An Act To Enact the Uniform Trust Code
Maine Legislature, Session 121, LD 0921
Committee Amendment CA_A_H795 (House)
Amends: 5 MRSA §17108, 5 MRSA §17153, 13 MRSA §4106, 18-A MRSA §1, 18-A MRSA §3, 18-A MRSA §5, 18-A MRSA §7, 18-A MRSA §8, 30-A MRSA §5706, 36 MRSA §5102

COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921, Bill, "An Act 
To Enact the Uniform Trust Code" 
Amend the bill by inserting after the enacting clause and 
before the concept draft summary the following: 
'PART A 
UNIFORM GENERAL COMMENT 
PREFATORY NOTE 
The Uniform Trust Code (2000) is the first national codification 
of the law of trusts. The primary stimulus to the Commissioners' 
drafting of the Uniform Trust Code is the greater use of trusts 
in recent years, both in family estate planning and in commercial 
transactions, both in the United States and internationally. This 
greater use of the trust, and consequent rise in the number of 
day-to-day questions involving trusts, has led to a recognition 
that the trust law in many States is thin. It has also led to a 
recognition that the existing Uniform Acts relating to trusts, 
while numerous, are fragmentary. The Uniform Trust Code will 
provide States with precise, comprehensive, and easily accessible 
guidance on trust law questions. 
On issues on which States 
diverge or on which the law is unclear or unknown, the Code will 
for the first time provide a uniform rule. The Code also contains 
a number of innovative provisions. 
Page l-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Default Rule: Most of the Uniform Trust Code consists of default 
rules that apply only if the terms of the trust fail to address 
or insufficiently cover a particular issue. Pursuant to Section 
105, a drafter is free to override a substantial majority of the 
Code's provisions. The exceptions are scheduled in Section 105(b). 
Innovative Provisions: 
codification of the 
Much of the Uniform Trust Code is a 
common 
law of trusts. But the Code does 
contain a 
number of innovative provisions. 
Among the more 
significant are specification of the rules of trust law that are 
not subject to override in the trust's terms (Section 105), the 
inclusion 
of 
a 
comprehensive 
article 
on 
representation 
of 
beneficiaries (Article 3), 
rules on trust modification and 
termination that will enhance flexibility (Sections 410-417), and 
the 
inclusion of 
an article collecting the special 
rules 
pertaining to revocable trusts (Article 6). 
Models for Drafting: While the Uniform Trust Code is the first 
comprehensive Uniform Act on the subject of trusts, comprehensive 
trust statutes are already in effect in several States. Notable 
examples include the statutes in California, Georgia, Indiana, 
Texas, 
and Washington, all of which were referred to in the 
drafting process. 
Most influential was 
the 
1986 California 
statute, 
found at Division 9 of the California Probate Code 
(Sections 
15000 et seq.), 
which was 
used by the Drafting 
Committee as its initial model. 
Existing Uniform 
Laws 
on Trust 
Law 
SUbjects: 
Uniform Acts are incorporated into the Uniform 
Others, addressing more specialized topics, will 
available for enactment in free-standing form. 
Certain older 
Trust Code. 
continue to be 
The following Uniform Acts are incorporated into or otherwise 
superseded by the Uniform Trust Code: 
Uniform Probate Code Article VII -
Originally approved in 
1969, 
Article 
VII 
has 
been 
enacted 
in 
about 
jurisdictions. 
Article 
VII, 
although 
titled 
"Trust 
Administration," is a modest statute, addressing only a 
limited number of topics. Except for its provisions on trust 
registration, Article VII is superseded by the Uniform Trust 
Code. Its provisions on jurisdiction are incorporated into 
Article 
of the 
Code, 
and its 
prov~s~on on trustee 
liability to persons other than beneficiaries are replaced 
by Section 1010. 
Uniform Prudent Investor Act (1994) 
-
This Act has been 
enacted in 35 jurisdictions. This Act, and variant forms 
enacted in a number of other States, has displaced the older 
"prudent man" standard, bringing trust law into line with 
COMMITTEE AMENDMENT 
" 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
modern investment practice. States that have enacted the 
Uniform Prudent Investor Act are encouraged to recodify it 
as part of their enactment of the Uniform Trust Code. A 
place for this is provided in Article 9. 
Uniform Trustee Powers 
Act 
(1964) 
This 
Act has been 
enacted in 16 States. The Act contains a list of specific 
trustee 
powers 
and 
deals 
with 
other 
selected 
issues, 
particularly relations of a trustee with persons other than 
beneficiaries. The Uniform Trustee Powers Act is outdated 
and is entirely superseded by the Uniform Trust Code, 
principally at Sections 815, 816, and 1012. States enacting 
the Uniform Trust Code should repeal their existing trustee 
powers legislation. 
Uniform Trusts Act (1937) -
This largely overlooked Act of 
similar name was enacted in only six States, none within the 
past 
several 
decades. 
Despite 
a 
title 
suggesting 
comprehensive coverage of its topic, this Act, like Article 
VII of the UPC, addresses only a limited number of topics. 
These include the duty of loyalty, the registration and 
voting of securities, and trustee liability to persons other 
than beneficiaries. States enacting the Uniform Trust Code 
should repeal this earlier namesake. 
The following Uniform Acts are not affected by enactment of the 
Uniform Trust Code and do not need to be amended or repealed: 
Uniform Common Trust Fund Act - Originally approved in 1938, 
this Act has been enacted in 34 jurisdictions. The Uniform 
Trust Code does not address the subject of common trust 
funds. 
In recent years, 
many 
banks 
have replaced their 
common trust funds with mutual funds that may also be 
available 
to 
non-trust 
customers. 
The 
Code 
addresses 
investment in mutual funds at Section 802(f). 
Uniform Custodial Trust Act (1987) 
-
This Act has been 
enacted in 14 jurisdictions. This Act allows standard trust 
provisions to be automatically incorporated into the terms 
of a trust simply by referring to the Act. This Act is not 
displaced by the Uniform Trust Code but complements it. 
Uniform Management of Institutional Funds Act (1972) - This 
Act has been enacted in 47 jurisdictions. It governs the 
administration of 
endowment 
funds 
held by charitable, 
religious, and other eleemosynary institutions. The Uniform 
Management of Institutional Funds Act establishes a standard 
of prudence for use of appreciation on assets, provides 
specific authority for the making of investments, authorizes 
the delegation of this authority, and specifies a procedure, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
through either donor consent or court approval, for removing 
restrictions on the ase of donated funds. 
Uniform Principal and Income Act (1997) -
The 1997 Uniform 
Principal and Income Act is a major revision of the widely 
enacted Uniform Act 
of the same 
name 
approved in 1962. 
Because this Act addresses issues with respect both to 
decedent' s estates and trusts, a jurisdiction enacting the 
revised Uniform Principal and Income Act may wish to include 
it either as part of this Code or as part of its probate 
laws. 
Uniform Probate 
Cod~ -
Originally approved in 1969, and 
enacted in close to complete form in about 20 States but 
influential in virtually all, the UPC overlaps with trust 
topics 
in several 
areas. 
One 
area of overlap, 
already 
mentioned, is UPC Article VII. Another area of overlap 
concerns representation of beneficiaries. UPC Section 1-403 
provides principles of representation for aChieving binding 
judicial settlements of matters involving both estates and 
trusts. The Uniform Trust Code refines these representation 
principles, 
and 
e~tends 
them 
to 
nonjudicial 
settlement 
agreements and to optional notices and consents. See Uniform 
Trust Code, Section 111 and Article 3. 
A final area of 
overlap between the UPC and trust law concerns rules of 
construction. 
The 
UPC, 
in Article II, 
Part 7, 
extends 
certain of the rules on the construction of wills to trusts 
and other nonprobate instruments. 
The Uniform Trust Code 
similarly extends to trusts the rules on the construction of 
wills. Unlike the 
UPC, 
however, 
the Trust Code does not 
prescr ibe the exact rules. Instead, Section 112 of the 
Uniform Trust Code is an optional 
prov~s~on applying to 
trusts whatever rules the enacting jurisdiction already has 
in place on the construction of wills. 
Uniform Statutory 
R~le Against Perpetuities 
Originally 
approved 
in 
1986, 
this 
Act 
has 
been 
enacted 
in 
jurisdictions. The Act reforms the durational limit on when 
property 
interests, 
including 
interests 
created 
under 
trusts, must vest or fail. The Uniform Trust Code does not 
limit the duration of trusts or alter the 
time 
when 
interests must otherwise vest, but leaves this issue to 
other state law. The Code may be enacted without change 
regardless of the status of the perpetuities law in the 
enacting jurisdiction. 
Uniform Supervision of Trustees for Charitable Purposes Act 
(1954) -
This Act, which has been enacted in four States, is 
limited 
to 
mechanisms 
for 
monitoring 
the 
actions 
of 
charitable trustees. 
Unlike the Uniform Trust Code, 
the 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Supervision of Trustees for Charitable Purposes Act does not 
address the substantive law of charitable trusts. 
Uniform Testamentary Additions to Trusts Act -
This Act is 
available in two versions: the 1960 Act, with 24 enactments; 
and the 1991 Act, with 20 enactments through 1999. As its 
name suggests, this Act validates pourover devises to 
trusts. Because it validates prov1s10ns in wills, it is 
incorporated into the Uniform Probate Code, not into the 
Uniform Trust Code. 
Role of Restatement of Trusts: The Restatement (Second) of Trusts 
was approved by the American Law Institute in 1957. Work on the 
Restatement Third began in the late 1980s. 
The 
portion of 
Restatement Third relating to the prudent investor rule and other 
investment topics was completed and approved in 1990. A tentative 
draft of the portion of Restatement Third relating to the rules 
on the creation and validity of trusts was approved in 1996, and 
the portion relating to the office of trustee, trust purposes, 
spendthrift provisions and the rights of creditors was approved 
in 1999. The Uniform Trust Code was drafted in close coordination 
with the writing of the Restatement Third. 
Overview of Uniform Trust Code 
The Uniform Trust Code consists of 11 articles. The substance of 
the Code is focused in the first 10 articles; Article 11 is 
primarily an effective date provision. 
Article 1 -
General Provisions and Definitions -
In addition to 
definitions, this article addresses miscellaneous but important 
topics. 
The 
Uniform Trust Code is primarily default law. 
A 
settlor, subject to certain limitations, is free to draft trust 
terms departing from the provisions of this Code. The settlor, if 
minimum contacts are present, may in addition designate the 
trust's 
principal 
place 
of 
administration; 
the 
trustee, 
if 
certain standards are met, may transfer the principal place of 
administration 
to 
another 
State 
or 
country. 
To 
encourage 
nonjudicial resolution of disputes, 
the Uniform Trust Code 
provides more certainty for when such settlements are binding. 
While the Code does not prescribe the exact rules to be applied 
to the construction of trusts, it does extend to trusts whatever 
rules the enacting jurisdiction has on the construction of wills. 
The 
Uniform 
Trust 
Code, 
although 
comprehensive, 
does 
not 
legislate on every issue. Its provisions are supplemented by the 
common law of trusts and principles of equity. 
Article 
Judicial 
Proceedings 
This 
article 
addresses 
selected issues involving judicial proceedings concerning trusts, 
particularly trusts having contacts with more than one State or 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
country. 
The 
courts 
in 
the 
trust's 
principal 
place 
of 
administration have jurisdiction over both the trustee and the 
beneficiaries as to any matter relating to the trust. Optional 
provisions on subject-matter jurisdiction and venue are provided. 
The minimal coverage of this article was deliberate. The Drafting 
Committee concluded that most issues related to jurisdiction and 
procedure are not appropriate to a Trust Code, but are best left 
to other bodies of law. 
Article 
Representation 
This article deals 
with 
the 
representation of beneficiaries and other interested persons, 
both 
by fiduciaries 
(personal 
representatives, 
guardians 
and 
conservators), 
and 
through 
what 
is 
known 
as 
virtual 
representation. 
The 
representation principles of the article 
apply 
to 
settlement of 
disputes, 
whether 
by 
a 
court or 
nonjudicially. They apply for the giving of required notices. 
They apply for the giving of consents to certain actions. The 
article also authorizes a court to appoint a representative if 
the court concludes that representation of 
a 
person might 
otherwise be inadequate. The court may appoint a representative 
to represent and approve a settlement on behalf of a minor, 
incapacitated, 
or unborn person or person whose 
identity or 
location is unknown and not reasonably ascertainable. 
Article 4 - Creation, Validity, Modification and Termination of 
Trust -
This article specifies the requirements for creating, 
modifying and terminating trusts. Most of the requirements 
relating to creation of trusts (Sections 401 through 409) track 
traditional doctrine, including requirements of intent, capacity, 
property, 
and valid trust 
purpose. 
The 
Uniform 
Trust 
Code 
articulates 
a 
three-part classification system for trusts: 
noncharitable, charitable, 
and honorary. 
Noncharitable trusts, 
the most common type, require an ascertainable beneficiary and a 
valid purpose. Charitable trusts, on the other hand, by their 
very nature are created to benefit the public at large. The so 
called honorary or purposes trust, although unenforceable at 
common law, is valid and enforceable under this Code despite the 
absence of an ascertainable beneficiary. The most common example 
is a trust for the care of an animal. 
Sections 410 through 417 provide a series of interrelated rules 
on when a trust may be terminated or modified other than by its 
express terms. The overall objective of these sections is to 
enhance flexibility consistent with the principle that preserving 
the settlor's intent is paramount. Termination or modification 
may be allowed upon beneficiary consent if the court concludes 
that the trust or a particular provision no longer serves a 
material purpose or if the settlor concurs; by the court in 
response to unanticipated circumstances or to remedy ineffective 
administrative terms; or by the court or trustee if the trust is 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
of insufficient size to justify continued administration under 
its existing terms. Trusts may be reformed to correct a mistake 
of law or fact, or modified to achieve the settlor's tax 
objectives. Trusts may be combined or divided. Charitable trusts 
may be modified or terminated under cy pres to better achieve the 
settlor's charitable purposes. 
Article 
Creditor's Claims: Spendthrift and Discretionary 
Trusts -
This article addresses the validity of a spendthrift 
provision and other issues relating to the rights of creditors to 
reach the trust to collect a debt. To the extent a trust is 
protected by a spendthrift provision, a beneficiary's creditor 
may not reach the beneficiary's interest until distribution is 
made by the trustee. To the extent not protected by a spendthrift 
provision, 
a creditor can reach the beneficiary's interest, 
subject 
to 
the 
court's 
power 
to 
limit the 
award. 
Certain 
categories of claims are exempt from a spendthrift restriction, 
including 
certain governmental 
claims 
and 
claims 
for 
child 
support or alimony. 
Other issues addressed in this article 
include creditor claims against discretionary trusts: creditor 
claims against a settlor, whether the trust is revocable or 
irrevocable: and the rights of creditors when a trustee fails to 
make a required distribution within a reasonable time. 
Article 6 -
Revocable Trusts -
This short article deals with 
issues of significance not totally settled under current law. The 
basic policy of this article and of the Uniform Trust Code in 
general is to treat the 
revocable trust as 
the functional 
equivalent of a will. The article specifies a 
standard of 
capacity, provides that a trust is presumed revocable unless its 
terms provide otherwise, prescribes the procedure for revocation 
or 
amendment of a 
revocable trust, 
addresses the rights of 
beneficiaries during the settlor's lifetime, 
and provides a 
statute of limitations on contests. 
Article 7 - Office of Trustee - This article contains a series of 
default rules dealing with the office of trustee, all of which 
may be modified in the terms of the trust. Rules are provided on 
acceptance of office and bonding. The role of the cotrustee is 
addressed, including the extent that one cotrustee may delegate 
to another, and the extent to which one cotrustee can be held 
liable for actions of another trustee. Also covered are changes 
in trusteeship, including the circumstances when a vacancy must 
be 
filled, 
the 
procedure 
for 
resignation, 
the 
grounds 
for 
removal, and the process for appointing a successor trustee. 
Finally, 
standards are provided for trustee compensation and 
reimbursement for expenses. 
Article 8 -
Duties and Powers of Trustee -
This article states 
the fundamental duties of a trustee and enumerates the trustee's 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
powers. 
The duties listed are not new, 
although some of the 
particulars have changed over the years. This article was drafted 
where possible to conform to the Uniform Prudent Investor Act. 
The 
Uniform 
Prudent 
Investor 
Act 
prescribes 
a 
trustee I s 
responsibilities with respect to the management and investment of 
trust property. This article also addresses a trustee' s duties 
regarding distributions to beneficiaries. 
Article 9 - Uniform Prudent Investor Act - This article provides 
a 
place for 
a 
jurisdiction to enact, 
reenact or codify its 
version of the Uniform Prudent Investor Act. States adopting the 
Uniform Trust Code which have previously enacted the Uniform 
Prudent Investor Act are encouraged to reenact their version of 
the Prudent Investor Act in this article. 
Article 10 -
Liability of Trustees and Rights of Persons Dealing 
With Trustees - Sections 1001 through 1009 list the remedies for 
breach of trust, describe how money damages are to be determined, 
provide a statute of limitations on claims against a trustee, and 
specify other defenses, including consent of a beneficiary and 
recognition of and limitations on the effect of an exculpatory 
clause. Sections 1010 through 1013 address trustee relations with 
persons other than beneficiaries. The objective is to encourage 
third parties to engage in commercial transactions with trustees 
to the same extent as if the property were not held in trust. 
Article 11 - Miscellaneous Provisions - The Uniform Trust Code is 
intended to have the widest possible application, consistent with 
constitutional limitations. The Code applies not only to trusts 
created on or after the effective date, but also to trusts in 
existence on the date of enactment. 
The Drafting Committee was assisted by numerous officially 
designated advisors 
and observers, 
representing 
an array of 
organizations. 
In addition to the American Bar Association 
. 
advisors listed above, 
advisors and observers who attended a 
majority of the Drafting Committee meetings include Edward C. 
Halbach, Jr., Reporter, Restatement (Third) of Trust Law; Kent H. 
McMahan, 
American College of Trust and Estate Counsel; Alex 
Misheff, American Bankers Association; and Lawrence W. Waggoner, 
Reporter, 
Restatement 
(Third) 
of Property: 
Wills 
and Other 
Donative Transfers. Significant input was also received from the 
Joint Editorial Board for Uniform Trusts and Estates Acts and the 
Committee on State Laws of the American College of Trust and 
Estate Counsel. 
MAINE GENERAL COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The Uniform Trust Code is adopted in Maine as the Maine Uniform 
Trust Code. 
Changes from the Uniform Trust Code are indicated in 
the Maine Comments for the section in which the changes are made. 
In addition, although section numbers are consistent between the 
Uniform Trust Code and the Maine Uniform Trust Code, "articles" 
in the Uniform Trust Code are "chapters" in the Maine Uniform 
Trust Code. 
Statutory units within sections of the Maine Uniform 
Trust Code are numbered and lettered differently from the Uniform 
Trust Code to maintain consistency with Maine statutes. 
The 
structure within the Maine Uniform Trust Code sections is as 
follows: 
Subsections (1, 2, 3, etc.) 
Paragraphs (A, B, C, etc.) 
Subparagraphs «1), (2), (3), etc.) 
Divisions «a), (b), (c), etc.). 
Sec. A-I. 18-B MRSA is enacted to read: 
TITLE 18-B 
TRUSTS 
PART 1 
MAINE UNIFORM TRUST CODE 
CHAPTER 1 
GENERAL PROVISIONS AND DEFINITIONS 
UNIFORM GENERAL COMMENT 
The Uniform Trust Code is primarily a default statute. Most of 
the Code's provisions can be overridden in the terms of the 
trust. The provisions not subject to override are scheduled in 
Section l05(b). These include the duty of a trustee to act in 
good faith and with regard to the purposes of the trust, public 
policy exceptions to enforcement of spendthrift provisions, the 
requirements for creating a trust, and the authority of the court 
to modify or terminate a trust on specified grounds. 
The remainder of the article specifies the scope of the Code 
(Section 102), provides definitions (Section 103), and collects 
provisions of importance not amenable to codification elsewhere 
in the Uniform Trust Code. Sections 106 and 107 focus on the 
sources of law that will govern a trust. Section 106 clarifies 
that despite the Code's comprehensive scope, not all aspects of 
the law of trusts have been codified. The Uniform Trust Code is 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
supplemented by the 
common 
law of trusts 
and principles of 
equity. Section 107 addresses selection of the jurisdiction or 
jurisdictions whose laws will govern the trust. A settlor, absent 
overriding public policy concerns, is free to select the law that 
will determine the meaning and effect of a trust's terms. 
Changing a trust's principal place of administration is sometimes 
desirable, particularly to lower a trust's state income tax. Such 
transfers are authorized in Section 108. The trustee, following 
notice 
to 
the 
"qualified beneficiaries," defined in Section 
103(12), may without approval of court transfer the principal 
place 
of 
administration 
to 
another 
State 
or 
country if 
a 
qualified beneficiary does not object and if the transfer is 
consistent with the trustee's duty to administer the trust at a 
place appropriate to its purposes, its administration, and the 
interests of the beneficiaries. The settlor, if minimum contacts 
are present, may also designate the trust's principal place of 
administration. 
Sections 
and 
through 
address procedural issues. 
Section 104 specifies when persons, particularly persons who work 
in organizations, are deemed to have acquired knowledge of a 
fact. Section 109 specifies the methods for giving notice and 
excludes 
from 
the 
Code's 
notice 
requirements 
persons 
whose 
identity or location is unknown and not reasonably ascertainable. 
Section 110 allows beneficiaries with remote interests to request 
notice of actions, such as notice of a trustee resignation, which 
are normally given only to the qualified beneficiaries. 
Section 
ratifies 
the 
use 
of 
nonjudicial 
settlement 
agreements. While the judicial settlement procedures may be used 
in all court proceedings relating to the trust, the nonjudicial 
settlement procedures will not always be available. The terms of 
the trust may direct that the procedures not be used, or settlors 
may negate or modify them by specifying their own methods for 
obtaining consents. Also, 
a nonjudicial settlement may include 
only terms and conditions a court could properly approve. 
The 
Uniform 
Trust 
Code 
does 
not 
prescribe 
the 
rules 
of 
construction to be applied to trusts created under the Code. The 
Code instead recognizes that enacting jurisdictions are likely to 
take a diversity of approaches, just as they have with respect to 
the rules of construction applicable to wills. Section 112 
accommodates 
this 
variation 
by 
providing 
that 
the 
State's 
specific rules on construction of wills, whatever they may be, 
also apply to the construction of trusts. 
§IOI. Short title 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This Part may be known and cited as "the Maine Uniform Trust 
Code." 
§102. Scope 
This 
Code 
applies 
to 
express 
trusts, 
charitable 
or 
noncharitable, and trusts created pursuant to a statute, judgment 
or decree that requires the trust to be administered in the 
manner of an express trust. 
UNIFORM COMMENT 
The Uniform Trust Code, 
while comprehensive, 
applies only to 
express trusts. Excluded from the Code's coverage are resulting 
and 
constructive trusts, 
which 
are 
not 
express 
trusts 
but 
remedial devices 
imposed by law. 
For the 
requirements for 
creating an express trust and the methods by which express trusts 
are created, see Sections 401-402. The Code does not attempt to 
distinguish express trusts from other legal relationships with 
respect to property, such as agencies and contracts for the 
benefit of third parties. For the distinctions, see Restatement 
(Third) of Trusts Sections 2, 5 (Tentative Draft No.1, approved 
1996); Restatement (Second) of Trusts Sections 2, 5-16C (1959). 
The Uniform Trust Code is directed primarily at trusts that arise 
in an estate planning or other donative context, but express 
trusts can arise in other contexts. For example, a trust created 
pursuant to a divorce action would be included, even though such 
a 
trust 
is 
not 
donative 
but 
is 
created 
pursuant 
to 
a 
bargained-for exchange. Commercial trusts come in numerous forms, 
including trusts created pursuant to a state business trust act 
and trusts created to administer specified funds, such as to pay 
a pension or to manage pooled investments. Commercial trusts are 
often subject to special-purpose legislation and case law, which 
in some respects displace the usual rules stated in this Code. 
See John H. Langbein, The Secret Life of the Trust: The Trust as 
an Instrument of Commerce, 107 Yale L.J. 165 (1997). 
Express trusts also may be created by means of court judgment or 
decree. Examples include trusts created to hold the proceeds of 
personal injury recoveries and trusts created to hold the assets 
of a protected person in a conservatorship proceeding. See, e.g., 
Uniform Probate Code Section 5-411(a)(4). 
MAINE COMMENT 
Although the Maine Uniform Trust Code by its terms applies to 
charitable 
and noncharitable trusts, 
"split interest" trusts 
Page ll-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
(i. e., trusts that have characteristics of both charitable and 
noncharitable trusts, e.g., charitable remainder and charitable 
lead trusts) are also within the scope of the Maine Uniform Trust 
Code. 
The term "noncharitable trust" is not a term currently used in 
Maine trust law. 
"Trust," as defined in the Probate Code, 
section 1-201, 
subsection 
(45) 
includes, 
among other things, 
"private" trusts. The term "noncharitable," as used in the Maine 
Uniform Trust Code, means "private" as currently used in Maine 
trust law. 
SID3. Definitions 
As 
used 
in 
this 
Code, 
unless 
the 
context 
otherwise 
indicates, the following terms have the following meanings. 
1. Action. 
"Action." with respect to an act of a trustee. 
includes a failure to act. 
2. 
Beneficia:ry. 
"Beneficiary" means a person that: 
A. 
Has a present or future beneficial interest in a trust. 
vested or contingent; or 
B. 
In a capacity other than that of trustee. holds a power 
of appointment over trust property. 
3. 
Charitable trust. 
"Charitable trust" means a trust. or 
portion of a trust. created for a charitable purpose described in 
section 405. subsection 1. 
3-A. 
Code. 
"Code" means the Maine Uniform Trust Code. 
4. 
Conservator. 
"Conservator" means a person appointed by 
the court to administer an estate of a minor or adult individual. 
5. Environmental law. 
"Environmental law" means a federal. 
state or local law. rule. regulation or ordinance relating to 
protection of the environment. 
6. 
Guardian. 
"Guardian" means a person who has qualified 
pursuant to court appointment to make decisions regarding the 
support. care, education, health and welfare of a minor or adult 
individual. The term does not include a guardian ad litem. 
7. 
Interests 
of 
beneficiaries. 
"Interests 
of 
the 
benef iciar ies" means the beneficial interests provided in the 
terms of the trust. 
Page l2-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
8. 
Jurisdiction. 
"Jurisdiction," 
with 
respect 
to 
a 
geographic area, includes a state or country. 
9. 
Person. 
"Person" means an individual, corporation, 
business trust, estate, trust, partnership, 
limited liability 
company, association, joint venture, government: governmental 
subdivision, 
agency or instrumentality: public corporation: or 
any other legal or commercial entity. 
10. 
Power of withdrawal. 
"Power of withdrawal" means a 
presently exercisable general power of appointment other than a 
power exercisable only upon consent of the trustee or a person 
holding an adverse interest. 
11. 
Property. 
"Property" means anything that may be the 
subject of 
ownership, 
whether 
real or personal, 
legal or 
equitable, or any interest therein. 
12. 
Qualified beneficiary. 
"Qualified beneficiary" means a 
beneficiary who on the date the beneficiary's qualification is 
determined: 
A. 
Is a distributee or permissible distributee of trust 
income or principal: 
B. 
Would be a distributee or permissible distributee of 
trust 
income 
or 
principal 
if 
the 
interests 
of 
the 
distributees described in paragraph A terminated on that 
date: or 
C. 
Would be a distributee or permissible distributee of 
trust income or principal if the trust terminated on that 
date. 
"Oualified beneficiary" 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. 
13. 
Revocable. 
"Revocable," as applied to a trust. means 
revocable by the settlor without the consent of the trustee or a 
person holding an adverse interest. 
14. 
Settlor. 
"Settlor" means 
a 
person, 
including a 
testator, who creates or contributes property to a trust. 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. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
15. 
Spendthrift provision. 
"Spendthrift provision" means a 
term of a trust that restrains both voluntary and involuntary 
transfer of a beneficiary's interest. 
16. 
State. 
"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. 
17. 
Terms of trust. 
"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. 
18. 
Trust 
instrument. 
"Trust 
instrument" 
means 
an 
instrument executed by the settlor that contains terms of the 
trust, including any amendments to the instrument. 
19. 
Trustee. 
"Trustee" includes an originaL additional 
and successor trustee, and a cotrustee, whether or not appointed 
or confirmed by a court. 
UNIFORM COMMENT 
A definition of "action" (paragraph (1» 
is included for drafting 
convenience, to avoid having to clarify in the numerous places in 
the Uniform Trust Code where reference is made to an "action" by 
the trustee that the term includes a failure to act. 
"Beneficiary" (paragraph (2» 
refers only to a beneficiary of a 
trust as defined in the Uniform Trust Code. In addition to living 
and 
ascertained individuals, 
beneficiaries may 
be 
unborn or 
unascertained. Pursuant to Section 402(b), a trust is valid only 
if a beneficiary can be ascertained now or in the future. The 
term "beneficiary" includes not only beneficiaries who received 
their 
interests 
under 
the 
terms 
of 
the 
trust 
but 
also 
beneficiaries who 
received their interests by other means, 
including by assignment, exercise of a 
power of appointment, 
resulting trust upon the failure of an interest, gap in a 
disposition, 
operation 
of 
an 
antilapse 
statute 
upon 
the 
predecease of a named beneficiary, or upon termination of the 
trust. The fact that a person incidentally benefits from the 
trust does not mean that the person is a beneficiary. For 
example, 
neither a 
trustee nor persons hired by the trustee 
become beneficiaries merely because they receive compensation 
from the trust. See Restatement (Third) of Trusts Section 48 cmt. 
c (Tentative Draft No.2, approved 1999); Restatement (Second) of 
Trusts Section 126 cmt. c (1959). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
While the holder of a power of appointment is not considered a 
trust beneficiary under the common law of trusts, holders of 
powers are classified as beneficiaries under the Uniform Trust 
Code. Holders of powers are included on the assumption that their 
interests are significant enough that they should be afforded the 
rights of beneficiaries. A power of appointment as used in state 
trust law and this Code is as defined in state property law and 
not federal tax law although there is considerable overlap 
between the two definitions. 
A power of appointment is authority to designate the recipients 
of beneficial interests in property. See Restatement (Second) of 
Property: Donative Transfers Section 11.1 (1986). 
A power is 
either general or nongeneral and either presently exercisable or 
not presently exercisable. A general power of appointment is a 
power exercisable in favor of the holder of the power, the power 
holder's creditors, the power holder's estate, or the creditors 
of the power holder's estate. 
See Restatement 
(Second) 
of 
Property: 
Donative Transfers 
Section 11.4 
(1986). 
All 
other 
powers are nongeneral. A power is presently exercisable if the 
power holder can currently create an interest, present or future, 
in an object of the power. 
A power of appointment is not 
presently exercisable if exercisable only by the power holder's 
will or if its exercise is not effective for a specified period 
of time or until occurrence of some event. 
See Restatement 
(Second) of Property: Donative Transfers Section 11. 5 (1986). 
Powers of appointment may be held in either a 
fiduciary or 
nonfiduciary capacity. The definition of "beneficiary" excludes 
powers held by a trustee but not powers held by others in a 
fiduciary capacity. 
While all categories of powers of appointment are included within 
the definition of "beneficiary," the Uniform Trust Code elsewhere 
makes distinctions among types of powers. A "power of withdrawal" 
(paragraph (10» 
is defined as a presently exercisable general 
power of appointment other than a power exercisable only upon 
consent of the trustee or a person holding an adverse interest. 
Under Section 302, the holder of a testamentary general power of 
appointment may represent and bind persons whose interests are 
subject to the power. 
The definition of "beneficiary" includes only those who hold 
beneficial interests in the trust. Because a charitable trust is 
not created to benefit ascertainable beneficiaries but to benefit 
the community at large (see Section 405( a», persons 
rece~v1ng 
distributions from a charitable trust are not beneficiaries as 
that term is defined in this Code. However, pursuant to Section 
110(b), charitable organizations expressly designated to receive 
distributions under the terms of a charitable trust, even though 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
not beneficiaries as defined, are granted the rights of qualified 
beneficiaries under the Code. 
The 
Uniform 
Trust 
Code 
leaves 
certain 
issues 
concerning 
beneficiaries to the common law. Any person with capacity to take 
and hold legal title to intended trust property has capacity to 
be a beneficiary. See Restatement (Third) of Trusts Section 43 
(Tentative Draft No.2, approved 1999); Restatement (Second) of 
Trusts Sections 116-119 (1959). Except as limited by public 
policy, the extent of a beneficiary's interest is determined 
solely by the settlor's intent. See Restatement (Third) of Trusts 
Section 49 (Tentative Draft No.2, approved 1999); Restatement 
(Second) of Trusts Sections 127-128 (1959). While most beneficial 
interests terminate upon a beneficiary's death, the interest of a 
beneficiary may devolve by will or intestate succession the same 
as a corresponding legal interest. See Restatement (Third) of 
Trusts Section 55(1) (Tentative Draft No.2, approved 1999); 
Restatement (Second) of Trusts Sections 140, 142 (1959). 
Under the Uniform Trust Code, when a trust has both charitable 
and noncharitable beneficiaries only the charitable portion 
qualifies as a 
"charitable trust" (paragraph (3». The great 
majority of the Code's provisions apply to both charitable and 
noncharitable 
trusts 
without 
distinction. 
The 
distinctions 
between the two types of trusts are found in the requirements 
relating to trust creation and modification. Pursuant to Sections 
and 413, a charitable trust must have a charitable purpose 
and charitable trusts may be modified or terminated under the 
doctrine of cy pres. Also, Section 411 allows a noncharitable 
trust to in certain instances be terminated by its beneficiaries 
while charitable trusts do not have beneficiaries in the usual 
sense. 
To the extent of these distinctions, a split-interest 
trust is subject to two sets of provisions, one applicable to the 
charitable interests, the other the noncharitable. 
For discussion of the definition of "conservator" 
(paragraph 
(4», see the definition of "guardian" (paragraph (6». 
To encourage trustees to accept and administer trusts containing 
real property, the Uniform Trust Code contains several provisions 
designed to limit exposure to possible liability for violation of 
"environmental law" (paragraph (5». Section 701(c)(2) authorizes 
a nominated trustee to investigate trust property to determine 
potential liability for violation of environmental law or other 
law without accepting the trusteeship. Section 816(13) grants a 
trustee comprehensive and detailed powers to deal with property 
involving environmental 
risks. 
Section 1010(b) 
immunizes 
a 
trustee from personal liability for violation of environmental 
law arising from the ownership and control of trust property •. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Under the Uniform Trust Code, a "guardian" (paragraph (6» 
makes 
decisions 
with 
respect 
to 
personal 
care; 
a 
"conservator" 
(paragraph (4» 
manages property. The terminology used is that 
employed in Article V of the Uniform Probate Code, and in its 
free-standing Uniform Guardianship and Protective Proceedings 
Act. Enacting jurisdictions not using these terms in the defined 
sense should substitute their own terminology. For this reason, 
both terms 
have been placed in brackets. 
The definition of 
"guardian" 
accommodates 
those 
jurisdictions 
which 
allow 
appointment of a guardian by a parent or spouse in addi tion to 
appointment by 
a 
court. 
Enacting jurisdictions which allow 
appointment of a guardian solely by a court should delete the 
bracketed language "a parent, or a spouse." 
The phrase "interests of the beneficiaries" (paragraph (7» 
is 
used 
with 
some 
frequency 
in 
the 
Uniform 
Trust 
Code. 
The 
definition clarifies that the interests are as provided in the 
terms of the trust and not as determined by the beneficiaries. 
Absent authority to do so in the terms of the trust, Section 108 
prohibits a trustee from changing a trust's principal place of 
administration if the transfer would violate the trustee's duty 
to administer the trust at a place appropriate to the interests 
of the beneficiaries. Section 706(b) conditions certain of the 
grounds 
for 
removing 
a 
trustee on the court's finding that 
removal of the trustee will best serve the interests of the 
beneficiaries. Section 801 requires the trustee to administer the 
trust in the interests of the beneficiaries, and Section 802 
makes clear that a trustee may not place its own interests above 
those of the beneficiaries. Section 808(d) requires the holder of 
a power to direct who is subject to a fiduciary obligation to act 
with regard to the interests of the beneficiaries. Section 
1002(b) may impose greater liability on a cotrustee who commits a 
breach of trust with reckless indifference to the interests of 
the beneficiaries. Section 1008 invalidates an exculpatory term 
to the extent it relieves a trustee of liability for breach of 
. 
trust committed with reckless indifference to the interests of 
the beneficiaries. 
"Jurisdiction" (paragraph (8», when used with reference to a 
geographic 
area, 
includes 
a 
state 
or 
country 
but 
is 
not 
necessarily so limited. Its precise scope will depend on the 
context in which it is used. "Jurisdiction" is used in Sections 
and 403 to refer to the place whose law will govern the 
trust. The term is used in Section 108 to refer to the trust's 
principal place of administration. The term is used in Section 
to refer to the place where the trustee may appoint an 
ancillary trustee and to the place in whose courts the trustee 
can bring and defend legal proceedings. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The definition of "property" (paragraph (11» 
is intended to be 
as expansive as possible and to encompass anything that may be 
the subject of ownership. Included are choses in action, claims, 
and interests created by beneficiary designations under policies 
of insurance, financial instruments, and deferred compensation 
and 
other 
retirement 
arrangements, 
whether 
revocable 
or 
irrevocable. Any such property interest is sufficient to support 
creation of a trust. See Section 401 comment. 
Due 
to 
the 
difficulty 
of 
identifying 
beneficiaries 
whose 
interests 
are 
remote 
and 
contingent, 
and 
because 
such 
beneficiaries are 
not likely to have 
much interest in the 
day-to-day affairs of the trust, the Uniform Trust Code uses the 
concept of "qualified beneficiary" (paragraph (12» 
to limit the 
class of beneficiaries to whom certain notices must be given or 
consents received. The definition of qualified beneficiaries is 
used in Section 705 to define the class to whom notice must be 
given of a trustee resignation. The term is used in Section 813 
to define 
the class to be 
kept 
informed of the trust's 
administration. Section 417 requires that notice be given to the 
qualified beneficiaries before a trust may be 
combined or 
divided. Actions which may be accomplished by the consent of the 
qualified beneficiaries include the appointment of a successor 
trustee as provided in Section 704. 
Prior to transferring a 
trust's 
principal 
place 
of 
administration, 
Section 
108(d) 
requires that the trustee give at least 60 days notice to the 
qualified beneficiaries. 
The 
qualified 
beneficiaries 
consist 
of 
the 
beneficiaries 
currently eligible to receive a distribution from the trust 
together 
with 
those 
who 
might 
be 
termed 
the 
first-line 
remaindermen. 
These 
are 
the beneficiaries 
who 
would 
become 
eligible to receive distributions were the event triggering the 
termination of a beneficiary's interest or of the trust itself to 
occur on the date in question. Such a terminating event will 
typically be the death or deaths of the beneficiaries currently 
eligible to receive the income. Should a qualified beneficiary be 
a 
minor, 
incapacitated, 
or 
unknown, 
or 
a 
beneficiary whose 
identity or 
location is not reasonably ascertainable, 
the 
representation and virtual representation principles of Article 3 
may be employed, including the possible appointment by the court 
of a representative to represent the beneficiary's interest. 
The qualified beneficiaries who take upon termination of the 
beneficiary's interest or of the trust can include takers in 
default of the exercise of a power of appointment. The term can 
also include the persons entitled to receive the trust property 
pursuant to the exercise of a power of appointment. Because the 
exercise of a testamentary power of appointment is not effective 
until the testator's death and probate of the will, the qualified 
Page l8-LR0466(2) 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
beneficiaries do not include 
living person. 
Nor would the 
unexercised inter vivos power. 
appointees under 
term include the 
the will 
objects 
of a 
of an 
Charitable trusts and trusts for a valid noncharitable purpose do 
not have beneficiaries in the usual sense. 
However, 
certain 
persons, while not technically beneficiaries, do have an interest 
in seeing that the trust is enforced. Section 110 expands the 
definition of qualified beneficiaries to encompass this wider 
group. It grants the rights of qualified beneficiaries to the 
attorney general of the state and charitable organizations 
expressly designated to receive distributions under the terms of 
a charitable trust. It also grants the rights of qualified 
beneficiaries to persons appointed by the terms of the trust or 
by the court to enforce a trust created for an animal or other 
noncharitable purpose. 
The definition of "revocable" 
(paragraph (13» 
clarifies that 
revocable 
trusts 
include 
only 
trusts 
whose 
revocation is 
substantially wi thin the settlor's control. The consequences of 
classifying a trust as revocable are many. The Uniform Trust Code 
contains provisions relating to liability of a revocable trust 
for payment of the settlor's debts (Section 505), the standard of 
capacity 
for 
creating 
a 
revocable trust 
(Section 601), 
the 
procedure for revocation (Section 602), the subjecting of the 
beneficiaries' rights to the settlor's control (Section 603), the 
period for contesting a revocable trust (Section 604), the power 
of the settlor of a revocable trust to direct the actions of a 
trustee (Section 808(a», notice to the qualified beneficiaries 
upon the settlor's death (Section 813(b», and the liability of a 
trustee of a revocable trust for the obligations of a partnership 
of which the trustee is a general partner (Section 1011(d». 
Because under Section 603(c) the holder of a power of withdrawal 
has the rights of a settlor of a revocable trust, the definition 
of 
"power 
of 
withdrawal" 
(paragraph 
(10», 
and 
"revocable" 
(paragraph (13» 
are similar. Both exclude individuals who can 
exercise their power only with the consent of the trustee or 
person having an adverse interest. 
The definition of "settlor" (paragraph (14» refers to the person 
who creates, or contributes property to, 
a trust, whether by 
will, self-declaration, transfer of property to another person as 
trustee, 
or 
exercise 
of 
a 
power 
of 
appointment. 
For 
the 
requirements for creating a trust, see Section 401. Determining 
the identity of the "settlor" is usually not an issue. The same 
person will both sign the trust instrument and fund the trust. 
Ascertaining the identity of the settlor becomes more difficult 
when more than one person signs the trust instrument or funds the 
trust. The fact that a person is designated as the "settlor" by 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the terms of the trust is not necessarily determinative. For 
example, 
the person who executes the trust instrument may be 
acting as the agent for the person who will be funding the trust. 
In that case, the person funding the trust, and not the person 
signing the trust instrument, will be the settlor. Should more 
than one person contribute to a trust, all of the contributors 
will ordinarily be treated as settlors in proportion to their 
respective contributions, 
regardless of which one 
signed the 
trust instrument. See Section 602(b). 
In the case of a revocable trust employed as a will substitute, 
gifts to the trust's creator are sometimes made by placing the 
gifted property directly into the trust. To recognize that such a 
donor is not intended to be treated as a settlor, the definition 
of "settlor" excludes a contributor to a trust that is revocable 
by another person or over which another person has a power of 
withdrawal. Thus, a parent who contributes to a child's revocable 
trust would not be treated as one of the trust's settlors. The 
definition of settlor would treat the child as the sole settlor 
of 
the 
trust 
to 
the 
extent 
of 
the 
child's 
proportionate 
contribution. Pursuant to Section 603(c), the child's power of 
withdrawal over the trust would also result in the child being 
treated as the settlor with respect to the portion of the trust 
attributable to the parent's contribution. 
Ascertaining the identity of the settlor is important for a 
variety of reasons. It is important for determining rights in 
revocable trusts. See Sections 505(a)(l), (3) (creditor claims 
against 
settlor 
of 
revocable 
trust), 
(revocation 
or 
modification of revocable trust), and 604 (limitation on contest 
of revocable trust). It is also important for determining rights 
of 
creditors 
in 
irrevocable 
trusts. 
See 
Section 
505(a)(2) 
(creditors of settlor can reach maximum 
amount trustee can 
distribute to settlor). While the settlor of an irrevocable trust 
traditionally has no continuing rights over the trust except for 
36. 
the right under Section 411 to terminate the trust with the 
beneficiaries' consent, the Uniform Trust Code also authorizes 
the settlor of an irrevocable trust to petition for removal of 
the trustee and to enforce or modify a charitable trust. See 
Sections 
405(c) 
(standing to enforce 
charitable trust), 
(doctrine of cy pres), and 706 (removal of trustee). 
"Spendthrift provision" (paragraph (15» 
means a term of a trust 
which restrains the transfer of a beneficiary's interest, whether 
by a voluntary act of the beneficiary or by an action of a 
beneficiary's creditor or assignee, which at least as far as the 
beneficiary is concerned, would be involuntary. A spendthrift 
provision is valid under the Uniform Trust Code only if it 
restrains 
both 
voluntary 
and 
involuntary transfer. 
For 
a 
discussion of this requirement and the effect of a spendthrift 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
prov~s~on in general, 
see 
Section 502. 
The 
insertion of 
a 
spendthrift 
prov~s~on in the 
terms 
of 
the 
trust 
may 
also 
constitute a material purpose sufficient to prevent termination 
of the trust by agreement of the beneficiaries under Section 411, 
although the Code does not presume this result. 
"Terms of a trust" (paragraph (17» 
is a defined term used 
frequently in the Uniform Trust Code. While the wording of a 
written trust instrument is almost always the most important 
determinant of a trust's terms, the definition is not so limited. 
Oral statements, the situation of the beneficiaries, the purposes 
of the trust, the circumstances under which the trust is to be 
administered, 
and, 
to the extent the settlor was otherwise 
silent, 
rules 
of 
construction, 
all 
may 
have 
a 
bearing 
on 
determining a trust's meaning. See Restatement (Third) of Trusts 
Section 
cmt. 
a 
(Tentative 
Draft No.1, 
approved 
1996); 
Restatement (Second) of Trusts Section 4 cmt. a (1959). If a 
trust established by order of court is to be administered as an 
express trust, the terms of the trust are determined from the 
court 
order 
as 
interpreted in light of 
the 
general 
rules 
governing interpretation of judgments. See Restatement (Third) of 
Trusts Section 4 cmt. f (Tentative Draft No.1, approved 1996). 
A manifestation of a settlor's intention does not constitute 
evidence of a trust's terms if it would be inadmissible in a 
judicial proceeding in which the trust's terms are in question. 
See Restatement (Third) of Trusts Section 4 cmt. b (Tentative 
Draft No.1, approved 1996); 
Restatement 
(Second) 
of Trusts 
Section 4 cmt. b (1959). See also Restatement (Third) Property: 
Donative Transfers Sections 10.2, 11.1-11. 3 (Tentative Draft No. 
1, approved 1995). For example, in many states a trust of real 
property is unenforceable unless evidenced by a writing, although 
Section 407 of this Code does not so require, leaving this issue 
to be covered by separate statute if the enacting jurisdiction so 
elects. Evidence otherwise relevant to determining the terms of a 
trust may also be excluded under other principles of law, such as 
the parol evidence rule. 
"Trust instrument" (paragraph (18» 
is a subset of the definition 
of "terms of a trust" (paragraph (17», referring to only such 
terms as are found in an instrument executed by the settlor. 
Section 403 provides that a trust is validly created if created 
in compliance with the 
law of the place where the trust 
instrument was 
executed. 
Pursuant to Section 604(a)(2), 
the 
contest period for 
a 
revocable trust can be 
shortened by 
providing the potential contestant with a 
copy of the trust 
instrument plus other information. Section 813 (b)( 1) requires 
that the trustee upon request furnish a beneficiary with a copy 
of the trust instrument. To allow a trustee to administer a trust 
with some dispatch without concern about liability if the terms 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
of a trust instrument are contradicted by evidence outside of the 
instrument, Section 1006 protects a trustee from liability to the 
extent a breach of trust resulted from reasonable reliance on 
those 
terms. 
Section 1013 
allows 
a 
trustee to substitute a 
certification of trust in lieu of providing a third person with a 
copy of the trust instrument. Section 1l06(a)(4) provides that 
unless there is a clear indication of a contrary intent, rules of 
construction and presumptions provided in the Uniform Trust Code 
apply to trust instruments executed before the effective date of 
the Code. 
The definition of "trustee" (paragraph (19» 
includes not only 
the original trustee but also an additional and successor trustee 
as well 
as 
a 
cotrustee. 
Because 
the definition of trustee 
includes trustees of all types, any trustee, whether original or 
succeeding, single or cotrustee, has the powers of a trustee and 
is subject to the duties imposed on trustees under the Uniform 
Trust 
Code. 
Any 
natural 
person, 
including 
a 
settlor 
or 
beneficiary, has capacity to act as trustee if the person has 
capacity to hold title to property free of trust. See Restatement 
(Third) of Trusts Section 32 (Tentative Draft No.2, approved 
1999); Restatement (Second) of Trusts Section 89 (1959). State 
banking statutes normally impose additional requirements before a 
corporation can act as trustee. 
MAINE COMMENT 
Subsection 4. 
The uniform code' s reference to "the court" has 
been changed to "a court" in the Maine Uniform Trust Code. 
The 
term "court" is intentionally used in the lowercase to clarify 
and acknowledge that the definition of "conservator" includes a 
conservator appointed in any number of courts, including a court 
in another state, which will permit a conservator appointed by a 
court in a foreign state to receive notice on behalf of, and to 
bind, a trust beneficiary. 
See, for example, the provisions of 
Chapter 3, Representation. 
It is acknowledged that the term "conservator" is also defined in 
the Probate Code, section 1-201, subsection (6). 
The definition 
of section 1-201, subsection (6) is intentionally left unchanged 
with the use of uppercase "Court." 
"Court" is defined in the Probate Code, section 1-201, subsection 
(5) as "anyone of the several courts of probate of this State 
" 
Subsection 6. 
The term "court" is intentionally used in the 
lowercase to clarify and acknowledge that the definition of 
"guardian" includes a guardian appointed in another state, which 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
will permit a guardian appointed by a court in a foreign state to 
receive notice on behalf of, and to bind, a trust beneficiary. 
See, for example, the provisions of chapter 3, Representation. 
"Court" is defined in the Probate Code, section 1-201, subsection 
(5) 
as "anyone of the several courts of probate of this 
State. •. ." 
A person who has qualified "pursuant to court appointment" 
includes 
a 
person 
who 
has 
been 
appointed 
by will 
for 
an 
incapacitated person and who has filed acceptance of appointment 
in the 
court 
in which 
the will is 
formally or 
informally 
probated, pursuant to the Probate Code, section 5-301. 
Subsection 12. 
Maine has added the sentence at the end of the 
definition to limit the class of beneficiaries to whom certain 
notices must be given or from whom consents must be received. 
The Uniform Comments to section 103, subsection 12 state, "the 
Uniform Trust Code uses the concept of 'qualified beneficiary' 
(paragraph (12» 
to limit the class of beneficiaries to whom 
certain notices must be given or consents received. 
. The 
qualified beneficiaries consist of the beneficiaries currently 
eligible to receive a distribution from the trust together with 
those who might be termed the first-line remaindermen." 
Despite the intention of the Uniform Trust Code drafters that the 
concept of "qualified beneficiary" be 
a 
limiting definition, 
under certain circumstances remote contingent distributees will 
fall within the scope of the definition as it appears in the 
Uniform Trust Code. 
For example, a "dynasty" trust that gives 
the trustee discretion to distribute 
income and/or principal 
among settlor's descendants, from generation to generation, or a 
credit shelter/bypass trust that gives the trustee discretion to 
distribute 
income 
and 
principal 
among 
"my 
spouse 
and 
my 
descendants" in equal or unequal shares, is likely to have an 
ultimate distribution clause leaving the trust assets to one or 
more charities in the unexpected event that at some time none of 
settlor's descendants 
is living. 
Under 
paragraph 
B, 
the 
charitable beneficiaries would be distributees of trust principal 
if the interests of the descendants, or spouse and descendants in 
the case of the credit shelter/bypass trust, all of whom are 
permissible distributees described in paragraph A, terminated. 
The addition of the last sentence makes clear that the charities, 
as contingent distributees, do not come within the definition of 
"qualified beneficiary." 
Subsection 16. 
The 
definition of "state" was 
modified by 
deleting the portion of the definition that stated, "The term 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
includes an Indian tribe or band recognized by federal law or 
formally acknowledged by a State." 
Subsection 19. 
The phrase "whether or not appointed or confirmed 
by a court" has been added to the Uniform Trust Code definition 
to make it clear that no action by a court is required for a 
trustee to assume the trusteeship, unless the terms of the trust 
require court action. 
§104. Knowledge 
1. Person. 
Subject to subsection 2, a person has knowledge 
of a fact if the person: 
A. 
Has actual knowledge of it; 
B. 
Has received a notice or notification of it; or 
C. 
From all the facts and circumstances known to the person 
at the time in question, has reason to know it. 
2. 
Organization. 
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 it 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. 
UNIFORM COMMENT 
This section specifies when a person is deemed to know a fact. 
Subsection (a) states the general rule. Subsection (b) provides a 
special rule dealing with notice to organizations. Pursuant to 
subsection (a), a fact is known to a person if the person had 
actual knowledge of the fact, received notification of it, or had 
reason to 
know of the fact's existence based on all of the 
circumstances and other facts known to the person at the time. 
Under 
subsection 
(b), 
notice 
to 
an 
organization 
is 
not 
necessarily achieved by giving notice to a branch office. Nor 
does the organization necessarily acquire knowledge at the moment 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the notice arrives in the organization IS mailroom. Rather, the 
organization has notice or knowledge of a fact only when the 
information is received by an employee having responsibility to 
act for the trust, or would have been brought to the employee 's 
attention had the organization exercised reasonable diligence. 
"Know" is used in its defined sense in Sections 109 (methods and 
waiver of notice), 305 (appointment of representative), 604(b) 
(limitation on contest of revocable trust), 812 (collecting trust 
property), 
1009 
(nonliabi1ity 
of 
trustee 
upon 
beneficiary IS 
consent, 
release, or ratification), 
and 1012 
(protection of 
person dealing with trustee). But as to certain actions, a person 
is charged with knowledge of facts 
the person would have 
discovered upon reasonable inquiry. See Section 1005 (limitation 
of action against trustee following report of trustee). 
This section is based on Uniform Commercial Code Section 1-202 
(2000 Annual Meeting Draft). 
§105. 
Default and mandato~ rules 
1. 
Code governs. 
Except as otherwise provided in the terms 
of the trust, this Code governs the duties and powers of a 
trustee, relations among trustees and the rights and interests of 
a beneficiary. 
2. 
Terms prevail: exceptions. 
The terms of a trust prevail 
over any provision of this Code 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. not contrary to public policy and 
possible to achieve; 
D. 
The power of the court to modify or terminate a trust 
under sections 410 to 416; 
E. 
The effect of a spendthrift prov~s~on and the rights of 
certain creditors and assignees to reach a trust as provided 
in chapter 5; 
F. 
The power of the court under section 702 to require, 
dispense with, modify or terminate a bond: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
G. 
The power of the court under section 708, subsection 2 
to adjust a trustee's compensation specified in the terms of 
the trust that is unreasonably low or high; 
H. 
The duty under section 813, subsection 2, paragraphs B 
and C to notify qualified beneficiaries of an irrevocable 
trust who have attained 25 years of age of the existence of 
the trust, of the identity of the trustee and of their right 
to request trustee's reports; 
I. 
The duty under section 813, subsection 1 to respond to 
the request of a qualified beneficiary of an irrevocable 
trust for trustee's reports and other information reasonably 
related to the administration of a trust; 
J. 
The effect of an exculpatory term under section 1008; 
K. 
The rights under sections 1010 to 1013 of a person other 
than a trustee or beneficiary; 
L. 
Periods of limitation for 
commencing 
a 
judicial 
proceeding: 
M. 
The power of the court to take such action and exercise 
such jurisdiction as may be necessary in the interests of 
justice: and 
N. 
The subject matter jurisdiction of the court and venue 
for commencing a proceeding as provided in sections 203 and 
204. 
UNIFORM COMMENT 
Subsection 
(a) 
emphasizes 
that 
the 
Uniform 
Trust 
Code 
is 
primarily a default statute. While this Code provides numerous 
procedural rules on which a settlor may wish to rely, the settlor 
is generally free to override these rules and to prescribe the 
conditions under which the trust is to be administered. With only 
limited exceptions, the duties and powers of a trustee, relations 
among trustees, and the rights and interests of a beneficiary are 
as specified in the terms of the trust. 
Subsection (b) lists the items not subject to override in the 
terms of the trust. Because subsection (b) refers specifically to 
other sections of the Code, enacting jurisdictions modifying 
these other sections may also need to modify subsection (b). 
Subsection (b)(l) confirms that the requirements for a trust's 
creation, 
such as the necessary level of capacity and the 
requirement that a trust have a legal purpose, are controlled by 
COMMI71EE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
statute and common law, not by the settlor. For the requirements 
for creating a trust, see Sections 401-409. Subsection (b) (12) 
makes clear that the settlor may not reduce any otherwise 
applicable 
period of 
limitations 
for 
commencing 
a 
judicial 
proceeding. 
See 
Sections 
(period 
of 
limitations 
for 
contesting validity of revocable trust), 
and 1005 (period of 
limitation on action for breach of trust). Similarly, a settlor 
may not so negate the responsibilities of a trustee that the 
trustee would no longer be acting in a fiduciary capacity. 
Subsection (b) (2) provides that the terms may not eliminate a 
trustee's duty to act in good faith and in accordance with the 
purposes of the trust. Subsection (b)(3) provides that the terms 
may not eliminate the requirement that a trust and its terms must 
be for the benefit of the beneficiaries. Subsection (b) (3) also 
provides that the terms may not eliminate the requirement that 
the trust have a purpose that is lawful, not contrary to public 
policy, 
and possible to achieve. 
Subsections (b)(2)-(3) are 
echoed in Sections 404 (trust and its terms must be for benefit 
of beneficiaries; trust must have a purpose that is lawful, not 
contrary to public policy, and possible to achieve), 801 (trustee 
must administer trust in good faith, in accordance with its terms 
and purposes and the interests of the beneficiaries), 802(a) 
(trustee must administer trust solely in interests of the 
beneficiaries), 814 (trustee must exercise discretionary power in 
good faith and in accordance with its terms and purposes and the 
interests of 
the beneficiaries), 
and 
1008 
(exculpatory term 
unenforceable to extent it relieves trustee of liability for 
breach 
of 
trust 
committed 
in 
bad 
faith 
or 
with 
reckless 
indifference to the purposes of the trust and the interests of 
the beneficiaries). 
The terms of a trust may not deny a court authority to take such 
action as necessary in the interests of justice, including 
requiring that a trustee furnish bond. Subsection (b)(6), (13). 
Additionally, should the jurisdiction adopting this Code enact 
the optional provisions on subject-matter jurisdiction and venue, 
subsection (b)(14) similarly provides that such provisions cannot 
be altered in the terms of the trust. The power of the court to 
modify or terminate a trust under Sections 410 through 416 is not 
subject to variation in the terms of the trust. 
Subsection 
(b)(4). However, all of these Code sections involve situations 
which 
the settlor could have 
addressed had the settlor had 
sufficient foresight. These include situations where the purpose 
of the trust has been achieved, a mistake was made in the trust's 
creation, or circumstances have arisen that were not anticipated 
by the settlor. 
Section 
beneficiaries 
requirements. 
imposes 
a 
general 
obligation 
to 
keep 
the 
informed 
as well 
as 
several 
specific notice 
Subsections (b)(8) and (b)(9) specify limits on the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
settlor's ability to waive these information requirements. With 
respect to beneficiaries age 25 or older, a settlor may dispense 
with all of the requirements of Section 813 except for the duties 
to inform the beneficiaries of the existence of the trust, of the 
identity of the trustee, and to provide a beneficiary upon 
request with such reports as the trustee may have prepared. Among 
the specific requirements that a settlor may waive include the 
duty to provide a beneficiary upon request with a copy of the 
trust instrument (Section 8l3(b)(1», and the requirement that 
the trustee provide annual reports to the qualified beneficiaries 
(Section 8l3(c». The furnishing of a copy of the entire trust 
instrument and preparation of annual reports may be required in a 
particular case, however, if such information is requested by a 
beneficiary 
and 
is 
reasonably 
related 
to 
the 
trust's 
administration. 
