§ 62-7-402 — Requirements for creation; merger of title.

(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 62-7-408; or (C) a trust for a noncharitable purpose, as provided in Section 62-7-409; (4) the trustee has duties to perform; and (5) the same person is not the sole trustee and sole current and future beneficiary. (b) If the trust agreement is in writing, the trust instrument may be signed by the settlor or in the settlor's name by some other person in the settlor's presence and by the settlor's direction. (c) A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities. (d) 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. (e) For purposes of Section 62-7-402(a)(5), if a person holds legal title to property in a fiduciary capacity and also has an equitable or beneficial title in the same property, either by transfer, by declaration, or by operation of law, no merger of the legal and equitable titles shall occur unless: (1) the fiduciary is the sole fiduciary and is also the sole current and future beneficiary; and (2) the legal title and the equitable title are of the same quality and duration. If either one of these conditions is not met, no merger may occur and the fiduciary relationship does not terminate.

Legislative History

HISTORY: 2005 Act No. 66, SECTION 1; 2013 Act No. 100, SECTION 2, eff January 1, 2014. Effect of Amendment The 2013 amendment added subsection (b), relating to written trust agreements, and redesignated subsections accordingly.