§ 59-16-14 — (814) Discretionary powers - Tax savings

North Dakota § 59-16-14

• Jurisdiction: North Dakota
• Title 59: Trusts, Uses, and Powers
• Ch. 59-16: Duties and Powers of Trustee

Text

1. Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust,
including the use of such terms as absolute, sole, or uncontrolled, the trustee shall
exercise a discretionary power in good faith and in accordance with the purposes of
the trust.
2. Subject to subsection 4, and unless the terms of the trust expressly indicate that a rule
in this subsection does not apply:
a. A person other than a settlor who is a beneficiary and trustee of a trust that
confers on the trustee a power to make discretionary distributions to or for the
trustee's personal benefit may exercise the power only in accordance with an
ascertainable standard; and
b. A trustee may not exercise a power to make discretionary distributions to satisfy a
legal obligation of support that the trustee personally owes another person.
3. A power whose exercise is limited or prohibited by subsection 2 may be exercised by a
majority of the remaining trustees whose exercise of the power is not so limited or
prohibited. If the power of all trustees is so limited or prohibited, the court may appoint
a special fiduciary with authority to exercise the power.
4. Subsection 2 does not apply to:
a. A power held by the settlor's spouse who is the trustee of a trust for which a
marital deduction, as defined in section 2056(b)(5) or 2523(e) of the Internal
Revenue Code was previously allowed;
b. Any trust during any period that the trust may be revoked or amended by its
settlor; or
c. A trust if contributions to the trust qualify for the annual exclusion under section
2503(c) of the Internal Revenue Code.