*Annotations to former chapter 780:
Probate Court has only powers expressly given or necessarily implied; cannot order trust terminated; when may construe trust. 93 C. 405. National bank can act as trustee whenever a state bank could. 94 C. 651.
Sec. 45a-473. (Formerly Sec. 45-83). Bonds of testamentary trustees.
Sec. 45a-474. (Formerly Sec. 45-84). Vacancies in office of trustee.
Sec. 45a-476. (Formerly Sec. 45-86). Legal title vests in trustee appointed to fill vacancy.
Sec. 45a-479. (Formerly Sec. 45-92). Suspension of fiduciary powers during armed forces service.
Sec. 45a-481. (Formerly Sec. 45-93). Distribution by testamentary trustee upon completion of trust.
Sec. 45a-482. (Formerly Sec. 45-93a). Distribution of assets of inoperative trust.
Sec. 45a-484. (Formerly Sec. 45-79c). Termination of small trusts.
Secs. 45a-487g to 45a-487i. Reserved
Sec. 45a-487j. Short title: “Connecticut Qualified Dispositions in Trust Act”.
Sec. 45a-487l. Appointment of trust director by transferor.
Sec. 45a-487n. Irrevocability of trust instrument.
Sec. 45a-487o. No retained interest of transferor.
Sec. 45a-487p. Avoidance of qualified dispositions.
Sec. 45a-487q. Persons not subject to qualified dispositions.
Sec. 45a-487r. Effect of avoidance of qualified dispositions.
Sec. 45a-487s. Applicability of sections 45a-487k to 45a-487r to qualified dispositions.
Sec. 45a-487t. Applicability of rules.
Sec. 45a-488. Division of trust for benefit of beneficiaries. Approval by beneficiaries required.
Sec. 45a-490. Short title: Uniform Statutory Rule Against Perpetuities.
Sec. 45a-491. Statutory rule against perpetuities.
Sec. 45a-492. When nonvested property interest or power of appointment created.
Sec. 45a-494. Exclusions from statutory rule against perpetuities.
Sec. 45a-495. Prospective application.
Sec. 45a-496. Uniformity of application and construction.
Secs. 45a-497 to 45a-499. Reserved
Sec. 45a-499a. Short title: “Connecticut Uniform Trust Code”.
Sec. 45a-499e. Default and mandatory rules.
Sec. 45a-499f. Common law of trusts; principles of equity.
Sec. 45a-499h. Principal place of administration.
Sec. 45a-499i. Methods and waiver of notice.
Sec. 45a-499j. Others treated as qualified beneficiaries.
Sec. 45a-499k. Nonjudicial settlement agreements.
Sec. 45a-499l. Insurable interest of trustee.
Sec. 45a-499m. Role of court in administration of trust.
Sec. 45a-499n. Jurisdiction over trustee and beneficiary.
Sec. 45a-499o. Subject matter jurisdiction of Probate Courts and the Superior Court.
Sec. 45a-499q. Representation: Basic effect.
Sec. 45a-499r. Representation by holder of general testamentary power of appointment.
Sec. 45a-499t. Appointment of representative.
Sec. 45a-499u. Designated representative.
Sec. 45a-499v. Methods of creating trust.
Sec. 45a-499w. Requirements for creation.
Sec. 45a-499x. Trusts created in other jurisdictions.
Sec. 45a-499y. Trust purposes.
Sec. 45a-499z. Charitable purposes; enforcement; conversion to new entity.
Sec. 45a-499aa. Creation of trust induced by fraud, duress or undue influence.
Sec. 45a-499bb. Evidence of oral trust.
Sec. 45a-499cc. Noncharitable trust without ascertainable beneficiary.
Sec. 45a-499dd. Modification or termination of trust; proceedings for approval or disapproval.
Sec. 45a-499ee. Modification or termination of noncharitable irrevocable trust by consent.
Sec. 45a-499hh. Limitation on court authority to apply cy pres.
Sec. 45a-499ii. Modification or termination of uneconomic trust.
Sec. 45a-499jj. Reformation of noncharitable trust to correct mistakes.
Sec. 45a-499kk. Modification to achieve settlor's tax objectives.
Sec. 45a-499ll. Combination and division of trusts.
Sec. 45a-499mm. Personal obligations of trustee.
Sec. 45a-499nn. Limitations on beneficiary's creditor to attach or compel distribution of property.
Sec. 45a-499oo. Revocation or amendment of revocable trust.
Sec. 45a-499pp. Settlor's powers; powers of withdrawal.
Sec. 45a-499rr. Accepting or declining trusteeship.
Sec. 45a-499ss. Trustee's bond.
Sec. 45a-499uu. Vacancy in trusteeship; appointment of successor.
Sec. 45a-499vv. Resignation of trustee.
Sec. 45a-499ww. Removal of trustee.
Sec. 45a-499xx. Delivery of property by former trustee.
Sec. 45a-499yy. Compensation of trustee.
Sec. 45a-499zz. Reimbursement of expenses.
Sec. 45a-499aaa. Duty to administer trust.
Sec. 45a-499bbb. Duty of loyalty.
Sec. 45a-499ccc. Impartiality.
Sec. 45a-499ddd. Prudent administration.
Sec. 45a-499eee. Delegation by trustee.
Sec. 45a-499fff. Creditor's claims against settlor.
Sec. 45a-499ggg. Control and protection of trust property.
Sec. 45a-499hhh. Recordkeeping and identification of trust property.
Sec. 45a-499iii. Enforcement and defense of claims.
Sec. 45a-499jjj. Collecting trust property.
Sec. 45a-499kkk. Trustee's duty to inform and report.
Sec. 45a-499lll. Discretionary powers; tax savings.
Sec. 45a-499mmm. General powers of trustee.
Sec. 45a-499nnn. Specific powers of trustee.
Sec. 45a-499ooo. Distribution of trust property upon termination.
Sec. 45a-499ppp. Breach of trust.
Sec. 45a-499qqq. Damages in absence of breach.
Sec. 45a-499rrr. Limitation of action against trustee.
Sec. 45a-499sss. Reliance on trust instrument.
Sec. 45a-499ttt. Event affecting administration or distribution.
Sec. 45a-499uuu. Exculpation of trustee.
Sec. 45a-499vvv. Beneficiary's consent, release or ratification.
Sec. 45a-499www. Limitation on personal liability of trustee.
Sec. 45a-499xxx. Interest as general partner.
Sec. 45a-499yyy. Protection of person dealing with trustee.
Sec. 45a-499zzz. Certification of trust.
Sec. 45a-500. Uniformity of application and construction of trust.
Sec. 45a-500a. Severability clause.
Sec. 45a-500b. Short title: Connecticut Uniform Directed Trust Act.
Sec. 45a-500c. Application; principal place of administration.
Sec. 45a-500d. Common law and principles of equity.
Sec. 45a-500f. Powers of trust director.
Sec. 45a-500g. Limitations on trust director.
Sec. 45a-500h. Duty and liability of trust director.
Sec. 45a-500i. Duty and liability of directed trustee.
Sec. 45a-500j. Duty to provide information to trust director or trustee.
Sec. 45a-500k. No duty to monitor, inform or advise.
Sec. 45a-500l. Application to cotrustee.
Sec. 45a-500m. Limitation of action against trust director.
Sec. 45a-500n. Defenses in action against trust director.
Sec. 45a-500o. Jurisdiction over trust director.
Sec. 45a-500p. Office of trust director.
Sec. 45a-500q. Uniformity of application and construction.
Sec. 45a-500r. Relation to Electronic Signatures in Global and National Commerce Act.
Sec. 45a-500s. Application of Connecticut Uniform Directed Trust Act with respect to federal act.
Sec. 45a-501. Reserved
Sec. 45a-503. (Formerly Sec. 45-95). Rule against perpetuities. “Second look” doctrine.
Sec. 45a-504. (Formerly Sec. 45-96). Reduction of age contingency to preserve interest.
Sec. 45a-506. (Formerly Sec. 45-98). Limitations not invalidated, when.
Sec. 45a-507. (Formerly Sec. 45-99). Application of rule.
Secs. 45a-509 to 45a-513. Reserved
Sec. 45a-514. (Formerly Sec. 45-79). Charitable trusts.
Sec. 45a-515. (Formerly Sec. 45-80). Charitable uses determined by trustee, when.
Sec. 45a-516. (Formerly Sec. 45-81). Gifts to charitable community trust.
Sec. 45a-518. Reserved
Sec. 45a-520. (Formerly Sec. 45-79b). Termination of charitable trusts.
Secs. 45a-522 to 45a-525. Reserved
Sec. 45a-535. Short title: Uniform Prudent Management of Institutional Funds Act.
Sec. 45a-535b. Standard of conduct in managing and investing institutional funds.
Sec. 45a-535d. Delegation of management and investment of institutional fund.
Sec. 45a-535f. Determination of compliance with act.
Sec. 45a-535g. Application to existing institutional funds.
Sec. 45a-535h. Relation of act to Electronic Signatures in Global and National Commerce Act.
Sec. 45a-535i. Uniformity of application and construction of act.
Secs. 45a-536 to 45a-539. Reserved
Sec. 45a-540. (Formerly Secs. 45-100a to 45-100c). Powers in trust instruments act.
Sec. 45a-541. Short title: Connecticut Uniform Prudent Investor Act.
Sec. 45a-541a. Prudent investor rule.
Sec. 45a-541b. Standard of care. Portfolio strategy. Risk and return objectives.
Sec. 45a-541c. Diversification.
Sec. 45a-541d. Duties at inception of trusteeship.
Sec. 45a-541g. Investment costs.
Sec. 45a-541h. Reviewing compliance.
Sec. 45a-541i. Delegation of investment and management functions.
Sec. 45a-541j. Language invoking standards of act.
Sec. 45a-541k. Uniformity of application and construction.
Sec. 45a-542. Short title: Connecticut Principal and Income Act.
Sec. 45a-542b. Fiduciary duties.
Sec. 45a-542c. Trustee's power to adjust.
Sec. 45a-542e. Distribution to beneficiaries.
Sec. 45a-542f. Right to income.
Sec. 45a-542h. Apportionment when income interest ends.
Sec. 45a-542i. Character of receipts.
Sec. 45a-542j. Distribution from trust or estate.
Sec. 45a-542k. Business and other activities conducted by trustee.
Sec. 45a-542l. Principal receipts.
Sec. 45a-542m. Rental property.
Sec. 45a-542n. Obligation to pay money.
Sec. 45a-542o. Insurance policies and similar contracts.
Sec. 45a-542p. Insubstantial allocations not required.
Sec. 45a-542q. Deferred compensation, annuities and similar payments. Separate funds.
Sec. 45a-542r. Liquidating asset.
Sec. 45a-542s. Minerals, water and other natural resources.
Sec. 45a-542u. Property not productive of income.
Sec. 45a-542v. Derivatives and options.
Sec. 45a-542w. Asset-backed securities.
Sec. 45a-542x. Disbursements from income.
Sec. 45a-542y. Disbursements from principal.
Sec. 45a-542z. Transfers from income to principal for depreciation.
Sec. 45a-542aa. Transfers from income to reimburse principal.
Sec. 45a-542cc. Adjustments between principal and income as result of taxes.
Sec. 45a-542dd. Uniformity of application and construction.
Sec. 45a-542ee. Severability clause.
Sec. 45a-542ff. Application to existing trust or decedent's estate.
Sec. 45a-543. Determination by court re abuse of discretion by fiduciary.
Secs. 45a-544 and 45a-545. Reserved
Sec. 45a-471.* (Formerly Sec. 45-213c). Trustee to receive proceeds of pension, retirement, death benefit and profit-sharing plans. (a) As used in this section, “proceeds” means the proceeds paid upon the death of any insured, employee or participant under any thrift plan or trust, savings plan or trust, pension plan or trust, death benefit plan or trust, stock bonus plan or trust including any employee's stock ownership plan or trust; any retirement plan or trust, which includes self-employed retirement plans and individual retirement accounts, annuities and bonds; and the proceeds of any individual, group or industrial life insurance policy, or accident and health insurance policy and any annuity contract, endowment insurance contract or supplemental insurance contract.
(b) (1) Proceeds may be made payable to a trustee under a trust agreement or declaration of trust in existence on the date of such designation, and identified in such designation. Such proceeds shall be paid to such trustee and held and disposed of in accordance with the terms of such trust agreement or declaration of trust, including any written amendments thereto in existence on the date of the death of the insured, employee or participant. It shall not be necessary to the validity of any such trust agreement or declaration of trust that it have a trust corpus other than the right of the trustee as beneficiary to receive such proceeds.
(2) Proceeds may be made payable to a trustee of a trust to be established by will. Upon issuance of a decree qualifying a trustee so named, such proceeds shall be payable to the trustee to be held and disposed of in accordance with the terms of such will as a testamentary trust. A designation which in substance names as such beneficiary the trustee under the will of the insured, employee or participant, shall be taken to refer to the will of such person actually admitted to probate, whether executed before or after the making of such designation.
(c) Such proceeds may be payable in more than one installment. If no qualified trustee claims such proceeds from the insurer or other payor within eighteen months after the death of the insured, employee or participant, or if satisfactory evidence is furnished to the insurer or other payor within such period showing that there is or will be no trustee to receive such proceeds, such proceeds shall be paid by the insurer or other payor to the personal representative or assigns of the insured, employee or participant, unless otherwise provided by agreement with the insurer or other payor during the lifetime of the insured, employee or participant.
(d) Except to the extent otherwise provided by the trust agreement, declaration of trust or will, proceeds received by the trustee shall not be subject to the debts of the insured, employee or participant, to any greater extent than if such proceeds were payable to the beneficiaries named in the trust; and for all purposes, including the succession and transfer tax, they shall not be deemed payable to or for the benefit of the estate of the insured, employee or participant.
(e) Proceeds so held in trust may be commingled with any other assets which may properly become part of such trust.
(f) Nothing in this section shall affect the validity of any designation made prior to October 1, 1978, of the trustee of any trust established under a trust agreement or declaration of trust or by will.
(P.A. 78-128.)
*Note: In accordance with the provisions of P.A. 87-384, S. 34, this section is applicable with respect to decedents dying before October 1, 1987.
History: Sec. 45-213c transferred to Sec. 45a-471 in 1991.
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Sec. 45a-472. Trustee to receive proceeds of pension, retirement, death benefit and profit-sharing plans. (a) As used in this section, “proceeds” means the proceeds paid upon the death of any insured, employee, participant, or beneficiary under: Any thrift plan, savings plan, pension plan, profit-sharing plan, death benefit plan, stock bonus plan including any employee stock ownership plan; any qualified cash or deferred arrangement which is part of a profit-sharing or stock bonus plan; any retirement plan including a self-employed retirement plan; any individual retirement account, annuity and bond or simplified employee pension plan; and the proceeds of any individual, group or industrial life insurance policy, or accident and health insurance policy and any annuity contract, endowment insurance contract or supplemental insurance contract.
(b) (1) Proceeds may be made payable to a trustee under a trust agreement or declaration of trust in existence on the date of such designation, and identified in such designation. Such proceeds shall be paid to such trustee and held and disposed of in accordance with the terms of such trust agreement or declaration of trust, including any written amendments thereto in existence on the date of death of the insured, employee or participant. It shall not be necessary to the validity of any such trust agreement or declaration of trust that it have a trust corpus other than the right of the trustee as beneficiary to receive such proceeds.
(2) Proceeds may be made payable to a trustee of a trust to be established by will. Upon issuance of a decree qualifying a trustee so named, such proceeds shall be payable to the trustee to be held and disposed of in accordance with the terms of such will as a testamentary trust. A designation which in substance names as such beneficiary the trustee under the will of the insured, employee or participant, shall be taken to refer to the will of such person actually admitted to probate, whether executed before or after the making of such designation.
(c) Such proceeds may be payable in more than one installment. If no qualified trustee claims such proceeds from the insurer or other payor within eighteen months after the death of the insured, employee or participant, or if satisfactory evidence is furnished to the insurer or other payor within such period showing that there is or will be no trustee to receive such proceeds, such proceeds shall be paid by the insurer or other payor to the personal representative or assigns of the insured, employee or participant, unless otherwise provided by agreement with the insurer or other payor during the lifetime of the insured, employee or participant.
(d) Except to the extent otherwise provided by the trust agreement, declaration of trust or will, proceeds received by the trustee shall not be subject to the debts of the insured, employee or participant, to any greater extent than if such proceeds were payable to the beneficiaries named in the trust; and for all purposes, including the succession and transfer tax, they shall not be deemed payable to or for the benefit of the estate of the insured, employee or participant.
(e) Proceeds so held in trust may be commingled with any other assets which may properly become part of such trust.
(f) Nothing in this section shall affect the validity of any designation made prior to October 1, 1978, of the trustee of any trust established under a trust agreement or declaration of trust or by will.
(g) The provisions of this section shall be applicable to decedents dying on or after October 1, 1987.
(P.A. 89-202, S. 6.)
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Sec. 45a-473. (Formerly Sec. 45-83). Bonds of testamentary trustees. Section 45a-473 is repealed, effective January 1, 2020.
(1949 Rev., S. 6887; P.A. 80-227, S. 13, 24; 80-476, S. 213; P.A. 82-472, S. 162, 183; P.A. 19-137, S. 123.)
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Sec. 45a-474. (Formerly Sec. 45-84). Vacancies in office of trustee. When a will, trust agreement or other instrument establishing a trust fails to provide for the contingency of the trustee's refusal to accept the trust or the trustee's resignation, death or incapacity, the Probate Court specified in section 45a-499p may, on the happening of any such contingency, appoint some suitable person to fill such vacancy, taking from such suitable person a probate bond, unless in the case of a will it is otherwise provided therein. The court may appoint a successor trustee of an inter vivos trust before such contingency has occurred if the court finds that a vacancy in the office of trustee is likely to occur. The court shall specify the conditions that the successor trustee of such inter vivos trust must satisfy before becoming trustee. In the event of a vacancy in the office of trustee of such inter vivos trust, the successor trustee may assume the office immediately upon satisfying the conditions set forth in the court's order without further court action.
(1949 Rev., S. 6888; P.A. 80-476, S. 214; P.A. 15-217, S. 26; P.A. 19-137, S. 114.)
History: P.A. 80-476 rephrased provisions and substituted “proceeds” for “avails”; Sec. 45-84 transferred to Sec. 45a-474 in 1991; P.A. 15-217 restructured existing provisions re Probate Court authority to appoint successor trustee when will, trust agreement or other instrument establishing a trust fails to provide for the contingency of the trustee's refusal to accept the trust or the trustee's resignation, death or incapacity, added provision re Probate Court authority to appoint successor trustee of inter vivos trust and made a technical change; P.A. 19-137 replaced existing provision re Probate Court district with “specified in section 45a-499p”, made a technical change and deleted “, in which case the provisions of section 45a-473 shall apply”, effective January 1, 2020.
See Sec. 52-60 re appointment of probate judge as attorney for nonresident fiduciary.
Annotations to former section 45-84:
Testator impliedly has power to provide manner of filling vacancies. 54 C. 325; 69 C. 708; 84 C. 499. Power to appoint trustees concurrent with Superior Court. 60 C. 325; 92 C. 473. Does not extend to trust involving personal discretion. 82 C. 198; 83 C. 654. Successor cannot exercise purely discretionary powers given to original trustee. 90 C. 461. Legal incapacity of corporation to accept fund for charitable purposes requires appointment of trustee. Id., 592. Refusal of trustee to act requires appointment of another. 67 C. 237; 71 C. 122; 74 C. 599. If validity of trust is doubtful, Probate Court should appoint. 77 C. 705. Trustee who has been superseded by another is not a proper party to action de fund. 91 C. 446. Trust will not be allowed to fail for want of a trustee. 106 C. 623. Cited. 132 C. 104; 140 C. 124.
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Sec. 45a-475. (Formerly Sec. 45-85). Filling of vacancy in town or county trusteeship. Duties of town's successor trustee. (a) Whenever the trustee of any trust for the use or benefit of any town or county or for the citizens of any town or county, as such, dies or becomes incapacitated or resigns or refuses to act, and no provision is made for such contingency by the instrument creating such trust, the treasurer of such town on behalf of the town or the State Treasurer on behalf of the county shall thereupon become such trustee, and such treasurer and his successors in office shall act as such trustee, provided the town treasurer shall secure such bond as the selectmen from time to time prescribe.
(b) (1) When any town treasurer acts as such trustee, he shall include in his annual statement a report in detail of his account as such trustee, including a list of the securities on hand, the price and date of purchase of all securities purchased since his last statement, the amount, date and source of each item of income received and the names of all banks and depositaries where such trust money is deposited with the amount on deposit in each bank or depositary. (2) Such trust funds held by a town treasurer shall be invested only in the manner prescribed by section 45a-203, unless otherwise directed by vote of a town meeting. (3) All property so held in trust by a town treasurer shall at all times be open to the inspection of the selectmen and to the inspection of the person or persons appointed under the provisions of section 7-392 to audit the accounts of the town.
(c) The provisions of section 45a-474 shall not apply to the trusts specified in this section.
(1949 Rev., S. 6889; 1959, P.A. 152, S. 63; P.A. 80-476, S. 215.)
History: 1959 act deleted all references to county government and empowered state treasurer to act for county as trustee; P.A. 80-476 divided section into Subsecs. and made minor wording changes, i.e. deleting “such” in Subsec. (b) in most instances of its occurrence; Sec. 45-85 transferred to Sec. 45a-475 in 1991.
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Sec. 45a-476. (Formerly Sec. 45-86). Legal title vests in trustee appointed to fill vacancy. When the legal title to any property has vested in a trustee and the trusteeship has become vacant, such legal title shall vest in his successor immediately upon his appointment and qualification. A certificate of the successor's appointment, duly made and recorded in the land records of the town in which the property is situated, shall be evidence that such legal title is vested in the successor trustee.
(1949 Rev., S. 6890; P.A. 80-476, S. 216.)
History: P.A. 80-476 rephrased provisions and substituted “property” for “estate”; Sec. 45-86 transferred to Sec. 45a-476 in 1991.
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Sec. 45a-477. (Formerly Sec. 45-90). Jurisdiction of Probate Court over trusts administered outside of this state. Any one or more of the beneficiaries of a trust that is administered outside of this state who are residents of this state may petition the Probate Court specified in section 45a-499p to assume jurisdiction of such trust. In the petition, the beneficiaries shall allege that it would be in the best interest of some or all of the beneficiaries and not adverse to any of the other beneficiaries to be administered in a Probate Court in this state or that all such beneficial owners consent to the administration of the trust or custodianship in a Probate Court in this state. The Probate Court, after hearing with notice as it directs, including notice to any court having jurisdiction over the trust upon written consent of all such beneficiaries or satisfaction that the allegations in the petition are true and upon proof that such transfer is not prohibited by law, may assume jurisdiction. If a probate bond is required under the laws of the state in which the transferring court is located or this state, such bond shall be given to the Probate Court prior to the assumption of jurisdiction by such court. Upon transfer and assumption of jurisdiction and administration of such trust to this state, the record shall be established in the Probate Court as if the trust were being originally established for administration in this state and the provisions of the general statutes shall govern the trust and its administration.
(1949 Rev., S. 6895; P.A. 80-227, S. 14, 24; 80-476, S. 217; P.A. 82-115, S. 1, 3; P.A. 19-137, S. 115.)
History: P.A. 80-227 rephrased provision re bond requirement, adding reference to increases in existing bond and security and reducing amount from double the value of the estate “of which such person is entitled to the life use or income” to an amount equaling the value of the estate to be removed from state, effective July 1, 1981; P.A. 80-476 rephrased provisions; P.A. 82-115 added Subsec. (b) allowing probate courts to assume jurisdiction over trusts created by nondomiciliaries; Sec. 45-90 transferred to Sec. 45a-477 in 1991; P.A. 19-137 deleted former Subsec. (a) re person not a resident of state who is owner of life estate or income in personal property or real property in state, deleted former Subsec. (b) designator and amended same by replacing “vested beneficial owners of interests established by a testamentary transfer of real property situated in this state or personal property wherever situated, in trust or under custodianship established and administered” with “beneficiaries of a trust that is administered”, replacing provision re Probate Court district with “the Probate Court specified in section 45a-499p”, deleting references to custodianship, replacing references to beneficial owners with references to beneficiaries, replacing “estate” with “trust”, and making technical changes, effective January 1, 2020.
See Sec. 45a-206 re foreign corporation's right to be executor or trustee.
See Sec. 45a-207 re investments held by foreign corporation as executor or trustee.
See Sec. 45a-635 re removal by foreign guardian of ward's personal property.
See Sec. 52-60 re appointment of probate judge as attorney for nonresident fiduciary.
Annotations to former section 45-90:
Court in which estate is settled alone has jurisdiction. 58 C. 233.
Transfer of funds in ancillary trust here to another jurisdiction is consistent with Connecticut public policy. 28 CS 499.
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Sec. 45a-478. (Formerly Sec. 45-87). Appointment of trustee when person has disappeared. Trustee's rights and duties. Procedure if person reappears. (a) When any person having property has disappeared so that after diligent search his whereabouts cannot be ascertained, the court of probate in the district in which he resided or had his domicile at the time of his disappearance or, if such person resided outside of this state, then in the district in which any of his property is situated, upon the application of the spouse, or a relative, creditor or other person interested in the property of such person, or the selectmen of the town where such person last resided, or in which such property is situated, shall, after public notice and a hearing thereon, appoint a trustee of the property of such person.
(b) Diligent search shall be deemed to have been made for any person who has disappeared while serving with the armed forces when such person has been reported or listed as missing, missing in action, interned in a neutral country or beleaguered, besieged or captured by an enemy.
