Louisiana Code Title 9 - Civil code-ancillaries

LouisianaCodeTitle9‐Civilcode‐ancillaries

RS9:1721—Louisianatrustcode

CHAPTER1.LOUISIANATRUSTCODE

PARTI.PRELIMINARYPROVISIONS



§1721.Title

ThisChaptershallbeknownandmaybecitedastheLouisianaTrustCode.



§1722.Expressprivatetrustsauthorized;applicationofCode

ExpressprivatetrustsareherebyauthorizedsubjecttotherulesprescribedinthisCode.



§1723.Dispositionscontainingsubstitutions

A disposition authorized by this Code may be made in trust although it would contain a

prohibitedsubstitutionifitweremadefreeoftrust.

§1724.ConstructionofCode

The provisions of this Code shall be accorded a liberal construction in favor of freedom of

disposition.Wheneverthis Code is silent, resortshallbehadto the Civil Code or other laws,

butneithertheCivilCodenoranyotherlawshallbeinvokedtodefeatadispositionsanctioned

expresslyorimpliedlybythisCode.

§1725.Definitions

Exceptwhenthecontextclearlyindicatesotherwise,asusedinthisCode:

(1)"Affiliate" means a person directly or indirectly controlling or controlled by another

person,orapersonunderdirectorindirectcommoncontrolwithanotherperson.Itincludes

apersonwithwhomatrusteehasanexpressorimpliedagreementregardingthepurchaseof

trust investment by each from the other directly or indirectly, except a broker or stock

exchange.

(2)"Income beneficiary" means a beneficiary to whom income is payable, presently,

conditionally, or in the future, or for whom it is accumulated, or who is entitled to the

beneficial use of principal presently, conditionally, or in the future, for a time before its

distribution.

(3)"Person" means an individual, a corporation, a partnership, an association, a joint stock

company,abusinesstrust,ortwoormorepersonshavingajointorcommoninterest.

(4)"Principalbeneficiary" meansa beneficiary presently, conditionally, or ultimately entitled

toprincipal.

(5)"Proper court" in the case of an inter vivos trust means the district court of the parish

designated by thesettlor, or if no designation is made, the district court of the parish of the

trustee'sdomicilewhenonlyonetrusteeisnamed,orwhenmorethanonetrusteeisnamed,

orwhenthetrusteeisanonresident,thedistrictcourtofthepa rishwheretheprincipaltrust

propertyislocated,butifthesettlorhasnamedtwoormoretrusteesinthetrustinstrument

andtheyaredomiciledinthesameparish,thedistrictcourtofthetrustee's domicileshallbe

thepropercourt.Ifthesettlordesignatesthecourt,heshalldesignate:(a)thedistrictcourtof

theparishofthedomicileofthetrustee;(b)thedistrictcourtoftheparishofthedomicileof

thesettlor;or(c)thedistrictcourtoftheparishwheretheprin cipaltrustpropertyislocated.

"Propercourt"inthecaseofatestamentarytrustmeansthedistrictcourthavingjurisdiction

ofthesettlor'ssuccession.

(6)"Relative"meansaspouse,ascendant,descendant,brother,orsister.

(7)"Spendthrifttrust,"whenusedwithoutotherqualifyingwords,meansatrustunderwhich

alienationbyabeneficiaryofan interest inincomeorprincipal is restricted tothefull extent

permittedbythisCode.

(8)"Trust instrument" means the written document creating the trust and all amendments 

andmodificationsthereof.

AmendedbyActs1972,No.656,§1.

PARTII.CREATIONOFTHETRUST

SUBPARTA.GENERALPROVISIONS

§1731.Trustdefined

Atrust,asthetermisusedin thisCode,istherelationshipresultingfromthe transferoftitle

topropertytoapersontobeadministeredbyhimasafiduciaryforthebenefitofanother.

§1732.Intervivosandtestamentarytrusts

Atrustiseithertestamentaryorintervivos.

§1733.Testamentarytrustdefined

Atrustistestamentarywhenitiscreatedbydonationmortiscausa.

§1734.Intervivostrustdefined

Alltrustsnottestamentaryareconsideredintervivos,regardlessofthetimeofcreation.

§1735.Gratuitousandoneroustrusts

Atrustmaybegratuitousoronerous.Itmaybegratuitousastoonebeneficiaryandonerous

astoanother.

§1736.Conditions

A trust or a disposition in trust may be made subj ect to any condition not f orbidden in this

Codeandnotagainstpublicorderorgoodmorals.

§1737.Dispositionspermitted 

A settlor may dispose of property in trust to the same extent that he may dispose of that

property free of trust and to any other extent authorized by this Code.A trust containing a

substitutionauthorizedbythisCodeisvalid.

SUBPARTB.FORM

§1751.Formoftestamentarytrust

Atestamentarytrustmaybecreatedonlyinoneoftheformsprescribedbythelawsregulating

donationsmortiscausa.

§1752.Formofintervivostrust

An inter vivos trust may be created only by  authentic act or by act under private signature

executed in the presence of two witnesses and duly acknowledged by the settlor or by the

affidavitofoneoftheattestingwitnesses.

§1753.Technicallanguagenotrequired;interpretationofinstrument

Noparticularlanguageisrequiredtocreateatrust,butitmustclearlyappearthatthecreation

ofatrustisintended.

A trust instrument shall be given an interpretation that will sustain the effectiveness of its

provisionsifthetrustinstrumentissusceptibleofsuchaninterpretation.

1754.Incorporationbyreference

A trust, whether inter vivos or testamentary, may incorporate by reference any or all of the

terms of an existing trust.Unless the instrument otherwise provides, all amendm ents of the

existing trust in force on the date of the execution of the instrument creating the new trust

shall be deemed incorporated, but neither subsequent modification nor termination of  the

existingtrustshallhaveanyeffectonthenewtrust.

§1755.Acceptancebytrustee

Thetrusteemayacceptthetrustinthetrustinstrumentorinaseparateinstrument.

SUBPARTC.THESETTLOR

§1761.Settlordefined

Asettlorisapersonwhocreatesatrust.Apersonwhosubsequentlytransferspropertytothe

trusteeofanexistingtrustisnotasettlor.

§1762.Numberofsettlors

Theremaybeoneormoresettlorsofanintervivostrust.

§1763.Whomaybesettlorofintervivostrust

Apersonhavingcapacitytocontractbyoneroustitlemaybeasettlorofanonerousintervivos

trust.Apersonhavingcapacitytocontractbygratuitoustitlemaybeasettlorofagratuitous

intervivostrust.

§1764.Whomaybesettloroftestamentarytrust

A natural person having capacity to make a donation mortis causa may be the settlor of a

testamentarytrust.

SUBPARTD.THETRUSTPROPERTY

§1771.Generalrule

Property susceptible of private ownership, and any interest in such property may be

transferredintrust.

SUBPARTE.THETRUSTEE

§1781.Trusteedefined

Atrusteeisa  persontowhomtitletothe trustproperty istransferredto beadministeredby

himasafiduciary.

§1782.Numberoftrustees

Theremaybeoneormoretrusteesofatrust.

§1783.Whomaybetrustee

A.Onlythefollowingpersonsorentitiesmayserveasatrusteeofa trustestablishedpursuant

tothisCode:

(1)Anaturalpersonenjo yingfullcapacitytocontractwhois a citizenorresidentalienofthe

UnitedStates,whomaybethesettlor,thebeneficiary,orboth.

(2)A federally insured de pository  institution organized under the laws of Louisiana, another

state,oroftheUnitedStates,orafinancialinstitutionortrustcompanyauthorizedtoexercise

trustorfiduciarypowersunderthelawsofLouisianaoroftheUnitedStates.

B.A nonprofit corporation or trust for educational, charitable, or religious purposes that is

designatedasincomeorprincipalbeneficiarymayserveastrusteeofatrustformixedprivate

orcharitablepurposes.

Acts1985,No.534,§1;Acts1995,No.215,§1;Acts1997,No.1400,§1,eff.July15,1997;Acts

2001,No.684,§1;Acts2004,No.521,§1.

§1784.Jurisdictionoverthetrustee

Atrusteewhoaccepts atrustestablishedpursuanttothis Codesubmitstothe jurisdiction of

thecourtsofthisstate.

Acts2001,No.594,§2.

§1785.Mannerinwhichtrusteechosen

Anoriginaltrustee,analternatetrustee,orasuccessortrusteemaybedesignatedinthetrust

instrument or chosen by the use of a method provided  in the trust instrument, but neither

failureofthetrustinstrument tosoprovidenordisqualificationor removalofthetrustee for

anyreason,incompetenceorunwillingnesstoactofthepersonsodesignatedorchosenshall

invalidatethetrust.Insuchacase,thepropercourtshallappointoneormoretrustees.

Acts1978,No.391,§1.

§1786.Provisionaltrustee

The proper court may appoint a provisional trustee if necessary to preserve, safeguard, and

administerthetrustproperty.Theappointmentmaybemadesummarilyupontheapplication

ofaninterestedpartyoruponthecourt'sownmotion.

§1787.Provisionaltrustee;security

Aprovisionaltrusteeshallfurnishthesecuritydeemednecessarybythepropercourt.

§1788.Resignationoftrustee

A trustee may resign at any time by giving written notice of resignation to each of the

beneficiaries or by mailing written notice to each at his last known address.The trust

instrumentmayprovideanothermethodofresignationandnotice.

§1789.Removaloftrustee

A.Atrusteeshallberemovedinaccordancewiththeprovisionsofthetrustinstrumentorby

thepropercourtforsufficientcause.

B.Additionally, a corporate trustee shall be removed upon the petition of a settlor or any

current beneficiary,  if the court  determines that removal is in the best interest of the

beneficiariesasawhole,anothercorporateentitythatis qualified tobea trusteehas agreed

toserveasthetrustee,andthetrustinstrumentdoesnotforbidsuchremoval.

Acts2001,No.594,§2.

§1790.Effectofresignationorremovaloftrustee

Exceptasprov idedinR.S.9:2069,atrusteewhohasresignedorwhohasbeenremovedhasno

furtherauthoritywithrespecttothetrustproperty.Hisresignationorremovaldoesnotaffect

hisliabilityforhisadministrationofthetrustproperty.

Acts1995,No.358,§1.

§1791.Appealfromjudgmentappointingorremovingtrustee

A judgment or an order of court appointing or removing a trustee shall be executed

provisionally.Anappealfromanorderorjudgmentappointingorremovingatrusteemustbe

taken and the security therefor furnished within thirty days from the date of the order or

judgment notwithstanding the filing of an application for a rehearing or a new trial.The

appealshallbedocketedandheardbypreference.

SUBPARTF.THEBENEFICIARY 

§1801.Beneficiarydefined

Abeneficiary isapersonfor whosebenefitthetrust iscreatedandmay beanaturalperson,

corporation, partnership, or other  legal entity having the capacity to receive property.A

trustee of a trust, in his capacity of trustee, can be the beneficiary of another trust.Neither

the heir, legatee, or assignee of a designated beneficiary, nor a beneficiary by reason of a

substitution under Subpart B of Part III of this Chapter, is considered a beneficiary for the

purposeoffixingthemaximumallowabletermofthetrust.

