Probate & Trust Law Section Conference Manual ... - Minnesota CLE

e. A trustee shall notify the qualified beneficiaries in advance of any change
in trustee compensation.
f. A trustee shall send an annual accounting to all current beneficiaries and
to any other beneficiary who requests a copy.
14. The UTC describes the trustee powers.
a. Discretionary powers must be exercised in good faith. A tax savings
provision is included that prohibits a trustee who is also a beneficiary from
making distributions to himself or herself, unless the distribution is limited
to an ascertainable standard.
b. General powers are provided and 26 specific powers are described,
including the power to make loans to a beneficiary.
c. The trustee’s power to make distributions upon termination is described
and the trustee is given an option to send a proposal for distribution before
making a final distribution. If no one objects to the proposal for
distribution within 30 days after the proposal is sent, the right to object to
the payment terminates. The trustee may ask the beneficiaries to sign a
release of liability, but the release will be invalid if the beneficiary did not
know the material facts relating to any breach that may have occurred
prior to the final distribution.
I. Article IX – Prudent Investor Act – incorporated by reference.
J. Article X – Liability of a Trustee and Rights of Persons Dealing with a Trustee.
1. The UTC provides possible court remedies for breach of trust.
2. Damages for breach of trust and in absence of breach of trust are described.
3. A trustee’s right to receive attorney’s fees and costs in a judicial proceeding
involving administration of a trust is described. The court may order fees and
expenses be paid by a particular party or from the trust, as justice and equity
may require.
4. A statute of limitations is provided for actions against a trustee. Claims must
be made within the earlier of one year from the date of a report that would
have disclosed the possible breach of trust, or five years from the first to occur
of the removal of the trustee, termination of the beneficiary’s interest, or the
termination of the trust.
5. A term of trust may exculpate the trustee from liability, but it is unenforceable
if the provision was inserted in bad faith, as the result of an abuse of a
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