(c) Such trustee, upon giving a probate bond, shall have charge of such property, and he shall have the same powers, duties and obligations as a conservator of the estate of an incapable person. With the approval of the court of probate, such trustee may use any portion of the income or principal of such property for the support of the spouse and minor children of such person.
(d) Upon its own motion or upon the application of any interested person, the court of probate may, after public notice and a hearing thereon, remove, discharge, require an accounting from, or appoint a successor to, such trustee.
(e) The court of probate may continue such trustee in office until satisfactory proof of the death of such person is furnished, until proceedings are taken to settle his estate on the presumption of his death under the provisions of section 45a-329, or for a period of seven years from the time of the disappearance of such person if he remains unheard of.
(f) In case of the reappearance of such person, the court of probate shall, on his application, after hearing and public notice thereof, order the restoration of such property to the person entitled thereto and the discharge of such trustee, after acceptance of the trustee's account.
(1949 Rev., S. 6892; 1953, S. 2909d; P.A. 80-476, S. 218.)
History: P.A. 80-476 divided section into Subsecs. and rephrased provisions; Sec. 45-87 transferred to Sec. 45a-478 in 1991.
See Sec. 52-60 re appointment of probate judge as attorney for nonresident fiduciary.
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Sec. 45a-479. (Formerly Sec. 45-92). Suspension of fiduciary powers during armed forces service. (a) When any fiduciary of any trust other than a testamentary trust is engaged in service in the armed forces, as defined in section 27-103, which prevents his giving the necessary attention to his duties as the fiduciary, the Superior Court, upon petition of the fiduciary or any person interested in such estate, may, upon such notice as said court deems suitable and after hearing, order the suspension of the powers and duties of the fiduciary for the period of such service and until the further order of said court.
(b) The Superior Court may appoint a substitute fiduciary to serve for the period of suspension whether or not there remains any fiduciary to exercise the powers and duties of the fiduciary who is in such service. Said court may decree that the ownership and title to the trust res shall vest in the substitute fiduciary or cofiduciary or both and that the duties and such of the powers and discretions as are not personal to the fiduciary may be exercised by the cofiduciary or substitute fiduciary and may make such further orders as said court deems advisable for the proper protection of such fund or estate.
(c) The rules of court with respect to judgments under the Selective Service Act shall not apply to actions under this section.
(d) Upon a petition therefor, the court may order the reinstatement of the fiduciary when his service in the armed forces has terminated.
(1949 Rev., S. 6897; 1957, P.A. 163, S. 40; P.A. 80-476, S. 219.)
History: P.A. 80-476 divided section into Subsecs. and rephrased provisions; Sec. 45-92 transferred to Sec. 45a-479 in 1991.
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Sec. 45a-480. (Formerly Sec. 45-91). Income from property acquired by trustee by conveyance or foreclosure when mortgage formerly held by trustee. In any case in which a trustee holds a mortgage upon property for the benefit of one or more tenants for life or limited term, with remainder over to another or others, and such trustee acquires title to such property by conveyance or foreclosure, such acquired property shall be a principal asset in lieu of such mortgage, and such tenant or tenants for life or limited term shall be entitled to the net income from such acquired property from the date of its acquisition.
(1949 Rev., S. 6896; P.A. 80-476, S. 220.)
History: P.A. 80-476 deleted “and become” preceding “a principal asset”; Sec. 45-91 transferred to Sec. 45a-480 in 1991.
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Sec. 45a-481. (Formerly Sec. 45-93). Distribution by testamentary trustee upon completion of trust. The trustee of any testamentary trust which has terminated may, unless the will creating the trust otherwise directs, after settling his final account, deliver the property remaining in his hands to the remainderman upon the order of the Probate Court, without returning the same to the estate of the decedent.
(1949 Rev., S. 6886.)
History: Sec. 45-93 transferred to Sec. 45a-481 in 1991.
Annotation to former section 45-93:
Power and duty of Probate Court to determine all issues involved in ascertainment of money or property that trustee is bound to pay or deliver to the person entitled. 121 C. 391.
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Sec. 45a-482. (Formerly Sec. 45-93a). Distribution of assets of inoperative trust. When the facts at the time of distribution from an estate to a trust or from a testamentary trust to a successive trust are such that no trust would be operative under the terms of the instrument creating such trust or successive trust because of the death of the life tenant, or because the beneficiary has reached a stipulated age, or if such trust would qualify for termination under section 45a-499ii, or for any other reason, the fiduciary of such estate or prior trust may distribute, with the approval of the court of probate having jurisdiction, directly from the estate or prior trust to the remaindermen of such trust, the corpus of such trust and any income earned during the period of estate administration or administration of the prior trust and distributable to such remaindermen, without the interposition of the establishment of such trust or successive trust. If distribution is based on the fact that the trust would qualify for termination under section 45a-499ii, reasonable notice shall be provided to all beneficiaries who are known and in being and who have vested or contingent interests in the trust.
(P.A. 73-250; P.A. 80-476, S. 221; P.A. 96-255, S. 1; P.A. 19-137, S. 116.)
History: P.A. 80-476 rephrased provisions; Sec. 45-93a transferred to Sec. 45a-482 in 1991; P.A. 96-255 amended section to provide for distribution if trust would qualify for termination under Sec. 45a-484 and require notice to all beneficiaries in such case; P.A. 19-137 replaced references to Sec. 45a-484 with references to Sec. 45a-499ii, effective January 1, 2020.
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Sec. 45a-483. (Formerly Sec. 45-94). Settlement of trust estate when beneficiary has been absent seven years. The trustee of any trust for the benefit of any person who has been absent from his home and unheard of for seven years or more may settle his account as such trustee in the court of probate having jurisdiction thereof. Upon the order of the court, the trustee shall distribute such trust estate to the persons entitled to the remainder thereof as determined by the court, and the trustee shall not thereafter be liable to any such absent beneficiary, his heirs, executors, administrators or assigns in any action for such trust estate or any interest therein or income thereof. A person shall not be entitled to receive any portion of such estate from the trustee until such person has filed in the court of probate a bond with surety to the acceptance of the court, payable to the state, conditioned to return such trust estate to the trustee or his successor on the reappearance of the person presumed to be dead within thirteen years from the date of such order authorizing distribution. After the expiration of such thirteen-year period, such person entitled to the remainder shall not be liable to any such absent beneficiary, his heirs, executors, administrators or assigns in any action for such trust estate or any interest therein or income thereof.
(1949 Rev., S. 6891; P.A. 80-476, S. 222.)
History: P.A. 80-476 rephrased provisions; Sec. 45-94 transferred to Sec. 45a-483 in 1991.
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Sec. 45a-484. (Formerly Sec. 45-79c). Termination of small trusts. Section 45a-484 is repealed, effective January 1, 2020.
(P.A. 88-95; P.A. 94-98, S. 9; P.A. 03-183, S. 1; P.A. 13-81, S. 7; P.A. 19-137, S. 123.)
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Sec. 45a-485. Superior Court or Probate Court jurisdiction to reform instrument to ensure allowance of marital deduction. (a) If any marital deduction would not be allowed by reason of Section 2056(d)(1) of the Internal Revenue Code of 1986 with respect to any interest in property passing under any will, trust agreement or other governing instrument because such interest fails to comply with the requirements of Sections 2056(d)(2)(A) and 2056A(a) of said code, the Superior Court, or a Probate Court specified in section 45a-499p, shall have jurisdiction over any action brought to reform such will, trust agreement or other governing instrument to comply with those requirements so as to allow a marital deduction under Section 2056(a) of said code. All references contained in this section to any section of the Internal Revenue Code of 1986 mean that section of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.
(b) The Superior Court or the Probate Court are empowered to reform any such will, trust agreement or other governing instrument described in subsection (a) of this section to the extent necessary to ensure the allowance of the marital deduction described in said subsection.
(c) Any reformation of any will, trust agreement or other governing instrument in accordance with the provisions of this section shall be effective whether or not a disclaimer has been filed within the period specified in sections 45a-578 to 45a-585, inclusive.
(d) This section shall be applicable to any action commenced to reform any such will, trust agreement or other governing instrument created by a decedent dying on or after November 10, 1988.
(P.A. 91-214; May Sp. Sess. P.A. 92-11, S. 33, 70; P.A. 98-219, S. 6; P.A. 19-137, S. 117.)
History: May Sp. Sess. P.A. 92-11 amended Subsec. (a) to delete redundant language re any subsequent corresponding internal revenue code of the United States; P.A. 98-219 amended Subsecs. (a) and (b) re jurisdiction of Probate Court to reform instrument to ensure allowance of marital deduction if instrument is otherwise subject to jurisdiction of Probate Court; P.A. 19-137 amended Subsec. (a) by replacing provision re trust or estate subject to Probate Court jurisdiction with “Probate Court specified in section 45a-499p” and made technical changes in Subsecs. (a), (b) and (c), effective January 1, 2020.
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Sec. 45a-486. Termination of inter vivos trust when settlor or spouse is an applicant for or recipient of medical assistance. (a) The provisions of this section shall apply to an inter vivos trust (1) established or funded on or after October 1, 1992; (2) established or funded within the same period of time prior to application for public assistance or Medicaid as is specified in Section 1917(c) of the Social Security Act or in a waiver approved by the Secretary of Health and Human Services concerning the disposal of assets for less than fair market value; and (3) in which the settlor or the settlor's spouse is a beneficiary.
(b) Upon the application of the Department of Social Services, the Superior Court shall terminate an inter vivos trust established by a person or the person's spouse when the person or the person's spouse becomes an applicant for or recipient of public assistance or Medicaid. The Superior Court shall order that the principal and any undistributed income shall be distributed to the settlor of the trust. This section shall not apply if the settlor, the settlor's spouse, a conservator or other legal representative of the settlor or the settlor's spouse, or any other person having a beneficial interest in the trust, establishes by clear and convincing evidence that not one of the principal purposes of the trust was the current or future qualification of the settlor or the settlor's spouse for benefits under Title XIX of the Social Security Act (42 USC 1396 et seq.).
(c) On or after October 1, 1992, the provisions of this section shall not apply to charitable remainder trusts, as defined in Section 664(d) of the Internal Revenue Code of 1986, or any corresponding internal revenue code of the United States, as from time to time amended, nor to transfers which are deductible pursuant to Section 170(f)(2)(B), 2055(e)(2) or 2522(c)(2) of said code, nor to any trust in which the settlor or the settlor's spouse has not retained any interest, other than reversionary interest of five per cent or less.
(P.A. 92-233, S. 3; P.A. 93-262, S. 1, 87; P.A. 96-255, S. 2; June 18 Sp. Sess. P.A. 97-2, S. 102, 165.)
History: P.A. 93-262 authorized substitution of commissioner and department of social services for commissioner and department of income maintenance, effective July 1, 1993; P.A. 96-255 amended Subsec. (b) by deleting “a person, his conservator or legal representative or” after “application” and provided that section shall not apply if it is established that not one of principal purposes of trust was qualification for benefits under Social Security Act, and added Subsec. (c) which provides that section is not applicable to certain specified charitable remainder trusts, certain transfers which are deductible under the Internal Revenue Code nor to any trust in which settlor or settlor's spouse has retained any interest, other than reversionary interest of 5% or less, on or after October 1, 1992; June 18 Sp. Sess. P.A. 97-2 made technical and conforming changes in Subsecs. (a) and (b) re references to public assistance and Medicaid, effective July 1, 1997.
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Secs. 45a-487 to 45a-487f. Powers of trustees who are trust beneficiaries. Beneficiary interests in trust matters: Definitions. Representation by holder of power of appointment. Representation by court-appointed conservator or guardian, agent, trustee, executor or administrator, or parent. Representation of minor, incapacitated or unborn individual or person whose identity or location is unknown. Appointment of guardian ad litem by court, when; powers. Notice and consent re representation and binding another person. Sections 45a-487 to 45a-487f, inclusive, are repealed, effective January 1, 2020.
(P.A. 95-315, S. 1, 2; P.A. 01-69, S. 1–6; P.A. 06-196, S. 275; P.A. 07-116, S. 7; P.A. 19-137, S. 123.)
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Secs. 45a-487g to 45a-487i. Reserved for future use.
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Sec. 45a-487j. Short title: “Connecticut Qualified Dispositions in Trust Act”. This section and sections 45a-487k to 45a-487s, inclusive, may be cited as the “Connecticut Qualified Dispositions in Trust Act”.
(P.A. 19-137, S. 99.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487k. Definitions. As used in this section and sections 45a-487l to 45a-487s, inclusive:
(1) “Claim” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.
(2) “Creditor” means, with respect to a transferor, a person who has a claim.
(3) “Debt” means liability on a claim.
(4) “Disposition” means a transfer, conveyance or assignment of property, including a change in the legal ownership of property occurring upon the substitution of one trustee for another or the addition of one or more new trustees, or the exercise of a power so as to cause a transfer of property, to a trustee or trustees. “Disposition” does not include the release or relinquishment of an interest that was the subject of a qualified disposition.
(5) “Property” includes real property, tangible and intangible personal property, and interests in real or personal property, tangible and intangible.
(6) “Qualified disposition” means a disposition by or from a transferor to a trustee, with or without consideration, by means of a trust instrument. “Qualified disposition” does not include a disposition: (A) In derogation of any state or federal agency claim or right of recovery under 42 USC Chapter 7, Subchapter XIX against a trust established by a transferor or such transferor's spouse, or (B) in respect to a state or federal agency treatment of the trust instrument in a determination of a transferor's eligibility under a state plan under 42 USC Chapter 7, Subchapter XIX.
(7) “Spouse” and “former spouse” means only persons to whom the transferor was married at, or before, the time the qualified disposition is made.
(8) “Transferor” means an individual who, or entity which, as an owner of property or as a holder of a general power of appointment, which authorizes the holder to appoint in favor of the holder, the holder's creditors, the holder's estate or the creditors of the holder's estate, or as a trustee, directly or indirectly, makes a disposition or causes a disposition to be made.
(9) “Qualified trustee” means:
(A) Any person, other than the transferor, who in the case of an individual, is a resident of this state or who, in all other cases, is a state or federally chartered bank or trust company having a place of business in this state, is authorized to engage in a trust business in this state, and maintains or arranges for custody in this state of some or all of the property that is the subject of the qualified disposition, maintains records in this state for the trust on an exclusive or nonexclusive basis, prepares or arranges for the preparation in this state of fiduciary income tax returns for the trust, or otherwise materially participates in this state in the administration of the trust.
(B) “Qualified trustee” does not include (i) the transferor, (ii) any other individual who is a nonresident of this state, or (iii) an entity that is not authorized by the laws of this state to act as a trustee or whose activities are not subject to supervision as provided in subparagraph (A) of this subdivision.
(10) “Trust instrument” means an instrument, in writing, appointing at least one qualified trustee for the property that is the subject of a disposition, which instrument:
(A) Expressly provides that the laws of this state govern the validity, construction and administration of the trust;
(B) Is irrevocable; and
(C) Provides that the interest of the transferor or other beneficiary in the trust property or the income from the trust property may not be transferred, assigned, pledged or mortgaged, whether voluntarily or involuntarily, before the qualified trustee or qualified trustees actually distribute the property or income from the trust property to or for the benefit of the beneficiary, and the provision of the trust instrument shall be deemed to be a restriction on the transfer of the transferor's beneficial interest in the trust that is enforceable under applicable nonbankruptcy law within the meaning of 11 USC 541(c)(2), as amended from time to time.
(P.A. 19-137, S. 100; P.A. 21-39, S. 6.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-39 amended Subdiv. (10)(C) to add “or for the benefit of”, effective January 1, 2022.
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Sec. 45a-487l. Appointment of trust director by transferor. (a) Nothing in sections 45a-487j to 45a-487s, inclusive, shall be construed to preclude a transferor from appointing one or more trust directors, including, but not limited to:
(1) Trust directors who have authority under the terms of the trust instrument to remove and appoint qualified trustees or trust directors; and
(2) Trust directors who have authority under the terms of the trust instrument to direct, consent to or disapprove distributions from the trust.
(b) A transferor may serve as trust director, but the power of a trust director, who is the transferor shall be limited to the retention of the veto right permitted by subdivision (1) of section 45a-487n.
(c) For purposes of this section, “trust director” includes a trust director, as defined in section 45a-499c, a trust protector, a trust advisor or any other person who, in addition to a qualified trustee, holds one or more trust powers.
(P.A. 19-137, S. 101.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487m. Qualified trustee; successor. Disposition to more than one trustee. Disposition by trustee who is not qualified. (a) If a qualified trustee of a trust ceases to meet the requirements of subparagraph (A) of subdivision (9) of section 45a-487k and no remaining trustee meets the requirements of said subparagraph, the qualified trustee shall be deemed to have resigned at the time of the cessation and the successor qualified trustee provided for in the trust instrument shall become a qualified trustee of the trust. In the absence of any successor qualified trustee provided for in the trust agreement, the court may, upon application of any interested party, appoint a successor qualified trustee.
(b) In the case of a disposition to more than one trustee, at least one of whom is a qualified trustee, a disposition that is otherwise a qualified disposition shall not be treated as other than a qualified disposition solely because not all of the trustees are qualified trustees.
(c) A trustee of a trust who is not a qualified trustee may transfer the assets of a trust to a qualified trustee. Notwithstanding the provisions of subparagraph (A) of subdivision (9) of section 45a-487k, a disposition by a trustee who is not a qualified trustee to a trustee who is a qualified trustee will not fail to qualify as a qualified disposition solely because the trust instrument does not contain an express provision that the laws of this state govern the validity, construction and administration of the trust.
(P.A. 19-137, S. 102.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487n. Irrevocability of trust instrument. For purposes of subparagraph (B) of subdivision (10) of section 45a-487k, a trust instrument is irrevocable regardless of whether the transferor retained any of the following rights, powers and interests:
(1) A transferor's power to veto a distribution from the trust;
(2) A power of appointment, other than a power to appoint to the transferor, the transferor's creditors, the transferor's estate or the creditors of the transferor's estate, exercisable by will or other written instrument of the transferor and effective only upon the transferor's death;
(3) The transferor's potential or actual receipt of income, including rights to such income retained in the trust instrument;
(4) The transferor's potential or actual receipt of income or principal from a charitable remainder unitrust or charitable remainder annuity trust, as such terms are defined in 26 USC 664, as amended from time to time; and the transferor's right, at any time and from time to time by written instrument delivered to the trustee, to release such transferor's retained interest in the trust, in whole or in part, in favor of a charitable organization that has or charitable organizations that have a succeeding beneficial interest in the trust;
(5) The transferor's receipt each year of a percentage, not to exceed five per cent, specified in the trust instrument of the initial value of the trust assets on their value determined from time to time pursuant to the trust instrument or of a fixed amount that, on an annual basis, does not exceed five per cent of the initial value of the trust assets;
(6) The transferor's potential or actual receipt or use of principal if the potential or actual receipt or use of principal would be the result of a qualified trustee acting:
(A) In the discretion of the qualified trustee;
(B) Pursuant to a standard that governs the distribution of principal and does not confer upon the transferor a substantially unfettered right to the receipt or use of the principal; or
(C) At the direction of a trust director described in section 45a-487l who is acting in the director's discretion, or pursuant to a standard that governs the distribution of principal and does not confer upon the transferor a substantially unfettered right to the receipt of or use of principal. For purposes of this subparagraph, a qualified trustee is presumed to have discretion with respect to the distribution of principal unless such discretion is expressly denied to the trustee by the terms of the trust instrument;
(7) The transferor's right to remove a trustee or director and to appoint a new trustee or director, other than a person who is a related or subordinate party with respect to the transferor within the meaning of 26 USC 672(c), as amended from time to time;
(8) The transferor's potential or actual use of real property held under a qualified personal residence trust within the meaning of the term as described in 26 USC 2702(c), as amended from time to time, or the transferor's possession and enjoyment of a qualified annuity interest within the meaning of the term as described in 26 CFR 25.2702-5(c)(8), as amended from time to time; and
(9) The transferor's potential or actual receipt of income or principal to pay, in whole or in part, income taxes due on income of the trust if the potential or actual receipt of income or principal is pursuant to a provision in the trust instrument that expressly provides for the payment of the taxes and if such potential or actual receipt of income or principal would be the result of a qualified trustee acting:
(A) In the qualified trustee's discretion; or
(B) At the direction of a trust director described in section 45a-487l who is acting in the director's discretion.
(P.A. 19-137, S. 103.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487o. No retained interest of transferor. A qualified disposition shall be subject to sections 45a-487j to 45a-487s, inclusive, notwithstanding a transferor's retention of any of the powers and rights described in section 45a-487n and the transferor's service as investment director or advisor pursuant to section 45a-487l. The transferor shall have only such powers and rights as are conferred by the trust instrument. Except as provided in the trust instrument, and permitted by section 45a-487l and in section 45a-487n, a transferor has no rights or authority with respect to the property that is the subject of a qualified disposition or the income therefrom, and any agreement or understanding purporting to grant or permit the retention of any greater rights or authority is void.
(P.A. 19-137, S. 104.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487p. Avoidance of qualified dispositions. (a) Notwithstanding any provision of the general statutes, no action of any kind, including, without limitation, an action to enforce a judgment entered by a court or other body having adjudicative authority, shall be brought at law or in equity for an attachment or other provisional remedy against property that is the subject of a qualified disposition or for avoidance of a qualified disposition, unless the action is brought pursuant to section 52-552h. In any such action, the creditor has the burden to prove each element by clear and convincing evidence.
(b) Notwithstanding the provisions of section 52-552j, a creditor may not bring an action under subsection (a) of this section if:
(1) The creditor's claim against the transferor arose before the qualified disposition was made, unless the action is brought within four years after the qualified disposition is made or, if later, within one year after the qualified disposition was or could reasonably have been discovered by the creditor; or
(2) The creditor's claim against the transferor arose subsequent to the qualified disposition, unless the action is brought within four years after the qualified disposition is made.
(c) For the purposes of sections 45a-487j to 45a-487s, inclusive, a qualified disposition that is made by means of a disposition by a transferor who is a trustee shall be deemed to have been made as of the time the property that is the subject of the qualified disposition was originally transferred to the transferor, or any predecessor trustee, making the qualified disposition in a form that conforms with the requirements set forth in subdivision (10) of section 45a-487k. If a trustee of an existing trust proposes to make a qualified disposition pursuant to this subsection, but the trust would not conform to the requirements of subdivision (10) of section 45a-487k as a result of the original transferor's nonconforming powers of appointment, upon the trustee's delivery to the qualified trustee of an irrevocable written election to have this subsection apply to the trust, the nonconforming powers of appointment shall be deemed modified to the extent necessary to conform with the requirements of subdivision (10) of section 45a-487k. For purposes of sections 45a-487j to 45a-487s, inclusive, an irrevocable written election includes a description of the original transferor's powers of appointment as modified together with the original transferor's written consent to the election but no such consent of the original transferor shall be considered a disposition within the meaning of subdivision (4) of section 45a-487k.
(d) Notwithstanding any provision of the general statutes, a creditor, including a creditor whose claim arose before or after a qualified disposition, or any other person shall have only such rights with respect to a qualified disposition as are provided in this section and sections 45a-487q and 45a-487r, and no such creditor nor any other person shall have any claim or cause of action against the trustee, or trust director, as described in section 45a-487l, of a trust that is the subject of a qualified disposition, or against any person involved in the counseling, drafting, preparation, execution or funding of a trust that is the subject of a qualified disposition.
(e) Notwithstanding any other provision of the general statutes, no action of any kind, including, without limitation, an action to enforce a judgment by a court or other body having adjudicative authority, shall be brought at law or in equity against the trustee, or trust director, as described in section 45a-487l, of a trust that is the subject of the qualified disposition, or against any person involved in the counseling, drafting, preparation, execution or funding of a trust that is the subject of a qualified disposition, if, as of the date the action is brought, an action by a creditor with respect to the qualified disposition would be barred under this section.
(f) If more than one qualified disposition is made by means of the same trust instrument:
(1) The making of a subsequent qualified disposition shall be disregarded in determining whether a creditor's claim with respect to a prior qualified disposition is extinguished as provided in subsection (b) of this section; and
(2) Any distribution to a beneficiary shall be deemed to have been made from the latest such qualified disposition.
(g) If, in any action brought against a trustee of a trust that is funded, in whole or in part, by a qualified disposition, a court takes any action whereby the court declines to apply the law of this state in determining the validity, construction or administration of the trust, or the effect of a spendthrift provision of the trust, the trustee shall immediately, upon the court's action and without the further order of any court, cease in all respects to be a trustee of the trust and (1) a successor trustee shall thereupon succeed as trustee in accordance with the terms of the trust instrument; or (2) if the trust instrument does not provide for a successor trustee and the trust would otherwise be without a trustee, the court having jurisdiction pursuant to sections 45a-499o and 45a-499p, upon the application of any beneficiary of the trust, shall appoint a successor trustee upon such terms and conditions as it determines to be consistent with the purposes of the trust and the provisions of this section. The court shall have no continuing jurisdiction over the trust or trustee merely by reason of appointing the trustee. Upon the trustee's ceasing to be trustee, the trustee shall have no power or authority other than to convey the trust property to the successor trustee named in the trust instrument or appointed by the court having jurisdiction in accordance with the provisions of this section.
(P.A. 19-137, S. 105.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487q. Persons not subject to qualified dispositions. Notwithstanding the provisions of section 45a-487p, sections 45a-487j to 45a-487s, inclusive, shall not apply to defeat a claim brought by:
(1) A person to whom the transferor is indebted on or before the date of a qualified disposition on account of an agreement or order of court for payment of support or alimony in favor of the transferor's spouse, former spouse or children, or for a division or distribution of property in favor of the transferor's spouse or former spouse, but only to the extent of the debt; or
(2) To any person who suffers death, personal injury or property damage on or before the date of a qualified disposition by a transferor, which death, personal injury or property damage is at any time determined to have been caused, in whole or in part, by the tortious act or omission of the transferor or by another person for whom the transferor is or was vicariously liable, but only to the extent of the claim against the transferor or other person for whom the transferor is or was vicariously liable.