Acts1989,No.110,§1;Acts1995,No.414,§1.

§1802.Sufficiencyofdesignation

Abeneficiarymustbedesignatedinthetrustinstrument,exceptasotherwiseprovidedinthis

Code.Thedesignationissufficientiftheidentityofthebeneficiaryisobjectivelyascertainable

solelyfromstandardsstatedinthetrustinstrument.

§1803.Requirementthatbeneficiarybeinbeingandascertainable

A beneficiary must be in being and ascertainable on the date of the creation of the trust,

exceptasotherwise provided in thisCode.An unbornchildis  deemed a personinbeingand 

ascertainable,ifheisbornalive.

§1804.Settlorasbeneficiary

A settlor may be the sole beneficiary of income or principal or both, or one of several

beneficiariesofincomeorprincipalorboth.

§1805.Oneorseveralbeneficiaries;separatebeneficiaries

Theremaybeonebeneficiary ortwoormorebeneficiariesastoincomeorprincipalorboth.

There may be separate beneficiaries of income and principal, or the same person may be a

beneficiaryofbothincomeandprincipal,inwhole orinpart.

§1806.Concurrentbeneficiaries

Theremaybeseveralconcurrentbeneficiariesofincomeorprincipalorboth.

§1807.Successiveincomebeneficiaries

Severalbeneficiariesmaybedesignatedtoenjoyincomesuccessively.

§1808.Acceptancebybeneficiary

Abeneficiaryneednotacceptthebenefitconferredonhim;hisacceptanceispresumed.

§1809.Representationuponpredeceaseofnamedprincipalbeneficiary

Whenatestamentarytrustdesignatesasprincipalbeneficiaryapersonwhoisadescendant,a

sibling,oradescendantofasiblingofthesettlor,andthatpersondoesnotsurvivethesettlor,

thedescendantsbyroots ofthat personwill beprincipalbeneficiaries inhis place,unlessthe

trustinstrumentprovidesotherwise.

Acts2003,No.480,§1.

SUBPARTG.EFFECTIVEDATEOFCREATION

§1821.Whentestamentarytrustcreated

A testame ntary trust is created at the moment of the settlor's death, without awaiting the

trustee'sacceptanceofthetrust.

§1822.Whenintervivostrustcreated

An inter vivos trust is created upon execution of the trust instrument,without regard to the

trustee'sacceptance

§1823.Retroactivenatureoftrustee'sacceptance

Atrustee'sacceptanceisretroactivetothedateofcreationofthetrust.

§1824.Consequenceoftrustee'sfailuretoaccept

Ifthetrusteewasnotapartytothetrustinstrument,hemustacceptthetrus tinwritingwithin

areasonabletimeafteritscreation,orthepropercourtshallappo intatrustee.

§1824.Consequenceoftrustee'sfailuretoaccept

Ifthetrusteewasnotapartytothetrustinstrument,hemustacceptthetrus tinwritingwithin

areasonabletimeafteritscreation,orthepropercourtshallappo intatrustee.

SUBPARTH.TERMOFTHETRUST

§1831.Limitationsuponstipulatedterm

If the trust instrument stipulates a term and unless an earlier termination is required by the

trustinstrument,orbythepropercourt,atrustshallterminateat:

(1)Thedeath ofthelast survivingincomebeneficiary ortheexpiration of twentyyearsfrom

thedeathofthesettlorlasttodie,whicheverlastoccurs,ifatleastonesettlorandoneincome

beneficiaryarenaturalpersons;

(2)Thedeath ofthelast survivingincomebeneficiary ortheexpiration of twentyyearsfrom

thecreationofthetrust,whicheverlastoccurs,ifnoneofthesettlorsisanaturalpersonbutat 

leastoneincomebeneficiaryisanaturalperson;

(3)The expiration of twenty years from the death of the settlor last to die, if at least one

settlorisanaturalpersonbutnoneoftheincomebeneficiariesis anaturalperson;

(4)Theexpirationoffiftyyearsfromthecreationofthetrust,ifnoneofthesettlorsandnone

oftheincomebeneficiariesisanaturalperson.

AmendedbyActs1968,No.132,§1;Acts1987,No.164,§1,eff.Aug.1,1987.

{{NOTE:SEEACTS1987,NO.164,§3.}}

§1832.Effectofstipulationofexcessiveterm

Atrustinstrumentthatstipulatesalongertermthanispermittedshallbeenforcedasthough

themaximumallowabletermhadbeenstipulated.

§1833.Terminabsenceofstipulation

Ifthetrustinstrumentstipulatesnoterm,thetrustshallterminate:

(1)Uponthedeathofthelastincomebeneficiarywhoisanaturalperson;or

(2)At the end of the term prescribed by R.S. 9:1831(3) or 9:1831(4), if the income

beneficiariesdonotincludeanaturalperson.

§1834.Exceptions

The provisions of this Sub‐part shall not apply to class trusts, to trusts by employers for the

benefit of e mployees, or to charitable dispositions contained in trusts for mixed private and

charitablepurposes.

§1835.Definitions

For the purpose of this Sub‐part, the term "surviving income beneficiary" means a natural

person designated in the trust instrument to enjoy a portion of trust income, whether

presentlyorinthefuture,orevenconditionally;aprincipalbeneficiarywhoisdesignatedalso

a beneficiary of income, whether presently or in the future, or even conditi onally; and also

includes a principal beneficiary who becomes entitled to enjoy income because of the

termination of the rights of an income beneficiary.It does  not include a beneficiary whose

interestinincomehasterminated.

SUBPARTI.THELEGITIMEINTRUST

§1841.Generalrule

Thelegitimeoranyportionthereofmaybeplacedintrustprovided:

(1)Thetrusteeaftertakingintoaccountalloftheotherincomeandsupporttobereceivedby

the forced heir during the year shall distribute to the forced heir, or to the legal guardian of

the forced heir, funds from the net income in trust sufficient  for the health,  maintenance,

support,andeducationoftheforcedhe ir.

(2)Theforcedheir'sinterestissubjecttono chargesor conditionsexceptas providedinR.S.

9:1843,1844,1891through1906andSubpartBofPartIIIofthisChapter.

(3)Exce pt as permitted by R.S. 9:1844, the term of the trust,  as it affects the legitime, does

notexceedthelifeoftheforcedheir;and

(4)Theprincipalshallbedeliveredtotheforcedheirorhisheirs,legatees,orassigneesfreeof

trust,upontheterminationoftheportionofthetrustthataffectsthelegitime.

AmendedbyActs1974,No.126,§1;Acts1979,No.160,§1;Acts1995,No.414,§1;Acts1999, 

No.967,§1.

§1842.Effectofimproperstipulation

AprovisionofatrustinstrumentthatisincompatiblewiththeprovisionsofthisSub‐partshall

bereformedtocomplyherewith.

§1843.Stipulationrestrainingalienation

Atrustinstrumentmayplacerestraintsuponthealienationofthelegitimeintrust.

§1844.Legitimeburdenedwithincomeinterestorusufruct

Thelegitimeintrustmaybeburdenedwithanincomeinterest orwithausufructinfavorofa

surviving spouse to the same extent and for the same term that a usufruct of the same

propertycouldbestipulatedinfavorofthesamepersonforalikeperiod.

AmendedbyActs1974,No.126,§1.

§1845.RepealedbyActs1979,No.160,§2

§1846.RepealedbyActs1979,No.160,§3

§1847.Invasionofprincipal;legitimeaffected

A trustee may not pay principal to an income beneficiary if the payment would deprive

another beneficiary of all or a part of his legitime, notwithstanding any contrary provision of

thetrustinstrument.

SUBPARTJ.MARITALPORTIONINTRUST

§1851.Generalrule

The marital portion provided under Article 2432 of the Louisiana Civil Code, whether in full

propertyorusufructonly,oranyportionthereof,maybeplacedintrust,if:

(1)The net income accruing to the surviving spouse therefrom is payable to the surviving

spousenotlessthanonceeachyear;

(2)Thesurvivingspouse'sinterestissubjecttonochargesorcondition,except thatthetrust

instrumentmayplacerestrictionsuponthealienationofthemaritalportionintrust;and

(3)The term of the trust, as it affects the marital portion, does not exceed the life of the

survivingspouse.

AddedbyActs1977,No.67,§1.AmendedbyActs1979,No.711,§2,eff.Jan.1,1980.

§1852.Maritalportioninfullproperty

An unconditional principal and income interest in trust, with income payable not less than

annually for the life of the beneficiary, satisfies the marital portion  to the same extent as

would the full ownership not in trust ofthe same property; however, during the term of the

trust, the trustee may pay principal from the trust property for support, maintenance,

education, medical expenses, or welfare of the beneficiary and, upon termination of the

portion of the trust that affects the marital portion, the principal shall be delivered to the

survivingspouseorhisheirs,legatees,orassignsfreeoftrust.

AddedbyActs1977,No.67,§1.

§1853.Maritalportioninusufruct

A usufru ct in trust, or an unconditional income interest in trust, without an interest in

principal,payablenotlessthanannuallyforatermorforthelifeofthebeneficiarysatisfiesthe

maritalportiontothesame extent as wouldausufructnot in trustonthe same propertyfor

thesameterm.

AddedbyActs1977,No.67,§1.

§1854.Effectofimproperstipulation

Aprovisionofatrustinstr umentthatisincompatiblewiththeprovisionsofthisSubpartshall

bereformedtocomplyherewith.

AddedbyActs1977,No.67,§1.

SUBPARTK.LIFEINSURANCEINTRUST

§1881.Generalrule

Asettlormaycreateanintervivosoratestamentarytrustupontheproceedsoflifeinsurance.



Ifapolicyoflifeinsuranceispayabletoanamedbeneficiaryofthepolicyastrustee,thetrust

isanintervivo s trustandtheinstrumentcreatingthetrustshallbeintheformrequiredforan

inter vivos trust.The trust is an inter vivos trust although the settlor reserves incidents of

ownership with respect to the policy, although the settlor reserves the power to revoke or

modifythetrust, and although the trustee has no activeduties to perform until the death of

thesettlor.

If the policy of life insura nce is payable to the settlor or to his succession or his succession

representative, or to a testamentary trustee, the trust is testamentary and the instrument

creatingthetrustshallbeintheformrequiredforatestamentarytrust.

AmendedbyActs1972,No.658,§1.

SUBPARTL.CLASSTRUSTS

A.GENERALRULES

§1891.Creationofclass

A.Notwithstanding the provisions of R.S. 9:1803, R.S. 9:1831 through 1835, and R.S. 9:1841

through 1847, but subject to the restrictions stated in this Subpart, a person may create an

inter vivos or testamentary trust in favor of a class consisting of some or all of his children,

grandchildren, great grandchildren, ni eces, nephews, grandnieces, grandnephews, and great

grandniecesandgreatgrandnephews,oranycombinationthereof,althoughsomemembersof

the class are not yet in being at the time of the creation of the trust, provided at least one

memberoftheclassistheninbeing.Sucha trustiscalledaclasstrust.Ifthetrustinstrument

soprovides,theinterestofeachbeneficiaryintheclassshallbeheldinaseparatetrustafter

theclasshasclosed.