Responding 
to 
the 
desire 
of 
some 
settlors 
that 
younger 
beneficiaries not know of the trust's bounty until they have 
reached an age of maturity and self-sufficiency, subsection 
(b)(8) allows a settlor to provide that the trustee need not even 
inform beneficiaries under age 25 of the existence of the trust. 
However, 
pursuant 
to 
subsection 
(b)(9), 
if 
the 
younger 
beneficiary learns of the trust and requests information, the 
trustee must respond. More generally, subsection (b)(9) prohibits 
a settlor from overriding the right provided to a beneficiary in 
Section 8l3(a) to request from the trustee of an irrevocable 
trust copies of trustee reports and other information reasonably 
related to the trust's administration. 
During the drafting of the Uniform Trust Code, 
the drafting 
committee discussed and rejected a proposal that the ability of 
the settlor to waive required notice be based on the nature of 
the beneficiaries' interest and not on the beneficiaries' age. 
Advocates of this alternative approach concluded that a settlor 
should be able to waive required notices to the remainder 
beneficiaries, regardless of their age. Enacting jurisdictions 
preferring this alternative should substitute the language "adult 
and current or permissible distributees of trust income 
or 
principal" for the reference to "qualified beneficiaries" in 
subsection (b)(8). 
They should also delete the reference to 
beneficiaries "who have attained the age of 25 years." 
Waiver 
by 
a 
settlor 
of 
the trustee's 
duty to 
keep 
the 
beneficiaries informed of the trust's administration does not 
otherwise affect the trustee's duties. 
The trustee remains 
accountable to the beneficiaries for the trustee's actions. 
Neither subsection (b)(8) nor (b)(9) apply to revocable trusts. 
The settlor of a revocable trust may waive all reporting to the 
beneficiaries, even in the event the settlor loses capacity. If 
COMMITTEE AMENDMENT 
, 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the settlor is silent about 
the subject, 
beneficiaries 
will 
be 
required 
upon 
the 
capacity. See Section 603. 
reporting to 
settlor's 
loss 
In conformity with traditional doctrine, the Uniform Trust Code 
the 
of 
limits the ability of a settlor to exculpate a trustee from 
liability for breach of trust. The limits are specified in 
Section 1008. 
Subsection 
(b)(lO) 
of this section provides 
a 
cross-reference. 
Similarly, 
subsection 
(b)(7) 
provides 
a 
cross-reference 
to Section 708(b), 
which limits the binding 
effect of a provision specifying the trustee's compensation. 
Finally, subsection (b)(ll) clarifies that a settlor is not free 
to limit the rights of third persons, such as purchasers of trust 
property. Subsection (b) (5) clarifies that a settlor may not 
restrict the rights of a beneficiary's creditors except to the 
extent a spendthrift restriction is allowed as provided in 
Article 5. 
2001 Amendment. By amendment in 2001, subsections (b) (3), (8) 
and (9) were revised to read as above. The language in subsection 
(b) (3) 
"that the trust have 
a 
purpose that is lawful, 
not 
contrary to public policy, and possible to achieve" is new. This 
addition clarifies that the settlor may not waive this common law 
requirement, which is codified in the Code at Section 404. 
Subsections (b)(8) and (9) formerly provided: 
(8) 
the 
duty 
to 
notify 
the qualified beneficiaries of 
an 
irrevocable trust who have attained 25 years of age of the 
existence of the trust, and of their right· to request trustee's 
reports 
and 
other 
information 
reasonably 
related 
to 
the 
administration of the trust: 
(9) the duty to respond to the request of a beneficiary of an 
irrevocable trust for trustee's reports and other information 
reasonably related to the administration of a trust. 
The amendment clarifies that the information requirements not 
subject to waiver are requirements specified in Section 813 of 
the Code. 
MAINE COMMENT 
Section 105, subsection 2, paragraph I has been changed by adding 
the word "qualified" before "beneficiary." 
The 
change is 
consistent with section 813, subsection 1, which, as adopted in 
Maine, 
requires 
that 
a 
trustee 
respond 
to 
a 
"qualified 
beneficiary's" 
request 
for 
trustee's 
reports 
and 
other 
information reasonably related to the administration of a trust. 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Notwithstanding the trustee's duty under section 813, subsection 
2, paragraphs Band C to provide qualified beneficiaries with 
notice of certain information about the trust, under section 105, 
subsection 2, paragraph H a settlor may, by the terms of the 
trust, 
prohibit 
the 
trustee 
from 
notifying 
a 
qualified 
beneficiary who has not yet attained 25 years of age, of the 
existence of the trust, of the identity of the trustee and of the 
qualified beneficiary's 
right 
to 
request 
trustee 
reports. 
However, the settlor may not prohibit a trustee from providing 
such notice to a qualified beneficiary who has attained 25 years 
of age. 
In other words, 
once a qualified beneficiary has 
attained 25 years of age, that beneficiary may no longer be kept 
in the dark about the existence of the trust, despite the 
settlor's desire to the contrary. 
The Uniform Trust Code has a hierarchy of rights built into its 
provisions 
relating 
to 
notifying various 
beneficiaries 
of 
information about a trust: 
i. 
Some 
classes 
of 
beneficiaries 
have 
a 
right 
to 
information whether they request it or not; e.g., under 
section 813, subsection 3 distributees or permissible 
distributees of trust income or principal have a right 
to receive annual reports without request. 
ii. Other beneficiaries have a right to be affirmatively 
told of their right to request information; e.g., under 
section 
813, 
subsection 
2, 
paragraph 
C 
qualified 
beneficiaries have to be informed of their right to 
request a copy of the trust instrument and of trustee's 
reports. 
iii. Nonqualified beneficiaries have a right to obtain a 
copy of the trust instrument only if they request a 
copy, but a trustee is under no affirmative obligation 
to inform them of the existence of the trust or of 
their right to 
request 
a 
copy; 
the nonqualified 
beneficiaries 
are 
on 
their 
own 
to 
learn 
of 
the 
existence of the trust. See section 813, subsection 2, 
paragraph A. 
Section 105 permits the settlor, 
alter the beneficiaries' 
rights 
section 813, except as specified 
paragraphs H and I. 
by the terms of the trust, to 
and trustee's duties under 
in section 105, subsection 2, 
§106. Common law of trusts: principles of egyity 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The common law of trusts and principles of equity supplement 
this Code, except to the extent modified by this Code or another 
statute of this State. 
UNIFORM COMMENT 
The Uniform Trust Code codifies those portions of the law of 
express trusts that are most amenable to codification. The Code 
is supplemented by the common law of trusts, including principles 
of equity, particularly as articulated in the Restatement of 
Trusts, Restatement (Third) of Property: Wills and Other Donative 
Transfers, and the Restatement of Restitution. The common law of 
trusts is not static but includes the contemporary and evolving 
rules of decision developed by the courts in exercise of their 
power to adapt the law to new situations and changing conditions. 
It also includes the traditional and broad equitable jurisdiction 
of the court, which the Code in no way restricts. 
The statutory text of the Uniform Trust Code is also supplemented 
by these comments, which, like the comments to any Uniform Act, 
may be relied on as a guide for interpretation. See Acierno v. 
Worthy Bros. Pipeline Corp., 
A.2d 1085, 
1090 (Del. 1995) 
(interpreting Uniform 
Commercial 
Code); 
Yale 
University v. 
Blumenthal, 
A.2d 
1304, 
1307 
(Conn. 
1993) 
(interpreting 
Uniform Management of Institutional Funds Act); 2 Norman Singer, 
Statutory Construction Section 52.05 (6th ed. 2000); Jack Davies, 
Legislative Law and Process in a Nutshell Section 55-4 (2d ed. 
1986). 
§l07. Governing law 
The 
meaning 
and effect of 
the terms of 
a 
trust are 
determined by: 
1. 
Law of jurisdiction designated: exception. 
The law of 
the jurisdiction designated in the terms unless the designation 
of that jurisdiction's law is contrary to a strong public policy 
of the jurisdiction having the most significant relationship to 
the matter at issue; or 
2. 
Law of jurisdiction with most significant relationship. 
In the absence of a controlling designation in the terms of the 
trust, the law of the jurisdiction having the most significant 
relationship to the matter at issue. 
UNIFORM COMMENT 
This section provides rules for determining the law that will 
govern the meaning and effect of particular trust terms. The law 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
to apply to determine whether a trust has been validly created is 
determined under Section 403. 
Paragraph (1) allows a settlor to select the law that will govern 
the meaning 
and effect of 
the 
terms 
of 
the trust. 
The 
jurisdiction selected need not have any other connection to the 
trust. The settlor is free to select the governing law regardless 
of where the trust property may be physically located, whether it 
consists of real or personal property, and whether the trust was 
created by will or during the settlor's lifetime. This section 
does not attempt to specify the strong public policies sufficient 
to invalidate a settlor's choice of governing law. These public 
policies will vary depending upon the locale and may change over 
time. 
Paragraph ( 2 ) provides a rule for trusts without governing law 
prov1s1ons -
the meaning and effect of the trust's terms are to 
be determined by the law of the jurisdiction having the most 
significant relationship to the matter at issue. Factors to 
consider in determining the governing law include the place of 
the trust's creation, the location of the trust property, and the 
domicile of the settlor, the trustee, and the beneficiaries. See 
Restatement (Second) of Conflict of Laws Sections 270 cmt. c and 
cmt. 
d 
(1971). 
Other 
more general factors that may 
be 
pertinent in particular cases include the relevant policies of 
the 
forum, 
the 
relevant 
policies 
of 
other 
interested 
jurisdictions and degree of their interest, the protection of 
justified expectations 
and 
certainty, 
and predictability and 
uniformity of result. See Restatement (Second) of Conflict of 
Laws Section 6 (1971). Usually, the law of the trust's principal 
place of administration will govern administrative matters and 
the law of the place having the most significant relationship to 
the trust's creation will govern the dispositive provisions. 
This section is consistent with and was partially patterned on 
36. 
the Hague Convention on the Law Applicable to Trusts and on their 
Recognition, signed on July 1, 1985. Like this section, the Hague 
Convention allows the settlor to designate the governing law. 
Hague Convention art. 6. Absent a designation, the Convention 
provides that the trust is to be governed by the law of the place 
having the closest connection to the trust. Hague Convention art. 
7. The Convention also lists particular public policies for which 
the forum may decide to override the choice of law that would 
otherwise apply. 
These policies are protection of minors and 
incapable parties, personal and proprietary effects of marriage, 
succession rights, transfer of title and security interests in 
property, protection of creditors in matters of insolvency, and, 
more generally, protection of third parties acting in good faith. 
Hague Convention art. 15. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
For the authority of a settlor to designate a trust's principal 
place of administration, see Section 108(a). 
Sl08. 
Principal place of administration 
1. 
Terms of trust controlling. 
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. 
A trustee's principal place of business is located in or 
a trustee is a resident of the designated jurisdiction; or 
B. 
Allor part of the administration occurs in the 
designated jurisdiction. 
2. 
Duty of trustee. 
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. 
Transfer of place of administration. 
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. 
Notice of transfer of place of administration. 
The 
trustee shall notify the qualified beneficiaries of a proposed 
transfer of a trust's principal place of administration not less 
than 
days before initiating the transfer. 
The notice of 
proposed transfer must include: 
A. 
The name of the jurisdiction to which the principal 
place of administration is to be transferred; 
B. 
The address and telephone number at the new location at 
which the trustee can be contacted; 
c. 
An explanation of the reasons for the proposed transfer; 
D. 
The date on which the proposed transfer is anticipated 
to occur; and 
E. 
The date, which may not be less than 60 days after the 
giving of the notice, by which the qualified beneficiary 
must notify the trustee of an objection to the proposed 
transfer. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
5. 
Objection to transfer. 
The authority of a trustee under 
this 
section 
to 
transfer 
a 
trust's 
principal 
place 
of 
administration terminates if a qualified beneficiary notifies the 
trustee of an objection to the proposed transfer on or before the 
date specified in the notice. 
6. 
Transfer property to successor trustee. 
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 704. 
OHIFORM COMMENT 
This section prescribes rules relating to a trust's principal 
place of administration. Locating a trust's principal place of 
administration will ordinarily determine which court has primary 
if not exclusive jurisdiction over the trust. It may also be 
important for other matters, such as payment of state income tax 
or determining the jurisdiction whose laws will govern the trust. 
See Section 107 comment. 
Because 
of 
the 
difficult 
and 
variable 
situations 
sometimes 
involved, the Uniform Trust Code does not attempt to further 
define principal place of administration. 
A trust's principal 
place of administration ordinarily will be the place where the 
trustee 
is 
located. 
Determining 
the 
principal 
place 
of 
administration becomes more difficult, however, when cotrustees 
are located in different states or when a single institutional 
trustee has trust operations in more than one state. In such 
cases, other factors may become relevant, including the place 
where the trust records are kept or trust assets held, or in the 
case of an institutional trustee, the place where the trust 
officer responsible for supervising the account is located. 
A concept akin to principal place of administration is used by 
the Office of the Comptroller of the Currency. Reserves that 
national banks are required to deposit with state authorities is 
based on the location of the office where trust assets are 
primarily administered. See 12 C.F.R. Section 9.14(b). 
Under the Uniform Trust Code, the fixing of a trust's principal 
place of administration will determine where the trustee and 
beneficiaries have consented to suit (Section 202), and the rules 
for locating venue within a particular state (Section 204). It 
may also be considered by a court in another jurisdiction in 
determining whether it has jurisdiction, and if so, whether it is 
a convenient forum. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
A 
settlor 
expecting 
to 
name 
a 
trustee 
or 
cotrustees with 
significant 
contacts 
in 
more 
than 
one 
state 
may 
eliminate 
possible uncertainty about the location of the trust's principal 
place of administration by specifying the jurisdiction in the 
terms of the trust. Under subsection (a), a designation in the 
terms of the trust is controlling if (1) a trustee is a resident 
of or has its principal place of business in the designated 
jurisdiction, or (2) all or part of the administration occurs in 
the designated jurisdiction. Designating the principal place of 
administration should be distinguished from designating the law 
to determine the meaning and effect of the trust's terms, as 
authorized by Section 107. 
A settlor is free to designate one 
jurisdiction as the principal place of administration and another 
to govern the meaning and effect of the trust's provisions. 
Subsection (b) provides that 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. 
"Interests of the beneficiaries," defined in Section 103 (7), 
means the beneficial interests provided in the terms of the 
trust. Ordinarily, absent a substantial change or circumstances, 
the trustee may assume that the original place of administration 
is also the appropriate place of administration. The duty to 
administer the trust at an appropriate place may also dictate 
that the trustee not move the trust. 
Subsections 
(c)-(f) 
provide 
a 
procedure 
for 
changing the 
principal place of administration to another state or country. 
Such changes are often beneficial. A change may be desirable to 
secure a lower state income tax rate, or because of relocation of 
the trustee or beneficiaries, the appointment of a new trustee, 
or 
a 
change in the location of the trust investments. 
The 
procedure for transfer specified in this section applies only in 
the absence of a contrary provision in the terms of the trust. 
See Section 105. To facilitate transfer in the typical case, 
where all concur that a transfer is either desirable or is at 
least not harmful, a transfer can be accomplished without court 
approval unless a qualified beneficiary objects. To allow the 
qualified beneficiaries sufficient time to review a proposed 
transfer, the trustee must give the qualified beneficiaries at 
least 60 days prior notice of the transfer. Notice must be given 
not only to qualified beneficiaries as defined in Section 103(12) 
but also to those granted the rights of qualified beneficiaries 
under Section 110. To assure that those receiving notice have 
sufficient information upon which to make a decision, minimum 
contents of the notice are specified. If a qualified beneficiary 
objects, a trustee wishing to proceed with the transfer must seek 
court approval. 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
In 
connection 
with 
a 
transfer 
of 
the 
principal 
place 
of 
administration, the trustee may transfer some or all of the trust 
property to a new trustee located outside of the state. The 
appointment of a new trustee may also be essential if the current 
trustee is ineligible to administer the trust in the new place. 
Subsection (f) clarifies that the appointment of the new trustee 
must comply with the provisions on appointment of successor 
trustees as provided in the terms of the trust or under Section 
704. Absent an order of succession in the terms of the trust, 
Section 704(c) 
provides 
the procedure 
for 
appointment 
of 
a 
successor trustee of a noncharitable trust, and Section 704(d) 
the procedure 
for 
appointment of 
a 
successor trustee of 
a 
charitable trust. 
While transfer of the principal place of administration will 
normally change the governing law with respect to administrative 
matters, a transfer does not normally alter the controlling law 
with respect to the validity of the trust and the construction of 
its dispositive provisions. See 5A Austin W. Scott & William F. 
Fratcher, The Law of Trusts Section 615 (4th ed. 1989). 
SlOg. Methods and waiver of notice 
1. 
Manner. 
Notice to a person under this Code or the 
sending of 
a 
document to 
a person under this Code 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 not required. 
Notice otherwise required under 
this Code or a document otherwise required to be sent under this 
Code need not be provided to a person whose identity or location 
is unknown to and not reasonably ascertainable by the trustee. 
3. 
Waiver. 
Notice under this Code or the sending of a 
document under this Code may be waived by the person to be 
notified or sent the document. 
4. 
Notice of judicial proceeding. 
Notice of a judicial 
proceeding must be given as provided in the applicable Maine 
Rules of Civil Procedure. 
UNIFORM COHMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Subsection (a) clarifies that notices under the Uniform Trust 
Code may be given by any method likely to result in its receipt 
by the person to be notified. The specific methods listed in the 
subsection 
are 
illustrative, 
not 
exhaustive. 
Subsection 
(b) 
relieves a trustee of responsibility for what would otherwise be 
an impossible task, 
the giving of notice to a 
person whose 
identity or location is unknown and not reasonably ascertainable 
by the trustee. The section does not define when a notice is 
deemed to have been sent or delivered or person deemed to be 
unknown or not reasonably ascertainable, the drafters preferring 
to leave this issue to the enacting jurisdiction's rules of civil 
procedure. 
Under the Uniform Trust Code, certain actions can be taken upon 
unanimous 
consent 
of 
the 
beneficiaries 
or 
qualified 
beneficiaries. 
See Sections 411 
(termination of noncharitable 
irrevocable trust) and 704 (appointment of successor trustee). 
Subsection (b) of this section only authorizes waiver of notice. 
A consent required from 
a beneficiary in order to achieve 
unanimity is not waived because the beneficiary is missing. But 
the fact a beneficiary cannot be located may be a sufficient 
basis for a substitute consent to be given by another person on 
the beneficiary's behalf under the representation principles of 
Article 3. 
To facilitate administration, subsection (c) 
allows waiver of 
notice by the person to be notified or sent the document. Among 
the notices and documents to which this subsection can be applied 
are notice 
of 
a 
proposed transfer of principal place of 
administration (Section 108(d» 
or of a trustee's report (Section 
(c) ). This subsection also applies to notice to qualified 
beneficiaries 
of 
a 
proposed 
trust 
combination 
or 
division 
(Section 417), of a 
temporary assumption of duties without 
accepting trusteeship (Section 701(c)(1», 
and of a trustee's 
resignation (Section 705(a)(1». 
Notices under the Uniform Trust Code are nonjudicial. Pursuant to 
subsection (d), notice of a judicial proceeding must be given as 
provided in the applicable rules of civil procedure. 
§llO. 
Others treated as qualified beneficiaries 
1. 
Charitable organization or person to enforce trust. 
A 
charitable 
organization 
expressly 
designated 
to 
receive 
distributions under the terms of a charitable trust or a person 
appointed to enforce a trust created for the care of an animal or 
another noncharitable purpose as provided in section 408 or 409 
has the rights of a qualified beneficiary under this Code. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
2. 
Attorney General. 
The Attorney General has the rights 
of a qualified beneficiary with respect to a charitable trust 
having its principal place of administration in this State. 
UNIFORM COMMENT 
Under the Uniform Trust Code, certain notices need be given only 
to 
the 
"qualified" 
beneficiaries. 
For 
the 
definition 
of 
"qualified beneficiary," see Section 103(12). Among these notices 
are notice of a 
transfer of the trust's principal place of 
administration (Section 108(d», notice of a trust division or 
combination 
(Section 
417), 
notice 
of 
a 
trustee 
resignation 
(Section 705(a)(1», and notice of a trustee's annual report 
(Section 813(c». Subsection (a) of this section authorizes other 
beneficiaries to receive one or more of these notices by filing a 
request for notice with the trustee. 
Under the Code, certain actions, such as the appointment of a 
successor trustee, can be accomplished by the consent of the 
qualified beneficiaries. See, e.g., Section 704 (filling vacancy 
in trusteeship). 
Subsection 
(a) only addresses notice, 
not 
required consent. A person who requests notice under subsection 
(a) does not thereby acquire a right to participate in actions 
that 
can 
be 
taken 
only 
upon 
consent 
of 
the 
qualified 
beneficiaries. 
Charitable trusts do not have beneficiaries in the usual sense. 
However, certain persons, while not technically beneficiaries, do 
have an interest in seeing that the trust is enforced. In the 
case of a charitable trust, this includes the state's attorney 
general and charitable organizations expressly designated to 
receive distributions under the terms of the trust, who under 
subsections 
(b)-(c) 
are 
granted 
the 
rights 
of 
qualified 
beneficiaries. Because the charitable organization must be named 
in the terms of the trust and must be designated to receive 
distributions, 
excluded 
are 
organizations 
who 
may 
receive 
distributions only in the trustee's discretion and organizations 
holding remainder interests subject to a contingency. 
Subsection 
(b) 
similarly 
grants 
the 
rights 
of 
qualified 
beneficiaries to persons appointed by the terms of the trust or 
by the court to enforce a trust created for an animal or other 
trust with a valid purpose but no ascertainable beneficiary. For 
the requirements for creating such trusts, see Sections 408 and 
409. 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
"At torney general" is placed in brackets in subsection (c) to 
accommodate jurisdictions which grant enforcement authority over 
charitable trusts to another designated official. 
This section does not limit other means by which the attorney 
general or other designated official can enforce a charitable 
trust. 
2001 Amendment. By amendment in 2001, "charitable organization 
expressly designated to receive distributions" was substituted 
for 
"charitable organization expressly entitled to 
receive 
benefits" in subsection (b). The amendment conforms the language 
of this section to terminology used elsewhere in the Code. 
MAINE COMMENT 
Maine has deleted the Uniform Trust Code's subsection (a), which 
stated: 
Whenever notice to qualified beneficiaries of a trust is 
required under the Uniform Trust Code, the trustee must also 
give notice to any other beneficiary who has sent the 
trustee a request for notice. 
Uniform Trust Code subsections (b) and (c) have been renumbered 1 
and 2, respectively, in the Maine version. The Uniform Comments, 
referring to subparagraphs (a), (b) and (c), refer to the Uniform 
Trust Code subsections before they have been renumbered in the 
Maine version and should therefore be read accordingly. 
The purpose of this section is to expand the class of persons who 
are treated as a "qualified beneficiary" as defined in Uniform 
Trust 
Code, 
section 
103, 
subsection 
12. 
The 
"qualified 
beneficiary" concept of the uniform code is used to narrowly 
define the class of beneficiaries who are entitled to notice of 
certain matters related to the trust. 
See the Uniform Comments 
under this section for further explanation. 
The notice required to be given to qualified beneficiaries under 
the Uniform Trust Code should not be confused with the notice 
requirements of the Probate Code, section 1-401, which requires 
that notice of a proceeding or hearing be given to any interested 
person. 
The term "interested person" is a defined term under the 
Probate Code, section 1-201, subsection (20) and defines a more 
expansive 
group 
of 
persons 
than 
does 
the 
term 
"qualified 
beneficiary." 
The provisions of the Probate Code, section 1-401 
are limited to notice of a proceeding or hearing, i.e., a matter 
involving the court. 
Note that the term "proceeding" is defined 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
in the Probate Code, section 1-201, subsection (32) as "including 
any civil action in any court of competent jurisdiction." 
This section is not intended to limit or affect the Attorney 
General's authority to enforce charitable trusts under the common 
law or Title 5, section 194. 
§lll. Nonjudicial settlement agreements 
1. 
Interested persons defined. 
For purposes of this 
section, "interested persons" means persons whose consent would 
be required in order to achieve a binding settlement were the 
settlement to be approved by the court. 
2. 
Binding nonjudicial settlement agreement. 
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. 
Validity of nonjudicial settlement agreement. 
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 this Code or other applicable law. 
4. 
Matters of nonjudicial settlement agreement. 
Matters 
that may 
be 
resolved 
by 
a 
nonjudicial 
settlement 
agreement 
include: 
A. 
The interpretation or construction of the terms of the 
trust: 
B. 
The approval of a trustee's report or accounting; 
C. 
Direction to a trustee to refrain from performing a 
particular act or the grant to a trustee of any necessary or 
desirable power: 
D. 
The resignation or appointment of a trustee and the 
determination of a trustee's compensation; 
E. 
Transfer of a trust's principal place of administration; 
and 
F. 
Liability of a trustee for an action relating to the 
trust. 
5. 
Court approval. 
Any interested person may request the 
court to approve a nonjudicial settlement agreement, to determine 
COMMITTEE AMENDMENT 
COMM:ITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
whether the representation as provided in chapter 3 was adequate 
and 
to 
determine 
whether 
the 
agreement 
contains 
terms 
and 
conditions the court could have properly approved. 
UNIFORM COMMENT 
While the Uniform Trust Code recognizes that a 
court may 
intervene in the administration of a trust to the extent its 
jurisdiction is invoked by interested persons or otherwise 
provided by law (see Section 201 (a) ), resolution of disputes by 
nonjudicial means is encouraged. This section facilitates the 
making of such agreements by giving them the same effect as if 
approved by the court. 
To 
achieve such certainty, however, 
subsection 
(c) 
requires that the nonjudicial settlement must 
contain terms and conditions that a court could properly approve. 
Under this section, a nonjudicial settlement cannot be used to 
produce a result not authorized by law, such as to terminate a 
trust in an impermissible manner. 
Trusts 
ordinarily 
have 
beneficiaries 
who 
are 
minors, 
incapacitated, 
unborn 
or 
unascertained. 
Because 
such 
beneficiaries cannot signify their consent to 
an 
agreement, 
binding settlements can ordinarily be achieved only through the 
application 
of 
doctrines 
such 
as virtual 
representation 
or 
appointment of a guardian ad litem, doctrines traditionally 
available only in the case of judicial settlements. The effect of 
this section and the Uniform Trust Code more generally is to 
allow for such binding representation even if the agreement is 
not 
submitted for 
approval 
to a 
court. 
For the rules 
on 
representation, including appointments of representatives by the 
court to approve particular settlements, see Article 3. 
Subsection (d) is a nonexclusive list of matters to which a 
nonjudicial settlement may pertain. Other matters which may be 
made the subject of a nonjudicial settlement are listed in the 
Article 
General 
comment. 
The 
fact 
that 
the 
trustee 
and 
beneficiaries may resolve a matter nonjudicially does not mean 
that beneficiary approval is required. For example, a trustee may 
resign pursuant to Section 705 solely by giving notice to the 
qualified beneficiaries, a living settlor, and any cotrustees. 
But 
a 
nonjudicial 
settlement 
between 
the 
trustee 
and 
beneficiaries will frequently prove helpful in working out the 
terms of the resignation. 
Because of the great variety of matters to which a nonjudicial 
settlement may be applied, 
this section does not attempt to 
precisely define the "interested persons" whose 
consent is 
required to obtain a binding settlement as provided in subsection 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
(a). However, 
the consent of the trustee would ordinarily be 
required to obtain a binding settlement with respect to matters 
involving a trustee's administration, such as approval of a 
trustee's report or resignation. 
§112. Rules of construction 
The rules of construction that apply in this State to the 
interpretation of and disposition of property by will also apply 
as appropriate to the interpretation of the terms of a trust and 
the disposition of the trust property. 
UNIFORM COMMENT 
This section is patterned after Restatement (Third) of Trusts 
Section 25 ( 2) 
and comment e 
(Tentati ve Draft No. 
1, approved 
1996), 
although this section, 
unlike the Restatement, 
also 
applies to 
irrevocable trusts. 
The 
revocable trust is used 
primarily as a will substitute, with its key provision being the 
determination of the persons to receive the trust property upon 
the settlor's death. Given this functional equivalence between 
the revocable trust and a will, the rules for interpreting the 
disposition of property at death should be the same whether the 
individual 
has 
chosen 
a 
will 
or 
revocable 
trust 
as 
the 
individual's primary estate planning instrument. Over the years, 
the legislatures of the States and the courts have developed a 
series of rules of construction reflecting the legislative or 
judicial understanding of how the average testator would wish to 
dispose of property in cases where the will is silent or 
insufficiently clear. Few legislatures have yet to extend these 
rules of construction to revocable trusts, and even fewer to 
irrevocable trusts, although a number of courts have done so as a 
matter of judicial construction. See Restatement (Third) of 
Trusts Section 25, Reporter's Notes to cmt. d and e (Tentative 
Draft No.1, approved 1996). 
Because of the wide variation among the States on the rules of 
construction applicable to wills, this Code does not attempt to 
prescribe the exact rules to be applied to trusts but instead 
adopts 
the 
philosophy 
of 
the 
Restatement 
that 
the 
rules 
applicable to trusts ought to be the same, whatever those rules 
might be. 
Rules 
of 
construction 
are 
not 
the 
same 
as 
constructional 
preferences. A constructional preference is general in nature, 
providing general 
guidance for 
resolving 
a 
wide 
variety of 
ambiguities. An example is a preference for a construction that 
results in a complete disposition and avoid illegality. Rules of 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
construction, 
on 
the 
other 
hand, 
are 
specific 
in 
nature, 
providing 
guidance 
for 
resolving 
specific 
situations 
or 
construing specific terms. Unlike a constructional preference, a 
rule of construction, 
when applicable, can lead to only one 
result. See Restatement (Third) of Property: Donative Transfers 
Section 11.3 and cmt. b (Tentative Draft No.1, approved 1995). 
Rules of construction attribute intention to individual donors 
based on assumptions of common intention. Rules of construction 
are found both in enacted statutes and in judicial decisions. 
Rules of construction can involve the meaning to be given to 
particular language in the document, such as the meaning to be 
given to "heirs" or "issue." Rules of construction also address 
situations the donor failed to anticipate. These include the 
failure to anticipate the predecease of a beneficiary or to 
specify the source from which expenses are to be paid. Rules of 
construction can also concern assumptions as to how a donor would 
have 
revised donative 
documents in light of certain events 
occurring after execution. These include rules dealing with the 
effect of a divorce and whether a specific devisee will receive a 
substitute gift if the subject matter of the devise is disposed 
of during the testator's lifetime. 
Instead of enacting this section, a jurisdiction enacting this 
Code may wish to enact detailed rules on the construction of 
trusts, either in addition to its rules on the construction of 
wills or as part of one comprehensive statute applicable to both 
wills 
and 
trusts. 
For 
this 
reason 
and 
to 
encourage 
this 
al ternative, the section has been made optional. For possible 
models, see Uniform Probate Code, Article 2, Parts 7 and 8, which 
was 
added to the UPC in 1990, and California Probate Code 
Sections 21101-21630, enacted in 1994. 
CHAPTER 2 
. 
JUDICIAL PROCEEDINGS 
UNIFORM GENERAL COMMENT 
This 
article 
addresses 
selected issues 
involving 
judicial 
proceedings concerning trusts, particularly trusts with contacts 
in more than one State or country. This article is not intended 
to 
provide 
comprehensive 
coverage 
of 
court 
jurisdiction or 
procedure with respect to trusts. 
These issues are better 
addressed elsewhere, for example in the State's rules of civil 
procedure or as provided by court rule. 
Section 201 makes clear that the jurisdiction of the court is 
available 
as 
invoked by 
interested persons or 
as 
otherwise 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
provided by law. Proceedings involving the administration of a 
trust normally will be brought in the court at the trust's 
principal place of administration. Section 202 provides that the 
trustee and beneficiaries are deemed to have consented to the 
jurisdiction 
of 
the 
court 
at 
the 
principal 
place 
of 
administration as to any matter relating to the trust. Sections 
and 204 are optional, bracketed provisions relating to 
subject-matter jurisdiction and venue. 
§201. Role of court in administration of trust 
1. 
Intervention. 
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. Continuing judicial supervision. 
A trust is not subject 
to continuing judicial supervision unless ordered by the court. 
3. 
Matter involving trust' s 
administration. 
A judicial 
proceeding involving a trust may relate to any matter involving 
the trust's administration, including a reguest for instructions 
and an action to declare rights. 
UNIFORM COMMENT 
While 
the 
Uniform 
Trust 
Code 
encourages 
the 
resolution of 
disputes without resort to the courts by providing such options 
as the nonjudicial· settlement authorized by Section 111, the 
court is always available to the extent its jurisdiction is 
invoked by interested persons. The jurisdiction of the court with 
respect to trust matters is inherent and historical and ·also 
includes the ability to act on its own initiative, to appoint a 
special master to investigate the facts of a case, and to provide 
a trustee with instructions even in the absence of an actual 
dispute. 
Contrary to the trust statutes in some States, the Uniform Trust 
Code does not create a 
system of routine or mandatory court 
supervision. While subsection (b) authorizes a court to direct 
that 
a 
particular 
trust 
be 
subject 
to 
continuing 
court 
supervision, the court's intervention will normally be confined 
to the particular matter brought before it. 
Subsection (c) makes clear that the court's jurisdiction may be 
invoked even absent an actual dispute. Traditionally, courts in 
equity have heard petitions for instructions and have issued 
declaratory judgments if there is a reasonable doubt as to the 
extent of the trustee's powers or duties. The court will not 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
ordinarily instruct trustees 
on 
how 
to exercise discretion, 
however. 
See Restatement 
(Second) of Trusts Section 187, 
(1959). 
This 
section 
does 
not 
limit 
the 
court's 
equity 
jurisdiction. Beyond mentioning petitions for instructions and 
actions to declare rights, subsection (c) does not attempt to 
list 
the 
types 
of 
judicial 
proceedings 
involving 
trust 
administration that might be brought by a trustee or beneficiary. 
Such an effort is made in California Probate Code Section 17200. 
Excluding matters not germane to the Uniform Trust Code, the 
California statute lists the following as items relating to the 
"internal 
affairs" 
of 
a 
trust: 
determining 
questions 
of 
construction; determining the existence or nonexistence of any 
immunity, 
power, privilege, duty, or right; determining the 
validity of a trust provision; ascertaining beneficiaries and 
determining to whom property will pass upon final or partial 
termination of the trust; settling accounts and passing upon the 
acts of a trustee, including the exercise of discretionary 
powers; instructing the trustee; compelling the trustee to report 
information about the trust or account to the beneficiary; 
granting powers to the trustee; fixing or allowing payment of the 
trustee's compensation or reviewing the reasonableness of the 
compensation; appointing or removing a trustee; accepting the 
resignation of a trustee; compelling redress of a breach of trust 
by any available remedy; approving or directing the modification 
or termination of a trust; approving or directing the combination 
or division of trusts; and authorizing or directing transfer of a 
trust or trust property to or from another jurisdiction. 
MAINE COMMENT 
This section supercedes the Probate Code, section 7-201, which 
resembled California practice of describing the actions over 
which the court has jurisdiction. 
§202. 
Jurisdiction over trustee and beneficiary 
1. Trustee. 
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. 
Beneficiaries; recipients. 
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 such a 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
trust. the recipient submits personally to the jurisdiction of 
the courts of this State regarding any matter involving the trust. 
3. 
Not exclusive. 
This section does not preclude other 
methods of obtaining jurisdiction over a trustee, beneficiary or 
other person receiving property from the trust. 
UNIFORM COMMENT 
This section clarifies that the courts of the principal place of 
administration have jurisdiction to enter orders relating to the 
trust that will be binding on both the trustee and beneficiaries. 
Consent to jurisdiction does not dispense with any required 
notice, however. With respect to jurisdiction over a beneficiary, 
the comment to Uniform Probate Code Section 7-103, upon which 
portions of this section are based, is instructive: 
It also seems reasonable to require beneficiaries to go to the 
seat of the trust when litigation has been instituted there 
concerning a trust in which they claim beneficial interests, much 
as the rights of shareholders of a corporation can be determined 
at a corporate seat. The settlor has indicated a principal place 
of administration by its selection of a trustee or otherwise, and 
it is reasonable to subject rights under the trust to the 
jurisdiction 
of 
the 
Court 
where 
the 
trust 
is 
properly 
administered. 
The jurisdiction conferred over the trustee and beneficiaries by 
this section does not preclude jurisdiction by courts elsewhere 
on some other basis. Furthermore, the fact that the courts in a 
new State acquire jurisdiction under this section following a 
change in a trust's principal place of administration does not 
necessarily mean that the courts of the former principal place of 
administration lose jurisdiction, particularly as to matters 
36. 
involving events occurring prior to the transfer. 
The jurisdiction conferred by this section is limited. Pursuant 
to subsection (b), until a distribution is made, jurisdiction 
over a beneficiary is limited to the beneficiary's interests in 
the trust. Personal jurisdiction over a beneficiary is conferred 
only upon the making of a distribution. Subsection (b) also gives 
the court jurisdiction over other recipients of distributions. 
This would include individuals who receive distributions in the 
mistaken belief they are beneficiaries. 
For a discussion of jurisdictional issues concerning trusts, see 
5A Austin W. 
Scott 
& William F. Fratcher, The Law of Trusts 
Sections 556-573 (4th ed. 1989). 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
MAINE COMMENT 
This section supercedes the Probate Code, 
sections 7-103 and 
7-104. 
Section 7-103 addressed the effect of registration upon 
jurisdiction over the trustee and beneficiary. The procedure for 
registering trusts has not been included in the Maine Uniform 
Trust Code because it has been utilized rarely and is thought to 
no longer serve a necessary or useful purpose. 
§203. 
Subject matter jurisdiction 
1. 
Concurrent jurisdiction. 
The Probate Court and the 
Superior Court have concurrent jurisdiction of all proceedings in 
this State involving a trust. 
2. 
Alternative dispute resolution not precluded. 
This 
section does not preclude judicial or nonjudicial alternative 
dispute resolution. 
UNIFORM COMMENT 
This section provides a means for distinguishing the jurisdiction 
of the court having primary jurisdiction for trust matters, 
whether denominated the probate court, chancery court, or by some 
other name, from other courts in a State that may on occasion 
resolve disputes concerning trusts. The section has been placed 
in brackets because the enacting jurisdiction may already address 
subject-matter jurisdiction by other statute or court rule. The 
topic also need not be addressed in States having unified court 
systems. For an explanation of types of proceedings which may be 
brought concerning the administration of a trust, see the comment 
to Section 201. 
MAINE COMMENT 
This section supercedes the Probate Code, 
sections 7-201 and 
7-204. 
Section 
7-204 
in 
part 
addressed 
the 
effect 
of 
registration upon jurisdiction. The effect of registration upon 
jurisdiction is not addressed in this section because the 
procedure for registering trusts has not been included in the 
Maine Uniform Trust Code. 
Section 203(a) 
of the Uniform Trust Code grants exclusive 
jurisdiction to the Probate Court of proceedings brought by a 
trustee or beneficiary concerning the administration of a trust. 
And §203(b) of the Uniform Trust Code grants to the Probate Court 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
concurrent jurisdiction with other courts of other proceedings 
involving a trust. 
Uniform Trust Code §203 has not been adopted 
because it is inconsistent with Maine law. 
Maine section 203, subsection 1 conforms to the Probate Code, 
section 7-201 and Title 4, 
section 252, 
which grant to the 
Probate Court concurrent jurisdiction with the Superior Court of 
all matters concerning the internal affairs of trusts. 
Section 203, subsection 2 was added to confirm that alternative 
dispute resolution is not precluded. 
§204. Venue 
1. 
Trust. 
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. 
Appointment of trustee. 
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. 
UNIFORM COMMENT 
This 
optional, 
bracketed 
section 
is 
made 
available 
for 
jurisdictions that conclude that venue for a judicial proceeding 
involving a trust is not adequately addressed in local rules of 
civil procedure. For jurisdictions enacting this section, general 
rules governing venue continue to apply in cases not covered by 
this section. This includes most proceedings where jurisdiction 
over a trust, trust property, or parties to a trust is based on a 
factor other than the trust's principal place of administration. 
The general rules governing venue also apply when the principal 
place of administration of a trust is in another locale, but 
jurisdiction is proper in the enacting State. 
MAINE COMMENT 
This section supercedes the Probate Code, section 7-202, which in 
part addressed the effect of registration upon venue. 
The effect 
of registration upon venue is not addressed in this section 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
because 
the 
procedure 
for 
registering trusts 
has 
not 
been 
included in the Maine Uniform Trust Code. 
CHAPTER 3 
REPRESENTATION 
UNIFORM COMMENT 
This article deals with representation of beneficiaries, both 
representation 
by 
fiduciaries 
(personal 
representatives, 
trustees, guardia,ns, and conservators), and what is known as 
virtual representation. Representation is a topic not adequately 
addressed under the trust law of most States. Representation is 
addressed in the Restatement (First) of Property Sections 180-186 
(1936), but the coverage of this article is more complete. 
Section 301 is the introductory section, laying out the scope of 
the article. The representation principles of this article have 
numerous 
applications 
under 
this 
Code. 
The 
representation 
principles of the article apply for purposes of settlement of 
disputes, whether by a court or nonjudicially. They apply for the 
giving of required notices. They apply for the giving of consents 
to certain actions. 
Sections 302-305 cover the different types of representation. 
Section 302 deals with representation by the holder of a general 
testamentary 
power 
of 
appointment. 
(Revocable 
trusts 
and 
presently exercisable general powers of appointment are covered 
by Section 603, which grant the settlor or holder of the power 
all rights of the beneficiaries or persons whose interests are 
subject to the power). Section 303 deals with representation by a 
fiduciary, 
whether 
of 
an estate, trust, 
conservatorship, 
or 
guardianship. The section also allows a parent without a conflict 
of interest to represent and bind a 
minor or unborn child. 
Section 304 is the virtual representation provision. It provides 
for representation of and the giving of a binding consent by 
another person having a substantially identical interest with 
respect to the particular issue. Section 305 authorizes the court 
to appoint 
a 
representative to represent the interests of 
unrepresented persons or persons for whom the court concludes the 
other available representation might be inadequate. 
The provisions of this article are subject to modification in the 
terms of the trust. See Section 105. Settlors are free to specify 
their own methods for providing substituted notice and obtaining 
substituted consent. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§30l. Representation: basic effect 
1. 
Notice. 
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. 
2. Consent. 
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 before the consent would otherwise have become 
effective. 
3. 
Notice and consent on settlor' s behalf. 
Except as 
otherwise provided in sections 411 and 602, 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. 
UNIFORM COMMENT 
This section is general and introductory, laying out the scope of 
the article. 
Subsection (a) validates substitute notice to a person who may 
represent and bind another person as provided in the succeeding 
sections of this article. Notice to the substitute has the same 
effect as if given directly to the other person. Subsection (a) 
does not apply to notice of a judicial proceeding. Pursuant to 
Section 109(d), notice of a judicial proceeding must be given as 
provided in the applicable rules of civil procedure, which may 
require that notice not only be given to the representative but 
also to the person represented. For a model statute for the 
giving of notice in such cases, see Unif. Probate Code Section 
1-403(3). Subsection (a) may be used to facilitate the giving of 
notice- to the qualified beneficiaries of a proposed transfer of 
principal place of administration (Section l08(d», of a proposed 
trust combination or division (Section 417), 
of 
a 
temporary 
assumption of duties without accepting trusteeship (Section 
70l(c)(1», of a trustee's resignation (Section 705(a)(1», and 
of a trustee's report (Section 8l3(c». 
Subsection (b) deals with the effect of a consent, whether by 
actual or virtual representation. Subsection (b) may be used to 
facilitate consent of the beneficiaries to modification or 
termination of a 
trust, with or without the consent of the 
settlor (Section 411), agreement of the qualified beneficiaries 
on appointment of a successor trustee of a noncharitable trust 
(Section 704(c)(2», and a beneficiary's consent to or release or 
affirmance of the actions of a trustee (Section 1009). A consent 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
by 
a 
representative 
bars 
a 
later objection 
by 
the 
person 
represented, 
but 
a 
consent 
is 
not 
binding if 
the 
person 
represented raises an objection prior to the date the consent 
would 
otherwise 
become 
effective. 
The 
possibility 
that 
a 
beneficiary might object to a consent given on the beneficiary's 
behalf will not be germane in many cases because the person 
represented will be unborn or unascertained. 
However, 
the 
representation principles of this article will sometimes apply to 
adult and competent beneficiaries. For example, while the trustee 
of a revocable trust entitled to a pourover devise has authority 
under Section 
to approve the personal representative's 
account on behalf of the trust beneficiaries, such consent would 
not be binding on a trust beneficiary who registers an objection. 
Subsection (b) implements cases such as Barber v. Barber, 837 
P.2d 714 (Alaska 1992), which held that the a refusal to allow an 
objection by an adult competent remainder beneficiary violated 
due process. 
Subsection (c) implements the policy of Sections 411 and 602 
requiring express authority in the power of attorney or approval 
of court before the settlor's agent, conservator or guardian may 
consent on behalf of the settlor to the termination or revocation 
of the settlor's revocable trust. 
MAINE COMMENT 
The 
Probate 
Code, 
like 
the 
Uniform 
Trust 
Code, 
validates 
substitute notice to a person who may represent and bind another 
person. 
See the Maine Revised Statutes, Title 18-A, section 
1-403. 
However, chapter 3 of the Maine Uniform Trust Code 
significantly 
broadens 
the 
application 
of 
Maine's 
current 
representation 
provisions. 
Maine's 
current 
law 
regarding 
substitute 
notice 
and 
representation 
is 
limited 
to 
formal 
proceedings involving a trust or estate of a decedent, minor, 
protected person or incapacitated person and in a 
judicially 
supervised 
settlement. 
Under 
the 
Uniform 
Trust 
Code, 
representation 
prOV1Slons 
can 
be 
applied 
to 
nonjudicial 
settlement proceedings, which are broadly defined under Uniform 
Trust Code, 
section Ill. 
According to Uniform Trust Code, 
section 111, parties may enter into nonjudicial settlements 
concerning any matters relating to trusts. 
Such agreements can 
contain any term or condition that a court properly could approve. 
Unlike the Uniform Trust Code, the Maine statute authorizing 
substitute notice 
does 
not explicitly discuss 
the 
issue of 
consent. 
Former section 7-303 of the Probate Code required 
trustees to keep trust beneficiaries reasonably informed of the 
trust administration and former section 7-307 of the Probate Code 
permits beneficiaries to bring claims against trustees unless 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
otherwise barred by previous consent or an untimely claim. 
Both 
of these sections were repealed in conjunction with the adoption 
of the Maine Uniform Trust Code. 
Enactment of the Uniform Trust Code provisions adds specificity 
to 
Maine's 
former 
law 
on 
representation. 
Furthermore, 
codification of the Uniform Trust Code representation provisions 
assembles a variety of rules that are not currently codified in 
one place under Maine's current law. 
Maine Uniform Trust Code, section 301, subsection 3 implements 
the policy of other Uniform Trust Code sections that authorize a 
settlor's guardian or conservator to modify or terminate the 
settlor's trust with court 
approval. 
It also 
extends 
the 
authority of courts to modify trusts. See Canal National Bank v. 
Old Folks' Home Association of Brunswick et al., 347 A.2d 428, 
6 ( Me • 197 5) . 
§302. 
Representation by holder of general testamenta~ power 
of appointment 
To the extent there is no conflict of interest between the 
holder of a general testamentary power of appointment and the 
persons represented with respect to the particular question or 
dispute, 
the 
holder 
may 
represent 
and 
bind 
persons 
whose 
interests, 
as permissible appointees, 
takers in default or 
otherwise, are subject to the power. 
UNIFORM COMMENT 
This section specifies the circumstances under which a holder of 
a general testamentary power of appointment may receive notices 
on behalf of and otherwise represent and bind persons whose 
interests are subject to 
the 
power, 
whether 
as 
permissible 
appointees, takers in default, or otherwise. Such representation 
is allowed except to the extent there is a conflict of interest 
with respect to the particular matter or dispute. Typically, the 
holder of a general testamentary power of appointment is also a 
life income beneficiary of the trust, oftentimes of a trust 
intended to qualify for the federal estate tax marital deduction. 
See I.R.C. Section 2056(b)(5). Without the exception for conflict 
of interest, the holder of the power could act in a way that 
could enhance the holder's income interests to the detriment of 
the appointees or takers in default, whoever they may be. 
MAINE COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The Maine Revised Statutes, Title l8-A, section 1-403, subsection 
(2), paragraph (i) tracks the language in the Maine Uniform Trust 
Code, section 302 closely. 
Both allow the holder of a general 
testamentary power of appointment to bind and represent persons 
whose interests are subject to the power. 
The Maine Uniform 
Trust 
Code, 
however, 
more 
explicitly 
states 
that 
such 
representation is limited to matters and disputes that do not 
involve conflicts of interest between the representative and the 
people who are represented. 
§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. 
Conservator. 
A conservator may represent and bind the 
estate that the conservator controls; 
2. 
Guardian. 
A guardian may represent and bind the ward if 
a conservator of the ward's estate has not been appointed; 
3. Agent. 
An agent having authority to act with respect to 
the particular question or dispute may represent and bind the 
principal; 
4. 
Trustee. 
A trustee may 
represent and bind the 
beneficiaries of the trust; 
5. 
Personal representative. 
A personal representative of a 
decedent's estate may represent and bind persons interested in 
the estate; and 
6. 
Parent. 
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. 
UNIFORM COMMENT 
This section allows for representation of persons by their 
fiduciaries 
(conservators, 
guardians, 
agents, 
trustees, 
and 
personal representatives), a principle that has long been part of 
the law. Paragraph (6), which allows parents to represent their 
children, is more recent, having originated in 1969 upon approval 
of the Uniform Probate Code. This section is not limited to 
representation 
of 
beneficiaries. 
It 
also 
applies 
to 
representation of the settlor. Representation is not available if 
the fiduciary or parent is in a conflict position with respect to 
the particular matter or dispute, however. 
A typical conflict 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
would be where the fiduciary or parent seeking to represent the 
beneficiary is either the trustee or holds an adverse beneficial 
interest. 
Paragraph (2) authorizes a guardian to bind and represent a ward 
if a conservator of the ward's estate has not been appointed. 
Granting a guardian authority to represent the ward with respect 
to interests in the trust can avoid the need to seek appointment 
of a conservator. This grant of authority to act with respect to 
the ward's trust interest may broaden the authority of a guardian 
in some States although not in States that have adopted the 
Section 1-403 of the Uniform Probate 
Code, 
from which this 
section 
was 
derived. 
Under 
the 
Uniform 
Trust 
Code, 
a 
"conservator" is appointed by the court to manage the ward's 
property, a "guardian" to make decisions with respect to the 
ward's personal affairs. See Section 103. 
Paragraph (3) authorizes an agent to represent a principal only 
to the extent the agent has authority to act with respect to the 
particular question or dispute. Pursuant to Sections 411 and 602, 
an agent may represent a settlor with respect to the amendment, 
revocation or termination of the trust only to the extent this 
authority is expressly granted either in the trust or the power. 
Otherwise, depending on the particular question or dispute, a 
general grant of authority in the power may be sufficient to 
confer the necessary authority. 
MAINE COMMENT 
For the most part, the Probate Code, section 1-403, subsection 
(2) , 
paragraph (ii) tracks the language of the Maine Uniform 
Trust Code, section 303. 
However, the Probate Code, section 
1-403, subsection (2) , 
paragraph (ii) does not include agents 
within 
the 
scope 
of 
representatives 
authorized 
to 
bind 
represented individuals. 
To 
this extent, 
section 303 
is 
a 
reasonable and logical extension of Maine law. 
§304. Representation by person having substantially identical 
interest 
Unless otherwise represented, a minor, an 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. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 618, L.D. 921 
UNIFORM COMMENT 
This section authorizes a person with a substantially identically 
interest with respect to a particular question or dispute to 
represent 
and 
bind 
an 
otherwise 
unrepresented 
minor, 
incapacitated or unborn individual, or person whose location is 
unknown and not reasonably ascertainable. This section is derived 
from Section 1-403(2)(iii) of the Uniform Probate Code, but with 
several modifications. Unlike the UPC, 
this section does not 
expressly require that the representation be adequate, 
the 
drafters 
preferring 
to 
leave 
this 
issue 
to 
the 
courts. 
Furthermore, 
this 
section extends 
the doctrine of virtual 
representation to 
representation of minors 
and 
incapacitated 
individuals. Finally, this section does not apply to the extent 
there is a conflict of interest between the representative and 
the person represented. 
Restatement (First) of Property Sections 181 and 185 (1936) 
provide 
that virtual 
representation is 
inapplicable if the 
interest 
represented 
was 
not 
sufficiently 
protected. 
Representation is deemed sufficiently protective as long as it 
does not appear that the representative acted in hostility to the 
interest of 
the 
person 
represented. 
Restatement 
(First) 
of 
Property Section 185 (1936). Evidence of inactivity or lack of 
skill is material 
only 
to 
the 
extent it establishes 
such 
hostility. Restatement (First) of Property Section 185 cmt. b 
(1936). 
Typically, the interests of the representative and the person 
represented will be identical. A common example would be a trust 
providing for distribution to the settlor's children as a class, 
wi th an adult child being able to represent the interests of 
children who 
are either minors or unborn. 
Exact identity of 
interests is not required, only substantial identity with respect 
. 
to the particular question or dispute. Whether such identity is 
present may depend on the nature of the interest. For example, a 
presumptive remaindermen may be able to represent alternative 
remaindermen with respect to approval of a trustee's report but 
not with respect to interpretation of the remainder provision or 
termination of the trust. Even if the beneficial interests of the 
representative 
representation 
interest. The 
trust that are 
such 
as 
a 
beneficiaries. 
cmt. d (1936). 
and 
person 
represented 
are 
identical, 
is not allowed in the event of conflict of 
representative may have interests outside of the 
adverse to the interest of the person represented, 
prior 
relationship 
with 
the 
trustee 
or 
other 
See Restatement (First) of Property Section 185 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
MAINE COMMENT 
Section 304 extends the doctrine of virtual representation to 
minors, incapacitated individuals and individuals whose identity 
or location is unknown and not reasonably ascertainable. Section 
also extends the applicability of virtual representation to 
nonjudicial settlement proceedings. In light of the increasingly 
widespread use of trusts that commonly last for decades and 
frequently benefit minors or incapacitated individuals, the 
expansion of virtual representation is regarded favorably. 
The 
expected result is a reduction in complexity and the time it will 
take to resolve issues, with similar reduction in trust expenses. 
Unlike the Probate Code, section 1-403, subsection (2), paragraph 
(iii), Maine Uniform Trust Code, section 304 does not expressly 
discuss the adequacy of virtual representation: however, adequate 
virtual representation is still required by the Maine Uniform 
Trust Code. 
Virtual representation will be deemed inapplicable 
if the represented interest is not sufficiently protected and 
Maine Uniform Trust Code section 305 authorizes the court to 
appoint 
a 
representative 
for 
an 
individual if the 
court 
determines that the representation received by that individual 
is, or is likely to be, inadequate. 
The appointed representative 
may represent an individual in both judicial and nonjudicial 
settings. 
It is expected that some 
showing of inadequate 
representation or insufficient representation will be required: 
the court should 
not reflexively appoint a 
representative 
without such a showing. 
§305. Appointment of representative 
1. Interest not represented; representation inadequate.. If 
the court determines that an interest is not represented under 
this chapter, or that the otherwise available representation 
might be inadequate, the court may appoint a representative to 
receive notice, give consent and otherwise represent, bind and 
act on behalf of a minor, an incapacitated or unborn individual 
or 
a 
person 
whose 
identity or 
location is 
unknown. 
A 
representative may be appointed to represent several persons or 
interests. 
2. 
Scope of representation. 
A representative may act on 
behalf of the individual represented with respect to any matter 
arising under this Code, whether or not a judicial proceeding 
concerning the trust is pending. 
3. 
Consider general benefit. 
In making decisions, 
a 
representative may consider general benefit accruing to the 
living members of the individual's family. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
This section is derived from Section 1-403(4) of the Uniform 
Probate Code. However, this section substitutes" representative" 
for "guardian ad litem" to signal that a representative under 
this Code serves a different role. Unlike a guardian ad litem, 
under this section a representative can be appointed to act with 
respect to a nonjudicial settlement or to receive a notice on a 
beneficiary's 
behalf. 
Furthermore, 
in 
making 
decisions, 
a 
representative may consider general benefit accruing to living 
members of the family. "Representative" is placed in brackets in 
case the enacting jurisdiction prefers 
a different term. 
The 
court may appoint a representative to act for a person even if 
the person could be represented under another section of this 
article. 
MAINE COMMENT 
Section 305 changes Maine 
law. 
It authorizes the court to 
appoint a "representative" rather than a "guardian ad litem" in 
cases 
where 
the 
court determines 
that 
the interests of 
an 
individual are not adequately represented. 
The representative is 
authorized to act with respect to nonjudicial settlements and is 
granted the authority to consider the "general benefit accruing 
to the living members of the individual's family" when making 
decisions. 
Section 
also 
expressly 
authorizes 
the 
representative to receive notice and give consent on behalf of 
the individual who is represented. 
These powers are not granted 
expressly in the Probate Code, section 1-403, subsection (4). 
CHAPTER 4 
CREATIOlf, VALIDITY, MODIFICATIOlf 
AND TERMINATION OF TRUST 
UNIFORM COMMENT 
Sections 401 through 409, which specify the requirements for the 
creation of a trust, largely codify traditional doctrine. Section 
specifies the methods by which trusts are created, that is, 
by transfer of property, self-declaration, or exercise of a power 
of appointment. Whatever method may have been employed, other 
requirements, 
including intention, 
capacity and, 
for 
certain 
types of trusts, an ascertainable beneficiary, also must be 
satisfied before 
a 
trust is created. 
These 
requirements are 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
listed in Section 402. Section 403 addresses the validity in the 
enacting jurisdiction of trusts created in other jurisdictions. A 
trust not created by will is validly created if its creation 
complied with the law of specified jurisdictions in which the 
settlor or trustee had a significant contact. Section 404 forbids 
trusts for illegal or impossible purposes, and requires that a 
trust and its terms must be for the benefit of its beneficiaries. 
Section 405 recites the permitted purposes of a charitable trust. 
Section 406 lists some of the grounds for contesting a trust. 
Section 407 validates oral trusts. The remaining sections address 
what are often referred to as "honorary" trusts, although such 
trusts are valid and enforceable under this Code. Section 408 
covers a trust for the care of an animal; Section 409 allows 
creation of a trust for another noncharitable purpose such as 
maintenance of a cemetery lot. 
Sections 410 through 417 provide a series of interrelated rules 
on when a trust may be terminated or modified other than by its 
express terms. The overall objective of these sections is to 
enhance flexibility consistent with the principle that preserving 
the settlor's intent is paramount. Termination or modification 
may be allowed upon beneficiary consent if the court concludes 
that the trust or a particular provision no longer achieves a 
material purpose or if the settlor concurs (Section 411), by the 
court in response to unanticipated circumstances or due to 
ineffective administrative terms (Section 412), or by the court 
or trustee if continued administration under the trust's existing 
terms 
would 
be 
uneconomical 
(Section 414). 