(P.A. 19-137, S. 106.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487r. Effect of avoidance of qualified dispositions. (a) A qualified disposition shall be avoided only to the extent necessary to satisfy the transferor's debt to the creditor at whose instance the disposition had been avoided, together with any costs, including attorney's fees, that the court may allow.
(b) If any qualified disposition is avoided pursuant to subsection (a) of this section, the following rules apply:
(1) If the court is satisfied that the trustee has not acted in bad faith in accepting or administering the property that is the subject of the qualified disposition:
(A) The trustee has a first and paramount lien against the property that is the subject of the qualified disposition in an amount equal to the entire cost, including attorney's fees, properly incurred by the trustee in the defense of the action or proceedings to avoid the qualified disposition;
(B) The qualified disposition shall be avoided subject to the proper fees, costs, preexisting rights, claims and interest of the trustee and of any predecessor trustee that has not acted in bad faith; and
(C) For purposes of this subdivision, it shall be presumed that the trustee did not act in bad faith merely by accepting the property.
(2) If the court is satisfied that a beneficiary of a trust has not acted in bad faith, the avoidance of the qualified disposition shall be subject to the right of the beneficiary to retain any distribution made upon the exercise of a trust power or discretion vested in the trustee of the trust, which power or discretion was properly exercised prior to the creditor's commencement of an action to avoid the qualified disposition. For purposes of this subdivision, it shall be presumed that the beneficiary, including a beneficiary who is also a transferor of the trust, did not act in bad faith merely by creating the trust or by accepting a distribution made in accordance with the terms of the trust.
(c) A creditor has the burden of proving by clear and convincing evidence that a trustee or beneficiary acted in bad faith as set forth in subsection (b) of this section, except, in the case of a beneficiary who is also the transferor, the burden on the creditor is to prove by a preponderance of the evidence that the transferor-beneficiary acted in bad faith. The provisions of this subsection shall be construed to provide substantive nonprocedural rights under state law.
(d) For purposes of sections 45a-487j to 45a-487r, inclusive, attachment, garnishment, sequestration or other legal or equitable processes shall be permitted only in circumstances permitted by the express terms of said sections.
(e) For purposes of this section, “court” means the Superior Court.
(P.A. 19-137, S. 107.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487s. Applicability of sections 45a-487k to 45a-487r to qualified dispositions. The provisions of this section and sections 45a-487k to 45a-487r, inclusive, apply to qualified dispositions made on or after January 1, 2020.
(P.A. 19-137, S. 108.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-487t. Applicability of rules. (a) Except as otherwise provided in sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, on January 1, 2020, the following rules apply:
(1) Sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, apply to all trusts created before, on or after January 1, 2020.
(2) Sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, apply to all judicial proceedings concerning trusts commenced on or after January 1, 2020.
(3) Sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, apply to judicial proceedings concerning trusts commenced before January 1, 2020, unless the court in which the judicial proceeding is pending finds that application of a particular provision of sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties. If the court finds substantial interference or prejudice, the particular provision of sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, do not apply and the superseded law applies.
(4) Any rule of construction or presumption provided in sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, applies to trust instruments executed before January 1, 2020, unless there is a clear indication of a contrary intent in the terms of the trust.
(5) An act done before January 1, 2020, is not affected by sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive.
(b) If a right is acquired, extinguished or barred upon the expiration of a prescribed period that has commenced to run under any provision of the general statutes, other than sections 45a-487j to 45a-487s, inclusive, and 45a-499a to 45a-500s, inclusive, before January 1, 2020, the provision of the general statutes continues to apply to the right even if the provision has been repealed or superseded.
(P.A. 19-137, S. 109.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-488. Division of trust for benefit of beneficiaries. Approval by beneficiaries required. Section 45a-488 is repealed, effective January 1, 2020.
(P.A. 95-82; P.A. 01-195, S. 25, 181; P.A. 19-137, S. 123.)
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Sec. 45a-489. Title and beneficial interest in property held in trust not merged nor trust invalidated, when. (a) The legal title to and the beneficial interest in property that is held in trust are not merged, nor is a trust invalidated, because any person, including the settlor of the trust, is or may become the sole trustee and the sole holder of any or all beneficial interests therein, whether any such interest be vested or contingent, present or future, and whether created by express provision of the trust instrument or as a result of reversion to the settlor's estate.
(b) This section shall be applicable to all trusts whether created before, on or after October 1, 1999. Nothing in this section shall be construed to invalidate any trust created prior to October 1, 1999.
(P.A. 99-103.)
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Sec. 45a-489a. Trust to provide for care of animal: Creation. Administration. Jurisdiction. Termination. (a) A testamentary or inter vivos trust may be created to provide for the care of an animal or animals alive during the settlor's or testator's lifetime. The trust shall terminate upon the death of the last surviving animal. A trust created pursuant to this section shall designate a trust protector in the trust instrument whose sole duty shall be to act on behalf of the animal or animals provided for in the trust instrument. A trust protector shall be replaced in the same manner as a trustee under section 45a-474.
(b) Except as otherwise provided in this section, the provisions of the laws of this state that govern the creation and administration of trusts shall apply to a trust created to provide for the care of an animal or animals pursuant to this section.
(c) The Superior Court, or a Probate Court specified in section 45a-499p, shall have jurisdiction over any trust created pursuant to this section.
(d) The trustee of a trust created pursuant to this section shall annually render an account for the trust, signed under penalty of false statement, to the trust protector.
(e) Any individual identified as a trust protector pursuant to this section may file a petition in the Superior Court or the Probate Court to enforce the provisions of the trust, remove or replace any trustee of the trust, or require a trustee to render an account as required under subsection (d) of this section. The court may award costs and attorney's fees to the trust protector, from the trust property, if the trust protector prevails on a petition filed under this subsection and the court finds that the filing of the petition was necessary to fulfill the trust protector's duty to act on behalf of the animal or animals provided for in the trust instrument.
(f) If the trust protector determines that the trustee has used trust property for personal use or has otherwise committed fraud with respect to the trust, the trust protector may request the Attorney General to file a petition in the Superior Court or the Probate Court to enforce the provisions of the trust, remove or replace any trustee of the trust or seek restitution from the trustee with respect to the trust property. The Attorney General may file such petition if the Attorney General determines that the circumstances warrant such filing.
(g) Trust property may be applied only to its intended use, subject to proper trust expenses including trustee fees, except to the extent the Superior Court or the Probate Court, upon application by the trustee or trust protector, determines that the value of the trust property exceeds the amount required for its intended use. Trust property not required for its intended use, including trust property remaining upon termination of the trust, shall be distributed in the following order of priority:
(1) As directed by the terms of the trust instrument;
(2) To the remainder beneficiaries identified in the trust instrument, under the same terms provided in the trust for the remainder interest;
(3) To the settlor, if then living;
(4) Pursuant to the residuary clause of the settlor's or testator's will; or
(5) To the settlor's or testator's heirs in accordance with the laws of this state governing descent and distribution.
(P.A. 09-169, S. 1; P.A. 19-137, S. 118.)
History: P.A. 19-137 amended Subsec. (c) by deleting former Subsec. (c)(2) re Probate Court's jurisdiction over trust, deleted Subdiv. (1) designator and amended provisions by replacing “probate court described in subdivision (2) of this subsection” with “Probate Court specified in section 45a-499p” and amended Subsecs. (e), (f) and (g) by replacing references to probate court having jurisdiction pursuant to Subsec. (c) with “the Probate Court” and made a technical change in Subsec. (f), effective January 1, 2020.
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*Cited. 234 C. 581.
Sec. 45a-490. Short title: Uniform Statutory Rule Against Perpetuities. Sections 45a-490 to 45a-496, inclusive, may be cited as the “Uniform Statutory Rule Against Perpetuities”.
(P.A. 89-44, S. 1.)
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Sec. 45a-491. Statutory rule against perpetuities. (a) A nonvested property interest is invalid unless: (1) When the interest is created, it is certain to vest or terminate no later than twenty-one years after the death of an individual then alive; or (2) the interest either vests or terminates within ninety years after its creation.
(b) A general power of appointment not presently exercisable because of a condition precedent is invalid unless: (1) When the power is created, the condition precedent is certain to be satisfied or become impossible to satisfy no later than twenty-one years after the death of an individual then alive; or (2) the condition precedent either is satisfied or becomes impossible to satisfy within ninety years after its creation.
(c) A nongeneral power of appointment or a general testamentary power of appointment is invalid unless: (1) When the power is created, it is certain to be irrevocably exercised or otherwise to terminate no later than twenty-one years after the death of an individual then alive; or (2) the power is irrevocably exercised or otherwise terminates within ninety years after its creation.
(d) In determining whether a nonvested property interest or a power of appointment is valid under subdivision (1) of subsection (a), (b) or (c) of this section, the possibility that a child will be born to an individual after the individual's death is disregarded.
(e) If, in measuring a period from the creation of a trust or other property arrangement, language in a governing instrument (1) seeks to disallow the vesting or termination of any interest or trust beyond, (2) seeks to postpone the vesting or termination of any interest or trust until, or (3) seeks to operate in effect in any similar fashion upon, the later of (A) the expiration of a period of time not exceeding twenty-one years after the death of the survivor of specified lives in being at the creation of the trust or other property arrangement or (B) the expiration of a period of time that exceeds or might exceed twenty-one years after the death of the survivor of lives in being at the creation of the trust or other property arrangement, that language is inoperative to the extent it produces a period of time that exceeds twenty-one years after the death of the survivor described in subparagraph (A) of this subsection. Nothing in this subsection shall affect the validity of the other provisions of the trust or other property arrangement or of the governing instrument.
(f) With respect to any trust created on or after January 1, 2020, this section and sections 45a-492 to 45a-495, inclusive, shall apply to a nonvested property interest or power of appointment contained in a trust by substituting “eight hundred years” in place of “ninety years” in each place such term appears in this section and sections 45a-492 to 45a-495, inclusive, unless the terms of the trust expressly require that all beneficial interests in the trust vest or terminate within a lesser period.
(P.A. 89-44, S. 2; P.A. 91-40; P.A. 19-137, S. 119; P.A. 21-39, S. 7.)
History: P.A. 91-40 added Subsec. (e) re when language in a governing instrument is rendered inoperative; P.A. 19-137 added Subsec. (f) re application of section and Secs. 45a-292 to 45a-495 to any trust created on or after January 1, 2020, effective January 1, 2020; P.A. 21-39 amended Subsec. (f) by adding “this section and” re each place 90 years appears, effective June 14, 2021 and applicable to any trust created on or after January 1, 2020.
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Sec. 45a-492. When nonvested property interest or power of appointment created. (a) Except as provided in subsections (b) and (c) of this section and in subsection (a) of section 45a-495, the time of creation of a nonvested property interest or a power of appointment is determined under general principles of property law.
(b) For purposes of sections 45a-490 to 45a-496, inclusive, if there is a person who alone can exercise a power created by a governing instrument to become the unqualified beneficial owner of (1) a nonvested property interest or (2) a property interest subject to a power of appointment described in subsection (b) or (c) of section 45a-491, the nonvested property interest or power of appointment is created when the power to become the unqualified beneficial owner terminates.
(c) For purposes of sections 45a-490 to 45a-496, inclusive, a nonvested property interest or a power of appointment arising from a transfer of property to a previously funded trust or other existing property arrangement is created when the nonvested property interest or power of appointment in the original contribution was created.
(P.A. 89-44, S. 3.)
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Sec. 45a-493. Reformation. Upon the petition of an interested person, a court shall reform a disposition in the manner that most closely approximates the transferor's manifested plan of distribution and is within the ninety years allowed by subdivision (2) of subsection (a), (b) or (c) of section 45a-491 if:
(1) A nonvested property interest or a power of appointment becomes invalid under section 45a-491;
(2) A class gift is not but might become invalid under section 45a-491 and the time has arrived when the share of any class member is to take effect in possession or enjoyment; or
(3) A nonvested property interest that is not validated by subdivision (1) of subsection (a) of section 45a-491 can vest but not within ninety years after its creation.
(P.A. 89-44, S. 4.)
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Sec. 45a-494. Exclusions from statutory rule against perpetuities. The provisions of section 45a-491 do not apply to:
(1) A nonvested property interest or a power of appointment arising out of a nondonative transfer, except a nonvested property interest or a power of appointment arising out of (A) a premarital or postmarital agreement, (B) a separation or divorce settlement, (C) a spouse's election, (D) a similar arrangement arising out of a prospective, existing or previous marital relationship between the parties, (E) a contract to make or not to revoke a will or trust, (F) a contract to exercise or not to exercise a power of appointment, (G) a transfer in satisfaction of a duty of support, or (H) a reciprocal transfer;
(2) A fiduciary's power relating to the administration or management of assets, including the power of a fiduciary to sell, lease or mortgage property, and the power of a fiduciary to determine principal and income;
(3) A power to appoint a fiduciary;
(4) A discretionary power of a trustee to distribute principal before termination of a trust to a beneficiary having an indefeasibly vested interest in the income and principal;
(5) A nonvested property interest held by a charity, government or governmental agency or subdivision, if the nonvested property interest is preceded by an interest held by another charity, government or governmental agency or subdivision;
(6) A nonvested property interest in or a power of appointment with respect to a trust or other property arrangement forming part of a pension, profit-sharing, stock bonus, health, disability, death benefit, income deferral or other current or deferred benefit plan for one or more employees, independent contractors or their beneficiaries or spouses, to which contributions are made for the purpose of distributing to or for the benefit of the participants or their beneficiaries or spouses the property, income or principal in the trust or other property arrangement, except a nonvested property interest or a power of appointment that is created by an election of a participant or a beneficiary or spouse; or
(7) A property interest, power of appointment or arrangement that was not subject to the common-law rule against perpetuities or is excluded by another statute of this state.
(P.A. 89-44, S. 5.)
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Sec. 45a-495. Prospective application. (a) Except as extended by subsection (b) of this section, sections 45a-490 to 45a-496, inclusive, apply to a nonvested property interest or a power of appointment that is created on or after October 1, 1989. For purposes of this section, a nonvested property interest or a power of appointment created by the exercise of a power of appointment is created when the power is irrevocably exercised or when a revocable exercise becomes irrevocable.
(b) If a nonvested property interest or a power of appointment was created before October 1, 1989, and is determined in a judicial proceeding, commenced on or after October 1, 1989, to violate this state's rule against perpetuities as that rule existed before October 1, 1989, a court upon the petition of an interested person may reform the disposition in the manner that most closely approximates the transferor's manifested plan of distribution and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment was created.
(P.A. 89-44, S. 6; P.A. 90-230, S. 59, 101.)
History: P.A. 90-230 made a technical change in Subsec. (b).
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Sec. 45a-496. Uniformity of application and construction. Sections 45a-490 to 45a-496, inclusive, shall be applied and construed to effectuate their general purpose to make uniform the law with respect to the subject of said sections among states enacting them.
(P.A. 89-44, S. 7.)
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Secs. 45a-497 to 45a-499. Reserved for future use.
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Sec. 45a-499a. Short title: “Connecticut Uniform Trust Code”. This section and sections 45a-499b to 45a-500s, inclusive, may be cited as the “Connecticut Uniform Trust Code”.
(P.A. 19-137, S. 1.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499b. Scope. (a) Sections 45a-499a to 45a-500s, inclusive, apply to express trusts, whether testamentary or inter vivos, and to trusts created pursuant to a statute, judgment or decree that requires the trust to be administered in the manner of an express trust.
(b) Except as expressly set forth in sections 45a-499a to 45a-500s, inclusive, sections 45a-499a to 45a-500s, inclusive, do not apply to a charitable trust, as defined in subdivision (5) of section 45a-499c.
(c) Sections 45a-499a to 45a-500s, inclusive, do not apply to statutory trusts created pursuant to chapter 615.
(d) No provision of sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, as such provision may be applied to a trust established pursuant to and in compliance with 42 USC 1396p(d)(4), as amended from time to time, shall be interpreted in a manner that is inconsistent with, or that contravenes, the provisions of federal law; nor shall any court having jurisdiction over any such trust issue an order, judgment, decree or ruling, that is inconsistent with, or that contravenes, the provisions of federal law.
(P.A. 19-137, S. 2.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499c. Definitions. As used in 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, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, as in effect on January 1, 2020, or as later amended.
(3) “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. “Beneficiary” does not include an appointee under a power of appointment until the power is exercised and the trustee has knowledge of the exercise and the identity of the appointee.
(4) “Breach of trust” includes a violation by a trust director or trustee of a duty imposed on the director or trustee by the terms of the trust, sections 45a-499a to 45a-500s, inclusive, or law of this state other than sections 45a-499a to 45a-500s, inclusive, pertaining to trusts.
(5) “Charitable trust” means a trust, or part of a trust, created (A) for a charitable purpose described in section 45a-499z; and (B) when property is dedicated for a charitable purpose, whether the dedication is by written instrument, declaration, deed, pledge, judgment or decree.
(6) “Conservator of the estate” means a person appointed by the court to administer the estate of an adult individual.
(7) “Conservator of the person” means a person appointed by the court to make decisions regarding the support, care, education, health and welfare of an adult individual and includes a conservator of the person of an adult, but does not include a guardian ad litem.
(8) “Court” means a court of this state having jurisdiction over the matter pursuant to sections 45a-499o and 45a-499p or a court of another state having jurisdiction under the law of the other state.
(9) “Current beneficiary” means a beneficiary that, on the date the beneficiary's qualification is determined, is a distributee or permissible distributee of trust income or principal.
(10) “Designated representative” means any person designated as provided in subsection (a) of section 45a-499u, unless precluded from acting by the trust instrument or applicable law.
(11) “Directed trust” means a trust for which the terms of the trust grant a power of direction.
(12) “Directed trustee” means a trustee that is subject to a trust director's power of direction.
(13) “Environmental law” means a federal, state or local law, rule, regulation or ordinance relating to protection of the environment.
(14) “Guardian” means a person appointed by the court pursuant to part V of chapter 802h.
(15) “Inter vivos trust” means a trust that is not a testamentary trust.
(16) “Interests of the beneficiaries” means the beneficial interests provided in the terms of the trust.
(17) “Jurisdiction”, with respect to a geographic area, includes a state or country.
(18) “Mandatory distribution” means distribution of income or principal that the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. “Mandatory distribution” does not include a distribution subject to the exercise of the trustee's discretion, regardless of whether the terms of the trust (A) include a support or other standard to guide the trustee in making distribution decisions; or (B) provide that the trustee may or shall make discretionary distributions, including distributions pursuant to a support or other standard.
(19) “Person” means an individual, corporation, statutory or business trust, estate, trust, partnership, limited liability company, association, joint venture, court, government, governmental subdivision, agency or instrumentality, public corporation or any other legal or commercial entity.
(20) “Power of direction” means a power over a trust granted to a person by the terms of the trust to the extent the power is exercisable while the person is not serving as a trustee. “Power of direction” includes a power over the investment, management or distribution of trust property or other matters of trust administration, but does not include the powers described in subsection (b) of section 45a-500e.
(21) “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.
(22) “Property” means anything that may be the subject of ownership, whether real or personal and whether legal or equitable, or any interest therein.
(23) “Qualified beneficiary” means a beneficiary that, 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) of this subdivision terminated on such 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 such date.
(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, that 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 such person's contribution, except to the extent another person has the power to revoke or withdraw such portion and as otherwise provided in section 45a-499nn.
(26) “Spendthrift provision” means a term of a trust that 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, and includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.
(28) “Terms of a trust” means:
(A) Except as otherwise provided in subparagraph (B) of this subdivision, the manifestation of the settlor's intent regarding a trust's provisions as:
(i) Expressed in the trust instrument; or
(ii) Established by other evidence that would be admissible in a judicial proceeding; or
(B) The trust's provisions, as established, determined or amended by:
(i) A trustee or other person in accordance with authority under the trust instrument, a statute or a court order;
(ii) A court order; or
(iii) A nonjudicial settlement agreement under section 45a-499k and subsection (a) of section 45a-499ll or court approval of the combination of a testamentary trust with another trust or the division of a testamentary trust into two or more separate trusts pursuant to subsection (b) of section 45a-499ll.
(29) “Testamentary trust” means a trust created under a will and, unless otherwise expressly provided, any trust established pursuant to an order of the Probate Court.
(30) “Trust director” means a person that is granted a power of direction by the terms of a trust to the extent the power is exercisable while the person is not serving as a trustee, provided a person is a trust director whether or not the terms of the trust refer to the person as a trust director and whether or not the person is a beneficiary or settlor of the trust.
(31) “Trust instrument” means any instrument executed by the settlor, including a will establishing or creating a testamentary trust, that contains terms of the trust, including any amendments thereto. In the case of a charitable trust, “trust instrument” means any written instrument by which property is dedicated for a charitable purpose described in section 45a-499z.
(32) “Trustee” includes an original, additional and successor trustee and a cotrustee.
(P.A. 19-137, S. 3; P.A. 21-39, S. 1.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-39 added Subdiv. (28) defining “terms of a trust”, redesignated existing Subdivs. (28) to (31) as Subdivs. (29) to (32) and made a technical change, effective January 1, 2022.
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Sec. 45a-499d. Knowledge. (a) Subject to subsection (b) of this section, for the purposes of sections 45a-499a to 45a-500s, inclusive, a person has knowledge of a fact if the person (1) has actual knowledge of the fact; (2) has received a notice or notification of the fact; or (3) from all the facts and circumstances known to the person at the time in question, has reason to know the fact.
(b) 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 from the time the information 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.
(P.A. 19-137, S. 4.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499e. Default and mandatory rules. (a) Except as provided in the terms of the trust, sections 45a-499a to 45a-500s, inclusive, govern the duties and powers of a trustee, relations among trustees and the rights and interests of a beneficiary.
(b) The terms of a trust prevail over each provision of sections 45a-499a to 45a-500s, inclusive, except: (1) The requirements for creating a trust; (2) the duty of a trustee to act in good faith and in accordance with the terms and purposes of the trust; (3) the requirement of section 45a-499y that a trust have a purpose that is lawful and not contrary to public policy; (4) the power of the court to modify or terminate a trust under sections 45a-499ee to 45a-499kk, inclusive; (5) the power of the court under section 45a-499ss to require, dispense with, modify or terminate a bond; (6) the power of the court under section 45a-499yy to adjust a trustee's compensation specified in the terms of the trust that is unreasonably low or high; (7) the duty under subdivisions (2) and (3) of subsection (b) of section 45a-499kkk to notify each qualified beneficiary of an irrevocable trust who has attained twenty-five years of age, or the designated representative of the qualified beneficiary, if any, of the existence of the trust, of the identity of the trustee, and of the right of the qualified beneficiary to request a trustee's report; (8) the duty under subsections (a) and (c) of section 45a-499kkk to respond to the request of a qualified beneficiary of an irrevocable trust or the designated representative of the qualified beneficiary, if any, for a trustee's report and other information reasonably related to the administration of a trust; (9) the effect of an exculpatory term under section 45a-499uuu; (10) the rights under sections 45a-499www to 45a-499zzz, inclusive, of a person other than a trustee or beneficiary; (11) periods of limitation for commencing a judicial proceeding; (12) the power of the court to take the action and exercise the jurisdiction necessary in the interests of justice; (13) the jurisdiction of the court as provided in sections 45a-499o and 45a-499p; and (14) the provisions of sections 45a-499a to 45a-500d, inclusive, dealing with judicial supervision of testamentary trusts.
(P.A. 19-137, S. 5.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499f. Common law of trusts; principles of equity. The common law of trusts and principles of equity supplement sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, except to the extent modified by sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, or another provision of the general statutes. The provisions of sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, expressly applying to charitable trusts apply only to supplement Connecticut common law of charitable trusts. No provision in sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, or this title shall be applied or construed to alter or diminish any charitable interest or purpose or any condition or restriction related to a charitable interest or purpose.
(P.A. 19-137, S. 6.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499g. Governing law. The meaning and effect of the terms of a trust are determined by: (1) The law of the jurisdiction designated in the terms of the trust, unless the designation of the 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) 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.
(P.A. 19-137, S. 7.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499h. Principal place of administration. (a) Without precluding other means for establishing a sufficient connection with the designated jurisdiction, terms of a trust designating the principal place of administration of the trust are valid and controlling if: (1) A trustee's principal place of business is located in, or a trustee is a resident of, the designated jurisdiction; (2) a trust director's principal place of business is located in, or a trust director is a resident of, the designated jurisdiction; or (3) all or part of the administration occurs in the designated jurisdiction.
(b) 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.
(c) Without precluding the right of the court to order, approve or disapprove a transfer, and except as set forth in subsection (e) of this section, in furtherance of the duty prescribed in subsection (b) of this section, a trustee may transfer the trust's principal place of administration to another state or to a jurisdiction outside of the United States.
(d) A change in the principal place of administration of a trust from this state to another jurisdiction does not, by itself, deprive the courts of this state of jurisdiction over the trust.
(e) The trustee may not transfer the principal place of administration of a charitable trust to a jurisdiction outside of the United States. The trustee of a testamentary trust may not transfer the principal place of administration without approval of the Probate Court having jurisdiction over the testamentary trust.
(f) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's principal place of administration not less than sixty days prior to the date of initiating the transfer. The notice of proposed transfer shall include:
(1) The name of the jurisdiction to which the principal place of administration is to be transferred;
(2) The address and telephone number at the new location at which the trustee can be contacted;
(3) An explanation of the reason for the proposed transfer; and
(4) The date on which the proposed transfer is anticipated to occur.