B.If before the application of R.S. 9:1894 the class consists only of members of one

generation, the interests of the members of the class shall be equal by roots from their

commonancestor,unlessthetrustinstrumentprovidesotherwise.Ifbeforetheapplicationof

R.S.9:1894 theclassconsistsof personsinmorethanone generation, theirinterestsshall be

equalbyheads,unlessthetrustinstrumentprovidesotherwise.

AmendedbyActs1982,No.479,§1;Acts1989,No.115,§1;Acts1989,No.339,§1,eff.June

28,1989;Acts 1995,No.274,§1;Acts1995,No.324,§1;Acts1995,No.1038,§1;Acts1997,

No.682,§1;Acts2001,No.594,§3.

{{NOTE:SEEACTS1989,NO.115,§2,ANDNO.339,§2.}}

§1892.Classmembers

Aclassmayincludethoseoftherelationshipwhetherbybloodoradoption.

Acts1985,No.582,§1.

§1893.Incomeandprincipaldesignations

Aclasstrustmaybecreatedwithrespecttoincomeorprincipal,orboth,butthemembersof

the class must always be the sole beneficiaries of the interest affected, whether income,

principal, or both.Subject to R.S. 9:2068, the trustee may invade principal for the benefit of

oneormoreindividual income beneficiaries or one ormoremembersofanyclass ofincome

beneficiaries, even thoug h such income beneficiary may not be a member of the class of

principalbeneficiaries.

AmendedbyActs1968,No.133,§1;Acts1974,No.127,§1;Acts2003,No.480,§1.

§1894.Representation

Ifapersondiesbeforethecreationofthetrust,whowouldhavebeenamemberoftheclassif

hehadnotdied,hisdescendantsshall beconsideredmembers ofthe classbyrepresentation

unlesstheinstrumentotherwiseprovides.

Acts1985,No.582,§1.

§1895.Effectofdeathofclassmemberduringthetermofthetrust

A.Aninterestofamemberoftheclasswhodiesduringthetermofthetrustvestsinhisheirs

or legatees, but the trust instrument may provide that the interest of a member of the class

who dies intestate and without descendants during the term of the trust vests in the other

members of the class, or,except as to the legitime in trust, that the interest of a member of

theclasswhodieswithoutdescendantsduringthetermofthetrustoratitsterminationvests

intheothermembersoftheclass.

B.Forthispurposetheterm"othermembersoftheclass"shallincludethesuccessorstothe

interests of any members of the class who predecease such deceased class member, unless

thetrustinstrumentprovidesotherwise.

Acts1988,No.284,§1;Acts1997,No.254,§1.

§1896.Closingoftheclass

Thetrustinstrumentmaystateadateoramethodfordefiningadateonwhichtheclassshall

close.Unlessthetrust instrumentprovides otherwise, the class shallclose when,because of

thedefinitionoftheclass,memb ersmaynolongerbeaddedtoit.

AmendedbyActs1978,No.706,§1.

§1897.Term;generalrule

AtrustcreatedundertheprovisionsofthisSub‐partshallnotterminatebeforetheclosingof

theclass.Thetermofthetrustthereafteris determinedbyther ulesprescribedbyR.S.9:1899

through9:1906.

§1898.Effectofstipulationofexcessiveterm

ThestipulationofanexcessiveterminadispositiongovernedbythisSub‐partshallnotdefeat

thedisposition,butthetermshallbereducedtotheperiodallowableunderthisSub‐par t.

B.RULESGOVERNINGWHENMEMBERSOFACLASSAREBENEFICIARIESOFINCOMEONLY

§1899.Distributionofincome;forcedheirs

Thetrustinstrumentmayprovidewhenincomeshallbedistributed,oritmayprovidethatthe

trustee has discretion to determine the time or frequen cy of distribution or to accumulate

some or all of the income, except as otherwise provided by this Code with respect to the

legitimeintrust.

§1900.Absenceoflivingmembersbeforeclasscloses;treatmentofincome

Ifthetrustinstrumentcontainsasurvivorshipprovisionandallmembersoftheclassofincome

beneficiariesdiebeforeclosingoftheclass,theincomeofthetrustshallbeaccumulateduntil

thereisamemberoftheclassortheclasscloses.Iftheclassclosesandthereisnomemberof

the class, the accumulated income shall be distributed to the beneficiaries of principal in

proportiontotheirinterests.

§1901.Closingofclass;membersliving;effect;termination

After the class closes, the trust shall continue as to the class until the death of the last

survivingmemberoftheclass,unlessanearlierterminationdatehasbeenstipulated.

C.RULESGOVERNINGWHENMEMBERSOFACLASSAREBENEFICIARIESOFPRINCIPALONLY

§1902.Closingofclass;continuationoftrust

When the memb ers of a class are designated beneficiaries  of principal only and the

beneficiaries of income are not a class as defined in this Sub‐part, the trust shall terminate

whentheclasshas closedandallinterestsin incomehaveceased.Thetrustinstrumentmay

provide that the trust shall continue with respect to the share of a class member for his

lifetime.

§1903.Classnotclosed;terminationofincomeinterests;effect

If all designated beneficiaries of income have died, or the period of their enjoyment has 

otherwise lapsed before the class that is beneficiary of the trust principal has closed, the

incomeshallbecreditedanddistributedannuallytothebeneficiariesoftheprincipaluntilthe

trust terminates, in proportion to their interests, unless  the trust instrument provides

otherwise.

D.RULESGOVERNINGWHENMEMBERSOFONECLASSAREBENEFICIARIESOFINCOMEAND

MEMBERSOFADIFFERENTCLASSAREBENEFICIARIESOFPRINCIPAL

§1904.Generalrule

If the members of one class of the settlor's children or grandchildren are designated

beneficiaries of income and members of a different class of his children or grandchildren are

designatedasbeneficiariesofprincipal,theclassofbeneficiariesofincomeshallbegoverned

byR.S.9:1899 through9:1901and theclassof beneficiariesof principalshallbegoverned by

R.S.9:1902and9:1903.

E.RULESGOVERNINGWHENTHEMEMBERSOFTHESAMECLASSAREBENEFICIARIESOFBOTH

INCOMEANDPRINCIPAL

§1905.Interestsinincome

If members of the same class of the settlor's children or gr andchildren are designated

beneficiariesofbothincomeandprincipal,interestsinincomebeforetheclassclosesshallbe

governedbyR.S.9:1899through9:1901.

§1906.Term

Thetrustshallcontinuewithrespecttotheshareofaclassmemberforhislifetimeunlessthe

trustinstrumentstipulatesashorterterm,butthetrustshallnotterminatewithrespecttoany

interestuntiltheclassisclosed.

SUBPARTM.TRUSTSFOREMPLOYEES

§1921.Generalrule

Anemployermaycreateatrustforthebenefitofemployeeswhetherornotthebeneficiaries

areinbeingandascertainableatthetimeofitscreation.Severalsettlorsmayjoininonetrust

forthebenefitoftheirrespectiveemployees.

§1922.Termoftrust

Atrustforemployeesmaybecreatedforanytermorforanindefiniteterm.

SUBPARTN.ADDITIONSTOTHETRUSTPROPERTY

§1931.Generalrule

Asettlororanyotherpersonmaymakeadditionsofpropertytoanexistingtrustbydonation

intervivosormortiscausa,withtheapprovalofthetrustee.Therighttomakeadditionsmay

berestrictedordeniedbythetrustinstrument.

§1932.Form

Anaddition ofpropertytoanexistingtrustmustbemadeand  accepted intheformrequired

forsuchadonationfreeoftrust.

Acts2001,No.594,§2.

§1933.Rightsofpersonwhoaddsproperty

Apersonwhoaddspropertytoanexistingtrustcannotacquiretherightsofasettlorbyvirtue

ofthetransfer,buttheadditionissubjecttothegenerallawofdonations.

§1934.Modification,termination,rescission,orrevocationoftrusttowhichpropertyadded

A trust may be modified, terminated, rescinded, or revoked, as provided by law or the trust

instrument,withouttheconsentofapersonwhohasaddedpropertytothetrust,eventhough

thepropertythathasbeenaddedisaffected.

§1935.Whenadditionbydonationintervivoseffected

An addition of property to an existing trust by donation inter vivos is effective upon

acceptancebythetrustee.

§1936.Whenadditionbydonationmortiscausaeffected

An addition of property to an existing trust by donation mortis causa is effective at the

momentofthedonor'sdeath.

§1937.Definitionofannualexclusion

When a trust anticipates future annual additions  and refers to the annual exclusion fr om 

federalgifttaxwithoutstipulatingadollar limitation,thedollarli mitationshallbetheamount

oftheexclusionineffectintheyearinwhichthedonationis madetothetrust.

AddedbyActs1982,No.423,§1.

SUBPARTO.TRUSTSFORMIXEDPRIVATEANDCHARITABLEPURPOSES

§1951.Generalrule

A trust may be created for mixed private and educational, charitable, or religious purposes.

Thedispositionsofsucha trustinfavorofprivatebeneficiariesaregovernedbytheprovisions

ofthisCode;thoseinfavorofotherbeneficiariesaregovernedbyR.S.9:2271through9:2337

relatingtotrustsforeducational,charitable,orreligiouspurposes.Aslongasthereremainsa

private beneficiary, the trust shall be administered in accordance with the provisions of R.S.

9:2061 through 9:2173.Unitrusts and annuity trusts as defined in the United States Internal

RevenueCodearemixedtrusts.

AmendedbyActs1972,No.659,§1.

§1952.Invasionofprincipalinmixedtrusts

Invasion of principal in unitrusts and annuity trusts, as defined in the United States Internal

Revenue Code, shall be regulated by principles set forth  in that Code, unless the trust 

instrumentprovidesotherwise.

AddedbyActs1972,No.660,§1.

SUBPARTP.COMMUNITYPROPERTYINTRUST

§1955.Powertodividecommunityinterests

Ifamarriedcoupletransferspropertytoatrusteeofatrusttheyalonehavecreated,orifthe

trustee of that trust is designated as the beneficiary of a benefit payable upon a spouse's

deathunderapolicyorplan,andthetransferredpropertyorthespouses'interestinthepolicy

or plan is wh olly  or partially their community property, the trust instrument may direct the

trusteetodividethetrustaftertheter minationofthecommunityintotwoseparateshares or

trustsaccordi ngtothespouses'respectiveownershipinterestsintheproperty,orinthepolicy

orplan.Thetwoseparatesharesortrustsmaybegovernedbydifferenttermsandconditions

in the trust instrument, even as to the designation of beneficiaries.A "policy or plan" shall

include a life insurance or annuity contract, and an employee benefit plan, individual

retirementaccount,orsimilarbenefit.

Acts1995,No.1038,§2.

PARTIII.THEINTERESTOFTHEBENEFICIARY

SUBPARTA.THEINTERESTOFTHEINCOMEBENEFICIARY

§1961.Natureoftheinterest

A.Aninterestinincomemaybegivenabsolutelyorconditionally.Itmaybegivenforthelife

ofabeneficiaryorforaterm,certainoruncertain,notexceedingthelifeofabeneficiary.