A trust may 
be 
reformed to correct a mistake of law or fact (Section 415), or 
modified to achieve the settlor's tax objectives (Section 416). 
Trusts may be combined or divided (Section 417). A trustee or 
beneficiary has standing to petition the court with respect to a 
proposed termination or modification (Section 410). 
Section 413 codifies and at the same time modifies the doctrine 
36. 
of cy pres, at least as applied in most states. The Uniform Trust 
Code authorizes the court to apply cy pres not only if the 
original means becomes impossible or unlawful but also if the 
means become impracticable or wasteful. Section 413 also creates 
a presumption of general charitable intent. Upon failure of the 
settlor's original plan, the court cannot divert the trust 
property to a noncharity unless the terms of the trust expressly 
so provide. Furthermore, absent a contrary provision in the terms 
of the trust, 
limits are placed on when 
a gift over to 
a 
noncharity can take effect upon failure or impracticality of the 
original charitable purpose. The gift over is effective only if, 
when the provision takes effect, the trust property is to revert 
to the settlor and the settlor is still living, or fewer than 21 
years have elapsed since the date of the trust's creation. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The requirements for a trust's creation, such as the necessary 
level of capacity and the requirement that a trust have a legal 
purpose, are controlled by statute and common law, not by the 
settlor. See Section 105(b)(l), (3). Nor may the settlor negate 
the court's ability to modify or terminate a trust as provided in 
Sections 
through 416. 
See Section 105(b)(4). 
However, 
a 
settlor is free to restrict or modify the trustee's power to 
terminate an uneconomic trust as provided in Sections 414, and 
the trustee's power to combine and divide trusts as provided in 
Section 417. 
§40l. Methods of creating trust 
A trust may be created by: 
1. 
Transfer of property. 
Transfer of property to another 
person as trustee during the settlor's lifetime or by will or 
other disposition taking effect upon the settlor's death; 
2. 
Declaration. 
Declaration by the owner of property that 
the owner holds identifiable property as trustee: or 
3. 
Exercise of power. 
Exercise of a power of appointment 
in favor of a trustee. 
UNIFORM COMMENT 
3D 
This section is based on Restatement (Third) of Trusts Section 10 
(Tentative Draft No.1, approved 1996), and Restatement (Second) 
of Trusts Section 17 (1959). Under the methods specified for 
creating a trust in this section, a trust is not created until it 
receives property. For what constitutes an adequate property 
interest, 
see 
Restatement 
(Third) 
of 
Trusts 
Sections 
40-41 
(Tentative Draft No.2, approved 1999); Restatement (Second) of 
Trusts Sections 74-86 (1959). The property interest necessary to 
fund and create a trust need not be substantial. A revocable 
designation of the trustee as beneficiary of a life insurance 
policy or employee benefit plan has long been understood to be a 
property interest sufficient to create a 
trust. 
See Section 
103(11) ("property" defined). Furthermore, the property interest 
need not be transferred contemporaneously with the signing of the 
trust instrument. A trust instrument signed during the settlor's 
lifetime is not rendered invalid simply because the trust was not 
created until property was transferred to the trustee at a much 
later date, including by contract after the settlor's death. A 
pourover devise to a previously unfunded trust is also valid and 
may constitute the property interest creating the trust. See 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Unif. 
Testamentary Additions to Trusts Act Section 1 
(1991), 
codified at Uniform Probate Code Section 2-511 (pourover devise 
to trust valid regardless of existence, size, or character of 
trust corpus). See also Restatement (Third) of Trusts Section 19 
(Tentative Draft No.1, approved 1996). 
While this section refers to transfer of property to a trustee, a 
trust can be created even though for a period of time no trustee 
is in office. See Restatement (Third) of Trusts Section 2 cmt. g 
(Tentative Draft No.1, approved 1996); Restatement (Second) of 
Trusts Section 2 cmt. i 
(1959). A trust can also be created 
without notice to or acceptance by a trustee or beneficiary. See 
Restatement (Third) of Trusts Section 14 (Tentative Draft No.1, 
approved 1996); Restatement (Second) of Trusts Sections 35-36 
(1959). 
The methods specified in this section are not exclusive. Section 
recognizes that trusts can also be created by special statute 
or court order. See also Restatement (Third) of Trusts Section 1 
cmt. a (Tentative Draft No.1, approved 1996); Unif. Probate Code 
Section 2-212 (elective share of incapacitated surviving spouse 
to be held in trust on terms specified in statute); Unif. Probate 
Code Section 5-411(a)(4) (conservator may create trust with court 
approval); 
Restatement 
(Second) 
of Trusts Section 17 
cmt. 
i 
(1959) (trusts created by statutory right to bring wrongful death 
action) • 
A trust can also be created by a promise that creates enforceable 
rights in a person who immediately or later holds these rights as 
trustee. 
See 
Restatement 
(Third) 
of 
Trusts 
Section 
(e) 
(Tentative Draft No.1, approved 1996). A trust thus created is 
valid notwithstanding that the trustee may resign or die before 
the promise is fulfilled. Unless expressly made personal, the 
promise can be enforced by a successor trustee. For examples of 
trusts created by means of promises enforceable by the trustee, 
see Restatement (Third) of Trusts Section 10 cmt. g 
(Tentative 
Draft No.1, approved 1996); Restatement (Second) of Trusts 
Sections 14 cmt. h, 26 cmt. n (1959). 
A 
trust 
created 
by 
self-declaration 
is 
best 
created 
by 
reregistering each of the assets that comprise the trust into the 
settlor I S 
name as trustee. However, such reregistration is not 
necessary to create the trust. See, e.g., In re Estate of 
Heggstad, 
Cal. 
Rptr. 
2d 433 
(Ct. 
App. 
1993); 
Restatement 
(Third) of Trusts Section 10 cmt. e (Tentative Draft No.1, 
approved 1996); Restatement (Second) of Trusts Section 17 cmt. a 
(1959). A declaration of trust can be funded merely by attaching 
a schedule listing the assets that are to be subject to the trust 
wi thout executing separate instruments of transfer. But such 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
practice can make it difficult to later confirm title with third 
party transferees and for this reason is not recommended. 
While a trust created by will may come into existence immediately 
at the testator's death and not necessarily only upon the later 
transfer of title from the personal representative, Section 701 
makes clear that the nominated trustee does not have a duty to 
act until there is an acceptance of the trusteeship, express or 
implied. To avoid an implied acceptance, a nominated testamentary 
trustee 
who 
is 
monitoring 
the 
actions 
of 
the 
personal 
representative but who has not yet made a final decision on 
acceptance should inform the beneficiaries that the nominated 
trustee has assumed only a limited role. The failure so to inform 
the beneficiaries could result in liability if misleading conduct 
by the nominated trustee causes harm to the trust beneficiaries. 
See Restatement (Third) of Trusts Section 35 cmt. b (Tentative 
Draft No.2, approved 1999). 
While this section confirms the familiar principle that a trust 
may be created by means of the exercise of a power of appointment 
(paragraph (3», this Code does not legislate comprehensively on 
the subject of powers of appointment but addresses only selected 
issues. See Sections 302 (representation by holder of general 
testamentary 
power 
of 
appointment); 
505(b) 
(creditor 
claims 
against holder of power of withdrawal); and 603(c) (rights of 
holder of 
power 
of withdrawal). 
For 
the 
law 
on 
powers 
of 
appointment generally, see Restatement (Second) of Property: 
Donative Transfers Sections 11.1-24.4 (1986); Restatement (Third) 
of Property: Wills and Other Donative Transfers (in progress). 
MAINE COMMENT 
Maine law allows the creation of a trust without the transfer of 
property under the Probate Code, section 2-511, although all 
rights of beneficiaries and all obligations of trustees are not 
invoked until the transfer of property. 
As explained in the 
Uniform 
Comment, 
above, 
a 
pour over devise to 
a 
previously 
unfunded trust is valid and may be the transfer of property that 
"creates" the trust. 
Although the terminology is different, the 
Probate Code, section 2-511 does not conflict with section 401 
and has not been amended. 
The transfer may be the transfer of an equitable interest in 
property as distinguished from an inter vivos gift. 
A gift 
transfer in trust, to be effective, requires a delivery of the 
legal interest in property, and must at once completely pass 
title so that the donor can have no further dominion over it. A 
gift in trust withholds the legal title from the donee, but the 
equitable title passes to the donee. 
The declaration must be of 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
a present trust vesting the equitable title. 
Northwestern Mutual 
Life Insurance Co. v. Collamore, 100 Me. 578; 62 A. 652 (1905). 
The 
donor 
has parted irrevocably with the beneficial title, 
whether the donor retains the legal title or transfers the legal 
title to a 3rd person. 
Bath Savings Inst. v. Hathorn, 88 Me. 
122, 33 A. 836 (1895); Norway Savings Bank v. Merriam et al., 88 
Me. 146, 33 A. 840 (1895). 
An express trust rests upon a declaration. No special phrase or 
formula is requisite to creating a trust. It is enough to make 
one's self a 
trustee for the benefit of another, if it be 
explicitly, unconditionally and fully stated or declared in 
writing or orally, if the property is personal, that it is held 
in trust for that other person named. Cazallis v. Ingraham, 119 
Me. 240; 110 A. 359 (1920). 
§402. Requirements for creation 
1. 
Requirements. 
A trust is created only if: 
A. 
The settlor has capacity to create a trust: 
B. 
The settlor indicates an intention to create the trust: 
C. 
The trust has a definite beneficiary or is: 
(I) 
A charitable trust; 
{2} 
A trust for the care of an animal, as provided in 
section 408; or 
(3) 
A trust for a noncharitable purpose, as provided 
in section 409; 
D. 
The trustee has duties to perform; and 
E. 
The same person is not the sole trustee and sole 
beneficiary. 
2. 
Definite beneficiary. 
A beneficiary is definite if the 
beneficiary can be ascertained now or in the future, subject to 
any applicable rule against perpetuities. 
3. 
Power to se1ect beneficiary: fai1ure of power. 
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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the persons who would have taken the property had the power not 
been conferred. 
UNIFORM COMMENT 
Subsection (a) codifies the basic requirements for the creation 
of a trust. To create a valid trust, the settlor must indicate an 
intention to create a trust. See Restatement (Third) of Trusts 
Section 13 (Tentative Draft No.1, approved 1996); Restatement 
(Second) 
of 
Trusts 
Section 
(1959). 
But 
only 
such 
manifestations of intent as are admissible as proof in a judicial 
proceeding may be considered. See Section 103(17) ("terms of a 
trust" defined). 
To create a trust, 
a settlor must have the requisite mental 
capacity. 
To 
create a 
revocable or testamentary trust, the 
settlor must have the capacity to make a will. To create an 
irrevocable trust, the settlor must have capacity during lifetime 
to transfer the property free of trust. See Section 601 (capacity 
of settlor to create 
revocable trust), 
and 
see generally 
Restatement (Third) of Trusts Section 11 (Tentative Draft No.1, 
approved 1996); Restatement (Second) of Trusts Sections 18-22 
(1959); 
and Restatement (Third) of Property: wills and Other 
Donative Transfers Section 8.1 (Tentative Draft No.3, 2001). 
Subsection (a)(3) requires that a trust, other than a charitable 
trust, a trust for the care of an animal, or a trust for another 
valid noncharitable purpose, have a definite beneficiary. While 
some beneficiaries will be definitely ascertained as of the 
trust's creation, subsection (b) recognizes that others may be 
ascertained in the future as long as this occurs within the 
applicable 
perpetuities 
period. 
The 
definite 
beneficiary 
requirement does not prevent a settlor from making a disposition 
in favor of a class of persons. Class designations are valid as 
long as the membership of the class will be finally determined 
within the applicable perpetuities period. For background on the 
definite beneficiary requirement, 
see 
Restatement 
(Third) 
of 
Trusts Sections 44-46 (Tentative Draft No.2, approved 1999); 
Restatement (Second) of Trusts Sections 112-122 (1959). 
Subsection (a)(4) 
recites standard doctrine that a 
trust is 
created 
only if the 
trustee 
has 
duties 
to 
perform. 
See 
Restatement (Third) of Trusts Section 2 (Tentative Draft No.1, 
approved 1996); Restatement (Second) of Trusts Section 2 (1959). 
Trustee duties are usually active, but a validating duty may also 
be passive, implying only that the trustee has an obligation not 
to interfere with the trustee's enjoyment of the trust property. 
Such passive trusts, while valid under this Code, 
may 
be 
terminable under the enacting jurisdiction's Statute of Uses. See 
COMM/7TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Restatement (Third) of Trusts Section 6 (Tentative Draft No. I, 
approved 1996); Restatement 
(Second) of Trusts Sections 67-72 
(1959). 
Subsection (a)(5) addresses the doctrine of merger, which, as 
traditionally stated, provides that a trust is not created if the 
settlor is the sole trustee and sole beneficiary of all 
beneficial 
interests. 
The 
doctrine 
of 
merger 
has 
been 
inappropriately applied by the courts in some jurisdictions to 
invalidate self-declarations of trust in which the settlor is the 
sole life beneficiary but other persons are designated as 
beneficiaries 
of 
the 
remainder. 
The 
doctrine 
of 
merger 
is 
properly applicable only if all beneficial interests, both life 
interests and remainders, are vested in the same person, whether 
in the settlor or someone else. An example of a trust to which 
the doctrine of merger would apply is a trust of which the 
settlor is sole trustee, sole beneficiary for life, and with the 
remainder 
payable 
to 
the 
settlor's probate 
estate. 
On 
the 
doctrine of merger generally, see Restatement (Third) of Trusts 
Section 69 (Tentative Draft No.3, 2001); Restatement (Second) of 
Trusts Section 341 (1959). 
Subsection (c) allows a settlor to empower the trustee to select 
the beneficiaries even if the class from whom the selection may 
be made cannot be ascertained. Such a provision would fail under 
traditional 
doctrine; 
it 
is 
an 
imperative 
power 
with 
no 
designated beneficiary capable of enforcement. Such a provision 
is valid, however, under both this Code and the Restatement, if 
there is at least one person who can meet the description. If the 
trustee does not exercise the power within a reasonable time, the 
power fails and the property will pass by resulting trust. See 
Restatement (Third) of Trusts Section 46 (Tentative Draft No.2, 
approved 1999). See also Restatement (Second) of Trusts Section 
(1959); Restatement (Second) of Property: Donative Transfers 
Section 12.1 cmt. e (1986). 
MAINE COMMENT 
The creation of 
a 
trust also requires, 
in addition to the 
transfer of property or the declaration of trust, the intention 
to create a trust. See Gower v. Keene, 113 Me. 249. 93 A. 
(1915). 
Prior Maine law also required that an attempted trust must fail 
for uncertainty and indefiniteness: 
A trust that by its terms 
may be applied to objects not charitable in the legal sense, and 
to persons not defined by name or by class, is too indefinite to 
be carried out. Haskell v. Staples, 116 Me. 103; 100 A. 
(1917). 
To the extent that trusts for the care of an animal, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
section 408, or for a noncharitable purpose, section 409, may 
have failed under prior law, section 402 is a change to Maine law. 
Maine law has not addressed the doctrine of merger and whether a 
trust payable to the settlor as beneficiary for life with 
remainder payable to the settlor's probate estate is valid or 
not, although this may be the practice for real estate nominee 
trusts 
as 
initially 
created. 
This 
section clarifies 
and 
supplements Maine law. 
§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: 
1. 
Settlor. 
The settlor was domiciled, had a place of 
abode or was a national; 
2. 
Trustee. 
A trustee was domiciled or had a place of 
business: or 
3. 
Trust property. 
Any trust property was located. 
UNIFORM COMMENT 
The validity of a trust created by will is ordinarily determined 
by the law of the decedent's domicile. No such certainty exists 
with respect to determining the law governing the validity of 
inter vivos trusts. Generally, at common law a trust was created 
if it complied with the 
law of the state having the most 
significant contacts to the trust. Contacts for making this 
determination include the domicile of the trustee, the domicile 
of the settlor at the time of trust creation, the location of the 
trust 
property, 
the 
place 
where 
the 
trust 
instrument 
was 
executed, and the domicile of the beneficiary. See 5A Austin 
Wakeman Scott 
& William Franklin Fratcher, The Law of Trusts 
Sections 597, 599 (4th ed. 1987). Furthermore, if the trust has 
contacts with two or more states, one of which would validate the 
trust's creation and the other of which would deny the trust's 
validity, 
the 
tendency is to select the 
law upholding 
the 
validity of the trust. See 5A Austin Wakeman Scott & William 
Franklin Fratcher, The Law of Trusts 600 (4th ed. 1987). 
Section 403 extends the common law rule by validating a trust if 
its creation complies with the law of any of a variety of states 
in 
which 
the 
settlor or 
trustee 
had 
significant contacts. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A." to H.P. 678, L.D. 921 
Pursuant to Section 403, 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; the trustee 
was domiciled or had a place of business; or any trust property 
was located. 
Section 403 is comparable to Section 2-506 of the 
Uniform 
Probate 
Code, 
which 
validates 
wills 
executed 
in 
compliance with the law of a variety of places in which the 
testator had 
a 
significant contact. Unlike the UPC, 
however, 
Section 403 is not limited to execution of the instrument but 
applies to the entire process of a trust's creation, including 
compliance with the requirement that there be trust property. In 
addition, unlike the UPC, Section 403 validates a trust valid 
under the law of the domicile or place of business of the 
designated trustee, or if valid under the law of the place where 
any of the trust property is located. 
The section does not supercede local law requirements for the 
transfer of real property, such that title can be transferred 
only by recorded deed. 
MAINE COMMENT 
There is little Maine law on this subject. 
The Maine Supreme 
Judicial Court would likely have followed the common law rule as 
described in the Uniform Comment, 
but this section clarifies 
Maine law. 
§404. Trust purposes 
A. trust may be created only to the extent its purposes are 
lawful, not contrary to public policy and possible to achieve. 
A. 
trust and its terms must be for the benefit of its beneficiaries. 
UNIFORM COMMENT 
For an explication of the requirement that a trust must not have 
a 
purpose 
that is 
unlawful 
or 
against 
public policy, 
see 
Restatement (Third) of Trusts Sections 27-30 (Tentative Draft No. 
2, approved 1999); Restatement (Second) of Trusts Sections 59-65 
(1959). A. trust with a purpose that is unlawful or against public 
policy is invalid. Depending on when the violation occurred, the 
trust may be invalid at its inception or it may become invalid at 
a later date. The invalidity may also affect only particular 
provisions. Generally, a trust has a purpose which is illegal if 
(1) its performance involves the commission of a criminal or 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
tortious act by 
the trustee; 
(2) 
the settlor's purpose in 
creating the trust was to defraud creditors or others; or (3) the 
consideration for the creation of the trust was illegal. See 
Restatement (Third) of Trusts Section 28 cmt. a (Tentative Draft 
No.2, approved 1999); Restatement (Second) of Trusts Section 60 
cmt. a (1959). Purposes violative of public policy include those 
that tend to encourage criminal or tortious conduct, that 
interfere with freedom to marry or encourage divorce, that limit 
religious freedom, or which are frivolous or capricious. See 
Restatement 
(Third) of Trusts Section 29 
cmt. 
d-h (Tentative 
Draft No.2, 1999); Restatement (Second) of Trusts Section 62 
(1959). 
Pursuant to Section 402 (a), a trust must have an identifiable 
beneficiary unless the trust is of a type that does not have 
beneficiaries in the usual sense, such as a charitable trust or, 
as provided in Sections 408 and 409, trusts for the care of an 
animal or other valid noncharitable purpose. The general purpose 
of trusts having identifiable beneficiaries is to benefit those 
beneficiaries in accordance with their interests as defined in 
the trust's terms. The requirement of this section that a trust 
and its terms be for the benefit of its beneficiaries, which is 
derived 
from 
Restatement 
(Third) 
of 
Trusts 
Section 
27(2) 
(Tentative Draft No.2, approved 1999), implements this general 
purpose. While a settlor has considerable latitude in specifying 
how 
a 
particular 
trust 
purpose 
is 
to 
be 
pursued, 
the 
administrative 
and 
other 
nondispositive 
trust 
terms 
must 
reasonably relate to this purpose and not divert the trust 
property to achieve a trust purpose that is invalid, such as one 
which is frivolous or capr1c10us. 
See Restatement (Third) of 
Trusts Section 27 cmt. b (Tentative Draft No.2, approved 1999). 
Section 412{b), which allows the court to modify administrative 
terms that are impracticable, wasteful, or impair the trust's 
administration, is a specific application of the requirement that 
a trust and its terms be for the benefit of the beneficiaries. 
The fact that a settlor suggests or directs an unlawful or other 
inappropriate means for performing a trust does not invalidate 
the trust if the trust has a substantial purpose that can be 
achieved by other methods. 
See Restatement (Third) of Trusts 
Section 28 cmt. e (Tentative Draft No.2, approved 1999). 
MAINE COMMENT 
For an explanation of the requirement under Maine law that a 
trust may not have a purpose that is unlawful or against public 
policy, see Holbrook Island Sanctuary v. Inhabitants of the Town 
of Brooksville, 161 Me. 476; 214 A.2d 660 (1965). 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§405. Charitable purposes; enforcement 
1. 
Purposes. 
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. Selection by court. 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. 
Enforcement. 
The settlor of a charitable trust, among 
others, may maintain a proceeding to enforce the trust. 
UNIFORM COMMENT 
The 
required purposes 
of 
a 
charitable trust specified in 
subsection 
(a) 
restate 
the 
well-established 
categories 
of 
charitable purposes listed in Restatement (Third) of Trusts 
Section 
(Tentative 
Draft 
No.3, 
approved 
2001), 
and 
Restatement 
(Second) 
of 
Trusts 
Section 
(1959), 
which 
ultimately derive from the Statute of Charitable Uses, 43 E1iz. 
I, c.4 (1601). The directive to the courts to validate purposes 
the achievement of which are beneficial to the community has 
proved to be 
remarkably adaptable over the centuries. 
The 
drafters concluded that it should not be disturbed. 
Charitable trusts are subject to the restriction in Section 404 
that a trust purpose must be legal and not contrary to public 
policy. 
This 
would 
include 
trusts 
that 
involve 
invidious 
discrimination. See Restatement (Third) of Trusts Section 28 cmt. 
f (Tentative Draft No.3, approved 2001). 
Under subsection (b), a trust that states a general charitable 
purpose does not fail if the settlor neglected to specify a 
particular 
charitable 
purpose 
or 
organization 
to 
receive 
distributions. 
The court may instead validate the trust by 
specifying 
particular 
charitable 
purposes 
or 
recipients, 
or 
delegate to the trustee the framing of an appropriate scheme. See 
Restatement 
(Second) 
of 
Trusts 
Section 
cmt. 
d 
(1959). 
Subsection (b) of this section is a corollary to Section 413, 
which states the doctrine of cy pres. Under Section 413 (a), a 
trust failing to state a general charitable purpose does not fail 
upon failure of the particular means specified in the terms of 
the trust. The court must instead apply the trust property in a 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
manner consistent with the settlor's charitable purposes to the 
extent they can be ascertained. 
Subsection (b) 
does not apply to the long-established estate 
planning technique of delegating to the trustee the selection of 
the charitable purposes or recipients. In that case, judicial 
intervention to supply particular terms is not necessary to 
validate the creation of the trust. The necessary terms instead 
will be supplied by the trustee. See Restatement (Second) of 
Trusts Section 396 (1959). Judicial intervention under subsection 
(b) will become necessary only if the trustee fails to make a 
selection. See Restatement (Second) of Trusts Section 397 cmt. d 
(1959). Pursuant to Section 110(b), the charitable organizations 
selected by the trustee would not have the rights of qualified 
beneficiaries under this Code because they are not expressly 
designated to receive distributions under the terms of the trust. 
Contrary to Restatement (Second) of Trusts Section 391 (1959), 
subsection (c) grants a settlor standing to maintain an action to 
enforce a charitable trust. The grant of standing to the settlor 
does not negate the right of the state attorney general or 
persons with special interests to enforce either the trust or 
their interests. For the law on the enforcement of chari table 
trusts, 
see 
Susan 
N. 
Gary, 
Regulating 
the 
Management 
of 
Charities: Trust Law, Corporate Law, and Tax Law, 21 U. Hawaii L. 
Rev. 593 (1999). 
MAINE COMMENT 
This section clarifies Maine law. 
Maine law has long recognized the validity of charitable trusts. 
See Tappan v. Deblois, 45 Me. 122 (Me. 1858); Howard v. American 
Peace Society, 49 Me. 288 (Me. 1860); Drew v. Wakefield, 54 Me. 
(Me. 1865). 
The language in section 405, subsection 1 has 
been broadly drafted to permit the courts to determine as 
charitable those purposes that are beneficial to the community so 
long as the purposes are not contrary to public policy. 
This section does appear to indicate a predisposition in favor of 
finding 
charitable 
purposes 
and 
upholding 
the 
validity 
of 
charitable gifts so as to give effect to the apparent intent of 
the grantor. 
This 
is generally consistent with 
underlying 
principles of Maine law that show a "special favoritism toward 
charitable gift or trust." 
In re Thompson's Estate, 414 A.2d 881 
(Me. 1980). 
See also Bills v. Pease, 116 Me. 98, 100 A. 146, 
(1917). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§406. Creation of trust induced by fraud. duress or undue 
influence 
A trust is void to the extent its creation was induced by 
fraud, duress or undue influence. 
UNIFORM COMMENT 
This section is a specific application of Restatement (Third) of 
Trusts Section 12 (Tentative Draft No.1, approved 1996), and 
Restatement (Second) of Trusts Section 333 (1959), which provide 
that a trust can be set aside or reformed on the same grounds as 
those which apply to a transfer of property not in trust, among 
which include undue influence, duress, and fraud, and mistake. 
This section addresses undue influence, duress, and fraud. For 
reformation of a trust on grounds of mistake, see Section 415. 
See 
also 
Restatement 
(Third) 
of 
Property: 
Wills 
and 
Other 
Donative Transfers Section 8.3 (Tentative Draft No.3, approved 
2001), 
which closely tracks the language above. Similar to a 
will, the invalidity of a trust on grounds of undue influence, 
duress, or fraud may be in whole or in part. 
§407. Evidence of oral trust 
Except as required by a statute other than this Code, a 
trust need not be evidenced by a trust instrument, but the 
creation of an oral trust and its terms may be established only 
by clear and convincing evidence. 
UNIFORM COMMENT 
While it is always advisable for a settlor to reduce a trust to 
36. 
writing, 
the 
Uniform Trust 
Code 
follows 
established 
law in 
recognizing oral trusts. Such trusts are viewed with caution, 
however. The requirement of this section that an oral trust can 
be established only by clear and convincing evidence is a higher 
standard than is in effect in many States. 
See Restatement 
(Third) of Trusts Section 20 Reporter' s Notes (Tentative Draft 
No.1, approved 1996). 
Absent some specific statutory provision, 
such as a provision 
requiring that transfers of real property be in writing, a trust 
need not be evidenced by a writing. States with statutes of 
frauds or other provisions requiring that the creation of certain 
trusts must be evidenced by a writing may wish specifically to 
cite such provisions. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
For the Statute of Frauds generally, see Restatement (Second) of 
Trusts Sections 40-52 
(1959). 
For a 
description of what the 
writing must contain, assuming that a writing is required, see 
Restatement (Third) of Trusts Section 22 (Tentative Draft No.1, 
approved 1996); Restatement (Second) of Trusts Section 46-49 
(1959). For a discussion of when the writing must be signed, see 
Restatement (Third) of Trusts Section 23 (Tentative Draft No.1, 
approved 1996); 
Restatement 
(Second) 
of Trusts Section 41-42 
(1959). For the law of oral trusts, see Restatement (Third) of 
Trusts 
Section 
(Tentative Draft No.1, 
approved 
1996); 
Restatement (Second) of Trusts Sections 43-45 (1959). 
MAINE COMMENT 
The Maine Revised Statutes, Title 33, section 851 requires that a 
trust concerning lands, except trust arising or resulting by 
implication of law, be created or declared by some writing signed 
by the party or the party's attorney. 
This exception to the 
general rule of section 407 is preserved. 
The burden of proof to be met by the proponent of an oral trust 
is new. 
Prior Maine law did not clearly establish a clear and 
convincing burden of proof for the creation of an oral trust. 
See Cazallis v. Ingraham, 119 Me. 240, 110 A. 359 (1920); Gower 
v. Keene, 113 Me. 249, 93 A. 546 (1915). 
§408. Trust for care of animal 
1. To provide care for animal: termination. 
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. 
Enforcement. 
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. 
Intended use of property. 
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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 618, L.D. 921 
the 
settlor, 
if 
then 
living, 
otherwise, 
to 
the 
settlor's 
successors in interest. 
UNIFORM COMMENT 
This section and the next section of the Code validate so called 
honorary trusts. Unlike honorary trusts created pursuant to the 
common law of trusts, which are arguably no more than powers of 
appointment, the trusts created by this and the next section are 
valid and enforceable. 
For 
a 
discussion of the common law 
doctrine, see Restatement (Third) of Trusts Section 41 (Tentative 
Draft No.2, approved 1999); Restatement (Second) of Trusts 
Section 124 (1959). 
This section addresses a particular type of honorary trust, the 
trust for the care of an animal. Section 409 specifies the 
requirements for trusts without ascertainable beneficiaries that 
are created for other nonchar i table purposes. A trust for the 
care of an animal may last for the life of the animal. While the 
animal will ordinarily be alive on the date the trust is created, 
an animal may be added as a beneficiary after that date as long 
as the addition is made prior to the settlor's death. Animals in 
gestation but not yet born at the time of the trust's creation 
may also be covered by its terms. A trust authorized by this 
section may 
be created to benefit one designated animal or 
several designated animals. 
Subsection 
(b) 
addresses 
enforcement. 
Noncharitable 
trusts 
ordinarily may be enforced by their beneficiaries. Charitable 
trusts may be enforced by the State's attorney general or by a 
person 
deemed 
to 
have 
a 
special interest. 
See 
Restatement 
(Second) of Trusts Section 391 (1959). But at common law, a trust 
for the care of an animal or a trust without an ascertainable 
beneficiary created for a noncharitable purpose was unenforceable 
because there was no person authorized to enforce the trustee's 
obligations. 
Sections 408 and 409 close this gap. The intended use of a trust 
authorized 
by either 
section 
may 
be 
enforced 
by 
a 
person 
designated in the terms of the trust or, if none, by a person 
appointed by the court. In either case, Section l10(b) grants to 
the person appointed the rights of a qualified beneficiary for 
the purpose of receiving notices and providing consents. If the 
trust is created for the care of an animal, a person with an 
interest in the welfare of the animal has standing to petition 
for an appointment. The person appointed by the court to enforce 
the trust should also be a person who has exhibited an interest 
in the animal's welfare. The concept of granting standing to a 
person with a demonstrated interest in the animal's welfare is 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
derived from the Uniform Guardianship and Protective Proceedings 
Act, which allows a person interested in the welfare of a ward or 
protected person to file petitions on behalf of the ward or 
protected 
person. 
See, 
e.g., 
Uniform 
Probate 
Code 
Sections 
5-2l0(b), 5-4l4(a). 
Subsection (c) addresses the problem of excess funds. If the 
court determines that the trust property exceeds the 
amount 
needed for the intended purpose and that the terms of the trust 
do not direct the disposition, a resulting trust is ordinarily 
created in the settlor or settlor's successors in interest. See 
Restatement (Third) of Trusts Section 47 (Tentative Draft No.2, 
approved 
1999); Restatement 
(Second) 
of Trusts Section 124 
(1959). Successors in interest include the beneficiaries under 
the settlor's will, if the settlor has a will, or in the absence 
of an effective will provision, the settlor's heirs. The settlor 
may also anticipate the problem of excess funds by directing 
their disposition in the terms of the trust. The disposition of 
excess funds is within the settlor's control. See Section 105(a). 
While a trust for an animal is usually not created until the 
settlor's death, subsection (a) allows such a trust to be created 
during the settlor's lifetime. Accordingly, if the settlor is 
still living, subsection (c) provides for distribution of excess 
funds to the settlor, and not to the settlor's successors in 
interest. 
Should the means chosen not be particularly efficient, a trust 
created for the care of an animal can also be terminated by the 
trustee or court under Section 414. Termination of a trust under 
that section, however, requires that the trustee or court develop 
an alternative means for carrying out the trust purposes. See 
Section 4l4(c). 
This section and the next section are suggested by Section 2-907 
of the Uniform Probate Code, but much of this and the following 
section is new. 
MAINE COMMENT 
This section is new Maine law. 
The question of the validity of a 
trust for the care of a 
specific animal or animals has not 
previously been addressed in Maine. 
These types of arrangements 
are distinguishable from trusts having broader objectives such as 
the prevention of cruelty to animals or the benefit of animals 
generally such as through the maintenance of wildlife sanctuaries 
or animal habitat. 
Maine case law has indirectly addressed the 
question 
of 
whether 
arrangements 
for 
the 
care 
of 
animals 
generally qualify as charitable activities. 
See, e.g., Holbrook 
Island Sanctuary v. Inhabitants of Town of Brooksville, 214 A.2d 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
660, 
Me. 
(1965), 
a 
case concerning the 
charitable 
exemption for property taxes. 
Citing the Restatement (Second) of 
Trusts, Section 374 (1959), the Law Court stated: 
"A trust to 
prevent or alleviate the suffering of animals is charitable. 
Thus, a trust for the prevention of cruelty to animals, or a 
trust to establish a 
home 
for animals, 
or a trust for the 
prevention or cure or treatment of diseases or of injuries to 
animals, is charitable." 
However, the Law Court held that the 
operation of 
a wildlife sanctuary or preserve was 
not 
a 
charitable purpose. 
Section 408 does not address these broader animal-related and 
wildlife-related arrangements, but section 409 may be applicable 
to 
those 
animal-related activities that 
do 
not 
qualify 
as 
charitable in nature. 
§409. Honcharitable trust without ascertainable beneficiary 
Except as otherwise provided in section 408 or by another 
statute, the following rules apply. 
1. 
Honcharitable pu~se. 
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. 
Enforcement. 
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. 
Intended 
use 
of 
property. 
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. 
UNIFORM COMMENT 
This section authorizes two types of trusts without ascertainable 
beneficiaries; trusts for general but noncharitable purposes, and 
trusts for a specific noncharitable purpose other than the care 
of an animal, on which see Section 408. Examples of trusts for 
general noncharitable purposes include a bequest of money to be 
distributed to such objects of benevolence as the trustee might 
select. 
Unless 
such attempted disposition was interpreted as 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
charitable, at common law the disposition was honorary only and 
did 
not 
create 
a 
trust. 
Under 
this 
section, 
however, 
the 
disposition is enforceable as a trust for a period of up to 21 
years, although that number is placed in brackets to indicate 
that States may wish to select a different time limit. 
The most common example of a trust for a specific noncharitable 
purpose is a trust for the care of a cemetery plot. The lead-in 
language to the section recognizes that some special purpose 
trusts, 
particularly those 
for 
care 
of 
cemetery plots, 
are 
subject to other statutes. 
Such legislation will typically 
endeavor to facilitate perpetual care as opposed to care limited 
to 21 years as under this section. 
For the requirement that a trust, particularly the type of trust 
authorized by this section, must have a purpose that is not 
capricious, see Section 404 comment. For examples of the types of 
trusts authorized by this section, see Restatement (Third) of 
Trusts Section 47 (Tentative Draft No.2, approved 1999), and 
Restatement (Second) of Trusts Section 62 cmt. wand Section 124 
(1959). The case law on capricious purposes is collected in 2 
Austin W. Scott & William F. Fratcher, The Law of Trusts Section 
124.7 (4th ed. 1987). 
This section is similar to Section 408, although less detailed. 
Much of the comment to Section 408 also applies to this section. 
MAINE COMMENT 
This section supplements Maine law in 2 problem areas involving 
trusts for a specific, noncharitable purpose for which there is 
no ascertainable beneficiary. 
The most common 
and typical 
example of this type of arrangement is a trust for the care of a 
private cemetery plot or monument. 
This type of arrangement has, 
historically, created conceptual problems both under the analysis 
that a trust without a beneficiary is unenforceable and in the 
application of the rule against perpetuities. 
Compare Swasey v. 
American Bible Society, 57 Me. 523 (1869) with Piper v. Moulton, 
Me. 155 (1881). 
Cases involving a 
single cemetery plot or monument should be 
distinguished from cases involving public cemeteries or burial 
grounds. 
As the Law Court stated in Johnson v. South Blue Hill 
Cemetery Association, 
A.2d 
(Me. 
1966), 
the care, 
maintenance and upkeep of public cemeteries is a public charity 
under Maine statutes relating to cemeteries or burial grounds and 
has been recognized as such by the great weight of authorities. 
Such charitable trusts are valid notwithstanding the absence of 
specific beneficiaries 
and 
may 
be 
enforced by 
the Attorney 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
General. 
Existing state statutes regulating cemeteries and 
mausoleums do not apply to private family burying grounds. See 
the Maine Revised Statutes, Title 13. 
The enactment of section 
will not affect the existing statutes regulating cemetery 
plots and burial grounds. 
The 
provision of section 409 limiting the duration of 
a 
noncharitable trust without an ascertainable beneficiary to a 
specified period of years, whether 21 or some other number, does 
not appear appropriate in the case of a cemetery plot or fund. 
Such arrangements are generally intended to be perpetual. 
In addition to burial grounds and trusts for animals described in 
section 408, other applications of trusts without ascertainable 
beneficiaries occasionally arise. These might include trusts for 
religious observances or memorials or gifts for a broad class of 
unascertained persons that might not be viewed as charitable. 
For example, a trust to provide an annual family reunion picnic 
for the descendants of a particular individual or an annual 
memorial dinner for a private club or group might fall into this 
category, as might a trust for the purpose of maintaining a 
family vacation property. 
Limiting the duration of these types 
of trusts to 21 years seems unduly restrictive. 
Accordingly, 
Maine has chosen to delete this limitation. 
§4l0. Modification or termination of trust; proceedings for 
approval or disapproval 
1. 
Termination. 
In addition to the methods of termination 
prescribed by sections 411 through 414. 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, contrary to public policy or 
impossible to achieve. 
2. Modification or termination proceeding. 
A proceeding to 
approve or disapprove 
a 
proposed modification or termination 
under sections 411 to 416, or trust combination or division under 
section 417, may be commenced by a trustee or beneficiary, and a 
proceeding to approve or disapprove a proposed modification or 
termination under section 411 may be commenced by the settlor. 
The settlor of a charitable trust may maintain a proceeding to 
modify the trust under section 413. 
UNIFORM COMMENT 
Subsection (a) lists the grounds on which trusts typically 
terminate. For a similar formulation, see Restatement (Third) of 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Trusts 
Section 
(Tentative 
Draft No.3, 
approved 
2001). 
Terminations under subsection (a) may be in either in whole or in 
part. Other types of terminations, all of which require action by 
a 
court, 
trustee, or beneficiaries, are covered in Sections 
411-414, 
which 
also 
address 
trust modification. 
Of 
these 
sections, all but Section 411 apply to charitable trusts and all 
but Section 413 apply to noncharitable trusts. 
Withdrawal of the trust property is not an event terminating a 
trust. The trust remains in existence although the trustee has no 
duties to perform unless and until property is later contributed 
to the trust. 
Subsection (b) specifies the persons who have standing to seek 
court approval or disapproval of proposed trust modifications, 
terminations, 
combinations, 
or 
divisions. 
An 
approval 
or 
disapproval may be sought for an action that does not require 
court permission, including a petition questioning the trustee's 
distribution upon termination of a trust under $50,000 (Section 
414), and a petition to approve or disapprove a proposed trust 
division or consolidation (Section 417). Subsection (b) makes the 
settlor 
an 
interested 
person 
with 
respect 
to 
a 
judicial 
proceeding brought by the beneficiaries under Section 411 to 
terminate or modify a trust. Contrary to Restatement (Second) of 
Trusts Section 391 
(1959), 
subsection (b) grants a settlor 
standing to petition the court under Section 413 to apply cy pres 
to modify the settlor's charitable trust. 
MAINE COMMENT 
This section is new Maine law. 
Section 410, subsection 1 sets forth the general circumstances in 
which a trust terminates by revocation, by the express terms of 
the trust, when the purposes of the trust have been achieved, or 
when circumstances have rendered the trust purposes unlawful, 
against public policy or impossible to achieve. The genesis of 
this section is the Restatement (Third) of Trusts Section 61 
(Tentative Draft No.3, approved 2001), and while there do not 
appear to be any Maine cases directly on point, this provision is 
consistent with general trust principles historically recognized 
by Maine courts. 
Section 410, subsection 2 describes the persons who have standing 
to bring the proceedings contemplated by sections 411 to 417. 
§4ll. Modification or termination of noncharitable irrevocable 
trust by consent 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
1. 
Consent 
of 
settl.or 
and 
al.l. 
beneficiaries. 
A 
noncharitable irrevocable trust may be modified or terminated 
upon consent of the settlor and all beneficiaries, even if the 
modification or termination is inconsistent with a material 
purpose of the trust. 
A settlor's power to consent to a trust's 
modification or termination may be exercised by an agent under a 
power of attorney only to the extent expressly authorized by the 
power of attorney or the terms of the trust; by the settlor's 
conservator with 
the 
approval 
of 
the 
court 
superv~s~ng the 
conservatorship if an agent is not so authorized; or by the 
settlor's guardian with the approval of the court supervising the 
guardianship if an agent is not so authorized and a conservator 
has not been appointed. 
2. 
Consent of beneficiaries. 
A noncharitable irrevocable 
trust may be terminated upon consent of all of the beneficiaries 
if the court concludes that continuance of the trust is not 
necessary to achieve any material purpose of the trust. A 
noncharitable irrevocable trust may be modified upon consent of 
all of the beneficiaries if the court concludes that modification 
is not inconsistent with a material purpose of the trust. 
3. 
Spendthrift prov~s~on. 
A spendthrift provision in the 
terms of the trust is not presumed to constitute a material 
purpose of the trust. 
4. 
Distribution after termination. 
Upon termination of a 
trust under subsection 1 
or 2, the trustee shall distribute the 
trust property as agreed by the beneficiaries. 
5. 
Court approval. without unanimous consent. 
If not all of 
the 
beneficiaries 
consent 
to 
a 
proposed 
modification 
or 
termination 
of 
the 
trust 
under 
subsection 
or 
2, 
the 
modification or termination may be approved by the court if the 
court is satisfied that: 
A. 
If all of the beneficiaries had consented, the trust 
could have been modified or terminated under this section; 
and 
B. 
The interests of a beneficiary who does not consent will 
be adequately protected. 
UNIFORM COMMENT 
This section describes the circumstances in which termination or 
modification 
of 
a 
noncharitable 
irrevocable 
trust 
may 
be 
compelled by the beneficiaries, with or without the concurrence 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
of 
the 
settlor. 
For 
provisions 
governing 
modification 
or 
termination of trusts 
without 
the 
need to 
seek beneficiary 
consent, see Sections 412 (modification or termination due to 
unanticipated 
circumstances or inability to 
administer trust 
effectively), 414 (termination or modification of uneconomic 
noncharitable trust), and 416 (modification to achieve settlor's 
tax objectives). If the trust is revocable by the settlor, the 
method of revocation specified in Section 602 applies. 
Subsection (a) states the test for termination or modification by 
the beneficiaries with the concurrence of the settlor. Subsection 
(b) states the test for termination or modification by unanimous 
consent of the beneficiaries without the concurrence of the 
settlor. The rules on trust termination in Subsections (a) -(b) 
carries forward the Claflin rule, first stated in the famous case 
of Claflin v. Claflin, 20 N.E. 454 (Mass. 1889). Subsection (c) 
addresses the effect of a spendthrift provision. Subsection (d) 
directs how the trust property is to be distributed following a 
termination under either subsection (a) or (b). Subsection (e) 
creates 
a 
procedure 
for 
judicial 
approval 
of 
a 
proposed 
termination or modification when the consent of less than all of 
the beneficiaries is available. 
Under this section, a 
trustee's objection. 
trustee has standing 
modification. 
trust may be modified or terminated over a 
However, 
pursuant to Section 410, 
the 
to object to a 
proposed termination or 
The settlor's right to join the beneficiaries in terminating or 
modifying a trust under this section does not rise to the level 
of a taxable power. See Treas. Reg. Section 20.2038-1(a)(2). No 
gift tax consequences result from a termination as long as the 
beneficiaries 
agree 
to 
distribute 
the 
trust 
property 
in 
accordance with the value of their proportionate interests. 
36. 
The 
provisions 
of 
Article 
on 
representation, 
virtual 
representation 
and 
the 
appointment 
and 
approval 
of 
representatives appointed by the court apply to the determination 
of whether all beneficiaries have signified consent under this 
section. The authority to consent on behalf of another person, 
however, does not include authority to consent over the other 
person's objection. See Section 301(b). Regarding the persons who 
may consent on behalf of a beneficiary, see Sections 302 through 
305. A consent given by a representative is invalid to the extent 
there is a conflict of interest between the representative and 
the 
person 
represented. 
Given 
this 
limitation, 
virtual 
representation of a beneficiary's interest by another beneficiary 
pursuant to Section 304 will rarely be available in a trust 
termination case, although it should be routinely available in 
cases 
involving trust modification, 
such as 
a 
grant to the 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
trustee of additional 
powers. 
If virtual or other 
form 
of 
representation is unavailable, Section 305 of the Code permits 
the court to appoint a representative who may give the necessary 
consent to the proposed modification or termination on behalf of 
the minor, incapacitated, unborn, or unascertained beneficiary. 
The ability to use virtual and other forms of representation to 
consent on a beneficiary's behalf to a trust termination or 
modification has not traditionally been part of the law, although 
there are some notable exceptions. Compare Restatement (Second) 
Section 337(1) (1959) (beneficiary must not be under incapacity), 
with Hatch v. Riggs National Bank, 361 F.2d 559 (D.C. Cir. 1966) 
(guardian ad litem authorized to consent on beneficiary's behalf). 
Subsection 
(a) 
also 
addresses 
the 
authority 
of 
an 
agent, 
conservator, or guardian to act on a settlor's behalf. Consistent 
with Section 602 on revocation or modification of a revocable 
trust, the section assumes that a settlor, in granting an agent 
general authority, did not intend for the agent to have authority 
to consent to the termination or modification of a trust, 
authority 
that 
could 
be 
exercised 
to 
radically 
alter 
the 
settlor's estate plan. In order for an agent to validly consent 
to a 
termination or modification of the settlor's revocable 
trust, such authority must be expressly conveyed either in the 
power or in the terms of the trust. 
Subsection (a), however, does not impose restrictions on consent 
by a conservator or guardian, other than prohibiting such action 
if the settlor is represented by an agent. The section instead 
leaves the issue of a conservator's or guardian's authority to 
local 
law. 
Many 
conservatorship 
statutes 
recognize 
that 
termination 
or 
modification 
of 
the 
settlor's trust is 
a 
sufficiently important transaction that 
a 
conservator 
should 
first 
obtain 
the 
approval 
of 
the 
court 
supervising· the 
conservatorship. 
See, 
e.g., 
Unif. 
Probate 
Code 
Section 
5-411(a)(4). 
Because the Uniform Trust Code 
uses the term 
"conservator" to refer to the person appointed by the court to 
manage an individual's property (see Section 103(4», a guardian 
may act on behalf of a settlor under this section only if a 
conservator has not been appointed. 
Subsection (a) is similar to Restatement (Third) of Trusts 
Section 
65(2) 
(Tentative Draft No.3, 
approved 
2001), 
and 
Restatement (Second) of Trusts Section 338(2) (1959), both of 
which permit termination upon joint action of the settlor and 
beneficiaries. Unlike termination by the beneficiaries alone 
under subsection (b), termination with the concurrence of the 
settlor does not require a finding that the trust no longer 
serves a material purpose. 
No finding of failure of material 
purpose is required because all parties with a possible interest 
in the trust's continuation, both the settlor and beneficiaries, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
agree there is no further need for the trust. Restatement Third 
goes further than subsection (b) of this section and Restatement 
Second, however, in also allowing the beneficiaries to compel 
termination of a trust that still serves a material purpose if 
the reasons for termination outweigh the continuing material 
purpose. 
Subsection (b), similar to Restatement Third but not Restatement 
Second, 
allows 
modification 
by 
beneficiary 
action. 
The 
beneficiaries 
may 
modify 
any 
term 
of 
the 
trust if 
the 
modification is not inconsistent with a material purpose of the 
trust. Restatement Third, though, goes further than this Code in 
also allowing the beneficiaries to use trust modification as a 
basis 
for 
removing 
the 
trustee if 
removal 
would 
not 
be 
inconsistent with a material purpose of the trust. Under the 
Code, however, Section 706 is the exclusive provision on removal 
of trustees. Section 706(b)(4) recognizes that a request for 
removal upon unanimous agreement of the qualified beneficiaries 
is a factor for the court to consider, but before removing the 
trustee the court must also find that such action best serves the 
interests 
of 
all 
the 
beneficiaries, 
that 
removal 
is 
not 
inconsistent with a material purpose of the trust, and that a 
suitable cotrustee or successor trustee is available. Compare 
Section 706(b)(4), with Restatement (Third) Section 65 cmt. 
f 
(Tentative Draft No.3, approved 2001). 
The requirement that the trust no longer serve a material purpose 
before it can be terminated by the beneficiaries does not mean 
that the trust has 
no 
rema1n1ng function. 
In order to be 
material, the purpose remaining to be performed must be of some 
significance: 
Material purposes are not readily to be inferred. A finding of 
such a purpose generally requires some showing of a particular 
concern or objective on the part of the settlor, such as concern 
with regard to the beneficiary's management skills, judgment, or 
level of maturity. Thus, a court may look for some circumstantial 
or 
other 
evidence 
indicating 
that 
the 
trust 
arrangement 
represented to the settlor more than a method of allocating the 
benefits of property among multiple beneficiaries, or a means of 
offering to the beneficiaries (but not imposing on them) 
a 
particular advantage. Sometimes, of course, the very nature or 
design of a trust suggests its protective nature or some other 
material purpose. 
Restatement (Third) of Trusts Section 65 cmt. d (Tentative Draft 
No.3, approved 2001). 
Subsection (c) of this section deals with the effect of a 
spendthrift provision on the right of a beneficiary to concur in 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
a 
trust termination or modification. 
Spendthrift 
terms 
have 
sometimes been construed to constitute a material purpose without 
inquiry into the intention of the particular settlor. For 
examples, see Restatement (Second) of Trusts Section 337 (1959); 
George G. Bogert & George T. Bogert, The Law of Trusts and 
Trustees Section 1008 (Rev. 2d ed. 1983); and 4 Austin W. Scott & 
William F. Fratcher, The Law of Trusts Section 337 (4th ed. 
1989). This result is troublesome because spendthrift provisions 
are often added to instruments with little thought. Subsection 
(c), similar to Restatement (Third) of Trusts Section 65 cmt. e 
(Tentative Draft No.3, approved 2001), does not negate the 
possibility that continuation of a trust to assure spendthrift 
protection might have been a material purpose of the particular 
settlor. 
The question of whether 
that was 
the intent of 
a 
particular settlor is instead a matter of fact to be determined 
on the totality of the circumstances. 
Subsection (d) recognizes that the beneficiaries' power to compel 
termination of the trust includes the right to direct how the 
trust property is 
to 
be 
distributed. 
While 
subsection 
(a) 
requires the settlor's consent to terminate an irrevocable trust, 
the settlor does not control the subsequent distribution of the 
trust property. Once termination has been approved, how the trust 
property is to be distributed is solely for the beneficiaries to 
decide. 
Subsection (e), similar to Restatement (Third) of Trusts Section 
cmt. c (Tentative Draft No.3, approved 2001), and Restatement 
(Second) of Trusts Sections 338(2) & 340(2) (1959), addresses 
situations in which a termination or modification is requested by 
less than all the beneficiaries, either because a beneficiary 
objects, the consent of a beneficiary cannot be obtained, or 
representation 
is 
either 
unavailable 
or 
its 
application 
uncertain. 
Subsection 
(e) 
allows 
the 
court 
to 
fashion 
an 
appropriate order protecting the interests of the nonconsenting 
36. 
beneficiaries while at the same time permitting the remainder of 
the trust property to be distributed without restriction. The 
order of protection for the nonconsenting beneficiaries might 
include partial continuation of the trust, the purchase of an 
annuity, or the valuation and cashout of the interest. 
MAINE COMMENT 
Section 411, subsection 1 permits an irrevocable noncharitable 
trust to be modified or terminated by the beneficiaries with the 
concurrence of the settlor, even if a material purpose of the 
trust has not been fulfilled. This provision effects a change in 
Maine 
law. 
Historically, 
the ability of the settlor and 
concurring 
beneficiaries 
to deviate 
from 
the 
terms 
of 
the 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
original trust has been narrowly construed by Maine courts. See 
Porter v. Porter, 138 Me. 1, 20 A.2d 465 (1941) and Skillin v. 
Skillin, 133 Me. 347, 177 A. 706 (1935). 
Section 411, subsection 1 also provides that consent to a trust 
termination may 
be 
provided by 
an 
agent 
under 
a 
power 
of 
attorney, but only to the extent expressly authorized by the 
power of attorney or the terms of the trust. Although Maine has 
not yet addressed this issue, the sections of the Probate Code 
dealing 
with 
powers 
of 
attorney 
contain 
similar 
prov~s~ons 
relating to the agent's ability to make gifts under a power of 
attorney. 
The 
Probate 
Code, 
section 5-508 
provides that an 
attorney-in-fact 
is 
not 
authorized 
to 
make 
gifts 
to 
the 
attorney-in-fact or others unless the durable financial power of 
attorney explicitly authorizes such gifts. 
Section 411, 
subsection 1 
further provides that a 
legally 
appointed 
conservator 
may 
consent 
to 
the 
modification 
or 
termination 
of 
a 
trust with 
the 
court's 
approval. 
If 
a 
conservator 
has 
not 
been appointed by 
the 
court, 
then the 
settlor's guardian is authorized to provide consent on behalf of 
the settlor with the approval of the court. The existing Maine 
statutes dealing with a conservator's powers do not expressly 
address this issue. The Probate Code, section 5-408 provides that 
the 
court 
has 
the 
power, 
acting directly 
or 
through 
a 
conservator, 
to 
create 
revocable 
or 
irrevocable 
trusts 
of 
property that may extend beyond the protected person's disability 
or life, but does not specifically authorize the termination of 
an existing trust. 
Section 411, subsection 2 is a clarification of Maine law. Maine 
has 
recently 
addressed 
termination 
or 
modification 
of 
a 
noncharitable trust in the case of University of Maine Foundation 
v. Fleet Bank of Maine, 2003 ME 20, 817 A.2d 871. 
The court 
recognized its long-standing authority to terminate a trust when 
its purpose has been accomplished or when there is no good reason 
for the trust to continue, and all beneficiaries are competent 
and release their interests. The court noted, however, that a 
trust may not be terminated early if (1) the time fixed by the 
settlor has not elapsed, or (2) there is a purpose that has not 
been accomplished. The court reasoned that the settlor intended 
to restrict the life beneficiaries' access and control to the 
trust assets, thereby creating a spendthrift provision. Citing 
the Restatement (Second) of Trusts Section 337 (1959), the court 
noted that spendthrift clauses carry out the intent of the 
settlor and represent a material purpose of the settlor, such 
that trusts containing a spendthrift provision could not be 
prematurely terminated. The court ultimately approved a partial 
termination of the trust of the surplus funds after ordering that 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
sufficient assets be retained in trust to provide for the life 
beneficiaries' interests. 
Section 411, subsection 3 provides that a spendthrift provision 
in a trust is not presumed to be a material purpose of the 
settlor. 
AS 
discussed above, 
this conflicts with the Maine 
court's opinion in the Uni versi ty of Maine Foundation case. 
However, there is authority that Maine courts will not broadly 
interpret a settlor's intent to create a spendthrift trust. 
Tilton v. Davidson, 98 Me. 55, 56 A. 215 (1903). 
AS explained by 
the Uniform Comment, subsection 3 clearly leaves room for a court 
to conclude that a spendthrift provision was a material purpose 
of the settlor. 
Thus it may be most accurately described as an 
extension of or incremental change in Maine law. 
Section 
411, 
subsection 
is 
new 
Maine 
law, 
allowing 
a 
modification or termination of a trust over a beneficiary's 
objection. See, e.g., University of Maine Foundation v. Fleet 
Bank, 2003 ME 20, 817 A.2d 871. The Uniform Comment provides 
examples of when it might be useful for the courts to be able to 
fashion appropriate remedies for requests for modification or 
termination, such as partial continuation of the trust, purchase 
of an annuity or the valuation and cashout of the beneficiary's 
interest, 
similar to what 
the 
court ultimately did 
in the 
University of Maine Foundation case, supra. 
§412. 
Modification or termination because of unanticipated 
circumstances or inability to administer trust effectively 
1. 
Modification or termination. 
The court may modify the 
administrative or dispositive terms of a trust or terminate the 
trust if, because of circumstances not anticipated by the 
settlor, modification or termination will further the purposes of 
the trust. To the extent practicable, the modification must be 
made in accordance with the settlor's probable intention. 
2. 
Modification of administrative terms. 
The court may 
modify the administrative terms of a trust if continuation of the 
trust on its existing terms would be impracticable or wasteful or 
impair the trust's administration. 
3. 
Distribution after termination. 
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. 
UNIFORM COMMENT 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This section broadens the court's ability to apply equitable 
deviation to terminate or modify a trust. Subsection (a) allows a 
court to modify the dispositive provisions of the trust as well 
as its administrative terms. For example, modification of the 
dispositive provisions to increase support of a beneficiary might 
be appropriate if the beneficiary has become unable to provide 
for support due to poor health or serious injury. Subsection (a) 
is 
similar 
to 
Restatement 
(Third) 
of 
Trusts 
Section 
66(1) 
(Tentative Draft No.3, approved 2001), except that this section, 
unlike the Restatement, does not impose a duty on the trustee to 
petition the court if the trustee is aware of circumstances 
justifying judicial modification. The purpose of the "equitable 
deviation" authorized by subsection (a) is not to disregard the 
settlor's intent but to modify inopportune details to effectuate 
better the settlor's broader purposes. 
Among 
other things, 
equitable deviation may be 
used to modify administrative or 
dispositive terms due to the failure to anticipate economic 
change 
or 
the 
incapacity 
of 
a 
beneficiary. 
For 
numerous 
illustrations, see Restatement (Third) of Trusts Section 66 cmt. 
b (Tentative Draft No.3, approved 2001). While it is necessary 
that there be circumstances not anticipated by the settlor before 
the 
court 
may 
grant 
relief 
under 
subsection 
(a) , 
the 
circumstances may have been in existence when the trust was 
created. This section thus complements Section 415, which allows 
for reformation of a trust based on mistake of fact or law at the 
creation of the trust. 
Subsection 
(b) 
broadens 
the 
court's ability to 
modify 
the 
administrative terms of a trust. The standard under subsection 
(b) 
is 
similar to the 
standard for applying cy pres to a 
charitable trust. See Section 413(a). Just as a charitable trust 
may be modified if its particular charitable purpose becomes 
impracticable or wasteful, so can the administrative terms of any 
trust, charitable or noncharitable. Subsections (a) and (b) are 
not mutually exclusive. Many situations justifying modification 
of administrative terms under subsection (a) will also justify 
modification under subsection (b). Subsection (b) is also an 
application of the requirement in Section 404 that a trust and 
its terms must be for the benefit of its beneficiaries. See also 
Restatement (Third) of Trusts Section 27(2) 
& cmt. b (Tentative 
Draft No.2, approved 1999). Although the settlor is granted 
considerable latitude in defining the purposes of the trust, the 
principle that a trust have a purpose which is for the benefit of 
its beneficiaries precludes unreasonable restrictions on the use 
of trust property. An owner's freedom to be capricious about the 
use of the 
owner's 
own property ends 
when the property is 
impressed with a trust for the benefit of others. See Restatement 
(Second) of Trusts Section 124 cmt. g (1959). Thus, attempts to 
impose unreasonable restrictions on the use of trust property 
will 
fail. 