(g) 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 45a-499uu.
(P.A. 19-137, S. 8.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499i. Methods and waiver of notice. (a) Notice to a person under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, or the sending of a document to a person under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, shall 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, if the person has consented in advance to receive notices or documents by electronic message, a properly directed electronic message.
(b) Notice otherwise required under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, or a document otherwise required to be sent under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, need not be provided to a person whose identity or location is unknown to and not reasonably ascertainable by the trustee.
(c) Notice under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, or the sending of a document under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, may be waived by the person to be notified or to be sent the document.
(d) Notice of a judicial proceeding shall be given as provided in the applicable rules of court.
(P.A. 19-137, S. 9.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499j. Others treated as qualified beneficiaries. (a) Whenever notice to qualified beneficiaries of a trust is required under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, the trustee shall also give notice to any beneficiary who sent the trustee a request for notice. The trustee may send notice to a designated representative who is qualified to represent a beneficiary under section 45a-499u in lieu of sending notice to a beneficiary.
(b) A charitable organization expressly designated to receive distributions under the terms of a charitable trust has the rights of a qualified beneficiary under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, if the charitable organization, on the date the charitable organization's qualification is being determined: (1) Is a distributee or permissible distributee of trust income or principal; (2) would be a distributee or permissible distributee of trust income or principal upon termination of the interests of other distributees or permissible distributees then receiving or eligible to receive distributions; or (3) would be a distributee or permissible distributee of trust income or principal if the trust terminated on such date.
(c) The Attorney General has the rights of a qualified beneficiary with respect to a charitable trust if (1) the trust's principal place of administration is in this state; or (2) either the primary charitable beneficiary or the intended charitable benefit is located in this state.
(d) A person appointed to enforce a trust created for (1) the care of an animal under section 45a-489a, or (2) another noncharitable purpose as provided in section 45a-499cc, has the rights of a qualified beneficiary under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive.
(e) A charitable organization shall be granted the rights of a qualified beneficiary under this section only if its interest in a charitable trust is not otherwise subject to any power of appointment, removal or any other power of termination on the date that its qualification is otherwise determined under this section.
(P.A. 19-137, S. 10; P.A. 21-39, S. 2; 21-40, S. 44.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-39 amended Subsec. (a) to delete former Subdiv. (1) re trustee to give notice to representative designated under Sec. 45a-499u and former Subdiv. (2) designator, and add provision authorizing trustee to send notice to designated representative, effective January 1, 2022; P.A. 21-40 made a technical change in Subsec. (c).
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Sec. 45a-499k. Nonjudicial settlement agreements. (a) For the 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.
(b) Except as provided in subsections (c) and (e) of this section, interested persons may enter into a binding, nonjudicial settlement agreement with respect to any matter involving an inter vivos trust.
(c) 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 sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, or other applicable law.
(d) Matters that may be resolved by a nonjudicial settlement agreement include: (1) The interpretation or construction of the terms of the trust; (2) the approval of a trustee's report or accounting; (3) direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power; (4) the resignation or appointment of a trustee and the determination of a trustee's compensation; (5) transfer of a trust's principal place of administration; and (6) liability of a trustee for an action relating to the trust.
(e) A nonjudicial settlement agreement may not modify or terminate an irrevocable trust. Such a modification or termination may be accomplished only under the provisions of sections 45a-499dd to 45a-499kk, inclusive.
(f) An interested person may request the court to approve a nonjudicial settlement agreement to determine whether the representation provided pursuant to sections 45a-499q to 45a-499u, inclusive, was adequate and to determine whether the agreement contains terms and conditions the court could have properly approved.
(P.A. 19-137, S. 11.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499l. Insurable interest of trustee. A trustee has an insurable interest in the life of an individual insured under a life insurance policy that is owned by the trustee or that designates the trust itself as the owner if, on the date the policy is issued:
(1) The insured is: (A) A settlor of the trust; or (B) an individual in whom a settlor of the trust has, or would have had if living at the time the policy was issued, an insurable interest; and
(2) The life insurance proceeds are primarily for the benefit of one or more trust beneficiaries who have: (A) An insurable interest in the life of the insured; or (B) a substantial interest engendered by love and affection in the continuation of the life of the insured and, if not already included under subdivision (1) of this section, who are: (i) Related within the third degree or closer, as measured by the law of this state for determining degrees of relation, either by blood or law, to the insured; or (ii) stepchildren of the insured.
(P.A. 19-137, S. 12.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499m. Role of court in administration of trust. (a) A testamentary trust is subject to continuing judicial supervision.
(b) An inter vivos trust is not subject to continuing judicial supervision.
(P.A. 19-137, S. 13.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499n. Jurisdiction over trustee and beneficiary. (a) If a trustee accepts trusteeship of a trust having its principal place of administration in this state or moves 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.
(b) 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. If a beneficiary accepts a distribution from such a trust, the beneficiary submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
(c) This section shall not preclude other methods of obtaining jurisdiction over a trustee, beneficiary or other person receiving property from the trust.
(d) Notwithstanding the provisions of subsections (a) to (c), inclusive, of this section, the courts of this state have jurisdiction over the trustee of a charitable trust if either the primary charitable beneficiary or the intended charitable benefit is located in this state.
(P.A. 19-137, S. 14.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499o. Subject matter jurisdiction of Probate Courts and the Superior Court. (a) Except as provided in subsection (b) of this section, the Probate Courts have sole original jurisdiction relating to testamentary trusts to:
(1) Determine the validity of the will establishing the trust pursuant to subdivision (2) of subsection (a) of section 45a-98;
(2) Compel a trustee to account pursuant to subdivision (6) of subsection (a) of section 45a-98;
(3) Approve a trustee's account pursuant to sections 45a-175 to 45a-179, inclusive, or proposed final distribution pursuant to section 45a-481;
(4) With respect to an action that could be reported in a subsequent account pursuant to sections 45a-175 to 45a-179, inclusive, hear and decide the petition of (A) a trustee to approve a proposed action, ratify a previously taken action or provide instructions to address a specific situation, or (B) a beneficiary to compel or prohibit action by a trustee;
(5) Approve the settlement of a disputed claim pursuant to section 45a-151;
(6) Approve the sale of personal property pursuant to section 45a-163;
(7) Approve the sale or mortgage of real property pursuant to section 45a-164;
(8) Remove or accept the resignation of a trustee pursuant to section 45a-499vv or subsection (b) of section 45a-499ww;
(9) Appoint a successor trustee in the event of a vacancy or anticipated vacancy pursuant to section 45a-499uu;
(10) Order a trustee to furnish a probate bond pursuant to section 45a-499ss;
(11) Assume jurisdiction of a trust pursuant to section 45a-477;
(12) Order distribution of a decedent's estate or testamentary trust to the beneficiaries of an inoperative trust pursuant to section 45a-482;
(13) Authorize a trustee to disclaim an interest pursuant to section 45a-579;
(14) Authorize a trustee to combine two or more trusts or divide a trust into two or more separate trusts pursuant to section 45a-499ll; and
(15) Terminate a charitable trust pursuant to section 45a-520.
(b) The Superior Court and the Probate Courts have concurrent original jurisdiction relating to testamentary trusts to:
(1) Determine title or rights of possession and use in and to any real, tangible or intangible property that constitutes or may constitute property of a trust, including the rights and obligations of a beneficiary of the trust pursuant to subdivision (3) of subsection (a) of section 45a-98;
(2) Determine the validity and construe the meaning and effect of a trust pursuant to subdivision (4) of subsection (a) of section 45a-98;
(3) Apply the doctrine of cy pres or approximation pursuant to subdivision (5) of subsection (a) of section 45a-98;
(4) Recover on a probate bond for breach of fiduciary duty pursuant to sections 45a-144 and 45a-145;
(5) Reform a trust to qualify for the marital deduction pursuant to section 45a-485;
(6) Reform a trust to qualify for the charitable deduction pursuant to section 45a-519;
(7) Reform a charitable remainder unitrust pursuant to section 45a-521;
(8) Authorize transfer of the principal place of administration of a trust to another jurisdiction pursuant to section 45a-499h;
(9) Modify or terminate a noncharitable trust pursuant to sections 45a-499ee, 45a-499ff, 45a-499ii, 45a-499jj and 45a-499kk; and
(10) Hear and decide a petition for instruction pursuant to subsection (d) of section 45a-500i.
(c) Notwithstanding subsection (a) of this section, the Superior Court has original jurisdiction relating to testamentary trusts with respect to:
(1) A proceeding relating to a testamentary trust that the court consolidates with another proceeding involving the same trust over which the Superior Court has original jurisdiction; and
(2) Any matter over which the Superior Court has statutory or common law jurisdiction or has powers or remedies that are not available to the Probate Courts.
(d) The Superior Court has original jurisdiction over all matters relating to inter vivos trusts. The Probate Courts have concurrent original jurisdiction with the Superior Court relating to inter vivos trusts to:
(1) Compel a trustee to account pursuant to subdivision (6) of subsection (a) of section 45a-98;
(2) Approve a trustee's account pursuant to section 45a-175;
(3) With respect to an action that could be reported in a subsequent account pursuant to section 45a-175, hear and decide the petition of a trustee to approve a proposed action, ratify a previously taken action or provide instruction to address a specific situation or the petition of a beneficiary to compel or prohibit an action by a trustee;
(4) Remove a trustee pursuant to subsection (b) of section 45a-499ww;
(5) Appoint a successor trustee in the event of a vacancy or anticipated vacancy pursuant to section 45a-487m or 45a-499uu and subsection (g) of section 45a-487p;
(6) Recover on a probate bond for breach of fiduciary duty pursuant to sections 45a-144 and 45a-145;
(7) Authorize a trustee to disclaim an interest pursuant to section 45a-579;
(8) Authorize a trustee to combine two or more trusts or divide a trust into two or more separate trusts pursuant to section 45a-499ll;
(9) Terminate a charitable trust pursuant to section 45a-520;
(10) Determine title or rights of possession and use in and to any real, tangible or intangible property that constitutes or may constitute property of a trust, including the rights and obligations of any beneficiary of the trust pursuant to subdivision (3) of subsection (a) of section 45a-98;
(11) Determine the validity and construe the meaning and effect of a trust pursuant to subdivision (4) of subsection (a) of section 45a-98;
(12) Apply the doctrine of cy pres or approximation pursuant to subdivision (5) of subsection (a) of section 45a-98;
(13) Reform a trust to achieve the settlor's tax objectives pursuant to section 45a-499kk;
(14) Authorize transfer of the principal place of administration of a trust to another jurisdiction pursuant to section 45a-499h;
(15) Modify or terminate a noncharitable trust pursuant to sections 45a-499ee, 45a-499ff, 45a-499ii, 45a-499jj and 45a-499kk; and
(16) Hear and decide a petition for instruction pursuant to subsection (d) of section 45a-500i.
(e) With respect to a matter over which the court has jurisdiction, the court may hear and decide a trustee's request for instructions or for approval of action or a party's request to compel or prohibit an action by a trustee.
(P.A. 19-137, S. 15.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499p. Venue. (a) Process for a proceeding in the Superior Court concerning a trust shall be returnable as provided in chapter 890.
(b) A petition to commence a proceeding in a Probate Court concerning a testamentary trust shall be filed with:
(1) The court that admitted the settlor's will to probate; or
(2) If the trust was established pursuant to a court order, the court that issued the order or the court to which the trust was subsequently transferred pursuant to rules of procedure adopted by the Supreme Court under section 45a-78.
(c) A petition to commence a proceeding in a Probate Court concerning an inter vivos trust shall be filed with the court for the probate district:
(1) Where the principal place of administration of the trust is located;
(2) Where a trustee or successor trustee resides or has a place of business;
(3) Where a trust asset is maintained or evidence of intangible property held by the trust is situated;
(4) Where the settlor resides;
(5) If the settlor is deceased, where the settlor's will was admitted to probate or that granted administration of the settlor's estate, or where the settlor resided immediately before death; or
(6) If a trust has no trustee, where a beneficiary resides or, if the beneficiary is not an individual, where the beneficiary has a place of business.
(P.A. 19-137, S. 16.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499q. Representation: Basic effect. (a) Notice to a person who may represent and bind another person under this section and sections 45a-499r to 45a-499u, inclusive, has the same effect as if notice were given directly to the other person.
(b) The consent of a person who may represent and bind another person under this section and sections 45a-499r to 45a-499u, inclusive, is binding on the person represented unless the person represented objects to the representation before the consent would otherwise have become effective.
(c) Except as provided in section 45a-499oo, a person that, pursuant to this section and sections 45a-499r to 45a-499u, inclusive, may represent a settlor who lacks capacity may receive notice and give a binding consent on the settlor's behalf.
(d) A settlor may not represent and bind a beneficiary under this section with respect to the termination or modification of a trust under sections 45a-499ee and 45a-499ff.
(e) This section and sections 45a-499r to 45a-499u, inclusive, of this act, shall apply to all judicial proceedings and all nonjudicial settlements, agreements or actions (1) under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive; and (2) under any other provisions of the general statutes pertaining to trust matters. As used in this subsection, “trust matters” means (A) any property or interest in property held as part of a trust; (B) actions by or against a trust or by or against the trustee of the trust, in its capacity as trustee; (C) proceedings for the interpretation of a document creating a trust or other instrument pursuant to which property is held by a trustee; (D) accountings, whether intermediate or final, of any trustee; and (E) any other matter concerning the administration of a trust. Any reference to a trust in this section and sections 45a-487b to 45a-487f, inclusive, includes both testamentary and inter vivos trusts.
(f) As used in this section, “represent” shall not be construed to permit a person who has not been admitted as an attorney pursuant to section 51-80 to serve as legal counsel for any other person in any matter arising under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive.
(P.A. 19-137, S. 17.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499r. Representation by holder of general testamentary power of appointment. To the extent there is no conflict of interest between the holder of a power of appointment and a person represented with respect to the particular question or dispute: (1) The sole holder or all coholders of a power of appointment, whether or not presently exercisable, represent the potential appointees; and (2) the sole holder or all coholders of a power of revocation or a general power of appointment, including one in the form of a power of amendment, represent the takers in default of the exercise of the power.
(P.A.19-137, S. 18.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499s. Representation by fiduciaries, parents and persons having substantially identical interests. (a) To the extent there is no conflict of interest between the representative and the person represented or among those being represented with respect to a particular question or dispute: (1) A conservator of the estate may represent and bind the estate that the conservator controls; (2) a conservator of the person or guardian of an adult with intellectual disability may, with court approval, represent and bind the conserved person if a conservator of the estate has not been appointed; (3) an agent having authority to do so may represent and bind the principal; (4) a trustee may represent and bind the beneficiaries of the trust; (5) an executor or administrator of a decedent's estate may represent and bind persons interested in the estate; and (6) if a guardian of the estate has not been appointed, a parent of a minor may represent and bind the parent's minor or unborn child.
(b) 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 person 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 being represented.
(P.A. 19-137, S. 19.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499t. Appointment of representative. (a) If the court determines that an interest is not represented pursuant to sections 45a-499q to 45a-499u, inclusive, or that the otherwise available representation may be inadequate, the court may appoint a guardian ad litem 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 guardian ad litem may be appointed to represent several persons or interests.
(b) A guardian ad litem may act on behalf of the individual represented with respect to any matter arising under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, whether or not a judicial proceeding concerning the trust is pending.
(c) In making decisions in any matter, a guardian ad litem may consider the general benefit accruing to the living members of the individual's family.
(P.A. 19-137, S. 20.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499u. Designated representative. (a) The trust instrument may (1) designate one or more persons other than the settlor to represent and bind a beneficiary that is not a charity and to receive a notice, information, an accounting or a report on behalf of the beneficiary; or (2) authorize a person or persons, other than a trustee of the trust or the settlor, to designate one or more persons to represent and bind a beneficiary that is not a charity and receive any notice, information, accounting or report. The designated representative shall act in good faith on behalf of any beneficiary so represented.
(b) Except as otherwise provided in sections 45a-499a to 45a-500s, inclusive, a designated representative may not represent and bind a beneficiary while the person is serving as trustee.
(c) Except as otherwise provided in sections 45a-499a to 45a-500s, inclusive, a designated representative may not represent and bind another beneficiary if the person designated also is a beneficiary, unless:
(1) The person was named by the settlor; or
(2) The person is the beneficiary's spouse or a grandparent or descendant of a grandparent of the beneficiary or the beneficiary's spouse.
(d) A designated representative is not liable to the beneficiary whose interests are represented, or to anyone claiming through that beneficiary, for any actions or omissions to act made in good faith.
(P.A. 19-137, S. 21; P.A. 21-39, S. 3.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-39 amended Subsec. (a) to add provision re designated beneficiary to act in good faith, effective January 1, 2022.
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Sec. 45a-499v. Methods of creating trust. A trust may be created by: (1) Transfer of property to another person as trustee during the settlor's lifetime, by deed or otherwise, or by will or other disposition taking effect upon the settlor's death; (2) declaration by the owner of property that the owner holds identifiable property as trustee; (3) exercise of a power of appointment or distribution in favor of a trustee; (4) transfer of property pursuant to a statute or judgment that requires property to be administered in the manner of an express trust, including, but not limited to, (A) a trust created by the guardian of the estate of a minor or by the conservator of an estate; or (B) a trust described in 42 USC 1396p(d)(4), as amended from time to time; or (5) court order.
(P.A. 19-137, S. 22.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499w. Requirements for creation. (a) A trust is created only if:
(1) The settlor has capacity to create a trust;
(2) The settlor indicates an intention to create the trust;
(3) The trust has a definite beneficiary or is (A) a charitable trust; (B) a trust for the care of an animal, as provided in section 45a-489a; or (C) a trust for a noncharitable purpose under section 45a-499cc; and
(4) The trustee has duties to perform.
(b) A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.
(c) A power in a trustee to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred. With respect to a charitable trust, if no default beneficiary is named in the trust instrument, the property subject to the power passes to one or more charitable purposes or beneficiaries that the court selects. The selection shall be consistent with the settlor's intention to the extent it can be ascertained.
(d) The settlor's power to create or contribute to a trust may be exercised by (1) an agent under a power of attorney only to the extent expressly authorized to create or contribute property to a trust; or (2) a conservator of the estate as authorized by the court.
(e) A charitable trust is created if the donor makes a gift with a charitable intent.
(P.A. 19-137, S. 23.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499x. Trusts created in other jurisdictions. An inter vivos trust is validly created if its creation complies with (1) the law of the jurisdiction in which the trust instrument was executed; or (2) the law of the jurisdiction in which, at the time of creation: (A) The settlor was domiciled, had a place of abode or was a national; (B) a trustee was domiciled or had a place of business; or (C) any trust property was located.
(P.A. 19-137, S. 24.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499y. Trust purposes.
A trust may be created only to the extent its purposes are lawful and not contrary to public policy.
(P.A. 19-137, S. 25.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499z. Charitable purposes; enforcement; conversion to new entity. (a) 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 are beneficial to the community consistent with the provisions of sections 45a-514 and 47-2.
(b) If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary and if the trustee is not given discretion to select the charitable beneficiaries consistent with the provisions of section 45a-515, the court may select one or more charitable purposes or beneficiaries. The selection shall be consistent with the settlor's intention to the extent it can be ascertained.
(c) The settlor of a charitable trust, or a person designated by the settlor who would not otherwise have standing, may maintain a proceeding to enforce the trust only to the extent specified in the trust instrument.
(d) If a charitable trust whose purposes are set forth in a trust instrument is converted to a corporation, limited liability company, benefit corporation or other entity, the governing instrument of the new entity shall recite the charitable purposes of the original trust instrument.
(P.A. 19-137, S. 26.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499aa. Creation of trust induced by fraud, duress or undue influence. A trust or a provision of a trust is void to the extent its creation was induced by fraud, duress or undue influence.
(P.A. 19-137, S. 27.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499bb. Evidence of oral trust. Except as required by any provision of the general statutes other than sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive, a trust need not be evidenced by a written trust instrument, but the creation and terms of an oral trust, other than a charitable trust, may be established only by clear and convincing evidence.
(P.A. 19-137, S. 28.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499cc. Noncharitable trust without ascertainable beneficiary. Except as otherwise provided in the general statutes, the following rules apply to a trust created pursuant to this section:
(1) A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee. The trust may not be enforced for more than ninety years. The ninety-year period specified in this subdivision applies only to trusts that become irrevocable on or after January 1, 2020.
(2) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is appointed, by a person appointed by the court.
(3) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use shall be distributed to (A) the settlor, if then living; or (B) if the settlor is not living, to the settlor's successors in interest.
(P.A. 19-137, S. 29.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499dd. Modification or termination of trust; proceedings for approval or disapproval. (a) In addition to the methods of termination prescribed by sections 45a-499ee, 45a-499ff and 45a-499ii, a noncharitable trust terminates to the extent the trust is revoked or expires pursuant to its terms.
(b) A charitable trust may be terminated only in accordance with the provisions of section 45a-499gg, 45a-499hh or 45a-520.
(c) A proceeding to approve or disapprove a proposed modification or termination of a trust under sections 45a-499ee to 45a-499kk, inclusive, or trust combination or division under section 45a-499ll may be commenced by a trustee or beneficiary. The settlor of a charitable trust or a person designated by the settlor who would not otherwise have standing may maintain a proceeding to modify the trust under section 45a-499gg or 45a-499hh if the trust instrument expressly grants the settlor or the person the right to do so.
(d) The trustee is a necessary party in any proceeding under sections 45a-499ee to 45a-499ll, inclusive. The trustee may appeal any order, denial or decree under sections 45a-499ee to 45a-499ll, inclusive.
(P.A. 19-137, S. 30.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ee. Modification or termination of noncharitable irrevocable trust by consent. (a) If the court finds that the settlor, the trustee and all beneficiaries consent to the modification or termination of a noncharitable irrevocable trust, the court may approve the modification or termination 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 (1) an agent under a power of attorney only to the extent expressly authorized by the power of attorney or the terms of the trust; or (2) the settlor's conservator with the approval of the court supervising the conservatorship. This subsection does not apply to irrevocable trusts created before, or revocable trusts that become irrevocable before, January 1, 2020.
(b) A noncharitable irrevocable trust may be (1) 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; and (2) modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.
(c) A spendthrift provision in the terms of the trust is not presumed to constitute a material purpose of the trust.
(d) Upon termination of a trust under subsection (a) or (b) of this section, the trustee shall distribute the trust property as agreed by the beneficiaries and approved by the court.
(e) If not all of the beneficiaries consent to a proposed modification or termination of the trust under subsection (a) or (b) of this section, the modification or termination may be approved by the court if the court is satisfied that:
(1) If all of the beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) The interests of a beneficiary who does not consent will be adequately protected.
(f) Notwithstanding the provisions of this section, the court may not terminate an irrevocable trust established pursuant to 42 USC 1396p(d)(4)(A) or (C), as amended from time to time. The court may approve a proposed modification of the terms of such trust to ensure compliance with the requirements of federal law or to modify any individual's contingent beneficial interest that is available only after repayment to this state or another state for (1) medical assistance provided; and (2) all claims for which this state would have claims against the estate of the deceased beneficiary that have not previously been paid or reimbursed.
(P.A. 19-137, S. 31.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ff. Modification or termination because of unanticipated circumstances or inability to administer trust effectively. (a) The court may modify the administrative or dispositive terms of a trust, subject to sections 45a-499gg and 45a-499hh, or terminate a noncharitable 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 shall be made in accordance with the settlor's probable intention.
(b) 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.
(c) 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 as directed by the court.
(d) In this section, “circumstances not anticipated by the settlor” does not include a change in the corporate identity of a trustee.
(e) Notwithstanding the provisions of this section, the court may not terminate an irrevocable trust established pursuant to 42 USC 1396p(d)(4)(A) or (C), as amended from time to time. The court may modify the terms of such a trust to ensure compliance with the requirements of federal law or to modify any individual's contingent beneficial interest that is available only after repayment to this state or another state for (1) medical assistance provided; and (2) all claims for which this state would have claims against the estate of the deceased beneficiary that have not previously been paid or reimbursed.
(P.A. 19-137, S. 32.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499gg. Cy pres. Except as otherwise provided in section 45a-499hh, if a particular charitable purpose becomes unlawful, impracticable, impossible to achieve or wasteful: (1) The trust does not fail, in whole or in part; (2) the trust property does not revert to the settlor or the settlor's successors in interest; and (3) the court may apply cy pres to modify or terminate the trust, subject to section 45a-520, 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.
(P.A. 19-137, S. 33; P.A. 21-39, S. 4.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-39 amended Subdiv. (3) to add “subject to section 45a-520,”, effective January 1, 2022.
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Sec. 45a-499hh. Limitation on court authority to apply cy pres. 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 section 45a-499gg to apply cy pres to modify or terminate the trust only if, when the provision takes effect: (1) Except as provided in section 45a-505, the trust property is to revert to the settlor and the settlor is living; or (2) fewer than twenty-one years have elapsed since the date of the trust's creation.
(P.A. 19-137, S. 34.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ii. Modification or termination of uneconomic trust. (a) After thirty days' notice to the qualified beneficiaries and such other beneficiaries as the trustee deems reasonable, the trustee of a noncharitable inter vivos trust consisting of trust property having a total value less than two hundred thousand dollars may terminate the trust if the trustee concludes that the value of the trust property is insufficient to justify the cost of administration. The provisions of this subsection shall not apply to a trust established pursuant to 42 USC 1396p(d)(4)(A) or (C), as amended from time to time.