B.A settlor may allocate to a beneficiary of income a portion of income.Any income not

allocatedtoanincomebeneficiaryshallbeallocatedtoprincipal.

C.Except as otherwise provided with respect to the legitime in trust, a settlor may give a

trusteewhoisnota beneficiaryofthetrustdiscretiontoallocateincomeindifferentamounts

among the income beneficiaries or to allocate some or all of the income to principal.The

settlormay allowincomethatisnotallocatedbytheendoftheyearinwhichitisreceivedto

remainunallocatedbythetrusteeuntilafutureyear.Anyincomeunallocatedwhenthetrust

terminatesshallbeallocatedtoprincipal.

Acts1997,No.767,§1;Acts2001,No.594,§2.

§1962.Distributionofincome

In the absence of a contrary stipulation, income shall be distributed to the designated

beneficiaryatleasteverysixmonths.

§1963.Permissiblestipulationsregulatingdistributionofincome 

Except as otherwise provided with respect to class trusts and the legitime in trust, a settlor

maystipulate when the income allocated to a beneficiary shall be distributed  to him, or may

stipulatethatthe trustee has discretion to determine the timeandfrequency of distribution.

If the trust instrument allows  the trust to retain income received in a year of the trust and

distribute it in a later year, the income retained at the end of the year is deemed to be

accumulated, unless the trust instrument requires the undistributed income to be added to

principal.Objective standards are not required for the accumulation of income or for the

distributionofaccumulatedincome.

Acts2003,No.480,§1.

§1964.Terminationofincomeinterest;undistributedincome

An interest in income terminates upon the death of the designated beneficiary, or at the

expiration of the period of his enjoyment if the interest is for a period less than life.At the

termination of an income interest, accumulated or undistributed income that has been or is

required to be allocated to the beneficiary shall be paid to the beneficiary or his heirs,

legatees,assignees,orlegalrepresentatives,exceptasotherwiseprovidedinthisCode.

Acts1997,No.767,§1.

§1965.Effectofterminationofinterest

Unlessthetrustinstrumentprovidesotherwise:

(1)Terminationoftheinterestofthesole incomebeneficiarypriortothe terminationofthe

trust causes each principal beneficiary to become a beneficiary of income in an amount

proportionatetohisinterestintheprincipal.

(2)(a)Ter minationof aninterestinincomeofoneof severalincome beneficiaries causesthe

other income beneficiaries or their successors to become beneficiaries of that interest in

incomeinproportiontotheirinterestsinthebalanceoftrustincome.

(b)If, however, termination of the income interest is by death, and if descendants of the

deceasedincomebeneficiaryarethebeneficiariesofaninterestintrustprincipalorsucceedto

such an interest upon the death of the income  beneficiary, such descendants shall become

beneficiaries of the deceased beneficiary's interest in trust income in proportion to the

descendants'interestsintheirportionoftrustprincipal.

Acts2003,No.480,§1.

SUBPARTB.THEINTERESTOFTHEPRINCIPALBENEFICIARY

§1971.Timeofacquisitionofinterest

The interest of a principal beneficiary is acquired immediately upon the creation of a trust,

subjecttotheexceptionsprovidedinthisCodeandinCivilCodeArticle1521(A)(2 ).

Acts1995,No.413,§1.

§1972.Treatmentofinterestupondeathofprincipalbeneficiary

Upon a principal beneficiary's death,  his interest vests in his heirs or legatees, subject to the

trust; provided, however, that the trust instrument may stipulate otherwise to the extent

permittedbythefollowingSections ofthisSubpartandR.S.9:1895.

AmendedbyActs1974,No.160,§1;Acts1995,No.414,§1.

§1973.Shiftinginterestinprincipal

A.The trust  instrument may provide that the interest of either an original or a substitute

principalbeneficiarywhodiesintestateandwithoutdescendantsduringthetermofthetrust

oratitsterminationvestsinsomeotherpersonorpersons,eachofwhomshallbeasubstitute

beneficiary.

B.Except as to the legitime in trust, the trust instrument may provide that the interest of

eitheranoriginalorasubstituteprincipalbeneficiarywhodieswithoutdescendantsduringthe

termof the trustor at its termination vests  in some other person or persons, each of whom

shallbeasubstitutebeneficiary.

AddedbyActs1974,No.160,§1.Acts1989,No.111,§1;Acts1997,No.254,§1.

§1974.Substitutebenefici ary'sinterestmaybeconditional

The interest of a substitute beneficiary  may be conditioned upon his surviving the principal

beneficiary.The trust instrument may provide for one or more alternative substitute

beneficiariesifasubstitutebeneficiarydoesnotsurvivetheprincipalbeneficiary.

AddedbyActs1974,No.160,§1.

§1975.Requirementthatsubstitutebeneficiarybeinbeingandascertainable

ExceptasprovidedinR.S. 9:1978,asubstitutebeneficiarymustbeinbeingand  ascertainable

on the date of the creation of the trust; provided, however, that a class may be a substitute

beneficiarysubjecttotherequirementsofR.S.9:189 1throughR.S.9:1906.

AddedbyActs1974,No.160,§1.AmendedbyActs1982,No.455§1.

§1976.Treatment upon death of substitute beneficiary whose interest is not conditioned on

survival

Upon a substitute beneficiary's death, his interest, if not conditioned on survival, vests in his

heirsorlegateessubjecttothetrust.

AddedbyActs1974,No.160,§1.

§1977.Classassubstitutebeneficiary

If the substitute beneficiary is a class, the interest of a deceased member of the class is

determinedbytherulesgoverningclasstrusts.

AddedbyActs1974,No.160,§1.

§1978.Shiftinginterestinprincipalifbeneficiaryisdescendantofsettlor

Thetrustinstrumentmayprovidethatthesubstitute beneficiaries under R.S. 9:1973 areone

or more of settlor's descendants who are in being and ascertainable on the date of death of

theprincipalbeneficiary.

AddedbyActs1982,No.455,§1;Acts1997,No.254,§1.

§1979.Statusofpotentialsubstituteprincipalbeneficiary

Aperson who willbea  principalbeneficiaryofa  trustonly if a substitution occurs under R.S.

9:1973isnotconsideredaprincipalbeneficiaryuntilthesubstitutionoccurs.

Acts2003,No.480,§1.

SUBPARTC.REFUSAL

§1981.GeneralRule

Abeneficiary,whetherofprincipalorincome,mayrefuseaninterestatanytimeaftercreation

of the trust, provided he does so before accepting any benefit under the trust.A person

incapable of contracting cannot refuse an interestin trust, but his representative may refuse

forhim.Therefusalisirrevocable.

§1982.Acceptanceofinterestinintervivostrustbycreditor;effect

Ifabeneficiaryofagratuitousintervivostrustrefuseshisinterest,hiscreditorcannotacceptit

inhisstead.

§1983.Acceptanceofinterestintestamentarytrustbycreditor;effect

If a beneficiary of a testamentary trust refuses his interest to the prejudice of his creditors'

rights, the creditors may accept in his stead to the extent that their rights have been

prejudiced.

§1984.Rightsofbeneficiarywhorefusesinterestintestamentarytrust

A beneficiary who refuses his interest in a testamentary trust cannot take the interest in the

propertyfreeofthetrust.

§1985.Mannerofrefusal;effectofconditions

The refusal of an interest conferred in an inter vivos trust shall be in authentic form

unequivocallydisclaimingtheinterest.The refusalofaninterestconferredina testamentary

trust shall be by renunciation of the settlor's succession.Conditions attached to the refusal

shallbereputednotwritten.

§1986.Retroactivenatureofrefusal

A refusal operates retroactively to the date of the creation of the trust, and a beneficiary is

considerednevertohavereceivedaninterest.

§1987.Effectofrefusalupontrustee

Arefusalisnoteffectiveastoatrusteeuntilacopyoftheactofrefusalhasbeenreceivedby

him.Acts performed by a trustee before a beneficiary's refusal becomes effective as to the 

trusteearenotaffectedbytherefusal.

§1988.Partialrefusal;refusalinanother'sfavor

Abeneficiarymayrefusealloranypartofaninterestintrust.Thedesignationofthepersonin

whosefavortherefusalistooperateconstitutesacceptance,butsuchadesignationissubject

toanyrestraintplaceduponalienationbythetrustinstrument.

Acts1983,No.79,§1.

§1989.Refusalofadditiontotrust

A beneficiary who  has not refused his interest under the trust instrument may refuse an

additionofpropertytothetrust.

§1990.Effectofrefusaluponinterestrefused

A settlor may stipulate the effect of refusal.Unless the trust instrumentotherwise provides,

thefollowingrulesgovern:

(1)Refusaloftheentireinterestintrustcausesthetrusttofail.

(2)Refusal by the sole income beneficiary causes principal beneficiaries, other than the

refusingbeneficiary,tobecomeincomebeneficiaries,totheextentofthe interestrefused, in

amounts pro portionate to their interests or, in the absence of other principal beneficiarie s,

sucharefusaloperatesasa substitutionofthesettlororhisheirsorlegateesasbeneficiaries

oftherefusedincomeinterest.

(3)Except as provided in Paragraph (4), refusal of an interest by one of several income

beneficiariesinuresinfavoroftheotherbeneficiariesortheirsuccessorsinproportiontotheir

interestsinthebalanceofthetrustincome.

(4)If one or more descendants of a refusing income  beneficiary are the beneficiaries of an

interest in trust principal, either by designation in the instrument or by reason of Paragraph

(5),thosedescendantsbecomethebeneficiariesoftherefusedinterest,inproportiontotheir

interestsintrustprincipal.

(5)Aprincipal beneficiary  of a testamentarytrustwhorefuseshisinterest andtowhomR.S.

9:1809 would have applied had he predeceased the settlor shall be treated as having

predeceasedthesettlor.

(6)Unless Paragraph (5) appl ies,  refusal by the sole principal beneficiary operates a

substitutionofthesettlororhisheirsorlegateesasbeneficiaryoftheprincipal,totheextent

oftheinterestrefused,withoutaffectingtheinterestoftheincomebeneficiary.

(7)UnlessParagraph(5)applies,refusalofaninterestbyoneofseveralprincipalbeneficiaries

inuresinfavoroftheotherbeneficiariesortheirsuccessorsinproportiontotheirinterestsin

thebalanceofthetrustprincipal.

Acts1983,No.79,§1;Acts2003,No.480,§1.

SUBPARTD.ALIENATIONBYTHEBENEFICIARY

§2001.Generalrule

Abeneficiarymay transferorencumber thewholeor anypartofhisinterest unless thetrust

instrumentprovidestothecontrary.

§2002.Restraintuponalienation

The trust instrument may provide that the interest of a beneficiary shall not be subject to

voluntaryorinvoluntaryalienationbyabeneficiary.Arestraintuponvoluntaryalienationbya

beneficiary is valid.But a restraint upon involuntary alienation by a beneficiary is subject to

thelimitationsprescribe dbythissub‐part.

§2003.Form

ExceptasotherwiseprovidedbyChapter9oftheLouisianaCommercialLaws,R.S.10:9‐101et

seq.,whereapplicable,atransferoranencumbrancebyabeneficiaryofhisinterestshallbeby

authenticactorbyactunderprivatesignatureexecutedinthepresenceoftwowitnessesand

duly acknowledged by the beneficiary or by the affidavit of one of the attesting witnesses.