See 
Restatement 
(Third) 
of 
Trusts 
Section 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Reporter's Notes to cmt. 
b 
1999). Subsection (b), unlike 
(Tentative Draft No. 
subsection (a), does 
2, 
approved 
not have a 
direct precedent in the common law, but various states have 
insisted on such a measure by statute. See, e.g., Mo. Rev. Stat. 
Section456.590.1. 
Upon termination of a trust under this section, subsection (c) 
requires that the trust be distributed in a manner consistent 
with the purposes of the trust. As under the doctrine of cy pres, 
effectuating a distribution consistent with the purposes of the 
trust requires an examination of what the settlor would have 
intended 
had 
the 
settlor 
been 
aware 
of 
the 
unanticipated 
circumstances. Typically, such terminating distributions will be 
made to the qualified beneficiaries, often in proportion to the 
actuarial value of their interests, although the section does not 
so prescribe. For the definition of qualified beneficiary, see 
Section 103(12). 
Modification under this section, because it does not require 
beneficiary action, is not precluded by a spendthrift provision. 
MAINE COMMENT 
As discussed above, Maine courts have exercised their equitable 
powers to approve modification or deviation from the terms of a 
trust due to unanticipated circumstances. See, e.g., Richardson 
v. Knight, 69 Me. 285, (1879), and Porter v. Porter, 138 Me. 1, 
A.2d 465 (1941). 
The power to modify or deviate from the 
3D 
original terms of a trust has generally been exercised with 
respect to administrative, rather than dispositive, terms, and 
not merely to accommodate a beneficiary's demand for more income 
or to increase a beneficiary's share of trust assets. The power 
to modify even administrative terms of the trust will not be 
exercised routinely, however, as the Porter court noted: "It is 
plain that the situation considered must present an emergency or 
exigency which menaces the trust estate, and the beneficiary." 
Section 412, subsection 1 represents an expansion of Maine case 
law in that it supports modification of dispositive provisions as 
well as administrative prov1s10ns, provided the modification 
furthers 
the 
purposes 
of 
the 
trust 
due 
to 
unanticipated 
circumstances. There is no requirement that circumstances have 
changed since the trust was created, nor does there seem to be 
any requirement that an emergency exists or that the trust res is 
otherwise threatened. 
Section 412, subsection 2 also broadens the court's authority in 
that it permits modification of administrative terms upon a 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
showing that continuation of the trust on its existing terms 
would be "wasteful" or would "impair the trust's administration." 
§413. Cy pres 
1. 
Charitable purpose becomes unlawful, impracticable, 
impossible to achieve or wasteful. 
Except as otherwise provided 
in subsection 2, if a particular charitable purpose of a trust 
becomes 
unlawful, 
impracticable, 
impossible 
to 
achieve 
or 
wasteful: 
A. 
The trust does not fail, in whole or in part; 
B. 
The trust property does not revert to the settlor or the 
settlor's successors in interest; and 
C. 
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. 
Noncharitable beneficiary. 
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 only if, when the provision takes effect: 
A. 
The trust property is to revert to the settlor and the 
settlor is still living; or 
B. 
Fewer than 50 years have elapsed since the date of the 
trust's creation. 
UNIFORM COMMENT 
Subsection (a) codifies the court's inherent authority to apply 
cy pres. The power may be applied to modify an administrative or 
dispositive term. The court may order the trust terminated and 
distributed to other charitable entities. Partial termination may 
also be ordered if the trust property is more than sufficient to 
satisfy the trust's current purposes. Subsection (a), which is 
similar to Restatement (Third) of Trusts Section 67 (Tentative 
Draft No.3, approved 2001), modifies the doctrine of cy pres by 
presuming that the settlor had a general charitable intent when a 
particular charitable purpose becomes impossible or impracticable 
to achieve. Traditional doctrine did not supply that presumption, 
leaving it to the courts to determine whether the settlor had a 
general charitable intent. If such an intent is found, the trust 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
property is applied to other charitable purposes. If not, the 
charitable 
trust fails. 
See 
Restatement 
(Second) 
of Trusts 
Section 399 (1959). In the great majority of cases the settlor 
would prefer that the property be used for other charitable 
purposes. Courts are usually able to find a general charitable 
purpose to which to apply the property, no matter how vaguely 
such purpose may have been expressed by the settlor. Under 
subsection (a), if the particular purpose for which the trust was 
created becomes impracticable, unlawful, impossible to achieve, 
or wasteful, the trust does not fail. The court instead must 
either modify the terms of the trust or distribute the property 
of the trust in a manner consistent with the settlor's charitable 
purposes. 
The settlor, with one exception, may mandate that the trust 
property pass to a noncharitable beneficiary upon failure of a 
particular charitable purpose. Responding to concerns about the 
clogging of title and other administrative problems caused by 
remote default provisions upon failure of a charitable purpose, 
subsection 
(b) 
invalidates 
a 
gift over 
to 
a 
noncharitable 
beneficiary upon failure of a particular charitable purpose 
unless the trust property is to revert to a living settlor or 
fewer than 21 years have elapsed since the trust's creation. 
Subsection (b) will not apply to a charitable lead trust, under 
which a char i ty receives payments for a term certain wi th a 
remainder to a noncharity. In the case of a charitable lead 
trust, the settlor's particular charitable purpose does not fail 
upon completion of the specified trust term and distribution of 
the remainder to the noncharity. Upon completion of the specified 
trust term, 
the settlor's . particular charitable purpose 
has 
instead been fulfilled. For a discussion of the reasons for a 
provision such as subsection (b), see Ronald Chester, Cy Pres of 
Gift Over: The Search for Coherence in Judicial Reform of Failed 
Charitable Trusts, 23 Suffolk U. L. Rev. 41 (1989). 
The doctrine of cy pres is applied not only to trusts, but also 
to other types of charitable dispositions, including those to 
charitable 
corporations. 
This 
section 
does 
not 
control 
dispositions made in nontrust form. However, in formulating rules 
for such dispositions, the courts often refer to the principles 
governing charitable trusts, which would include this Code. 
For the definition of charitable purpose, see Section 405(a). 
Pursuant to Sections 405(c) and 410(b), a petition requesting a 
court to enforce a charitable trust or to apply cy pres may be 
maintained by a settlor. Such actions can also be maintained by a 
cotrustee, the state attorney general, or by a person having a 
special interest in the charitable disposition. See Restatement 
(Second) of Trusts Section 391 (1959). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
MAINE COMMENT 
The doctrine of cy pres has been long recognized in Maine. 
See 
Lynch v. South Congregational Parish of Augusta, 109 Me. 32, 82 
A. 
(1912). 
The basic idea behind the doctrine is that a 
specific charitable gift that becomes impracticable or impossible 
to carry out can be fulfilled in a modified manner that carries 
out another charitable purpose that is believed to carry out the 
original purpose of the trust as closely as possible. 
See 
Petition of Pierce, 153 Me. 180, 136 A.2d 510 (1957). 
The basic 
prerequisites for a 
cy pres action in Maine are (1) 
a valid 
charitable trust; (2) proof that the specific purpose of the 
trust is impossible or impractical to carry out; and (3) proof 
that the creator of the trust had a general charitable intent. 
In re Thompson's Estate, 414 A.2d 881 (Me. 1980); First Portland 
National Bank v. Kaler-Vaill Memorial Home, 155 Me. 50, 151 A.2d 
(1959). 
Adoption of the Uniform Trust Code changes Maine law in this area. 
Probably the 
most 
significant change 
involves the 
issue of 
whether the grantor had general charitable intent. 
According to 
the 
Uniform 
Comment 
to 
chapter 
4, 
section 
creates 
a 
presumption that the creator of a charitable trust had a general 
charitable intent 
and 
that 
the gift 
should not 
revert to 
noncharitable beneficiaries. 
The text of section 413 is silent 
as to how this presumption of general charitable intent can be 
rebutted. 
The precedential value of cases such as In re 
Thompson's Estate, 414 A.2d 881 (Me. 1980); Grigson v. Harding, 
Me. 146, 144 A.2d 870 (1958); First Universalist Soc. of Bath 
v. Swett, 148 Me. 142, 90 A.2d 812 (1952); Manufacturer's Nat. 
Bank v. Woodward, 141 Me. 28, 38 A.2d 657 (1944); 
Bancroft v. 
Maine Sanatorium Ass'n, 119 Me. 56, 109 A. 585 (1920); Gilman v. 
Burnett, 116 Me. 382, 102 A. 108 (1917); and Allen v. Trustees of 
Nasson Institute, 107 Me. 120, 77 A. 
(1910) may be called 
into question by the adoption of this section. 
The grounds for the application of cy pres have been broadened 
from the current standard of "impossible" or "impractical" to 
include "wasteful" and "unlawful." 
This does not appear to be a 
material change from Maine law. 
Even when the governing instrument provides for an alternate 
taker, section 413 provides that the terms of the governing 
instrument would be given effect only if the trust property is to 
revert to the settlor and the settlor is still living or if fewer 
than 
years 
have 
elapsed since the date of the trust's 
creation. 
Previous Maine law provided that the cy pres doctrine 
did not apply if the donor provided an alternative gift in the 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
event the 
charitable gift failed. 
See City of Belfast v. 
Goodwill Farm, 150 Me. 17, 103 A.2d 517 (1954); Town of Lee v. 
Town of Lincoln, 351 A.2d 554 (Me. 1976); and Estate of Champlin, 
A.2d 798 (Me. 1996). 
This section could affect gifts made in trust to governmental 
units under the Maine Revised Statutes, Title 3D-A, section 
5653. 
Current Maine municipal law provides that a municipality 
may receive money or other property in trust for any public 
purpose. 
If the municipality fails to comply with the terms of 
the trust, the property reverts to the donor or the donor's 
heirs. 
There is no 50-year time limitation on this reversion. 
To the extent there is no conflict between the 2 statutes, 
section 413 controls. 
§414. 
Modification or termination of uneconomic trust 
1. 
Termination by trustee after notice. 
After notice to 
the qualified beneficiaries, the trustee of a trust consisting of 
trust property having a total value less than $100,000 may 
terminate the trust if the trustee concludes that the value of 
the trust property is insufficient to justify the cost of 
administration. 
2. 
Modification, termination, new trustee by court. 
The 
court may modify or terminate a trust or remove the trustee and 
appoint a different trustee if it determines that the value of 
the trust property is insufficient to justify the cost of 
administration. 
3. 
Distribution after termination. 
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. 
Easement for conservation or preservation. 
This section 
does not apply to an easement for conservation or preservation. 
UNIFORM COMMENT 
Subsection (a) assumes that a trust with a value of $50,000 or 
less is sufficiently likely to be inefficient to administer that 
a trustee should be able to terminate it without the expense of a 
judicial termination proceeding. The amount has been placed in 
brackets to signal to enacting jurisdictions that they may wish 
to designate a higher or lower figure. Because subsection (a) is 
a default rule, a settlor is free to set a higher or lower figure 
or to specify different procedures or to prohibit termination 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
without a court order. See Section 105 and Article 4 General 
comment. 
Subsection (b) allows the court to modify or terminate a trust if 
the costs of administration would otherwise be excessive in 
relation to the size of the trust. The court may terminate a 
trust under this section even if the settlor has forbidden it. 
See Section 105(b)(4). Judicial termination under this subsection 
may be used whether or not the trust is larger or smaller than 
$50,000. 
When 
considering whether 
to 
terminate 
a 
trust under either 
subsection (a) or (b), the trustee or court should consider the 
purposes of the trust. Termination under this section is not 
always wise. Even if administrative costs may seem excessive in 
relation to the size of the trust, protection of the assets from 
beneficiary 
mismanagement 
may 
indicate 
that 
the 
trust 
be 
continued. 
The 
court 
may 
be 
able 
to 
reduce 
the 
costs 
of 
administering the trust by appointing a new trustee. 
Upon termination of a trust under this section, subsection (c) 
requires that the trust property be distributed in a 
manner 
consistent with the purposes of the trust. In addition to 
outright distribution 
to 
the 
beneficiaries, 
Section 
816(21) 
authorizes payment to be made by a variety of alternate payees. 
Distribution under this section will typically be made to the 
qualified beneficiaries in proportion to the actuarial value of 
their interests. 
Even though not accompanied by the usual trappings of a trust, 
the creation and transfer of an easement for conservation or 
preservation will 
frequently create 
a 
charitable trust. 
The 
organization to whom the easement was conveyed will be deemed to 
be acting as trustee of what will ostensibly appear to be a 
contractual or property arrangement. Because of the fiduciary 
obligation imposed, the termination or substantial modification 
of the easement by the "trustee" could constitute a breach of 
trust. The drafters of the Uniform Trust Code concluded that 
easements for conservation or preservation are sufficiently 
different from the typical cash and securities found in small 
trusts that they should be excluded from this section, and 
subsection (d) so provides. Most creators of such easements, it 
was 
surmised, 
would prefer that the easement be continued 
unchanged even if the easement, 
and hence the trust, has a 
relatively low market value. 
For 
the 
law of conservation 
easements, 
see 
Restatement 
(Third) 
of 
Property: 
Servitudes 
Section1.6 (2000). 
While this section is not directed principally at honorary 
trusts, it may be so applied. See Sections 408, 409. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Because termination of a trust under this section is initiated by 
the trustee or ordered by the court, termination is not precluded 
by a spendthrift provision. 
MAINE COMMENT 
Section 414, subsections 1 and 2, which allow the termination of 
relatively uneconomic trusts, even though a material purpose of 
the trust remains unfulfilled, are new Maine law. 
See University 
of Maine Foundation v. Fleet Bank, 2003 ME 20, 817 A.2d 871. 
Former Probate Code, 
sections 7-201 and 7-305, providing for 
appointment, removal and replacement of trustees, are repealed as 
part of the adoption of the Maine Uniform Trust Code. 
§415. 
Reformation to correct mistaies 
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. 
UNIFORM COMMENT 
Reformation of inter vivos instruments to correct a mistake of 
law or fact is a long-established remedy. Restatement (Third) of 
Property: Donative Transfers Section 12.1 (Tentative Draft No.1, 
approved 1995), which this section copies, clarifies that this 
doctrine also applies to wills. 
This section applies whether the mistake is one of expression or 
one of inducement. A mistake of expression occurs when the terms 
of the trust misstate the settlor's intention, fail to include a 
term that was intended to be included, or include a term that was 
not intended to be excluded. A mistake in the inducement occurs 
when the terms of the trust accurately reflect what the settlor 
intended to be included or excluded but this intention was based 
on a mistake of fact or law. See Restatement (Third) of Property: 
Donative Transfers Section 12.1 cmt. i 
(Tentative Draft No.1, 
approved 1995). Mistakes of expression are frequently caused by 
scriveners' errors while mistakes of inducement often trace to 
errors of the settlor. 
Reformation is different from resolving an ambiguity. Resolving 
an ambiguity involves the interpretation of language already in 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the instrument. Reformation, on the other hand, may involve the 
addition of language not originally in the instrument, or the 
deletion of language originally included by mistake, if necessary 
to 
conform 
the 
instrument to 
the settlor's intent. 
Because 
reformation 
may 
involve 
the 
addition of 
language 
to 
the 
instrument, or the deletion of language that may appear clear on 
its face, reliance on extrinsic evidence is essential. To guard 
against the possibility of unreliable or contrived evidence in 
such circumstance, the higher standard of clear and convincing 
proof is required. See Restatement (Third) of Property: Donative 
Transfers Section 12.1 cmt. e (Tentative Draft No.1, approved 
1995). 
In determining the settlor's original intent, 
the court may 
consider evidence relevant to the settlor's intention even though 
it contradicts 
an 
apparent plain meaning of 
the text. 
The 
objective 
of 
the plain 
meaning 
rule, 
to 
protect 
against 
fraudulent testimony, is satisfied by the requirement of clear 
and convincing proof. 
See Restatement 
(Third) 
of Property: 
Donative Transfers Section 12.1 cmt. 
d 
and Reporter's Notes 
(Tentative Draft No.1, approved 1995). See also John H. Langbein 
& Lawrence W. 
Waggoner, Reformation of Wills on the Ground of 
Mistake: Change of Direction in American Law?, 130 U. Pa. L. Rev. 
(1982). 
For further discussion of the rule of this section and its 
application to illustrative cases, see Restatement (Third) of 
Property: Donative Transfers Section 12.1 cmts. and Reporter's 
Notes (Tentative Draft No.1, approved 1995). 
MAINE COMMENT 
Section 415 is an extension of Maine law, in that it gives courts 
the power to reform dispositive, 
as well as administrative 
. 
provisions of trusts in case of 
mistake. 
See In re Estate of 
Burdon-Muller, 456 A.2d 1266 (Me. 1983) and Canal National Bank 
v. Old Folks' Home Association of Brunswick, 347 A.2d 428,436 
(Me. 1975). 
Also new is the "clear and convincing" evidentiary 
standard, which may offset somewhat the expansion of the court's 
power to reform. 
§416. 
Modification to achieve settlor's tax objectives 
To 
achieve the settlor's tax objectives, 
the court may 
modify the terms of a trust in a manner that is not contrary to 
the settlor's probable intention. The court may provide that the 
modification has retroactive effect. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
This section is copied from Restatement (Third) of Property: 
Donative Transfers Section 12.2 (Tentative Draft No.1, approved 
1995). "Modification" under this section is to be distinguished 
from the "reformation" authorized by Section 415. Reformation 
under Section 415 is available when the terms of a trust fail to 
reflect the donor's original, particularized intention. The 
mistaken terms are then reformed to conform to this specific 
intent. The modification authorized here allows the terms of the 
trust to be changed to meet the settlor's tax-saving objective as 
long 
as 
the resulting terms, 
particularly the dispositive 
prov~s~ons, are not inconsistent with the settlor's probable 
intent. The modification allowed by this subsection is similar in 
concept to the cy pres doctrine for charitable trusts 
(see 
Section 413), 
and the deviation doctrine for unanticipated 
circumstances (see Section 412). 
Whether a modification made by the court under this section will 
be recognized under federal tax law is a matter of federal law. 
Absent 
specific 
statutory 
or 
regulatory 
authority, 
binding 
recognition is normally given only to modifications made prior to 
the taxing event, for example, 
the death of the testator or 
settlor in the case of the federal estate tax. See Rev. Rul. 
73-142, 
1973-1 
C.B. 
405. 
Among 
the 
specific 
modifications 
authorized by the Internal Revenue Code or Service include the 
revision of split-interest trusts to qualify for the charitable 
deduction, modification of a trust for a noncitizen spouse to 
become eligible as a qualified domestic trust, and the splitting 
of 
a 
trust 
to 
utilize 
better 
the 
exemption 
from 
generation-skipping tax. 
For further discussion of the rule of this section and the 
relevant case law, see Restatement (Third) of Property: Donative 
Transfers Section 12.2 cmts. 
and Reporter's Notes 
(Tentative 
Draft No.1, approved 1995). 
MAIRE COMMENT 
Section 416 is a modest expansion of Maine law that will make it 
easier for courts modify trusts to achieve the settlor's tax 
objectives. 
See In re Estate of Burdon-Muller, 456 A.2d 1266 
(Me. 1983), appeal after remand, Estate of Burdon-Muller, 470 
A.2d 1267 (Me. 1984). 
However, as noted in the Uniform Comment, 
the question of whether such modifications will be effective for 
federal 
tax 
purposes 
is 
a 
matter 
of 
federal 
law 
and 
after-the-fact changes or modifications may not achieve the 
desired tax consequence. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§417. 
Combination and division of trusts 
After notice to the qualified beneficiaries, a trustee may 
combine 2 or more trusts into a single trust or divide a trust 
into 2 or more separate trusts, if the result does not impair 
rights of any beneficiary or adversely affect achievement of the 
purposes of the trust. 
UNIFORM CC»IMENT 
This section, which authorizes the combination or division of 
trusts, is subject to contrary provision in the terms of the 
trust. See Section 105 and Article 4 General comment. Many trust 
instruments 
and 
standardized estate planning 
forms 
include 
comprehensive provisions governing combination and division of 
trusts. 
Except 
for 
the 
requirement 
that 
the 
qualified 
beneficiaries receive advance notice of a proposed combination or 
division, this section is similar to Restatement (Third) of 
Trusts Section 68 (Tentative Draft No.3, approved 2001). 
This section allows a trustee to combine two or more trusts even 
though their terms are not identical. Typically the trusts to be 
combined will have been created by different members of the same 
family and will vary on only insignificant details, such as the 
presence of different perpetuities savings periods. The more the 
dispositive provisions of the trusts to be combined differ from 
each other the more likely it is that a combination would impair 
some beneficiary's interest, hence the less likely that the 
combination can be approved. 
Combining trusts may prompt more 
efficient trust administration and is sometimes an alternative to 
terminating an uneconomic trust as authorized by Section 414. 
Administrative economies promoted by combining trusts include a 
potential 
reduction 
in 
trustees' 
fees, 
particularly if the 
trustee charges a minimum fee per trust, the ability to file one 
trust income tax return instead of multiple returns, and the 
ability to invest a larger pool of capital more effectively. 
Particularly if the terms of the trust are identical, available 
administrative economies may suggest that the trustee has a 
responsibility to pursue a combination. See Section 805 (duty to 
incur only reasonable costs). 
Division 
of 
trusts 
is 
often 
beneficial 
and, 
in 
certain 
circumstances, almost routine. Division of trusts is frequently 
undertaken due to a 
desire to obtain maximum advantage of 
exemptions available under the federal generation-skipping tax. 
While the terms of the trusts which result from such a division 
are identical, 
the division will permit differing investment 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
objectives 
to 
be 
pursued 
and 
allow 
for 
discretionary 
distributions to be made from one trust and not the other. Given 
the substantial tax benefits often involved, a failure by the 
trustee to pursue a division might in certain cases be a breach 
of fiduciary duty. The opposite could also be true if the 
division is undertaken to increase fees or to fit within the 
small trust termination provision. See Section 414. 
This section authorizes a trustee to divide a trust even if the 
trusts that result are dissimilar. Conflicts among beneficiaries, 
including differing investment objectives, often invite such a 
division, although as in the case with a proposed combination of 
trusts, the more the terms of the divided trusts diverge from the 
original plan, the less likely it is that the settlor's purposes 
would be achieved and that the division could be approved. 
This section does not require that a combination or division be 
approved either by the court or by the beneficiaries. Prudence 
may dictate, however, that court approval under Section 410 be 
sought and beneficiary consent obtained whenever the terms of the 
trusts to be combined or the trusts that will result from a 
division differ substantially 
one 
from 
the 
other. 
For 
the 
provisions relating to beneficiary consent or ratification of a 
transaction, or release of trustee from liability, see Section 
1009. 
While the consent of the beneficiaries is not necessary before a 
trustee may combine or divide trusts under this section, advance 
notice to the qualified beneficiaries of the proposed combination 
or division is required. This is consis,tent with Section 813, 
which requires that the trustee keep the beneficiaries reasonably 
informed of trust administration, including the giving of advance 
notice to the qualified beneficiaries of several specified 
actions that may have a major impact on their interests. 
Numerous States have enacted statutes authorizing division of 
trusts, either by trustee action or upon court order. For a list 
of these statutes, see Restatement (Third) Property: Donative 
Transfers Section 12.2 Statutory Note (Tentative Draft No.1, 
approved 1995). Combination or division has also been authorized 
by the courts in the absence of authorizing statute. See, e.g., 
In 
re 
Will 
of 
Marcus, 
N.Y.S. 
2d 
(Surr. 
Ct.1990) 
(combination); In re Heller Inter Vivos Trust, 613 N.Y.S. 2d 809 
(Surr. Ct. 1994) (division); and BankBoston v. Marlow, 701 N.E. 
2d 304 (Mass. 1998) (division). 
For a provision authorizing a trustee, in distributing the assets 
of the divided trust, to make non-pro-rata distributions, see 
Section 816(22). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 618, L.D. 921 
MAINE COMMENT 
Section 411 replaces and expands former Probate Code, section 
7-402, 
subsection 
(27), 
which 
allowed 
division, 
but 
not 
combination, of trusts and was repealed as part of the adoption 
of the Maine Uniform Trust Code. 
CHAPTER 5 
CREDITOR· S CLAIMS; SPENDTHRIFT AND 
DISCRETIONARY TRUSTS 
UNIFORM COMMENT 
This article addresses the validity of a spendthrift prov~s~on 
and 
the 
rights 
of 
creditors, 
both 
of 
the 
settlor 
and 
beneficiaries, to reach a trust to collect a debt. Sections 501 
and 502 state the general rules. To the extent that a trust is 
protected by a spendthrift provision, a beneficiary's creditor 
may not reach the beneficiary's interest until distribution is 
made by the trustee. To the extent not protected by a spendthrift 
provision, 
however, 
the creditor can reach the beneficiary's 
interest subject to the court's power to limit the relief. 
Section 503 lists the categories of creditors whose claims are 
not subject to a spendthrift restriction. Sections 504 through 
address 
special 
categories 
in 
which 
the 
rights 
of 
a 
beneficiary's creditors are the same whether or not the trust 
contains 
a 
spendthrift 
provision. 
Section 
deals 
with 
discretionary trusts and trusts for which distributions are 
subject to a standard. Section 505 covers creditor claims against 
a settlor, whether the trust is revocable or irrevocable, and if 
revocable, 
whether 
the 
claim 
is 
made 
during 
the 
settlor's 
lifetime or incident to the settlor's death. Section 506 provides 
a creditor with a remedy if a trustee fails to make a mandated 
distribution within a reasonable time. Section 507 clarifies that 
although the trustee holds legal title to trust property, that 
property is not subject to the trustee's personal debts. 
The provisions of this article relating to the validity and 
effect of a 
spendthrift provision and the rights of certain 
creditors and assignees to reach the trust may not be modified by 
the terms of the trust. See Section 105(b)(5). 
This article does not supersede state exemption statutes nor an 
enacting jurisdiction's Uniform Fraudulent Transfers Act which, 
when applicable, invalidates any type of gratuitous transfer, 
including transfers into trust. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
S501. 
Rights of beneficiary's creditor or assignee 
To the extent a beneficiary's interest is not protected by a 
spendthrift prov1s1on, 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. 
UNIFORM COMMENT 
Absent a valid spendthrift provision, a creditor may reach the 
interest 
of 
a 
beneficiary 
the 
same 
as 
any 
other 
of 
the 
beneficiary's assets. This does not necessarily mean that the 
creditor can collect all distributions made to the beneficiary. 
Other creditor law of the State may limit the creditor to a 
specified percentage of a distribution. See, e.g., Cal. prob. 
Code 
Section 15306.5. 
This section does not prescribe the 
procedures for reaching a beneficiary's interest or of priority 
among claimants, leaving those issues to the enacting State's 
laws on creditor rights. The section does clarify, however, that 
an order obtained against the trustee, whatever state procedure 
may have been used, may extend to future distributions whether 
made 
directly 
to 
the 
beneficiary 
or 
to 
others 
for 
the 
beneficiary's benefit. By allowing an order to extend to future 
payments, the need for the creditor periodically to return to 
court will be reduced. 
A creditor typically will pursue a claim by serving an order on 
the trustee attaching the beneficiary's interest. Assuming that 
the validity of the order cannot be contested, the trustee will 
then pay to the creditor instead of to the beneficiary any 
payments the trustee would otherwise be required to make to the 
beneficiary, as well as discretionary distributions the trustee 
decides to make. 
The creditor may also, in theory, 
force 
a 
judicial sale of a beneficiary's interest. 
Because proceedings to satisfy a claim are equitable in nature, 
the 
second 
sentence 
of 
this 
section 
ratifies 
the 
court's 
discretion 
to 
limit 
the 
award 
as 
appropriate 
under 
the 
circumstances. In exercising its discretion to limit relief, the 
court 
may 
appropriately consider 
the 
support 
needs 
of 
a 
beneficiary and the beneficiary's family. See Restatement (Third) 
of Trusts Section 56 cmt. e (Tentative Draft No.2, approved 
1999). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§S02. 
Spendthrift provision 
1. 
Restrains vo1untary and invo1untary transfers. 
A 
spendthrift 
provision 
is 
valid 
only if it restrains 
both 
voluntary and involuntary transfer of a beneficiary's interest. 
2. 
Terminology. 
A term of a trust providing that the 
interest of 
a beneficiary is held subject to a 
"spendthrift 
trust." or words of similar import. is sufficient to restrain 
both voluntary and involuntary transfer of the beneficiary's 
interest. 
3. 
No transfer by beneficiary: creditors and assignees. 
A 
beneficiary may not transfer an interest in a trust in violation 
of 
a 
valid spendthrift 
prov~s~on and, 
except as otherwise 
provided 
in 
this 
chapter, 
a 
creditor 
or 
assignee 
of 
the 
beneficiary may not reach the interest or a distribution by the 
trustee before its receipt by the beneficiary. 
UNIFORM COMMENT 
Under this section, a settlor has the power to restrain the 
transfer of a beneficiary's interest, regardless of whether the 
beneficiary has an interest in income, in principal, or in both. 
Unless 
one 
of the exceptions under this article applies, 
a 
creditor of the beneficiary is prohibited from attaching a 
protected interest and may only attempt to collect directly from 
the beneficiary after payment is made. This section is similar to 
Restatement (Third) of Trusts Section 58 (Tentative Draft No.2, 
approved 1999), and Restatement (Second) 
of Trusts Sections 
152-153 (1959). For the definition of spendthrift provision, see 
Section 103(15). 
For a spendthrift prov~s1on to be effective under this Code, it 
must prohibit both the voluntary and involuntary transfer of the 
beneficiary's interest, that is, a settlor may not allow a 
beneficiary to assign while prohibiting a beneficiary's creditor 
from collecting, and vice versa. See Restatement (Third) of 
Trusts Section 58 cmt. b (Tentative Draft No.2, approved 1999). 
See also Restatement (Second) of Trusts Section 152(2) (1959). A 
spendthrift 
prov~s~on valid 
under 
this 
Code 
will 
also 
be 
recognized as valid in a federal bankruptcy proceeding. See 11 
U.S.C. Section 541(c)(2). 
Subsection (b), which is derived from Texas Property Code Section 
112.035(b), 
allows a settlor to provide maximum spendthrift 
protection simply by stating in the instrument that all interests 
are held subject to a "spendthrift trust" or words of similar 
effect. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
A disclaimer, because it is a refusal to accept ownership of an 
interest and not a transfer of an interest already owned, is not 
affected by the presence or absence of a spendthrift provision. 
Most disclaimer statutes expressly provide that the validity of a 
disclaimer is not affected by a 
spendthrift protection. See, 
e.g., Unif. Probate Code Section 2-801(a). Releases and exercises 
of powers of appointment are also not affected because they are 
not transfers of property. See Restatement (Third) of Trusts 
Section 58 cmt. c (Tentative Draft No.2, approved 1999). 
A spendthrift 
prov~s~on is ineffective against 
a 
beneficial 
interest retained by the settlor. See Restatement (Third) of 
Trusts Section 58(2) (Tentative Draft No.2, approved 1999). This 
is a necessary corollary to Section 505(a)(2), which allows a 
creditor or assignee of the settlor to reach the maximum amount 
that can be distributed to or for the settlor's benefit. This 
right to 
reach the trust applies whether or not the trust 
contains a spendthrift provision. 
A valid spendthrift 
prov~s~on makes 
it impossible 
for 
a 
beneficiary to make a legally binding transfer, but the trustee 
may choose to honor the beneficiary's purported assignment. The 
trustee 
may 
recommence 
distributions 
to 
the beneficiary at 
anytime. The beneficiary, not having made a binding transfer, can 
withdraw the beneficiary's direction but only as 
to 
future 
payments. See Restatement (Third) of Trusts Section 58 cmt. d 
(Tentative Draft No.2, approved 1999); Restatement (Second) of 
Trusts Section 152 cmt. i (1959). 
MAINE COMMENT 
This section codifies existing Maine case law. 
§503. 
Exceptions to spendthrift provision 
There are no exceptions to spendthrift provisions except as 
provided in sections 504, 505 and 506. 
UNIFORM COMMENT 
This 
section exempts 
the 
claims of certain categories 
of 
creditors from the effects of a spendthrift restriction. 
The exception in subsection (b) 
for 
support a beneficiary's child or current 
accord 
with 
Restatement 
(Third) 
of 
judgments or orders to 
or former spouse is in 
Trusts 
Section 
(a) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
(Tentative Draft No.2, approved 1999), Restatement (Second) of 
Trusts Section 157(a) (1959), and numerous state statutes. It is 
also consistent with federal bankruptcy law, which exempts such 
support orders from discharge. The effect of this exception is to 
permit the claimant for unpaid support to attach present or 
future 
distributions 
that 
would 
otherwise 
be 
made 
to 
the 
beneficiary. 
Distributions 
subject 
to 
attachment 
include 
distributions required by the express terms of the trust, such as 
mandatory payments of income, and distributions the trustee has 
otherwise decided to make, 
such as 
through the exercise of 
discretion. 
Subsection 
(b), 
unlike 
Section 
504, 
does 
not 
authorize the spousal or child claimant to compel a distribution 
from the trust. Section 504 authorizes a spouse or child claimant 
to compel a distribution to the extent the trustee has abused a 
discretion or failed to comply with a standard for distribution. 
Subsection (b) refers both to "support" and "maintenance" in 
order to accommodate differences among the States in terminology 
employed. No difference in meaning between the two terms is 
intended. 
The definition of "child" in subsection (a) 
accommodates the 
differing approaches States take to defining the class of 
individuals eligible for child support, including such issues as 
whether support can be awarded to stepchildren. However the State 
making the award chooses to define "child" will be recognized 
under this Code, whether the order sought to be enforced was 
entered in the same or different State. 
The exception in subsection (b) for a judgment creditor who has 
provided services for the protection of a beneficiary's interest 
in the trust is in accord with Restatement (Third) of Trusts 
Section 59(b) 
(Tentative Draft No.2, 
approved 1999), 
and 
Restatement 
(Second) 
of 
Trusts 
Section 
l57(c) 
(1959). 
This 
exception allows a beneficiary of modest means to overcome an 
obstacle 
preventing 
the 
beneficiary's 
obtaining 
services 
essential to the protection or enforcement of the beneficiary's 
rights under the trust. See Restatement (Third) of Trusts Section 
cmt. d (Tentative Draft No.2, approved 1999). 
Subsection (c), which is similar to Restatement (Third) of Trusts 
Section 59 cmt. a (Tentative Draft No.2, approved 1999), exempts 
certain governmental claims 
from 
a 
spendthrift restriction. 
Federal preemption guarantees that certain federal claims, such 
as 
claims 
by 
the Internal 
Revenue 
Service, 
may 
bypass 
a 
spendthrift provision no matter what this Code might say. The 
case law and relevant Internal Revenue Code provisions on the 
exception for federal tax claims are collected in George G. 
Bogert & George T. Bogert, The Law of Trusts and Trustees Section 
(Rev. 
2d ed. 1992); and 2A Austin W. 
Scott & William F. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Fratcher, 
The 
Law 
of Trusts Section 157.4 
(4th ed. 
1987). 
Regarding claims by state governments, this subsection recognizes 
that States take a variety of approaches with respect to 
collection, depending on whether the claim is for unpaid taxes, 
for care provided at an institution, or for other charges. 
Acknowledging this diversity, subsection (c) does not prescribe a 
rule, but refers to other statutes of the State on whether 
particular claims are subject to or exempted from spendthrift 
provisions. 
Unlike Restatement (Third) of Trusts Section 59 (2) (Tentative 
Draft No.2, approved 1999), and Restatement (Second) of Trusts 
Section 157(b) (1959), this Code does not create an exception to 
the spendthrift restriction for creditors who 
have furnished 
necessary services or supplies to the beneficiary. Most of these 
cases involve claims by governmental entities, which the drafters 
concluded are better handled by the 
enactment of 
special 
legislation as authorized by subsection (c). The drafters also 
declined to create an exception for tort claimants. For a 
discussion of the exception for tort claims, 
which has not 
generally been recognized, see Restatement (Third) of Trusts 
Section 59 Reporter I s Notes to cmt. a (Tentative Draft No.2, 
approved 1999). For a 
discussion of other exceptions to a 
spendthrift restriction, recognized in some States, see George G. 
Bogert & George T. Bogert, The Law of Trusts and Trustees Section 
(Rev. 
2d ed. 1992); and 2A Austin W. 
Scott & William F. 
Fratcher, The Law of Trusts Sections 157-157.5 (4th ed. 1987). 
MAINE COMMENT 
Uniform Trust Code, section 503, which proposed to exempt certain 
judgments or orders from the spendthrift provisions of trusts 
created by 3rd parties was not adopted in Maine. Third parties, 
parents, for example, should be free to create trusts for the 
benefit of their children or other issue with the confidence that 
the assets with which they fund the trust will be reserved for 
the intended purpose, 
and cannot be attached by any of the 
beneficiaries I 
creditors. 
Proposed Uniform Trust Code section 
504, 
dealing with discretionary distributions, 
was materially 
amended for the same reason. 
Uniform Trust Code, section 505, 
which provides different rules for self-settled trusts, 
was 
enacted as proposed. 
§504. 
Discretionary trusts: effect of standard 
1. 
Creditor may not compel distribution. 
Whether or not a 
trust contains 
a 
spendthrift provision, 
a 
creditor of 
a 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
beneficiary may not compel a distribution that is subject to the 
trustee's discretion, even if: 
A. 
The discretion is expressed in the form of a standard of 
distribution; or 
B. 
The trustee has abused the discretion. 
2. Right of beneficiary not limited. 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. 
UNIFORM COMMENT 
This section addresses the ability of a beneficiary's creditor to 
reach the beneficiary's discretionary trust interest, whether or 
not the exercise of the trustee's discretion is subject to a 
standard. This section, similar to the Restatement, eliminates 
the 
distinction 
between 
discretionary 
and 
support 
trusts, 
unifying the rules for all trusts fitting within either of the 
former categories. See Restatement (Third) of Trusts Section 60 
Reporter's Notes to cmt. a (Tentative Draft No.2, approved 1999). 
This section will have limited application. Pursuant to Section 
502, 
the 
effect 
of 
a 
valid 
spendthrift 
prov~s~on, 
where 
applicable, is to prohibit a creditor from collecting on a 
distribution prior to its receipt by the beneficiary. Only if the 
trust is not protected by a spendthrift provision, or if the 
creditor falls within 
one 
of 
the exceptions 
to spendthrift 
enforcement created by Section 503, does this section become 
relevant. 
For a discussion of the definition of "child" in subsection (a), 
see Section 503 comment. 
Subsection (b), which establishes the general rule, forbids a 
creditor from compelling a distribution from the trust, even if 
the 
trustee 
has 
failed 
to 
comply 
with 
the 
standard 
of 
distribution or has abused a discretion. Under subsection (d), 
the power to force a distribution due to an abuse of discretion 
or failure to comply with a 
standard belongs solely to the 
beneficiary. Under Section 8l4(a), a trustee must always exercise 
a 
discretionary power in good faith and with regard to the 
purposes of the trust and the interests of the beneficiaries. 
Subsection (c) creates an exception for support claims of a 
child, spouse, or former spouse who has a 
judgment or order 
against 
a 
beneficiary for 
support or maintenance. 
While 
a 
creditor of a beneficiary generally may not assert that a trustee 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
has abused a discretion or failed to comply with a standard of 
distribution, such a claim may be asserted by the beneficiary's 
child, spouse, or former spouse enforcing a judgment or court 
order against the beneficiary for unpaid support or maintenance. 
The court must direct the trustee to pay the child, spouse or 
former spouse such amount as is equitable under the circumstances 
but not in excess of the amount the trustee was otherwise 
required to distribute to or for the benefit of the beneficiary. 
Before fixing this amount, the court having jurisdiction over the 
trust should consider that in setting the respective support 
award, the family court has already considered the respective 
needs and assets of the family. The Uniform Trust Code does not 
prescribe a particular procedural method for enforcing a judgment 
or 
order 
against 
the 
trust, 
leaving 
that matter 
to 
local 
collection law. 
MAINE COMMENT 
Portions of the proposed Uniform Trust Code, section 503 and 
section 504, subsections 1 and 3 were deleted on the belief that 
these sections constituted an undesirable expansion of existing 
Maine law. 
§505. 
Creditor's claim against settlor 
1. 
Creditor's claims. 
Whether or not the terms of a trust 
contain a spendthrift provision, the following rules apply. 
A. 
During the lifetime of the settlor, the property of a 
revocable trust is subject to claims of the settlor's 
creditors. 
B. 
With respect to an irrevocable 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. 
C. 
After the death of a settlor, and subj ect to the 
settlor's right to direct the source from which liabilities 
will be paid, the property of a trust that was revocable at 
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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
inadequate to satisfy those claims, 
costs, 
expenses 
and 
allowances. 
2. 
Bolder of power. 
For purposes of this section: 
A. 
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 
B. 
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 the federal Internal Revenue Code of 1986, 
Section 
2041(b)(2} 
or 
2514(e) 
or 
the 
federal 
Internal 
Revenue Code of 1986, Section 2503(b), in each case as in 
effect on July 1, 2005, or as later amended. 
UNIFORM COMMENT 
Subsection (a)(I) states what is now a well accepted conclusion, 
that a revocable trust is subject to the claims of the settlor's 
creditors while the settlor is living. See Restatement (Third) of 
Trusts Section 25 cmt. e (Tentative Draft No.1, approved 1996). 
Such claims were not allowed at common 
law, 
however. 
See 
Restatement (Second) of Trusts Section 330 cmt. 
(1959). Because 
a settlor usually also retains a beneficial interest that a 
creditor may reach under subsection (a)(2), the common law rule, 
were it retained in this Code, would be of little significance. 
See Restatement (Second) of Trusts Section 156(2) (1959). 
Subsection (a)(2), 
which is based on Restatement (Third) of 
Trusts Section 58(2) and cmt. e (Tentative Draft No.2, approved 
36. 
1999), and Restatement (Second) of Trusts Section 156 (1959), 
follows traditional doctrine in providing that a settlor who is 
also a beneficiary may not use the trust as a shield against the 
settlor's creditors. The drafters of the Uniform Trust Code 
concluded 
that 
traditional 
doctrine 
reflects 
sound 
policy. 
Consequently, the drafters rejected the approach taken in States 
like Alaska and Delaware, both of which allow a settlor to retain 
a beneficial interest immune from creditor claims. See Henry J. 
Lischer, Jr. , 
Domestic Asset Protection Trusts: Pallbearers to 
Liability, 35 Real Prop. Probe 
& Tr. J. 479 (2000); John E. 
Sullivan, III, Gutting the Rule Against Self-Settled Trusts: How 
the Delaware Trust Law Competes with Offshore Trusts, 23 Del. J. 
Corp. L. 423 (1998). Under the Code, whether the trust contains a 
spendthrift provision or not, a creditor of the settlor may reach 
the maximum 
amount that the trustee could have paid to the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
settlor-beneficiary. If the trustee has discretion to distribute 
the entire income and principal to the settlor, the effect of 
this subsection is to place the settlor's creditors in the same 
position as if the trust had not been created. For the definition 
of "settlor," see Section 103(14). 
This section does not address possible rights against a settlor 
who was insolvent at the time of the trust's creation or was 
rendered insolvent by the transfer of property to the trust. This 
subject is 
instead left to 
the 
State's 
law 
on 
fraudulent 
transfers. A transfer to the trust by an insolvent settlor might 
also constitute a voidable preference under federal bankruptcy 
law. 
Subsection (a)(3) recognizes that a revocable trust is usually 
employed 
as 
a 
will substitute. 
As 
such, 
the trust assets, 
following the death of the settlor, should be subject to the 
settlor's debts and other charges. However, in accordance with 
traditional doctrine, the assets of the settlor's probate estate 
must normally first be 
exhausted before the assets 
of the 
revocable trust can be reached. This section does not attempt to 
address the procedural issues raised by the need first to exhaust 
the decedent's probate estate before reaching the assets of the 
revocable trust. Nor does this section address the priority of 
creditor claims or liability of the decedent's other nonprobate 
assets for the decedent's debts and other charges. Subsection 
(a)(3), however, does ratify the typical pourover will, revocable 
trust plan. 
As 
long as the rights of the creditor or family 
member claiming a statutory allowance are not impaired, the 
settlor· is free to. shi·ft liability from the probate estate to the 
revocable trust. Regarding other issues associated with potential 
liability of nonprobate assets for unpaid Claims, see Section 
6-102 of the Uniform Probate Code, which was added to that ·Code 
in 1998. 
Subsection (b)(l) treats a power of withdrawal as the equivalent 
of a power of revocation because the two powers are functionally 
identical. This is also the approach taken in Restatement (Third) 
of Trusts Section 56 cmt. b (Tentative Draft No.2, approved 
1999). If the power is unlimited, the property subject to the 
power will be fully subject to the claims of the power holder's 
creditors, the same as the power holder's other assets. If the 
power holder retains the power until death, the property subject 
to the power may be liable for claims and statutory allowances to 
the extent the power holder's probate estate is insufficient to 
satisfy those claims and allowances. For powers limited either in 
time or amount, such as a right to withdraw a $10,000 annual 
exclusion contribution within 
days, 
this subsection would 
limit the creditor to the $10,000 contribution and require the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
creditor to take action prior to the expiration of the 30-day 
period. 
Upon the lapse, release, or waiver of a power of withdrawal, the 
property formerly subject to the power will normally be subject 
to the claims of the power holder's creditors and assignees the 
same as if the power holder were the settlor of a now irrevocable 
trust. Pursuant to subsection (a) (2), a creditor or assignee of 
the power holder generally may reach the power holder's entire 
beneficial interest in the trust, whether or not distribution is 
subject to the trustee's discretion. However, following the lead 
of Arizona Revised Statutes Section l4-7705(g) and Texas Property 
Code Section l12.035(e), subsection (b)(2) creates an exception 
for trust property which was subject to a Crummey or five and 
five power. Upon the lapse, release, or waiver of a power of 
withdrawal, the holder is treated as the settlor of the trust 
only to the extent the value of the property subject to the power 
at the time of the lapse, release, or waiver exceeded the greater 
of the amounts specified in IRC Sections 204l(b)(2) or 25l4(e) 
[greater of 5% or $5,000], or IRC Section 2503(b) 
[$10,000 in 
2001]. 
The Uniform Trust Code does not address creditor issues with 
respect to property subject to a special power of appointment or 
a testamentary general power of appointment. For creditor rights 
against 
such 
interests, 
see 
Restatement 
(Property) 
Second: 
Donative Transfers Sections 13.1-13.7 (1986). 
MAINE COMMENT 
This section will fill the void in Maine trust law regarding a 
creditor's claims against the settlor of self-settled trusts. 
§506. 
Overdue distribution 
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. 
UNIFORM COMMENT 
The effect of a spendthrift provision is generally to insulate 
totally a beneficiary's interest until a distribution is made and 
received by the beneficiary. See Section 502. But this section, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A." to H.P. 678, L.D. 921 
along with several other sections in this article, recognizes 
exceptions to this general rule. Whether a trust contains a 
spendthrift prov~s~on or not, a trustee should not be able to 
avoid creditor claims against a beneficiary by refusing to make a 
distribution required to be made by the express terms of the 
trust. On the other hand, a spendthrift provision would become 
largely a nUllity were a beneficiary's creditors able to attach 
all required payments as soon as they became due. This section 
reflects a compromise between these two competing principles. A. 
creditor 
can 
reach 
a 
mandatory 
distribution, 
including 
a 
distribution upon termination, if the trustee has failed to make 
the 
payment 
within 
a 
reasonable 
time 
after 
the 
designated 
distribution date. Following this reasonable period, payments 
mandated by the express terms of the trust are in effect being 
held by the trustee as agent for the beneficiary and should be 
treated as part of the beneficiary's personal assets. 
This section is similar to Restatement (Third) of Trusts Section 
cmt. d (Tentative Draft No.2, approved 1999). 
2001 Amendment. By amendment in 2001, "designated distribution 
date" 
was 
substituted for 
"required distribution date." 
The 
amendment conforms the language of this section to terminology 
used elsewhere in the Code. 
MAINE COMMENT 
This section codifies existing Maine common law. 
§507. 
Personal obligations of trustee 
Trust property is not subject to personal obligations of the 
trustee, even if the trustee becomes insolvent or bankrupt. 
36. 
UNIFORM COMMENT 
Because 
the beneficiaries of 
the trust hold the beneficial 
interest in the trust property and the trustee holds only legal 
title without the benefits of ownership, the creditors of the 
trustee have only a personal claim against the trustee. See 
Restatement 
(Third) 
Section 5 
cmt. 
k 
(Tentative Draft No.1, 
approved 1996); Restatement (Second) of Trusts Section 12 cmt. a 
(1959). 
Similarly, 
a 
personal 
creditor of 
the 
trustee 
who 
attaches trust property to satisfy the debt does not acquire 
title as a bona fide purchaser even if the creditor is unaware of 
the trust. See Restatement (Second) of Trusts Section 308 (1959). 
The protection afforded by this section is consistent with that 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
provided by the Bankruptcy Code. Property in 
holds 
legal title as 
trustee is not part 
bankruptcy estate. 11 U.S.C. Section 54l(d). 
which the trustee 
of the trustee's 
The exemption of the trust property from the personal obligations 
of the trustee is the most significant feature of Anglo-American 
trust law by comparison with the devices available in civil law 
countries. A principal objective of the Hague Convention on the 
Law Applicable to Trusts and on their Recognition is to protect 
the Anglo-American trust with respect to transactions in civil 
law countries. See Hague Convention art. 11. See also Henry 
Hansmann & Ugo Mattei, The Functions of Trust Law: A Comparative 
Legal and Economic Analysis, 73 N.Y.U. L. Rev. 434 (1998); John 
H. 
Langbein, 
The Secret Life of the Trust: 
The Trust as an 
Instrument of Commerce, 107 Yale L.J. 165, 179-80 (1997). 
MAINE COMMENT 
This section fills a void in Maine law, making it clear that the 
personal creditors of a trustee may not attach property interests 
titled to the trustee for benefit of 3rd-party beneficiaries. 
This position follows common law, Restatement (Second) of Trusts 
Section 12, cmt. (a) (1959) and Restatement (Third) of Trusts, 
Section 5, cmt. (k) (tentative draft no. 1, 1996), all of which 
the Law Court has relied upon in the past when presented with 
trust and fiduciary issues of first impression in Maine. 
CHAPTER 6 
REVOCABLE TRUSTS 
UNIFORM COMMENT 
This article deals with issues of significance not totally 
settled under prior law. Because of the widespread use in recent 
years of the revocable trust as an alternative to a will, this 
short article is one of the more important articles of the Code. 
This article and the other articles of the Code treat the 
revocable trust as the functional equivalent of a will. Section 
provides that the capacity standard for wills applies in 
determining 
whether 
the 
settlor 
had 
capacity 
to 
create 
a 
revocable trust. Section 602, after providing that a trust is 
presumed 
revocable 
unless 
stated 
otherwise, 
prescribes 
the 
procedure for revocation or amendment, whether the trust contains 
one or several settlors. Section 603 provides that while a trust 
is revocable and the settlor has capacity, the rights of the 
beneficiaries are subject to the settlor's control. Section 604 
prescribes a statute of limitations on contest of revocable 
trusts. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Sections 601 and 604, because they address requirements relating 
to creation and contest of trusts, are not subject to alteration 
or restriction in the terms of the trust. See Section 105. 
Sections 602 and 603, by contrast, are not so limited and are 
fully subject to the settlor's control. 
§601. 
Capacity of settlor of revocable trust 
The capacity required to create, 
amend, 
revoke or add 
property to a revocable trust, or to direct the actions of the 
trustee of a revocable trust. is the same as that required to 
make a will. 
UNIFORM COMMENT 
This section is patterned after Restatement (Third) of Trusts 
Section 11(1) 
(Tentative Draft No.1, 
approved 1996). 
The 
revocable trust is used primarily as a will substitute, with its 
key provision being the determination of the persons to receive 
the trust property upon the settlor's death. To solidify the use 
of the revocable trust as a device for transferring property at 
death, the settlor usually also executes a pourover will. The use 
of a pourover will assures that property not transferred to the 
trust during life will be combined with the property the settlor 
did manage to convey. Given this primary use of the revocable 
trust as 
a 
device 
for 
disposing of property at death, 
the 
capacity standard for wills rather than that for lifetime gifts 
should apply. The application of the capacity standard for wills 
does not mean that the revocable trust must be executed with the 
formalities of a will. There are no execution requirements under 
this Code for a trust not created by will, and a trust not 
containing real property may be created by an oral statement. See 
Section 407 and comment. 
The Uniform Trust Code does not explicitly spell out the standard 
of capacity necessary to create other types of trusts, although 
Section 402 does require that the settlor have capacity. This 
section includes a capacity standard for creation of a revocable 
trust because of the uncertainty in the case law and the 
importance of the issue in modern estate planning. 
No 
such 
uncertainty exists with respect to the capacity standard for 
other types 
of trusts. 
To 
create 
a 
testamentary trust, 
the 
settlor must have the capacity to make a will. To create an 
irrevocable trust, the settlor must have the capacity that would 
be needed to transfer the property free of trust. See generally 
Restatement (Third) of Trusts Section 11 (Tentative Draft No.1, 
approved 1996); Restatement (Third) of Property: Wills and Other 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Donative Transfers Section 8.1 (Tentative Draft No.3, approved 
2001). 
MAINE COMMENT 
This is a change from the Maine common law, which required the 
same capacity that would be needed to transfer property. 
§602. 
Revocation or amendment of revocable trust 
I. 
Revocable unless expressly provided. 
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 July 
1, 2005. 
2. 
Revocable trust with more than one settlor. 
If a 
revocable trust is created or funded by more than one settlor: 
A. 
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; 
B. 
To the extent the trust consists of property other than 
communi ty 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 
C. 
Upon the revocation or amendment of the trust by fewer 
than all of the settlors. the trustee shall notify the other 
settlors of the revocation or amendment. 
3. 
Revoke or amend. 
The settlor may revoke or amend a 
revocable trust: 
A. 
By substantial compliance with a method provided in the 
terms of the trust; or 
B. 
If the terms of the trust do not provide a method or the 
method 
provided 
in 
the 
terms 
is 
not 
expressly 
made 
exclusive. by: 
(1) 
A later will or codicil that expressly refers to 
the trust or specifically devises property that would 
otherwise have passed according to the terms of the 
trust; or 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
(2) 
Any other method manifesting clear and convincing 
evidence of the settlor's intent. 
4. 
Delivery of property after revocation. 
Upon revocation 
of a revocable trust, the trustee shall deliver the trust 
property as the settlor directs. 
5. 
Agent expressly authorized. 
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. 
6. 
Conservator or guardian of settlor. 
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. Trustee without knowledge of revocation or amendment. 
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. 
UNIFORM COMMENT 
Subsection (a), which provides that a settlor may 
revoke or 
mOdify a trust unless the terms of the trust expressly state that 
the trust is irrevocable, changes the common law. Most states 
follow the rule that a trust is presumed irrevocable absent 
evidence of contrary intent. See Restatement (Second) of Trusts 
Section 330 (1959). California , Iowa, Montana, Oklahoma, and 
Texas presume that a trust is revocable. The Uniform Trust Code 
endorses this minority approach, but only for trusts created 
after its effective date. This Code presumes revocability when 
the instrument is silent because the instrument was likely 
drafted by a nonprofessional, who intended the trust as a will 
substitute. The most recent revision of the Restatement of Trusts 
similarly reverses the 
former 
approach. 
A trust is presumed 
revocable if the settlor has retained a beneficial interest. See 
Restatement (Third) of Trusts Section 63 cmt. c (Tentative Draft 
No.3, approved 2001). Because professional drafters habitually 
spell out whether or not a trust is revocable, subsection (a) 
will have limited application. 
A 
power 
of 
revocation 
includes 
the 
power 
to 
amend. 
An 
unrestricted power to amend may also include the power to revoke 
COMMll1EE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
a trust. See Restatement (Third) of Trusts Section 63 cmt. g 
(Tentative Draft No.3, approved 2001); Restatement (Second) of 
Trusts Section 331 cmt. g & h (1959). 
Subsection (b), which is similar to Restatement (Third) of Trusts 
Section 
cmt. 
k 
(Tentative Draft No.3, 
approved 
2001), 
provides default rules for revocation or amendment of a trust 
having several settlors. The settlor's authority to revoke or 
modify the trust depends on whether the trust contains community 
property. To the extent the trust contains community property, 
the trust may be revoked by either spouse acting alone but may be 
amended only by joint action of both spouses. The purpose of this 
provision, 
and the reason for the use of joint trusts in 
community property states, is to preserve the community character 
of property transferred to the trust. While community property 
does not prevail in a 
majority of states, contributions of 
community property to trusts created in noncommunity property 
states does occur. This is due to the mobility of settlors, and 
the fact that community property retains its community character 
when a couple move from a community to a noncommunity state. For 
this reason, subsection (b), and its provision on contributions 
of community property, should be enacted in all states, whether 
community or noncommunity. 
With respect to separate property contributed to the trust, or 
all property of the trust if none of the trust property consists 
of community property, subsection (b) provides that each settlor 
may revoke or amend the trust as to the portion of the trust 
contributed by that settlor. 
The 
inclusion of 
a 
rule for 
contributions 
of 
separate 
property 
does 
not 
mean 
that 
the 
drafters of this Code concluded that the use of joint trusts 
should be 
encouraged. 
The 
rule is included because of 
the 
widespread use of joint trusts in noncommunity property states in 
recent years. 
Due 
to 
the 
desire 
to preserve 
the 
community 
character of trust property, joint trusts are a necessity in 
community property states. 
Unless 
community property will be 
contributed to the trust, no similarly important reason exists 
for the creation of a joint trust in a noncommunity property 
state. Joint trusts are often poorly drafted, confusing the 
dispositive provisions of the respective settlors. Their use can 
also lead to unintended tax consequences. See Melinda S. Merk, 
Joint 
Revocable 
Trusts 
for 
Married 
Couples 
Domiciled 
in 
Common-Law Property States, 32 Real Prop. Prob. 
& Tr. J. 345 
(1997). 
Subsection (b) does not address the many technical issues that 
can arise in determining the settlors' proportionate contribution 
to 
a 
joint 
trust. 
Most 
problematic 
are 
contributions 
of 
jointly-owned property. In the case of joint tenancies in real 
estate, each spouse would presumably be treated as having made an 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
equal contribution because of the right to sever the interest and 
convert it into a tenancy in common. This is in contrast to joint 
accounts in financial institutions, ownership of which in most 
states is based not on fractional interest but on actual dollar 
contribution. See, e.g., Unif. Probate Code Section 6-211. Most 
difficult may be determining a contribution rule for entireties 
property. In Holdener v. Fieser, 971 S.W. 2d 946 (Mo. Ct. APP, 
1998), the court held that a surviving spouse could revoke the 
trust with respect to the entire interest but did not express a 
view as to revocation rights while both spouses were living. 
This section does not explicitly require that the other settlor 
or settlors be notified if a joint trust is revoked by less than 
all of the settlors, but such notice would be required pursuant 
to Section 603. While a trust is revocable and the settlor has 
capacity, Section 603(a) provides that the duties of the trustee, 
including the duty to 
keep 
the beneficiaries 
informed of 
administrative developments, are owed exclusively to the settlor. 
With respect to trusts having several settlors, Section 603 (b) 
clarifies that the trustee's duties, including the duty to keep 
the beneficiaries informed of developments, are owed to all 
settlors having capacity. Notifying the other settlor or settlors 
of the revocation or amendment will place them in a better 
position 
to 
protect their 
interests. 