(b) The court may modify or terminate a noncharitable testamentary or inter vivos trust or remove the trustee of the trust and appoint a different trustee if it determines that the value of the trust property is insufficient to justify the cost of administration relative to the material purposes of the trust. Notwithstanding the provisions of this subsection, the court may not terminate a testamentary or inter vivos trust established pursuant to 42 USC 1396p(d)(4)(A) or (C), as amended from time to time. The court may only modify a trust established pursuant to 42 USC 1396p(d)(4)(A) or (C), as amended from time to time to ensure compliance with the requirements of federal law or to modify any individual's contingent beneficial interest that is available only after repayment to this state or another state for (1) medical assistance provided; and (2) all claims for which this state would have claims against the estate of the deceased beneficiary that have not previously been paid or reimbursed. The provisions of this subsection providing for repayment of medical assistance to the state for trusts established under 42 USC 1396p(d)(4)(A) or (C), as amended from time to time, are presumed to be a material purpose of the trust.
(c) Upon termination of a trust under this section, the trustee shall distribute the trust property: (1) In a manner consistent with the purposes of the trust; or (2) if the termination is approved by the court, as directed by the court after considering the material purposes of the trust.
(d) The provisions of this section do not apply to an easement for conservation or preservation.
(P.A. 19-137, S. 35; P.A. 21-40, S. 45.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-40 made a technical change in Subsec. (b).
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Sec. 45a-499jj. Reformation of noncharitable trust to correct mistakes. The court may reform the terms of a noncharitable trust, even if unambiguous, to conform the terms to the settlor's intention if it is proved by clear and convincing evidence what the settlor's intention was and that the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.
(P.A. 19-137, S. 36.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499kk. 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.
(P.A. 19-137, S. 37.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ll. Combination and division of trusts. (a) After thirty days' notice to the qualified beneficiaries, the trustee of an inter vivos trust may combine two or more trusts into a single trust or divide a trust into two or more separate trusts, if the result does not impair rights of a beneficiary or adversely affect achievement of the purposes of the trust.
(b) The trustee of a testamentary trust, with court approval, may combine the trust with another trust or divide the trust into two or more separate trusts if the result does not impair rights of a beneficiary or adversely affect achievement of the purposes of the trust.
(P.A. 19-137, S. 38.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499mm. Personal obligations of trustee. Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt.
(P.A. 19-137, S. 39.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499nn. Limitations on beneficiary's creditor to attach or compel distribution of property. (a) For all purposes under this section and section 45a-499mm, a creditor of a beneficiary, other than a creditor of the settlor if the settlor is a beneficiary of the trust, may not attach or compel a distribution of property that is subject to:
(1) A power of withdrawal held by the beneficiary if the value of the property subject to the power does not exceed the greater of the amount specified in Section 2041(b)(2) or 2514(e) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, and the regulations thereunder, or Section 2503(b) of said Internal Revenue Code and the regulations thereunder, in each case as in effect on January 1, 2020;
(2) A power, whether mandatory or discretionary, held by the trustee of the trust, including a power held by the beneficiary as the sole trustee or a cotrustee of the trust, to make distributions to or for the benefit of the beneficiary, if the power is exercisable by the trustee only in accordance with an ascertainable standard relating to such beneficiary's individual 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, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, and the regulations thereunder, as in effect on January 1, 2020;
(3) A power, whether mandatory or discretionary, held by the trustee of the trust, including a power held by the beneficiary as the sole trustee or a cotrustee of the trust, to make distributions to or for the benefit of a person who the beneficiary has an obligation to support, if the power is exercisable by the trustee only in accordance with an ascertainable standard relating to such person's individual 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, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, and the regulations thereunder, as in effect on January 1, 2020; or
(4) A power of withdrawal that has lapsed or been waived or released over all or any part of the trust property.
(b) A beneficiary holding a power set forth in subsection (a) of this section shall not, during the period the power may be exercised or upon the lapse, release or waiver of the power, be treated as a settlor of the trust.
(c) This section and section 45a-499mm do not apply to statutory trusts created pursuant to chapter 615 to the extent inconsistent with the terms of said chapter.
(P.A. 19-137, S. 40; P.A. 21-39, S. 5.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-39 added Subsec. (a)(4) re power of withdrawal, effective January 1, 2022.
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Sec. 45a-499oo. Revocation or amendment of revocable trust. (a) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection shall not apply to (1) a trust created under an instrument executed before January 1, 2020; (2) charitable pledges; or (3) other charitable gifts in which the charitable interest has otherwise vested.
(b) If a revocable trust is created or funded by more than one settlor: (1) 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; and (2) to the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard to the part of the trust property attributable to the settlor's contribution.
(c) With respect to a revocable trust:
(1) The settlor may revoke or amend the trust by substantial compliance with a method provided in the terms of the trust.
(2) If the terms of the trust do not provide a method to revoke or amend the trust, or the method provided in the terms is not expressly made exclusive, the settlor may revoke or amend the trust by (A) executing a later will or codicil that has been admitted to probate and that expressly refers to the trust or expressly devises specifically identified items of real or personal property that would otherwise have passed according to the terms of the trust; or (B) any other method manifesting clear and convincing evidence of the settlor's intent, provided (i) a written revocable trust may be amended only by a later written instrument; and (ii) a written revocable trust may be revoked only by a later written instrument or by the burning, cancellation, tearing or obliteration of the revocable trust by the settlor or by some person in the settlor's presence and at the settlor's direction.
(d) Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.
(e) 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 and the power of attorney.
(f) Unless expressly prohibited by the terms of the trust, a conservator of the settlor may exercise a settlor's powers with respect to revocation, amendment or distribution of trust property with approval of the trustee and the court supervising the conservatorship.
(g) 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.
(h) A trust created pursuant to 42 USC 1396p(d)(4), as amended from time to time, is irrevocable if the terms of the trust prohibit the settlor from revoking it, even if the settlor's estate or the settlor's heirs at law are named as the remainder beneficiary of the trust upon the settlor's death.
(P.A. 19-137, S. 41.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499pp. Settlor's powers; powers of withdrawal. (a) To the extent a trust is revocable by a settlor, a trustee may follow a direction of the settlor that is contrary to the terms of the trust. To the extent a trust is revocable by a settlor in conjunction with a person other than a trustee or person holding an adverse interest, the trustee may follow a direction from the settlor and the other person holding the power to revoke even if the direction is contrary to the terms of the trust.
(b) To the extent 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.
(c) 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.
(P.A. 19-137, S. 42.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499qq. Limitation on action contesting validity of revocable trust; distribution of trust property. (a) 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:
(1) One year after the settlor's death; or
(2) One hundred twenty days after the date on which 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. The trustee may provide the documentation and information set forth in this subdivision to (A) all persons who would be entitled to notice of the application for probate of a will or administration of an intestate estate or to notice of the admission of a will to probate or the granting of letters of administration; and (B) the beneficiaries of the trust and all persons whose interests are, in the opinion of the trustee, adversely affected by the trust. The provisions of this subdivision shall not apply to a person if notice is sent to the designated representative for the person but not to the person.
(b) 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 accordance with the terms of the trust. The trustee is not subject to liability for doing so unless: (1) The trustee knows of a pending judicial proceeding contesting the validity of the trust; (2) a potential contestant has notified the trustee of a possible judicial proceeding to contest the trust and a judicial proceeding is commenced not later than sixty days after the date on which the contestant sent the notification; or (3) the trustee failed to give notice in accordance with section 45a-499kkk.
(c) If the court determines that a distribution to a beneficiary of a trust is invalid, the beneficiary is liable to return the distribution received.
(P.A. 19-137, S.43.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499rr. Accepting or declining trusteeship. (a) Except as provided in subsection (c) of this section, a person designated as trustee accepts the trusteeship: (1) By substantially complying with a method of acceptance provided in the terms of the trust; (2) if the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship; or (3) in the case of a testamentary trust, filing an acceptance of trust in the court with jurisdiction over the trust.
(b) A person designated as trustee who has not yet accepted the trusteeship may reject the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable period after knowing of the designation is deemed to have rejected the trusteeship.
(c) A person designated as trustee, without accepting the trusteeship, may: (1) Act to preserve the trust property if, within a reasonable period 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 (2) inspect or investigate trust property (A) to determine potential liability under state or federal environmental or other law; or (B) for any other purpose.
(P.A. 19-137, S. 44.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ss. Trustee's bond. (a) A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond (1) is needed to protect the interests of the beneficiaries; or (2) is required by the terms of the trust and, in the case of noncharitable trusts, the court has not dispensed with the requirement of a bond.
(b) The court may specify the amount of a bond, its liabilities and whether sureties are necessary. Except in the case of a charitable trust, the court may modify or terminate a bond at any time.
(c) In addition to the requirements of this section, a testamentary trustee that is a foreign corporation shall comply with section 45a-206.
(P.A. 19-137, S. 45.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499tt. Cotrustees. (a) Cotrustees who are unable to reach a unanimous decision may act by majority decision.
(b) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.
(c) Subject to the provisions of section 45a-500l, a cotrustee shall participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification under other law or other temporary incapacity or the cotrustee has properly delegated the performance of the function to another trustee.
(d) If a cotrustee is unavailable to perform duties because of absence, illness, disqualification under other law or other temporary incapacity, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.
(e) A trustee may delegate to a cotrustee the performance of any function other than a function that the terms of the trust expressly require to be performed by the trustees jointly. Unless a delegation was irrevocable, a delegating trustee may revoke a delegation previously made.
(f) Except as provided in subsection (g) of this section, a trustee who does not join in an action of another trustee is not liable for the action.
(g) Subject to the provisions of section 45a-500l, a trustee shall exercise reasonable care to: (1) Prevent a cotrustee from committing a serious breach of trust; and (2) compel a cotrustee to redress a serious breach of trust.
(h) A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified any cotrustee of the dissent at or before the time of the action is not liable for the action unless the action is a serious breach of trust.
(P.A. 19-137, S. 46.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499uu. Vacancy in trusteeship; appointment of successor. (a) A vacancy in a trusteeship occurs if: (1) A person designated as trustee rejects the trusteeship; (2) a person designated as trustee cannot be identified or does not exist; (3) a trustee resigns; (4) a trustee is disqualified or removed; (5) a trustee dies; or (6) a conservator is appointed for an individual serving as trustee.
(b) If one or more cotrustees remain in office, a vacancy in a trusteeship of a noncharitable trust need not be filled, unless otherwise required by the terms of the trust. A vacancy in a trusteeship shall be filled if the trust has no remaining trustee. A vacancy in a trusteeship of a charitable trust shall be filled, unless otherwise excused by the terms of the trust.
(c) A vacancy in a trusteeship required to be filled shall be filled in the following order of priority: (1) By a person designated in the terms of the trust to act as successor trustee or appointed according to a procedure specified in the terms and, in the case of a testamentary trust, appointed by the Probate Court; (2) in the case of a noncharitable, inter vivos trust, by a person appointed by unanimous agreement of the qualified beneficiaries; or (3) by a person appointed by the court.
(d) Whether or not a vacancy in a trusteeship exists or is required 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.
(P.A. 19-137, S. 47.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499vv. Resignation of trustee. (a) A trustee of an inter vivos trust may resign (1) without court approval upon giving not less than thirty days' notice to the qualified beneficiaries, the settlor, if living, and all cotrustees; or (2) with the approval of the court.
(b) A trustee of a testamentary trust may resign with the approval of the court.
(c) In approving a resignation pursuant to subsection (b) of this section, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property, the beneficiaries and the other trustees, and may issue such other orders as law and equity may require.
(d) Any liability of a trustee, former trustee or of any sureties on such trustee's bond for acts or omissions of such trustee is not discharged or affected by such trustee's resignation.
(P.A. 19-137, S. 48.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ww. Removal of trustee. (a) The settlor of a noncharitable trust, the settlor of a charitable trust who has expressly retained the right to do so, the Attorney General in the case of a charitable trust, a cotrustee, a beneficiary or the surety on the trustee's probate bond, may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.
(b) Subject to subsection (a) of this section, the court may remove a trustee if:
(1) The trustee becomes incapable of executing or neglects to perform the trustee's duties, wastes the trust assets, fails to furnish an additional or substitute probate bond ordered by the court, or has committed any other serious breach of trust;
(2) Lack of cooperation among cotrustees substantially impairs administration of the trust;
(3) Because of unfitness, unwillingness or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or
(4) There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries and the court finds that (A) removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust; and (B) a suitable cotrustee or successor trustee is available. The court may not remove a successor corporate fiduciary in a manner that discriminates against state banks or national banking associations. No consolidated state bank or national banking association and no receiving state bank or national banking association may be removed solely because it is a successor fiduciary, as defined in section 45a-245a.
(P.A. 19-137, S. 49.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499xx. Delivery of property by former trustee. (a) Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.
(b) A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee or other person entitled to it.
(c) All suits in favor of or against the original trustee shall survive to and may be prosecuted by or against the person appointed to succeed such trustee.
(P.A. 19-137, S. 50.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499yy. Compensation of trustee. (a) 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.
(b) 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: (1) The duties of the trustee are substantially different from those contemplated when the trust was created; or (2) the compensation specified by the terms of the trust would be unreasonably low or high.
(P.A. 19-137, S. 51.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499zz. Reimbursement of expenses. (a) A trustee is entitled to be reimbursed out of the trust property, with interest as appropriate, for: (1) Expenses that were properly incurred in the defense or administration of the trust, unless the trustee is determined to have committed a breach of trust; and (2) to the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.
(b) If a trustee advances money to protect the trust, the trustee has a lien against the trust property to secure reimbursement of the money with reasonable interest.
(P.A. 19-137, S. 52.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499aaa. Duty to administer trust. Upon acceptance of a trusteeship, the trustee shall administer the trust (1) in good faith; (2) in accordance with its terms and purposes, settlor's intent and the interests of the beneficiaries; and (3) in accordance with sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive.
(P.A. 19-137, S. 53.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499bbb. Duty of loyalty. (a) A trustee shall administer trust assets solely in the interests of the beneficiaries consistent with the settlor's intent.
(b) Subject to the rights of persons dealing with or assisting the trustee as provided in section 45a-499yyy, a sale, encumbrance or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or which is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless: (1) The transaction was authorized by the terms of the trust; (2) the transaction was approved by the court; (3) the beneficiary did not commence a judicial proceeding within the time allowed by section 45a-499rrr; (4) the beneficiary consented to the trustee's conduct, ratified the transaction or released the trustee as provided in section 45a-499vvv; or (5) the transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.
(c) 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: (1) The trustee's spouse; (2) the trustee's descendants, sibling, parents or their spouses; (3) an agent or attorney of the trustee; or (4) a corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in an entity that is acting as the trustee, has an interest that may affect the trustee's best judgment.
(d) If a transaction between a trustee and a beneficiary which does not concern trust property but (1) which occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary; and (2) from which the trustee obtains an advantage, the transaction is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.
(e) If a trustee engages in a transaction in the trustee's individual capacity and not concerning trust property and if the transaction concerns an opportunity properly belonging to the trust, the transaction is a conflict between the personal and fiduciary interests of the trustee.
(f) If a transaction and any investment made pursuant to the transaction complies with the Connecticut Uniform Prudent Investor Act, sections 45a-541 to 45a-541l, inclusive, is in the best interests of the beneficiaries and is not prohibited by the governing instrument, the following transactions are not presumed to be affected by a conflict of interest between a trustee's personal and fiduciary interests, provided: (1) 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; (2) an investment by a trustee in an insurance contract purchased from an insurance agency is owned by, or affiliated with, the trustee or its affiliate; and (3) the placing of securities transactions by a trustee through a securities broker that is a part of the same company as the trustee is owned by the trustee or is affiliated with the trustee.
(g) 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 consistent with the intentions of the settlor. 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.
(h) The provisions of this section do not preclude the following transactions, if fair to the beneficiaries: (1) An agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee; (2) payment of reasonable compensation to the trustee; (3) a transaction between a trust and another trust, decedent's estate or conservatorship of which the trustee is a fiduciary or in which a beneficiary has an interest; (4) a deposit of trust money in a regulated financial service institution operated by the trustee; or (5) an advance by the trustee of money for the protection of the trust.
(i) The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that may violate the provisions of this section if entered into by the trustee.
(P.A. 19-137, S. 54.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ccc. Impartiality. If a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing and distributing the trust property, giving due regard to the beneficiaries' respective interests.
(P.A. 19-137, S. 55.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ddd. 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.
(P.A. 19-137, S. 56.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499eee. Delegation by trustee. (a) A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate to an agent under the circumstances. The trustee shall exercise reasonable care, skill and caution in:
(1) Selecting an agent for the delegation;
(2) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(3) Periodically reviewing the agent's actions to monitor the agent's performance and compliance with the terms of the delegation.
(b) 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.
(c) A trustee who complies with subsection (a) of this section is not liable to the beneficiaries or to the trust for an action of the agent to whom the function was delegated.
(d) 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.
(P.A. 19-137, S. 57.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499fff. Creditor's claims against settlor. The settlor of an irrevocable trust shall not be deemed to have a beneficial interest in such trust merely because the trustee is authorized under the trust instrument or any other provision of law to (1) pay or reimburse the settlor for any tax on trust income or trust principal that is payable by the settlor under the law imposing such tax; or (2) pay any such tax directly to the taxing authorities. No creditor of the settlor of an irrevocable trust shall be entitled to reach any trust property based on the discretionary powers described in this section.
(P.A. 19-137, S. 58.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ggg. Control and protection of trust property. A trustee shall take reasonable steps to take control of and protect the trust property.
(P.A. 19-137, S. 59.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499hhh. Recordkeeping and identification of trust property. (a) A trustee shall keep adequate records of the administration of the trust.
(b) A trustee shall keep trust property separate from the trustee's own property.
(c) Except as provided in subsection (d) of this section, a trustee 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.
(d) If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of two or more separate trusts.
(P.A. 19-137, S. 60.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499iii. Enforcement and defense of claims. A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust.
(P.A. 19-137, S. 61.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499jjj. Collecting trust property. A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee and to redress a breach of trust known to the trustee to have been committed by a former trustee.
(P.A. 19-137, S. 62.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499kkk. Trustee's duty to inform and report. (a) A trustee shall keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for the beneficiaries to protect their interests. A trustee shall promptly respond to a beneficiary's request for information reasonably related to the administration of the trust.
(b) A trustee: (1) Upon request of a beneficiary, shall promptly furnish to the beneficiary a copy of the relevant portions of the trust instrument; (2) within sixty days after accepting a trusteeship, shall notify the qualified beneficiaries of the acceptance and of the trustee's name, address and telephone number; and (3) within sixty days after the date on which the trustee acquires knowledge of the creation of an irrevocable trust, or the date on which 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 (c) of this section.
(c) A trustee shall send a report to the current beneficiaries, and to other qualified beneficiaries who request it, at least annually and at the termination of the trust. Upon a vacancy in a trusteeship, unless a cotrustee remains in office, the former trustee shall send a report to the current beneficiaries and to other qualified beneficiaries who request it. An executor, administrator or conservator may send the report on behalf of a deceased or incapacitated trustee. The report may be formal or informal, but shall include information relating to the trust property, liabilities, receipts and disbursements, including the amount of the trustee's compensation, a listing of the trust assets and, if feasible, their respective market values.
(d) A beneficiary of a trust may petition the court for an accounting by the trustee. The court may grant the petition of: (1) A qualified beneficiary of testamentary trust, if the court finds that an account is necessary to protect the interests of a beneficiary; (2) any other beneficiary of a testamentary trust, if the court finds that the same standard applicable to an inter vivos trust as set forth in subsection (c) of section 45a-175 is satisfied; and (3) a beneficiary of an inter vivos trust, if the court finds the standard set forth in subsection (c) of section 45a-175 is satisfied.
(e) Nothing in subsection (c) of this section limits the power of the court in an accounting proceeding to determine which beneficiaries are entitled to a copy of the accounting and to receive notice of the proceedings.
(f) Nothing in subsection (c) or (g) of this section limits a trustee's obligations under section 45a-177.
(g) A beneficiary may waive the right to trustee's reports or other information otherwise required to be furnished under this section. A beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.
(h) The provisions of subsections (b) and (c) of this section do not apply to an irrevocable trust created before January 1, 2020, or to a revocable trust that becomes irrevocable before January 1, 2020.
(i) Judicial approval of a trustee's report forecloses claims as to those given notice of the proceeding as to matters disclosed in the report.
(j) The representation provisions of sections 45a-499q to 45a-499u, inclusive, apply with respect to all rights of any beneficiary under this section. Notice or information provided to a designated representative under section 45a-499u shall satisfy the trustee's duty to provide information or notice required under sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive.
(P.A. 19-137, S. 63; P.A. 21-40, S. 46.)
History: P.A. 19-137 effective January 1, 2020; P.A. 21-40 made a technical change in Subsec. (f).
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Sec. 45a-499lll. Discretionary powers; tax savings. (a) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such 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, settlor's intent and the interests of the beneficiaries.
(b) Subject to subsection (d) of this section, and unless the terms of the trust expressly indicate that a provision in this subsection does not apply:
(1) 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 with an ascertainable standard relating to the trustee's individual 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, or any subsequent corresponding internal revenue code of the United States, as amended from time to time; and
(2) 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.
(c) A power to make discretionary distributions, the exercise of which is limited or prohibited by subsection (b) of this section, may be exercised by a majority of the remaining trustees whose exercise of such power is not so limited or prohibited. If the exercise of the power by all trustees is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.
(d) Subsection (b) of this section does not apply to: (1) A power held by the settlor's spouse who is the trustee of a trust for which a marital deduction, as described in Section 2056(b)(5) or 2523(e) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, was previously allowed; (2) a trust during any period that the trust may be revoked or amended by its settlor; or (3) a trust, if contributions to the trust qualify for the annual exclusion under Section 2503(c) of said Internal Revenue Code.
(P.A. 19-137, S. 64.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499mmm. General powers of trustee. (a) A trustee, without authorization by the court, may exercise: (1) Powers conferred by the terms of the trust; and (2) except as limited by the terms of the trust, (A) all powers over the trust property which an unmarried competent owner has over individually owned property; (B) any other powers appropriate to achieve the proper investment, management and distribution of the trust property; and (C) any other power conferred by sections 45a-487j to 45a-487t, inclusive, and 45a-499a to 45a-500s, inclusive.
(b) The exercise of a power is subject to the fiduciary duties prescribed by sections 45a-499aaa to 45a-499ooo, inclusive.
(P.A. 19-137, S. 65.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499nnn. Specific powers of trustee. (a) Without limiting the authority conferred by section 45a-499mmm, and except as otherwise prohibited by law or by the terms of the trust instrument, a trustee may:
(1) Collect trust property and accept or reject additions to the trust property from a settlor or any other person;
(2) Acquire or sell property, for cash or on credit, at public or private sale;
(3) Exchange, partition or otherwise change the character of trust property;
(4) Deposit trust money in an account in a regulated financial service institution;
(5) 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) With respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members or property owners, including merging, dissolving or otherwise changing the form of business organization or contributing additional capital;
(7) With respect to stocks or other securities, exercise the rights of an absolute owner, including the right to (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) With respect to an interest in real property, construct or make ordinary or extraordinary repairs to, alterations to or improvements in buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate land to public use or grant public or private easements, and make or vacate plats and adjust boundaries;
(9) Enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust;
(10) Grant an option involving a sale, lease or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired;
(11) Insure the property of the trust against damage or loss and insure the trustee, the trustee's agents and beneficiaries against liability arising from the administration of the trust;
(12) Abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration;
(13) With respect to possible liability for violation of environmental law, (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 which 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) Pay or contest a claim, settle a claim by or against the trust, and release, in whole or in part, a claim belonging to the trust;
(15) Pay taxes, assessments, compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the administration of the trust;
(16) Exercise elections with respect to federal, state and local taxes;
(17) Select a mode of payment under any employee benefit or retirement plan, annuity or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;
(18) Make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances, with the trustee having a lien on future distributions for repayment of such loans;
(19) Pledge trust property to guarantee loans made by others to the beneficiary;
(20) Appoint a trustee to act in another jurisdiction with respect to trust property located in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the appointing trustee, require the appointed trustee to furnish security and remove any trustee so appointed;
(21) Pay an amount distributable to a beneficiary who is under a legal disability or who the trustee reasonably believes is incapacitated, by: (A) Paying it directly to the beneficiary or applying it for the beneficiary's benefit; (B) paying it to the beneficiary's conservator of the estate or guardian of the estate; (C) if the beneficiary does not have a conservator of the estate or guardian of the estate, 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 (D) managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution;
(22) On distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the trust property for such purposes and adjust for resulting differences in valuation;
(23) 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 an action, claim or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee's duties;
(25) Sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the trustee's powers;
(26) On termination of the trust, exercise the powers appropriate to wind up administration of the trust and distribute the trust property to the persons entitled to it; and
(27) Exercise all powers appropriate to achieve the proper investment, management, preservation and distribution of a digital asset held in the trust estate whether the trustee, the grantor or a third party is the original or a successor user of the digital asset. This subdivision shall be construed in accordance with the Connecticut Revised Uniform Fiduciary Access to Digital Assets Act, as said act is in effect from time to time during the administration of the trust. The custodian of each digital asset held in the trust, whether public or private, shall divulge to the trustee with respect to the asset: (A) Any electronically stored information; (B) the content of all electronic communications sent or received by the original and successor user; and (C) any record or other information stored by the custodian on a remote-computing service.
