and options
Status: in_force

59-04.2-22. (414) Derivatives and options

1. In this section, "derivative" means a contract or financial instrument or a combination

of contracts and financial instruments which gives a trust the right or obligation to

participate in some or all changes in the price of a tangible or intangible asset or group

of assets, or changes in a rate, an index of prices or rates, or other market indicator for

an asset or a group of assets.

2. To the extent that a trustee does not account under section 59-04.2-11 for transactions

in derivatives, the trustee shall allocate to principal receipts from and disbursements

made in connection with those transactions.

3. If a trustee grants an option to buy property from the trust, whether or not the trust

owns the property when the option is granted, grants an option that permits another

person to sell property to the trust, or acquires an option to buy property for the trust or

an option to sell an asset owned by the trust, and the trustee or other owner of the

asset is required to deliver the asset if the option is exercised, an amount received for

granting the option must be allocated to principal. An amount paid to acquire the option

must be paid from principal. A gain or loss realized upon the exercise of an option,

including an option granted to a settlor of the trust for services rendered, must be

allocated to principal.