If the 
revocation or 
amendment by less than all of the settlors breaches an implied 
agreement not to revoke or amend the trust, those harmed by the 
action can sue for breach of contract. If the trustee fails to 
notify the 
other settlor or settlors of the 
revocation or 
amendment, the parties aggrieved by the trustee's failure can sue 
the trustee for breach of trust. 
Subsection (c), which is similar to Restatement (Third) of Trusts 
Section 63 cmt. h & i (Tentative Draft No.3, approved 2001), 
specifies the method of revocation and amendment. Revocation of a 
trust differs fundamentally from revocation of a will. Revocation 
of a will, because a will is not effective until death, cannot 
affect an existing fiduciary relationship. With a trust, however, 
because a revocation will terminate an already existing fiduciary 
relationship, there is a need to protect a trustee who might act 
without knowledge that the trust has been revoked. There is also 
a need to protect trustees against the risk that they will 
misperceive the settlor's intent and mistakenly assume that an 
informal document or communication constitutes a revocation when 
that was not in fact the settlor's intent. To protect trustees 
against these 
risks, 
drafters habitually insert prov1s1ons 
providing that a revocable trust may be revoked only by delivery 
to the trustee of a formal revoking document. Some courts require 
strict compliance with the stated formalities. 
Other courts, 
recognizing that the formalities were inserted primarily for the 
trustee's 
and 
not 
the settlor's benefit, 
will 
accept 
other 
Page l14-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
methods of revocation as long as the settlor's intent is clear. 
See Restatement (Third) of Trusts Section 63 Reporter's Notes to 
cmt. h-j (Tentative Draft No.3, approved 2001). 
This Code tries to effectuate the settlor's intent to the maximum 
extent possible while at the same time protecting a 
trustee 
against inadvertent liability. While notice to the trustee of a 
revocation is good practice, this section does not make the 
giving of such notice a prerequisite to a trust's revocation. To 
protect a trustee who has not been notified of a revocation or 
amendment, subsection (g) provides that 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, as 
unamended, was still in effect. However, to honor the settlor's 
intent, 
subsection 
(c) 
generally 
honors 
a 
settlor's 
clear 
expression of intent even if inconsistent with stated formalities 
in the terms of the trust. 
Under sUbsection (c), the settlor may revoke or amend a revocable 
trust by substantial compliance with the method specified in the 
terms of the trust or by a later will or codicil or any other 
method manifesting clear and convincing evidence of the settlor's 
intent. Only if the method specified in the terms of the trust is 
made exclusive is use of the other methods prohibited. Even then, 
a 
failure 
to 
comply with 
a 
technical 
requirement, 
such as 
required notarization, may be excused as long as compliance with 
the method specified in the terms of the trust is otherwise 
substantial. 
While revocation of a trust will ordinarily continue to be 
accomplished by signing and delivering a written document to the 
trustee, other methods, 
such as 
a physical act or an -oral 
statement coupled with a withdrawal of the property, might also 
demonstrate the necessary intent. These less formal methods, 
because they provide less reliable indicia of intent, will often 
be insufficient, however. The method specified in the terms of 
the trust is a 
reliable safe harbor and should be followed 
whenever possible. 
Revocation or amendment by will is mentioned in subsection (c) 
not to encourage the practice but to make clear that it is not 
precluded by omission. See Restatement (Third) of Property: Will 
and Other Donative Transfers Section 7.2 cmt. e (Tentative Draft 
No.3, approved 2001), which validates revocation or amendment of 
will substitutes by later will. Situations do arise, particularly 
in death-bed cases, where revocation by will may be the only 
practicable method. 
In such cases, 
a will, 
a 
solemn document 
executed with a high level of formality, may be the most reliable 
method for expressing intent. A revocation in a will ordinarily 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
becomes effective only upon probate of the will following the 
testator's death. 
For the cases, 
see 
Restatement 
(Third) 
of 
Trusts Section 63 Reporter's Notes to cmt. h-i (Tentative Draft 
No.3, approved 2001). 
A residuary clause in a will disposing of the estate differently 
than the trust is alone insufficient to revoke or amend a trust. 
The provision in the will must either be express or the will must 
dispose of specific assets contrary to the terms of the trust. 
The substantial body of law on revocation of Totten trusts by 
will offers helpful guidance. The authority is collected in 
William H. Danne, Jr., Revocation of Tentative ("Totten") Trust 
of Savings Bank Account by Inter Vivos Declaration or Will, 46 
A.L.R. 3d 487 (1972). 
Subsection (c) does not require that a trustee concur in the 
revocation or amendment of a trust. Such a concurrence would be 
necessary only if required by the terms of the trust. If the 
trustee concludes that an amendment unacceptably changes the 
trustee's duties, the trustee may resign as provided in Section 
705. 
Subsection (d), providing that upon revocation the trust property 
is to be distributed as the settlor directs, codifies a provision 
commonly included in revocable trust instruments. 
A settlor's power to revoke is not terminated by the settlor's 
incapacity. The power to revoke may instead be exercised by an 
agent under a power of attorney as authorized in subsection (e), 
by a conservator or guardian as authorized in subsection (f), or 
by the settlor personally if the settlor regains capacity. 
Subsection (e), which is similar to Restatement (Third) of Trusts 
Section 
cmt. 
(Tentative Draft No.3, 
approved 
2001), 
authorizes an agent under a power of attorney to revoke or modify 
a revocable trust only to the extent the terms of the trust or 
power of attorney expressly so permit. An express provision is 
required because most settlors usually intend that the revocable 
trust, 
and not the power of attorney, 
to function as the 
settlor's principal property management 
device. 
The power of 
attorney is usually 
intended as 
a 
backup for 
assets 
not 
transferred to the revocable trust or to address specific topics, 
such as the power to sign tax returns or apply for government 
benefits, which may be beyond the authority of a trustee or are 
not customarily granted to a trustee. 
Subsection (f) addresses the authority of a conservator or 
guardian to revoke or amend a revocable trust. Under the Uniform 
Trust Code, a "conservator" is appointed by the court to manage 
the ward's party, a "guardian" to make decisions with respect to 
Page l16-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the ward's 
personal affairs. 
See 
Section 103. 
Consequently, 
subsection (f) authorizes a guardian to exercise a settlor's 
power to revoke or amend a trust only if a conservator has not 
been appointed. 
Many state conservatorship statutes authorize a conservator to 
exercise the settlor's power of revocation with the prior 
approval of the court supervising the conservatorship. See, e.g., 
Unif. Probate Code Section 411(a)(4). Subsection (f) ratifies 
this practice. 
Under the Code, 
a 
conservator may exercise a 
settlor's power of revocation, amendment, or right to withdraw 
trust property 
upon 
approval 
of 
the 
court 
superV1s1ng 
the 
conservatorship. Because a settlor often creates a revocable 
trust for the very purpose of avoiding conservatorship, this 
power should be exercised by the court reluctantly. Settlors 
concerned about revocation by a conservator may wish to deny a 
conservator a power to revoke. However, while such a provision in 
the terms of the trust is entitled to considerable weight, the 
court may override the restriction if it concludes that the 
action is necessary in the interests of justice. See Section 
105(b)(13). 
Steps a conservator can take to stem possible abuse is not 
limited to petitioning to revoke the trust. The conservator could 
peti tion for removal of the trustee under Section 706. 
The 
conservator, acting on the settlor-beneficiary's behalf, could 
also bring an action to enforce the trust according to its terms. 
Pursuant to Section 303, a conservator may act on behalf of the 
beneficiary whose estate the conservator controls whenever a 
consent or other action by the beneficiary is required or may be 
given under the Code. 
If 
a 
conservator 
has 
not 
been 
appointed, 
subsection 
(f) 
authorizes a guardian to exercise a settlor's power to revoke or 
amend the trust upon approval of the court superv1s1ng the 
36. 
guardianship. The court supervising the guardianship will need to 
determine whether it can grant a guardian authority to revoke a 
revocable trust under local law or whether it will be necessary 
to appoint a conservator for that purpose. 
2001 Amendment. By amendment in 2001, revocation by "executing a 
later will or codicil" in subsection (c)(2)(A) was changed to 
revocation by a "later will or codicil" to avoid an implication 
that the trust is revoked immediately upon execution of the will 
or codicil and not at the testator's death. 
MAINE COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Referencing section 602, subsection 2 and the Uniform Comment, 
Maine has not as yet adopted the Uniform Probate Code, section 
6-211. 
Referencing section 602, subsection 6 and the Uniform 
Comment, the reference to section 411, subsection (a), paragraph 
(4) of the Uniform Trust Code appears covered by the Probate 
Code, section 5-408. 
§603. 
Settlor's powers: powers of withdrawal 
1. 
Revocable trust. 
While a trust is revocable and the 
settlor 
has 
capacity 
to 
revoke 
the 
trust, 
rights 
of 
the 
beneficiaries are subject to the control of, and the duties of 
the trustee are owed exclusively to, the settlor. 
2. 
Rights of settlor of revocable trust. 
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. 
UNIFORM COMMENT 
This section has the effect of postponing enforcement of the 
rights of the beneficiaries of a revocable trust until the death 
or incapacity of the settlor or other person holding the power to 
revoke the trust. This section thus recognizes that the settlor 
of a revocable trust is in control of the trust and should have 
the right to enforce the trust. 
Pursuant to this section, the duty under Section 813 to inform 
and report to beneficiaries is owed to the settlor of a revocable 
trust as long as the settlor has capacity. In the case of a trust 
having several settlors, subsection (b) clarifies that this duty 
extends to all settlors having capacity. Should fewer than all 
settlors revoke or modify their portion of the trust, the trustee 
must notify the other settlor or settlors of the action. See 
Section 602 comment. 
If the settlor loses capacity, subsection (a) no longer applies, 
with the consequence that the rights of the beneficiaries are no 
longer subject to the settlor I s control. The beneficiaries are 
entitled to request information concerning the trust and the 
trustee 
must 
provide 
the 
beneficiaries 
with 
annual 
trustee 
reports and whatever other information may be required under 
Section 
813. 
However, 
because 
this 
section 
may 
be 
freely 
overridden in the terms of the trust, a settlor is free to deny 
the beneficiaries these rights, even to the point of directing 
the trustee not to inform them of the existence of the trust. 
Also, should an incapacitated settlor later regain capacity, the 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
beneficiaries' rights will again be subject to the settlor's 
control. 
The 
cessation 
of 
the 
settlor's 
control 
upon 
the 
settlor's 
incapacity 
or 
death 
does 
not 
mean 
that 
the 
beneficiaries may reopen transactions the settlor approved while 
having capacity. 
Typically, the settlor of a revocable trust will also be the sole 
or 
primary 
beneficiary 
of 
the 
trust. 
Upon 
the 
settlor's 
incapacity, any right of action the settlor-trustee may have 
against the trustee for breach of fiduciary duty will pass to the 
settlor's agent or conservator. 
Subsection (c) makes clear that a holder of a power of withdrawal 
has the same powers over the trust as the settlor of a revocable 
trust. 
Equal 
treatment is warranted 
due 
to 
the 
holder's 
equivalent power to control the trust. For the definition of 
power of withdrawal, see Section 103(10). 
2001 Amendment. By a 2001 amendment, former subsection (b) was 
deleted. 
Former 
subsection 
(b) 
provided: 
"While 
a 
trust is 
revocable and the settlor does not have capacity to revoke the 
trust, 
rights 
of 
the 
beneficiaries 
are 
held 
by 
the 
beneficiaries." No 
substantive change was 
intended by this 
amendment. Former subsection (b) was superfluous. Rights of the 
beneficiaries are always held by the beneficiaries unless taken 
away by some other provision. Subsection (a) grants these rights 
to the settlor of a 
revocable trust while the settlor has 
capacity. Upon a settlor's loss of capacity, these rights are 
held by the beneficiaries with or without former subsection (b). 
§604. 
Limitation on action contesting validity of revocable 
trust; distribution of trust property 
1. 
Revocable trust. 
A person may commence a judicial 
proceeding to contest the validity of a trust that was revocable 
at the settlor's death within the earlier of: 
A. 
Three years after the settlor's death; or 
B. 
One hundred and twenty days after the trustee sent the 
person a copy of the trust instrument and a notice informing 
the person of the trust's existence, of the trustee's name 
and 
address 
and of 
the 
time 
allowed for 
commencing 
a 
proceeding. 
2. 
Trustee liability for distributions. 
Upon the death of 
the settlor of a trust that was revocable at the settlor's death, 
the trustee may proceed to distribute the trust property in 
Page l19-LR0466(2) 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
accordance with the terms of the trust. 
The trustee is not 
subject to liability for doing so unless: 
A. 
The trustee knows 
of a pending judicial proceeding 
contesting the validity of the trust; or 
B. 
A potential contestant has notified the trustee of a 
possible judicial proceeding to contest the trust and a 
judicial proceeding is commenced within 60 days after the 
contestant sent the notification. 
3. 
Beneficia~ to return distribution. 
A beneficiary of a 
trust that is determined to have been invalid is liable to return 
any distribution received. 
OHIFORM COMMENT 
This section provides finality to the question of when a contest 
of a revocable trust may be brought. The section is designed to 
allow an adequate time in which to bring a contest while at the 
same time permitting the expeditious distribution of the trust 
property following the settlor's death. 
A trust can be contested on a variety of grounds. For example, 
the contestant may allege that no trust was created due to lack 
of intent to create a trust or lack of capacity (see Section 
402), that undue influence, duress, or fraud was involved in the 
trust's creation (see Section 406), or that the trust had been 
revoked or modified (see Section 602). A "contest" is an action 
to invalidate all or part of the terms of the trust or of 
property 
transfers 
to 
the 
trustee. 
An 
action 
against 
a 
beneficiary or other person for intentional interference with an 
inheritance or gift, not being a contest, is not subject to this 
section. For the law on intentional interference, see Restatement 
36. 
(Second) of Torts Section 774B (1979). Nor does this section 
preclude an action to determine the validity of a trust that is 
brought during the settlor's lifetime, such as a petition for a 
declaratory judgment, if such action is authorized by other law. 
See Section 106 (Uniform Trust Code supplemented by common law of 
trusts and principles of equity). 
This section applies only to a revocable trust that becomes 
irrevocable by reason of the settlor's death. A trust that became 
irrevocable by reason of the settlor's lifetime release of the 
power to revoke is outside its scope. A revocable trust does not 
become irrevocable upon a settlor's loss of capacity. Pursuant to 
Section 
602, 
the 
power 
to 
revoke 
may 
be 
exercised by 
the 
settlor's agent, conservator, or guardian, or personally by the 
settlor if the settlor regains capacity. 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Subsection (a) specifies a time limit on when a contest can be 
brought. A contest is barred upon the first to occur of two 
possible events. The maximum possible time for bringing a contest 
is three years from the settlor's death. This should provide 
potential contestants with ample time in which to determine 
whether they have an interest that will be affected by the trust, 
even if formal notice of the trust is lacking. The three-year 
period is derived from Section 3-108 of the Uniform Probate Code. 
Three years is the maximum limit under the UPC for contesting a 
nonprobated will. Enacting jurisdictions prescribing shorter or 
longer time limits for contest of a 
nonprobated will should 
substitute their own time limit. To facilitate this process, the 
"three-year" period has been placed in brackets. 
A trustee who wishes to shorten the contest period may do so by 
giving notice. Drawing from California Probate Code Section 
16061.7, 
subsection 
(a)(2) 
bars 
a 
contest 
by 
a 
potential 
contestant 120 days after the date the trustee sent that person a 
copy of the trust instrument and informed the person of the 
trust's existence, of the trustee's name and address, and of the 
time allowed for commencing a contest. The reference to "120" 
days 
is 
placed 
in 
brackets 
to 
suggest 
to 
the 
enacting 
jurisdiction that it substitute its statutory time period for 
contesting a will following notice of probate. The 120 day period 
in subsection (a) (2) is subordinate to the three-year bar in 
subsection (a)(l). A contest is automatically barred three years 
after the settlor's death even if notice is sent by the trustee 
less than 120 days prior to the end of that period. 
Because only a small minority of trusts are actually contested, 
trustees 
should not 
be 
restrained from 
making distributions 
because of concern about possible liability should a contest 
later be 
filed. 
Absent 
a 
protective statute, 
a 
trustee is 
ordinarily absolutely liable for misdelivery of the trust assets, 
even if the trustee reasonably believed that the distribution was 
proper. See Restatement (Second) of Trusts Section 226 (1959). 
Subsection 
(b) 
addresses 
liability concerns 
by 
allowing the 
trustee, upon the settlor's death, to proceed expeditiously to 
distribute the trust property. The trustee may distribute the 
trust property in accordance with the terms of the trust until 
and unless the trustee receives notice of a pending judicial 
proceeding contesting the validity of the trust, 
or until 
notified 
by 
a 
potential 
contestant 
of 
a 
possible 
contest, 
followed by its filing within 60 days. 
Even though a distribution in compliance with subsection (b) 
discharges the trustee from potential liability, subsection (c) 
makes the beneficiaries of what later turns out to have been an 
invalid trust liable to return any distribution received. Issues 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
as to whether the distribution must be returned with interest, or 
with income earned or profit made are not addressed in this 
section but are left to the law of restitution. 
For purposes of notices under this section, the substitute 
representation principles of Article 3 are applicable. The notice 
by the trustee under subsection (a)(2) or by a potential 
contestant under subsection (b) (2) must be given in a manner 
reasonably suitable under the circumstances and likely to result 
in its receipt. See Section 109(a). 
This section does not address possible liability for the debts of 
the deceased settlor or 
a 
trustee's possible liability to 
creditors for distributing trust assets. For possible liability 
of the trust, see Section 505(a) (3) 
and comment. Whether a 
trustee 
can 
be 
held 
personally 
liable 
for 
creditor 
claims 
following distribution of trust assets is addressed in Uniform 
Probate Code Section 6-102, which was added to that Code in 1998. 
MAINE COMMENT 
Maine has not adopted Uniform Probate Code section 6-102 as added 
to that Code in 1998. 
CHAPTER 7 
OFFICE OF TRUSTEE 
UNIFORM COMMENT 
This article contains a series of default rules dealing with the 
office of trustee. Sections 701 and 702 address the process for 
getting a trustee into office, including the procedures for 
indicating an acceptance 
and whether bond will be required. 
Section 703 addresses cotrustees, permitting the cotrustees to 
act by majority action and specifying the extent to which one 
trustee may delegate to another. Sections 704 through 707 address 
changes in the office of trustee, specifying the circumstances 
when a vacancy must be filled, the procedure for resignation, the 
grounds for removal, and the process for appointing a successor. 
Sections 708 and 709 prescribe the standards for determining 
trustee compensation and reimbursement for expenses advanced. 
Except for 
the court's authority to order bond, all of the 
provisions of this article are subject to modification in the 
terms of the trust. See Section 105. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§70l. 
Accepting or declining trusteeship 
1. Acceptance. 
Exce~t as otherwise ~rovided in subsection 
3, a person designated as trustee accepts the trusteeship: 
A. 
By substantially complying with a method of acceptance 
provided in the terms of the trust: or 
B. 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, 
exerc~s~ng powers 
or 
performing 
duties 
as 
trustee 
or 
otherwise indicating acceptance of the trusteeship. 
2. 
Rejection. 
A person designated as trustee who has not 
yet accepted the trusteeship may reject the 
trusteeshi~. 
A 
designated trustee who does not accept the trusteeship within a 
reasonable time after knowing of the designation is deemed to 
have rejected the trusteeship. 
3. 
Action without acceptance. 
A person designated as 
trustee, without accepting the trusteeship, may: 
A. 
Act 
to preserve 
the trust property if, within 
a 
reasonable time after acting, the person sends a rejection 
of the trusteeship to the settlor or, if the settlor is dead 
or lacks capacity, to a qualified beneficiary; and 
B. 
Inspect or investigate trust property to determine 
potential liability under environmental or other law or for 
any other purpose. 
UNIFORM CC»tMENT 
This section, which specifies the requirements for a valid 
acceptance of the trusteeship, implicates many of the same issues 
that arise in determining whether a trust has been revoked. 
Consequently, 
the 
two 
provisions 
track 
each 
other 
closely. 
Compare 
Section 701(a), 
with Section 602(c) 
(procedure for 
revoking or modifying trust). Procedures specified in the terms 
of the trust are recognized, but only substantial, not literal 
compliance is required. A failure to meet technical requirements, 
such as notarization of the trustee's signature, does not result 
in a failure to accept. Ordinarily, the trustee will indicate 
acceptance by signing the trust instrument or signing a separate 
written instrument. 
However, 
this section validates any other 
method demonstrating the necessary intent, such as by knowingly 
exercising trustee powers, unless the terms of the trust make the 
specified method exclusive. This section also does not preclude 
an acceptance by estoppel. 
For general background on issues 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
relating to trustee acceptance and rejection, see Restatement 
(Third) of Trusts Section 35 (Tentative Draft No.2, approved 
1999); 
Restatement 
(Second) 
of Trusts Section 102 
(1959). 
Consistent with Section 20l(b), which emphasizes that continuing 
judicial supervision of a trust is the rare exception, not the 
rule, the Uniform Trust Code does not require that a trustee 
qualify in court. 
To avoid the inaction that can result if the person designated as 
trustee fails to communicate a decision either to accept or to 
reject the trusteeship, subsection (b) provides that a failure to 
accept within a reasonable time constitutes a rejection of the 
trusteeship. What will constitute a reasonable time depends on 
the facts and circumstances of the particular case. 
A major 
consideration is possible harm that might occur if a vacancy in a 
trusteeship is not filled in a 
timely manner. 
A trustee's 
rejection normally precludes a later acceptance but does not 
cause the trust to fail. 
See Restatement (Third) 
of Trusts 
Section 35 
cmt. 
c 
(Tentative Draft No.2, approved 1999). 
Regarding the filling of a vacancy in the event of a rejection, 
see Section 704. 
A person designated as trustee who decides not to accept the 
trusteeship need not provide a formal rejection, but a clear and 
early communication is recommended. The appropriate recipient of 
the rejection depends 
upon the circumstances. Ordinarily, it 
would be appropriate to communicate the rejection to the person 
who 
informed 
the 
designee 
of 
the 
proposed trusteeship. 
If 
judicial proceedings 
involving the trust are 
pending, 
the 
rejection could be filed with the court. In the case of a person 
named as trustee of a revocable trust, it would be appropriate to 
communicate the rejection to the settlor. In any event, it would 
be best to inform a beneficiary with a significant interest in 
the trust because that beneficiary might be more motivated than 
others to seek appointment of a new trustee. 
Subsection (c) (1) makes clear that a nominated trustee may act 
expeditiously 
to 
protect 
the 
trust 
property 
without 
being 
considered to have accepted the trusteeship. However, 
upon 
conclusion of the intervention, the nominated trustee must send a 
rejection of office to the settlor, if living and competent, 
otherwise to a qualified beneficiary. 
Because 
of 
the 
potential 
liability 
that 
can 
inhere 
in 
trusteeship, subsection (c) (2) allows a person designated as 
trustee to inspect the trust property without accepting the 
trusteeship. The condition of real property is a particular 
concern, including possible tort liability for the condition of 
the premises or liability for violation of state or federal 
environmental laws such as CERCLA, 42 U.S.C. Section 9607. For a 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
prov~s~on limiting a trustee's personal liability for obligations 
arising from ownership or control of trust property, see Section 
1010(b). 
MAINE COMMENT 
Section 701, subsection 3, paragraph B is consistent with the 
Probate Code, Section 1-111. 
§702. 
Trustee's bond 
1. 
Bond. 
A trustee shall give bond to secure performance 
of the trustee's duties only if the court finds that a bond is 
needed to protect the interests of the beneficiaries or is 
required by the terms of the trust and the court has not 
dispensed with the requirement. 
2. 
Amount. 
The court may specify the amount of a bond, its 
liabilities, and whether sureties are necessary. The court may 
modify or terminate a bond at any time. 
3. 
Financial 
institution. 
A 
financial 
institution 
qualified to do trust business in this State need not give bond, 
even if required by the terms of the trust. 
4. 
Cost charged to trust. 
Unless otherwise directed by the 
court, the cost of a bond is charged to the trust. 
UlfIFORM COMMENT 
This provision is consistent with the Restatement Third and with 
the 
bonding provisions 
of 
the 
Uniform 
Probate 
Code. 
See 
Restatement (Third) of Trusts Section 34(3) and cmt. a (Tentative 
Draft No.2, approved 1999); Uniform Probate Code Sections 3-604 
(personal 
representatives), 
5-415 
(conservators), 
and 
7-304 
(trustees). Because a bond is required only if the terms of the 
trust require bond or 
a 
bond is found by the court to be 
necessary to protect the interests of beneficiaries, bond should 
rarely be required under this Code. 
Despite the ability of the court pursuant to Section 105(b)(6) to 
override a term of the trust waiving bond, the court should order 
bond in such cases only for good reasons. Similarly, the court 
should rarely dispense with bond if the settlor directed that the 
trustee give bond. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This section does not attempt to detail all of the technical 
bonding 
requirements 
that 
the 
court 
may 
impose. 
Typical 
requirements are listed in the Uniform Probate Code sections 
ci ted above. 
The amount of a 
bond otherwise required may be 
reduced by the value of trust property deposited in a manner that 
prevents its unauthorized disposition, and by the value of real 
property which the trustee, by express limitation of power, lacks 
power to convey without court authorization. Also, the court may 
excuse or otherwise modify a requirement of a bond, reduce or 
increase the amount of a bond, release a surety, or permit the 
substitution of another bond with the same or different sureties. 
Subsection 
(c) clarifies that a 
regulated financial-service 
insti tution need not provide bond for individual trusts. Such 
institutions 
must 
meet 
detailed 
financial 
responsibility 
requirements in order to do trust business in the State, thereby 
obviating the need to post bonds in individual trusts. Subsection 
(c) is placed in brackets because the enacting jurisdiction may 
have already dealt with the subject in separate legislation, such 
as 
in its statutes on regulation of financial institutions. 
Instead of the phrase "regulated financial-service institution," 
enacting jurisdictions may wish to substitute their own term for 
institutions qualified to engage in trust business in the State. 
MAINE COMMENT 
Section 702 replaces the Probate Code, section 7-304, which was 
repealed as part of the adoption of the Uniform Trust Code. 
In section 702, subsection 3, 
was 
used to 
be 
consistent 
statutes. 
the term "financial institution" 
with Title 
9-B 
and other Maine 
Subsection 4 has been added to section 702 of the Uniform Trust 
Code to make clear that unless a court determines otherwise, the 
cost of a bond should be charged to the trust. 
§703. 
Cotrustees 
1. 
Unanimous decision; majority decision. 
Cotrustees who 
are unable to reach a unanimous decision may act by majority 
decision. 
2. 
Vacancy. 
If a vacancy occurs in a cotrusteeship, the 
remaining cotrustees may act for the trust. 
3. 
Participation 
by 
cotrustee. 
A 
cotrustee 
must 
participate in the performance of a trustee's function unless the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
cotrustee is unavailable to perform the function because of 
absence, illness, disqualification or other temporary incapacity 
or the cotrustee has properly delegated the performance of the 
function to another trustee. 
4. 
Cotrustee unavailable. 
If a cotrustee is unavailable to 
perform duties because of absence, illness, disqualification or 
other temporary incapacity, the remaining cotrustee or a majority 
of the remaining cotrustees may act for the trust. 
5. 
Delegation. 
A trustee may not delegate to a cotrustee 
the performance of a function the settlor reasonably expected the 
trustees 
to 
perform 
jointly. 
Unless 
a 
delegation 
was 
irrevocable, a trustee may revoke a delegation previously made. 
6. 
Liability. 
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. 
Reasonable care. 
Each trustee shall exercise reasonable 
care to: 
A. 
Prevent a cotrustee from committing a serious breach of 
trust; and 
B. 
Compel a cotrustee to redress a serious breach of trust. 
8. 
Dissenting trustee. 
A dissenting trustee who joins in 
an action at the direction of the majority of the trustees and 
who notified in writing 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. 
UNIFORM COMMENT 
This section contains most but not all of the Code's provisions 
on cotrustees. Other provisions relevant to cotrustees include 
Sections 704 
(vacancy in trusteeship need not be filled if 
cotrustee remains in office), 705 (notice of resignation must be 
given to cotrustee), 706 (lack of cooperation among cotrustees as 
ground for removal), 
(obligations of resigning or removed 
trustee), 
(reporting 
requirements 
upon 
vacancy 
in 
trusteeship), and 1013 (authority of cotrustees to authenticate 
documents. 
Cotrustees are appointed for 
a variety of reasons. 
Having 
multiple 
decision-makers 
serves 
as 
a 
safeguard 
against 
eccentricity or misconduct. Cotrustees are often appointed to 
gain the advantage of differing skills, 
perhaps 
a 
financial 
Page l27-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
institution for its permanence and professional skills, and a 
family 
member 
to 
maintain 
a 
personal 
connection 
with 
the 
beneficiaries. On other occasions, cotrustees are appointed to 
make certain that all family lines are represented in the trust's 
management. 
Cotrusteeship 
should 
not 
be 
called 
for 
without 
careful 
reflection. Division of responsibility among cotrustees is often 
confused, 
the accountability of any individual trustee is 
uncertain, obtaining consent of all trustees can be burdensome, 
and unless an odd number of trustees is named deadlocks requiring 
court resolution can occur. Potential problems can be reduced by 
addressing division of responsibilities in the terms of the 
trust. Like the other sections of this article, this section is 
freely subject to modification in the terms of the trust. See 
Section 105. 
Much of this section is based on comparable provisions of the 
Restatement of Trusts, although with extensive modifications. 
Reference should also be made to ERISA Section 405 (29 U.S.C. 
Section 1105), which in recent years has been the statutory base 
for the most significant case law on the powers and duties of 
cotrustees. 
Subsection (a) is in accord with Restatement (Third) of Trusts 
Section 39 (Tentative Draft No.2, approved 1999), which rejects 
the common law rule, followed in earlier Restatements, requiring 
unanimity among the trustees of a private trust. See Restatement 
(Second) of Trusts Section 194 (1959). This section is consistent 
with the prior Restatement rule applicable to charitable trusts, 
which 
allowed 
for action by 
a 
majority of trustees. 
See 
Restatement (Second) of Trusts Section 383 (1959). 
Under subsection (b), a majority of the remaining trustees may 
act for the trust when a vacancy occurs in a cotrusteeship. 
Section 704 provides that a vacancy in a cotrusteeship need be 
filled only if there is no trustee remaining in office. 
Pursuant to subsection (c), a cotrustee must participate in the 
performance 
of 
a 
trustee 
function unless 
the cotrustee has 
properly delegated performance to another cotrustee, or the 
cotrustee is unable to partiCipate due to temporary incapacity or 
disqualification under other law. 
Other laws under which a 
cotrustee might be disqualified include federal securities law 
and the ERISA prohibited transactions rules. Subsection (d) 
authorizes a cotrustee to assume some or all of the functions of 
another trustee who is unavailable to perform duties as provided 
in subsection (c). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Subsection 
(e) 
addresses the extent to which 
a 
trustee may 
delegate 
the 
performance 
of 
functions 
to 
a 
cotrustee. 
The 
standard differs from the standard for delegation to an agent as 
provided in Section 807 because the two situations are different. 
Section 807, which is identical to Section 9 of the Uniform 
Prudent Investor Act, 
recognizes that many trustees are not 
professionals. Consequently, trustees should be encouraged to 
delegate functions they are not competent to perform. Subsection 
(e) is premised on the assumption that the settlor selected 
cotrustees for a specific reason and that this reason ought to 
control the scope of a permitted delegation to a cotrustee. 
Subsection (e) prohibits a trustee from delegating to another 
trustee functions the settlor reasonably expected the trustees to 
perform jointly. The exact extent to which a trustee may delegate 
functions to another trustee in a particular case will vary 
depending 
on 
the 
reasons 
the 
settlor 
decided 
to 
appoint 
cotrustees. The better practice is to address the division of 
functions in the terms of the trust, as allowed by Section 105. 
Subsection (e) is based on language derived from Restatement 
(Second) 
of Trusts Section 171 
(1959). 
This section of the 
Restatement Second, which applied to delegations to both agents 
and cotrustees, was superseded, as to delegation to agents, by 
Restatement (Third) of Trusts: Prudent Investor Rule Section 171 
(1992). 
By permitting the trustees to act by a majority, this section 
contemplates that there may be a trustee or trustees who might 
dissent. Trustees who dissent from the acts of a cotrustee are in 
general 
protected 
from 
liability. 
Subsection 
(f) 
protects 
trustees 
who 
refused to 
Jo~n in the action. 
Subsection (h) 
protects a dissenting trustee who 
joined the action at the 
direction of the majority, such as to satisfy a demand of the 
other side to a transaction, if the trustee expressed the dissent 
to a cotrustee at or before the time of the action in question. 
However, the protections provided by subsections (f) and (h) no 
. 
longer apply if the action constitutes a serious breach of trust. 
In that event, subsection (g) may impose liability against a 
dissenting trustee for 
failing to take 
reasonable steps 
to 
rectify the improper conduct. The responsibility to take action 
against a breaching cotrustee codifies the substance of Sections 
and 224 of the Restatement (Second) of Trusts (1959). 
MAINE COMMENT 
Section 703 
fills a void in Maine 
prov~s~ons relating to cotrustees. 
sections 7-403 and 7-405, which have 
adoption of the Uniform Trust Code. 
law, 
See 
been 
which had few specific 
former Probate Code, 
repealed as part of the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
In section 703, subsections 3 and 4, the phrase "disqualification 
under other 
law" 
in the Uniform Trust Code was 
changed to 
"disqualification" because the modification "under other law" 
seemed 
unduly, 
or 
perhaps 
misleadingly, 
restrictive. 
For 
example, 
a 
cotrustee who is also 
a 
beneficiary might be 
disqualified from participating in certain trustee decisions by 
the provisions of the trust instrument itself. 
Section 703, subsection 4 deletes the requirement in the Uniform 
Trust Code that remaining trustees or a majority thereof may act 
if a cotrustee is otherwise unavailable only if prompt action is 
necessary to achieve the purposes of the trust or to avoid injury 
to the trust property. Section 703, subsection 4 allows the 
remaining trustees or a majority thereof to act in any case in 
which a cotrustee is unavailable to perform his or her duties 
because of absence, illness, disqualification or other temporary 
incapacity. 
§704. 
Vacancy in trusteeship: appointment of successor 
1. 
Vacancy. 
A vacancy in a trusteeship occurs if: 
A. 
A person designated as trustee rejects the trusteeship: 
B. 
A person designated as trustee can not be identified or 
does not exist; 
C. 
A trustee resigns; 
D. 
A trustee is disqualified or removed; 
E. 
A trustee dies; or 
F. 
A guardian or conservator is appointed for an individual 
serving as trustee. 
2. 
Filling of vacancies. 
If one or more cotrustees remain 
in office, a vacancy in a trusteeship need not be filled. 
A 
vacancy in a trusteeship must be filled if the trust has no 
remaining trustee. 
3. 
Order of priority; noncharitable trust. 
A vacancy in a 
trusteeship of a 
noncharitable trust that is required to be 
filled must be filled in the following order of priority: 
A. 
By a person designated in the terms of the trust to act 
as successor trustee; 
Page l30-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
B. 
By a person appointed by unanimous agreement of the 
gualified beneficiaries; or 
C. 
By a person appointed by the court. 
4. 
Order of priority; charitable trust. 
A vacancy in a 
trusteeship of a charitable trust that is reguired to be filled 
must be filled in the following order of priority: 
A. 
By a person designated in the terms of the trust to act 
as successor trustee; 
B. 
By a person appointed by unanimous agreement of the 
charitable organizations expressly designated to receive 
distributions under the terms of the trust if the Attorney 
General concurs in the appointment; or 
C. 
By a person appointed by the court. 
5. 
Appointment by court. 
Whether or not a vacancy in a 
trusteeship exists or is reguired to be filled, the court may 
appoint an additional trustee or special fiduciary whenever the 
court considers the appointment necessary for the administration 
of the trust. 
UNIFORM COMMENT 
This section lists the ways in which a trusteeship becomes vacant 
and the rules on ,,£illing the vacancy. 
See also Sections 701 
(accepting or declining trusteeship), 705 (resignation), and 706 
(removal). Good drafting practice suggests that the terms of the 
trust deal expressly with the problem of vacancies, 
naming 
successors and specifying the procedure for filling vacancies. 
This section applies only if the terms of the trust fail to 
specify a procedure. 
The disqualification of 
a 
trustee referred to in subsection 
(a)(4) would include a financial institution whose right to 
engage in trust business has 
been 
revoked or 
removed. 
Such 
disqualification might also occur if the trust's principal place 
of administration is transferred to a jurisdiction in which the 
trustee, whether an individual or institution, is not qualified 
to act. 
Subsection (b) provides that a vacancy in the cotrusteeship must 
be filled only if the trust has no remaining trustee. If a 
vacancy 
in 
the 
cotrusteeship 
is 
not 
filled, 
Section 
authorizes the remaining cotrustees to continue to administer the 
trust. 
However, 
as 
provided 
in 
subsection 
(e), 
the 
court, 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
exercising its inherent equity authority, 
may 
always 
appoint 
additional 
trustees if the 
appointment 
would promote better 
administration of the trust. See Restatement (Third) of Trusts 
Section 
cmt. 
e 
(Tentative Draft No.2, 
approved 
1999); 
Restatement (Second) of Trusts Section 108 cmt. e (1959). 
Subsection (c) provides a procedure for filling a vacancy in the 
trusteeship 
of 
a 
noncharitable 
trust. 
Absent 
an 
effective 
provision in the terms of the trust, subsection (c)(2) permits a 
vacancy in the trusteeship to be filled, without the need for 
court approval, by a person selected by unanimous agreement of 
the qualified beneficiaries. An effective provision in the terms 
of the trust for the designation of a successor trustee includes 
a procedure under which the successor trustee is selected by a 
person designated in those terms. Pursuant to Section 705(a)(1), 
the 
qualified beneficiaries 
may 
also 
receive 
the 
trustee's 
resignation. If a trustee resigns following notice as provided in 
Section 
705, 
the 
trust may 
be 
transferred to 
a 
successor 
appointed pursuant to subsection (c) (2) of this section, all 
without court involvement. 
A nonqualified beneficiary who is 
displeased with the choice of the qualified beneficiaries may 
petition the court for removal of the trustee under Section 706. 
If the qualified beneficiaries fail 
to make 
an appointment, 
subsection (c)(3) authorizes the court to fill the vacancy. In 
making the appointment, the court should consider the objectives 
and probable intention of the settlor, the promotion of the 
proper administration of the trust, and the interests and wishes 
of the beneficiaries. See Restatement (Third) of Trusts Section 
cmt. 
f 
(Tentative Draft No.2, approved 1999); Restatement 
(Second) of Trusts Section 108 cmt. d (1959). 
Subsection (d) specifies a procedure for filling a vacancy in the 
trusteeship 
of 
a 
charitable 
trust. 
Absent 
an 
effective 
designation in the terms of the trust, a successor trustee may be 
36. 
selected by the charitable organizations expressly designated to 
receive distributions in the terms of the trust but only if the 
attorney general 
concurs 
in the 
selection. 
If the 
attorney 
general does not concur in the selection, however, or if the 
trust does not designate a charitable organization to receive 
distributions, the vacancy may be filled only by the court. 
In the case of a revocable trust, the appointment of a successor 
will normally be made directly by the settlor. As to the duties 
of 
a 
successor trustee with respect to the actions of a 
predecessor, see Section 812. 
2001 Amendment. Subsection (d), which creates a procedure for the 
filling of a vacancy in the trusteeship of a charitable trust, 
was added by a 2001 amendment. 
Page l32-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
MAINE COMMENT 
Section 704 fills a void in Maine law, which has no specific 
provisions concerning vacancies in trusteeship. 
In section 704, subsection 4, paragraph B, the phrase "selected 
by" in the Uniform Trust Code was changed to "appointed by 
unanimous agreement of" to conform to the procedure in section 
704, subsection 3, paragraph B for filling a 
vacancy in a 
noncharitable trust. 
This 
seemed 
to provide 
more 
specific 
directions to the charitable beneficiaries, as well. 
§705. 
Resignation of trustee 
1. 
Resignation. 
A trustee may resign: 
A. 
Upon 
at least 
days' 
notice 
to 
the qualified 
beneficiaries, the settlor, if living, and all cotrustees; or 
B. 
With the approval of the court. 
2. 
Approval by court. 
In approving a resignation, the 
court may issue orders and impose conditions reasonably necessary 
for the protection of the trust property. 
3. 
Liability. 
Any liability of a resigning trustee or of 
any sureties on the trustee's bond for acts or omissions of the 
trustee 
is 
not 
discharged 
or 
affected 
by 
the 
trustee's 
resignation. 
UNIFORM COMMENT 
This section rejects the common 
law rule that a trustee may 
resign only with permission of the court, and goes further than 
the Restatements, 
which allow a 
trustee to resign with the 
consent of the beneficiaries. See Restatement (Third) of Trusts 
Section 36 
(Tentative Draft No.2, 
approved 1999); Restatement 
(Second) of Trusts Section 106 
(1959). 
Concluding that the 
default rule ought to approximate standard drafting practice, the 
drafting committee provided in subsection (a) that a trustee may 
resign by giving notice to the qualified beneficiaries, a living 
settlor, and any cotrustee. A resigning trustee may also follow 
the traditional method and resign with approval of the court. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Restatement (Third) of Trusts Section 36 cmt. d (Tentative Draft 
No.2, approved 1999), and Restatement (Second) of Trusts Section 
cmt. b (1959), provide, similar to subsection (c), that a 
resignation does not release the resigning trustee from potential 
liabilities for acts or omissions while in office. The act of 
resignation can give rise to liability if the trustee resigns for 
the purpose of facilitating a breach of trust by a cotrustee. See 
Ream v. Frey, 107 F.3d 147 (3rd Cir. 1997). 
Regarding the residual responsibilities of a resigning trustee 
until the trust property is delivered to a successor trustee, see 
Section 707. 
In the case of a 
revocable trust, because the rights of the 
qualified beneficiaries are subject to the settlor's control (see 
Section 603), 
resignation of the trustee is accomplished by 
giving notice to the settlor instead of the beneficiaries. 
2001 Amendment. 
By 
a 
2001 amendment, 
subsection (a)(l) was 
amended to require that notice of a trustee's resignation be 
given to a living settlor. Previously, notice to a living settlor 
was required for a revocable but not irrevocable trust. Notice to 
the settlor of a revocable trust was required because the rights 
of the qualified beneficiaries, including the right to receive a 
trustee's resignation, are subject to the settlor's exclusive 
control. See Section 603. 
MAINE C<BIENT 
Section 705 fills a void in Maine law, which has no specific 
provisions concerning resignation of a trustee. 
§706. 
Remova1 of trustee 
1. 
Regyest to remove trustee. 
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. 
Remova1 by court. 
The court may remove a trustee if: 
A. 
The trustee has committed a serious breach of trust; 
B. 
Lack of cooperation among cotrustees substantially 
impairs the administration of the trust; 
C. 
Because 
of 
unfitness, 
unwillingness 
or 
persistent 
failure of the trustee to administer the trust effectively, 
Page l34-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the court determines that removal of the trustee best serves 
the interests of the beneficiaries; or 
D. 
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 l?url?ose of the trust, and a 
suitable cotrustee or successor trustee is available. 
3. 
Appropriate relief. 
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 al?propriate relief 
under section 100L subsection 2 as may be necessary to protect 
the trust property or the interests of the beneficiaries. 
UNIFORM COMMKNT 
Subsection (a), contrary to the common law, grants the settlor of 
an irrevocable trust the right to petition for removal of a 
trustee. The right to petition for removal does not give the 
settlor of an irrevocable trust any other rights, such as the 
right to 
an 
annual 
report or to 
receive other 
information 
concerning 
administration 
of 
the 
trust. 
The 
right 
of 
a 
beneficiary to petition for removal does not apply to a revocable 
trust while the settlor has capacity. Pursuant to Section 603(a), 
while a trust is revocable and the settlor has capacity, the 
rights of the beneficiaries 
are 
subject to 
the settlor's 
exclusive control. 
Trustee removal may be regulated by the terms of the trust. See 
Section 105. In fashioning a removal provision for an irrevocable 
trust, the drafter should be cognizant of the danger that the 
trust may be included in the settlor's federal gross estate if 
the settlor retains the power to be appointed as trustee or to 
appoint someone who is not independent. See Rev. Rul. 95-58, 
1995-2 C.B. 191. 
Subsection (b) lists the grounds for removal of the trustee. The 
grounds for removal are similar to those found in Restatement 
(Third) of Trusts Section 37 cmt. 
e 
(Tentative Draft No.2, 
approved 1999). A trustee may be removed for untoward action, 
such as for a serious breach of trust, but the section is not so 
limited. 
A trustee may also be removed under a variety of 
circumstances in which the court concludes that the trustee is 
not best serving the interests of the beneficiaries. The term 
"interests of the beneficiaries" means the beneficial interests 
as provided in the terms of the trust, not as defined by the 
beneficiaries. 
See 
Section 
103(7). 
Removal 
for 
conduct 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
detrimental 
to 
the 
interests 
of 
the 
beneficiaries 
is 
a 
well-established 
standard 
for 
removal 
of 
a 
trustee. 
See 
Restatement (Third) of Trusts Section 37 cmt. d (Tentative Draft 
No.2, approved 1999): Restatement (Second) of Trusts Section 107 
cmt. a (1959). 
Subsection (b)(l), consistent with Restatement (Third) of Trusts 
Section 37 cmt. e and g (Tentative Draft No, 2, approved 1999), 
makes clear that not every breach of trust justifies removal of 
the trustee. The breach must be "serious." A serious breach of 
trust may consist of a single act that causes significant harm or 
involves flagrant misconduct. A serious breach of trust may also 
consist 
of 
a 
series 
of 
smaller 
breaches, 
none 
of 
which 
individually justify removal when considered alone, but which do 
so 
when 
considered 
together. 
A 
particularly 
appropriate 
circumstance justifying removal of the trustee is 
a 
serious 
breach of the trustee's duty to keep the beneficiaries reasonably 
informed of the administration of the trust or to comply with a 
beneficiary's request for information as required by Section 813. 
Failure to comply with this duty may make it impossible for the 
beneficiaries to protect their interests. It may also mask more 
serious violations by the trustee. 
The lack of cooperation among trustees justifying removal under 
subsection (b) (2) need not involve a breach of trust. The key 
factor 
is 
whether 
the 
administration 
of 
the 
trust 
is 
significantly impaired by the trustees' failure to agree. Removal 
is particularly appropriate if the naming of an even number of 
trustees, combined with their failure to agree, has resulted in 
deadlock requiring court resolution. The court may remove one or 
more or all of the trustees. If a cotrustee remains in office 
following 
the 
removal, 
under 
Section 
appointment 
of 
a 
successor trustee is not required. 
Subsection (b)(2) deals only with lack of cooperation among 
cotrustees, 
not 
with 
friction 
between 
the 
trustee 
and 
beneficiaries. Friction between the trustee and beneficiaries is 
ordinarily not a basis for removal. However, 
removal might be 
justified if a communications breakdown is caused by the trustee 
or appears to be incurable. See Restatement (Third) of Trusts 
Section 37 cmt. e (Tentative Draft No.2, approved 1999). 
Subsection (b)(3) authorizes removal for a variety of grounds, 
including unfitness, 
unwillingness, 
or persistent failure 
to 
administer the trust effectively. Removal in any of these cases 
is 
allowed 
only if it best 
serves 
the 
interests 
of 
the 
beneficiaries. 
For 
the 
definition 
of 
"interests 
of 
the 
beneficiaries," see Section 103(7). "Unfitness" may include not 
only mental 
incapacity but also lack of basic ability to 
administer the trust. Before removing a trustee for unfitness the 
Page l36-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
court should consider the extent to which the problem might be 
cured by a delegation of functions the trustee is personally 
incapable of performing. "Unwillingness" includes not only cases 
where 
the 
trustee 
refuses 
to 
act 
but 
also 
a 
pattern of 
indifference to some or all of the beneficiaries. See Restatement 
(Third) of Trusts Section 37 cmt. 
e 
(Tentative Draft No.2, 
approved 1999). A "persistent failure to administer the trust 
effectively" 
might 
include 
a 
long-term pattern of 
mediocre 
performance, such as consistently poor investment results when 
compared to comparable trusts. 
It has traditionally been more difficult to remove a trustee 
named 
by the settlor than a 
trustee named by the court, 
particularly if the settlor at the time of the appointment was 
aware of the trustee's failings. See Restatement (Third) of 
Trusts Section 37 cmt. f (Tentative Draft No.2, approved 1999); 
Restatement (Second) of Trusts Section 107 cmt. f-g (1959). 
Because of the discretion normally granted to a trustee, the 
settlor's confidence in the judgment of the particular person 
whom 
the settlor selected to act as trustee is entitled to 
considerable weight. This deference to the settlor's choice can 
weaken or dissolve if a 
substantial change in the trustee's 
circumstances 
occurs. 
To 
honor 
a 
settlor's 
reasonable 
expectations, subsection (b)(4) lists a substantial change of 
circumstances as a possible basis for removal of the trustee. 
Changed 
circumstances 
justifying removal 
of 
a 
trustee might 
include a substantial change in the character of the service or 
location of 
the 
trustee. 
A corporate 
reorganization of 
an 
institutional trustee is not itself a change of circumstances if 
it does not affect ,the service provided the individual trust 
account. 
Before 
removing 
a 
trustee 
on 
account 
of 
changed 
circumstances, the court must also conclude that removal is not 
inconsistent with a material purpose of the trust, that it will 
best serve 
the interests of 
the beneficiaries, 
and that 
a 
suitable cotrustee or successor trustee is available. 
Subsection (b) (4) also contains a specific but more limited 
application of Section 411. Section 411 allows the beneficiaries 
by unanimous agreement to compel modification of a trust if the 
court 
concludes 
that 
the 
particular 
modification 
is 
not 
inconsistent with a material purpose of the trust. Subsection 
(b)(4) 
of 
this 
section 
similarly 
allows 
the 
qualified 
beneficiaries 
to 
request 
removal 
of 
the 
trustee if the 
designation of the trustee was not a material purpose of the 
trust. Before removing the trustee the court must also find that 
removal will best serve the interests of the beneficiaries and 
that a suitable cotrustee or successor trustee is available. 
Subsection (c) authorizes the court to intervene pending a final 
decision on a request to remove a trustee. Among the relief that 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
the court may order under Section 1001(b) 
is an injunction 
prohibiting the trustee from performing certain acts and the 
appointment of a special fiduciary to perform some or all of the 
trustee's functions. Pursuant to Section 1004, the court may also 
award attorney's fees as justice and equity may require. 
MAINE Cc:MmNT 
Section 706 fills a void in Maine law, which has very limited 
statutory provisions concerning removal of a trustee. 
Former 
Probate Code, section 7 -305 has removal provisions related only 
to the place of administration of a trust moving to another state 
and was repealed as part of the adoption of the Uniform Trust 
Code. 
A number of Maine cases discuss the removal of trustees 
and the provisions of section 706 would provide helpful standards 
to guide trustees, beneficiaries and the courts. 
§707. 
Delivery of property by former trustee 
1. 
Duties of former trustee. 
Unless a cotrustee remains in 
office or the court otherwise orders, 
and until the trust 
property is delivered to the cotrustee, successor trustee or 
other person entitled to it, a trustee who has resigned or been 
removed or disqualified has the duties of a trustee and the 
powers necessary to protect the trust property. 
2. 
Expeditious delivery. 
A trustee who has resigned or 
been 
removed 
or disqualified shall proceed expeditiously to 
deliver the trust property within the trustee's possession to the 
cotrustee, successor trustee or other person entitled to it. 
UNIFORM COMMENT 
This section addresses the continuing authority and duty of a 
resigning or removed trustee. Subject to the power of the court 
to make other arrangements or unless 
a 
cotrustee remains in 
office, a resigning or removed trustee has continuing authority 
until the trust property is delivered to a 
successor. 
If a 
cotrustee remains in office, there is no reason to grant a 
resigning or removed trustee any continuing authority, and none 
is granted under this section. In addition, if a cotrustee 
remains in office, the former trustee need not submit a final 
trustee's report. See Section 8l3(c). 
There is ample 
appointment of 
authority 
a 
special 
in the Uniform Trust Code 
fiduciary, 
an appointment 
Page l38-LR0466(2) 
for the 
which can 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
avoid the need for a resigning or removed trustee to exercise 
residual powers until a successor can take office. See Sections 
704(e) (court may appoint additional trustee or special fiduciary 
whenever court considers appointment necessary for administration 
of trust), 705(b) (in approving resignation, court may impose 
conditions necessary for protection of trust property), 706(c) 
(pending decision on petition for removal, court may order 
appropriate relief), and 1001(b) (5) (to remedy breach of trust, 
court may appoint special fiduciary as necessary to protect trust 
property or interests of beneficiary). 
If the former trustee has died, the Uniform Trust Code does not 
require that the trustee's personal representative windup the 
deceased trustee's administration. Nor is a trustee's conservator 
or 
guardian 
required 
to 
complete 
the 
former 
trustee's 
administration if the trustee's authority terminated due to an 
adjudication 
of 
incapacity. 
However, 
to 
limit 
the 
former 
trustee's liability, the personal representative, conservator or 
guardian may submit a trustee's report on the former trustee's 
behalf as authorized by Section 813 (c). Otherwise, the former 
trustee remains liable for actions taken during the trustee's 
term of office until liability is otherwise barred. 
MAINE COMMENT 
Section 707 fills a void in Maine law, which has no specific 
provisions concerning delivery of property by a former trustee. 
The phrase "the cotrustee" was inserted between "delivered to" 
and "successor trustee" in subsection 1 to make it harmonious 
with subsection 2. 
§708. 
Compensation of trustee 
1. 
Reasonable. 
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. 
A percentage fee is 
allowable under this section only if the fee is reasonable. 
Among the factors a court may consider as guides in determining 
the reasonableness of fees under this section are the following: 
A. 
The time and labor required, the novelty and difficulty 
of the questions involved and the skill requisite to perform 
the service properly: 
B. 
The likelihood, if apparent to the trustee, that the 
acceptance of the particular employment will preclude the 
person employed from other employment; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
C. 
The fee customarily charged in the locality for similar 
services; 
D. 
The amounts involved and the results obtained; 
E. 
The time limitations imposed by the trustee or by the 
circumstances; and 
F. 
The experience, reputation and ability of the person 
performing the services. 
The order of the factors in this subsection does not imply their 
relative importance. 
2. 
Terms of trust. 
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: 
A. 
The duties of the trustees are substantially different 
from those contemplated when the trust was created; or 
B. 
The compensation specified by the terms of the trust 
would be unreasonably low or high. 
3. 
Review: 
refunds if excessive. 
On petition of a 
qualified 
beneficiary, 
after 
notice 
to 
all 
qualified 
beneficiaries, the court may review the reasonableness of the 
compensation 
determined 
by 
the 
trustee 
for 
the 
trustee's 
services. 
A trustee who has received excessive compensation from 
a trust may be ordered to make appropriate refunds. 
UNIFORM COMMENT 
Subsection (a) establishes a standard of reasonable compensation. 
Relevant factors in determining this compensation, as specified 
in the Restatement, include the custom of the community; the 
trustee's skill, experience, and facilities; the time devoted to 
trust duties; the amount and character of the trust property; the 
degree 
of 
difficulty, 
responsibility 
and 
risk 
assumed 
in 
administering the trust, 
including in making discretionary 
distributions; 
the nature and costs of services 
rendered by 
others; 
and the quality of the trustee's performance. 
See 
Restatement (Third) of Trusts Section 38 cmt. c (Tentative Draft 
No.2, approved 1999): Restatement (Second) of Trusts Section 242 
cmt. b (1959). 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
In setting compensation, 
the services actually performed and 
responsibilities 
assumed 
by 
the 
trustee 
should 
be 
closely 
examined. A downward adjustment of fees may be appropriate if a 
trustee has delegated significant duties to agents, such as the 
delegation of investment authority to outside managers. See 
Section 807 (delegation by trustee). On the other hand, a trustee 
with special skills, such as those of a real estate agent, may be 
entitled to extra compensation for performing services that would 
ordinarily be delegated. 
See Restatement (Third) of Trusts 
Section 
cmt. 
d 
(Tentative Draft No.2, 
approved 1999); 
Restatement (Second) of Trusts Section 242 cmt. d (1959). 
Because "trustee" as defined in Section 103(19) includes not only 
an 
indi vidual 
trustee 
but 
also 
cotrustees, 
each 
trustee, 
including a cotrustee, is entitled to reasonable compensation 
under the circumstances. The fact that a trust has more than one 
trustee does not mean that the trustees together are entitled to 
more 
compensation than had either acted alone. 
Nor does the 
appointment of more than one trustee mean that the trustees are 
eligible to receive the compensation in equal shares. The total 
amount of the compensation to be paid and how it will be divided 
depend 
on the totality of the circumstances. 
Factors to be 
considered include the settlor's reasons for naming more than one 
trustee 
and 
the 
level 
of 
responsibility 
assumed 
and 
exact 
services performed by each trustee. Often the fees of cotrustees 
will be in the aggregate higher than the fees for a single 
trustee because of the duty of each trustee to participate in 
administration and not delegate to a cotrustee duties the settlor 
expected the trustees to perform jointly. See Restatement (Third) 
of Trusts Section 38 cmt. 
i 
(Tentative Draft No.2, approved 
1999). The trust may benefit in such cases from the enhanced 
quality 
of 
decision-making 
resulting 
from 
the 
collective 
deliberations of the trustees. 
Financial institution trustees normally base their fees 
on 
published fee schedules. Published fee schedules are subject to 
the same standard of reasonableness under the Uniform Trust Code 
as 
are 
other 
methods 
for 
computing 
fees. 
The 
courts 
have 
generally upheld published fee 
schedules 
but this is not 
automatic. 
Among 
the more litigated topics is the issue of 
termination fees. Termination fees are charged upon termination 
of the trust and sometimes upon transfer of the trust to a 
successor trustee. Factors 
relevant to whether 
the fee is 
appropriate 
include 
the 
actual 
work 
performed; 
whether 
a 
termination fee was authorized in the terms of the trust; whether 
the 
fee 
schedule 
specified 
the 
circumstances 
in 
which 
a 
termination fee would be charged; whether the trustee's overall 
fees for administering the trust from the date of the trust's 
creation, including the termination fee, were reasonable; and the 
general practice in the community regarding termination fees. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 618, L.D. 921 
Because significantly less work is normally involved, termination 
fees are less appropriate upon transfer to a successor trustee 
than upon termination of the trust. For representative cases, see 
Cleveland Trust Co. v. Wilmington Trust Co., 258 A.2d 58 (Del. 
1969); In re Trusts Under Will of Dwan, 311 N.W. 2d 641 (Minn. 
Ct. App. 1985); Mercer v. Merchants National Bank, 298 A.2d 136 
(N.H. 1912); In re Estate of Payson, 562 N.Y.S. 2d 329 (Surr. Ct. 
1990); In re Indenture Agreement of Lawson, 601 A. 
2d 803 (Pa. 
Super. Ct. 1992); In re Estate of Ischy, 415 A.2d 31 (Pa. 1980); 
Memphis Memorial Park v. Planters National Bank, 1986 Tenn. App. 
LEXIS 2918 (May 1, 1986); In re Trust of Sensenbrenner, 252 N.W. 
2d 41 (Wis. 1911). 
This Code does not take a specific position on whether dual fees 
may be charged when a trustee hires its own law firm to represent 
the trust. The trend is to authorize dual compensation as long as 
the overall fees are reasonable. For a discussion, see Ronald C. 