(b) The powers in subsection (a) of this section do not apply to a charitable trust to the extent that their exercise would give the trustee the authority to deviate from a stated charitable purpose or violate a restricted gift. A trustee of a charitable trust and a person holding and administering an endowment fund or an institutional fund, both as defined in section 45a-535a, shall not mortgage, hypothecate, pledge, use as collateral or otherwise encumber any of the following assets of such charitable trust, endowment fund or institutional fund, if the source of the asset was a charitable gift: (1) Funds for which expenditures are restricted by the settlor for a purpose other than the general purposes of a charity or institution; and (2) the principal or corpus of a charitable trust or institutional fund for which such principal or corpus is restricted to investment or endowment purposes.
(c) The provisions of this section apply to any trust whether established before, on or after January 1, 2020, except that no power is conferred by this section to any trust established before January 1, 2020, if the trust instrument reflects an intent to disallow the exercise of the power.
(P.A. 19-137, S. 66.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ooo. Distribution of trust property upon termination. (a) Upon termination or partial termination of a trust, the trustee may send to the qualified beneficiaries a proposal for distribution. If the proposal informed the beneficiary of the right to object and of the time allowed for objection, the right of any beneficiary, to whom the trustee has sent the proposal, to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection not later than thirty days after the date on which the proposal was sent.
(b) 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.
(c) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent: (1) It was induced by improper conduct of the trustee; or (2) 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.
(d) The provisions of this section do not apply to testamentary trusts.
(P.A. 19-137, S. 67.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ppp. Breach of trust. A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(P.A. 19-137, S. 68.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499qqq. Damages in absence of breach. (a) A trustee is accountable to an affected beneficiary for any profit made by the trustee arising from administration of the trust, even absent a breach of trust.
(b) 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.
(P.A. 19-137, S. 69.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499rrr. Limitation of action against trustee. (a) A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the date on which 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.
(b) 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.
(c) If subsection (a) of this section does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust shall be commenced not later than three years after the first to occur of: (1) The removal, resignation or death of the trustee; (2) the termination of the beneficiary's interest in the trust; or (3) the termination of the trust.
(d) In a proceeding involving a charitable trust, any notice that is required to be given to the Attorney General shall include a copy of the trust instrument.
(e) The provisions of this section do not apply to testamentary trusts.
(P.A. 19-137, S. 70.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499sss. 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.
(P.A. 19-137, S. 71.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499ttt. Event affecting administration or distribution. If an event, including marriage, divorce, performance of educational requirements or death affects 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.
(P.A. 19-137, S. 72.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499uuu. Exculpation of trustee. (a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it: (1) 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 (2) was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.
(b) Except for terms intended to provide protection for carrying out a stated trust purpose, 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.
(P.A. 19-137, S. 73.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499vvv. Beneficiary's consent, release or ratification. (a) 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) The consent, release or ratification of the beneficiary was induced by improper conduct of the trustee; or (2) 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.
(b) The liability of a trustee of a testamentary trust is not governed by the provisions of this section.
(P.A. 19-137, S. 74.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499www. Limitation on personal liability of trustee. (a) 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.
(b) Except as otherwise limited by the general statutes, the 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.
(c) A claim 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, if the claim is based on (1) a contract entered into by a trustee in the trustee's fiduciary capacity, (2) an obligation arising from ownership or control of trust property, or (3) a tort committed in the course of administering a trust.
(P.A. 19-137, S. 75.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499xxx. Interest as general partner. (a) Except as provided in subsection (c) of this section 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, sections 34-300 to 34-399, inclusive, or the Uniform Limited Partnership Act, sections 34-9 to 34-38u, inclusive.
(b) Except as otherwise provided in subsection (c) of this section, a trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.
(c) The immunity provided by this section does not apply if an interest in the partnership is held by the trustee in a capacity other than that of trustee or is held by the trustee's spouse or one or more of the trustee's descendants, siblings or parents, or the spouse of any of them.
(d) 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.
(P.A. 19-137, S. 76.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499yyy. Protection of person dealing with trustee. (a) A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers, is protected from liability as if the trustee properly exercised the power.
(b) 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.
(c) A person who in good faith delivers assets to a trustee need not ensure the proper application of such assets.
(d) 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.
(e) Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section.
(P.A. 19-137, S. 77.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-499zzz. Certification of trust. (a) Instead of furnishing a copy of the trust instrument to a person other than a beneficiary or, in the case of a charitable trust, the Attorney General's office, the trustee may furnish to the person a certification of trust containing the following information: (1) That the trust exists and the date the trust instrument was executed; (2) the identity of the settlor; (3) the identity and address of the currently acting trustee; (4) the powers of the trustee; (5) the revocability or irrevocability of the trust and the identity of any person holding a power to revoke the trust; (6) the authority of cotrustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee; (7) the trust's taxpayer identification number; and (8) the manner of taking title to trust property.
(b) A certification of trust may be signed or otherwise authenticated by any trustee.
(c) A certification of trust shall 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.
(d) A certification of trust need not contain the dispositive terms of a trust.
(e) 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 which designate the trustee and confer upon the trustee the power to act in the pending transaction.
(f) A person who acts in reliance upon a certification of trust without knowledge that the representations contained in the certification 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.
(g) 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.
(h) A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages, including legal fees and costs, if the court determines that the person did not act in good faith in demanding the trust instrument.
(i) 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 and does not limit the right of the Attorney General to notice under subsection (d) of section 45a-499rrr.
(P.A. 19-137, S. 78.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500. Uniformity of application and construction of trust. In applying and construing the uniform provisions of sections 45a-499a to 45a-500a, inclusive, consideration shall be given to the need to promote uniformity of the law with respect to the subject matter among states that enact the uniform provisions.
(P.A. 19-137, S. 79.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500a. Severability clause. If any provision of this section or sections 45a-499a to 45a-500, inclusive, or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this section or sections 45a-499a to 45a-500, inclusive, which can be given effect without the invalid provision or application, and to this end the provisions of this section and sections 45a-499a to 45a-500, inclusive, are severable.
(P.A. 19-137, S. 80.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500b. Short title: Connecticut Uniform Directed Trust Act. This section and sections 45a-500c to 45a-500s, inclusive, may be cited as the “Connecticut Uniform Directed Trust Act”.
(P.A. 19-137, S. 81.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500c. Application; principal place of administration. Sections 45a-500b to 45a-500s, inclusive, apply to a trust, whenever created, that has its principal place of administration in this state, subject to the following rules:
(1) If the trust was created before January 1, 2020, sections 45a-500b to 45a-500s, inclusive, apply only to a decision or action occurring on or after January 1, 2020.
(2) If the principal place of administration of the trust is changed to this state on or after January 1, 2020, sections 45a-500b to 45a-500s, inclusive, apply only to a decision or action occurring on or after the date of the change.
(P.A. 19-137, S. 82.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500d. Common law and principles of equity. The common law and principles of equity supplement sections 45a-500b to 45a-500s, inclusive, except to the extent modified by sections 45a-500b to 45a-500s, inclusive, or law of this state other than this act.
(P.A. 19-137, S. 83.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500e. Exclusions. (a) As used in this section, “power of appointment” means a power that enables a person acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over trust property.
(b) Sections 45a-500b to 45a-500s, inclusive, do not apply to a:
(1) Power of appointment;
(2) Power to appoint or remove a trustee or trust director;
(3) Power of a settlor over a trust to the extent the settlor has a power to revoke the trust;
(4) Power of a beneficiary over a trust to the extent the exercise or nonexercise of the power affects the beneficial interest of:
(A) The beneficiary; or
(B) Another beneficiary represented by the beneficiary under sections 45a-499q to 45a-499u, inclusive, with respect to the exercise or nonexercise of the power; or
(5) Power over a trust if:
(A) The terms of the trust provide that the power is held in a nonfiduciary capacity; and
(B) The power is held in a nonfiduciary capacity to achieve the settlor's tax objectives under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.
(c) Unless the terms of a trust provide otherwise, a power granted to a person to designate a recipient of an ownership interest in or power of appointment over trust property which is exercisable while the person is not serving as a trustee is a power of appointment and not a power of direction.
(P.A. 19-137, S. 84.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500f. Powers of trust director. (a) Subject to section 45a-500g, the terms of a trust may grant a power of direction to a trust director.
(b) Unless the terms of a trust provide otherwise: (1) A trust director may exercise any further power appropriate to the exercise or nonexercise of a power of direction granted to the director under subsection (a) of this section; and (2) trust directors with joint powers shall act by majority decision.
(P.A. 19-137, S. 85.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500g. Limitations on trust director. A trust director is subject to the same rules as a trustee in a like position and under similar circumstances in the exercise or nonexercise of a power of direction or further power under subdivision (1) of subsection (b) of section 45a-500f regarding:
(1) A payback provision in the terms of a trust necessary to comply with the reimbursement requirements of 42 USC 1396p(d)(4)(A), as amended from time to time; and
(2) A charitable interest in the trust, including notice regarding the interest to the Attorney General.
(P.A. 19-137, S. 86.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500h. Duty and liability of trust director. (a) Subject to the provisions of subsection (b) of this section, with respect to a power of direction or further power under subdivision (1) of subsection (b) of section 45a-500f:
(1) A trust director has the same fiduciary duty and liability in the exercise or nonexercise of the power:
(A) If the power is held individually, as a sole trustee in a like position and under similar circumstances; or
(B) If the power is held jointly with a trustee or another trust director, as a cotrustee in a like position and under similar circumstances; and
(2) The terms of the trust may vary the director's duty or liability to the same extent the terms of the trust could vary the duty or liability of a trustee in a like position and under similar circumstances.
(b) Unless the terms of a trust provide otherwise, if a trust director is licensed, certified, or otherwise authorized or permitted by law other than sections 45a-500b to 45a-500s, inclusive, to provide health care in the ordinary course of the director's business or practice of a profession, to the extent the director acts in that capacity, the director has no duty or liability under sections 45a-500b to 45a-500s, inclusive.
(c) The terms of a trust may impose a duty or liability on a trust director in addition to the duties and liabilities under this section.
(P.A. 19-137, S. 87.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500i. Duty and liability of directed trustee. (a) Subject to the provisions of subsection (b) of this section, a directed trustee shall take reasonable action to comply with a trust director's exercise or nonexercise of a power of direction or further power under subdivision (1) of subsection (b) of section 45a-500f and the trustee is not liable for the action.
(b) A directed trustee shall not comply with a trust director's exercise or nonexercise of a power of direction or further power under subdivision (1) of subsection (b) of section 45a-500f to the extent that by complying the trustee would engage in wilful misconduct.
(c) An exercise of a power of direction under which a trust director may release a trustee or another trust director from liability for breach of trust is not effective if: (1) The breach involved the trustee's or other director's wilful misconduct; (2) the release was induced by improper conduct of the trustee or other director in procuring the release; or (3) at the time of the release, the director did not know the material facts relating to the breach.
(d) A directed trustee that has reasonable doubt about its duty under this section may petition the court for instructions and the court shall have jurisdiction to provide such instructions.
(e) The terms of a trust may impose a duty or liability on a directed trustee in addition to the duties and liabilities under this section.
(P.A. 19-137, S. 88.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500j. Duty to provide information to trust director or trustee. (a) Subject to the provisions of section 45a-500k, a trustee shall provide information to a trust director to the extent the information is reasonably related to: (1) The powers or duties of the trustee; and (2) the powers or duties of the director.
(b) Subject to the provisions of section 45a-500k, a trust director shall provide information to a trustee or another trust director to the extent the information is reasonably related to: (1) The powers or duties of the director; and (2) the powers or duties of the trustee or other director.
(c) A trustee that acts in reliance on information provided by a trust director is not liable for a breach of trust to the extent the breach resulted from the reliance, unless by so acting the trustee engages in wilful misconduct.
(d) A trust director that acts in reliance on information provided by a trustee or another trust director is not liable for a breach of trust to the extent the breach resulted from the reliance, unless by so acting the trust director engages in wilful misconduct.
(P.A. 19-137, S. 89.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500k. No duty to monitor, inform or advise. (a) Unless the terms of a trust provide otherwise: (1) A trustee does not have a duty to: (A) Monitor a trust director; or (B) inform or give advice to a settlor, beneficiary, trustee or trust director concerning an instance in which the trustee might have acted differently than the director; and (2) by taking an action described in subdivision (1) of this subsection, a trustee does not assume the duty excluded in said subdivision.
(b) Unless the terms of a trust provide otherwise: (1) A trust director does not have a duty to: (A) Monitor a trustee or another trust director; or (B) inform or give advice to a settlor, beneficiary, trustee or another trust director concerning an instance in which the director might have acted differently than a trustee or another trust director; and (2) by taking an action described in subdivision (1) of this subsection, a trust director does not assume the duty excluded by said subdivision.
(P.A. 19-137, S. 90.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500l. Application to cotrustee. The terms of a trust may relieve a cotrustee from duty and liability with respect to another cotrustee's exercise or nonexercise of a power of the other cotrustee to the same extent that, in a directed trust, a directed trustee is relieved from duty and liability with respect to a trust director's power of direction under sections 45a-500i to 45a-500k, inclusive.
(P.A. 19-137, S. 91.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500m. Limitation of action against trust director. (a) An action against a trust director for breach of trust must be commenced within the same limitation period as under section 45a-499rrr for an action for breach of trust against a trustee in a like position and under similar circumstances.
(b) A financial report or accounting has the same effect on the limitation period for an action against a trust director for breach of trust that the financial report or accounting would have under section 45a-499rrr in an action for breach of trust against a trustee in a like position and under similar circumstances.
(P.A. 19-137, S. 92.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500n. Defenses in action against trust director. In an action against a trust director for breach of trust, the director may assert the same defenses a trustee in a like position and under similar circumstances could assert in an action for breach of trust against the trustee.
(P.A. 19-137, S. 93.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500o. Jurisdiction over trust director. (a) By accepting appointment as a trust director of a trust subject to sections 45a-500b to 45a-500s, inclusive, the director submits to personal jurisdiction of the courts of this state regarding any matter related to a power or duty of the director.
(b) This section does not preclude other methods of obtaining jurisdiction over a trust director.
(P.A. 19-137, S. 94.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500p. Office of trust director. Unless the terms of a trust provide otherwise, the rules applicable to a trustee apply to a trust director regarding the following matters:
(1) Acceptance under section 45a-499rr;
(2) Giving of bond to secure performance under section 45a-499ss;
(3) Reasonable compensation under section 45a-499yy;
(4) Resignation under section 45a-499vv;
(5) Removal under section 45a-499ww; and
(6) Vacancy and appointment of successor under section 45a-499uu.
(P.A. 19-137, S. 95.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500q. Uniformity of application and construction. In applying and construing the uniform provisions of sections 45a-500b to 45a-500s, inclusive, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
(P.A. 19-137, S. 96.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500r. Relation to Electronic Signatures in Global and National Commerce Act. Sections 45a-500b to 45a-500s, inclusive, modify, limit and supersede the Electronic Signatures in Global and National Commerce Act, 15 USC 7001 et seq., but do not modify, limit or supersede Section 101(c) of said act, 15 USC 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of said act, 15 USC 7003(b).
(P.A. 19-137, S. 97.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-500s. Application of Connecticut Uniform Directed Trust Act with respect to federal act. The provisions of this section and sections 45a-500b to 45a-500r, inclusive, governing the legal effect, validity or enforceability of electronic records or electronic signatures, and of contracts formed or performed with the use of the records or signatures, conform to the requirements of Section 102 of the Electronic Signatures in Global and National Commerce Act, 15 USC 7002 and supersede, modify and limit the requirements of that act.
(P.A. 19-137, S. 98.)
History: P.A. 19-137 effective January 1, 2020.
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Sec. 45a-501. Reserved for future use.
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Sec. 45a-502. (Formerly Sec. 45-96a). “Majority” defined for trusts executed prior to October 1, 1972. When the word “majority” is used in a will or trust instrument executed prior to October 1, 1972, it shall be construed to mean a person who has attained the age of twenty-one.
(1972, P.A. 127, S. 73.)
History: Sec. 45-96a transferred to Sec. 45a-502 in 1991.
Annotation to former section 45-96a:
Cited. 168 C. 144.
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Sec. 45a-503. (Formerly Sec. 45-95). Rule against perpetuities. “Second look” doctrine. In applying the rule against perpetuities to an interest in real or personal property created before October 1, 1989, limited to take effect at or after the termination of one or more life estates in, or lives of, persons in being when the period of said rule commences to run, the validity of the interest shall be determined on the basis of facts existing at the termination of such one or more life estates or lives. For the purpose of this section, an interest which must terminate not later than the death of one or more persons is a life estate although it may terminate at an earlier time.
(1955, S. 2912d; P.A. 89-44, S. 8.)
History: P.A. 89-44 limited applicability of section to an interest created before October 1, 1989; Sec. 45-95 transferred to Sec. 45a-503 in 1991.
Annotations to former section 45-95:
Application of “second look” doctrine. 174 C. 616, 628. Cited. 213 C. 676.
When contingent remainder not cured under section. 29 CS 275. Cited. 41 CS 79.
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Sec. 45a-504. (Formerly Sec. 45-96). Reduction of age contingency to preserve interest. If an interest in real or personal property created before October 1, 1989, would violate the rule against perpetuities as modified by section 45a-503 because such interest is contingent upon any person attaining or failing to attain an age in excess of twenty-one, the age contingency shall be reduced to twenty-one as to all persons subject to the same age contingency.
(1955, S. 2913d; 1972, P.A. 127, S. 68; P.A. 73-35, S. 1, 2; P.A. 89-44, S. 9.)
History: 1972 act reduced age of majority from 21 to 18; P.A. 73-35 returned applicable age to 21; P.A. 89-44 limited applicability of section to an interest created before October 1, 1989; Sec. 45-96 transferred to Sec. 45a-504 in 1991.
Annotation to former section 45-96:
Cited. 29 CS 275.
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Sec. 45a-505. (Formerly Sec. 45-97). Fee simple determinable or subject to right of entry to become absolute, when. A fee simple determinable in land or a fee simple in land subject to a right of entry for condition broken shall become a fee simple absolute if the specified contingency does not occur within thirty years from the date when such fee simple determinable or such fee simple subject to a right of entry becomes possessory. If such contingency occurs within such thirty years, the succeeding interest, which may be an interest in a person other than the person creating the interest or his heirs, shall become possessory or the right of entry exercisable notwithstanding the rule against perpetuities. If a fee simple determinable in land or a fee simple in land subject to a right of entry for condition broken is so limited that the specified contingency must occur, if at all, within the period of the rule against perpetuities, said interests shall take effect as limited. This section shall not apply where both such fee simple determinable and such succeeding interest, or both such fee simple and such right of entry, are for public, charitable or religious purposes; nor shall it apply to a deed, gift or grant of the state or any political subdivision thereof.
(1955, S. 2914d.)
History: Sec. 45-97 transferred to Sec. 45a-505 in 1991.
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Sec. 45a-506. (Formerly Sec. 45-98). Limitations not invalidated, when. Except as provided in the first sentence of section 45a-505, sections 45a-502 to 45a-507, inclusive, shall not be construed to invalidate or modify the terms of any limitation which would have been valid prior to October 1, 1955.
(1955, S. 2915d.)
History: Sec. 45-98 transferred to Sec. 45a-506 in 1991.
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Sec. 45a-507. (Formerly Sec. 45-99). Application of rule. Sections 45a-502 to 45a-506, inclusive, shall apply only to inter vivos instruments and wills taking effect after October 1, 1955, and to appointments made after said date, including appointments by inter vivos instrument or will under powers created before said date. Said sections shall apply to both legal and equitable interests.
(1955, S. 2916d.)
History: Sec. 45-99 transferred to Sec. 45a-507 in 1991.
Annotation to former section 45-99:
Application of “second look” doctrine. 174 C. 616.
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Sec. 45a-508. (Formerly Sec. 45-100). Exemption of certain employees' trust funds from the rule against perpetuities. A trust created by an employer as part of a stock bonus, pension, disability, death benefit or profit-sharing plan for the benefit of some or all employees, to which contributions are made by the employer or employees or both, for the purpose of distributing to the employees the earnings or the principal, or both earnings and principal, of the fund held in trust, shall not be deemed to be invalid as violating any existing law or rule of law against perpetuities or suspension of the power of alienation of the title to property. A trust created for such purpose may continue for such time as may be necessary to accomplish the purposes for which it has been created. The income arising from any property held in any such trust may be permitted to accumulate in accordance with the terms of such trust and the plan of which such trust forms a part for such time as may be necessary to accomplish the purposes for which such trust has been created. Any rule of law against perpetuities or suspension of the power of alienation of the title to property shall not invalidate any such trust.
(1949 Rev., S. 6898; P.A. 80-476, S. 223.)
History: P.A. 80-476 made minor changes in wording and deleted obsolete provision re invalidation of trusts “terminated by a court of competent jurisdiction in a suit instituted within three years after May 21, 1947”; Sec. 45-100 transferred to Sec. 45a-508 in 1991.
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Secs. 45a-509 to 45a-513. Reserved for future use.
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Sec. 45a-514. (Formerly Sec. 45-79). Charitable trusts. Any charitable trust or use created in writing or by deed by any resident of the state, or any public and charitable trust or use for aiding and assisting any person or persons to be selected by the trustees of such trust or use to acquire education, shall forever remain to the uses and purposes to which it has been granted according to the true intent and meaning of the grantor and to no other use.
(1949 Rev., S. 6882.)
History: Sec. 45-79 transferred to Sec. 45a-514 in 1991.
See Sec. 47-2 re charitable uses of estates.
Annotations to former section 45-79:
A trust to promote the distribution of books or pamphlets may, in the absence of any profit element, qualify as a valid charity; gifts devoted to illegal objectives are void. 143 C. 247. Upon failure of trust, a resulting trust arises in favor of grantor-testator's estate. 150 C. 570. A charitable trust is to be construed, as far as reasonably possible, so as to uphold the trust. 157 C. 265. Lands and property owned by charitable organization devoted to a charitable public use may not be used for commercial purposes unless reasonably necessary to continue the charitable purpose of such organization. 168 C. 447. Cited. 172 C. 496; 179 C. 62; 209 C. 429.
The modified doctrine of cy pres, or of approximation, exists only when the specific method adopted by the testator for carrying his general intent into effect can no longer be executed, but court held that the fact that at any particular time there are only a few, or even no, persons qualified to receive the benefit intended by a charitable bequest is not necessarily a reason for holding that such bequest has failed. 21 CS 217. Applicability of cy pres doctrine or doctrine of approximation depends on proof of general dominant charitable intent to which particular expressed intent is secondary. 27 CS 176. Neither doctrine of cy pres nor that of deviation will be applied when testator's express directions can be carried out. Id., 483.
Annotation to present section:
Cited. 225 C. 32.
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Sec. 45a-515. (Formerly Sec. 45-80). Charitable uses determined by trustee, when. Any person may, by will, deed or other instrument, give, devise or bequeath property, real or personal or both, to any trustee or trustees, and may provide in such instrument that the property so given, devised or bequeathed shall be held in trust and the income or principal applied in whole or in part for any charitable purpose. A donor or testator shall not be required to designate in such will, deed or other instrument the particular charitable purpose or class of purposes for which the property shall be used or the income applied. Any such gift, devise or bequest shall be valid and operative, provided the donor or testator shall give to the trustee or trustees thereof or to any other person or persons, the power to select, from time to time and in such manner as such donor or testator may direct, the charitable purpose or purposes to which such property or the income thereof shall be applied; and such gift, devise or bequest, accompanied by such power of selection, shall not be void by reason of uncertainty.
(1949 Rev., S. 6883; P.A. 80-476, S. 224.)
History: P.A. 80-476 rephrased provisions; Sec. 45-80 transferred to Sec. 45a-515 in 1991.
Annotations to former section 45-80:
Trusts for support of religion are charitable trusts; trust giving trustee power to select particular mission held to comply with statute. 113 C. 231. Trust not void for uncertainty if trustee can distribute only to institutions exclusively devoted to charitable purposes. 123 C. 552. Trust valid with direction that trustee distribute “to such charitable and educational purposes as it may deem wise and prudent.” 126 C. 665. Effect of section is to make valid a bequest to charity generally, provided that by the terms of the bequest there is an absolute power vested in either a trustee or some other person to determine to what specific charity the property bequeathed shall be devoted. 138 C. 676. Cited. 157 C. 268.
Cited. 18 CS 100. A trustee, in fulfillment of his duty to give effect to the testator's charitable intentions as made apparent in the will, may use surplus income to bestow on the charities named by the testator additional benefits in proportion to their original shares. 22 CS 409.
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Sec. 45a-516. (Formerly Sec. 45-81). Gifts to charitable community trust. Any person may incorporate by reference in any will, deed or other instrument, the terms, conditions, trusts, uses or purposes of any existing written or printed resolution, declaration or deed of trust passed by any corporation or executed by any person whereby there is established or is attempted to be established any charitable community trust. Any gift, devise or bequest so given to any person or corporation, in trust for any use or purpose of such charitable community trust, shall be valid and effectual notwithstanding that the terms, conditions, uses and purposes thereof are not otherwise recited in such deed, will or other instrument than by such reference; and the property so given to such person or corporation shall be used for the purposes and upon the terms, conditions and trusts contained in such resolution, declaration or deed of trust establishing such community trust, so far as the same do not conflict with the intent of the donor or testator as expressed in such will, deed or other instrument. Any gift, devise or bequest so made shall not be void for uncertainty or invalid because such resolution, declaration or deed of trust establishing such community trust was not executed by the testator or donor in accordance with statutory provisions, provided such will, deed or other instrument is executed in accordance with such provisions.
(1949 Rev., S. 6884; P.A. 80-476, S. 225.)
History: P.A. 80-476 made minor changes in wording; Sec. 45-81 transferred to Sec. 45a-516 in 1991.
Annotation to former section 45-81:
Cited. 126 C. 670.
