PRINTER'S NO. 1666
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1231
Session of
2024
INTRODUCED BY BAKER, TARTAGLIONE, PENNYCUICK, J. WARD, COSTA,
MILLER AND SANTARSIERO, MAY 31, 2024
REFERRED TO JUDICIARY, MAY 31, 2024
AN ACT
1 Amending Title 20 (Decedents, Estates and Fiduciaries) of the
2 Pennsylvania Consolidated Statutes, in trusts, further
3 providing for definitions - UTC 103, for trust instrument
4 controls and mandatory rules - UTC 105, for governing law -
5 UTC 107, for situs of trust, for nonjudicial settlement
6 agreements - UTC 111, for charitable purposes; enforcement -
7 UTC 405, for trust for care of animal - UTC 408, for
8 noncharitable trust without ascertainable beneficiary - UTC
9 409, for reformation to correct mistakes - UTC 415, for
10 modification to achieve settlor's tax objectives - UTC 416,
11 for spendthrift provision - UTC 502, for creditor's claim
12 against settlor - UTC 505(a), for overdue distribution - UTC
13 506, for revocation or amendment of revocable trust - UTC
14 602, for trustee's duties and powers of withdrawal - UTC 603,
15 for accepting or declining trusteeship - UTC 701, for
16 trustee's bond - UTC 702, for cotrustees - UTC 703, for
17 vacancy in trusteeship and appointment of successor - UTC
18 704, for resignation of trustee and filing resignation, for
19 compensation of trustee - UTC 708, for duty to administer
20 trust - UTC 801, for duty of loyalty - UTC 802, for powers to
21 direct - UTC 808, for duty to inform and report, for
22 discretionary powers and for powers of trustees - UTC 815,
23 providing for directed trusts, further providing for remedies
24 for breach of trust--UTC 1001, providing for nonjudicial
25 account settlement and further providing for reliance on
26 trust instrument - UTC 1006, for exculpation of trustee - UTC
27 1008, for certification of trust - UTC 1013 and for title of
28 purchaser.
29 The General Assembly of the Commonwealth of Pennsylvania
30 hereby enacts as follows:
31 Section 1. The definitions of "interests of the
 1 beneficiaries" and "spendthrift provision" in section 7703 of
2 Title 20 of the Pennsylvania Consolidated Statutes are amended
3 and the section is amended by adding definitions to read:
4 § 7703. Definitions - UTC 103.
5 The following words and phrases when used in this chapter
6 shall have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 * * *
9 "Breach of trust." A violation by a trustee or trust
10 director of a duty that the trustee or trust director owes to a
11 beneficiary of the trust.
12 * * *
13 "Interests of the beneficiaries." The beneficial interests
14 provided in the [trust instrument] terms of a trust.
15 * * *
16 "Power of appointment." A power given to a person by the
17 terms of a trust, exercisable in a nonfiduciary capacity, to
18 grant and define a beneficial interest in trust property or to
19 grant a power of appointment over the trust property.
20 * * *
21 "Spendthrift provision." A [provision in a trust instrument]
22 term of a trust that restrains both voluntary and involuntary
23 transfer of a beneficiary's interest.
24 "Terms of a trust." Either of the following:
25 (1) Except as otherwise provided in paragraph (2), the
26 manifestation of the settlor's intent expressed in the trust
27 instrument.
28 (2) The trust's provisions, as established, determined
29 or amended by a trustee or other person in accordance with
30 applicable law, by a court order or by a nonjudicial
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 1 settlement agreement under section 7710.1 (relating to
2 nonjudicial settlement agreements - UTC 111) or rules of
3 construction.
4 * * *
5 Section 2. Sections 7705 heading, (a), (b) introductory
6 paragraph, (2) and (7), 7707, 7708(a), (b) heading and
7 introductory paragraph and (f), 7710.1(b) and (d)(1), 7735(b)
8 and (c), 7738(b) and (c), 7739(2) and (3), 7740.5, 7740.6,
9 7742(b), 7745 introductory paragraph, 7746(b) and 7752(a), (c)
10 and (e) of Title 20 are amended to read:
11 § 7705. Trust [instrument] controls; mandatory rules - UTC 105.
12 (a) Trust [instrument] controls.--Except as provided in
13 subsection (b), the [provisions] terms of a trust [instrument]
14 prevail over any contrary provisions of this chapter.
15 (b) Mandatory rules.--Notwithstanding a contrary provision
16 in the terms of the trust [instrument], the following rules
17 apply:
18 * * *
19 (2) [The] Subject to sections 7780.20 (relating to duty
20 and liability of directed trustee - UDTA 9), 7780.22
21 (relating to no duty to monitor, inform or advise - UDTA 11)
22 and 7780.23 (relating to application of cotrustee - UDTA 12),
23 the duty of a trustee to act in good faith and in accordance
24 with the terms and purposes of the trust as set forth in
25 section 7771 (relating to duty to administer trust - UTC
26 801).
27 * * *
28 (7) The power of the court under section 7768(b)
29 (relating to compensation of trustee - UTC 708) to adjust a
30 trustee's compensation specified in the terms of the trust
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 1 [instrument].
