§ 23-47-803 — Substitution of subsidiary trust company or national trust company for affiliated bank

Arkansas § 23-47-803

• Jurisdiction: Arkansas
• Title: 23

Text

(a) A subsidiary trust company or national trust company and one (1) or more of its affiliated banks may enter into one (1) or more agreements under which the subsidiary trust company or national trust company is substituted as fiduciary for each affiliated bank in each fiduciary account listed in the agreement. The agreement shall be filed with the Bank Commissioner before the effective date of the substitution and must include: (1) A list of each fiduciary account for which substitution is requested; and (2) The effective date of the substitution, which may not be less than ninety (90) days after the date of the agreement. (b) Not later than ninety (90) days before the effective date of a substitution under this section, the parties to the substitution agreement shall send written notice of the substitution to the following: (1) Each person who is readily ascertainable as a beneficiary of the account because of the receipt of statements of account by the person, or in the case of a minor beneficiary, by a parent, conservator, or guardian of the minor beneficiary; (2) Each cofiduciary; (3) Each surviving settlor of a trust; (4) Each issuer of a security for which the affiliated bank administers a fiduciary account; (5) The plan sponsor of each employee benefit plan; (6) The principal of each agency account; and (7) The guardian of the person of each ward under guardianship. (c) (1) The notice must be sent by United States mail to the person's current address as shown on the fiduciary records. (2) If the fiduciary has no address for the person on its records, the fiduciary shall make a reasonable attempt to ascertain the person's current address. (3) The notice must disclose the person's rights with respect to objecting to the transfer of the fiduciary account and the liability of the existing fiduciary and the substitute fiduciary for their actions. (4) Intentional failure to send the required notice renders the substitution of fiduciary ineffective, but an unintentional failure to send the required notice does not impair the validity or effect of substitution. (5) If a substitution of a subsidiary trust company is ineffective because of a defect in the required notice, the actions taken by the subsidiary trust company before the determination of the invalidity of the substitution are valid if the actions would have been valid if performed by the affiliated bank. (d) (1) Except as provided by this subsection, the prospective designation in a will or other instrument of the affiliated bank as fiduciary is considered designation of the subsidiary trust company or national trust company, and any grant in the will or other instrument of any discretionary power is considered conferred on the subsidiary trust company or national trust company. (2) However, the affiliated bank and subsidiary trust company or national trust company may agree in writing to have the designation of the affiliated bank as fiduciary be binding, or the creator of the fiduciary account may, by appropriate language in the document creating the fiduciary account, provide that the fiduciary account is not eligible for substitution under this subchapter. (e) Substitution under this section is effective for all purposes on the effective date stated in the agreement between the subsidiary trust company or national trust company and the affiliated bank, unless, not later than fifteen (15) days before the effective date, a party entitled to notice of the substitution under subsection (b) of this section files a written petition in a court of competent jurisdiction seeking to have the substitution denied under § 23-47-804 and provides the affiliated bank with a copy of the filed petition. (f) If a petition is filed and notice is given under subsection (e) of this section, the substitution takes effect when the petition is withdrawn or dismissed or when the court enters a final order denying the relief sought. (g) (1) On the effective date, the subsidiary trust company or national trust company succeeds to all right, title, and interest in all property that the affiliated bank holds as fiduciary, except property held for accounts for which there has been no substitution under this subchapter, without the necessity of any instrument of transfer or conveyance, and the subsidiary trust company or national trust company shall, without the necessity of any judicial action or action by the creator of the fiduciary account, become fiduciary and perform all the duties and obligations and exercise all the powers and authority connected with or incidental to that fiduciary capacity in the same manner as if the subsidiary trust company or national trust company had been originally named or designated fiduciary. (2) However, the affiliated bank is responsible and liable for all actions taken by it while it acted as fiduciary.

Legislative History

Acts 1997, No. 89, § 1.