Link, Developments Regarding the Professional Responsibility of 
the Estate Administration Lawyer: The Effect of the Model Rules 
of Professional Conduct, 26 Real Prop. Prob. 
& Tr. J. 1, 22-38 
(1991). 
Subsection (b) permits the terms of the trust to override the 
reasonable compensation standard, subject to the court's inherent 
equity 
power 
to 
make 
adjustments 
downward 
or 
upward 
in 
appropriate 
circumstances. 
Compensation 
prov1s10ns 
should 
be 
drafted with care. Common questions include whether a provision 
in the terms of the trust setting the amount of the trustee's 
compensation is binding on a 
successor trustee, 
whether 
a 
dispositive provision for the trustee in the terms of the trust 
is 
in addition 
to 
or 
in lieu of 
the trustee's 
regular 
compensation, and whether a dispositive provision for the trustee 
is conditional on the person performing services as trustee. See 
Restatement (Third) of Trusts Section 38 cmt. e (Tentative Draft 
No.2, approved 1999); Restatement (Second) of Trusts Section 242 
cmt. f (1959). 
Compensation may be set by agreement. A trustee may enter into an 
agreement 
with 
the 
beneficiaries 
for 
lesser 
or 
increased 
compensation, 
although an agreement increasing compensation is 
not binding on a nonconsenting beneficiary. See Section 11l(d) 
(matters that may be the resolved by nonjudicial settlement). See 
also Restatement (Third) of Trusts Section 38 cmt. f (Tentative 
Draft No.2, 
approved 1999); 
Restatement 
(Second) 
of Trusts 
Section 242 cmt. i 
(1959). A trustee may also agree to waive 
compensation and should do so prior to rendering significant 
services if concerned about possible gift and income taxation of 
the compensation accrued prior to the waiver. 
See Rev. 
Ru1. 
66-161, 1966-1 C.B. 20. See also Restatement (Third) of Trusts 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Section 
cmt. 
g 
(Tentative Draft No.2, 
approved 
1999); 
Restatement (Second) of Trusts Section 242 cmt. j (1959). 
Section 816 (15) grants the trustee authority to fix and pay its 
compensation without the necessity of prior court review, subject 
to the right of a beneficiary to object to the compensation in a 
later judicial proceeding. Allowing the trustee to pay its 
compensation without prior court approval 
promotes efficient 
trust administration but does place a significant burden on a 
beneficiary who believes the compensation is unreasonable. 
To 
provide a beneficiary with time to take action, and because of 
the importance of trustee's fees to the beneficiaries' interests, 
Section 8l3(b) (4) requires a trustee to provide the qualified 
beneficiaries with advance notice of any change in the method or 
rate of the trustee's compensation. Failure to provide such 
advance 
notice 
constitutes 
a 
breach 
of 
trust, 
which, 
if 
sufficiently serious, would justify the trustee's removal under 
Section 706. 
Under Sections 501-502 of the Uniform Principal and Income Act 
(1997), one-half of a trustee's regular compensation is charged 
to 
income 
and 
the 
other half 
to principal. 
Chargeable 
to 
principal are fees for acceptance, distribution, or termination 
of the trust, and fees charged on disbursements made to prepare 
property for sale. 
MAINE C£WMKNT 
This section is a considerable departure from the Uniform Trust 
Code. 
It combines the provisions of the Uniform Trust Code with 
the provisions of prior Maine law addressing trustee compensation 
found in the Probate Code, section 7-205, which was repealed as 
part of the adoption of the Uniform Trust Code. 
Subsection (a) of the Uniform Trust Code, as proposed, required 
the 
trustee 
compensation, 
if not 
specified 
in the 
trust 
instrument, 
to be "reasonable under the circumstances." 
The 
provisions of the former Probate Code, section 7-205 represent an 
attempt to define reasonableness of trustee compensation under 
the circumstances. 
Because these provisions have been widely 
accepted in Maine by trustees, settlors and beneficiaries, they 
were incorporated. 
A new subsection 3 was 
added, 
to preserve the ability of 
qualified trust beneficiaries in Maine to obtain judicial review 
of the reasonableness of trustee compensation as provided in 
former Probate Code, section 7 -206 and the remedy provided in 
former Probate Code, section 7-205. 
Page l43-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
S709. 
Reimbursement of exPenses 
1. 
Reimbursement. 
A trustee is entitled to be reimbursed 
out of the trust property, with interest as appropriate, for: 
A. 
Expenses 
that 
were 
properly 
incurred 
in 
the 
administration of the trust; and 
B. 
To the extent necessary to prevent unjust enrichment of 
the trust, expenses that were not properly incurred in the 
administration of the trust. 
2. 
Advance by trustee. 
An advance by the trustee of money 
for the protection of the trust gives rise to a lien against 
trust property to secure reimbursement with reasonable interest. 
UNIFORM COMMENT 
A trustee has the authority to expend trust funds as necessary in 
the administration of the trust, including expenses incurred in 
the hiring of agents. See Sections 807 (delegation by trustee) 
and 816(15) 
(trustee to pay expenses of administration from 
trust) • 
Subsection (a)(l) clarifies that a 
trustee is entitled to 
reimbursement from the trust for incurring expenses within the 
trustee's authority. The trustee may also withhold appropriate 
reimbursement for expenses ibefore making distributions to the 
beneficiaries. See Restatement (Third) of Trusts Section 38 cmt. 
b (Tentative Draft No.2, approved 1999); Restatement (Second) of 
Trusts Section 244 cmt. b (1959). A trustee is ordinarily not 
entitled to reimbursement for incurring unauthorized expenses. 
Such expenses are normally the personal responsibility of the 
36, 
trustee. 
As 
provided in subsection (a)(2), 
a 
trustee is entitled to 
reimbursement for unauthorized expenses only if the unauthorized 
expenditures benefitted the trust. The purpose of this provision, 
which is derived from Restatement (Second) of Trusts Section 245 
(1959), is not to ratify the unauthorized conduct of the trustee, 
but to prevent unjust enrichment of the trust. Given this 
purpose, a court, on appropriate grounds, may delay or even deny 
reimbursement 
for 
expenses 
which 
benefitted 
the 
trust. 
Appropriate grounds include: (1) whether the trustee acted in bad 
faith in incurring the expense; (2) whether the trustee knew that 
the expense was inappropriate; (3) whether the trustee reasonably 
believed the expense was necessary for the preservation of the 
trust estate; (4) whether the expense has resulted in a benefit; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
and (5) whether indemnity can be allowed without defeating or 
impairing the purposes of the trust. See Restatement (Second) of 
Trusts Section 245 cmt. g (1959). 
Subsection (b) implements Section 802(h)(5), which creates an 
exception to the duty of loyalty for advances by the trustee for 
the protection of the trust if the transaction is fair to the 
beneficiaries. 
Reimbursement under this section may include attorney's fees and 
expenses incurred by the trustee in defending an action. However, 
a trustee is not ordinarily entitled to attorney's fees 
and 
expenses if it is determined that the trustee breached the trust. 
See 3A Austin W. Scott & William F. Fratcher, The Law of Trusts 
Section 245 (4th ed. 1988). 
MAINE COMMENT 
Section 709 
adds specificity to existing Maine 
law. 
Former 
Probate Code, section 7-402, especially subsection (18), which 
was repealed as part of the adoption of the Uniform Trust Code, 
authorizes the trustee to expend money for the benefit of the 
trust and subsection (18) gives the trustee a lien on trust 
assets to secure any such expenditures. 
CHAPTER 8 
DUTIES AND POWERS OF TRUSTEE 
UNIFORM COMMENT 
This article states the fundamental duties of a trustee and lists 
the trustee's powers. The duties listed are not new, but how the 
particular duties are formulated and applied has changed over the 
years. This article was drafted where possible to conform with 
the 1994 Uniform Prudent Investor Act, which has been enacted in 
approximately two thirds of the States. The Uniform Prudent 
Investor Act prescribes a trustee's responsibilities with respect 
to the management and investment of trust property. The Uniform 
Trust Code also addresses a trustee's duties with respect to 
distribution to beneficiaries. 
Because of the widespread adoption of the Uniform Prudent 
Investor 
Act, it was 
decided not to disassemble 
and fully 
integrate the Prudent Investor Act into the Uniform Trust Code. 
Instead, States enacting the Uniform Trust Code are encouraged to 
recodify their version of the Prudent Investor Act by reenacting 
it as Article 9 of this Code rather than leaving it elsewhere in 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
their statutes. Where the Uniform Trust Code and Uniform Prudent 
Investor Act overlap, States should enact the provisions of this 
article and not enact the duplicative provisions of the Prudent 
Investor Act. Sections of this article which overlap with the 
Prudent Investor Act are Sections 802 (duty of loyalty), 803 
(impartiality), 
(costs of administration), 
(trustee's 
skills), and 807 (delegation). For more complete instructions on 
how to enact the Uniform Prudent Investor Act as part of this 
Code, see the General comment to Article 9. 
All of the provisions of this article may be overridden in the 
terms of the trust except for certain aspects of the trustee's 
duty to keep the beneficiaries informed of administration (see 
Section 105(b)(8)-(9», and the trustee's fundamental obligation 
to act in good faith, in accordance with the purposes of the 
trust, and for the benefit of the beneficiaries (see Section 
105(b)(2)-(3». 
SaOI. 
Duty to administer trust 
U:eon 
acce:etance 
of 
a 
trusteeshi:e. 
the 
trustee 
shall 
administer the trust in good faith, in accordance with its terms 
and Eur:eoses 
and thg interests of the beneficiaries and in 
accordance with this Code. 
UHIFORM COMMENT 
This section confirms that a primary duty of a trustee is to 
follow the terms and purposes of the trust and to do so in good 
faith. Only if the terms of a trust are silent or for some reason 
invalid on a particular issue does this Code govern the trustee's 
duties. This section also confirms that a trustee does not have a 
duty to act until the trustee has accepted the trusteeship. For 
the procedure for accepting a trusteeship, see Section 701. 
In administering the trust, the trustee must not only comply with 
this section but also with the other duties specified in this 
article, particularly the obligation not to place the interests 
of others above those of the beneficiaries (Section 802), the 
duty to act with prudence (Section 804), and the duty to keep the 
qualified 
beneficiaries 
reasonably 
informed 
about 
the 
administration of the trust (Section 813). 
While a trustee generally must administer a trust in accordance 
with its terms and purposes, the purposes and particular terms of 
the trust can on occasion conflict. If such a conflict occurs 
because of circumstances not anticipated by the settlor, it may 
be appropriate for the trustee to petition under Section 412 to 
modify or terminate the trust. Pursuant to Section 404, 
the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
trustee is not required to perform a duty 
of the trust if performance would be 
contrary to public policy. 
prescribed by the terms 
impossible, illegal or 
For background on the trustee's duty to administer the trust, see 
Restatement (Second) of Trusts Sections 164-169 (1959). 
MAINE COMMENT 
This section replaces the Probate Code, section 7-301, repealed 
in conjunction with the adoption of the Uniform Trust Code. 
§S02. 
Duty of loyalty 
1. 
Interests of beneficiaries. 
A trustee shall administer 
the trust solely in the interests of the beneficiaries. 
2. 
Voidable transaction; exceptions. 
Subject to the rights 
of persons dealing with or assisting the trustee as provided in 
section 1012, 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 that is 
otherwise affected by a conflict between the trustee's fiduciary 
and personal interests is voidable by a beneficiary affected by 
the transaction unless: 
A. 
The transaction was authorized by the terms of the trust: 
B. 
The transaction was approved by the court: 
C. 
The beneficiary did not commence a judicial proceeding 
within the time allowed by section 1005; 
D. 
The beneficiary consented to the trustee's conduct, 
ratified the 
transaction, 
or 
released the trustee in 
compliance with section 1009: or 
E. 
The transaction involves a contract entered into or 
claim acquired by the trustee before the person became or 
contemplated becoming trustee. 
3. 
Transaction presumed affected by conflict. 
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: 
A. 
The trustee's spouse: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
B. 
The trustee's descendants, siblings or parents, or their 
spouses; 
C. 
An agent or attorney of the trustee; or 
D. 
A corporation or other person or 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. 
Transaction 
between 
trustee 
and 
beneficiary. 
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 
beyond the normal commercial advantage for such a transaction is 
voidable by the beneficiary unless the trustee establishes that 
the transaction was fair to the beneficiary. 
5. 
Opportunity belonging to trust. 
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. Investment. 
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 9. 
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 813 to receive a copy of the 
trustee's annual report of the rate and method by which that 
compensation was determined. 
7. 
Act in best interests of beneficiaries. 
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. 
Page l48-LR0466(2) 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
8. 
Transactions not precluded. 
This section does not 
preclude the following transactions, if fair to the beneficiaries: 
A. 
An agreement between a trustee and a beneficiary 
relating to the appointment or compensation of the trustee: 
B. 
Payment of reasonable compensation to the trustee; 
C. 
A transaction between a trust and another trust or a 
decedent's estate, a conservatorship or a guardianship of 
which the trustee is a fiduciary or in which a beneficiary 
has an interest; 
D. 
A deposit of trust money in a regulated financial 
service institution operated by the trustee; or 
E. 
An advance by the trustee of money for the protection of 
the trust. 
9. Appointment of special fiduciary. 
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. 
UNIFORM COMMENT 
This section addresses the duty of loyalty, perhaps the most 
fundamental 
duty of 
the trustee. 
Subsection 
(a) 
states the 
general principle, which is copied from Restatement (Second) of 
Trusts Section 170(1) (1959). A trustee owes a duty of loyalty to 
the beneficiaries, a principle which is sometimes expressed as 
the obligation of the trustee not to place the trustee's own 
interests over those of the beneficiaries. Most but not all 
violations of the duty of loyalty concern transactions involving 
the trust property, but breaches of the duty can take other 
forms. For a discussion of the different types of violations, see 
George G. 
Bogert & George T. Bogert, The Law of Trusts and 
Trustees Section 543 (Rev. 2d ed. 1993); and 211. Austin W. Scott & 
William F. Fratcher, The Law of Trusts Sections 170-170.24 (4th 
ed. 1987). The "interests of the beneficiaries" to which the 
trustee must be loyal are the beneficial interests as provided in 
the terms of the trust. See Section 103(7). 
The duty of loyalty applies to both charitable and noncharitable 
trusts, even though the beneficiaries of charitable trusts are 
indefinite. In the case of a charitable trust, the trustee must 
administer the trust solely in the interests of effectuating the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
trust's charitable purposes. See Restatement (Second) of Trusts 
Section 379 cmt. a (1959). 
Duty of 
loyalty issues often arise in connection with the 
settlor's designation of the trustee. For example, it is not 
uncommon that the trustee will also be a beneficiary. Or the 
settlor will name a friend or family member who is an officer of 
a 
company in which the settlor owns 
stock. 
In such cases, 
settlors should be advised to consider addressing in the terms of 
the trust how such conflicts are to be handled. Section 105 
authorizes a settlor to override an otherwise applicable duty of 
loyalty in the terms of the trust. Sometimes the override is 
implied. 
The 
grant to 
a 
trustee of 
authority to 
make 
a 
discretionary distribution to 
a 
class 
of beneficiaries that 
includes the trustee implicitly authorizes the trustee to make 
distributions for the trustee's own benefit. 
Subsection 
(b) 
states 
the 
general 
rule 
with 
respect 
to 
transactions involving trust property that are affected by a 
conflict of interest. 
A transaction affected by 
a 
conflict 
between the trustee's fiduciary 
and personal interests is 
voidable by a beneficiary who is affected by the transaction. 
Subsection (b) carries out the "no further inquiry" rule by 
making transactions involving trust property entered into by a 
trustee for the trustee's own personal account voidable without 
further proof. Such transactions are irrebuttably presumed to be 
affected by a conflict between personal and fiduciary interests. 
It is immaterial whether the trustee acts in good faith or pays a 
fair consideration. See Restatement (Second) of Trusts Section 
cmt. b (1959). 
The rule is less severe with respect to transactions involving 
trust property entered into with persons who have close business 
or personal ties with the trustee. 
Under 
subsection (c), 
a 
transaction between a trustee and certain relatives and business 
associates 
is 
presumptively 
voidable, 
not 
void. 
Also 
presumptively voidable are transactions with corporations or 
other enterprises in which the trustee, or a person who owns a 
significant interest in the trustee, has an interest that might 
affect the trustee's best judgment. The presumption is rebutted 
if the trustee establishes that the transaction was not affected 
by a conflict between personal and fiduciary interests. Among the 
factors 
tending to 
rebut 
the 
presumption 
are whether 
the 
consideration was 
fair 
and 
whether 
the other 
terms 
of the 
transaction are similar to those that would be transacted with an 
independent party. 
Even where the presumption under subsection (c) does not apply, a 
transaction may still be 
voided by 
a 
beneficiary if the 
beneficiary proves that a conflict between personal and fiduciary 
Page l50-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
interests existed and that the transaction was affected by the 
conflict. 
The 
right of 
a 
beneficiary to void a 
transaction 
affected by 
a 
conflict of interest is optional. 
If the 
transaction proves profitable to the trust and unprofitable to 
the trustee, the beneficiary will likely allow the transaction to 
stand. 
For 
a 
comparable 
prov~s~on 
regulating 
fiduciary 
investments by national banks, see 12 C.F.R. Section 9.l2(a). 
As provided in subsection (b), no breach of the duty of loyalty 
occurs if the transaction was authorized by the terms of the 
trust or approved by the court, or if the beneficiary failed to 
commence a judicial proceeding within the time allowed or chose 
to ratify the transaction, either prior to or subsequent to its 
occurrence. In determining whether a beneficiary has consented to 
a transaction, the principles of representation from Article 3 
may be applied. 
Subsection (b)( 5), which is derived from Section 3 -713 (1) of the 
Uniform Probate Code, allows a trustee to implement a contract or 
pursue a claim that the trustee entered into or acquired before 
the person became or contemplated becoming trustee. While this 
subsection 
allows 
the 
transaction 
to 
proceed 
without 
automatically being voidable by a beneficiary, the transaction is 
not necessarily free from scrutiny. In implementing the contract 
or pursuing the claim, 
the trustee must still complete the 
transaction in a way that avoids a conflict between the trustee's 
fiduciary 
and personal 
interests. 
Because 
avoiding 
such 
a 
conflict 
will 
frequently 
be 
difficult, 
the 
trustee 
should 
consider petitioning the court to appoint a special fiduciary, as 
authorized by subsection (i), 
to 
work 
out 
the details 
and 
complete the transaction. 
Subsection (d) creates a presumption that a transaction between a 
trustee and a beneficiary not involving trust property is an 
abuse by the trustee of a confidential relationship with the 
beneficiary. This subsection has limited scope. If the trust has 
terminated, there must be proof that the trustee's influence with 
the beneficiary remained. Furthermore, whether or not the trust 
has terminated, there must be proof that the trustee obtained an 
advantage from the relationship. The fact the trustee profited is 
insufficient to show an abuse if a third party would have 
similarly profited in an arm's length transaction. Subsection (d) 
is based on Cal. Probe Code Section16004(c). See also 2A Austin 
W. 
Scott & William F. Fratcher Section 170.25 (4th ed. 1987), 
which states the same principle in a slightly different form: 
"Where he deals directly with the beneficiaries, the transaction 
may stand, but only if the trustee makes full disclosure and 
takes no advantage of his position and the transaction is in all 
respects fair and reasonable." 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Subsection (e), which allows a beneficiary to void a transaction 
entered 
into 
by 
the 
trustee 
that 
involved 
an 
opportunity 
belonging to the trust, is based on Restatement (Second) of 
Trusts Section 170 cmt. k (1959). While normally associated with 
corporations and with their directors and officers, what is 
usually referred to as. the corporate opportunity doctrine also 
applies to other types of fiduciary. The doctrine prohibits the 
trustee's 
pursuit 
of 
certain 
business 
activities, 
such 
as 
entering into a business in direct competition with a business 
owned by the trust, or the purchasing of an investment that the 
facts suggest the trustee was expected to purchase for the trust. 
For discussion of the corporate opportunity doctrine, see Kenneth 
B. Davis, Jr., Corporate Opportunity and Comparative Advantage, 
Iowa L. Rev. 211 (1999); and Richard A. Epstein, Contract and 
Trust in Corporate Law: The Case of Corporate Opportunity, 21 
Del. J. Corp. 
L. 
(1996). 
See also Principles of Corporate 
Governance: Analysis and Recommendations Section 5.05 (American 
Law Inst. 1994). 
Subsection (f) creates an exception to the no further inquiry 
rule for trustee investment in mutual funds. This exception 
applies 
even 
though 
the 
mutual 
fund 
company 
pays 
the 
financial-service 
institution trustee 
a 
fee 
for 
providing 
investment advice and other services, such as custody, transfer 
agent, and distribution, that would otherwise be provided by 
agents of the fund. Mutual funds offer several advantages for 
fiduciary investing. 
By comparison with common trust funds, 
mutual 
fund 
shares 
may 
be 
distributed 
in-kind 
when 
trust 
interests terminate, avoiding liquidation and the associated 
recognition of gain for tax purposes. Mutual funds commonly'offer 
daily pricing, which gives trustees and beneficiaries better 
information about performance. Because mutual funds can combine 
fiduciary and nonfiduciary accounts, they can achieve larger 
size, which can enhance diversification and produce economies of 
scale that can lower investment costs. 
Mutual 
fund 
investment 
also 
has 
a 
number 
of 
potential 
disadvantages. It adds another layer of expense to the trust, and 
it causes the trustee to lose control over the nature and timing 
of transactions in the fund. Trustee investment in mutual funds 
sponsored by the trustee, its affiliate, or from which the 
trustee 
receives 
extra 
fees 
has 
given 
rise 
to litigation 
implicating the trustee's duty of loyalty, the duty to invest 
with 
prudence, 
and 
the 
right 
to 
receive 
only 
reasonable 
compensation. Because financial institution trustees ordinarily 
provide advisory services to and receive compensation from the 
very funds in which they invest trust assets, the contention is 
made that investing the assets of individual trusts in these 
funds is imprudent and motivated by the effort to generate 
additional fee income. Because the financial institution trustee 
Page l52-LR0466(2) 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
often will also charge its regular fee for administering the 
trust, the contention is made that the financial institution 
trustee's total compensation, both direct and indirect, is 
excessive. 
Subsection (f) attempts to retain the advantages of mutual funds 
while at the same time making clear that such investments are 
subject to traditional fiduciary responsibilities. Nearly all of 
the States have enacted statutes authorizing trustees to invest 
in 
funds 
from 
which 
the 
trustee 
might 
derive 
additional 
compensation. Portions of subsection (f) are based on these 
statutes. 
Subsection 
(f) 
makes 
clear 
that 
such 
dual 
investment-fee arrangements are not automatically presumed to 
involve a conflict between the trustee's personal and fiduciary 
interests, but subsection (f) does not otherwise waive or lessen 
a 
trustee's fiduciary obligations. 
The 
trustee, 
in deciding 
whether to invest in a mutual fund, must not place its own 
interests ahead of those of the beneficiaries. The investment 
decision must also 
comply with the enacting jurisdiction's 
prudent investor rule. 
To obtain the protection afforded by 
subsection (f), the trustee must disclose at least annually to 
the beneficiaries entitled to receive a copy of the trustee's 
annual report the rate and method by which the additional 
compensation was 
determined. 
Furthermore, 
the selection of 
a 
mutual fund, 
and the resulting delegation of certain of the 
trustee's functions, may be taken into account under Section 708 
in setting the trustee's regular compensation. See also Uniform 
Prudent Investor Act Sections 7 and 9 and comments; Restatement 
(Third) of Trusts: Prudent Investor Rule Section 227 cmt. m 
(1992). 
Subsection (f) applies whether the services to the fund are 
provided directly by the trustee or by an affiliate. While the 
term "affiliate" is not used in subsection (c), the individuals 
and entities listed there are examples of affiliates. The term is 
also used in the regulations under ERISA. 
An "affiliate" of a 
fiduciary includes (1) any person who directly or indirectly, 
through one or more intermediaries, controls, is controlled by, 
or is under common control with the fiduciary; (2) any officer, 
director, partner, employee, or relative of the fiduciary, and 
any corporation or partnership of which the fiduciary is an 
officer, director or partner. See 29 C.F.R. Section 2510.3-21(e). 
Subsection (g) addresses an overlap between trust and corporate 
law. It is based on Restatement of Trusts (Second) Section 193 
cmt. 
a 
(1959), which provides that "[i]t is the duty of the 
trustee in voting shares of stock to use proper care to promote 
the 
interest 
of 
the 
beneficiary," 
and 
that 
the 
fiduciary 
responsibility of a trustee in voting a control block "is heavier 
than where 
he holds 
only 
a 
small fraction of the shares." 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Similarly, 
the Department of Labor construes ERISA's duty of 
loyalty to make share voting a fiduciary function. See 29 C.F.R. 
Section 2509.94-2. When the trust owns the entirety of the shares 
of a corporation, the corporate assets are in effect trust assets 
that the trustee determines to hold in corporate form. 
The 
trustee may not use the corporate form to escape the fiduciary 
duties of trust law. Thus, for example, a trustee whose duty of 
impartiality 
would 
require 
the 
trustee 
to 
make 
current 
distributions for the support of current beneficiaries may not 
evade that duty by holding assets in corporate form and pleading 
the discretion of corporate directors to determine dividend 
policy. Rather, the trustee must vote for corporate directors who 
will follow a dividend policy consistent with the trustee's 
trust-law duty of impartiality. 
Subsection (h) contains several exceptions to the general duty of 
loyalty, 
which 
apply if the transaction was 
fair 
to 
the 
beneficiaries. Subsection (h)(1)-(2) clarify that a trustee is 
free to contract about the terms of appointment and rate of 
compensation. 
Consistent with Restatement 
(Second) 
of Trusts 
Section 170 cmt. r (1959), subsection (h)(3) authorizes a trustee 
to engage in a transaction involving another trust of which the 
trustee is also trustee, a transaction with a decedent's estate 
or a conservatorship estate of which the trustee is personal 
representative or conservator, or a transaction with another 
trust or other fiduciary relationship in which a beneficiary of 
the trust has an interest. The authority of a trustee to deposit 
funds in a 
financial institution operated by the trustee, as 
provided in subsection (h)(4), is recognized in Restatement 
(Second) 
of Trusts Section 170 cmt. 
m (1959). 
The power to 
deposit 
funds 
in its own institution does not negate the 
trustee's 
responsibility 
to 
invest 
prudently, 
including 
the 
obligation to earn a reasonable rate of interest on deposits. 
Subsection (h) (5) authorizes a trustee to advance money for the 
protection of the trust. Such advances usually are of small 
amounts 
and 
are 
made 
in 
emergencies 
or 
as 
a 
matter 
of 
convenience. Pursuant to Section 709(b), the trustee has a lien 
against the trust property for any advances made. 
MAINE COMMENT 
Section 802, subsection 1 replaces former Probate Code, section 
7-302, subsection (e), repealed in conjunction with the adoption 
of the Uniform Trust Code. 
Section 802, subsection 2 changes Maine law, to the extent that 
Estate of Spear 689 A.2d 590 (Me. 1997) or Probate Code, section 
7-404, repealed in conjunction with the adoption of this Code, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
requires court approval before or after such a transaction in 
every case. 
The trustee' s duty must be primarily construed and understood 
within the context of the written trust document. 
Financial institutions that serve as trustees often have other 
business relationships with trust beneficiaries. 
Subsection 4 is 
not intended to place an undue burden on such trustees to defend 
actions that may be clearly within the 
scope of commercial 
reasonableness and on competitive terms with services offered by 
3rd parties. Therefore, the phrase "beyond the normal commercial 
advantage from such a transaction" was inserted in subsection 4 
after the words "obtains an advantage." This phrase was included 
in an earlier version of the Uniform Trust Code. 
Since a guardian has authority over the finances of its ward if 
no conservator is appointed for the ward, the word "guardianship" 
was added to subsection 8, paragraph C. 
Subsection 9 should not be read to limit the rights of a court to 
authorize a single transaction for a person under a disability, 
including the creation of a trust for such person, pursuant to 
the provisions of the Probate Code, section 5-409. 
SS03. 
Impartiality 
If a trust has 2 or more beneficiaries, the trustee shall 
act impartially in investing, managing and distributing the trust 
property, giving due regard to the beneficiaries' respective 
interests. 
UNIFORM COMMENT 
The duty of impartiality is an important aspect of the duty of 
loyalty. This section is identical to Section 6 of the Uniform 
Prudent Investor Act, except that this section also applies to 
all aspects of trust administration and to decisions by a trustee 
wi th respect to distributions. 
The Prudent Investor Act is 
limited to duties with respect to the investment and management 
of trust property. The differing beneficial interests for which 
the trustee must act impartially include those of the current 
beneficiaries versus those of beneficiaries holding interests in 
the remainder; 
and among those currently eligible to receive 
distributions. In fulfilling the duty to act impartially, the 
trustee 
should 
be 
particularly 
sensitive 
to 
allocation 
of 
receipts and disbursements between income and principal and 
should consider, in an appropriate case, a reallocation of income 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
to the principal account and vice versa, if allowable under local 
law. For an example of such authority, see Uniform Principal and 
Income Act Section 104 (1997). 
The duty to act impartially does not mean that the trustee must 
treat the beneficiaries equally. Rather, the trustee must treat 
the beneficiaries equitably in light of the purposes and terms of 
the trust. A settlor who prefers that the trustee, when making 
decisions, generally favor the interests of one beneficiary over 
those of others should provide appropriate guidance in the terms 
of the trust. See Restatement (Second) of Section 183 cmt. a 
(1959). 
This 
section replaces 
subsection (f), 
which 
adoption of the Uniform 
MAIRE COMMENT 
former 
Probate 
Code, 
section 7-302, 
was 
repealed in conjunction with the 
Trust Code. 
§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. 
UNIFORM COMMENT 
The duty to administer a trust with prudence is a fundamental 
duty of the trustee. This duty does not depend on whether the 
trustee receives compensation. The duty may be altered by the 
terms of the trust. See Section 105. This section is similar to 
Section 2(a) of the Uniform Prudent Investor Act and Restatement 
(Third) of Trusts: Prudent Investor Rule Section 227 (1992). 
The language of this section diverges from the language of the 
previous Restatement. 
The prior Restatement can be read as 
applying the same standard -
"man of ordinary prudence would 
exercise in dealing with his own property" -
regardless of the 
type or purposes of the trust. See Restatement (Second) of Trusts 
Section 174 cmt. a (1959). This section appropriately bases the 
standard 
on 
the 
purposes 
and 
other 
circumstances 
of 
the 
particular trust. 
A settlor who wishes to modify the standard of care specified in 
this section is free to do so, but there is a limit. Section 1008 
Page l56-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
prohibits a settlor from exculpating a trustee from liability for 
breach 
of 
trust 
committed 
in 
bad 
faith 
or 
with 
reckless 
indifference to the purposes of the trust or to the interests of 
the beneficiaries. 
§805. 
Costs of administration 
In administering a trust. the trustee may incur only costs 
that are 
reasonable in relation to the trust property, 
the 
purposes of the trust and the skills of the trustee. 
UNIFORM COMMENT 
This section is similar to Section 7 of the Uniform Prudent 
Investor Act and is consistent with the rules concerning costs in 
Restatement 
(Third) 
of Trusts: 
Prudent Investor Rule Section 
227(c)(3) (1992). For related rules concerning compensation and 
reimbursement of trustees, see Sections 708 and 709. The duty not 
to incur unreasonable costs applies when 
a 
trustee decides 
whether and how to delegate to agents, 
as well as to other 
aspects of trust administration. In deciding whether and how to 
delegate, 
the trustee must 
be alert to balancing projected 
benefits against the likely costs. To protect the beneficiary 
against excessive costs, the trustee should also be alert to 
adjusting compensation for 
functions which the trustee has 
delegated to others. The obligation to incur only necessary or 
appropriate costs of administration has long been part of the law 
of trusts. See Restatement (Second) of Trusts Section 188 (1959). 
MAINE CCMmNT 
Section 805 replaces the former Probate Code, section 7-302, 
subsection 
(g), 
which 
was 
repealed in conjunction with the 
adoption of the Uniform Trust Code. 
§806. 
Trustee's skills 
A trustee who has special skills or expertise, or is named 
trustee in reliance upon the trustee's representation that the 
trustee has special skills or expertise, shall use those special 
skills or expertise. 
UNIFORM COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This section is similar to Section 7 -302 of the Uniform Probate 
Code, 
Restatement 
(Second) 
of Trusts Section 174 
(1959), 
and 
Section 2(f) of the Uniform Prudent Investor Act. 
MAINE COMMENT 
Section 806 replaces the former Probate Code, section 7-302, 
subsection (b), paragraph (6), which was repealed in conjunction 
with the adoption of the Uniform Trust Code. 
§807. 
Delegation by trustee 
1. 
Delegation. 
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: 
A. 
Selecting an agent; 
B. 
Establishing the scope and terms of the delegation, 
consistent with the purposes and terms of the trust; and 
C. 
Periodically reviewing the agent's actions in order to 
monitor the agent's performance and compliance with the 
terms of the delegation. 
2. 
Agent"s duty to trust. 
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. 
Liability of trustee. 
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. 
36. 
4. 
Agent 
submits to jurisdiction. 
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. 
5. 
Review of agent. 
Upon 
petition of 
a 
qualified 
beneficiary, after notice to all qualified beneficiaries, the 
trustee and the agent of the trustee, the court may review the 
employment of any agent by the trustee and the reasonableness of 
the agent's 
compensation. 
Any 
agent 
who 
is found 
to have 
received excess compensation from a trust may be ordered to make 
appropriate refunds. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
This section permits trustees to delegate various aspects of 
trust administration to agents, subject to the standards of the 
section. The language is derived from Section 9 of the Uniform 
Prudent Investor Act. See also John H. Langbein, Reversing the 
Nondelegation Rule of Trust-Investment Law, 59 Mo. L. Rev. 105 
(1994) (discussing prior law). 
This 
section encourages 
and protects 
the trustee in making 
delegations appropriate to the facts and circumstances of the 
particular trust. Whether a particular function is delegable is 
based on whether it is a function that a prudent trustee might 
delegate under similar circumstances. 
For example, delegating 
some administrative and reporting duties might be prudent for a 
family trustee but unnecessary for a corporate trustee. 
This 
section applies 
only to delegation to agents, 
not to 
delegation 
to 
a 
cotrustee. 
For 
the 
provision 
regulating 
delegation to a cotrustee, see Section 703(e). 
MAINE COMMENT 
Section 807 of the Uniform Trust Code is enacted as section 807, 
subsections 1 to 4 of the Maine Uniform Trust Code. 
These 
replace former Probate Code, section 7-302, subsection (i), which 
is repealed in conjunction with the adoption of the Uniform Trust 
Code. 
Subsection 5 was added to preserve existing Maine law. 
The 
Probate Code, section 7-205, which contains provisions for review 
of the propriety of fees charged by agents of a trustee, is 
repealed in conjunction with adoption of this Code. 
SODa. 
Powers to direct 
1. Revocable trust: direction of settlor. While a trust is 
revocable, the trustee may follow a direction of the settlor that 
is contrary to the terms of the trust. 
2. 
Directions of person conferred power to direct trustee. 
If the terms of a trust confer upon a person other than the 
settlor of a revocable trust power to direct certain actions of 
the trustee, the trustee shall act in accordance with an exercise 
of the power unless the attempted exercise is manifestly contrary 
to the terms of the trust or the trustee knows the attempted 
exercise would constitute a serious breach of a fiduciary duty 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
that the' person holding the power owes to the beneficiaries of 
the trust. 
3. 
Modification or termination. 
The terms of a trust may 
confer upon a trustee or other person a power to direct the 
modification or termination of the trust. 
4. 
Power to direct; fiduciary duty. 
A person, other than a 
beneficiary, who holds a power to direct is presumptively a 
fiduciary who, as such, is required to act in good faith with 
regard to the purposes of the trust and the interests of the 
beneficiaries. The holder of a power to direct is liable for any 
loss that results from breach of a fiduciary duty. 
UNIFORM COMMENT 
Subsection 
(a) 
is 
an 
application 
of 
Section 
603(a), 
which 
provides that a revocable trust is subject to the settlor's 
exclusive control as long as the settlor has capacity. Because of 
the settlor's degree of control, subsection (a) of this section 
authorizes a trustee to rely on a direction from the settlor even 
if it is contrary to the terms of the trust. The direction of the 
settlor 
might 
be 
regarded 
as 
an 
amendment 
of 
the 
trust. 
Subsection 
(a) 
has 
limited 
application 
upon 
a 
settlor's 
incapacity. An agent, conservator, or guardian has authority to 
give the trustee instructions contrary to the terms of the trust 
only if the agent, conservator, or guardian succeeds to the 
settlor's powers with respect to revocation, 
amendment, 
or 
distribution as provided in Section 602(e). 
Subsections 
(b)-(d) 
ratify the use 
of trust protectors 
and 
advisers. 
Subsections 
(b) 
and 
(d) 
are 
based 
in paFt 
on 
Restatement (Second) of Trusts Section 185 (1959). Subsection (c) 
is similar to Restatement 
(Third) 
of Trusts Section 64(2) 
(Tentative Draft No.3, approved 2001). "Advisers" have long been 
used for certain trustee functions, such as the power to direct 
investments or manage a closely-held business. "Trust protector," 
a term largely associated with offshore trust practice, is more 
recent 
and 
usually 
connotes 
the 
grant 
of 
greater 
powers, 
sometimes including the power to amend or terminate the trust. 
Subsection (c) ratifies the recent trend to grant third persons 
such broader powers. 
A power to direct must be distinguished from a veto power. A 
power to direct involves action initiated and within the control 
of a third party. The trustee usually has no responsibility other 
than to carry out the direction when made. But if a third party 
holds a veto power, the trustee is responsible for initiating the 
decision, subject to the third party's approval. A trustee who 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
administers a trust subject to a veto power occupies a position 
akin to that of 
a 
cotrustee and is responsible for taking 
appropriate action if the third party's refusal to consent would 
result in a serious breach of trust. See Restatement (Second) of 
Trusts Section 185 cmt. 
g 
(1959); Section 703(g)(duties of 
cotrustees}. 
Frequently, 
the 
person 
holding 
the 
power 
is directing 
the 
investment of the holder's 
own beneficial interest. 
Such 
self-directed accounts are particularly prevalent among trusts 
holding interests in employee benefit plans or 
individual 
retirement accounts. See ERISA Section 404(c} (29 U.S.C. Section 
1104(c)}. But for the type of donative trust which is the primary 
focus 
of this Code, 
the holder of the 
power to direct is 
frequently acting on behalf of others. In that event and as 
provided in subsection (d), the holder is presumptively acting in 
a fiduciary capacity with respect to the powers granted and can 
be held liable if the holder's conduct constitutes a breach of 
trust, whether through action or inaction. 
Like a trustee, 
liabili ty cannot be imposed if the holder has not accepted the 
grant of the power either expressly or informally through 
exercise of the power. See Section 701. 
Powers to direct are most effective when the trustee is not 
deterred from exercising the power by fear of possible liability. 
On the other hand, the trustee does have overall responsibility 
for seeing that the terms of the trust are honored. For this 
reason, 
subsection 
(b) 
imposes 
only 
minimal 
oversight 
responsibility on the trustee. A trustee must generally act in 
accordance with the direction. A trustee may refuse the direction 
only if the attempted exercise would be manifestly contrary to 
the 
terms of the trust or the trustee 
knows 
the attempted 
exercise would constitute a serious breach of a fiduciary duty 
owed by the holder of the power to the beneficiaries of the trust. 
The provisions of this section may be altered in the terms of the 
trust. See Section 105. A settlor can provide that the trustee 
must accept the decision of the power holder without question. Or 
a settlor could provide that the holder of the power is not to be 
held to the standards of a fiduciary. A common technique for 
assuring that a settlor continues to be taxed on all of the 
income of an irrevocable trust is for the settlor to retain a 
nonfiduciary power of administration. See I.R.C. Section 675(4}. 
S809. 
Control and protection of trust property 
A trustee shall take reasonable steps to take control of and 
protect the trust property. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
This section codifies the substance of Sections 175 and 176 of 
the Restatement (Second) of Trusts (1959). The duty to take 
control of and safeguard trust property is an aspect of the 
trustee's duty of prudent administration as provided in Section 
804. See also Sections 816(1) (power to collect trust property), 
816(11) (power to insure trust property), and 816(12) (power to 
abandon trust property). The duty to take control normally means 
that the trustee must take physical possession of tangible 
personal property and securities belonging to the trust, and must 
secure payment of any choses in action. See Restatement (Second) 
of Trusts Section 175 cmt. a, c & d (1959). This section, like 
the other sections in this article, is subject to alteration by 
the terms of the trust. See Section 105. For example, the settlor 
may provide that the spouse may occupy the settlor's former 
residence rent free, in which event the spouse's occupancy would 
prevent the trustee from taking possession. 
§OIO. 
Record keeping and identification of trust property 
1. 
Adequate records of administration. 
A trustee shall 
keep adequate records of the administration of the trust. 
2. 
Separation of property. 
A trustee shall keep trust 
property separate from the trustee's own property. 
3. 
Interest of trust. 
records. 
Except 
as 
otherwise 
provided in subsection 4, a trustee not subject to federal or 
state banking regulation 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 to whom the trustee has delivered the 
property. 
4. 
Two or more trusts. 
If the trustee maintains records 
clearly indicating the respective interests, a trustee may invest 
as a whole the property of 2 or more separate trusts. 
UNIFORM COMMENT 
The duty to keep adequate records stated in subsection (a) is 
implicit in the duty to act with prudence (Section 804) and the 
duty 
to 
report 
to 
beneficiaries 
(Section 
8l3). 
For 
an 
application, see Green v. Lombard, 343 A. 2d 905, 911 (Md. Ct. 
Spec. 
App. 
1975). 
See also Restatement 
(Second) 
of Trusts 
Sections 172, 174 (1959). 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The duty to earmark trust assets and the duty of a trustee not to 
mingle the assets of the trust with the trustee's own are closely 
related. Subsection (b), which addresses the duty not to mingle, 
is derived from Section 179 of the Restatement (Second) of Trusts 
(1959) • 
Subsection (c) 
makes 
the requirement that assets be 
earmarked more precise than that articulated in Restatement 
(Second) Section 179 by requiring that the interest of the trust 
must appear in the records of a third party, such as a bank, 
brokerage firm, or transfer agent. Because of the serious risk of 
mistake or misappropriation even if disclosure is made to the 
beneficiaries, showing the interest of the trust solely in the 
trustee's 
own 
internal 
records 
is 
insufficient. 
Section 
816(7) (B), which allows a trustee to hold securities in nominee 
form, is not inconsistent with this requirement. While securities 
held in nominee form are not specifically registered in the name 
of the trustee, they are properly earmarked because the trustee's 
holdings 
are 
indicated 
in 
the 
records 
maintained 
by 
an 
independent party, such as in an account at a brokerage firm. 
Earmarking is not practical for all types of assets. With respect 
to assets not subject to registration, such as tangible personal 
property and bearer bonds, arranging for the trust's ownership 
interest 
to 
be 
reflected 
on 
the 
records 
of 
a 
third-party 
custodian would not be feasible. For this reason, subsection (c) 
waives separate recordkeeping for these types of assets. Under 
subsection (b), however, the duty of the trustee not to mingle 
these or any other trust assets with the trustee's own remains 
absolute. 
Subsection (d), following the lead of a number of state statutes, 
allows a trustee to use the property of two or more trusts to 
make joint investments, even though under traditional principles 
a joint investment would violate the duty to earmark. A joint 
investment frequently is more economical than attempting to 
invest the funds of each trust separately. Also, the risk of 
misappropriation or mistake is less when the trust property is 
invested jointly with the property of another trust than when 
pooled with the property of the trustee or other person. 
MAINE COMMENT 
Section 810, subsection 3 of the Uniform Trust Code was amended 
to insert the clause "not subject to federal or state banking 
regulation." 
The Uniform Comment on subsection (c) is too broad. 
A bank trustee that registers securities in the name of a nominee 
will 
not 
cause 
any particular fiduciary 
relationship to 
be 
reflected in the records of a 3rd party. 
If an individual 
trustee 
trades 
through 
a 
broker /dealer, 
the 
name 
on 
the 
Page l63-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
broker/dealer account will ordinarily not be the trust's name, as 
the 
Uniform 
Comment 
contemplates. 
The 
absence 
of 
3rd-party 
designation in corporate trustee situations has not historically 
caused problems, and subsection 3 should not require it. 
The clause "to whom the trustee has delivered the property" was 
added at the end of 3 to provide clarity. 
§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. 
UNIFORM COMMENT 
This section codifies the substance of Sections 177 and 178 of 
the Restatement 
(Second) 
of Trusts 
(1959). It may 
not be 
reasonable to enforce a claim depending upon the likelihood of 
recovery and the cost of suit and enforcement. It might also be 
reasonable to settle an action or suffer a default rather than to 
defend an action. 
See also Section 816(14) 
(power to pay, 
contest, settle, or release claims). 
§812. 
Collecting trust property 
A trustee shall take reasonable steps: 
1. 
Compel delivery. 
To compel a former trustee or other 
person to deliver trust property to the trustee: and 
2. 
Redress breach. 
To redress a breach of trust known to 
the trustee to have been committed by a former trustee. 
UNIFORM COMMENT 
This section is a specific application of Section 811 on the duty 
to enforce claims, which includes a claim for trust property held 
by a former trustee or others, and a claim against a predecessor 
trustee for breach of trust. The duty imposed by this section is 
not absolute. Pursuit of a claim is not required if the amount of 
the claim, costs of suit and enforcement, and likelihood of 
recovery, 
make 
such 
action 
uneconomic. 
Unlike 
Restatement 
(Second) of Trusts Section 223 (1959), this section only requires 
a successor trustee to redress breaches of trust "known" to have 
been committed by the predecessor. For the definition of "know," 
see Section 104. Limiting the successor's obligation to known 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
breaches is a common feature of state trust statutes. See, e.g., 
Mo. Rev. Stat. Section 456.187.2. 
As authorized by Section 1009, the beneficiaries may relieve the 
trustee from potential liability for failing to pursue a claim 
against 
a 
predecessor trustee or other person holding trust 
property. The obligation to pursue a predecessor trustee can also 
be addressed in the terms of the trust. See Section 105. 
MAINE COMMENT 
Section 812 was divided into subsections to clarify the substance 
of the section. 
§813. 
Duty to infonm and report 
1. 
Inform beneficiaries. 
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 a request 
is unreasonable under the circumstances, a trustee shall promptly 
respond 
to 
a 
qualified beneficiary's 
request 
for 
trustee's 
reports 
and 
other 
information 
reasonably 
related 
to 
the 
administration of the trust. 
2. 
Information. 
A trustee: 
A. 
Upon request of a beneficiary, shall promptly furnish to 
the beneficiary a copy of the trust instrument; 
B. 
Within 60 days after accepting a trusteeship, shall 
notify the qualified beneficiaries of the acceptance and of 
the trustee's name, address and telephone number; 
c. 
Wi thin 60 days after the date the trustee acquires 
knowledge of the creation of an irrevocable trust, or the 
date 
the 
trustee 
acquires 
knowledge 
that 
a 
formerly 
revocable trust has become irrevocable, whether by the death 
of the settlor or otherwise, shall notify the qualified 
beneficiaries of the trust's existence, of the identity of 
the settlor or settlors, of the right to request a copy of 
the trust instrument and of the right to a trustee's report 
as provided in subsection 3; and 
D. 
Shall notify the qualified beneficiaries in advance of 
any 
change 
in 
the 
method 
or 
rate 
of 
the 
trustee' s 
compensation. 
Page l65-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
3. 
Report. 
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 and 
tax bases. 
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 of 
a deceased trustee or a conservator of the estate or, if no 
conservator has been appointed, a guardian of an incapacitated 
trustee may send qualified beneficiaries a report on behalf of a 
deceased or incapacitated trustee. 
4. 
Waiver. 
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. 
UNIFORM COMMENT 
The duty to keep the beneficiaries reasonably informed of the 
administration of the trust is a fundamental duty of a trustee. 
For the common law duty to keep the beneficiaries informed, see 
Restatement (Second) of Trusts Section 173 (1959). This section 
makes the duty to keep the beneficiaries informed more precise by 
limiting it to the qualified beneficiaries. For the definition of 
qualified beneficiary, see Section 103(12). The result of this 
limitation is that the information need not be furnished to 
beneficiaries with remote remainder interests unless they have 
filed a specific request with the trustee. See Section 110(a) 
(request for notice). 
For the extent to which a settlor may waive the requirements of 
this section in the terms of the trust, see Section 105(b)(B)-(9). 
The trustee is under 
a 
duty to communicate to 
a 
qualified 
beneficiary information about the administration of the trust 
that is reasonably necessary to enable the beneficiary to enforce 
the beneficiary's rights and to prevent or redress a breach of 
trust. See Restatement (Second) of Trusts Section 173 cmt. 
c 
(1959). Ordinarily, the trustee is not under a duty to furnish 
information to a beneficiary in the absence of a specific request 
for the information. See Restatement (Second) of Trusts Section 
cmt. d (1959). Thus, the duty articulated in subsection (a) 
is ordinarily satisfied by providing the beneficiary with a copy 
of the annual report mandated by subsection (c). However, special 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
circumstances may require that the trustee provide additional 
information. For example, if the trustee is dealing with the 
beneficiary on the trustee's own account, the trustee must 
communicate material facts relating to the transaction that the 
trustee knows or should know. See Restatement (Second) of Trusts 
Section 
cmt. 
d 
(1959). 
Furthermore, 
to 
enable 
the 
beneficiaries to take action to protect their interests, the 
trustee may be required to provide advance notice of transactions 
involving real estate, closely-held business interests, and other 
assets that are difficult to value or to replace. See In re Green 
Charitable Trust, 431 N.W. 2d 492 (Mich. Ct. App. 1988); Allard 
v. Pacific National Bank, 663 P.2d 104 (Wash. 1983). The trustee 
is 
justified in not providing 
such 
advance disclosure if 
disclosure is forbidden by other law, as under federal securities 
laws, or if disclosure would be seriously detrimental to the 
interests of the beneficiaries, 
for example, 
when disclosure 
would cause the loss of the only serious buyer. 
Subsection (a) provides a different standard if a beneficiary, 
whether qualified or not, makes a request for information. In 
that 
event, 
the 
trustee 
must 
promptly 
comply 
with 
the 
beneficiary's 
request 
unless 
unreasonable 
under 
the 
circumstances. 
Further 
supporting 
the 
principle 
that 
a 
beneficiary should be allowed to make an independent assessment 
of what information is relevant to protecting the beneficiary's 
interest, subsection (b) (1) requires the trustee on request to 
furnish 
a 
beneficiary with 
a 
complete 
copy of 
the trust 
instrument and not merely with those portions the trustee deems 
relevant to the beneficiary's interest. For a case reaching the 
same result, see Fletcher v. Fletcher, 480 S.E. 2d 488 (Va. Ct. 
App. 1997). Subsection (b)(l) is contrary to Section 7-303(b) of 
the Uniform Probate Code, which provides that "[u]pon reasonable 
request, the trustee shall provide the beneficiary with a copy of 
the terms of the trust which describe or affect his interest. 
The drafters of this Code decided to leave open for further 
consideration by the courts the extent to which a trustee may 
claim attorney-client privilege against a beneficiary seeking 
discovery of attorney-client communications between the trustee 
and the trustee's attorney. The courts are split because of the 
important values that are in tension on this question. 
"The 
[attorney-client] privilege recognizes that sound legal advice or 
advocacy serves public ends and that such advice or advocacy 
depends upon the lawyer's being fully informed by the client." 
Upjohn Co. v. United States, 449 U. S. 383 (1981). On the other 
hand, subsection (a) of this section requires that a trustee keep 
the 
qualified 
beneficiaries 
reasonably 
informed 
about 
the 
administration of the trust and of the material facts necessary 
for them to protect their interests, which could include facts 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
that the trustee has revealed only to the trustee's attorney. 
There is authority for the view that the trustee is estopped from 
pleading attorney-client privilege in such circumstances. In the 
leading case, Riggs National Bank v. Zimmer, 355 A.2d 709, 713 
(Del. Ch. 1976), the court reasoned that the beneficiary, not the 
trustee, is the attorney's client: "As a representative for the 
beneficiaries of the trust which he is administering, the trustee 
is not the real client 
." This beneficiary-as-client 
theory has been criticized on the ground that it conflicts with 
the trustee's fiduciary duty to implement the intentions of the 
settlor, which are sometimes in tension with the wishes of one or 
more beneficiaries. See Louis H. Hamel, Jr., Trustee's Privileged 
Counsel: A Rebuttal, 21 ACTEC Notes 156 (1995); Charles F. Gibbs 
& Cindy 
D. 
Hanson, 
The 
Fiduciary 
Exception to 
a 
Trustee's 
Attorney/Client Privilege, 21 ACTEC Notes 236 (1995). Prominent 
decisions in California and Texas have refused to follow Delaware 
in recognizing an exception for the beneficiary against the 
trustee's attorney-client privilege. Wells Fargo Bank v. Superior 
Court (Boltwood), 990 P.2d 591 (Cal. 2000); Huie v. De Shazo, 922 
S.W. 
2d 
(Tex. 
1996). 
The 
beneficiary-as-client 
theory 
continues to be applied to ERISA trusts. See, e.g., United States 
v. Mett, 178 F.3d 1058, 1062-64 (9th Cir. 1999). However, in a 
pension trust the beneficiaries are the settlors of their own 
trust because 
the trust is funded with their 
own earnings. 
Accordingly, 
in ERISA attorney-client cases "[t]here are no 
competing interests such as other stockholders or the intentions 
of the Settlor." Gibbs 
& Hanson, 21 ACTEC Notes at 238. For 
further discussion of the attorney-client privilege and whether 
there is a duty to disclose to the beneficiaries, see ACTEC 
commentaries 
on 
the 
Model 
Rules 
of 
Professional 
Conduct, 
commentary on MRPC 1.2 (3d ed. 1999); Rust E. Reid et aI., 
Privilege and Confidentiality Issues When a Lawyer Represents a 
Fiduciary, 30 Real Prop. Prob. & Tr. J. 541 (1996). 
To enable beneficiaries to protect their interests effectively, 
it is essential that they know the identity of the trustee. 
Subsection (b)(2) requires that a trustee inform the qualified 
beneficiaries within 
days of the trustee's acceptance of 
office and of the trustee's name, address and telephone number. 
Similar to the obligation imposed on a personal representative 
following admission of the will to probate, subsection (b) (3) 
requires the trustee of a revocable trust to inform the qualified 
beneficiaries of the trust's existence within 60 days after the 
settlor's death. These two duties can overlap. If the death of 
the settlor happens also to be the occasion for the appointment 
of a successor trustee, the new trustee of the formerly revocable 
trust would need to inform the qualified beneficiaries both of 
the trustee's acceptance and of the trust's existence. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Subsection (b)(4) deals with the sensitive issue of changes, 
usually increases, in trustee compensation. Changes can include 
changes in a periodic base fee, rate of percentage compensation, 
hourly rate, termination fee, or transaction charge. Regarding 
the standard for setting trustee compensation, see Section 708 
and comment. 
Subsection 
(c) 
requires 
the trustee to 
furnish the 
current 
beneficiaries and other beneficiaries who request it with a copy 
of a trustee's report at least annually and upon termination of 
the trust. Unless a cotrustee remains in office, the former 
trustee also must provide a 
report to all of the qualified 
beneficiaries upon the trustee's resignation or removal. If the 
vacancy 
occurred 
because 
of 
the 
former 
trustee's 
death 
or 
adjudication of incapacity, 
a 
report may, 
but need not be 
provided 
by 
the 
former 
trustee's 
personal 
representative, 
conservator, or guardian. 
The Uniform Trust Code employs the term "report" instead of 
"accounting" in order to negate any inference that the report 
must be prepared in any particular format or with a high degree 
of formality. The reporting requirement might even be satisfied 
by providing the beneficiaries with copies of the trust's income 
tax returns 
and monthly brokerage account statements if the 
information on those returns and statements is complete and 
sufficiently clear. The key factor is not the format chosen but 
whether 
the 
report 
provides 
the 
beneficiaries 
with 
the 
information necessary to protect their interests. 
For 
model 
account forms, together with practical advice on how to prepare 
reports, see Robert Whitman, Fiduciary Accounting Guide (2d ed. 
1998). 
Subsection 
(d) 
allows 
trustee 
reports 
and 
other 
required 
information to be waived by a beneficiary. A beneficiary may also 
withdraw a consent. However, a waiver of a trustee's report or 
other 
information 
does 
not 
relieve 
the 
trustee 
from 
accountability and potential liability for matters that the 
report or other information would have disclosed. 
MAINE COMMENT 
Section 813 was changed to require that, except for providing a 
copy of the trust to a beneficiary who requests it, the trustee 
is required to send reports and information only to qualified 
beneficiaries. 
The settlor may further restrict the information 
provided to qualified beneficiaries who are 25 years of age or 
older. 
See section 105. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Section 
813, 
subsection 
was 
amended 
to 
require that 
trustee's report include information on the tax basis of 
trust's assets. This information is commonly provided and should 
be required. 
the 
the 
It is to be noted that, while there is an official Maine Probate 
Court form for estate accountings, Form DE-406, this section 
specifically contemplates that there will be no official form for 
trust accountings. In addition, while estate accountings only 
report personal property, 
this section makes 
no distinction 
between real estate and other kinds of property held in trust. 
Trust reports 
should reflect all property, 
whether 
real or 
personal. 
§814. 
Discretionary powers: tax savings 
1. 
Discretionary 
power: 
interests 
of 
beneficiaries. 
Notwithstanding the breadth of discretion granted to a trustee in 
the terms of the trust, including the use of such terms as 
"absolute," "sole" or "uncontrolled," the trustee shall exercise 
a discretionary power in good faith and in accordance with the 
terms and purposes of the trust and the interests of the 
beneficiaries. 
A trustee's 
power 
to 
make 
distributions is 
discretionary notwithstanding terms of the trust providing that 
the trustee "shall" make distributions exercising a discretionary 
power, with or without standards. 
2. 
Discretionacy distributions. 
Subject to subsection 4, 
and unless the terms of the trust expressly indicate that a rule 
in this subsection does not apply: 
. 
A. 
A person other than a settlor who is a beneficiary and 
trustee of a trust that confers on the trustee a power to 
make discretionary distributions to or for the trustee's 
personal benefit may exercise the power only in accordance 
wi th an ascertainable standard relating to the trustee's 
individual health, education, support or maintenance within 
the meaning of the federal Internal Revenue Code of 1986, 
Section 2041(b)(I)(A) or 2514(c)(1), as in effect on July 1, 
2005, or as later amended; and 
B. 
A trustee may not exercise a power to make discretionary 
distributions to satisfy a legal Obligation of support that 
the trustee personally owes another person. 
3. 
Cotrustees; special fiduciary. 
A power whose exercise 
is limited or prohibited by subsection 2 may be exercised by a 
majority of the remaining trustees whose exercise of the power is 
not so limited or prohibited. 
If the power of all trustees is so 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
limited or prohibited, the court may appoint a special fiduciary 
with authority to exercise the power. 
4. 
Exceptions. 
Subsection 2 does not apply to: 
A. 
A power held by the settlor's spouse who is the trustee 
of a trust for which a marital deduction, as defined in the 
federal Internal Revenue Code of 1986, Section 2056(b)(5) or 
2523(e), as in effect on July 1, 2005, or as later amended, 
was previously allowed; 
B. 
Any trust during any period that the trust may be 
revoked or amended by its settlor; or 
C. 