Exceptasotherwiseprovidedby Chapter9oftheLouisianaCommercialLaws,R.S.10:9‐101et

seq.,whereapplicable,thetransferorencumbranceisnoteffectiveastoatrusteeuntilacopy

oftheauthenticactoracopyoftheacknowledgedactisreceivedbyhim.

Acts1991,No.665,§1.

§2004.Seizurebycreditor;generalrule

Acreditormayseizeonly:

(1)Aninterestinincomeorprincipalthatissubjecttovoluntaryalienationbyabeneficiary.

(2)A beneficiary's interest in income and principal, to the extent that the beneficiary has

donatedpropertytothetrust,directlyorindirectly.

Acts1985,No.581,§1;Acts1987,No.246,§1,eff.July3,1987;Acts1997,No.253,§1.

§2005.Seizurebycreditor;specialclaims

Notwithstanding any stipulation in the trust instrument to the contrary, the proper court, in

summaryproceedings towhichthetrustee,thebeneficiary,andthebeneficiary'screditorshall 

beparties,maypermitseizureofanyportionofthebeneficiary'sinterestintrustincomeand

principalinitsdiscretionandasmaybejustunderthecircumstancesiftheclaimisbasedupon

ajudgmentfor:

(1)Alimony,ormaintenanceofapersonwhomthebeneficiaryisobligatedtosupport;

(2)Necessary services rendered or necessary supplies furnished to the beneficiary or to a

personwhomthebeneficiaryisobligatedtosupport; or

(3)RepealedbyActs2004,No.521,§2.

Acts2004,No.521,§2.

§2006.Exemptionfromseizure

Exemptions from seizure accorded by law to any kind of property or interest in property are

effectivewithrespecttosuchpropertyintrusttothesameextentasifthepropertywereheld

freeoftrust.

SUBPARTE.DEFERRED ASCERTAINMENTOFPRINCIPALBENEFICIARIESOFREVOCABLETRUSTS

§2011.Generalrule

A revocable trust instrument need not designate the beneficiaries upon the creation of the 

trustbutmayinstead provideamethodwherebytheyaredeterminedata latertime,but no

later than the time when the trust becomes irrevocable.A beneficiary thus determined may

bea person who isnotin being when thetrustis  created,aslong as heisinbeing whenthe

beneficiariesaredetermined.Ifbeneficiariesarethusdetermined,anyprovisionin thisCode

that refers to persons in existence at the creation of the trust shall be deemed to refer to

persons in existence at the time when the beneficiaries are determined under the trust

instrument.Theinterestofthebeneficiarymaybeconditioneduponthebeneficiarysurviving

thesettlorforaperiodoftimepermittedbyCivilCodeArticle1521(A)(2).

Acts1988,No.589,§1;Acts1989,No.112,§1;Acts1995,No.413,§1.

§2012.Provisionalprincipalbeneficiaries

Untilthetimewhentheprincipalbeneficiariesaredetermined,thepersons whowouldbethe

principal beneficiaries had that time arrived shall be known as the provisional principal

beneficiaries.Provisionalprincipalbeneficiariesshallbeincomebeneficiariesintheabsenceof

aneffectivelydesignatedincomebeneficiary.Aprovisionalprincipal beneficiarywhoisnotan

incomebeneficiaryisnotconsideredabeneficiaryforanypurposesunderthisCode.

Acts1988,No.589,§1.

§2013.Settlorasdefaultprincipalbeneficiary

Ifthetrustinstrumentfailseffectivelytodesignateaprincipalbeneficiaryatthetimewhenthe

principal beneficiary is to be determined, the settlor shall be the principal beneficiary, and

upon his death his interest shall vest in his heirs or legatees.Likewise, if at any time no

provisional principal beneficiary is identifiable under the terms of the trust instrument, the

settlorshallbetheprovisionalprincipalbeneficiary.

Acts1988,No.589,§1.

§2014.Numberofsettlorsallowed

A.Except as provided in Subsection B, the provisions of this Subpart shall apply only if the

trusthasbutonesettlor.

B.Ifatrustiscreatedbytwosettlorswhoaremarriedtoeachother,andthetrustinstrument

divides community property in the manner described in R.S. 9:1955, and the trust becomes

irrevocable as to a spouse's share or trust no later than at the death of that spouse, the

beneficiariesofsuchshareortrustmaybeascertainedundertheprovisionsofthisSubpart.

Acts1988,No.589,§1;Acts1995,No.1038,§3.

PARTIV.MODIFICATION,TERMINATION,REVOCATIONANDRESCISSIONOFTHETRUST

SUBPARTA.MODIFICATIONANDTERMINATIONOFTHETRUST

§2021.Generalrule;modification

Thesettlormaymodifythetermsofthetrustafteritscreationonlytotheextentheexpressly

reservestherighttodoso.

§2022.Effectofreservationofrighttorevoke

Reservationoftherighttorevokeincludestherighttomodifythetrust.

§2023.Effectofreservationofunrestrictedrighttomodify

Ifthe settlor reserves anunrestrictedrighttomodifythetrust,he may change oramendthe

termsofthetrustinanyparticular,orevenrevokeorterminatethetrust.

§2024.Concurrenceofsettlorsinmodification

Allsurvivingcompetentsettlorsmustconcurinamodificationofthetrust.

§2025.Delegationofrighttoterminateortomodifyadministrativeprovisions 

A settlor may delegate to another person the right to terminate a trust, or to modify the

administrativeprovisionsofatrust,buttheri ghttomodifyotherprovisionsofatrustmaynot

bedelegated.

§2026.Changeofcircumstances

Thepropercourtmayordertheterminationormodificationofatrust,inwholeorinpart,if:

(1)Thecontinuanceofthetrustunchangedwoulddefeatorsubstantiallyimpairthepurposes

ofthetrust.

(2)Exceptasotherwiseprovidedbythetermsofthetrust,atrusteehasdeterminedthatthe

marketvalue of atrustis less than one hundred thousand dollars and that,in relationtothe

costs of administration of the trust, the continuance of the trust unchanged would defeat or 

substantially impair the purposes of the trust.In such a case, the court may provide for the

distribution of the trust property, including  principal and undistributed income, to the

beneficiariesinamannerwhichconforms  asnearlyas possibletothe intentionof thesettlor 

andthecourtshallmakeappropriateprovisionsfortheappointmentofa tutorinthecaseofa

minor beneficiary.In the event of the termination or modification of a trust under  the

provisionsofthisParagraph,thetrusteeshallnotbesubjecttoliabilityforsuchterminationor

modification.

Acts1991,No.665,§1;Acts1997,No.252,§1;Acts2001,No.594,§2.

§2027.Accomplishmentofpurposesbecomingimpossibleorillegal

The proper court may order the termination or modification of the trust if the purpose for

whichitiscreatedbecomesimpossibleofaccomplishmentorillegal.

§2028.Concurrenceofsettlorsintermination

The consent of all settlors, trustees, and beneficiaries shall not be effective to terminate the

trustoranydispositionintrust,unlessthetrustinstrumentprovidesotherwise.

§2029.Effectoftermination

Aterminationofatrustcausesthedispositiveprovisionsofthetrusttoachievetheirultimate

effect.A partial termination of a trust causes some of the dispositive provisions  to achieve

theirultimateeffect.Abeneficiaryreceivingtrustpropertyasaresultofthe wholeorpartial

termination of a trust shall be personally liable for the obligations and liabilities of the trust

existingonthedateofterminationtotheextentofthevalue ofthetrustpropertyreceivedby

suchbeneficiaryunless,inthecaseofapartialtermination,existingtrustpropertyissufficient

tosatisfytheobligationsandliabilitiesofthetrust.

Acts1995,No.344,§3.

§2030.Combinationanddivisionoftrusts

A trustee may combine two or more trusts into one trust, or divide a trust intotwo or more

trusts, on written notice to all beneficiaries having a current interest in the trust or trusts, if

the combination or division does not impair the rights of any beneficiary or adversely affect

the accomplishment of the purposes of the trust or trusts.The division of a trust shall be

basedonthe fair market value of the assets of the trust onthe effective date of the division

and need not result in a uniform interest in each asset.After the division, discretionary

distributionsneednotbemadeuniformlyfromeachoftheseparatetrusts.Atrustinstrument

may modify these rules, either to expand or to restrict the trustee's authority to combine or

divideatrust.

Acts1995,No.344,§2;Acts2001,No.594,§2.

SUBPARTB.REVOCATIONANDRESCISSIONOFTHETRUST

§2041.Generalrule;revocation

ExceptasotherwiseprovidedinthisCode,asettlormayrevokeatrustinwholeorinpartonly

ifhehasreservedtherighttorevokethetrustoranunrestrictedrighttomodifythetrust.

§2042.Effectofreservationofrighttorevoke

Areservation by thesettlor oftheright  to revoke includes the right to revoke theinterestof

anybeneficiary,unlessotherwiselimitedbythetrustinstrument.

§2043.Revocationorrescissionundergenerallaw

An onerous disposition in trust may be rescinded for the causes and under the limitations

specified in the general law of contracts.A gratuitous disposition  may be revoked for the

causesandunderthelimitationsspecifiedinthegenerallawofdonations,whetherornotthe

right to revoke has been reserved.For this purposeeverydisposition in favor of a particu lar

beneficiaryshallbetreatedasaseparatedonationorcontract,asthecasemaybe.

§2044.Concurrenceofsettlorsinrevocation;effect

Revocation of a trust, or of a disposition in trust, pursuant to a reservation of such a right,

requires the concurrence of all surviving compe tent settlors, in the absence of a contrary

stipulation.

§2045.Delegationofrighttorevoke

A settlor who has reserved the right to revoke a  trust may delegate that  right only  by an

expressstatementinthetrustinstrumentorinapowerofattorneyexecutedinauthenticform

referringtothetrust.

Acts2001,No.594,§2.

§2046.Effectofrevocationorrescission

The settlor may stipulate the effect of revocation or rescission of a disposition.Unless the

trustinstrumentotherwiseprovides,thefollowingrulesshallgovern:

(1)Revocation or rescission shall cause the trust to fail and the trust property held by the

trusteeatthe time such revocationor rescission takes effect shall revert to the settlor orhis

heirs,legatees,orassignees;

(2)Revocation or rescission of a disposition affecting an income beneficiary has  the same

effectasifthebeneficiaryhaddiedontheeffectivedateoftherevocationorrescission;

(3)Revocation or rescission at any time of a disposition in favor of a principal beneficiary

operatesasubstitutionof thesettlor,orhisheirs,legatees,or assigneesasthebeneficiaryof

the interest involved, without affecting the interest of the income beneficiaries; if there are

two or more settlors, each disposition  affecting principal shall be divided into as many

separate dispositions as the number of settlors, and each settlor or his heirs, legatees, or

assignees shall receive a share in proportion to the amount of his contribution to the trust

principal;

(4)Revocation or rescission affects property added to a trust according to the rules of this

section.

(5)Acts of the trustee with regard to the trust property  shall not be affected by the

subsequentrevocationorrescissionofadispositionintrust.Afteratrusthasbeenrevokedor

rescinded, the trustee shall have only  those powers necessary to carry out the effects of the

revocationorrescission.