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Sec. 45a-517. (Formerly Sec. 45-82). Community trustees to render annual accounts. Hearing on adjustment and allowance. (a) The trustee or trustees of any charitable community trust shall annually render an account signed under penalty of false statement to the court of probate for the district in which the trust is being administered. The account shall include an inventory of the estate held by such trustee or trustees and shall state the manner in which the principal of such fund is invested and the items of income and expenditure.
(b) The court of probate shall direct the notice, if any, which shall be given of the hearing upon the adjustment and allowance of any such account. The court may adjust and allow the account and make any order necessary to secure the execution of the duties of such trustee or trustees, subject to appeal as provided for appeals from orders of the probate court.
(1949 Rev., S. 6885; P.A. 80-476, S. 226; P.A. 99-84, S. 22.)
History: P.A. 80-476 divided section into Subsecs. and rephrased provisions; Sec. 45-82 transferred to Sec. 45a-517 in 1991; P.A. 99-84 amended Subsec. (a) by deleting “under oath” and inserting “signed under penalty of false statement”.
Annotation to former section 45-82:
Cited. 126 C. 670.
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Sec. 45a-518. Reserved for future use.
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Sec. 45a-519. (Formerly Sec. 45-79a). Superior Court or Probate Court jurisdiction to reform instruments to federal tax requirements. (a) If any deduction under Section 170, Section 2055 or Section 2522 of the Internal Revenue Code of 1986 is not allowable with respect to any interest in property passing under any will, trust agreement or other governing instrument to a person, or for a use, described in Section 170(c), Section 2055(a) or Section 2522(a) and (b) of said code because such interest fails to comply with the requirements of Section 170(f)(2), Section 2055(e)(2) or Section 2522(c)(2) of said code, the Superior Court, or a Probate Court specified in section 45a-499p, shall have jurisdiction over any action brought to reform such will, trust agreement or other governing instrument in accordance with the provisions of Section 170(f)(7), Section 2055(e)(3) or Section 2522(c)(4) of said code so that such deduction may be allowed under the applicable provisions of said code. All references contained in this section to any section of the Internal Revenue Code of 1986 mean that section of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.
(b) The Superior Court or the Probate Court are empowered to reform any such will, trust agreement or other governing instrument only to the extent necessary in order to ensure the allowance of any deduction described in subsection (a) of this section, and only to the extent the court finds that such reformation is consistent with the original intent of the testator or donor.
(c) This section shall not be construed to effect a change in any dispositive provisions of the governing instrument as provided in section 45a-514.
(d) Any reformation of any will, trust agreement or other governing instrument in accordance with the provisions of this section shall be effective whether or not a disclaimer has been filed within the period specified in sections 45a-578 to 45a-585, inclusive.
(e) This section shall be applicable to any action commenced on or after July 18, 1984.
(P.A. 75-207, S. 1, 2; P.A. 77-436, S. 1, 2; P.A. 79-43; P.A. 80-122; P.A. 81-42, S. 1, 2; P.A. 83-24, S. 1, 2; P.A. 85-523, S. 3, 9; P.A. 89-211, S. 46; May Sp. Sess. P.A. 92-11, S. 32, 70; P.A. 98-219, S. 7; P.A. 19-137, S. 120.)
History: P.A. 77-436 revised dates in Subsec. (a), substituting “December 31, 1977” for “September 21, 1974” re date of execution of will or creation of trust and for “December 31, 1975” re date action brought to conform instrument to requirements of Internal Revenue Code and added Subsec. (f) re effect of failure to file disclaimer within time specified in Ch. 798; P.A. 79-43 changed year from 1977 to 1978 in Subsec. (a) re date of action brought to conform instrument to Internal Revenue Code requirements; P.A. 80-122 changed year to 1980 in provision re date of action brought to conform instrument to Code; P.A. 81-42 amended Subsec (a) to change date applicable to execution of will or creation of trust from December 31, 1977, to December 31, 1978, and date applicable to actions subject to court jurisdiction to conform will or trust to meet federal requirements from December 31, 1980, to December 31, 1981; P.A. 83-24 amended Subsec. (a) by deleting references to decedent whose death occurs after December 31, 1969, and to any action brought on or before December 31, 1981, and added references to Section 170 of the Internal Revenue Code and provision re jurisdiction of superior court over any action brought within the time provided in Section 2055(e)(3) of the Internal Revenue Code of 1954; P.A. 85-523 entirely revised section, removing limitation of execution of will or creation of trust before December 31, 1978, and making revised provisions applicable to any action commenced on or after July 18, 1984; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; Sec. 45-79a transferred to Sec. 45a-519 in 1991; May Sp. Sess. P.A. 92-11 amended Subsec. (a) to delete redundant language re any subsequent corresponding internal revenue code of the United States; P.A. 98-219 added provisions applying section to Probate Court; P.A. 19-137 amended Subsec. (a) by replacing provision re Probate Court's jurisdiction with “or a Probate Court specified in section 45a-499p” and made technical changes, effective January 1, 2020.
See Sec. 45a-485 re reformation of instrument to ensure allowance of marital deduction.
Annotations to former section 45-79a:
Cited. 9 CA 825.
Cited. 39 CS 80.
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Sec. 45a-520. (Formerly Sec. 45-79b). Termination of charitable trusts. (a) As used in this section: (1) “Charitable beneficiary” and “charitable entity” include, without limitation, towns, ecclesiastical society and cemetery associations owning or controlling the operation of a cemetery or burial ground; and (2) “charitable trust” means a trust for the benefit of one or more charitable beneficiaries.
(b) In any case where the current market value of the assets of a testamentary or inter vivos charitable trust is less than one hundred fifty thousand dollars, any trustee thereof, any charitable beneficiary specifically designated in the governing instrument or the Attorney General may petition a Probate Court specified in section 45a-499p for an order terminating the trust. Upon receipt of such a petition, the court shall order a hearing and cause notice thereof to be given to the Attorney General, the trustees, the grantor of the trust, if living, and any charitable beneficiary of the trust specifically designated in the governing instrument. If at such a hearing the court determines that continuation of the trust is uneconomic when the costs of operating the trust, probable income and other relevant factors are considered or not in the best interest of the beneficiaries, the court may order termination of the trust and distribution of the trust assets to any charitable beneficiary specifically designated in the governing instrument or, if no such beneficiary exists, to such other charitable trusts or charitable entities, including any community trust or foundation, as the court may determine will fulfill the charitable purposes of the trust being so terminated.
(c) The provisions of this section shall not apply to termination of trusts or funds as provided in chapter 368j.
(P.A. 79-365; P.A. 80-221; P.A. 82-155; P.A. 84-294, S. 14; P.A. 86-234, S. 3, 6; P.A. 96-35; P.A. 14-122, S. 181; P.A. 19-137, S. 121.)
History: P.A. 80-221 inserted Subsec. (a) defining charitable beneficiaries, entities and trusts, made previous provisions Subsec. (b) clarifying to which court petition should be brought and added Subsec. (c); P.A. 82-155 amended Subsec. (b) by increasing from $10,000 to $15,000 the limitation on the maximum value of a trust which may be terminated; P.A. 84-294 amended Subsec. (b) by increasing limit on market value of assets of a testamentary or inter vivos charitable trust from $15,000 to $20,000; P.A. 86-234 amended Subsec. (b) by increasing the asset level of the trust from $20,000 to $65,000; Sec. 45-79b transferred to Sec. 45a-520 in 1991; P.A. 96-35 amended Subsec. (b) by increasing asset level of trust to $150,000; P.A. 14-122 made technical changes in Subsec. (a); P.A. 19-137 amended Subsec. (b) by replacing “court of probate” with “Probate Court specified in section 45a-499p”, deleted provisions re Probate Court district in which petition is to be brought, and made a technical change, effective January 1, 2020.
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Sec. 45a-521. Superior Court or Probate Court jurisdiction to reform charitable remainder unitrust re payment. (a) Upon a petition filed within the period specified in 26 CFR 1.664-3, by a trustee of a charitable remainder unitrust, the Superior Court, or a Probate Court specified in section 45a-499p shall have jurisdiction to reform such charitable remainder unitrust for the sole purpose of substituting a provision allowing payment of the unitrust amount under 26 CFR 1.664-3 for an existing provision providing for payment of the unitrust amount under 26 CFR 1.664-3.
(b) The Superior Court or the Probate Court are empowered to reform such trust only to the extent the court finds that such reformation is consistent with the original intent of the testator or donor.
(c) This section shall not be construed to effect a change in any dispositive provision of the trust as provided in section 45a-514.
(P.A. 99-164, S. 34, 36; P.A. 19-137, S. 122.)
History: P.A. 99-164 effective June 23, 1999; P.A. 19-137 amended Subsec. (a) by replacing reference to Code of Federal Regulations title and section with “26 CFR 1.664-3”, deleting provision re trustee or trust subject to jurisdiction of Probate Court, deleting “, provided such an accounting need not be required,” and adding “specified in section 45a-499p”, and amended Subsec. (b) by making a technical change, effective January 1, 2020.
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Secs. 45a-522 to 45a-525. Reserved for future use.
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Secs. 45a-526 to 45a-529. (Formerly Secs. 45-100h to 45-100k). Short title: Uniform Management of Institutional Funds Act. Definitions. Expenditure of net appreciation, standards. Exception and restriction on expenditure of net appreciation; construction. Sections 45a-526 to 45a-529, inclusive, are repealed, effective April 29, 2008.
(P.A. 73-548, S. 1–3, 9; P.A. 74-121, S. 1, 2; P.A. 80-476, S. 211; P.A. 93-189, S. 4, 5; P.A. 08-6, S. 4.)
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Secs. 45a-529a and 45a-529b. Accumulation of annual net income, standards. Exception and restriction on accumulation of annual net income; construction. Sections 45a-529a and 45a-529b are repealed, effective April 29, 2008.
(P.A. 93-189, S. 2, 3; P.A. 08-6, S. 4.)
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Secs. 45a-530 to 45a-534. (Formerly Secs. 45-100l to 45-100p). Investment of institutional funds. Delegation of powers of investment. Standards applicable to actions of governing board. Release of restriction in gift instrument: Written consent, court order; limitations; doctrine of cy pres applicable. Construction. Sections 45a-530 to 45a-534, inclusive, are repealed, effective April 29, 2008.
(P.A. 73-548, S. 4–8; P.A. 78-280, S. 2, 127; P.A. 80-476, S. 212; P.A. 93-189, S. 6; P.A. 97-140, S. 14; P.A. 08-6, S. 4.)
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Sec. 45a-535. Short title: Uniform Prudent Management of Institutional Funds Act. Sections 45a-535 to 45a-535i, inclusive, may be cited as the “Uniform Prudent Management of Institutional Funds Act”.
(P.A. 07-91, S. 28.)
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Sec. 45a-535a. Definitions. As used in sections 45a-535 to 45a-535i, inclusive, unless the context otherwise requires:
(1) “Charitable purpose” means the relief of poverty, the advancement of education or religion, the promotion of health, the promotion of governmental purposes and any other purpose the achievement of which is beneficial to the community;
(2) “Endowment fund” means an institutional fund or any part thereof not wholly expendable by the institution on a current basis under the terms of a gift instrument. The term does not include assets of an institution designated by the institution as an endowment fund for its own use;
(3) “Gift instrument” means a record or records, including an institutional solicitation, under which property is granted to, transferred to or held by an institution as an institutional fund;
(4) “Institution” means:
(A) A person, other than an individual, organized and operated exclusively for charitable purposes;
(B) A government or a governmental subdivision, agency or instrumentality to the extent that it holds funds exclusively for a charitable purpose; and
(C) A trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated;
(5) “Institutional fund” means a fund held by an institution exclusively for charitable purposes or a fund held by a trustee for a charitable community trust. “Institutional fund” does not include:
(A) Program-related assets;
(B) A fund held for an institution by a trustee that is not an institution, other than a fund which is held for a charitable community trust; or
(C) A fund in which a beneficiary that is not an institution has an interest other than an interest that could arise upon violation or failure of the purposes of the fund;
(6) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality or any other legal or commercial entity;
(7) “Program-related asset” means an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for appreciation or the production of income; and
(8) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(P.A. 07-91, S. 29; P.A. 08-6, S. 3; P.A. 10-32, S. 135.)
History: P.A. 08-6 redefined “institutional fund” in Subdiv. (5) by adding references to a fund held for a charitable community trust, effective April 29, 2008; P.A. 10-32 made technical changes in Subdiv. (5), effective May 10, 2010.
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Sec. 45a-535b. Standard of conduct in managing and investing institutional funds. (a) Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.
(b) In addition to complying with the duty of loyalty imposed by law other than sections 45a-535 to 45a-535i, inclusive, each person responsible for managing and investing an institutional fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
(c) In managing and investing an institutional fund, an institution:
(1) May incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution and the skills available to the institution; and
(2) Shall make a reasonable effort to verify facts relevant to the management and investment of the fund.
(d) An institution may pool two or more institutional funds for purposes of management and investment.
(e) Except as otherwise provided by a gift instrument, the following shall apply to an institution:
(1) In managing and investing an institutional fund, the following factors, if relevant, shall be considered:
(A) General economic conditions;
(B) The possible effect of inflation or deflation;
(C) The expected tax consequences, if any, of investment decisions or strategies;
(D) The role that each investment or course of action plays within the overall investment portfolio of the fund;
(E) The expected total return from income and the appreciation of investments;
(F) Other resources of the institution;
(G) The needs of the institution and the fund to make distributions and to preserve capital; and
(H) An asset's special relationship or special value, if any, to the charitable purposes of the institution.
(2) Management and investment decisions about an individual asset shall be made not in isolation but rather in the context of the institutional fund's portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the institution.
(3) Except as otherwise provided by law other than sections 45a-535 to 45a-535i, inclusive, an institution may invest in any kind of property or type of investment consistent with the standards of this section.
(4) An institution shall diversify the investments of an institutional fund unless the institution reasonably determines that because of special circumstances the purposes of the fund are better served without diversification.
(5) Within a reasonable time after receiving property, an institution shall make and implement decisions concerning the retention or disposition of the property or to rebalance a portfolio in order to bring the institutional fund into compliance with the purposes, terms, distribution requirements and other circumstances of the institution and the requirements of sections 45a-535 to 45a-535i, inclusive.
(6) A person who has special skills or expertise or is selected in reliance upon the person's representation that the person has special skills or expertise has a duty to use those special skills or that expertise in managing and investing institutional funds.
(P.A. 07-91, S. 30.)
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Sec. 45a-535c. Appropriation for expenditure or accumulation of endowment fund. Factors in making a determination to appropriate or accumulate. Rules of construction. (a) Subject to the intent of a donor expressed in a gift instrument, an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines to be prudent for the uses, benefits, purposes and duration for which the endowment fund is established. Unless stated otherwise in a gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances and shall consider, if relevant, the following factors:
(1) The duration and preservation of the endowment fund;
(2) The purposes of the institution and the endowment fund;
(3) General economic conditions;
(4) The possible effect of inflation or deflation;
(5) The expected total return from income and the appreciation of investments;
(6) Other resources of the institution; and
(7) The investment policy of the institution.
(b) To limit the authority to appropriate for expenditure or accumulate under subsection (a) of this section, a gift instrument shall specifically state the limitation.
(c) Terms in a gift instrument designating a gift as an endowment or a direction or authorization in the gift instrument to use only “income”, “interest”, “dividends” or “rents, issues or profits”, or “to preserve the principal intact”, or similar words:
(1) Create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the fund; and
(2) Do not otherwise limit the authority to appropriate for expenditure or accumulate under subsection (a) of this section.
(P.A. 07-91, S. 31.)
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Sec. 45a-535d. Delegation of management and investment of institutional fund. (a) Subject to any specific limitation set forth in a gift instrument or in law other than sections 45a-535 to 45a-535i, inclusive, an institution may delegate to an external agent the management and investment of an institutional fund to the extent that an institution could prudently delegate under the circumstances. An institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation, consistent with the purposes of the institution and the institutional fund; and
(3) Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the scope and terms of the delegation.
(b) In performing a delegated function, an agent owes a duty to the institution to exercise reasonable care to comply with the scope and terms of the delegation.
(c) An institution that complies with subsection (a) of this section is not liable for the decisions or actions of an agent to which the function was delegated.
(d) By accepting delegation of a management or investment function from an institution that is subject to the laws of this state, an agent submits to the jurisdiction of the courts of this state in all proceedings arising from or related to the delegation or the performance of the delegated function.
(e) An institution may delegate management and investment functions to its committees, officers or employees as authorized by law other than sections 45a-535 to 45a-535i, inclusive.
(P.A. 07-91, S. 32.)
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Sec. 45a-535e. Release or modification of restrictions contained in gift instrument on management, investment or purpose of institutional fund. (a) With the donor's consent in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution.
(b) If a restriction contained in a gift instrument on the management or investment of an institutional fund becomes impracticable or wasteful or impairs the management or investment of the fund or if because of circumstances not anticipated by the donor a modification of a restriction will further the purposes of the fund, a court, upon application of the institution, may modify the restriction. The institution shall notify the Attorney General, who shall be given an opportunity to be heard. To the extent practicable, any modification shall be made in accordance with the donor's probable intention.
(c) If a particular charitable purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve or wasteful, a court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument. The institution shall notify the Attorney General, who shall be given an opportunity to be heard.
(d) Nothing in this section shall be construed as amending or altering existing standards in the law for approximation, cy pres or equitable deviation actions.
(P.A. 07-91, S. 33; P.A. 09-102, S. 4.)
History: P.A. 09-102 amended Subsec. (d) by substituting “law” for “general statutes”, effective July 1, 2009.
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Sec. 45a-535f. Determination of compliance with act. Compliance with sections 45a-535 to 45a-535i, inclusive, is determined in light of the facts and circumstances existing at the time a decision is made or an action is taken.
(P.A. 07-91, S. 34.)
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Sec. 45a-535g. Application to existing institutional funds. Sections 45a-535 to 45a-535i, inclusive, apply to institutional funds existing on or established after October 1, 2007. As applied to institutional funds existing on October 1, 2007, sections 45a-535 to 45a-535i, inclusive, govern only decisions made or actions taken after such date.
(P.A. 07-91, S. 35.)
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Sec. 45a-535h. Relation of act to Electronic Signatures in Global and National Commerce Act. Sections 45a-535 to 45a-535i, inclusive, modify, limit and supersede the Electronic Signatures in Global and National Commerce Act, 15 USC Section 7001 et seq., but do not modify, limit or supersede Section 101 of said act, 15 USC Section 7001(a), or authorize electronic delivery of any of the notices described in Section 103 of said act, 15 USC Section 7003(b).
(P.A. 07-91, S. 36.)
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Sec. 45a-535i. Uniformity of application and construction of act. In applying and construing sections 45a-535 to 45a-535h, inclusive, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
(P.A. 07-91, S. 37.)
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Secs. 45a-536 to 45a-539. Reserved for future use.
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Sec. 45a-540. (Formerly Secs. 45-100a to 45-100c). Powers in trust instruments act. Sections 45-100a to 45-100c, inclusive, are repealed, except said sections shall continue in effect insofar as any instrument executed prior to January 1, 1970, incorporated said sections.
(1967, P.A. 753, S. 1–3; 1969, P.A. 827, S. 5; P.A. 80-476, S. 208–210.)
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Sec. 45a-541. Short title: Connecticut Uniform Prudent Investor Act. Sections 45a-541 to 45a-541l, inclusive, may be cited as the “Connecticut Uniform Prudent Investor Act”.
(P.A. 97-140, S. 1.)
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Sec. 45a-541a. Prudent investor rule. (a) Except as provided in subsection (b) of this section, a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule, as set forth in sections 45a-541 to 45a-541l, inclusive.
(b) The prudent investor rule is a default rule that may be expanded, restricted, eliminated or otherwise altered by provisions of the trust. A trustee is not liable to a beneficiary to the extent that the trustee acted in reasonable reliance on provisions of the trust.
(P.A. 97-140, S. 2.)
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Sec. 45a-541b. Standard of care. Portfolio strategy. Risk and return objectives. (a) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.
(b) A trustee's investment and management decisions respecting individual assets shall 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.
(c) Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to the trust or its beneficiaries: (1) General economic conditions; (2) the possible effect of inflation or deflation; (3) the expected tax consequences of investment decisions, strategies and distributions; (4) 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; (5) the expected total return from income and the appreciation of capital; (6) related trusts and other income and resources of the beneficiaries; (7) needs for liquidity, for regularity of income and for preservation or appreciation of capital; (8) an asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries; (9) the size of the portfolio; and (10) the nature and estimated duration of the trust.
(d) A trustee shall take reasonable steps to verify facts relevant to the investment and management of trust assets.
(e) Subject to the standard of sections 45a-541 to 45a-541l, inclusive, a trustee may invest in any kind of property or type of investment.
(f) 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, has a duty to use those special skills or expertise.
(P.A. 97-140, S. 3.)
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Sec. 45a-541c. 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.
(P.A. 97-140, S. 4.)
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Sec. 45a-541d. 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 sections 45a-541 to 45a-541l, inclusive.
(P.A. 97-140, S. 5.)
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Sec. 45a-541e. Loyalty. A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.
(P.A. 97-140, S. 6.)
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Sec. 45a-541f. Impartiality. If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.
(P.A. 97-140, S. 7.)
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Sec. 45a-541g. Investment costs. In investing and managing trust assets, a trustee may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the trust and the skills of the trustee.
(P.A. 97-140, S. 8.)
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Sec. 45a-541h. Reviewing compliance. The prudent investor rule expresses a standard of conduct, not outcome. 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.
(P.A. 97-140, S. 9.)
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Sec. 45a-541i. Delegation of investment and management functions. (a) A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill and caution in: (1) Selecting an agent; (2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and (3) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the scope and terms of the delegation.
(b) In performing a delegated function, an agent owes a duty to the trustee and to the trust to exercise reasonable care to comply with the scope and terms of the delegation and to exercise the delegated function with reasonable care, skill and caution. An attempted exoneration of the agent from liability for failure to meet such a duty is contrary to public policy and void.
(c) A trustee who complies with the requirements of subsection (a) of this section is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d) By accepting the delegation of a trust function 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 and can be held liable by the courts of this state for any breach of duty arising out of the delegation agreement or the terms of sections 45a-541 to 45a-541l, inclusive.
(P.A. 97-140, S. 10.)
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Sec. 45a-541j. Language invoking standards of act. The following terms or comparable language in a trust instrument, unless otherwise limited or modified by the instrument, authorizes any investment or strategy permitted under sections 45a-541 to 45a-541l, inclusive: “Investments permissible by law for investment of trust funds”, “legal investments”, “authorized investments”, “using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital”, “prudent man rule”, “prudent trustee rule”, “prudent person rule”, and “prudent investor rule”.
(P.A. 97-140, S. 11.)
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Sec. 45a-541k. Uniformity of application and construction. Sections 45a-541 to 45a-541l, inclusive, shall be applied and construed to effectuate their general purpose to make uniform the law with respect to the subject of said sections among the states enacting them.
(P.A. 97-140, S. 12.)
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Sec. 45a-541l. Applicability. Sections 45a-541 to 45a-541l, inclusive, apply to trusts existing on and created after October 1, 1997. As applied to trusts existing on October 1, 1997, sections 45a-541 to 45a-541l, inclusive, govern only decisions or actions occurring after that date.
(P.A. 97-140, S. 13; P.A. 08-6, S. 2.)
History: P.A. 08-6 made technical changes, effective April 29, 2008.
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Sec. 45a-542. Short title: Connecticut Principal and Income Act. Sections 45a-542 to 45a-542ff, inclusive, may be cited as the “Connecticut Principal and Income Act (1999)”.
(P.A. 99-164, S. 1, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542a. Definitions. As used in sections 45a-542 to 45a-542ff, inclusive:
(1) “Accounting period” means a calendar year unless another twelve-month period is selected by a fiduciary. The term includes a portion of a calendar year or other twelve-month period that begins when an income interest begins or ends when an income interest ends.
(2) “Beneficiary” includes, in the case of a decedent's estate, an heir, legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.
(3) “Fiduciary” means a personal representative or a trustee. The term includes an executor, administrator, successor personal representative, special administrator and a person performing substantially the same function.
(4) “Income” means money or property that a fiduciary receives as current return from a principal asset. The term includes a portion of receipts from a sale, exchange or liquidation of a principal asset, to the extent provided in sections 45a-542i to 45a-542w, inclusive.
(5) “Income beneficiary” means a person to whom net income of a trust is or may be payable.
(6) “Income interest” means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion.
(7) “Mandatory income interest” means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute.
(8) “Net income” means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under sections 45a-542 to 45a-542ff, inclusive, to or from income during the period.
(9) “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) “Principal” means property held in trust for distribution to a remainder beneficiary when the trust terminates.
(11) “Remainder beneficiary” means a person entitled to receive principal when an income interest ends.
(12) “Terms of a trust” means the manifestation of the intent of a settlor or decedent with respect to the trust, expressed in a manner that admits of its proof in a judicial proceeding, whether by written or spoken words or by conduct.
(13) “Trustee” includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court.
(P.A. 99-164, S. 2, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542b. Fiduciary duties. (a) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of sections 45a-542d to 45a-542h, inclusive, a fiduciary:
(1) Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in sections 45a-542 to 45a-542ff, inclusive;
(2) May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by sections 45a-542 to 45a-542ff, inclusive;
(3) Shall administer a trust or estate in accordance with sections 45a-542 to 45a-542ff, inclusive, if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration; and
(4) Shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust and sections 45a-542 to 45a-542ff, inclusive, do not provide a rule for allocating the receipt or disbursement to or between principal and income.