A trust if contributions to the trust qualify for the 
annual exclusion under the federal Internal Revenue Code of 
1986, Section 2503(c) as in effect on July 1, 2005, or as 
later amended. 
UNIFORM COMMENT 
Despite the breadth of discretion purportedly granted by the 
wording of a trust, no grant of discretion to a trustee, whether 
with respect to management or distribution, is ever absolute. A 
grant of discretion establishes a range within which the trustee 
may act. The greater the grant of discretion, the broader the 
range. Pursuant to subsection (a), a trustee's action must always 
be in good faith, with regard to the purposes of the trust, and 
in accordance with the trustee's other duties, 
including the 
obligation to exercise reasonable skill, care and caution. See 
Sections 801 (duty to administer trust) and 804 (duty to act with 
prudence). The standard stated in subsection (a) applies only to 
powers which are to be exercised in a fiduciary as opposed to a 
nonfiduciary capacity. Regarding the standards for exercising 
discretion and construing particular language of discretion, see 
Restatement (Third) of Trusts Section 50 (Tentative Draft No.2, 
approved 
1999); 
Restatement 
(Second) 
of 
Trusts 
Section 
(1959). See also Edward C. Halbach, Jr., Problems of Discretion 
in Discretionary Trusts, 61 Colum. L. Rev. 1425 (1961). An abuse 
by the trustee of the discretion granted in the terms of the 
trust is a breach of trust that can result in surcharge. See 
Section 1001(b) (remedies for breach of trust). 
Subsections (b) through (d) rewrite the terms of a trust that 
might 
otherwise 
result 
in 
adverse 
estate 
and 
gift 
tax 
consequences 
to 
a 
beneficiary-trustee. 
This 
Code 
does 
not 
generally address the subject of tax curative provisions. These 
are provisions that automatically rewrite the terms of trusts 
that might otherwise fail to qualify for probable intended tax 
Page l71-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
benefits. Such provisions, because they apply to all trusts using 
or failing to 
use 
specified language, 
are often overbroad, 
applying not only to trusts intended to qualify for tax benefits 
but also to smaller trust situations where taxes are not a 
concern. Enacting tax-curative provisions also requires special 
diligence 
by state legislatures to 
make 
certain that 
these 
provisions are periodically amended to account for the frequent 
changes in federal tax law. Furthermore, many failures to draft 
with sufficient care may be correctable by including a tax 
savings 
clause 
in 
the 
terms 
of 
the 
trust 
or 
by 
seeking 
modification of the trust using one or more of the methods 
authorized by Sections 411-417. Notwithstanding these reasons, 
the 
unintended 
inclusion 
of 
the 
trust 
in 
the 
beneficiary-trustee's 
gross 
estate 
is 
a 
frequent 
enough 
occurrence that the drafters concluded that it is a topic that 
this Code should address. It is also a topic on which numerous 
States have enacted corrective statutes. 
A tax curative provision differs from a statute such as Section 
of this Code, which allows a court to modify a trust to 
achieve 
an 
intended 
tax 
benefit. 
Absent 
Congressional 
or 
regulatory authority authorizing the specific modification, 
a 
lower 
court 
decree 
in state 
court modifying 
a 
trust is 
controlling for federal estate tax purposes only if the decree 
was issued before the taxing event, which in the case of the 
estate tax would be the decedent's death. See Rev. Rul. 73-142, 
1973-1 C.B. 405. There is specific federal authority authorizing 
modification of trusts for a number of reasons (see comment to 
Section 416) but not on the specific issues addressed in this 
section. 
Subsections 
(b) 
through 
(d), 
by 
interpreting 
the 
original language of the trust instrument in a way that qualifies 
for intended tax benefits, obviates the need to seek a later 
modification of the trust. 
Subsection (b) (1) states the main rule. Unless the terms of the 
trust expressly indicate that the rule in this subsection is not 
to apply, the power to make discretionary distributions to a 
beneficiary-trustee is automatically limited by the requisite 
ascertainable standard necessary to avoid inclusion of the trust 
in the trustee's gross estate or result in a taxable gift upon 
the trustee's release or exercise of the power. Trusts of which 
the trustee-beneficiary is also a settlor are not subject to this 
subsection. 
In such 
a 
case, 
limiting the discretion of a 
settlor-trustee 
to 
an 
ascertainable 
standard 
would 
not 
be 
sufficient to avoid inclusion of the trust in the settlor's gross 
estate. See generally John J. Regan, Rebecca C. Morgan & David M. 
English, Tax, Estate and Financial Planning for the Elderly 
Section 17.07[2)[h). Furthermore, the inadvertent inclusion of a 
trust in a settlor-trustee's gross estate is a far less frequent 
and 
better 
understood 
occurrence 
than 
is 
the 
inadvertent 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
inclusion 
of 
the 
trust 
trustee-beneficiary. 
in 
the 
estate 
of 
a 
nonsettlor 
Subsection (b)(2) addresses a common trap, the trustee who is not 
a 
beneficiary 
but 
who 
has 
power 
to 
make 
discretionary 
distributions 
to 
those 
to 
whom 
the 
trustee 
owes 
a 
legal 
obligation of support. Discretion to make distributions to those 
to whom the trustee owes a legal obligation of support, such as 
to the trustee's minor children, results in inclusion of the 
trust in the trustee's gross estate even if the power is limited 
by an ascertainable standard. The applicable regulation provides 
that 
the 
ascertainable 
standard 
exception 
applies 
only 
to 
distributions 
for 
the 
benefit 
of 
the 
decedent, 
not 
to 
distributions 
to 
those 
to 
whom 
the 
decedent 
owes 
a 
legal 
obligation of support. See Treas. Reg. Section 20.204l-l(c)(2). 
Subsection (c) deals with cotrustees and adopts the common 
planning technique of granting the broader discretion only to the 
independent trustee. Cotrustees who are beneficiaries of the 
trust or who have a legal obligation to support a beneficiary may 
exercise the power only as limited by subsection (b). If all 
trustees 
are 
so 
limited, 
the 
court 
may 
appoint 
a 
special 
fiduciary to make a decision as to whether a broader exercise is 
appropriate. 
Subsection (d) excludes certain trusts from the operation of this 
section. Trusts qualifying for the marital deduction will be 
includable in the surviving spouse's gross estate regardless of 
whether this section applies. Consequently, if the spouse is 
acting as trustee, there is no need to limit the power of the 
spouse-trustee to make 
discretionary distributions 
for 
the 
spouse's benefit. 
Similar reasoning applies to the revocable 
trust, which, because of the settlor's power to revoke, is 
automatically includable in the settlor's gross estate even if 
the settlor is not named as a beneficiary. 
QTIP marital trusts are subject to this section, however. QTIP 
trusts qualify for the marital deduction only if so elected on 
the federal estate tax return. Excluding a QTIP for which an 
election has been made from the operation of this section would 
allow the terms of the trust to be modified after the settlor's 
death. 
By 
not 
making 
the 
QTIP 
election, 
an 
otherwise 
unascertainable standard would be limited. By making the QTIP 
election, the trustee's discretion would not be curtailed. This 
ability to modify a trust depending on elections made on the 
federal estate tax return could itself constitute a taxable power 
of appointment resulting in inclusion of the trust in the 
surviving spouse's gross estate. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The exclusion of the Section 2503(c) minors trust is necessary to 
avoid loss of gift tax benefits. While preventing a trustee from 
distributing trust funds in discharge of a legal obligation of 
support would keep the trust out of the trustee's gross estate, 
such a restriction might result in loss of the gift tax annual 
exclusion for contributions to the trust, even if the trustee 
were otherwise granted unlimited discretion. See Rev. 
Rul. 
69-345, 1969-1 C.B. 226. 
MAINE COMMENT 
The 2nd sentence of section 814, subsection 1 has been added to 
confirm that a trust, the terms of which provide that a trustee 
"shall" make distributions in the exercise of the trustee's 
discretion, as opposed to "may," is nonetheless a discretionary 
trust. Whether the trustee has properly exercised its discretion 
will depend upon a range of factors, including, as mentioned in 
the first sentence of subsection 1, the terms and purposes of the 
trust and the interests of the beneficiaries. 
See Restatement 
(Second) of Trusts Section 155(1) (1959), and Restatement (Third) 
of Trusts Section 50(2) (2003). 
§815. 
General powers of trustee 
1. General powers. 
A trustee, without authorization by the 
court, may exercise: 
A. 
Powers conferred by the terms of the trust: and 
B. 
Except as limited by the terms of the trust: 
(1) 
All 
powers 
over 
the trust property that an 
unmarried competent owner has over individually owned 
property: 
(2) 
Any other powers appropriate to achieve the proper 
investment. management and distribution of the trust 
property: and 
(3) 
Any other powers conferred by this Code. 
2. 
Subject to fiduciary duties. 
The exercise of a power is 
subject to the fiduciary duties prescribed by this chapter. 
UNIFORM COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This section is intended to grant trustees the broadest possible 
powers, but to be exercised always in accordance with the duties 
of the trustee and any limitations stated in the terms of the 
trust. This broad authority is denoted by granting the trustee 
the powers of an unmarried competent owner of individually owned 
property, unlimited by restrictions that might be placed on it by 
marriage, disability, or cotenancy. 
The powers conferred elsewhere in this Code that are subsumed 
under this section include all of the specific powers listed in 
Section 816 as well as other powers described elsewhere in this 
Code. 
See 
Sections 
108(c) 
(transfer 
of 
principal 
place 
of 
administration), 414(a) (termination of uneconomic trust with 
value 
less 
than 
$50,000), 
(combination 
and division of 
trusts), 703(e) (delegation to cotrustee), 802(h) (exception to 
duty of loyalty), 807 (delegation to agent of powers and duties), 
8l0(d) 
(joint investments), 
and Article 
(Uniform Prudent 
Investor Act). The powers conferred by this Code may be exercised 
without court approval. If court approval of the exercise of a 
power is desired, a petition for court approval should be filed. 
A power differs from a duty. A duty imposes an obligation or a 
mandatory prohibition. 
A power, 
on 
the other hand, 
is 
a 
discretion, 
the 
exercise 
of 
which 
is 
not 
obligatory. 
The 
existence of a power, however created or granted, does not speak 
to the question of whether it is prudent under the circumstances 
to exercise the power. 
MAINE COMMENT 
The value of a trust that might be terminated under section 414, 
subsection 1 is increased to $100,000 in the Maine Uniform Trust 
Code. 
§816. 
Specific powers of trustee 
Without limiting the authority conferred by section 815, a 
trustee may: 
1. 
Collect trust 
property. 
Collect trust property and 
accept or reject additions to the trust property from a settlor 
or any other person; 
2. 
Acquire or sell property. 
Acquire or sell property, for 
cash or on credit, at public or private sale; 
3. 
Change character of trust property. 
Exchange t partition 
or otherwise change the character of trust property; 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
4. 
Deposit trust money. 
Deposit trust money in an account 
in a regulated financial service institution; 
5. Borrow money: pledge trust property. Borrow money, with 
or without security, and mortgage or pledge trust property for a 
periOd within or extending beyond the duration of the trust; 
6. 
Continue business or ente~rise. 
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. 
Exercise rights of owner. 
With respect to stocks or 
other securities, 
exercise the rights of an absolute owner, 
including the right to: 
A. 
Vote, or give proxies to vote, with or without power of 
substitution, 
or enter into or continue 
a 
voting trust 
agreement; 
B. 
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; 
C. 
Pay calls, assessments and other sums chargeable or 
accruing against the securities, and sell or exercise stock 
subscription or conversion rights; and 
D. 
Deposit the securities with a depositary or other 
regulated financial service institution; 
8. 
Improvements. 
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 lease. 
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; 
Page l76-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
10. 
Grant or acquire option. 
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. 
Insure the property of the trust against 
damage or loss and insure the trustee, the trustee's agents and 
beneficiaries against liability arising from the administration 
of the trust; 
12. 
Abandon or decline administration. 
Abandon or decline 
to administer property of no value or of insufficient value to 
justify its collection or continued administration; 
13. 
Liability for violation of environmental law. 
With 
respect to possible liability for violation of environmental law: 
A. 
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; 
B. 
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: 
C. 
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; 
D. 
Compromise claims against the trust that may be asserted 
for an alleged violation of environmental law: and 
E. 
Pay the expense of any inspection, review, abatement or 
remedial action to comply with environmental law: 
14. 
Claims against trust. 
Payor 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 
expenses 
of 
administration. 
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; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
16. 
Taxes. 
Exercise elections with respect to federal, 
state and local taxes: 
17. 
Trustee compensation and benefits. 
Select a mode of 
payment under any employee benefit or retirement plan, annuity or 
life insurance payable to the trustee: exercise rights under 
those 
instruments. 
including 
exercise 
of 
the 
right 
to 
indemnification for expenses and against liabilities: and take 
appropriate action to collect the proceeds; 
18. 
Loans. 
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: the 
trustee has a lien on future distributions for repayment of those 
loans; 
19. 
Guarantee loans. 
Pledge trust property to guarantee 
loans made by others to the beneficiary; 
20. 
Appoint trustee in another jurisdiction. 
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. 
Beneficia~ under legal disability or incapacitated. 
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: 
A. 
Paying it to the beneficiary's conservator or, if the 
beneficiary does not have a conservator, the beneficiary's 
guardian; 
B. 
Paying it to the beneficiary's custodian under Title 33, 
chapter 32, which is the Maine Uniform Transfers to Minors 
Act, or to a custodial trustee under the laws of another 
state, and, for that purpose, creating a custodianship or 
custodial trust; 
C. 
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 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
D. 
Managing it as a separate fund on the beneficiary's 
behalf, 
subject to the beneficiary's continuing right to 
withdraw the distribution; 
22. Distribution, division or termination. 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. 
Resolution of dispute. 
Resolve a dispute concerning 
the interpretation of the trust or its administration by 
mediation, arbitration or other procedure for alternative dispute 
resolution; 
24. 
Prosecute or defend. 
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. 
Contracts and other instruments. 
Sign and deliver 
contracts and other instruments that are useful to achieve or 
facilitate the exercise of the trustee's powers; and 
26. 
Wind up administration and distribute. 
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 it. 
UNIFORM COMMENT 
This section enumerates specific powers 
commonly 
included in 
trust instruments and in trustee powers legislation. All the 
36. 
powers listed are subject to alteration in the terms of the 
trust. See Section 105. The powers listed are also subsumed under 
the general authority granted in Section 815(a)(2) to exercise 
all powers over the trust property which an unmarried competent 
owner has over individually owned property, and any other powers 
appropriate to achieve the proper management, investment, and 
distribution of the trust property. The powers listed add little 
of substance not already granted by Section 815 and powers 
conferred elsewhere in the Code, which are listed in the comment 
to Section 815. While the Committee drafting this Code discussed 
dropping the list of specific powers, it concluded that the 
demand of third parties to see language expressly authorizing 
specific transactions justified retention of a detailed list. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
As provided in Section 8l5(b), the exercise of a power is subject 
to fiduciary duties except as modified in the terms of the trust. 
The fact that the trustee has a power does not imply a duty that 
the power must be exercised. 
Many of the powers listed in this section are similar to the 
powers listed in Section 3 of the Uniform Trustees' Powers Act 
(1964). Several are new, however, 
and other powers drawn from 
that Act have been updated. The powers enumerated in this section 
may be divided into categories. Certain powers, 
such as the 
powers to acquire or sell property, borrow money, and deal with 
real estate, securities, and business interests, are powers that 
any individual can exercise. Other powers, such as the power to 
collect trust property, are by their very nature only applicable 
to trustees. Other specific powers, particularly those listed in 
other sections of the Uniform Trust Code, modify a trustee duty 
that 
would 
otherwise 
apply. 
See, 
e.g., 
Sections 
802(h) 
(exceptions to duty of loyalty) and 810(d) (joint investments as 
exception to earmarking requirement). 
Paragraph (1) authorizes a trustee to collect trust property and 
collect or decline additions to the trust property. The power to 
collect trust property is an incident of the trustee's duty to 
administer the trust as provided in Section 801. The trustee has 
a 
duty to enforce claims as provided in Section 811, 
the 
successful prosecution of which can result in collection of trust 
property. Pursuant to Section 812, the trustee also has a duty to 
collect trust property from a 
former trustee or other person 
holding trust property. For an application of the power to reject 
additions to the trust property, see Section 816(13) (power to 
decline property with possible environmental liability). 
Paragraph (2) authorizes a trustee to sell trust property,· for 
cash 
or 
on 
credit, 
at public or 
private sale. 
Under 
the 
Restatement, a power of sale is implied unless limited in the 
terms 
of the trust. 
Restatement 
(Third) 
of Trusts: 
Prudent 
Investor Rule Section 190 (1992). In arranging a sale, a trustee 
must comply with the duty to act prudently as provided in Section 
804. This duty may dictate that the sale be made with security. 
Paragraph (4) authorizes a trustee to deposit funds in an account 
in a regulated financial-service institution. This includes the 
right of a financial institution trustee to deposit funds in its 
own banking department as authorized by Section 802(h)(4). 
Paragraph (5) authorizes a trustee to borrow money. Under the 
Restatement, the sole limitation on such borrowing is the general 
obligation 
to 
invest 
prudently. 
See 
Restatement 
(Third) 
of 
Trusts: 
Prudent Investor Rule Section 191 
(1992). 
Language 
clarifying that the loan may extend beyond the duration of the 
Page l80-LR0466(2) 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
trust was added to negate an older view that the trustee only had 
power to encumber the trust property for the period that the 
trust was in existence. 
Paragraph (6) authorizes the trustee to continue, contribute 
additional capital to, or change the form of a business. Any such 
decision by the trustee must be made in light of the standards of 
prudent investment stated in Article 9. 
Paragraph 
(7), 
regarding 
codifies and amplifies the 
Trusts Section 193 (1959). 
powers 
with respect to securities, 
principles of Restatement (Second) of 
Paragraph (9), authorizing the leasing of property, negates the 
older view, reflected in Restatement (Second) of Trusts Section 
cmt. c (1959), that a trustee could not lease property beyond 
the duration of the trust. Whether a longer term lease is 
appropriate is judged by the standards of prudence applicable to 
all investments. 
Paragraph (10), authorizing a trustee to grant options with 
respect to sales, 
leases or other dispositions of property, 
negates the older view, reflected in Restatement (Second) of 
Trusts Section 190 cmt. k (1959), that a trustee could not grant 
another person an option to purchase trust property. Like any 
other investment decision, whether the granting of an option is 
appropriate is a question of prudence under the standards of 
Article 9. 
Paragraph 
(11), 
authorizing a 
trustee to purchase insurance, 
empowers 
a 
trustee to implement the duty to protect trust 
property. 
See 
Section 
809. 
The 
trustee 
may 
also 
insure 
beneficiaries, 
agents, 
and 
the 
trustee 
against 
liability, 
including liability for breach of trust. 
Paragraph (13) is one of several provisions in the Uniform Trust 
Code 
designed 
to 
address 
trustee 
concerns 
about 
possible 
liability for violations of environmental law. This paragraph 
collects all the powers relating to environmental concerns in one 
place even though some of the powers, such as the powers to pay 
expenses, compromise claims, and decline property, overlap with 
other paragraphs of this section (decline property, paragraph 
(1); compromise claims, paragraph (14); pay expenses, paragraph 
(15». 
Numerous 
States 
have 
legislated 
on 
the 
subject 
of 
environmental liability of fiduciaries. For a representative 
state statute, see Tex. Prop. Code Ann. Section 113.025. See also 
Sections 701(c) (2) (designated trustee may inspect property to 
determine potential violation of environmental or other law or 
for any purpose) and lOl0(b) (trustee not personally liable for 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT itA" to H.P. 678, L.D. 921 
violation of environmental law arising from ownership or control 
of trust property). 
Paragraph (14) authorizes a trustee to pay, contest, settle, or 
release claims. Section 811 requires that a trustee need take 
only "reasonable" steps to enforce claims, meaning that a trustee 
may release a claim not only when it is uncollectible, but also 
when collection would be uneconomic. See Restatement (Second) of 
Trusts Section 192 (1959) (power to compromise, arbitrate and 
abandon claims). 
Paragraph (15), among other things, authorizes a trustee to pay 
compensation to the trustee and agents without prior approval of 
court. Regarding the standard for setting trustee compensation, 
see Section 708. See also Section 709 (repayment of trustee 
expenditures). 
While 
prior 
court 
approval 
is not 
required, 
Section 8l3(b)(4) requires the trustee to inform the qualified 
beneficiaries in advance of a change in the method or rate of 
compensation. 
Paragraph (16) authorizes a trustee to make elections with 
respect to taxes. The Uniform Trust Code leaves to other law the 
issue of whether the trustee, in making such elections, must make 
compensating adjustments in the beneficiaries' interests. 
Paragraph (17) authorizes a trustee to take action with respect 
to employee benefit or retirement plans, or annuities or life 
insurance payable to the trustee. 
Typically, 
these will be 
beneficiary designations which the settlor has made payable to 
the trustee, but this Code also allows the trustee to acquire 
ownership of annuities or life insurance. 
Paragraphs (18) and (19) allow a trustee to make loans to a 
beneficiary or to guarantee loans of a beneficiary upon such 
terms 
and 
conditions 
as 
the 
trustee 
considers 
fair 
and 
reasonable. The determination of what is fair and reasonable must 
be made in light of the fiduciary duties of the trustee and the 
purposes of the trust. Frequently, a trustee will make loans to a 
beneficiary which might be considered less than prudent in an 
ordinary commercial 
sense 
although of great benefit to the 
beneficiary and which help carry out the trust purposes. If the 
trustee 
requires 
security for 
the 
loan to the beneficiary, 
adequate security under this paragraph may consist of a charge on 
the beneficiary's interest in the trust. See Restatement (Second) 
of Trusts Section 
(1959). 
However, 
the interest of 
a 
beneficiary subject to a spendthrift restraint may not be pledged 
as security for a loan. See Section 502. 
Paragraph (20) authorizes the appointment of ancillary trustees 
in jurisdictions in which the regularly appointed trustee is 
Page l82-LR0466(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
unable or unwilling to act. Normally, an ancillary trustee will 
be appointed only when there is a need to manage real estate 
located in another jurisdiction. This paragraph allows the 
regularly appointed trustee to select the ancillary trustee and 
to confer on the ancillary trustee such powers and duties as may 
be necessary. The appointment of ancillary trustees is a topic 
which a settlor may wish to address in the terms of the trust. 
Paragraph (21) authorizes a trustee to make payments to another 
person for the use or benefit of a beneficiary who is under a 
legal disability or who the trustee reasonably believes is 
incapacitated. 
Although 
an 
adult 
relative 
or 
other 
person 
receiving funds is required to spend it on the beneficiary's 
behalf, it is preferable that the trustee make the distribution 
to a person having more formal fiduciary responsibilities. For 
this reason, payment may be made to an adult relative only if the 
trustee does not know of a conservator, guardian, custodian, or 
custodial trustee capable of acting for the beneficiary. 
Paragraph 
(22) 
authorizes 
a 
trustee 
to 
make 
non-pro-rata 
distributions and allocate particular assets in proportionate or 
disproportionate shares. This power provides needed flexibility 
and lessens the risk that a non-pro-rata distribution will be 
treated as a taxable sale. 
Paragraph (23) authorizes a trustee to resolve disputes through 
mediation or arbitration. The drafters of this Code encourage the 
use of such alternate methods for resolving disputes. Arbitration 
is a form of nonjudicial settlement agreement authorized by 
Section 
111. 
In 
representing 
beneficiaries 
and 
others 
in 
connection with arbitration or mediation, the representation 
principles of Article 3 may be applied. Settlors wishing to 
encourage use of alternate dispute resolution may draft to 
provide 
it. 
For 
sample 
language, 
see 
American 
Arbitration 
Association, Arbitration Rules for Wills and Trusts (1995). 
Paragraph (24) authorizes a trustee to prosecute or defend an 
action. As to the propriety of reimbursement for attorney's fees 
and other expenses of an action or judicial proceeding, see 
Section 709 and comment. See also Section 811 (duty to defend 
actions). 
Paragraph 
(26), 
which is 
similar 
to 
Section 
of 
the 
Restatement (Second) of Trusts (1959), clarifies that even though 
the trust has terminated, the trustee retains the powers needed 
to wind up the administration of the trust and distribute the 
remaining trust property. 
MAINE COMMENT 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Section 816 replaces former Probate Code, section 7-402, repealed 
in conjunction with the adoption of this Code. 
Section 816, subsection 13 is consistent with the Probate Code, 
section 1-111. 
§8l7. Distribution upon termination 
1. 
Proposed distribution. 
Upon termination or partial 
termination of a trust, the trustee may send to the beneficiaries 
a proposal for distribution. 
The right of any beneficiary to 
object to the proposed distribution terminates if the beneficiary 
does not notify the trustee of an objection within 30 days after 
the proposal was sent but only if the proposal informed the 
beneficiary of the right to object and of the time allowed for 
objection. 
2. 
Distribution; reasonable reserve. 
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. 
Release from liability invalid. 
A release by a 
beneficiary of a trustee from liability for breach of trust is 
invalid to the extent: 
A. 
It was induced by improper conduct of the trustee; or 
B. 
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. 
UNIFORM COMMENT 
This section contains several provisions governing distribution 
upon termination. Other provisions of the Uniform Trust Code 
relevant to distribution upon termination include Section 816(26} 
(powers 
upon 
termination 
to 
windup 
administration 
and 
distribution), and 1005 (limitation of action against trustee). 
Subsection 
(a) 
is based on Section 3-906(b} 
of the Uniform 
Probate Code. It addresses the dilemma that sometimes arises when 
the 
trustee 
is 
reluctant 
to 
make 
distribution 
until 
the 
beneficiary approves but the beneficiary is reluctant to approve 
until the assets are in hand. The procedure made available under 
Page l84-LR0466(2} 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
subsection 
(a) 
distributions. 
better practice 
beneficiaries to 
facilitates 
the 
making 
of 
non-pro-rata 
However, 
whenever 
practicable it is 
normally 
to obtain the advance written consent of the 
a proposed plan of distribution. 
Subsection 
(b) 
recognizes that upon 
an event terminating or 
partially terminating a trust, expeditious distribution should be 
encouraged to the extent reasonable 
under 
the circumstances. 
However, a trustee is entitled to retain a reasonable reserve for 
payment of debtS I 
expenses l 
and taxes. Sometimes these reserves 
must be quite large, 
for 
example, 
upon the death of the 
beneficiary of a QTIP trust that is subject to federal estate tax 
in the beneficiary's estate. Not infrequently, a substantial 
reserve must be retained until the estate tax audit is concluded 
several years after the beneficiary's death. 
Subsection (c) is an application of Section 1009. Section 1009 
addresses the validity of any type of release that a beneficiary 
might give. Subsection (c) is more limited, dealing only with 
releases given upon termination of the trust. Factors affecting 
the validity of a release include adequacy of disclosure, whether 
the beneficiary had a legal incapacitYI and whether the trustee 
engaged in any improper conduct. See Restatement (Second) of 
Trusts Section 216 (1959). 
CHAPTER 9 
MAINE UNIFORM PRUDENT INVES"l'OR ACT 
PREFATORY NOTE 
Over the quarter century from the late 1960' s the investment 
practices of fiduciaries 
experienced significant change. 
The 
Uniform Prudent Investor Act (UPIA) undertakes to update trust 
investment 
law in 
recognition of the alterations that have 
occurred in investment practice. These changes have occurred 
under the influence of a 
large and broadly accepted body of 
empirical and theoretical knowledge about the behavior of capital 
markets, often described as "modern portfolio theory." 
This Act draws 
upon the revised standards for prudent trust 
investment promulgated by the American Law Institute in its 
Restatement 
(Third) 
of Trusts: 
Prudent Investor 
Rule 
(1992) 
[hereinafter Restatement of Trusts 3d: Prudent Investor Rule; 
also referred to as 1992 Restatement]. 
Objectives of the Act. UPIA makes five fundamental alterations in 
the former criteria for prudent investing. All are to be found in 
the Restatement of Trusts 3d: Prudent Investor Rule. 
COMMll1EE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
(1) The standard of prudence is applied to any investment as part 
of the total portfolio, rather than to individual investments. In 
the trust setting the term "portfolio" embraces all the trust's 
assets. UPIA § 2(b). 
(2) The tradeoff in all investing between risk and return is 
identified as the fiduciary's central consideration. UPIA § 2(b). 
(3) All categoric restrictions on types of investments have been 
abrogated; the trustee can invest in anything that plays an 
appropriate role in achieving the risk/return objectives of the 
trust and that meets the other requirements of prudent investing. 
UPIA § 2(e). 
(4) 
The 
long familiar requirement that fiduciaries diversify 
their investments has been integrated into the definition of 
prudent investing. UPIA § 3. 
(5) The much criticized former rule of trust law forbidding the 
trustee to delegate investment and management functions has been 
reversed. 
Delegation is now permitted, subject to safeguards. 
UPIA § 9. 
Literature. These changes in trust investment law have been 
presaged in an extensive body of practical and scholarly writing. 
See especially the discussion and reporter's notes by Edward C. 
Halbach, Jr., in Restatement of Trusts 3d: Prudent Investor Rule 
(1992); see also Edward C. Halbach, Jr., Trust Investment Law in 
the Third Restatement, 27 Real Property, Probate & Trust J. 407 
(1992); Bevis Longstreth, Modern Investment Management and the 
Prudent 
Man 
Rule 
(1986); 
Jeffrey 
N. 
Gordon, 
The 
Puzzling 
Persistence of the Constrained Prudent Man Rule, 62 N.Y.U.L. Rev. 
(1987); John H. Langbein & Richard A. Posner, The Revolution 
in Trust Investment Law, 
A.B.A.J. 
(1976); Note, The 
Regulation of Risky Investments, 83 Harvard L. Rev. 603 (1970). A 
succinct account of the main findings of modern portfolio theory, 
written for lawyers, is Jonathan R. Macey, 
An Introduction to 
Modern Financial Theory (1991) 
(American College of Trust 
& 
Estate Counsel Foundation). A leading introductory text on modern 
portfolio theory is R.A. Brealey, An Introduction to Risk and 
Return from Common Stocks (2d ed. 1983). 
Legislation. 
Most 
states 
have 
legislation 
governing 
trust-investment law. This Act promotes uniformity of state law 
on the basis of the new consensus reflected in the Restatement of 
Trusts 3d: Prudent Investor Rule. Some states have already acted. 
California, 
Delaware, 
Georgia, 
Minnesota, 
Tennessee, 
and 
Washington 
revised 
their 
prudent 
investor 
legislation 
to 
emphasize the total-portfolio standard of care in advance of the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
1992 Restatement. These statutes are extracted and discussed in 
Restatement of Trusts 3d: Prudent Investor Rule § 227, reporter's 
note, at 60-66 (1992). 
Drafters in Illinois in 1991 worked from the April 1990 "Proposed 
Final Draft" of the Restatement of Trusts 3d: Prudent Investor 
Rule and enacted legislation that is closely modeled on the new 
Restatement. 
ILCS § 5/5 (prudent investing); and § 5/5.1 
(delegation) (1992). As the Comments to this Uniform Prudent 
Investor Act reflect, the Act draws upon the Illinois statute in 
several sections. Virginia revised its prudent investor act in a 
similar vein in 1992. Virginia Code § 26-45.1 (prudent investing) 
(1992). Florida revised its statute in 1993. Florida Laws, ch. 
93-257, 
amending Florida Statutes § 518.11 (prudent investing) 
and creating § 518.112 (delegation). New York legislation drawing 
on the new Restatement and on a preliminary version of this 
Uniform Prudent Investor Act was enacted in 1994. N.Y. Assembly 
Bill 11683-B, Ch. 609 (1994), adding Estates, Powers and Trusts 
Law § 11-2.3 (Prudent Investor Act). 
Remedies. This Act does not undertake to address issues of remedy 
law or the computation of damages in trust matters. Remedies are 
the subject of a 
reasonably distinct body of doctrine. See 
generally Restatement 
(Second) 
of Trusts §§ 
197-226A 
(1959) 
[hereinafter cited as Restatement of Trusts 2d; also referred to 
as 1959 Restatement]. 
Implications for charitable and pension trusts. This Act is 
centrally concerned with the investment responsibilities arising 
under the private gratuitous trust, which is the common vehicle 
for conditioned wealth transfer within the family. Nevertheless, 
the prudent investor rule also bears on charitable and pension 
trusts, among others. "In making investments of trust funds the 
trustee of a charitable trust is under a duty similar to that of 
the trustee of a private trust." Restatement of Trusts 2d § 389 
(1959). The Employee Retirement Income Security Act (ERISA), the 
federal regulatory scheme for pension trusts enacted in 1974, 
absorbs trust-investment law through the prudence standard of 
ERISA § 404(a)(1)(B), 29 U.S.C. § 1104(a). The Supreme Court has 
said: 
"ERISA's 
legislative 
history 
confirms 
that 
the 
Act's 
fiduciary 
responsibility 
prov~s~ons 
'codif [y] 
and 
mak [e] 
applicable to (ERISA] fiduciaries certain principles developed in 
the evolution of the law of trusts. ,It Firestone Tire & Rubber Co. 
v. Bruch, 489 U.S. 101, 110-11 (1989) (footnote omitted). 
Other fiduciary relationships. The Uniform Prudent Investor Act 
regulates the investment responsibilities of trustees. Other 
fiduciaries -
such as executors, conservators, and guardians of 
the property -
sometimes have responsibilities over assets that 
are governed by the standards of prudent investment. It will 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
often be 
appropriate for states to adapt the 
law governing 
investment by trustees under this Act to these other fiduciary 
regimes, taking account of such changed circumstances as the 
relatively short duration of most executorships and the intensity 
of court supervision of conservators and guardians in some 
jurisdictions. 
The present Act does 
not undertake to adjust 
trust-investment law to the special circumstances of the state 
schemes for administering decedents' estates or conducting the 
affairs of protected persons. 
Although the Uniform Prudent Investor Act by its terms applies to 
trusts and not to charitable corporations, the standards of the 
Act can be expected to inform the investment responsibilities of 
directors and officers of charitable corporations. As the 1992 
Restatement observes, "the duties of the members of the governing 
board of a charitable corporation are generally similar to the 
duties of the trustee of a charitable trust." Restatement of 
Trusts 3d: Prudent Investor Rule § 379, Comment b, at 190 (1992). 
See also id. § 389, Comment b, at 190-91 (absent contrary statute 
or other provision, prudent investor rule applies to investment 
of funds held for charitable corporations). 
MAINE COMMENT 
The Uniform Trust Code was drafted to incorporate the Uniform 
Prudent Investor Act, the provisions of which were formerly 
codified as Probate Code, section 7-302, now repealed. 
No change 
in the prior Maine law is intended; the former law is recodified 
here to integrate the body of statutory law of trusts and 
trustees and avoid overlapping provisions that are intended to 
lead to the same results. 
Those subsections of former Probate Code, section 7-302 that do 
not appear in chapter 9 are still the law of Maine, each having 
been replaced with a Uniform Trust Code section appearing in 
chapter 8. 
Former Probate Code, section 7-302, subsection (b), paragraph (6) 
is replaced by Maine Uniform Trust Code, section 806, which is 
nearly identical. 
The words of the section have been changed 
slightly to remain consistent with the use of language in the 
Uniform Trust Code. 
Former Probate Code, section 7-302, subsection (e) is replaced by 
Maine Uniform Trust Code, section 802, which provides detailed 
guidance about what it means for a trustee to manage the trust 
assets solely in the interests of the beneficiaries. 
All of the 
provisions of section 802 seem to be fairly included within the 
COMMI11EE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
broad language of former Probate Code, section 7-302, subsection 
(e) • 
Former Probate Code, section 7-302, subsection (f) is replaced by 
Maine Uniform Trust Code, section 803, which is nearly identical. 
Former Probate Code, section 7-302, subsection (g) is replaced by 
Maine 
Uniform 
Trust 
Code, 
section 
805, 
which 
is 
nearly 
identical. 
The words of the section have been changed slightly 
to remain consistent with the use of language in the Uniform 
Trust Code. 
Former Probate Code, section 7-302, subsection (i) is replaced by 
Maine Uniform Trust Code, section 807, subsections 1 to 4, which 
are nearly identical. 
The words of the section have been changed 
slightly to remain consistent with the use of language in the 
Uniform Trust Code. 
§901. Prudent investor rule 
1. 
Duty to comply. 
Except as otherwise provided in section 
902, 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 this chapter. 
2. 
Altered by provisions of trust. 
The prudent investor 
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. 
UNIFORM COMMENT 
This section imposes the obligation of prudence in the conduct of 
investment functions and identifies further sections of the Act 
that specify the attributes of prudent conduct. 
Origins. The prudence standard for trust investing traces back to 
Harvard College v. Amory, 26 Mass. (9 Pick.) 446 (1830). Trustees 
should "observe how men of prudence, discretion and intelligence 
manage 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 the 
capital to be invested." Id. at 461. 
Prior legislation. The Model Prudent Man Rule Statute (1942), 
sponsored by the American Bankers Association, 
undertook to 
codify the language of the Amory case. See Mayo A. Shattuck, The 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Development of the Prudent Man Rule for Fiduciary Investment in 
the United States in the Twentieth Century, 12 Ohio State L. J. 
491, at 501 (1951); for the text of the model act, which inspired 
many 
state statutes, 
see 
ide 
at 
508-09. 
Another 
prominent 
codification of the Amory standard is Uniform Probate Code § 
7-302 (1969), which provides that "the trustee shall observe the 
standards in dealing with the trust assets that would be observed 
by a prudent man dealing with the property of another ..• 
" 
Congress has 
imposed 
a 
comparable prudence standard for the 
administration of pension and employee benefit trusts in the 
Employee Retirement Income Security Act (ERISA), enacted in 1974. 
ERISA § 404(a)(1)(B), 
U.S.C. § 1l04(a), provides that "a 
fiduciary shall discharge his duties with respect to a plan 
solely in the interest of the participants and beneficiaries and 
with the care, skill, prudence, 
and diligence under the 
circumstances then prevailing that a prudent man acting in a like 
capacity and familiar with such matters would use in the conduct 
of an enterprise of like character and with like aims ..•. " 
Prior Restatement. 
The Restatement of Trusts 2d (1959) also 
tracked the language of the Amory case: "In making investments of 
trust funds the trustee is under a duty to the beneficiary ••. to 
make such investments and only such investments as a prudent man 
would make of his own property having in view the preservation of 
the estate and the amount and regularity of the income to be 
derived .••• " Restatement of Trusts 2d § 227 (1959). 
Objective standard. 
The concept of prudence in the judicial 
op1n1ons 
and 
legislation 
is 
essentially 
relational 
or 
comparative. It resembles in this respect the "reasonable person" 
rule of tort law. A prudent trustee behaves as other trustees 
similarly situated would behave. The standard is, therefore, 
objective rather than subjective. Sections 2 through 9 of this 
Act identify the main factors that bear on prudent investment 
behavior. 
Variation. Almost all of the rules of trust law are default 
rules, that is, rules that the settlor may alter or abrogate. 
Subsection 
(b) 
carries forward this traditional attribute of 
trust law. Traditional trust law also allows the beneficiaries of 
the trust to excuse its performance, when they are all capable 
and not misinformed. Restatement of Trusts 2d § 216 (1959). 
§902. 
Standard of care; portfolio strategy; risk and return 
objectives 
1. 
Consideration 
of 
purposes, 
terms, 
distribution 
requirements and other circumstances. 
A trustee shall invest and 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
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. 
Overall investment strategy. 
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. Relevant circumstances to consider. 
Among c i rcums tances 
that a trustee shall consider in investing and managing trust 
assets are all of the following that are relevant to the trust or 
its beneficiaries: 
36. 
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, to the extent the 
other resources are known to the trustee: 
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. Reasonable effort to verify facts. 
A trustee shall make 
a reasonable effort to verify facts relevant to the investment 
and management of trust assets. 
5. 
Kind of property; type of investment. 
A trustee may 
invest in any kind of property or type of investment consistent 
with the standards of this chapter. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UHIFORM COMMENT 
Section 2 is the heart of the Act. Subsections (a), (b), and (c) 
are patterned loosely on the language of the Restatement of 
Trusts 3d: Prudent Investor Rule § 227 (1992), and on the 1991 
Illinois statute, 760 § ILCS 5/5a (1992). Subsection (f) is 
derived from Uniform Probate Code § 7-302 (1969). 
Objective standard. Subsection (a) of this Act carries forward 
the relational and objective standard made familiar in the Amory 
case, 
in earlier prudent 
investor 
legislation, 
and 
in 
the 
Restatements. Early formulations of the prudent person rule were 
sometimes 
troubled by the effort to distinguish between the 
standard of a prudent person investing for another and investing 
on his or her own account. The language of subsection (a), by 
relating the trustee's duty to "the purposes, terms, distribution 
requirements, and other circumstances of the trust," should put 
such questions to rest. The standard is the standard of the 
prudent investor similarly situated. 
Portfolio standard. Subsection (b) emphasizes the consolidated 
portfolio 
standard for 
evaluating investment decisions. 
An 
investment that might be imprudent standing alone can become 
prudent if undertaken in sensible relation to other trust assets, 
or to other nontrust assets. 
In the trust setting the term 
"portfolio" embraces the entire trust estate. 
Risk and return. Subsection (b) also sounds the main theme of 
modern investment practice, sensitivity to the risk/return curve. 
See generally the works cited in the Prefatory Note to this Act, 
under "Literature." Returns correlate strongly with risk, but 
tolerance for risk varies greatly with the financial and other 
circumstances of the investor, or in the case of a trust, with 
the purposes of the trust and the relevant circumstances of the 
beneficiaries. 
A trust whose main purpose is to support an 
elderly widow of modest means will have a lower risk tolerance 
than a trust to accumulate for a young scion of great wealth. 
Subsection (b) of this Act follows Restatement of Trusts 3d: 
Prudent Investor Rule § 227(a), which provides that the standard 
of prudent investing "requires the exercise of reasonable care, 
skill, and caution, and is to be applied to investments not in 
isolation but in the context of the trust portfolio and as a part 
of an overall investment strategy, which should incorporate risk 
and return objectives reasonably suitable to the trust." 
Factors affectinq investment. Subsection (c) points to certain of 
the factors that commonly bear on risk/return preferences in 
fiduciary 
investing. 
This 
listing 
is 
nonexclusive. 
Tax 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
considerations, such as preserving the stepped up basis on death 
under Internal Revenue Code § 1014 for low-basis assets, have 
traditionally been exceptionally important in estate planning for 
affluent persons. Under the present recognition rules of the 
federal 
income 
tax, 
taxable 
investors, 
including 
trust 
beneficiaries, 
are in general best served by 
an 
investment 
strategy that minimizes the taxation incident to portfolio 
turnover. See generally Robert H. Jeffrey & Robert D. Arnott, Is 
Your Alpha Big Enough to Cover Its Taxes?, Journal of Portfolio 
Management 15 (Spring 1993). 
Another familiar example of how tax considerations bear upon 
trust investing: In a regime of pass-through taxation, it may be 
prudent for the trust to buy lower yielding tax-exempt securities 
for high-bracket taxpayers, 
whereas it would ordinarily be 
imprudent for the trustees of a charitable trust, whose income is 
tax 
exempt, 
to 
accept 
the 
lowered yields 
associated with 
tax-exempt securities. 
When 
tax considerations affect beneficiaries differently, 
trustee's 
duty 
of 
impartiality 
requires 
attention to 
competing interests of each of them. 
the 
the 
Subsection (c)(8), allowing the trustee to take into account any 
preferences of the beneficiaries respecting heirlooms or other 
prized 
assets, 
derives 
from 
the 
Illinois act, 
ILCS 
§ 
5/5(a)(4) (1992). 
Duty to monitor. Subsections (a) through (d) apply both to 
investing 
and 
managing 
trust 
assets. 
"Managing" 
embraces 
monitoring, that is, the trustee's continuing responsibility for 
oversight of the suitability of investments already made as well 
as the trustee's decisions respecting new investments. 
Duty 
to 
investigate. 
Subsection 
(d) 
carries 
forward 
the 
traditional responsibility of the fiduciary investor to examine 
information likely to bear importantly on the value or the 
security of an investment - for example, audit reports or records 
of title. E.g., Estate of Collins, 72 Cal. App. 3d 663, 139 Cal. 
Rptr. 
(1977) 
(trustees 
lent 
on 
a 
junior 
mortgage 
on 
unimproved real estate, failed to have land appraised, 
and 
accepted 
an 
unaudited 
financial 
statement; 
held liable 
for 
losses). 
Abrogating categoric restrictions. Subsection 2(e) clarifies that 
no 
particular 
kind 
of 
property 
or 
type 
of 
investment 
is 
inherently imprudent. Traditional trust law was encumbered with a 
variety of categoric exclusions, such as prohibitions on junior 
mortgages or new ventures. In some states legislation created 
so-called 
"legal 
lists" 
of 
approved 
trust 
investments. 
The 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
universe of investment products changes incessantly. Investments 
that were at one time thought too risky, such as equities, or 
more recently, futures, are now used in fiduciary portfolios. By 
contrast, the investment that was at one time thought ideal for 
trusts, the long-term bond, has been discovered to import a level 
of risk and volatility - in this case, inflation risk -
that had 
not been anticipated. Accordingly, section 2(e) of this Act 
follows 
Restatement of Trusts 
3d: 
Prudent 
Investor 
Rule 
in 
abrogating 
categoric 
restrictions. 
The 
Restatement 
says: 
"Specific investments or techniques are not per se prudent or 
imprudent. The riskiness of a specific property, and thus the 
propriety of its inclusion in the trust estate, is not judged in 
the abstract but in terms of its anticipated effect on the 
particular trust's portfolio." Restatement of Trusts 3d: Prudent 
Investor Rule § 227, Comment I, at 24 (1992). The premise of 
subsection 2(e) is that trust beneficiaries are better protected 
by 
the 
Act's 
emphasis 
on 
close 
attention to 
risk/return 
objectives as prescribed in subsection 2 (b) than in attempts to 
identify categories of investment that are per se prudent or 
imprudent. 
The Act impliedly disavows the emphasis in older law on avoiding 
"speculative" or "risky" investments. Low levels of risk may be 
appropriate in some trust settings but inappropriate in others. 
It is the trustee's task to invest at a risk level that is 
suitable to the purposes of the trust. 
The 
abolition 
of 
categoric 
restrictions 
against 
types 
of 
investment in no way alters the trustee's conventional duty of 
loyalty, which is reiterated for the purposes of this Act in 
Section 5. For example, were the trustee to invest in a second 
mortgage on a piece of real property owned by the trustee, the 
investment would be wrongful on account of the trustee's breach 
of 
the 
duty 
to abstain 
from 
self-dealing, 
even 
though the 
investment would 
no 
longer automatically offend the former 
categoric restriction against fiduciary investments in junior 
mortgages. 
Professional fiduciaries. The distinction taken in subsection (f) 
between amateur and professional trustees is familiar law. The 
prudent investor standard applies to a range of fiduciaries, from 
the most sophisticated professional investment management firms 
and 
corporate 
fiduciaries, 
to 
family 
members 
of 
minimal 
experience. Because the standard of prudence is relational, it 
follows that the standard for professional trustees is the 
standard of 
prudent professionals; 
for 
amateurs, 
it is the 
standard of prudent amateurs. Restatement of Trusts 2d § 174 
(1959) provides: "The trustee is under a duty to the beneficiary 
in administering the trust to exercise such care and skill as a 
man of ordinary prudence would exercise in dealing with his own 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
property: and if the trustee has or procures his appointment as 
trustee by representing that he has greater skill than that of a 
man of ordinary prudence, he is under a duty to exercise such 
skill." Case law strongly supports the concept of the higher 
standard of care for the trustee representing itself to be expert 
or professional. See Annot., Standard of Care Required of Trustee 
Representing Itself to Have Expert Knowledge or Skill, 91 A.L.R. 
3d 904 (1979) & 1992 Supp. at 48-49. 
The Drafting Committee declined the suggestion that the Act 
should create an exception to the prudent investor rule (or to 
the diversification requirement of Section 3) in the case of 
smaller trusts. The Committee believes that subsections (b) and 
(c) of the Act emphasize factors that are sensitive to the traits 
of small trusts: and that subsection (f) adjusts helpfully for 
the distinction between professional and amateur trusteeship. 
Furthermore, it is always open to the settlor of a trust under 
Section l(b) of the Act to reduce the trustee's standard of care 
if the settlor deems such a 
step appropriate. The official 
comments to the 1992 Restatement observe that pooled investments, 
such as mutual funds and bank common trust funds, are especially 
suitable for small trusts. Restatement of Trusts 3d: Prudent 
Investor Rule § 227, Comments h, m, at 28, 51: reporter's note to 
Comment g, id. at 83. 
Matters of proof. 
Although virtually all express trusts are 
created by written instrument, 
oral trusts are 
known, 
and 
accordingly, 
this Act presupposes 
no 
formal 
requirement that 
trust terms be in writing. 
When there is a written trust 
instrument, modern authority strongly favors allowing evidence 
extrinsic to the instrument to be consulted for the purpose of 
ascertaining the settlor's intent. See Uniform Probate Code § 
2-601 (1990), Comment: Restatement (Third) of Property: Donative 
Transfers (Preliminary Draft No.2, ch. 11, Sept. 11, 1992). 
§903. 
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. 
UNIFORM COMMENT 
The language of this section derives from Restatement of Trusts 
2d § 228 (1959). ERISA insists upon a comparable rule for pension 
trusts. ERISA § 404(a)(l)(C), 29 U.S.C. § 1104(a)(l)(C). Case law 
overwhelmingly supports the duty to diversify. See Annot., Duty 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
of Trustee to Diversify Investments, and Liability for Failure to 
Do So, 24 A.L.R. 3d 730 (1969) & 1992 Supp. at 78-79. 
The 1992 Restatement of Trusts takes the significant step of 
integrating the diversification requirement into the concept of 
prudent investing. Section 227{b) of the 1992 Restatement treats 
diversification as one of the fundamental elements of prudent 
investing, replacing the separate section 228 of the Restatement 
of Trusts 2d. The message of the 1992 Restatement, carried 
forward in Section 3 of this Act, is that prudent investing 
ordinarily requires diversification. 
Circumstances can, however, overcome the duty to diversify. For 
example, if a tax-sensitive trust owns an underdiversified block 
of low-basis securities, the tax costs of recognizing the gain 
may outweigh the advantages of diversifying the holding. The wish 
to retain a family business is another situation in which the 
purposes of the trust sometimes override the conventional duty to 
diversify. 
Rationale for diversification. "Diversification reduces risk ••• 
[because] 
stock 
price 
movements 
are 
not 
uniform. 
They 
are 
imperfectly correlated. This means that if one holds a well 
diversified portfolio, the gains in one investment will cancel 
out the losses in another." Jonathan R. Macey, An Introduction to 
Modern Financial Theory 20 (American College of Trust and Estate 
Counsel Foundation, 1991). For example, during the Arab oil 
embargo of 1973, international oil stocks suffered declines, but 
the 
shares 
of 
domestic oil 
producers 
and 
coal 
companies 
benefitted. Holding a broad enough portfolio allowed the investor 
to set off, to some extent, the losses associated with the 
embargo. 
Modern portfolio theory divides risk into the categories of 
"compensated" and "uncompensated" risk. The risk of owning shares 
in a mature and well-managed company in a settled industry is 
less than the risk of owning shares in a start-up high-technology 
venture. The investor requires a higher expected return to induce 
the 
investor 
to 
bear 
the greater 
risk 
of 
disappointment 
associated with the start-up firm. This is compensated risk - the 
firm pays the investor for bearing the risk. By contrast, nobody 
pays the investor for owning too few stocks. The investor who 
owned only international oils in 1973 was running a risk that 
could 
have 
been 
reduced by having configured the portfolio 
differently -
to include investments in different industries. 
This is uncompensated risk -
nobody pays the investor for owning 
shares in too few industries and too few companies. Risk that can 
be 
eliminated 
by 
adding 
different 
stocks 
(or 
bonds) 
is 
uncompensated risk. The object of diversification is to minimize 
this uncompensated risk of having too few investments. "As long 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
as stock prices do not move exactly together, the risk of a 
diversified portfolio will be less than the average risk of the 
separate holdings." R.A. Brealey, An Introduction to Risk and 
Return from Common Stocks 103 (2d ed. 1983). 
There 
is 
no 
automatic 
rule 
for 
identifying 
how 
much 
diversification 
is 
enough. 
The 
1992 
Restatement 
says: 
"Significant diversification advantages can be achieved with a 
small number of well-selected securities representing different 
industries 
Broader 
diversification is 
usually to 
be 
preferred in trust investing," and pooled investment vehicles 
"make 
thorough diversification practical for 
most trustees." 
Restatement of Trusts 3d: Prudent Investor Rule § 227, General 
Note on Comments e-h, at 77 (1992). See also Macey, supra, at 
23-24; Brealey, supra, at 111-13. 
Diversifying by pooling. It is difficult for a small trust fund 
to diversify thoroughly by constructing its own portfolio of 
individually selected investments. Transaction costs such as the 
round-lot 
(100 
share) 
trading 
economies 
make it relatively 
expensive for 
a 
small investor to assemble 
a 
broad enough 
portfolio to minimize uncompensated risk. For this reason, pooled 
investment 
vehicles 
have 
become 
the 
main 
mechanism 
for 
facilitating diversification for the investment needs of smaller 
trusts. 
Most states have legislation authorizing common trust funds; see 
Austin W. 
Scott & William F. Fratcher, The Law of Trusts § 
227.9, at 463-65 n.26 (4th ed. 1988) (collecting citations to 
state statutes). As 
of 1992, 
states and the District of 
Columbia had enacted the Uniform Common Trust Fund Act (UCTFA) 
(1938), overcoming the rule against commingling trust assets and 
expressly enabling banks and trust companies to establish common 
trust funds. 7 Uniform Laws Ann. 1992 Supp. at 130 (schedule of 
adopting states). The Prefatory Note to the UCTFA explains: "The 
purposes of 
such a 
common 
or joint investment fund are to 
diversify the investment of the several trusts and thus spread 
the risk of loss, and to make it easy to invest any amount of 
trust funds quickly and with a small amount of trouble." 7 
Uniform Laws Ann. 402 (1985). 
Fiduciary investing in mutual funds. 
Trusts can also achieve 
diversification by investing in mutual funds. See Restatement of 
Trusts 3d: Prudent Investor Rule, § 227, Comment m, at 99-100 
(1992) (endorsing trust investment in mutual funds). ERISA § 
401(b)(1), 29 U.S.C. § 1l01(b)(1), expressly authorizes pension 
trusts to invest in mutual funds, 
identified as securities 
"issued by an investment company registered under the Investment 
Company Act of 1940 .••. " 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§904. 
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. 
UNIFORM COMMENT 
Section 4, requ~r~ng the trustee to dispose of unsuitable assets 
within a reasonable time, is old law, codified in Restatement of 
Trusts 3d: Prudent Investor Rule § 229 (1992), lightly revising 
Restatement of Trusts 2d § 230 (1959). The duty extends as well 
to investments that were proper when purchased but subsequently 
become improper. Restatement of Trusts 2d § 231 (1959). The same 
standards apply to successor trustees, see Restatement of Trusts 
2d § 196 (1959). 
The question of what period of time is reasonable turns on the 
totality of factors affecting the asset and the trust. The 1959 
Restatement took the view that "[o]rdinarily any time within a 
year is reasonable, but under some circumstances a year may be 
too long a time and under other circumstances a trustee is not 
liable although he fails to effect the conversion for more than a 
year." Restatement of Trusts 2d § 230, comment b (1959). The 1992 
Restatement retreated from this rule of thumb, 
saying, 
"No 
positive rule can be stated with respect to what constitutes a 
reasonable 
time 
for 
the 
sale or 
exchange 
of securities." 
Restatement of Trusts 3d: Prudent Investor Rule § 229, comment b 
(1992). 
The criteria and circumstances identified in Section 2 of this 
Act as bearing upon the prudence of decisions to invest and 
manage trust assets also pertain to the prudence of decisions to 
retain or dispose of inception assets under this section. 
§905. 
Investment costs 
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. 
UNIFORM COMMENT 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
(This is §8 of the Uniform Prudent Investor Act.) 
This 
section derives 
from 
the 
1991 Illinois act, 
ILCS 
S/S(a)(2) (1992), which draws upon Restatement of Trusts 3d: 
Prudent Investor Rule § 227, comment b, at 11 (1992). Trustees 
are not insurers. Not every investment or management decision 
will turn out in the light of hindsight to have been successful. 
Hindsight is not the relevant standard. In the language of law 
and economics, the standard is ex ante, not ex post. 
§906. 
Language invoking standard of chapter 
The following terms or comparable language in the prov~s~ons 
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"; or "prudent investor rule." 
UNIFORM COMMENT 
(This is §10 of the Uniform Prudent Investor Act.) 
This provision is taken from the Illinois act, 760 ILCS § S/S(d) 
(1992), and is meant to facilitate incorporation of the Act by 
means 
of 
the 
formulaic 
language 
commonly 
used 
in trust 
instruments. 
§907. 
Uniformity of application and construction 
This chapter must be applied and construed to effectuate its 
general purposes to make uniform the law with respect to the 
subject of the Uniform Prudent Investor Act among the states 
enacting it. 
COMMENT 
(This is §12 of the Uniform Prudent Investor Act.) 
SO 
§908. 
Short title 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This chapter may be known and cited as the "Maine Uniform 
Prudent Investor Act." 
CHAPTER 10 
LIABILITY OF TRUSTEES AND RIGHTS 
OF PERSONS DEALING WITH TRUSTEE 
UNIFORM COMMENT 
Sections 1001 through 1009 identify the remedies for breach of 
trust, describe how money damages are to be determined, 
and 
specify potential defenses. Section 1001 lists the remedies for 
breach of trust and specifies when a breach of trust occurs. A 
breach of trust occurs when the trustee breaches one of the 
duties contained in Article 8 or elsewhere in the Code. 
The 
remedies for breach of trust in Section 1001 are broad and 
flexible. Section 1002 provides how money damages for breach of 
trust are to be determined. The standard for determining money 
damages rests on two principles: (1) the trust should be restored 
to the position it would have been in had the harm not occurred; 
and (2) the trustee should not be permitted to profit from the 
trustee's own wrong. Section 1003 holds a trustee accountable for 
profits made from the trust even in the absence of a breach of 
trust. Section 1004 reaffirms the court's power in equity to 
award costs and attorney's fees as justice requires. 
Sections 1005 through 1009 deal with potential defenses. Section 
1005 provides a statute of limitations on actions against a 
trustee. Section 1006 protects a trustee who acts in reasonable 
reliance on the terms of a written trust instrument. Section 1007 
protects a trustee who has exercised reasonable care to ascertain 
the happening of events that might affect distribution, such as a 
beneficiary's 
marriage or 
death. 
Section 
1008 describes 
the 
effect and limits on the use of an exculpatory clause. Section 
1009 
deals 
with 
the 
standards 
for 
recogn~z~ng beneficiary 
approval of acts of the trustee that might otherwise constitute a 
breach of trust. 
Sections 1010 through 1013 address trustee relations with persons 
other than beneficiaries. The emphasis is on encouraging third 
parties to engage in commercial transactions to the same extent 
as if the property were not held in trust. Section 1010 negates 
personal liability on contracts entered into by the trustee if 
the fiduciary capacity was properly disclosed. The trustee is 
also relieved from liability for torts committed in the course of 
administration unless the trustee was personally at fault. 
Section 1011 negates personal liability for contracts entered 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
into by partnerships in which the trustee is a general partner as 
long as the fiduciary capacity was disclosed in the contract or 
partnership certificate. Section 1012 protects persons other than 
beneficiaries who deal with a trustee in good faith and without 
knowledge that the trustee is exceeding or improperly exercising 
a 
power. 