2 * * *
3 § 7707. Governing law - UTC 107.
4 The meaning and effect of the [provisions] terms of a trust
5 [instrument] shall be determined by:
6 (1) the law of the jurisdiction designated in the terms
7 of the trust [instrument], but the mandatory rules of section
8 7705(b) (relating to trust [instrument] controls; mandatory
9 rules - UTC 105) shall govern if different from the law of
10 the designated jurisdiction [designated in the trust
11 instrument]; or
12 (2) in the absence of an effective designation in the
13 terms of the trust [instrument], the law of the jurisdiction
14 in which the settlor is domiciled when the trust becomes
15 irrevocable.
16 § 7708. Situs of trust.
17 (a) Specified in trust [instrument].--Without precluding
18 other means for establishing a sufficient connection with the
19 designated jurisdiction, [provisions] the terms of a trust
20 [instrument] designating the situs of the trust are valid and
21 controlling if:
22 (1) a trustee's principal place of business is located
23 in or a trustee is a resident of the designated jurisdiction;
24 (2) all or part of the trust administration occurs in
25 the designated jurisdiction; [or]
26 (3) one or more of the beneficiaries resides in the
27 designated jurisdiction[.]; or
28 (4) a trust director's principal place of business is
29 located in or a trust director is a resident of the
30 designated jurisdiction.
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 1 (b) Unspecified in trust [instrument].--If the terms of a
2 trust [instrument does] do not specify a situs:
3 * * *
4 (f) Successor trustee.--In connection with a transfer of the
5 trust's situs, the trustee may transfer some or all of the trust
6 property to a successor trustee designated in the terms of a
7 trust [instrument] or appointed pursuant to section 7764
8 (relating to vacancy in trusteeship; appointment of successor -
9 UTC 704).
10 * * *
11 § 7710.1. Nonjudicial settlement agreements - UTC 111.
12 * * *
13 (b) General rule.--Except as otherwise provided in
14 subsection (c), all beneficiaries [and trustees of], all
15 trustees and other persons, if any, who have an interest in a
16 matter relating to a trust may enter into a binding nonjudicial
17 settlement agreement with respect to [any matter involving the
18 trust] the matter. The rules of Subchapter C (relating to
19 representation) shall apply to a settlement agreement under this
20 section. Persons having interests in the matter shall be the
21 same as indispensable parties to a court action seeking the same
22 result.
23 * * *
24 (d) Matters that may be resolved.--Matters that may be
25 resolved by a nonjudicial settlement agreement include the
26 following:
27 (1) The interpretation or construction of the
28 [provisions] terms of a trust [instrument].
29 * * *
30 § 7735. Charitable purposes; enforcement - UTC 405.
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 1 * * *
2 (b) Selection by court.--If the [provisions] terms of a
3 charitable trust [instrument] do not indicate or authorize the
4 trustee to select a particular charitable purpose or
5 beneficiary, the court may select one or more charitable
6 purposes or beneficiaries. The selection must be consistent with
7 the settlor's intention to the extent it can be ascertained.
8 (c) Proceeding to enforce trust.--A proceeding to enforce a
9 charitable trust may be brought by the settlor during the
10 settlor's lifetime or at any time by the Attorney General, a
11 charitable organization expressly named in the terms of the
12 trust [instrument] to receive distributions from the trust or
13 any other person who has standing to do so.
14 § 7738. Trust for care of animal - UTC 408.
15 * * *
16 (b) Enforcement.--A trust authorized by this section may be
17 enforced by a person appointed in the terms of the trust
18 [instrument] or, if no person is so appointed, by a person
19 appointed by the court. A person having an interest in the
20 welfare of the animal may request the court to appoint a person
21 to enforce the trust or to remove a person appointed.
22 (c) Limitation.--Property of a trust authorized by this
23 section may be applied only to its intended use, except to the
24 extent the court determines that the value of the trust property
25 exceeds the amount required for the intended use. Except as
26 otherwise provided in the terms of the trust [instrument],
27 property not required for the intended use must be distributed
28 to the settlor if then living, otherwise to the settlor's
29 successors in interest.
30 § 7739. Noncharitable trust without ascertainable beneficiary -
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 1 UTC 409.
2 Except as otherwise provided in section 7738 (relating to
3 trust for care of animal - UTC 408) or by another statute:
4 * * *
5 (2) A trust authorized by this section may be enforced
6 by a person appointed in the terms of the trust [instrument]
7 or, if no person is so appointed, by a person appointed by
8 the court.
9 (3) Property of a trust authorized by this section may
10 be applied only to its intended use, except to the extent the
11 court determines that the value of the trust property exceeds
12 the amount required for the intended use. Except as otherwise
13 provided in the terms of the trust [instrument], property not
14 required for the intended use must be distributed to the
15 settlor if then living, otherwise to the settlor's successors
16 in interest.
17 § 7740.5. Reformation to correct mistakes - UTC 415.