(6)A person receiving trust property as a result of therevocation or rescission of the trust

shallbe personally liable for the obligations and liabilities of the trust existing on the date of

revocation or rescission to the extent of the value of the trust property received by such

beneficiaryunlessexistingtrustpropertyissufficienttosatisfytheobligationsandliabilitiesof

thetrust.

AmendedbyActs1974,No.128,§1;Acts1995,No.344,§3.

SUBPARTC.FORMALREQUIREMENTS

§2051.Form

A.Amodification, division,termination,orrevocationofatrustshallbebyauthenticactorby

actunderprivatesignatureexecutedinthepresenceoftwowitnesses anddulyacknowledged

bythepersonwhomakesthemodification,division, orterminationorbytheaffidavitofone

of the attesting witnesses.The modification, division, termination, or revocation is not

effectiveastoatrusteeuntilacopyoftheauthenticactoracopyoftheacknowledgedactis

receivedbyhim.

B.A modification, division, termination, or revocation of a trust may also be by testam ent.

Such a modification, division, termination, or revocation is not effective as to a trustee until

thetrusteereceivesa copyofthe testament andofthe orderprobatingitorordering itfiled 

andexecuted.

Acts1995,No.344,§1;Acts2003,No.480,§1.

PARTV.DUTIESANDPOWERSOFTHETRUSTEE

SUBPARTA.GENERALDISPOSITIONS

§2061.Generalrule

The nature and extent of the duties and powers of a trustee are determined from the

provisionsofthetrustinstrument,exceptasotherwiseexpresslyprovidedinthisCode,and,in

theabsenceofanyprovisionsofthetrustinstrument,bytheprovisionsofthisPartandbylaw.



§2062.Limitationofdutiesbysettlor

A provision of the trust instrument that purports to limit a trustee's duty of loyalty to the

beneficiaryisineffective,excepttotheextentpermitted bythisPart.

§2063.Relieffromdutiesbybeneficiary

Bywritten instrument delivered to a trustee a competent beneficiary who is acting upon full

information may, with respect to himself, and with the trustee's consent, relieve the trustee

fromdutiesandrestrictionsconcerningtheadministrationofthetrustthatareimposedupon

thetrusteebythetrustinstrumentorbythisCode,butnosuchinstrumentiseffectivetothe

extentthatitpurportstolimitprospectivelyandingeneraltermsthetrustee'sdutyofloyalty 

tothebeneficiary.

§2064.Judicial permission or direction to deviate from administrative provisions of trust

instrument

The proper court may direct or permit a trustee to deviate from a provision of the trust

instrument concerning the administration of the trust if compliance would defeat or

substantiallyimpairthepurposesofthetrust.

Acts1997,No.252,§1.



§2065.Judicialpermissiontodeviatefromadministrativeprovisionsofthiscode

The proper court for cause shown may relieve a trustee from duties and restrictions that

otherwisewouldbeplaceduponhimbytheadministrativeprovisionsofthisCode.

§2066.Judicial permission or direction to deviate from investment provisions of trust

instrument

The proper court, if convinced that adherence to the investments prescribed by the trust

instrument wouldbe likely to affect adversely the bestinterests of a beneficiary to a serious 

extent,havingdueregardforthepurposesofthetrust,mayuponapplicationbyatrusteeora

beneficiary permit or direct the trustee to invest in securities not prescribed by the trust

instrument,butatrusteeisundernodutytomakesuchanapplicationtothecourt.

§2067.Invasionofprincipal;actionofcourt

The proper court may direct or permit a trustee to pay income or principal from the trust

propertyforthenecessarysupport,maintenance,education,medicalexpenses,orwelfareofa

beneficiarybefore thetime heisentitledtotheenjoymentof that income orprincipal,ifthe

interestofnootherbeneficiary ofthetrustisimpairedthereby.

§2068.Invasionofprincipal;provisionsoftrustinstrument

A.The trust instrument may direct or permit a trustee to pay principal to an income

beneficiary for support, maintenance, education, or medical expenses, or, pursuant to an

objectivestandard,foranyotherpurp ose.Thetrustinstrumentmaydirectthetrusteetopay

allor partofthe principal to an income beneficiary upon therequestof thebeneficiary.The

trustinstrumentmaydirectthetrusteetopaya stipulatedamountorpercentagetoanincome

beneficiaryunderanytrust,includingaunitrustorannuitytrustasdefinedintheUnitedStates

Internal Revenue Code, even if the payments exceed income.The trust instrument may

providethemannerinwhichandtheshareofthetrusttowhichthepaymentshallbecharged;

ifitdoesnot,allpaymentsofprincipalmadeforthebenefitofanincomebeneficiaryshallbe

chargedagainstsuchbeneficiary'ssharein the trust as principalbeneficiary,or,if there is no

suchshare,proportionatelyagainstthesharesofallprincipalbe neficiaries.Exceptasprovided

inR.S.9:1841through1847,treatingthelegitimeintrust,apaymentunderthisSubsectionA

maybemadeeventhoughthepaymentimpairstheinterestofanotherbeneficiary.

B.If the same person is beneficiary of both income and principal, the trust instrument may

direct or permit the trustee in the trustee's complete discretion to invade principal held for

thatbeneficiary.

AmendedbyActs1968,No.133,§1;Acts1972,No.661,§1;Acts1974,No.158,§1;Acts1989, 

No.113,§1;Acts1995,No.220,§1;Acts2003,No.480,§1.

§2069.Winding‐updutyandpowersoftrustee

Ifthetrustterminatesorisrevoked,orif thetrust eeresignsorisremoved,heshallpreserve

thetrustpropertyanddeliver itwithoutdelaytothosepersonswhoareentitledtoit.Untilhe

delivers the property, the trustee shall retain the powers that are necessary to preserve and

deliverittothosepersonswhoareentitledtoit.

Acts1995,No.358,§2.

SUBPARTB.DUTIESOFTHETRUSTEE

§2081.Breachoftrustdefined

Aviolationbyatrusteeofadutyheowestoabeneficiaryastrusteeisabreachoftrust.

§2082.Administrationininterestofbeneficiary;dutyofimpartiality

A.Atrusteeshalladministerthetrustsolelyintheinterestofthebeneficiary.

B.When there is more than one benef iciary, a trustee shall administer the tru st impartially ,

basedon whatisfairand reasonable to allofthe beneficiaries, except to the extent that the

trustinstrumentmanifestsanintentionthatthetrusteeshallormayfavoroneormoreofthe

beneficiaries.

Acts2001,No.520,§1.

§2083.Dealingonownaccount

Atrusteeindealingwithabeneficiary onthetrustee's ownaccountshalldealfairly withhim

andcommunicatetohimallmaterialfactsinconnectionwiththetransactionthatthetrustee

knowsorshouldknow.

§2084.Loanbytrusteetohimself

Acorporatetrusteeshallnotlendtrustfundstoitselforanaffiliate,ortoa director,anofficer

oranemployee ofitselforofanaffiliate,unlessthetrustinstrumentprovides  otherwise.An

individual trustee shall not lend funds to himself, or to his relative, employer, employee,

partner,orotherbusinessassociate,unlessthetrustinstrumentprovidesotherwise.

§2085.Salebytrusteetohimself

A.Acorporatetrusteeshallnotdirectlyorindirectlybuyorsellpropertyforthetrustfromor

toitselforanaffiliate,orfromortoadirector,officer,oranemployeeofitselforanaffiliate,

unlessthe trustinstrumentprovidesotherwise,orunlessspecificallyauthorizedbya courtof

competentjurisdiction,afteracontradictoryhearing.Anindividu altrusteeshallnotdirectlyor

indirectly buy or sell property for the trust from or to himself or his relative, employer,

employee, partner, or other business associate, unless the trust instrument provides

otherwise, or unless specifically authorized by a court of competent jurisdiction, after a

contradictoryhearing.

B.Notrusteeshall,astrusteeofonetrust,sellpropertytohimselfastrusteeofanothertrust ,

unless the trust instruments concerned expressly provide otherwise, or unless specifically

authorized by a court of competent jurisdiction, after a contradictory hearing, except that 

bonds, notes, bills, and other  obligatio ns issued,  or fully guaranteed as to both principal and

interestbytheUnitedStatesofAmerica,orinterestsintimedepositsorcertificatesofdeposit

or other short term investment instruments may be sold from one trust to another only by

corporatetrusteesattheexistingcurrentmarketvalue.

Acts1990,No.359,§1,eff.July10,1990.

§2086.Self‐dealingbycorporatetrustee

A.A corporate trustee shall not purchase for a trust shares of its own stock, or its bonds or

other securities, or the stock, bonds, or other securities of an affiliate, unless the trust

instrument provides otherwise; but the trustee may retain any such securities, together with

anyrightspertainingthereto,ifacquiredotherthanbypurchasebythattrustee.

B.A corporate trustee may invest or reinvest in the securities  of mutual funds registered 

undertheInvestmentCompanyActof1940,evenifthetrusteeoranaffiliatethereofreceives

compensationwithrespecttosuchmutualfund, providedthatthecompensationisreasonable

andthebasisfordeterminingthecompensationisdisclosedtoallbeneficiariesaffectedbythe

investment.

Acts2001,No.520,§1.

§2087.Delegatingperformance

A.ExceptasotherwiseprovidedinthisSection, atrusteeshallnotdelegatetheperformance

ofhisduties.

B.A trustee may delegate theperformanceofacts that hecould notreasonablybe required

toperformpersonally.

C.A trustee may delegate the selection of specific investments by acquiring mutual funds

registered under the InvestmentCompany Act of 1940, or other pooled funds managed by a

third party, so long as the portfolio of such a fund consists substantially of investments not 

prohibitedbythetrustinstrument.

D.(1)A trustee may delegate investment and asset management functions that a prudent

trustee of comparable skills could properly delegate under the circumstances.In connection

withsuchdelegation,thetrusteehasthedutytoexercisereasonablecare,skill,andcautionin

selectingtheagentandestablishingthescopeandtermsofthedelegationconsistentwiththe

purposes and terms of the trust instrument, to review periodically the actions of the agent,

and, in the event of a breach of the agent's duties discovered by the trustee, to take such

actiontoremedythebreachasisreasonableunderthecircums tances.

(2)In performing a delegated function, an agent owes a duty to the trustee and to the

beneficiaries to exercise reasonable care and skill, considering the scope and terms of the

delegation.Anagreementtorelievetheagentfromthatdutyiscontrarytopublicpolicy and

void.

(3)By accepting delegation from a trustee of a trust established pursuant to this Code, an

agent submits  to the jurisdiction of the courts of this state in all matters relating to the

performanceofhisduties.

Acts2001,No.520,§1.

§2088.Accounting

A.Atrusteeisunderadutytoabeneficiarytokeepandrenderclearandaccurateaccountsof

theadministration of thetrust.Ifthetrustisrevocable,the trustee has adutytoaccountto

thesettloronly.