Section 
1013 
permits 
a 
third party to rely on 
a 
certification of trust, thereby reducing the need for a third 
party to request a copy of the complete trust instrument. 
Much of this article is not subject to override in the terms of 
the trust. The settlor may not limit the rights of persons other 
than beneficiaries as provided in Sections 1010 through 1013, nor 
interfere with the court's ability to take such action to remedy 
a breach of trust as my be necessary in the interests of justice. 
See Section 105. 
SIOOI. Remedies for breach of trust 
1. 
Violation of duty. 
A violation by a trustee of a duty 
the trustee owes to a beneficiary is a breach of trust. 
2. 
Remedies. 
To remedy a breach of trust that has occurred 
or may occur, the court may: 
A. 
Compel the trustee to perform the trustee's duties; 
B. Enjoin the trustee from committing a breach of trust; 
C. 
Compel the trustee to redress a breach of trust by 
paying money, restoring property or other means; 
D. 
Order a trustee to account; 
E. 
Appoint a special fiduciary to take possession of the 
trust property and administer the trust; 
F. 
Suspend the trustee; 
G. 
Remove the trustee as provided in section 706; 
H. 
Reduce or deny compensation to the trustee; 
I. 
Subject to section 1012, 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 
J. 
Order any other appropriate relief. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
This section codifies the remedies available to rectify or to 
prevent a breach of trust for violation of a duty owed to a 
beneficiary. The duties that a trust might breach include those 
contained in Article 8 in addition to those specified elsewhere 
in the Code. 
This section identifies the available 
remedies but does not 
attempt to cover the refinements and exceptions developed in case 
law. The availability of a remedy in a particular circumstance 
will be determined not only by this Code but also by the common 
law of trusts and principles of equity. See Section 106. 
Beneficiaries and cotrustees have standing to bring a petition to 
remedy 
a 
breach of trust. 
Following a 
successor trustee's 
acceptance of office, a successor trustee has standing to sue a 
predecessor for breach of trust. See Restatement (Second) of 
Trusts 
Section 
(1959). 
A 
person 
who 
may 
represent 
a 
beneficiary's interest under Article 3 would have standing to 
bring a petition on behalf of the person represented. In the case 
of a charitable trust, those with standing include the state 
attorney general, a charitable organization expressly designated 
to receive distributions under the terms of the trust, and other 
persons with a special interest. See Section 110 & Restatement 
(Second) of Trusts Section 391 (1959). A person appointed to 
enforce a trust for an animal or a trust for a noncharitable 
purpose would have standing to sue for a breach of trust. See 
Sections 110(b), 408, 409. 
Traditionally, remedies for breach of trust at law were limited 
to sui ts to enforce unconditional obligations to pay money or 
deliver chattels. See Restatement (Second) of Trusts Section 198 
(1959). Otherwise, remedies for breach of trust were exclusively 
equitable, and as such, punitive damages were not available and 
findings of fact were made by the judge and not a jury. See 
Restatement (Second) of Trusts Section 197 (1959). The Uniform 
Trust Code does not preclude the possibility that a particular 
enacting jurisdiction might not follow these norms. 
The 
remedies 
identified 
in 
this 
section 
are 
derived 
from 
Restatement (Second) of Trusts Section 199 (1959). The reference 
to payment of money in subsection (b)(3) includes liability that 
might be characterized as damages, restitution, or surcharge. For 
the measure of liability, see Section 1002. Subsection (b)(5) 
makes explicit the court's authority to appoint 
a 
special 
fiduciary, 
also 
sometimes 
referred 
to 
as 
a 
receiver. 
See 
Restatement 
(Second) 
of Trusts 
Section 199(d) 
(1959). 
The 
authority of the court to appoint a special fiduciary is not 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
limited to actions alleging breach of trust but is available 
whenever 
the 
court, 
exerc~s~ng its 
equitable 
jurisdiction, 
concludes that an appointment would promote administration of the 
trust. See Section 704(d) 
(special fiduciary may be appointed 
whenever 
court 
considers 
such 
appointment 
necessary 
for 
administration). 
Subsection (b)(8), which allows the court to reduce or deny 
compensation, is in accord with Restatement (Second) of Trusts 
Section 243 
(1959). For the factors to consider in setting a 
trustee's compensation absent breach of trust, see Section 708 
and comment. 
In deciding whether to reduce or deny a trustee 
compensation, the court may wish to consider (1) whether the 
trustee acted in good faith; (2) whether the breach of trust was 
intentional; (3) the nature of the breach and the extent of the 
loss; (4) whether the trustee has restored the loss; and (5) the 
value of the trustee's services to the trust. See Restatement 
(Second) of Trusts Section 243 cmt. c (1959). 
The authority under subsection (b)(9) to set aside wrongful acts 
of the trustee is a corollary of the power to enjoin a threatened 
breach as provided in subsection (b) (2). 
However, in setting 
aside the wrongful acts of the trustee the court may not impair 
the rights of bona fide purchasers protected under Section 1012. 
See Restatement (Second) of Trusts Section 284 (1959). 
MAIRE COMMENT 
This section appears to be declarative of existing Maine law or 
of the likely decisions of the courts in Maine. 
See Louisa T. 
York Orphan Asylum V. Erwin, 281 A.2d 453 (Me. 1971) 
(remedy for 
breach of a charitable trust is enforcement of the purposes of 
the trust not reverter). 
§I002. 
Damages for breach of trust 
1. 
Damages. 
A trustee who commits a breach of trust is 
liable to the beneficiaries affected for the greater of: 
A. 
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; and 
B. 
The profit the trustee made by reason of the breach. 
2. 
Contribution from other trustees. 
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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
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. 
UNIFORM COMMENT 
Subsection (a) is based on Restatement (Third) of Trusts: Prudent 
Investor Rule Section 205 (1992). If a trustee commits a breach 
of trust, the beneficiaries may either affirm the transaction or, 
if a loss has occurred, hold the trustee liable for the amount 
necessary to compensate fully for the consequences of the breach. 
This may 
include recovery of lost income, 
capital gain, 
or 
appreciation that would have resulted from proper administration. 
Even if a loss has not occurred, the trustee may not benefit from 
the improper action and is accountable for any profit the trustee 
made by reason of the breach. 
For 
extensive 
commentary 
on 
the 
determination 
of 
damages, 
traditionally known as trustee surcharge, with numerous specific 
applications, see Restatement (Third) of Trusts: Prudent Investor 
Rule Sections 205-213 (1992). For the use of benchmark portfolios 
to determine damages, see Restatement (Third) of Trusts: Prudent 
Investor Rule Reporter's Notes to Sections 205 and 208-211 
(1992). On the authority of a court of equity to reduce or excuse 
damages for breach of trust, see Restatement (Second) of Trusts 
Section 205 cmt. g (1959). 
For purposes of this section and Section 1003, "profit" does not 
include the trustee's compensation. A trustee who has committed a 
breach of trust is entitled to 
reasonable 
compensation for 
administering the trust unless the court reduces or denies the 
trustee compensation pursuant to Section 1001(b)(8). 
Subsection (b) is based on Restatement (Second) of Trusts Section 
(1959). Cotrustees are jointly and severally liable for a 
breach of trust if there was joint participation in the breach. 
Joint and several liability also is imposed on a nonparticipating 
cotrustee who, as provided in Section 703(g), failed to exercise 
reasonable care (1) to prevent a cotrustee from committing a 
serious breach of trust, or (2) to compel a cotrustee to redress 
a serious breach of trust. Joint and several liability normally 
carries with it a right in any trustee to seek contribution from 
a cotrustee to the extent the trustee has paid more than the 
trustee's proportionate share of the liability. Subsection (b), 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
consistent 
with 
Restatement 
(Second) 
of 
Trusts 
Section 
(1959), creates an exception. A trustee who was substantially 
more at fault or committed the breach of trust in bad faith or 
with reckless indifference to the purposes of the trust or the 
interests of the beneficiaries is not entitled to contribution 
from the other trustees. 
Determining degrees of comparative fault is a question of fact. 
The fact that one trustee was more culpable or more active than 
another does not necessarily establish that this trustee was 
substantially more at fault. Nor is a trustee substantially less 
at fault because the trustee did not actively participate in the 
breach. See Restatement (Second) of Trusts Section 258 cmt. e 
(195). 
Among 
the factors 
to consider: 
(1) 
Did the trustee 
fraudulently induce the other trustee to join in the breach? (2) 
Did the trustee commit the breach intentionally while the other 
trustee was at most negligent? (3) Did the trustee, because of 
greater experience or expertise, control the actions of the other 
trustee? 
(4) 
Did the trustee alone commit the breach with 
liability imposed on 
the 
other trustee only because of 
an 
improper delegation or failure to properly monitor the actions of 
the cotrustee? See Restatement (Second) of Trusts Section 258 
cmt. d (1959). 
MAINE COMMENT 
This section appears to be declarative of existing Maine law. 
See Estate of Wilde, 1998 ME 55, 708 A.2d 273. See also Estate of 
Baldwin, 442 A.2d 529, 536 & n. 23 (Me. 1982); 
In re Estate of 
Stowell, 595 A.2d 1022 (Me. 1991) (Stowell I); 
In re Estate of 
Stowell, 
A.2d 
(Me. 
1994) 
(Stowell 
II); 
Estate of 
Whitlock, 
A.2d 1173, 1178-79 (Me. 1992). 
Probate Code, 
section 7-405 is repealed as part of the enactment of the Uniform 
Trust Code. 
36. 
§1003. 
Damages in absence of breach 
I. 
Accountable for profit. 
A trustee is accountable to an 
affected beneficiary for any profit made by the trustee arising 
from the administration of the trust. even absent a breach of 
trust. 
Nothing in this section limits a trustee' s right to 
reasonable compensation under section 708. 
2. 
Not accountable for loss, depreciation or no profit. 
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. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
The principle on which a trustee's duty of loyalty is premised is 
that a trustee should not be allowed to use the trust as a means 
for personal profit other than for routine compensation earned. 
While most instances of personal profit involve situations where 
the trustee has breached the duty of loyalty, not all cases of 
personal profit involve a breach of trust. Subsection (a), which 
holds a trustee accountable for any profit made, even absent a 
breach of trust, is based on Restatement (Second) of Trusts 
Section 203 (1959). A typical example of a profit is receipt by 
the trustee of a commission or bonus from a third party for 
actions relating to the trust's administration. See Restatement 
(Second) of Trusts Section 203 cmt. a (1959). 
A trustee is not an insurer. Similar to Restatement (Second) of 
Trusts Section 204 (1959), subsection (b) provides that absent a 
breach of trust 
a 
trustee is not liable for 
a 
loss or 
depreciation in the value of the trust property or for failure to 
make a profit. 
The final sentence 
make it clear that 
MAINE COMMENT 
in section 1003, subsection 1 was added to 
this section is not intended to limit a 
trustee's right to receive reasonable compensation, as permitted 
and within the standards set forth in section 708, even though 
the trustee by collecting such compensation realizes a profit. 
Otherwise, there is apparently no material difference between 
this section and the likely result in litigation in Maine and it 
is adopted without further changes. See Estate of Voignier, 609 
A.2d 704 (Me. 1992); Stowell I implies a similar result. 
§1004. 
Attorney's fees and costs 
In a judicial proceeding involving the administration of a 
trust. the court, as justice and equity may require. may award 
costs and expenses, including reasonable attorney's fees, to any 
party, to be paid by another party or from the trust that is the 
subject of the controversy. 
UNIFORM COMMENT 
This section, 
which is based on Massachusetts General 
Laws 
chapter 215, Section 45, codifies the court's historic authority 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
to award costs and fees, including reasonable attorney's fees, in 
judicial proceedings grounded in equity. The court may award a 
party its own fees and costs from the trust. The court may also 
charge a party's costs and fees against another party to the 
litigation. Generally, litigation expenses were at common law 
chargeable against another party only in the case of egregious 
conduct such as bad faith or fraud. With respect to a party's own 
fees, Section 709 authorizes a trustee to recover expenditures 
properly incurred in the administration of the trust. The court 
may award a beneficiary litigation costs if the litigation is 
deemed beneficial to the trust. Sometimes, litigation brought by 
a 
beneficiary involves 
an 
allegation that 
the 
trustee 
has 
committed a breach of trust. On other occasions, the suit by the 
beneficiary is brought because of the trustee's failure to take 
action against a third party, 
such as to recover property 
properly 
belonging 
to 
the 
trust. 
For 
the 
authority 
of 
a 
beneficiary to bring an action when the trustee fails to take 
action against a third party, see Restatement (Second) of Trusts 
Sections 281-282 
(1959). For the case law on the award of 
attorney's fees and other litigation costs, see 3 Austin W. Scott 
& William F. Fratcher, The Law of Trusts Sections 188.4 (4th ed. 
1988). 
MAINE COMMENT 
There is apparently no material difference between this section 
and existing Probate Code, section 1-601 and this section is 
adopted without change. 
For example, the "costs and expenses" 
the court can award under this section may include, without 
limitation, 
reasonable 
witness 
fees, 
costs of depositions, 
hospital records or medical reports. 
See also In re Estate of Stowell, 
A.2d 440 
(Me. 
1994) 
(Stowell II); Estate of Whitlock, 615 A.2d 1173, 1178-79 (Me. 
1992); Estate of Voignier, 609 A.2d 704 (Me. 1992); Estate of 
Brideau, 458 A.2d 745, 748 (Me. 1983). 
§l005. 
Limitation of action against trustee 
1. 
Report; one-year limitation. 
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 of the time allowed for commencing a 
proceeding. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ItAIt to H.P. 678, L.D. 921 
2. 
Disclosure of potential claim. 
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. 
Six years. 
If subsection I does not apply, a judicial 
proceeding by a beneficiary against a trustee for breach of trust 
must be commenced within 6 years after the first to occur of: 
A. 
The removal, resignation or death of the trustee: 
B. 
The termination of the beneficiary's interest in the 
trust: and 
C. 
The termination of the trust. 
UNIFORM COMMENT 
The one-year and five-year limitations periods under this section 
are not the only means for barring an action by a beneficiary. A 
beneficiary 
may 
be 
foreclosed 
by 
consent, 
release, 
or 
ratification as provided in Section 1009. 
Claims may also be 
barred by principles such as estoppel and laches 
ar~s~ng in 
equity under the common law of trusts. See Section 106. 
The representative referred to in subsection (a) is the person 
who may represent and bind a beneficiary as provided in Article 
3. During the time that a trust is revocable and the settlor has 
capacity, the person holding the power to revoke is the one who 
must receive the report. See Section 603(a) (rights of settlor of 
revocable trust). 
This section addresses only the issue of when the clock will 
start to run for purposes of the statute of limitations. If the 
trustee wishes to foreclose possible claims immediately, 
a 
consent to the report or other information may be obtained 
pursuant to Section 1009. For the provisions relating to the duty 
to report to beneficiaries, see Section 813. 
Subsection 
(a) 
applies only if the trustee has furnished 
a 
report. The one-year statute of limitations does not begin to run 
against a beneficiary who has waived the furnishing of a report 
as provided in Section 813(d). 
Subsection (c) is intended to provide some ultimate repose for 
actions against a trustee. It applies to cases in which the 
trustee has failed to report to the beneficiaries or the report 
did not meet the disclosure requirements of subsection (b). It 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
also applies to beneficiaries who did not receive notice of the 
report, whether personally or through representation. While the 
five-year limitations period will normally begin to run on 
termination of the trust, it can also begin earlier. If a trustee 
leaves office prior to the termination of the trust, the 
limitations period for actions against that particular trustee 
begins to run on the date the trustee leaves office. If a 
beneficiary receives a final distribution prior to the date the 
trust terminates, the limitations period for actions by that 
particular beneficiary begins 
to 
run 
on 
the date of final 
distribution. 
If a trusteeship terminates by reason of death, a claim against 
the trustee's estate for breach of fiduciary duty would, like 
other claims against the trustee's estate, be barred by a probate 
creditor's 
claim 
statute 
even 
though 
the 
statutory 
period 
prescribed by this section has not yet expired. 
This section does not specifically provide that the statutes of 
limitations under this section are tolled for fraud or other 
misdeeds, the drafters preferring to leave the resolution of this 
question to other law of the State. 
MAIRE COMMENT 
Section 1005, subsection 3 was amended to change the limitation 
period from 5 years to 6 years, to be consistent with the general 
statute of limitations under Maine law. 
Nothing in section 1005 
affects or limits the right to bring claims for fraud, but only 
claims for breach of trust. 
Fraud claims would be independent 
claims 
governed 
by 
the 
statute 
of 
limitations 
generally 
applicable to them. 
This section replaces the limitations 
formerly contained in Probate Code, section 7-307, repealed as 
part of the enactment of the Uniform Trust Code. 
In essence, the 
Probate Code limitations periods were 6 months or 3 years for 
breach of trust and 6 years for other causes of action. 
The 
Uniform Trust Code extends the period after disclosure of the 
facts to 1 year or, in the absence of full disclosure, 6 years. 
The 
Uniform 
Trust 
Code 
periods 
give 
greater 
protection to 
beneficiaries, 
though they increase the period of risk for 
trustees. 
§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. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
It sometimes happens that the intended terms of the trust differ 
from the apparent meaning of the trust instrument. This can occur 
because the court, in determining the terms of the trust, is 
allowed to consider evidence extrinsic to the trust instrument. 
See Section 
103(17) 
(definition of 
"terms 
of 
a 
trust"). 
Furthermore, if a trust is reformed on account of mistake of fact 
or law, as authorized by Section 415, provisions of a trust 
instrument can be deleted or contradicted and provisions not in 
the trust instrument may be added. The concept of the "terms of a 
trust," both as defined in this Code and as used in the doctrine 
of reformation, is intended to effectuate the principle that a 
trust should be administered and distributed in accordance with 
the settlor's intent. However, a trustee should also be able to 
administer a trust with some dispatch and without concern that a 
reasonable reliance on the terms of the trust instrument is 
misplaced. This section protects a trustee who so relies on a 
trust instrument but only to the extent the breach of trust 
resulted from such reliance. This section is similar to Section 
l(b) of the Uniform Prudent Investor Act, which protects a 
trustee from liability to the extent that the trustee acted in 
reasonable reliance on the provisions of the trust. 
This section protects a trustee only if the trustee's reliance is 
reasonable. 
For 
example, 
a 
trustee's reliance 
on 
the trust 
instrument would not be justified if the trustee is aware of a 
prior .court decree or binding nonjudicial settlement agreement 
clarifying or changing the terms of the trust. 
MAINE COMMENT 
This section replaces Probate Code, 
section 7-302, 
subsection 
(a), which was repealed as part of the adoption of the Uniform 
Trust 
Code, 
which 
has 
been 
interpreted 
similarly. 
See 
Lichtenstein v. Consolidated Services Group, Inc., 173 F.3d 17 
(1st Cir. 1999). 
§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. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
UNIFORM COMMENT 
This section, which is based on Washington Revised Code Section 
11.98.100, is designed to encourage trustees to administer trusts 
expeditiously and without undue concern about liability for 
failure to ascertain external facts, often of a personal nature, 
that might affect administration or distribution of the trust. 
The 
common 
law, 
contrary to this section, 
imposed absolute 
liability against a trustee for misdelivery regardless of the 
trustee's level of care. 
See Restatement 
(Second) 
of Trusts 
Section 226 (1959). The events listed in this section are not 
exclusive. 
A 
trustee 
who 
has 
exercised 
reasonable 
care 
to 
ascertain the occurrence of other events, such as the attainment 
by 
a 
beneficiary of 
a 
certain age, 
is also protected from 
liability. 
MAINE COMMENT 
This section replaces Probate Code, 
section 7-301, which was 
repealed as part of the adoption of the Uniform Trust Code. 
Sl008. 
Exculpation of trustee 
1. 
Exculpation unenforceable. 
A term of a trust relieving 
a trustee of liability for breach of trust is unenforceable to 
the extent that it: 
A. 
Relieves the trustee of liability for breach of trust 
committed in bad faith or with reckless indifference to the 
purposes of the trust or the interests of the beneficiaries: 
or 
B. 
Was inserted as the result of an abuse by the trustee of 
a fiduciary or confidential relationship to the settlor. 
2. 
Invalid: proof otherwise. 
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. 
UNIFORM COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Even if the terms of the trust attempt to completely exculpate a 
trustee for the trustee's acts, the trustee must always comply 
wi th a certain minimum standard. As provided in subsection (a), a 
trustee must always act in good faith with regard to the purposes 
of the trust and the interests of the beneficiaries. Subsection 
(a) is consistent with the standards expressed in Sections 105 
and 814(a), which, similar to this section, place limits on the 
power of a settlor to negate trustee duties. This section is also 
similar to Section 222 of the Restatement (Second) of Trusts 
(1959), except that this Code, unlike the Restatement, allows a 
settlor to exculpate a trustee for a profit that the trustee made 
from the trust. 
Subsection (b) disapproves of cases such as Marsman v. Nasca, 573 
N.E.2d 1025 (Mass. App. Ct. 1991), which held that an exculpatory 
clause in a trust instrument drafted by the trustee was valid 
because the beneficiary could not prove that the clause was 
inserted as a result of an abuse of a fiduciary relationship. For 
a later case where sufficient proof of abuse was present, see 
Rutanan v. Ballard, 678 N.E.2d 133 (Mass. 1997). Subsection (b) 
responds to the danger that the insertion of such a clause by the 
fiduciary or its agent may have been undisclosed or inadequately 
understood by the settlor. To overcome the presumption of abuse 
in subsection (b), the trustee must establish that the clause was 
fair 
and 
that its existence 
and 
contents were 
adequately 
communicated to the settlor. In determining whether the clause 
was fair, the court may wish to examine: (1) the extent of the 
prior relationship between the settlor and trustee; (2) whether 
the settlor received independent advice; (3) the sophistication 
of the settlor with respect to business and fiduciary matters; 
(4) the trustee's reasons for inserting the clause; and (5) the 
scope of 
the particular 
prov~s~on inserted. 
See 
Restatement 
(Second) of Trusts Section 222 cmt. d (1959). 
The requirements of subsection (b) are satisfied if the settlor 
was 
represented 
by 
independent 
counsel. 
If the settlor was 
represented by independent counsel, the settlor's attorney is 
considered the drafter of the instrument even if the attorney 
used the trustee's form. Because the settlor's attorney is an 
agent of the settlor, disclosure of an exculpatory term to the 
settlor's attorney is disclosure to the settlor. 
MAINE COMMENT 
This section presents no apparent differences from existing Maine 
law and adds clarity. 
See Bay of Naples Condominium Association 
v. Lewis, 582 A.2d 1210 (Me. 1990). 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§l009. 
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: 
1. 
Induced by improper conduct. 
The consent, release or 
ratification of the beneficiary was induced by improper conduct 
of the trustee; or 
2. 
Beneficiary did not know rights. 
At the time of the 
consent, release or ratification, the beneficiary did not know of 
the beneficiary's rights or of the material facts relating to the 
breach. 
UNIFORM COMMENT 
This 
section is based 
on 
Sections 
through 
of 
the 
Restatement (Second) of Trusts (1959). A consent, release, or 
affirmance under this section may occur either before or after 
the approved conduct. This section requires an affirmative act by 
the beneficiary. 
A failure to object is not sufficient. See 
Restatement (Second) of Trusts Section 216 cmt. 
a 
(1959). A 
consent is binding on a consenting beneficiary although other 
beneficiaries have not consented. See Restatement (Second) of 
Trusts Section 216 cmt. g (1959). To constitute a valid consent, 
the beneficiary must know of the beneficiary's rights and of the 
material facts relating to the breach. See Restatement (Second) 
of Trusts Section 216 
cmt. 
k 
(1959). If the beneficiary's 
approval involves a self-dealing transaction, the approval is 
binding only if the transaction was fair and reasonable. See 
Restatement (Second) of Trusts Sections 170(2), 216(3) 
& cmt. n 
(1959). 
An approval by the settlor of a revocable trust or by the holder 
of a presently exercisable power of withdrawal binds all the 
beneficiaries. See Section 603. A beneficiary is also bound to 
the extent 
an approval is given by 
a 
person authorized to 
represent the beneficiary as provided in Article 3. 
2001 Amendment. 
By a 
2001 amendment, the limitation of this 
section to beneficiaries "having capacity" was deleted. This 
limitation was included by mistake. As indicated in the second 
paragraph of the comment, the drafting committee did not intend 
to prohibit the use of the representation provisions of Article 
3, several of which address representation of and the giving of a 
binding consent on behalf of an incapacitated beneficiary. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
MAINE COMMENT 
This section is declarative of existing Maine law. 
Marble et al., 136 Me. 52, 1 A.2d 355 (1938). 
See In re 
§lOlO. 
Limitation on personal liability of trustee 
1. 
Hot personally liable on contract; exception. 
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. 
2. 
Personally liable for torts. 
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. 
Claim against trustee in fiduciary capacity. 
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. 
UNIFORM COMMENT 
This section is based on Section 7-306 of the Uniform Probate 
Code. However, unlike the Uniform Probate Code, which requires 
that the contract both disclose the representative capacity and 
identify the trust, subsection (a) protects a trustee who reveals 
the fiduciary relationship either by indicating a signature as 
trustee or by simply referring to the trust. The protection 
afforded the trustee by this section applies only to contracts 
that 
are 
properly entered 
into 
in 
the 
trustee's 
fiduciary 
capacity, meaning that the trustee is exercising an available 
power and is not violating a duty. This section does not excuse 
any liability the trustee may have for breach of trust. 
Subsection (b) addresses trustee liability arising from ownership 
or control of trust property and for torts occurring incident to 
the administration of the trust. Liability in such situations is 
imposed 
on 
the trustee personally only if the trustee 
was 
personally at fault, either intentionally or negligently. This is 
contrary to Restatement (Second) of Trusts Section 264 (1959), 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
which 
imposes 
liability on 
a 
trustee 
regardless 
of 
fault, 
including liability for acts of agents under respondeat superior. 
Responding to a particular concern of trustees, subsection (b) 
specifically protects 
a 
trustee 
from personal liability for 
violations of environmental law such as CERCLA (42 U.S.C. Section 
9607) 
or its state law counterparts, unless the trustee was 
personally at fault. See also Sections 701(c)(2) 
(nominated 
trustee may investigate trust property to determine potential 
violation 
of 
environmental 
law 
without 
having 
accepted 
trusteeship) and 816(13) (trustee powers with respect to possible 
liability for violation of environmental law). 
Subsection (c) alters the common law rule that a trustee could 
not be sued in a representative capacity if the trust estate was 
not liable. 
MAINE COMMENT 
This 
section is 
identical 
to 
Probate 
Code, 
section 
7-306, 
liability of trustee to 3rd persons. 
See also former Probate 
Code, section 7-405, liability of joint trustees. 
Both former 
Probate Code sections were repealed as part of the adoption of 
the Uniform Trust Code. 
See Maine Shipyard & Marine Railway v. Lilley, 2000 ME 9, 743 
A.2d 1264; Haley v. Palmer, 107 Me. 311, 315, 78 A. 368, 370 
(1910); 
Bay of Naples Condominium Association v. Lewis, 582 A.2d 
1210 (Me. 1990); 
In re Estate of Stowell, 595 A.2d 1022 (1991) 
(Stowell I). 
SIOII. 
Interest as general partner 
1. Rot personally liable on contract. 
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 in the contract or in a statement previoUSly filed 
pursuant to the Uniform Partnership Act or the Maine Revised 
Uniform Limited Partnership Act. 
2. 
Rot personally liable for torts. 
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 arlslng from ownership or 
control of the interest unless the trustee is personally at fault. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
3. 
Exceptions to inununity. 
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 the 
trustee's descendants, siblings or parents. 
4. 
Liability of settlor. 
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. 
UNIFORM COMMENT 
Section 
1010 protects 
a 
trustee 
from 
personal liability on 
contracts that the trustee enters into on behalf of the trust. 
Section 1010 also absolves a trustee from liability for torts 
committed in administering the trust unless the trustee was 
personally at fault. It does not protect a trustee from personal 
liability for contracts entered into or torts committed by a 
general or limited partnership of which the trustee was a general 
partner. That is the purpose of this section, which is modeled 
after Ohio Revised Code Section 1339.65. Subsection (a) protects 
the 
trustee 
from 
personal 
liability 
for 
such partnership 
obligations whether the trustee signed the contract or it was 
signed by another general partner. Subsection (b) protects a 
trustee 
from personal liability for 
torts 
committed 
by the 
partnership 
unless 
the 
trustee 
was 
personally 
at 
fault. 
Protection 
from 
the partnership's contractual Obligations is 
available under subsection (a) only if the other party is on 
notice of the fiduciary relationship, either in the contract 
itself or in the partnership certificate on file. 
Special protection is not needed for other business interests 
that the trustee may own, 
such as an interest as a 
limited 
partner, a membership interest in an LLC, or an interest as a 
corporate shareholder. In these cases the nature of the entity or 
the interest owned by the trustee carries with it its own 
limitation on liability. 
Certain exceptions apply. The section is not intended to be used 
as a device for individuals or their families to shield assets 
from creditor claims. Consequently, subsection (c) excludes from 
the protections provided by this section trustees who own an 
interest in the partnership in another capacity or if an interest 
is owned by the trustee's spouse or the trustee's descendants, 
siblings, parents, or the spouse of any of them. 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Nor can a revocable trust be used as a device for avoiding claims 
against 
the 
partnership. 
Subsection 
(d) 
imposes 
personal 
liability on the settlor for partnership contracts and other 
obligations of the partnership the same as if the settlor were a 
general partner. 
This section has been placed in brackets to alert enacting 
jurisdictions to consider mOdifying the section to conform it to 
the State's specific laws on partnerships and other forms of 
unincorporated businesses. 
MAINE COMMENT 
This section is new law. 
No prior Maine law could be found on 
point. 
§l012. 
Protection of person dealing with trustee 
1. 
Exceeding or improperly exercising powers. 
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 those powers. 
2. 
No duty to inquire. 
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. 
In good faith delivery of assets. 
A person who in good 
faith delivers assets to a trustee need not ensure their proper 
application. 
36. 
4. 
Former trustee. 
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. 
Other protections prevail. 
Provisions of other laws 
relating to commercial transactions or transfer of securities by 
fiduciaries that are more protective prevail over the protection 
provided by this section. 
UNIFORM COMMENT 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
This section is derived from Section 7 of the Uniform Trustee 
Powers Act. 
Subsection (a) protects two different classes: persons other than 
beneficiaries who assist a trustee with a transaction, and 
persons other than beneficiaries who deal with the trustee for 
value. As long as the assistance was provided or the transaction 
was entered into in good faith and without knowledge, 
third 
persons in either category are protected in the transaction even 
if the trustee was exceeding or improperly exercising the power. 
For the definition of "know," see Section 104. This Code does not 
define "good faith" for purposes of this and the next section. 
Defining good faith with reference to the definition used in the 
State's commercial statutes would be consistent with the purpose 
of this section, which is to treat commercial transactions with 
trustees similar to other commercial transactions. 
Subsection (b) confirms that a third party who is acting in good 
faith is not charged with a duty to inquire into the extent of a 
trustee's powers or the propriety of their exercise. The third 
party may assume that the trustee has the necessary power. 
Consequently, there is no need to request or examine a copy of 
the trust instrument. A third party who wishes assurance that the 
trustee has the necessary authority instead should request a 
certification of trust as provided in Section 1013. Subsection 
(b), and the comparable provisions enacted in numerous States, 
are intended to negate the rule, followed by some courts, that a 
third party is charged with constructive notice of the trust 
instrument and its contents. The cases are collected in George G. 
Bogert & George T. Bogert, The Law of Trusts and Trustees Section 
(Rev. 
2d ed. 1995): and 4 Austin W. 
Scott & William F. 
Fratcher, The Law of Trusts Section 297 (4th ed. 1989). 
Subsection (c) protects any person, including a beneficiary, who 
in good faith delivers property to a trustee. The standard of 
protection in the Restatement is phrased differently although the 
result is similar. Under Restatement (Second) of Trusts Section 
(1959), the person delivering property to a trustee is liable 
if at the time of the delivery the person had notice that the 
trustee was misapplying or intending to misapply the property. 
Subsection (d) extends the protections afforded by the section to 
assistance provided to or dealings for value with a 
former 
trustee. The third party is protected the same as if the former 
trustee still held the office. 
Subsection (e) clarifies that a statute relating to commercial 
transactions controls whenever both it and this section could 
apply to a transaction. Consequently, the protections provided by 
this section are superseded by comparable protective provisions 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
of these other laws. The principal statutes in question are the 
various 
articles 
of 
the 
Uniform 
Commercial 
Code, 
including 
Article 8 on the transfer of securities, as well as the Uniform 
Simplification of Fiduciary Securities Transfer Act. 
MAINE COMMENT 
This section is substantially the same as Probate Code, section 
7-406, which was repealed as part of the Adoption of the Uniform 
Trust Code. 
The Uniform Trust Code proposed section 1012 was 
adopted with only one change. 
The first word of subsection 5 
was changed from "comparable" in the Uniform Trust Code to "more" 
to make it clear that, when there are other protective laws 
similar to this section in other Maine statutes, the other 
provisions control if, but only if, they are more protective of 
3rd persons dealing with the trustee. 
§1013. 
Certification of trust 
1. 
Information. 
Instead of furnishing a copy of the trust 
instrument to a person other than a beneficiary, the trustee may 
furnish to the person a certification of trust containing some or 
all of the following information: 
A. 
That the trust exists and the date the trust instrument 
was executed; 
B. 
The identity of the settlor; 
C. 
The identity and address of the currently acting trustee; 
D. 
The powers of the trustee; 
E. 
The revocability or irrevocability of the trust and the 
identity of any person holding a power to revoke the trust; 
F. 
The authority of cotrustees to sign or otherwise 
authenticate and whether all or fewer than all are reguired 
in order to exercise powers of the trustee; 
G. 
The trust's taxpayer identification number; and 
H. 
The manner of taking title to trust property. 
2. 
Authentication. 
A certification of trust may be signed 
or otherwise authenticated by any trustee. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
3. 
Representations correct. 
A certification of trust must 
state that the trust has not been revoked, modified or amended in 
any manner that would cause the representations contained in the 
certification of trust to be incorrect. 
4. 
Dispositive terms. 
A certification of trust need not 
contain the dispositive terms of a trust. 
5. 
Excerpts from trust instrument. 
A recipient of a 
certification of trust may require the trustee to furnish copies 
of those excerpts from the original trust instrument and later 
amendments that designate the trustee and confer upon the trustee 
the power to act in the pending transaction. 
6. 
Hot liable for reliance on incorrect representations; 
knowledge. 
A person who acts in reliance upon a certification of 
trust without 
knowledge 
that the 
representations 
contained 
therein are incorrect is not liable to any person for so acting 
and may 
assume without inquiry the existence of the facts 
contained in the certification. 
Knowledge of the terms of the 
trust may not be inferred solely from the fact that a copy of all 
or part of the trust instrument is held by the person relying 
upon the certification. 
7. Enforce transactions. 
A person who in good faith enters 
into a transaction in reliance upon a certification of trust may 
enforce the transaction against the trust property as if the 
representations contained in the certification were correct. 
8. 
Demand not in good faith: damages. 
A person making a 
demand for the trust instrument in addition to a certification of 
trust or excerpts is liable for damages if the court determines 
that the person did not act in good faith in demanding the trust 
instrument. 
9. 
Copy in judicial proceeding. 
This section does not 
limit the right of a person to obtain a copy of the trust 
instrument in a judicial proceeding concerning the trust. 
UNIFORM COMMENT 
This section, 
derived from California Probate Code Section 
18100.5, is designed to protect the privacy of a trust instrument 
by discouraging requests from persons other than beneficiaries 
for complete 
copies of the instrument in order to verify a 
trustee's authority. Even absent this section, such requests are 
usually unnecessary. Pursuant to Section 1012(b), a third person 
proceeding in good faith is not required to inquire into the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
extent 
of 
the 
trustee's 
powers 
or 
the 
propriety of 
their 
exercise. This section adds another layer of protection. 
Third persons frequently insist on receiving a 
copy of the 
complete trust instrument solely to verify a specific and narrow 
authority of the trustee to engage in a particular transaction. 
While a testamentary trust, because it is created under a will, 
is a matter of public record, an inter vivos trust instrument is 
private. Such privacy is compromised, however, if the trust 
instrument must be distributed to third persons. A certification 
of trust is a document signed by a currently acting trustee that 
may 
include excerpts 
from the trust instrument necessary to 
facilitate the particular transaction. A certification provides 
the third party with an assurance of authority without having to 
disclose the trust's dispositive provisions. Nor is there a need 
for third persons who may already have a copy of the instrument 
to pry into its provisions. Persons acting in reliance on a 
certification may assume the truth of the certification even if 
they have a complete copy of the trust instrument in their 
possession. 
Subsections (a) through (c) specify the required contents of a 
certification. Subsection (d) clarifies that the certification 
need not include the trust' s dispositive terms. A certification, 
however, normally will contain the administrative terms of the 
trust relevant to the transaction. Subsection (e) provides that 
the third party may make 
this 
a 
condition of acceptance. 
Subsections (f) and (g) protect a third party who relies on the 
certification. The third party may assume that the certification 
is true, and is not charged with constructive knowledge of the 
terms of the trust instrument even if the third party has a copy. 
To encourage compliance with this section, a person demanding a 
trust instrument after already being offered a certification may 
be liable under subsection (h) for damages if the refusal to 
accept the certification is determined not to have been in good 
faith. A person acting in good faith would include a person 
required to examine 
a 
complete copy of the trust instrument 
pursuant to due diligence standards or as required by other law. 
Examples of such due diligence and legal requirements include (1) 
in connection with transactions to be executed in the capital 
markets 
where documentary standards have been established in 
connection with underwriting concerns; (2) to satisfy documentary 
requirements 
established 
by 
state 
or 
local 
government 
or 
regulatory 
agency; 
(3) 
to satisfy documentary 
requirements 
established by a state or local government or regulatory agency; 
and (4) where the insurance rates or premiums or other expenses 
of the party would be higher absent the availability of the 
documentation. 
COMMIITEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The Uniform Trust Code leaves to other law the issue of how 
damages for a bad faith refusal are to be computed and whether 
attorney's fees might be recoverable. For a discussion of the 
meaning of "good faith," see Section 1012 comment. 
MAINE COMMENT 
This section is new law. 
No prior Maine law could be found on 
point and the Uniform Trust Code section 1013 was adopted with 
one 
change. 
Subsection 
I 
was 
changed 
to state that 
a 
certification 
of 
trust 
may 
contain 
"some 
or 
all 
of" 
the 
information listed in paragraphs A to H. 
It is up to the trustee 
to include all that information or only some of it, depending on 
the intended purpose and uses of the certification of trust and 
appropriate considerations of privacy. 
The effect of subsection 
is that, whatever information the trustee chooses to include in 
the certification of trust may be relied upon by a person who 
acts 
in 
reliance 
upon 
it 
without 
knowledge 
that 
the 
representations 
contained 
therein 
are 
incorrect. 
Thus, 
as 
amended, 
subsection 
does 
not 
mandate 
the 
inclusion of 
particular information that the trustee chooses not to include; 
but see SUbsection 3, which does require a statement that the 
trust has not been revoked, modified or amended in any manner 
that 
would 
cause 
the 
representations 
contained 
in 
the 
certification of trust to be incorrect. 
Subsection 6 also does 
not require a party receiving the certification to rely upon it 
without more, 
or to accept it with whatever limitations or 
omissions the trustee has chosen. 
This approach preserves the flexibility of the certification of 
trust and the trustee's freedom to include as much or as little 
information as the trustee deems appropriate, balancing the 
legitimate need of a 3rd party for particular information against 
the privacy interests of the beneficiaries and settlor of the 
trust. 
Other jurisdictions, in adopting the Uniform Trust Code, 
chose to delete or modify one or more of paragraphs A to H, 
apparently for privacy reasons. 
Allowing the contents of a 
particular certificate to vary according to the circumstances is 
more flexible and should better accommodate the interests of 
trustees, beneficiaries and 3rd parties. 
CHAPTER 11 
MISCELLANEOUS PROVISIONS 
§1101. 
Uniformity of application and construction 
COMMIITEE AMENDMENT 
• 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
In applying and construing this Code, consideration must be 
given to the need to promote uniformity of the law with respect 
to its subject matter among states that enact it. 
§1102. 
Electronic records and signatures 
The provisions of this Code governing the legal effect. 
validity or enforceability of electronic records or electronic 
signatures, and of contracts formed or performed with the use of 
such 
records 
or 
signatures, 
conform to 
the 
requirements 
of 
Section 102 of the federal Electronic Signatures in Global and 
National Commerce Act, 15 United States Code, Section 7002, and 
supersede, modify and limit the requirements of the federal 
Electronic Signatures in Global and National Commerce Act. 
UNIFORM COMMENT 
This section, which is being inserted in all Uniform Acts 
approved in 
2000 
or later, 
preempts 
the federal 
Electronic 
Signatures 
in 
Global 
and 
National 
Commerce 
Act. 
Section 
102(a)(2)(B) of that Act provides that the federal law can be 
preempted by a later statute of the State that specifically 
refers to the federal law. 
The effect of this section, when 
enacted as part of this Code, is to leave to state law the 
procedures for obtaining and validating an electronic signature. 
The Uniform Trust Code does not require that any document be in 
paper 
form, 
allowing all 
documents 
under 
this 
Code 
to 
be 
transmitted in electronic form. A properly directed electronic 
message is a valid method of notice under the Code as long as it 
is reasonably suitable under the circumstances and likely to 
result in receipt of the notice or document. See Section 109(a). 
§1103. 
Effective date 
This Code takes effect on July 1, 2005. 
§1104. 
Application to existing relationships 
1. Application. 
Except as otherwise provided in this Code, 
on July 1, 2005: 
A. 
This Code applies to all trusts created before, on or 
after July 1, 2005; 
B. 
This Code applies to all judicial proceedings concerning 
trusts commenced on or after July 1, 2005; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
C. 
This Code applies to judicial proceedings concerning 
trusts commenced before July I. 2005 unless the court finds 
that application of a particular provision of this Code 
would substantially interfere with the effective conduct of 
the judicial proceedings or prejudice the rights of the 
parties. in which case the particular provision of this Code 
does not apply and the superseded law applies; 
D. 
Any rule of construction or presumption provided in this 
Code applies to trust instruments executed before July 1, 
2005 unless there is a clear indication of a contrary intent 
in the terms of the trust: and 
E. 
An act done before July I. 2005 is not affected by this 
Code. 
2. 
Continued application of statute. 
If a 
right is 
acquired, 
extinguished 
or 
barred 
upon 
the 
expiration of 
a 
prescribed period that has commenced to run under any other 
statute before July 1, 2005, that statute continues to apply to 
the right even if it has been repealed or superseded. 
UNIFORM COMMENT 
The Uniform Trust Code is intended to have the widest possible 
effect within constitutional limitations. Specifically, the Code 
applies to all trusts whenever created, to judicial proceedings 
concerning trusts commenced on or after its effective date, and 
unless the court otherwise orders, to judicial proceedings in 
progress on the effective date. 
In addition, 
any rules of 
construction 
or 
presumption 
provided 
in 
the 
Code 
apply to 
preexisting trusts unless there is a clear indication of a 
contrary intent in the trust's terms. By applying the Code to 
preexisting trusts, the need to know two bodies of law will 
quickly lessen. 
This Code cannot be fully retroactive, however. Constitutional 
limitations 
preclude 
retroactive 
application 
of 
rules 
of 
construction to alter property rights under trusts that became 
irrevocable prior to the effective date. Also, rights already 
barred by a statute of limitation or rule under former law are 
not revived by a possibly longer statute or more liberal rule 
under this Code. Nor is an act done before the effective date of 
the Code affected by the Code's enactment. 
The Uniform Trust Code contains an additional effective date 
prov~s~on. Pursuant to Section 602 (a), prior law will determine 
whether a trust executed prior to the effective date of the Code 
is presumed to be revocable or irrevocable. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 67S, L.D. 921 
For 
a 
comparable 
uniform 
law effective date provision, 
see 
Uniform Probate Code Section S-101. 
Sec. A-2. Effective date. 
This Part takes effect July 1, 2005. 
S 
~HB 
Sec. B-1. 5 MRSA §17108, sub-§2, 'l[A, as enacted by PL 19S5, c. 
SOl, §§5 and 7, is amended to read: 
A. 
The fiduciary or registered investment advisor shall 
invest and reinvest the funds of the retirement system in 
accordance with the standards defined in Title lS-AT see~ieB 
7-~Ga 
lS-B, 
sections 
S02 
to 
and 
chapter 
9. 
The 
investment and reinvestment sRall ae are subject to periodic 
review by the board. 
Sec. B-2. 
MRSA §17153, sub-§3, as enacted by PL 1985, c. 
SOl, §§5 and 7, is amended to read: 
3. 
Investment of funds. The board may cause the funds 
created by this Part to be invested and reinvested in accordance 
with the standards defined in Title lS-AT 
see~ieB 7-~Qa lS-B, 
sections S02 to 807 and chapter 9, subject to periodic approval 
of the investment program by the board. 
2S 
Sec. B-3. 13 MRSA §4106, last '1[, as enacted by PL 2001, c. 550, 
Pt. C, §5 and affected by §29, is amended to .read: 
In 
the 
administration 
of 
the 
powers 
to 
appropriate 
appreciation, to make and retain investments and to delegate 
investment 
management 
of 
institutional 
funds, 
trustees 
of 
charitable trusts are governed by the standards set forth in 
Title lS-AT-see~ieB-7-~Ga lS-B, sections 802 to S07 and chapter 9. 
Sec. B-4. 18-A MRSA §1-302, sub-§(a), as enacted by PL 1979, c. 
540, §1, is amended to read: 
(a) 
To the full extent provided in sections 3-105, 5-102T 
and 5-402, 7-aGl aBa 7-aQ4T the court has jurisdiction over all 
subject matter relating to (1) estates of decedents, including 
construction of wills and determination of heirs and successors 
of decedents and estates of protected persons; (2) protection of 
minors and incapacitated persons; and (3) trusts. 
4S 
Sec. B·5. 18·A MRSA §3-913, sub·§(a), as enacted by PL 1979, c. 
540, §1, is repealed. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
Sec. B-6. 18-A MRSA §3-913, sub-§(c), as enacted by PL 1979, c. 
540, §l, is amended to read: 
(c) 
No inference of negligence on the part of 
representative 
shall 
may 
be 
drawn 
from 
his 
representative's failure to exercise the authority 
sHBseetisas-fa}-aas subsection (b). 
the personal 
the 
personal 
conferred by 
Sec. B-7. 
18-A MRSA §5-417, as enacted by PL 1979, c. 540, 
§1, is amended to read: 
§5-4l7. General duty of conservator 
In 
the 
exercise 
of 
his 
the 
conservator's 
conservator is to act as 
a 
fiduciary and shall 
standards of care applicable to trustees as described 
+-6Qa Title 18-B, sections 802 to 807 and chapter 9. 
powers, 
a 
observe the 
by seetisa 
Sec. B-8. 18-A MRSA §5-508, sub-§§(a) and (d), as repealed and 
replaced by PL 1997, c. 683, Pt. C, §6, are amended to read: 
(a) 
A durable financial power of attorney is a durable 
power of attorney by which a principal designates another as 
attorney-in-fact to make decisions on the principal's behalf in 
matters concerning the principal's finances, property or both. 
In the exercise of the powers conferred under a durable financial 
power of attorney, an attorney-in-fact shall act as a fiduciary 
under the standards of care applicable to trustees as described 
by seetisa-+-6Qa Title 18-B, sections 802 to 807 and chapter 9. 
(d) 
A durable financial power of attorney must contain the 
following language: 
"Notice to the Principal: 
As the "Principal," you are using this 
Durable Power of Attorney to grant power to another person 
(called the "Agent" or "Attorney-in-fact") to make decisions 
about your 
money, 
property or both and to use your money, 
property or both on your behalf. 
If this written Durable Power 
of Attorney does not limit the powers that you give your Agent, 
your Agent will have broad and sweeping powers to sell or 
otherwise dispose of your property and spend your money without 
advance notice to you or approval by you. 
Under this document, 
your Agent will continue to have these powers after you become 
incapacitated, and you may also choose to authorize your Agent to 
use these powers before you become incapacitated. 
The powers 
that you give your Agent are explained more fully in the Maine 
Revised Statutes, Title 18-A, sections 5-501 to 5-508 and in 
Maine case law. 
You have the right to revoke or take back this 
Durable Power of Attorney at any time as long as you are of sound 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
mind. 
If there is anything about this Durable Power of Attorney 
that you do not understand, you should ask a lawyer to explain it 
to you. 
Notice to the Agent: 
As the "Agent" or "Attorney-in-fact," you 
are given power under this Durable Power of Attorney to make 
decisions about the money, property or both belonging to the 
Principal and to spend the Principal's money, property or both on 
that person's behalf in accordance with the terms of this Durable 
Power of Attorney. 
This Durable Power of Attorney is valid only 
if the Principal is of sound mind when the Principal signs it. 
As the Agent, you are under a duty (called a "fiduciary duty") to 
observe the standards observed by a prudent person dealing with 
the property of another. 
The duty is explained more fully in the 
Maine Revised Statutes, Title 18-A, sections 5-501 to 5-508 and 
+-~Q~ Title 18-B, sections 802 to 807 and chapter 9 and in Maine 
case law. 
As the Agent, you are not entitled to use the money or 
property for your own benefit or to make gifts to yourself or 
others unless the Durable Power of Attorney specifically gives 
you the authority to do so. 
As the Agent, your authority under 
this Durable Power of Attorney will end when the Principal dies 
and you will not have the authority to administer the estate 
unless you are authorized to do so in accordance with the Ma~Be 
Probate Code. 
If you violate your fiduciary duty under this 
Durable Power of Attorney, you may be liable for damages and may 
be subject to criminal prosecution. 
If there is anything about 
this Durable Power of Attorney or your duties under it that you 
do not understand, you should ask a lawyer to explain it to you." 
This language does not confer powers not otherwise contained in 
the durable financial power of attorney. 
Sec. B-9. 18-A MRSA §§7-101 to 7-104, as enacted by PL 1979, 
c. 540, §1, are repealed. 
Sec. B-I0. 18-A MRSA Art. 7, Pt. 2, as amended, is repealed. 
Sec. B-ll. 18-A MRSA Art. 7, Pt. 3, as amended, is repealed. 
Sec. B-12. 18-A MRSA §7-401, as enacted by PL 1979, c. 540, 
§l, is repealed. 
Sec. B-13. 18-A MRSA §7-402, as amended by PL 2001, c. 544, 
§1, is repealed. 
Sec. B-14. 18-A MRSA §§7-403 to 7-406, as enacted by PL 1979, 
c. 540, §l, are repealed. 
Sec. B-15. 18-A MRSA §8-304, as enacted by PL 1979, c. 540, 
§1, is amended to read: 
COMMI1TEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
§S-304. Approval of bond by judge 
Except 
as 
otherwise provided by seetiea sections 
3-603 
th~ea~h to 3-606, 4-204, 4-207, 5-411, 5-4127 and 5-432 and +-~Q4 
Title l8-B, section 702, no bond required to be given to the 
judge of probate or to be filed in the probate office is 
sufficient until it has been examined by the judge and his the 
judge's approval has been written thereon. 
Sec. B-16. 18-A MRSA §8-313, as enacted by PL 1979, c. 540, 
§l, is amended to read: 
§S-313. Judicial authorization of actions 
The judge of probate may expressly authorize or instruct a 
personal representative or other fiduciary, at the judge's 
discretion or on the complaint of himself 
e~ any interested 
person, to commence an action on the bond for the benefit of the 
estate. Nothing herein shall may be deemed to limit the power or 
duty of a successor fiduciary to bring such proceedings as they 
are authorized to bring without express court authorization under 
section 3-606, subsection (a) , 
paragraph (4) ; section 5-412, 
subsection (a), paragraph (3); Title l8-B, section +-~94 702; or 
as otherwise provided by law. 
Sec. B-17. 30-A MRSA §5706, sub-§4, as amended by PL 1995, c. 
206, §l, is further amended to read: 
4. 
Safekeeping and investment management agreements. 
The 
municipal officers may enter into an agreement with any financial 
institution with trust powers authorized to do business in the 
State for the safekeeping of the reserve funds, as defined in 
section 5801, or trust funds, as defined by section 5653, of the 
municipality. 
Services 
must consist of the safekeeping of the 
funds, collection of interest and dividends, and any other fiscal 
service that is normally covered in a safekeeping agreement. 
Investment of reserve funds or trust funds deposited under a 
safekeeping agreement may be managed either by the financial 
institution 
with 
which 
the 
funds 
are 
deposited 
or 
by 
an 
investment advisor registered with the National Association of 
Securities Dealers, federal Securities and Exchange Commission or 
other governmental agency or instrumentality with jurisdiction 
over investment advisors, to act in such capacity pursuant to an 
investment advisory agreement providing for investment management 
and periodic review of portfolio investments. 
Investment of 
funds on behalf of the municipality under this section a~e is 
governed by the rule of prudence, 
according to Title IS-AT 
seetiea 
7-~Qa 18-B, sections 802 to 807 and chapter 9. 
The 
contracting parties shall give assurance of proper safeguards 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
that are usual to these contracts and shall furnish insurance 
protection satisfactory to both parties. 
Sec. B-18. 36 MRSA §5102, sub-§4, <J[<J[B and C, as amended by PL 
1991, c. 148, §1, are further amended to read: 
B. 
A trust created by will of a decedent who at death was 
domiciled in this State; or 
C. 
A trust created by, or consisting of property of, a 
person domiciled in this StateT-eF~ 
Sec. B-19. 36 MRSA §5102, sub-§4, <J[D, as enacted by PL 1991, 
c. 148, §2, is repealed. 
Sec. B-20. Effective date. 
This Part takes effect July 1, 2005. 
PARTe 
Sec. C-l. 18-A MRSA §5-506, sub-§(d) is enacted to read: 
(d) 
An agent under a durable health care power of attorney 
has 
the 
power 
and 
authority 
to 
serve 
as 
the 
personal 
representative of the principal for all purposes of the federal 
Health Insurance Portability and Accountability Act of 1996, 42 
United States Code, Section 1320d et seq. and its regulations, 45 
Code of Federal Regulations 160-164. 
The agent has all the 
rights of the principal with respect to the use and disclosure of 
the 
individually 
identifiable 
health 
information 
and 
other 
medical records of the principal. 
Sec. C-2. 18-A MRSA §5-802, sub-§G) is enacted to read: 
(j) A surrogate or an agent named in an advance health-care 
directive has the power and authority to serve as the personal 
representative of the patient who 
executed the health care 
directive 
for all purposes 
of the 
federal 
Health 
Insurance 
Portability and Accountability Act of 1996, 42 United States 
Code, Section 1320d et seq. 
and its regulations, 45 Code of 
Federal Regulations 160-164. 
The surrogate or agent has all the 
rights of the patient with respect to the use and disclosure of 
the 
individually identifiable health information 
and 
other 
medical records of the patient. 
Sec. C-3. 
18-A MRSA §5-804, Pt. 1, as enacted by PL 1995, c. 
378, Pt. A, §1, is amended to read: 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
PART 1 
POWER OF ATTORNEY FOR HEALTH CARE 
(1) 
DESIGNATION OF AGENT: 
I designate the following 
individual as my agent to make health-care decisions for me: 
· ..................................................... . 
(name of individual you choose as agent) 
· ..................................................... . 
(address) 
(city) 
(state) 
(zip code) 
· ..................................................... . 
(home phone) 
(work phone) 
OPTIONAL: 
If I revoke my agent's authority or if my agent 
is 
not 
willing, 
able 
or 
reasonably 
available 
to 
make 
a 
health-care decision for me, I designate as my first alternate 
agent: 
· ..................................................... . 
(name of individual you choose as first alternate agent) 
· ..................................................... . 
(address) 
(city) 
(state) 
(zip code) 
· ..................................................... . 
(home phone) 
(work phone) 
OPTIONAL: 
If I revoke the authority of my agent and first 
alternate agent or if neither is willing, able or reasonably 
available to make a health-care decision for me, I designate as 
my second alternate agent: 
(name of individual you choose as second alternate agent) 
(address) 
(city) 
(state) 
(zip code) 
(home phone) 
(work phone) 
(2) 
AGENT'S AUTHORITY: 
My agent is authorized to make all 
health-care decisions for me, including decisions to provide, 
withhold or withdraw artificial nutrition and hydration and all 
other forms of health care to keep me alive, except as I state 
here: 
· ..................................................... . 
(Add additional sheets if needed.) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
( 3 ) 
WHEN AGENT'S AUTHORITY BECOMES EFFECTIVE: 
My agent's 
authority becomes effective when my primary physician determines 
that I am unable to make my own health-care decisions unless I 
mark the following box. 
If I mark this box [ 
], my agent's 
authority to make health-care decisions for 
me 
takes effect 
immediately. 
(4) 
AGENT'S OBLIGATION: 
My agent shall make health-care 
decisions for me in accordance with this power of attorney for 
health care, any instructions I give in Part 2 of this form and 
my other wishes to the extent known to my agent. 
To the extent 
my wishes are unknown, my agent shall make health-care decisions 
for me in accordance with what my agent determines to be in my 
best interest. 
In determining my best interest, my agent shall 
consider my personal values to the extent known to my agent. 
(5) 
NOMINATION OF GUARDIAN: 
If a guardian of my person 
needs to be appointed for me by a court, I nominate the agent 
designated in this form. 
If that agent is not willing, able or 
reasonably available to act as guardian, I nominate the alternate 
agents whom I have named, in the order designated. 
( 6) 
HEALTH 
INFORMATION 
AND 
OTHER 
MEDICAL 
RECORDS: 
In 
addition to the other powers granted by this document, I grant to 
my 
agent 
the 
power 
and 
authority to 
serve 
as 
my personal 
representative for all purposes of the federal Health Insurance 
Portability and Accountability Act of 1996, 
United States 
Code, Section 1320d et seq., "HIPAA," and its regulations, 45 
Code of Federal Regulations 160-164, during any time that my 
agent is exercising authority under this document. 
I intend for 
my agent to be treated as I would be with respect to my rights 
regarding the use and disclosure of my individually identifiable 
health information and other medical 
records. 
This release 
authority applies to any information governed by HIPAA. 
I authorize any physician, health-care professionaL dentist, 
health plan, 
hospital, clinic, 
laboratory, 
pharmacy or other 
covered health-care provider, 
any insurance company and any 
health-care clearinghouse that has provided treatment or services 
to me or that has paid for, or is seeking reimbursement from me 
for, such services to give, disclose and release to my agent, 
without restriction, all of my individually identifiable health 
information and medical records regarding any past, present or 
future medical or mental health condition, 
to include all 
information relating to the diagnosis and treatment of HIV/AIDS, 
sexually transmitted diseases, mental illness and drug or alcohol 
abuse. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 678, L.D. 921 
The authority given to my agent supersedes any prior agreement 
that I may have made with my health-care providers to restrict 
access to or disclosure of my individually identifiable health 
information. 
The authority given to my agent has no expiration 
date and expires only in the event that I revoke the authority in 
writing and deliver it to my health-care providers. 
SUMMARY 
This amendment replaces the bill. 
Part A enacts the Maine Uniform Trust Code. 
Uniform 
Comments and Maine Comments are included. 
Part A is effective 
July 1, 2005. 
Part B repeals superseded sections of the Probate Code and 
updates cross-references. 
Part B is effective July 1, 2005. 
Part C amends 
sections of the Probate Code concerning 
different forms of health care powers of attorney to ensure that 
health care providers are not limited in the medical information 
they provide to the agent by the federal Health Insurance 
Portability and Accountability Act of 1996. 
COMMI71EE AMENDMENT