18 The court may reform the terms of a trust [instrument], even
19 if unambiguous, to conform to the settlor's probable intention
20 if it is proved by clear and convincing evidence that both the
21 settlor's intent [as expressed in] and the terms of the trust
22 [instrument was] were affected by a mistake of fact or law,
23 whether in expression or inducement. The court may provide that
24 the modification have retroactive effect.
25 § 7740.6. Modification to achieve settlor's tax objectives -
26 UTC 416.
27 The court may modify the terms of a trust [instrument] in a
28 manner that is not contrary to the settlor's probable intention
29 in order to achieve the settlor's tax objectives. The court may
30 provide that the modification have retroactive effect.
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 1 § 7742. Spendthrift provision - UTC 502.
2 * * *
3 (b) Creation.--A term of a trust [instrument] providing that
4 the interest of a beneficiary is held subject to a "spendthrift
5 trust," or words of similar import, is sufficient to restrain
6 both voluntary and involuntary transfer of the beneficiary's
7 interest.
8 * * *
9 § 7745. Creditor's claim against settlor - UTC 505(a).
10 Whether or not the terms of a trust [instrument contains]
11 contain a spendthrift provision and notwithstanding section 7744
12 (relating to discretionary trusts; effect of standard - UTC
13 504):
14 * * *
15 § 7746. Overdue distribution - UTC 506.
16 * * *
17 (b) Definition.--As used in this section, the term
18 "mandatory distribution" means a distribution of income or
19 principal that the trustee is required by the terms of the trust
20 [instrument] to make to a beneficiary, including a distribution
21 upon the termination of the trust. The term excludes a
22 distribution that is subject to the exercise of the trustee's
23 discretion regardless of whether the terms of the trust
24 [instrument includes] include a support or other standard to
25 guide the trustee in making distribution decisions or provides
26 that the trustee "may" or "shall" make discretionary
27 distributions, including distributions pursuant to a support or
28 other standard.
29 § 7752. Revocation or amendment of revocable trust - UTC 602.
30 (a) Power to revoke or amend.--The settlor may revoke or
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 1 amend a trust unless the terms of the trust [instrument]
2 expressly [provides] provide that the trust is irrevocable.
3 * * *
4 (c) How to revoke or amend.--The settlor may revoke or amend
5 a revocable trust only:
6 (1) by substantial compliance with a method provided in
7 the terms of the trust [instrument]; or
8 (2) if the terms of the trust [instrument does] do not
9 provide a method or the method provided in the terms of the
10 trust [instrument] is not expressly made exclusive, by a
11 later writing, other than a will or codicil, that is signed
12 by the settlor and expressly refers to the trust or
13 specifically conveys property that would otherwise have
14 passed according to the terms of the trust [instrument].
15 * * *
16 (e) Agent.--A settlor's powers with respect to revocation or
17 amendment of the nondispositive provisions of or withdrawal of
18 property from a trust may be exercised by an agent under a power
19 of attorney only to the extent expressly authorized by the terms
20 of the trust [instrument] or the power. The agent under a power
21 of attorney that expressly authorizes the agent to do so may
22 amend the dispositive provisions of a revocable trust as the
23 court may direct.
24 * * *
25 Section 3. Section 7753(a) of Title 20 is amended and the
26 section is amended by adding a subsection to read:
27 § 7753. Trustee's duties; powers of withdrawal - UTC 603.
28 (a) Power of settlor.--Regardless of the legal capacity of
29 the settlor, the rights of the beneficiaries are subject to the
30 control of, and the duties of the trustee are owed exclusively
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 1 to, the settlor [while] to the extent a trust is revocable.
2 * * *
3 (c) Direction contrary to trust terms.--While a trust is
4 revocable, the trustee may follow a written direction of the
5 settlor that is contrary to the terms of the trust. To the
6 extent a trust is revocable by a settlor in conjunction with
7 other persons, the trustee may follow a written direction from
8 the settlor and those persons that is contrary to the terms of
9 the trust.
10 Section 4. Sections 7761(a), 7762(a) and (c), 7763(a.1), (c)
11 and (g), 7764(b), (c)(1) and (d)(1), 7765(a.1)(2), 7768(a) and
12 (b), 7771, 7772(b)(1) and 7778 of Title 20 are amended to read:
13 § 7761. Accepting or declining trusteeship - UTC 701.
14 (a) Accepting trusteeship.--Except as otherwise provided in
15 subsection (c), a person designated as trustee accepts the
16 trusteeship:
17 (1) by substantially complying with a method of
18 acceptance provided in the terms of the trust [instrument];
19 or
20 (2) if the terms of the trust [instrument does] do not
21 provide a method or the method provided in the terms of the
22 trust [instrument] is not expressly made exclusive, by
23 accepting delivery of the trust property, exercising powers
24 or performing duties as trustee or by otherwise indicating
25 acceptance of the trusteeship.
26 * * *
27 § 7762. Trustee's bond - UTC 702.
28 (a) When required.--A trustee shall give bond to secure
29 performance of the trustee's duties only if the court finds that
30 a bond is needed to protect the interests of the beneficiaries
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 1 or is required by the [provisions] terms of the trust