(b) In exercising the power to adjust under subsection (a) of section 45a-542c or a discretionary power of administration regarding a matter within the scope of sections 45a-542 to 45a-542ff, inclusive, whether granted by the terms of a trust, a will or said sections, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with sections 45a-542 to 45a-542ff, inclusive, is presumed to be fair and reasonable to all of the beneficiaries.
(P.A. 99-164, S. 3, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542c. Trustee's power to adjust. (a) A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to the trust's income, and the trustee determines, after applying the rules in subsection (a) of section 45a-542b, that the trustee is unable to comply with subsection (b) of said section.
(b) In deciding whether and to what extent to exercise the power conferred by subsection (a) of this section, a trustee shall consider all factors relevant to the trust and its beneficiaries, including the following factors to the extent they are relevant:
(1) The nature, purpose and expected duration of the trust;
(2) The intent of the settlor, including the settlor's probable intent, which is the settlor's dominant plan and purpose as they appear from the entirety of the trust when read and considered in light of the present facts and circumstances;
(3) The identity and circumstances of the beneficiaries;
(4) The needs for liquidity, regularity of income and preservation and appreciation of capital;
(5) The assets held in the trust; the extent to which they consist of financial assets, interests in closely held enterprises, tangible and intangible personal property or real property; the extent to which an asset is used by a beneficiary; and whether an asset was purchased by the trustee or received from the settlor;
(6) The net amount allocated to income under sections 45a-542 to 45a-542b, inclusive, and sections 45a-542d to 45a-542ff, inclusive, and the increase or decrease in the value of the principal assets, which the trustee may estimate as to assets for which market values are not readily available;
(7) Whether and to what extent the terms of the trust give the trustee the power to invade principal or accumulate income or prohibit the trustee from invading principal or accumulating income, and the extent to which the trustee has exercised a power from time to time to invade principal or accumulate income;
(8) The actual and anticipated effect of economic conditions on principal and income and effects of inflation and deflation; and
(9) The anticipated tax consequences of an adjustment.
(c) A trustee may not make an adjustment:
(1) That diminishes the income interest in a trust that requires all of the income to be paid at least annually to a spouse and for which an estate tax or gift tax marital deduction would be allowed, in whole or in part, if the trustee did not have the power to make the adjustment;
(2) That reduces the actuarial value of the income interest in a trust to which a person transfers property with the intent to qualify for a gift tax exclusion;
(3) That changes the amount payable to a beneficiary as a fixed annuity or a fixed fraction of the value of the trust assets;
(4) From any amount that is permanently set aside for charitable purposes under a will or the terms of a trust unless both income and principal are so set aside;
(5) If possessing or exercising the power to make an adjustment causes an individual to be treated as the owner of all or part of the trust for income tax purposes and the individual would not be treated as the owner if the trustee did not possess the power to make an adjustment;
(6) If possessing or exercising the power to make an adjustment causes all or part of the trust assets to be included for estate tax purposes in the estate of an individual who has the power to remove a trustee or appoint a trustee, or both, and the assets would not be included in the estate of the individual if the trustee did not possess the power to make an adjustment;
(7) If the trustee is a beneficiary of the trust;
(8) If the trustee is not a beneficiary, but the adjustment would benefit the trustee directly or indirectly;
(9) Between the income and principal of a legal life estate; or
(10) If the exercise of the power to adjust by allocating principal to income conferred by subsection (a) of this section would not significantly increase the funds actually available to the income beneficiary, taking into account funds available from sources other than the trust.
(d) If subdivision (5), (6), (7) or (8) of subsection (c) of this section applies to a trustee and there is more than one trustee, a cotrustee to whom the provision does not apply may make the adjustment unless the exercise of the power by the remaining trustee or trustees is not permitted by the terms of the trust.
(e) A trustee may release the entire power conferred by subsection (a) of this section or may release only the power to adjust from income to principal or the power to adjust from principal to income if the trustee is uncertain about whether possessing or exercising the power will cause a result described in subdivisions (1) to (6), inclusive, or subdivision (8) of subsection (c) of this section or if the trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in said subsection (c). The release may be permanent or for a specified period, including a period measured by the life of an individual.
(f) Terms of a trust that limit the power of a trustee to make an adjustment between principal and income do not affect the application of this section unless it is clear from the terms of the trust that the terms are intended to deny the trustee the power of adjustment conferred by subsection (a) of this section.
(P.A. 99-164, S. 4, 36; P.A. 01-68, S. 2.)
History: P.A. 99-164 effective January 1, 2000; P.A. 01-68 amended Subsec. (c)(10) by adding “by allocating principal to income”.
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Sec. 45a-542d. Determination and distribution of income interest of decedent's estate or in trust after trust ends. After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:
(1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary under the rules in sections 45a-542f to 45a-542cc, inclusive, which apply to trustees and the rules in subdivision (5) of this section. The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.
(2) A fiduciary shall determine the remaining net income of a decedent's estate or a terminating income interest under the rules in sections 45a-542f to 45a-542cc, inclusive, which apply to trustees and by:
(A) Including in net income all income from property used to discharge liabilities;
(B) Paying from income or principal, in the fiduciary's discretion, fees of attorneys, accountants and fiduciaries; court costs and other expenses of administration; and interest on death taxes, but the fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment of those expenses from income will not cause the reduction or loss of the deduction; and
(C) Paying from principal all other disbursements made or incurred in connection with the settlement of a decedent's estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust or applicable law.
(3) A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright the interest or any other amount provided by the will, the terms of the trust or this subdivision from net income determined under subdivision (2) of this section or from principal to the extent that net income is insufficient. Unless a will or trust waives such interest or provides for its calculation in a different amount or manner, a pecuniary amount payable outright shall bear simple interest in the amount of six per cent per year, beginning one year after the date of death in the case of pecuniary amounts payable under a will, or one year after the day the income interest ends in the case of pecuniary amounts payable from a trust after an income interest ends, and ending on the day the pecuniary amount is paid.
(4) A fiduciary shall distribute the net income remaining after distributions required by subdivision (3) of this section in the manner described in section 45a-542e to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.
(5) A fiduciary may not reduce principal or income receipts from property described in subdivision (1) of this section because of a payment described in sections 45a-542x and 45a-542y to the extent that the will, the terms of the trust or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent that the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the date of a decedent's death or an income interest's terminating event, and by making a reasonable provision for amounts that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed.
(P.A. 99-164, S. 5, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542e. Distribution to beneficiaries. (a) Each beneficiary described in subdivision (4) of section 45a-542d is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one who does not receive part of the distribution, is entitled, as of each distribution date, to the net income the fiduciary has received after the date of death or terminating event or earlier distribution date but has not distributed as of the current distribution date.
(b) In determining a beneficiary's share of net income, the following rules apply:
(1) The beneficiary is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date, including assets that later may be sold to meet principal obligations.
(2) The beneficiary's fractional interest in the undistributed principal assets must be calculated without regard to property specifically given to a beneficiary and property required to pay pecuniary amounts not in trust.
(3) The beneficiary's fractional interest in the undistributed principal assets must be calculated on the basis of the aggregate value of those assets as of the distribution date without reducing the value by any unpaid principal obligation.
(c) If a fiduciary does not distribute all of the collected but undistributed net income to each person as of a distribution date, the fiduciary shall maintain appropriate records showing the interest of each beneficiary in that net income.
(d) A fiduciary may apply the rules in this section, to the extent that the fiduciary considers it appropriate to net gain or loss realized after the date of death or terminating event or earlier distribution date from the disposition of a principal asset if this section applies to the income from the asset.
(P.A. 99-164, S. 6, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542f. Right to income. (a) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.
(b) An asset becomes subject to a trust:
(1) On the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life;
(2) On the date of a testator's death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate; or
(3) On the date of an individual's death in the case of an asset that is transferred to a fiduciary by a third party because of the individual's death.
(c) An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (d) of this section even if there is an intervening period of administration to wind up the preceding income interest.
(d) An income interest ends on the day before an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.
(P.A. 99-164, S. 7, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542g. Apportionment of receipts and disbursements when decedent dies or interest income begins. (a) A trustee shall allocate an income receipt or disbursement other than one to which subdivision (1) of section 45a-542d applies to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.
(b) A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins must be allocated to principal and the balance must be allocated to income.
(c) An item of income or an obligation is due on the date the payer is required to make a payment. If a payment date is not stated, there is no due date for the purposes of sections 45a-542 to 45a-542ff, inclusive. Distributions to shareholders or other owners from an entity to which section 45a-542i applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
(P.A. 99-164, S. 8, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542h. Apportionment when income interest ends. (a) In this section, “undistributed income” means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
(b) When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than five per cent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked must be added to principal.
(c) When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate or other tax requirements.
(P.A. 99-164, S. 9, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542i. Character of receipts. (a) In this section, “entity” means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund or any other organization in which a trustee has an interest other than a trust or estate to which section 45a-542j applies, a business or activity to which section 45a-542k applies, or an asset-backed security to which section 45a-542w applies.
(b) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.
(c) A trustee shall allocate the following receipts from an entity to principal:
(1) Property other than money;
(2) Money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity;
(3) Money received in total or partial liquidation of the entity; and
(4) Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
(d) Money is received in partial liquidation:
(1) To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or
(2) If the total amount of money and property received in a distribution or series of related distributions is greater than twenty per cent of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.
(e) Money is not received in partial liquidation, nor may it be taken into account under subdivision (2) of subsection (d) of this section, to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money.
(f) A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors; provided, however, that no such statement shall override the provisions of subdivision (2) of subsection (d) of this section and subsection (e) of this section.
(P.A. 99-164, S. 10, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542j. Distribution from trust or estate. A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest, and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in such a trust to a trustee, section 45a-542i or 45a-542w applies to a receipt from the trust.
(P.A. 99-164, S. 11, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542k. Business and other activities conducted by trustee. (a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
(b) A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
(c) Activities for which a trustee may maintain separate accounting records include:
(1) Retail, manufacturing, service and other traditional business activities;
(2) Farming;
(3) Raising and selling livestock and other animals;
(4) Management of rental properties;
(5) Extraction of minerals and other natural resources;
(6) Timber operations; and
(7) Activities to which section 45a-452v applies.
(P.A. 99-164, S. 12, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542l. Principal receipts. A trustee shall allocate to principal:
(1) To the extent not allocated to income under sections 45a-542 to 45a-542ff, inclusive, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest or a payer under a contract naming the trust or its trustee as beneficiary;
(2) Money or other property received from the sale, exchange, liquidation or change in form of a principal asset, including realized profit, subject to sections 45a-542i to 45a-542w, inclusive;
(3) Amounts recovered from third parties to reimburse the trust because of disbursements described in subdivision (7) of subsection (a) of section 45a-542y or for other reasons to the extent not based on the loss of income;
(4) Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income;
(5) Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income; and
(6) Other receipts as provided in sections 45a-542p to 45a-542w, inclusive.
(P.A. 99-164, S. 13, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542m. Rental property. To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.
(P.A. 99-164, S. 14, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542n. Obligation to pay money. (a) An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium.
(b) A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within one year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income.
(c) This section does not apply to an obligation to which section 45a-542q, 45a-542r, 45a-542s, 45a-542t, 45a-542v or 45a-542w applies.
(P.A. 99-164, S. 15, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542o. Insurance policies and similar contracts. (a) Except as otherwise provided in subsection (b) of this section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of, or loss of title to, a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income and to principal if the premiums are paid from principal.
(b) A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to section 45a-542k, loss of profits from a business.
(c) This section does not apply to a contract to which section 45a-542q applies.
(P.A. 99-164, S. 16, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542p. Insubstantial allocations not required. If a trustee determines that an allocation between principal and income required by section 45a-542q, 45a-542r, 45a-542s, 45a-542t or 45a-542w is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in subsection (c) of section 45a-542c applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in subsection (d) of section 45a-542c and may be released for the reasons and in the manner described in subsection (e) of said section. An allocation is presumed to be insubstantial if:
(1) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than ten per cent; or
(2) The value of the asset producing the receipt for which the allocation would be made is less than ten per cent of the total value of the trust's assets at the beginning of the accounting period.
(P.A. 99-164, S. 17, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542q. Deferred compensation, annuities and similar payments. Separate funds. (a) In this section:
(1) “Payment” means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. “Payment” includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer. For the purposes of subsections (d) to (g), inclusive, of this section, “payment” also includes any payment from any separate fund, regardless of the reason for the payment.
(2) “Separate fund” includes a private or commercial annuity, an individual retirement account and a pension, profit-sharing, stock-bonus or stock-ownership plan. “Separate fund” does not include a payment pursuant to an installment sale contract.
(b) To the extent that a payment is characterized as interest or a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate the payment to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend or an equivalent payment.
(c) If no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income ten per cent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not “required to be made” to the extent that it is made because the trustee exercises a right of withdrawal.
(d) Except as otherwise provided in subsection (e) of this section, subsections (f) and (g) of this section apply, and subsections (b) and (c) of this section do not apply, in determining the allocation of a payment made from a separate fund to:
(1) A trust to which an election to qualify for a marital deduction would be allowed under Section 2056(b)(7) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time; or
(2) A trust that qualifies for the marital deduction under Section 2056(b)(5) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.
(e) Subsections (d), (f) and (g) of this section do not apply if and to the extent that the series of payments would, without the application of subsection (d) of this section, qualify for the marital deduction under Section 2056(b)(7)(C) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.
(f) A trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to this section. On request of the surviving spouse, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The trustee shall allocate the balance of the payment to principal. On request of the surviving spouse, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.
(g) If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal four per cent of the fund's value, according to the most recent statement of value preceding the beginning of the accounting period. If the trustee can determine neither the internal income of the separate fund nor the fund's value, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under Section 7520 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, for the month preceding the account period for which the computation is made.
(h) This section does not apply to a payment to which section 45a-542r applies.
(i) The provisions of this section apply to a trust described in subsection (d) of this section on and after the following dates:
(1) If the trust is not funded as of October 1, 2010, the date of the decedent's death.
(2) If the trust is initially funded in the calendar year beginning January 1, 2010, the date of the decedent's death.
(3) If the trust is not described in subdivision (1) or (2) of this subsection, the date of January 1, 2010.
(P.A. 99-164, S. 18, 36; P.A. 10-31, S. 1.)
History: P.A. 99-164 effective January 1, 2000; P.A. 10-31 amended Subsec. (a) to redefine “payment” in Subdiv. (1) and define “separate fund” in Subdiv. (2), amended Subsec. (d) to replace former provisions re allocation necessary to obtain marital deduction with provisions re determining allocation of payment from separate fund, inserted new Subsec. (e) re applicability of Subsecs. (d), (f) and (g), inserted Subsec. (f) re trustee's determination of internal income of each separate fund, inserted Subsec. (g) re amount deemed internal income when trustee cannot determine internal income of a separate fund, redesignated existing Subsec. (e) as Subsec. (h), inserted Subsec. (i) re dates when section applies to trust described in Subsec. (d), and made technical changes.
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Sec. 45a-542r. Liquidating asset. (a) In this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to section 45a-542q, resources subject to section 45a-542s, timber subject to section 45a-542t, an activity subject to section 45a-542v, an asset subject to section 45a-542w, or any asset for which the trustee establishes a reserve for depreciation under section 45a-542z.
(b) A trustee shall allocate to income ten per cent of the receipts from a liquidating asset and the balance to principal.
(P.A. 99-164, S. 19, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542s. Minerals, water and other natural resources. (a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.
(2) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.
(3) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus or delay rental is more than nominal, ninety per cent must be allocated to principal and the balance to income.
(4) If an amount is received from a working interest or any other interest not provided for in subdivision (1), (2) or (3) of this subsection, ninety per cent of the net amount received must be allocated to principal and the balance to income.
(b) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, ninety per cent of the amount must be allocated to principal and the balance to income.
(c) Sections 45a-542 to 45a-542ff, inclusive, apply whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
(d) If a trust owns an interest in minerals, water or other natural resources on January 1, 2000, the trustee may allocate receipts from the interest as provided in sections 45a-542 to 45a-542ff, inclusive, or in the manner used by the trustee before January 1, 2000. If the trust acquires an interest in minerals, water or other natural resources after January 1, 2000, the trustee shall allocate receipts from the interest as provided in sections 45a-542 to 45a-542ff, inclusive.
(P.A. 99-164, S. 20, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542t. Timber. (a) To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts:
(1) To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest;
(2) To principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(3) To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease or contract and applying the rules in subdivisions (1) and (2) of this subsection; or
(4) To principal to the extent that advance payments, bonuses, and other payments are not allocated pursuant to subdivision (1), (2) or (3) of this subsection.
(b) In determining net receipts to be allocated pursuant to subsection (a) of this section, a trustee shall deduct and transfer to principal a reasonable amount for depletion.
(c) Sections 45a-542 to 45a-542ff, inclusive, apply whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
(d) If a trust owns an interest in timberland on January 1, 2000, the trustee may allocate net receipts from the sale of timber and related products as provided in sections 45a-542 to 45a-542ff, inclusive, or in the manner used by the trustee before January 1, 2000. If the trust acquires an interest in timberland after January 1, 2000, the trustee shall allocate net receipts from the sale of timber and related products as provided in sections 45a-542 to 45a-542ff, inclusive.
(P.A. 99-164, S. 21, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542u. Property not productive of income. (a) If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under section 45a-542c and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time, or exercise the power conferred by subsection (a) of section 45a-542c. The trustee may decide which action or combination of actions to take.
(b) In cases not governed by subsection (a) of this section, proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.
(P.A. 99-164, S. 22, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542v. Derivatives and options. (a) In this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates or other market indicator for an asset or a group of assets.
(b) To the extent that a trustee does not account under section 45a-542k for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
(c) If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a settlor of the trust for services rendered, must be allocated to principal.
(P.A. 99-164, S. 23, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542w. Asset-backed securities. (a) In this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. The term includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return. The term does not include an asset to which section 45a-542i or 45a-542q applies.
(b) If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment which the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
(c) If a trust receives one or more payments in exchange for the trust's entire interest in an asset-backed security in one accounting period, the trustee shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust's interest in the security over more than one accounting period, the trustee shall allocate ten per cent of the payment to income and the balance to principal.
(P.A. 99-164, S. 24, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542x. Disbursements from income. A trustee shall make the following disbursements from income to the extent that they are not disbursements to which subparagraph (B) or (C) of subdivision (2) of section 45a-542d applies:
(1) One-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee;
(2) One-half of all expenses for accountings, judicial proceedings or other matters that involve both the income and remainder interests;
(3) All of the other ordinary expenses incurred in connection with the administration, management or preservation of trust property and the distribution of income, including interest, ordinary repairs, regularly recurring taxes assessed against principal and expenses of a proceeding or other matter that concerns primarily the income interest; and
(4) Recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.
(P.A. 99-164, S. 25, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542y. Disbursements from principal. (a) A trustee shall make the following disbursements from principal:
(1) The remaining one-half of the disbursements described in subdivisions (1) and (2) of section 45a-542x;
(2) All of the trustee's compensation calculated on principal as a fee for acceptance, distribution or termination, and disbursements made to prepare property for sale;
(3) Payments on the principal of a trust debt;
(4) Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property;
(5) Premiums paid on a policy of insurance not described in subdivision (4) of section 45a-542x of which the trust is the owner and beneficiary;
(6) Estate, inheritance and other transfer taxes, including penalties, apportioned to the trust; and
(7) Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties, and defending claims based on environmental matters.
(b) If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
(P.A. 99-164, S. 26, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542z. Transfers from income to principal for depreciation. (a) In this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion or gradual obsolescence of a fixed asset having a useful life of more than one year.
(b) A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:
(1) Of that portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary;
(2) During the administration of a decedent's estate; or
(3) Under this section if the trustee is accounting under section 45a-542k for the business or activity in which the asset is used.
(c) An amount transferred to principal need not be held as a separate fund.
(P.A. 99-164, S. 27, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542aa. Transfers from income to reimburse principal. (a) If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future disbursements.
(b) Principal disbursements to which subsection (a) of this section applies include the following, but only to the extent that the trustee has not been and does not expect to be reimbursed by a third party:
(1) An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;
(2) A capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments;
(3) Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements and broker's commissions;
(4) Periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments; and
(5) Disbursements described in subdivision (7) of subsection (a) of section 45a-542y.
(c) If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends, a trustee may continue to transfer amounts from income to principal as provided in subsection (a) of this section.
(P.A. 99-164, S. 28, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542bb. Income taxes. (a) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.
(b) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
(c) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid:
(1) From income to the extent that receipts from the entity are allocated only to income;
(2) From principal to the extent that receipts from the entity are allocated only to principal;
(3) Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal; and
(4) From principal to the extent that the tax exceeds the total receipts from the entity.
(d) After applying subsections (a) to (c), inclusive, of this section, the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
(P.A. 99-164, S. 29, 36; P.A. 10-31, S. 2.)
History: P.A. 99-164 effective January 1, 2000; P.A. 10-31 amended Subsec. (c) to delete “proportionately” re payment under Subdivs. (1) and (2), to add “only” in Subdiv. (1) and to replace former Subdiv. (2) with new Subdiv. (2) re payment from principal to extent receipts are allocated only to principal, Subdiv. (3) principal to re payments proportionately from principal and income and Subdiv. (4) re payments from principal to extent tax exceeds total receipts, and amended Subsec. (d) to replace former provisions with requirement that trustee adjust income or principal receipts after applying Subsecs. (a) to (c).
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Sec. 45a-542cc. Adjustments between principal and income as result of taxes. (a) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from:
(1) Elections and decisions, other than those described in subsection (b) of this section, that the fiduciary makes from time to time regarding tax matters;
(2) An income tax or any other tax that is imposed upon the fiduciary or a beneficiary as a result of a transaction involving or a distribution from the estate or trust; or
(3) The ownership by an estate or trust of an interest in an entity whose taxable income, whether or not distributed, is includable in the taxable income of the estate or trust, or a beneficiary.
(b) If the amount of an estate tax marital deduction or charitable contribution deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes, and as a result estate taxes paid from principal are increased and income taxes paid by an estate, trust or beneficiary are decreased, each estate, trust or beneficiary that benefits from the decrease in income tax shall reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax to the extent that the principal used to pay the increase would have qualified for a marital deduction or charitable contribution deduction but for the payment. The proportionate share of the reimbursement for each estate, trust or beneficiary whose income taxes are reduced must be the same as its proportionate share of the total decrease in income tax. An estate or trust shall reimburse principal from income.
(P.A. 99-164, S. 30, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542dd. Uniformity of application and construction. In applying and construing sections 45a-542 to 45a-542ff, inclusive, consideration must be given to the fact that this is a uniform law and the need to promote uniformity of the law with respect to its subject matter among states that enact it.
(P.A. 99-164, S. 31, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542ee. Severability clause. If any provision of sections 45a-542 to 45a-542ff, inclusive, or their application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of said sections which can be given effect without the invalid provision or application, and to this end the provisions of sections 45a-542 to 45a-542ff, inclusive, are severable.
(P.A. 99-164, S. 32, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-542ff. Application to existing trust or decedent's estate. Sections 45a-542 to 45a-542ff, inclusive, apply to every trust or decedent's estate existing on or after January 1, 2000, except as otherwise expressly provided in the will or terms of the trust or in said sections.
(P.A. 99-164, S. 33, 36.)
History: P.A. 99-164 effective January 1, 2000.
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Sec. 45a-543. Determination by court re abuse of discretion by fiduciary. (a) A court shall not change a fiduciary's decision to exercise a discretionary power conferred by sections 45a-542 to 45a-542ff, inclusive, unless it determines that the decision was an abuse of the fiduciary's discretion. A court shall not determine that a fiduciary abused its discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.
(b) The decisions to which subsection (a) of this section applies include: (1) A determination under subsection (a) of section 45a-542c of whether and to what extent an amount should be transferred from principal to income or from income to principal; and (2) a determination of the factors that are relevant to the trust and its beneficiaries, the extent to which they are relevant, and the weight, if any, to be given to the relevant factors, in deciding whether and to what extent to exercise the power conferred by subsection (a) of section 45a-542c.
(c) If a court determines that a fiduciary has abused its discretion, the remedy is to restore the income and remainder beneficiaries to the positions they would have occupied if the fiduciary had not abused its discretion, according to the following rules: (1) To the extent that the abuse of discretion has resulted in no distribution to a beneficiary or a distribution that is too small, the court may require the fiduciary to distribute from the trust to the beneficiary an amount that the court determines will restore the beneficiary, in whole or in part, to his or her appropriate position; (2) to the extent that the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court may restore the beneficiaries, the trust, or both, in whole or in part, to their appropriate positions by requiring the fiduciary to withhold an amount from one or more future distributions to the beneficiary who received the distribution that was too large or requiring the beneficiary to return some or all of the distribution to the trust; and (3) to the extent that the court is unable, after applying subdivisions (1) and (2) of this subsection, to restore the beneficiaries, the trust, or both, to the positions they would have occupied if the fiduciary had not abused its discretion, the court may require the fiduciary to pay an appropriate amount from its own funds to one or more of the beneficiaries or to the trust, or both.
(d) Upon a petition by the fiduciary, the court having jurisdiction over the trust or estate may determine whether a proposed exercise or nonexercise by a fiduciary of a discretionary power conferred by sections 45a-542 to 45a-542ff, inclusive, will result in the abuse of the fiduciary's discretion. If the petition describes the proposed exercise or nonexercise of the power and contains sufficient information to inform the beneficiaries of the reasons for the proposal, the facts upon which the fiduciary relies, and an explanation of how the income and remainder beneficiaries will be affected by the exercise or nonexercise of the power, a beneficiary who challenges the proposed exercise or nonexercise has the burden of establishing that it will result in an abuse of discretion.
(P.A. 01-68, S. 1.)
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Secs. 45a-544 and 45a-545. Reserved for future use.
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