Section 91-8-103 - DefinitionsIn this chapter:
(1) "Action," with respect to an act of a trustee, includes a failure to act.(2) "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code of 1986, as in effect on July 1, 2014, or as later amended.(3) "Beneficial interest" means a distribution interest or a remainder interest; provided, however, a beneficial interest specifically excludes a power of appointment or a power reserved by a settlor.(4) "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.(5) "Beneficiary surrogate" means a person, including a trust protector or trust advisor, other than a trustee, designated by the settlor in the trust instrument or in a writing delivered to the trustee, or designated in a writing delivered to the trustee by a trust protector or trust advisor with power under the terms of the trust instrument to receive notices, information, and reports otherwise required to be provided to a beneficiary under Section 91-8-813(a) and (b), or to represent a beneficiary under Section 91-8-303(8).(6) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in Section 91-8-405(a).(7) "Conservator" means a person appointed by the court to administer the estate of a minor or adult individual as defined in Section 93-20-102.(8) "Directed trust" means a trust where through the terms of the trust, one or more persons are given the authority to direct or consent to a fiduciary's actual or proposed investment decision, distribution decision, or any other decision of the fiduciary.(9) "Distribution interest" means: (A) An interest, other than a remainder interest, held by an eligible distributee or permissible distributee under a trust and may be a current distribution interest or a future distribution interest;(B) A distribution interest is classified as either a mandatory interest, a support interest or a discretionary interest; and although not the exclusive means to create each such respective distribution interest, absent clear and convincing evidence to the contrary, use of the example language accompanying the following definitions of each such respective distribution interest results in the indicated classification of distribution interest: (i) A mandatory interest means a distribution interest in which the timing of any distribution must occur within one (1) year from the date the right to the distribution arises and the trustee has no discretion in determining whether a distribution shall be made or the amount of such distribution; example distribution language indicating a mandatory interest includes, but is not limited to:a. All income shall be distributed to a named beneficiary; orb. One Hundred Thousand Dollars ($100,000.00) a year shall be distributed to a named beneficiary;(ii) A support interest means a distribution interest that is not a mandatory interest but still contains mandatory language such as "shall make distributions" and is coupled with a standard capable of judicial interpretation; example distribution language indicating a support interest includes, but is not limited to:a. The trustee shall make distributions for health, education, maintenance, and support;b. Notwithstanding the distribution language used, if a trust instrument containing such distribution language specifically provides that the trustee exercise discretion in a reasonable manner with regard to a discretionary interest, then notwithstanding any other provision of this subparagraph defining distribution interests, the distribution interest shall be classified as a support interest;(iii) A discretionary interest means any interest that is not a mandatory or a support interest and is any distribution interest where a trustee has any discretion to make or withhold a distribution; example distribution language indicating a discretionary interest includes, but is not limited to: a. The trustee may, in the trustee's sole and absolute discretion, make distributions for health, education, maintenance, and support;b. The trustee, in the trustee's sole and absolute discretion, shall make distributions for health, education, maintenance, and support;c. The trustee may make distributions for health, education, maintenance, and support;d. The trustee shall make distributions for health, education, maintenance, and support; however, the trustee may exclude any of the beneficiaries or may make unequal distributions among them; ore. The trustee may make distributions for health, education, maintenance, support, comfort, and general welfare;f. A discretionary interest may also be evidenced by:1. Permissive distribution language such as "may make distributions";2. Mandatory distribution language that is negated by the discretionary distribution language contained in the trust such as "the trustee shall make distributions in the trustee's sole and absolute discretion";g. An interest that includes mandatory distribution language such as "shall" but is subsequently qualified by discretionary distribution language shall be classified as a discretionary interest and not as a support or a mandatory interest;(C)(i) To the extent a trust contains distribution language indicating the existence of any combination of a mandatory, support and discretionary interest, that combined interest of the trust shall be divided and treated separately as follows: a. The trust shall be a mandatory interest only to the extent of the mandatory distribution language;b. The trust shall be a support interest only to the extent of such support distribution language; andc. The remaining trust property shall be held as a discretionary interest;(ii) For purposes of this subparagraph (C), a support interest that includes mandatory distribution language such as "shall" but is subsequently qualified by discretionary distribution language, shall be classified as a discretionary interest and not as a support interest.(10) "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment.(11) "Excluded fiduciary" means any trustee, trust advisor, or trust protector to the extent that, under the terms of a trust:(A) The trustee, trust advisor, or trust protector is excluded from exercising a power, or is relieved of a duty; and(B) The power or duty is granted or reserved to another person.(12) "Fiduciary" means: (A) A trustee, conservator, guardian, agent under any agency agreement or other instrument, an executor, personal representative or administrator of a decedent's estate, or any other party, including a trust advisor or a trust protector, who is acting in a fiduciary capacity for any person, trust, or estate;(B) For purposes of subparagraph (A), an agency agreement includes, but is not limited to, any agreement under which any delegation is made, either pursuant to Section 91-8-807 or by anyone holding a power or duty pursuant to Article 12;(C) For purposes of the definition of fiduciary in Section 91-8-103, fiduciary does not mean any person who is an excluded fiduciary as such is defined in Section 91-8-103.(13) "Guardian" means a person appointed by the court to make decisions regarding the support, care, education, health, and welfare of a minor or adult individual as defined in Section 93-20-102. The term does not include a guardian ad litem.(14) "Interests of the beneficiaries" means the beneficial interests provided in the terms of the trust.(15) "Internal Revenue Code" means the Internal Revenue Code of 1986, as in effect on July 1, 2014, or as later amended.(16) "Jurisdiction," with respect to a geographic area, includes a state or country.(17) "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.(18) "Power of appointment" means:(A) An inter vivos or testamentary power to direct the disposition of trust property, other than a distribution decision made by a trustee or other fiduciary to a beneficiary;(B) Powers of appointment are held by the person to whom such power has been given, and not by a settlor in that person's capacity as settlor.(19) "Power of withdrawal" means a presently exercisable general power of appointment other than a power: (A) exercisable by a trustee and limited by an ascertainable standard; or(B) exercisable by another person only upon consent of the trustee or a person holding an adverse interest.(20) "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.(21) "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 subparagraph (A) terminated on that date without causing the trust to terminate; or(C) Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.(22) "Remainder interest" means an interest under which a trust beneficiary will receive property held by a trust outright at some time during the future.(23) "Reserved power" means a power held by a settlor.(24) "Revocable," as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest.(25) "Settlor" means a person, including a testator, who creates, or contributes property to, a trust. If more than one (1) 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.(26) "Spendthrift provision" means a term of a trust which restrains both voluntary and involuntary transfer of a beneficiary's interest.(27) "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. The term includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.(28) "Successors in interest" means 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 at law.(29) "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.(30) "Trust advisor" means any person described in Section 91-8-1201(a).(31) "Trust instrument" means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto.(32) "Trustee" includes an original, additional, and successor trustee, and a cotrustee.(33) "Trust protector" means any person described in Section 91-8-1201(a).Amended by Laws, 2019, ch. 463, SB 2828,§ 8, eff. 1/1/2020.Amended by Laws, 2016, ch. 396, SB 2211, 1, eff. 7/1/2014.Added by Laws, 2014, ch. 421, SB 2727, 3, eff. 7/1/2014.