B.Atrusteeshallrendertoabeneficiaryorhislegalrepresentativeatleastonceayearaclear

and accurate account covering his administration for the preceding year.His first annual

account shall relate  to the calendar year during which he became responsible for the trust

property, or, at his option, the first accounting period of not more than twelve months and

shall be rendered within ninety days afterthe expirationof that calendar year or accounting

period.Eachannualaccountshallshowindetail allreceiptsanddisbursementsofcashandall

receipts and deliveries of other trust property during the year, and shall set forth a list of all

itemsoftrustpropertyattheendoftheyear.

C.A trustee upon the termi nation, revocation, or rescission of the trust, or upon his

resignation or removal, shall render to a beneficiary or his legal representative his final

accountcoveringtheperiodelapsedsincehismostrecentannualaccount(or,shouldthetrust

haveterminated,orhavebeenrevokedorrescinded,duringthefirstyear,theperiodelapsed

since he became responsible for the trust property), and setting forth the same information

requiredforannualaccounts.

D.Awrittenapprovalbyabeneficiaryorhislegalrepresentativeofanaccountrenderedbya

trusteeshall be conclusive against the beneficiary with respecttoallmatters  disclosed in the

account.If a beneficiary or his legal representative fail or refuse to approve in writing an

account rendered by a trustee, a trustee may apply to the proper court for an approval

contradictorily with a beneficiary.An approval obtained from the proper court is  conclusive

againstabeneficiarywithrespecttoallmattersdisclosedintheaccountsoapproved.

E.Atrusteeshallnotbeunderaduty,tofilehisaccountswiththecourtunlessheisexpressly

requiredtodosobythetrustinstrumentorbythepropercourt.

Acts2001,No.594,§2.

§2089.Furnishingofinformation

A trustee shall give to a beneficiary upon his request at reasonable times complete and

accurateinformationastothenatureandamountofthetrustproperty,andpermithim,ora

person duly authorized by him, to inspect the subject matter of the trust, and the accounts,

vouchers,andotherdocumentsrelatingtothetrust.

§2090.Prudentadministration

A.A trustee shall administer the trust as a prudent personwouldadminister it.In satisfying

this standard, the trustee shall exercise reasonable care and skill, considering the purposes,

terms,distributionrequirements,andothercircumstancesofthetrust.

B.Atrusteewhohasspecialskills orexpertise,orhasheldhimselfoutashavingspecialskills

orexpertise,hasadutytousethosespecialskillsorexpertise.

Acts2001,No.520,§1.

§2091.Controlandpreservationoftrustproperty

Atrusteeisunderadutytoabeneficiarytotakereasonablestepstotake,keepcontrolof,and

preservethetrustproperty.

§2092.Recordationofinstruments

A.If at any time the trust property of either an inter vivos  trust or a testamentary trust

includesimmovablesor otherproperty the title to whichmustbe recorded inordertoaffect

thirdparties,atrusteeshallfilethetrustinstrument,oranextractthereof,forrecordineach

parishinwhichthepropertyislocated.

B.(1)For purposes of recording an extract of a  trust instrument, such an extract shall be

executedbyeitherthesettlororthetrusteeandshallincludeallofthefollowing:

(a)Thenameofthetrust,ifany.

(b)Astatementastowhetherthetrustisrevocable orirrevocable.

(c)Thenameofeachsettlor.

(d)The name of each trustee and name or other description of the beneficiary or

beneficiaries.

(e)Thedateofexecutionofthetrust.

(f)A brief description of the immovable property or other property subject to the trust, the

titletowhichmustberecordedinordertoaffectthirdpersons. 

(2)TheprovisionsofthisSectionauthorizingthefilingofanextractofthetrustinstrumentare

remedial and shall be applied retroactively to any trust extract theretofore filed for record

whichisinsubstantialcompliancewiththeprovisionsofthisSubsection,andsuchextractshall

affect third persons as of the date  of recordation.If the extract of an inter vivos trust

instrument is recorded, the failure of the trust instrument to be in the form r equired by R.S.

9:1752shallnotbeeffectiveagainstthirdparties,whoshallbeimmunefromclaimsbasedon

thefailureofthetrustinstrumenttobeintheformrequiredbyR.S.9:1752.

Acts1995,No.257,§1;Acts2003,No.731,§1;Acts2004,No.491,§1.

NOTE:SEEACTS1987,NO.164,§3.

§2093.Defenseofactions

Atrusteeshalldefendactionsthatmayresultinalosstothetrustestate,unlessunderallthe

circumstancesitisreasonablenottomakeadefense.

2094.Separationoftrustproperty

A trustee shall keep the trust property separate from his individual property, and, so far as

reasonable, keep it separate from other property not subject to the trust, and see that the

propertyisdesignatedaspropertyofthetrust,unlessthetrustinstrumentprovidesotherwise

§2095.Bankdeposits

Althoughatrusteecanproperlymakeageneralde positoftrustmoneyinabank,heshalluse

reasonable care in selecting the bank and properly earmark the deposit as a deposit of trust

fundsbyhimastrustee,unlessthetrustinstrumentprovidesotherwise.

A corporate trustee making a general deposit of trust money with an affiliate or its own

banking department has a duty to a beneficiary to obtain as security for the deposit readily

marketablebondsorotherobligationshavingandmaintainingamarketvalueatleastequalto

the amount of the deposit, unless dispensed from doing so by specific words in the trust

instrument, butsuchadispensationshallnot be construedaspreventinga corporatetrustee

fromputtingupsecurityforadepositoftrustmoneyifitdesirestodoso.Nosecurityshallbe

required for any deposit up to the amount insured by the Federal Deposit Insurance

Corporation.

AmendedbyActs1982,No.279,§1.

§2096.Co‐trustees

Iftherearetwoormoretrustees,eachshallparticipateintheadministrationofthetrustand

use reasonable care to prevent a co‐trustee from committing a breach of trust and shall

compelhimtoredressabreachoftrust.

§2097.Servingasofficeroflegalentityinwhichtrustfundsinvested

A.No trustee of any trust created under the laws of this state shall serve as an officer,

including without limitation the president, vice president, secretary, treasurer, manager, or

managingpartnerofanylegalentityformedafterthetrustiscreated,otherthanacorporate

trustee, in which trust funds are invested unless the settlor so authorizes such action in the

instrumentcreatingthetrustorbya subsequentmodificationthereof.However,thisshallnot

restricttheinvestmentoftrustfundsinanybankorsavingsandloanassociationwithdeposits

therein insured by the Federal Deposit Insurance Corporation or by any other agency or

instrumentalityofthefederalgovernment.

B.Anytrusteewhoviolatestheprovisionsofthissectionshallbesubjecttoremovalforcause

byacourtofcompetentjurisdiction.Thebeneficiaryofanysuchtrustmayofferprooftothe

court of competent jurisdiction that a trustee is acting in violation of this section, and upon

presentationofsuchproof,thecourtshallremovethetrustee.

C.Alllawsorpartsoflawsinconflictherewithareherebyrepealed,buttheprovisionshereof

shallnotbeconstruedtorepealR.S.9:2081throughR.S.9:2096.

Acts1968,No.627,§§1to3;Acts1997,No.251,§1.

SUBPARTC.POWERSOFTHETRUSTEE

§2111.Extentofpowers

Except as stated in R.S. 9:2061 through 9:2066, a trustee shall exercise only those powers

conferred upon him by the provisions of the trust instrumentor  necessary or appropriate to

carry out the purposes of the trust and are not forbidden by the provisions of the trust 

instrument.

§2112.Attachmentofpowerstooffice

All powers of a trustee shall be attached to the office and shall not be personal, unless it is

otherwiseprovidedbythetrustinstrumentorbyorderofthepropercourt.

§2113.Exerciseofpowersbytwotrustees

Iftherearetwotrustees,thepowersconferreduponthemshallbeexercisedonlybybothof

them,unlessitisotherwiseprovidedbythetrustinstrumentorbyorderofthepropercourt.

§2114.Threeormoretrustees;exerciseofpowers

A power vested in three or more trustees may be exercised by a majority of the trustees,

unless the trust instrument provides  otherwise.A trustee who has not joined in exercising  a

power shall not be liable to the beneficiaries or to others for the consequences of that

exercise, nor shall a disse nting trustee be liable for the consequences of an act in which he

joinsatthedirectionofthemajorityoftrustees,ifheexpresseshisdissentinwritingtohisco‐

trusteesatorbeforethetimeofthejoinder.Nothinginthissectionshallexcuseaco‐trustee

from liability for inactivity in the administration of the trust nor for failure to attempt to

preventabreachoftrust.

§2115.Controlofdiscretionarypowers

If discretion is conferred upon a trustee with respect to the exercise of a power, its exercise

shall not be subject to control by the court, except to prevent an abuse of discretion by a

trustee.

§2116.RepealedbyActs2001,No.520,§5.

§2117.Expensesthatmaybeincurred

A trustee may incur expenses necessary to carry out the purposes of the trust and not

forbidden by the provisions of the trust instrument, and other expenses authorized by the

provisionsofthetrustinstrument.

§2118.Leaseoftrustproperty

Unless the trust instrument provides otherwise, a trustee may enter into leases of trust

property,includingoil,gas,andmineralleases,eitheraslessororlessee,forsuchperiodsand

withsuch provisionsasarereasonable,whetherornotthetermoftheleaseexceedstheterm

ofthetrust.

AmendedbyActs1968,No.134,§1.

§2119.Saleoftrustproperty

A trustee may sell trust property unless the sale is forbidden in specific words by the trust

instrumentorunlessitappearsfromtheprovisionsofthetrustinstrumentthatthepropertyis

toberetainedinkind.Asettlorbytheprovisionsofthetrustinstrumentcannotforbidasale

ofimmovablepropertyforaperiodbeyondfifteenyearsfromhisdeath.

§2120.Mortgageorpledge;borrowing

Atrusteemaymortgageorpledgetrustproperty,orborrowmoneyonthecreditofthetrust

estateandchargethetrustestatetherefor,unlessthetrustinstrumentprovidesotherwise.

§2121.Compromise,arbitration,andabandonmentofclaims

A trustee may compromise, submit to arbitration, or abandon claims affecting the trust

property.

§2122.Powerswithrespecttosharesofstock

A trustee may exercise all powers of holders of shares of stock or other securities, including

therighttovoteinpersonorbyproxy.

§2123.Stocksubscription;incorporator;organizer;partnership;jo int venture;limitedliability

company;otherlegalentities

Atrusteemayacquireandsubscribeforcorporateshares,actasanincorporatorororganizer,

orbecome a member of a partnership, jointventure, limited liability company, orotherlegal

entity,unlessthetrustinstrumentprovidesotherwise.

Acts1997,No.251,§1.

§2124.Holdingstockinnameofnominee

Atrustee owningstockmayholditinthenam eofanominee,withoutmentionofthetrustin

thestockcertificateorstockregistrationbook,providedthatthetrustrecordsandallreports

or accounts rendered by a trustee clearly show the ownership of the stock and the facts

regardingitsholding.Atrusteeshallbepersonallyliableforanylosstothetrustresultingfrom

anyactofthenomineeinconnectionwithstocksoheld.

§2125.Contractualliabilityoftrust

A.Ifatrusteemakesacontractthatiswithinhispowersastrustee,orifapredecessortrustee

hasmadesuchacontract,andifacauseofactionarisesthereon,thepartyinwhosefavorthe

cause of action has accrued may sue the trustee in his representative capacity.A judgment

rendered in the action in favor of the plaintiff shall affect or be satisfied out of the trust

property.

B.Abenefici arymayinterveneinsuchanactionforthepurposeofcontesting therightofthe

plaintifftorecover.

C.Theplaintiffmayalso holdatrusteewhomakesacontractpersonallyliableonthecontract,

if the contract does not exclude personal liability. The addi tion of the word "trustee" or the

words"astrustee"together withlanguageide ntifyingthetrust,afterthesignatureofatrustee

to a contract, shall be deemed prima facie evidence of an intent to exclude a trustee from

personalliability.

§2126.Tortliabilityoftrust

A.If a  trustee or his predecessor has incurred personal liability for a tort committed in the 

courseofadministration,thetrusteeinhisrepresentativecapacitymaybesuedandcollection 

hadfromthetrustproperty,ifthecourt determinesinsuchanaction:

(1)Thatthetortwasacommonin cidentofthekindofbusinessactivityinwhichthetrusteeor

hispredecessorwasproperlyengagedforthetrust;or

(2)That, although  the tort was not a common incident of such an activity, neither a trustee

norhispredecessornoranofficeroremployeeofthetrusteeorhispredecessorwasguiltyof

personalfaultinincurringtheliability;or

(3)That, although the tort does not fall within paragraphs (1) or (2) above, it increased the

valueofthetrustproperty.

B.Ifthetortfallswithinparagraphs(1)or(2)ofSub‐sectionAabove,collectionmaybehadof

the full amount of damage proved and, if the tort falls  within paragraph (3) of Sub‐section A 

above, collection may be had only to the extent of the increase in the value of the trust

property.

C.Abeneficiarymayinterveneinsuchanactionforthepurposeofcontestingtherightofthe

plaintifftorecover.

D.Atrusteemayalsobeheldpersonallyliableforanytortcommittedbyhimorhisagentsor

employees in the course of their employment, subject to the right of exoneration or

reimbursementprovidedinR.S.9:2191through9:2196.

§2127.Standardofcareininvestingandmanagement

Unless the trust instrument provides otherwise, a trustee shall invest and manage trust

property as a prudent investor.In satisfying this standard, the trustee shall consider the

purposes,terms, distribution  requirements, and othercircumstancesofthe trust.Atrustee's

investmentandmanagementdecisionsaretobeevaluatedinthecontextofthetrustproperty

as a whole and as part of an overall investment strategy having risk and return objectives

reasonablysuitedtothetrust.Ininvestingwithinthelimitationsoftheforegoingstandard,a

trusteeisauthorizedtoretainandacquireeverykindofproperty.

Acts1986,No.178,§1;Acts1991,No.665,§2;Acts2001,No.520,§1.

§2128.Commontrustfunds

A.Atrusteemayestablishcommontrustfundsfortheinvestmentoftrustfundsofwhichheis

trustee or cotrustee and may invest in such common trust funds, if such investment is not

prohibitedbythetrustins trument,andifthetrusteeprocurestheconsentofhiscotrustees to 

theinvestment;providedthat:

(1)Therecords,reports,andaccountsofeachtrusthavinganinterestinthefundclearlyshow

theextentofsuchinterest;and

(2)Thetrusteehimselfhasnointerestinsuchfund;and

(3)The fractional part of the management fee charged by the trustee proportionate to the

interest of each beneficiary shall not, when added to any other compensation charged by a

trustee to a beneficiary, exceed the total amount of compensation which would have been

chargedtothebeneficiary ifnoassetsofthebeneficiaryhadbeeninvestedinthefund;and

(4)Thefundismaintainedunderawrittenplanthatisonfileattheofficeofthetrusteeandis

availableforinspectionduringbusinesshoursbyanyinterestedparty;and

(5)Thetrusteehashadprepared annuallybyacertifiedpublicaccountantandplacedonfile

withthetrustee,astatementoftheinvestmentchanges,income,disbursements,andalistof

the current investments with a notation as to defaults, for the period since the last such

statement.The trustee shall notify each beneficiar y  that a copy of the annual statement is

availableandwillbefurnishedtothebeneficiaryonrequest;and

(6)Entrances into, and withdrawals from, such common trust fund are permitted only on

thosedaysuponwhichtheassetscomprisingthefundarevalued;and

(7)No funds are admitted to the common trust fund at a time when less than forty per

centumofthevalueofthecommontrustfundiscomposedofcashormarketableinvestments

forwhichquotationsarereadilyavailable;and

(8)The fund is managed in accordan ce with any regulations  pe rtaining thereto issued from

timetotimebytheofficeoffinancialinstitutions;and

(9)On the termination of a trust interested in the common trust fund, the trustee shall

terminate the interestof that trust and shall pay from cash in the common trust fund to the

personorpersonsthenentitledtothetrustcapitalthethenmarketvalueoftheinterestofthe

trustinthecommontrustfund.

B.Ifthetrusteeisrestrictedtocertaininvestments,thenhemayinvestonlyincommontrust

fundslimitedtosuchinvestments.

C.Atrustee whohasestablishedacommontrustfundfortheinvestmentoftrustfundsmay

also invest therein any other funds that he holds as a fiduciary, provided he procures the

consentofhisco‐fiduciaries.

D.ForthepurposeofthisSection,theterm"trust ee"shallincludetwoormoretrusteeswho

aremembersofthesame"affiliatedgroup"asdefin edinSection1504oftheInternalRevenue

Code of 1954, as amended, with respectto any fund established pursuant to this Section, of

whichanyofsuchtrusteeistrusteeorcotrustee.

Acts1986,No.179,§1.

§2129.Corporatetrustees;depositofsecuritiesinclearingcorporation

A.Unlessthetrustinstrumentprovidesotherwise,acorporatetrusteemaydepositorarrange

fordepositinaclearingcorporationsecuritiesheldbyitasfiduciaryorasagentforafiduciary

or nonfiduciary, provided the records maintained by the corporate trustee with respect to

thosesecuritiesdisclosethecapacityinwhichtheyareheld.

B.Securities depositedinaclearing corporation may beregisteredin the nameofeither the

clearingcorporationoritsnomineewithoutdisclosingthecapacityinwhichtheyareheld.

C.Securitiesdepositedinaclearingcorporationmaybestoredtogetherwithothersecurities

of the same class of the same issuer also stored in the clearing corporation, but not the

securities of the clearing corporation, and may be combined with such other securities into

oneormoresecuritiesofthesameclassofthesameissuer.

AddedbyActs1983,No.346,§1.

§2130.Transferoffiduciaryaccounts

A.NotwithstandinganyotherprovisionofthisChaptertothecontrary,anytwoormorebanks

authorized to exercise fi duciary powers may enter into an agreement under which a bank 

domiciledinthestateofLouisianaissubstitutedasfiduciaryforeachexistingfiduciaryaccou nt

listed in the agreement.The agr eement shall be filed with the commissioner of financial

institutionsforapprovalorotherdispositionwithinthirtydays,andshallbeaccompaniedbya

feetobedeterminedbythecommissionerbyrule.

B.Followingapprovalbythecommissioner andnotlaterthansixtydayspriortotheeffective

dateofasubstitutionunderthisSection,thetransferringbankshallsendwrittennoticeofthe

substitution of fiduciary to each interested party for each fiduciary account listed in the

agreement.Forpurposesof this Section, anintere sted partyshallincludeonlythe following,

eachasmaybeappropriatetotherespectivefiduciaryaccount:

(1)Eachadultbeneficiary.

(2)Each parent, tutor, or guardian of a  minor beneficiary receiving or entitled to receive

currentdistributionsofincomeorprincipal.

(3)Eachco‐fiduciary.

(4)Eachpersonwhoaloneoractinginconjunctionwithothershasthepowertoremovethe

transferringbank.

(5)Eachsurvivingsettlor.

(6)Eachissuerofasecurityforwhichthetransferringbankadministersafiduciaryaccount.

(7)Theplansponsorofeachemployeebenefitplan.

(8)Theprincipalofeachagencyaccount.

(9)Thecuratorofthepersonofeachinterdictundercuratorship.

C.ThenoticeshallbesentbyUnitedStatesmailtotheperson'scurrentaddressasshownon

therecordsofthetransferringbank.Ifthetransferringbankhasno addressonitsrecords,the

transferring bank shall make a reasonable attempt to ascertain the person's current address.

The notice shall disclose the person's rights with respect to objecting to the transfer of the

fiduciary account.Intentional failure to send the required notice renders the substitution of

fiduciary ineffective, but an unintentional failure to send the required notice shall not impair

the validity or effect of the substitution.If a substitution is determined to be ineffective

becauseofadefectintherequirednotice,theactionstakenbythesubstitutebankbeforethe

determinationoftheinvalidityofthesubstitutionshallbevalidif theactions wouldhavebeen

validifperformedbythetransferringbank.

D.Except as provided by this Subsection, the prospective designation in a will or other

instrument of the transferring bank as fiduciary shall be considered designation of the

substitute bank.However, the transferring bank and substitute bank may agree in writingto

have the designation of the transferring bank as fiduciary of particular fiduciary accounts

remain 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Section.

E.S ubstitution under this Section shall be effective for all purposes on the effective date

statedintheagreementbetweenthetwobanks unless,notlaterthanfifteendayspriortothe

effectivedate:

(1)An inter ested party entitled to notice under this Section who possesses the lawful

authority to designate the trustee or successor trustee sends via certified mail a written

objectionto the proposedtransferoftheparti cular account.Uponreceipt ofsuch objection,

the transferring bank shall remove that account from the operation of the agreement.The

transferringbankshall,  uponthe directionofsuch interestedparty, transfertheaccounttoa

qualifiedsuccessor.

(2)AnyotherinterestedpartyentitledtonoticeunderthisSectionfilesawrittenpetitionina

courtofcompetentjurisdictionandvenueseekingtohavethesubstitutiondeniedandserves

the transferring bank and the substitute bank with a copy of the filed petition.The

substitution may be denied if the court, on notice and hearing, determines that the

substitution of fiduciary is a material detriment to the account or to the beneficiaries of  the

account.

F.SubsectionEofthisSectionshallbecumulativetoanyapplicableprovisionsforremovalofa

fiduciary or appointment of a successor fiduciary in any other statute or in the instrument

creatingthefiduciaryrelationship.

G.On the effective date of the substitution, the substitute bank shall succeed to all rights,

title, and interest in all property that the transferring bank holds as fiduciary in the listed

accounts, without the necessity of any instrument of transfer or conveyance, and the

substitute bank 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thefiduciarycapacityinthesame

mannerasifthesubstitu tebankhadbeenoriginallynamedordesignatedfiduciary.However,

thetransferringbankshall beresponsibleandliableforallactionstakenbyitwhileitactedas

fiduciary.

H.A fiduciary account may be removed from the operation of the agreement by an

amendmenttothea greementfiledwiththecommissionerpriortotheeffectivedatestatedin

theagreement.

Acts1990,No.191,§1;Acts1991,No.665,§1;Acts2001,No.532,§1,eff.June21,2001