75B-1 - General Provisions

Title 75B > 75B-1

Sections (16)

General Provisions

75B-1-101 - Definitions for title.

As used in this title: 75B-1-101(1) “Agent” means the same as that term is defined in Section 75-1-201. 75B-1-101(2) “Beneficiary” means a person that:has a present or future beneficial interest in a trust, vested or contingent; orin a capacity other than that of trustee, holds a power of appointment over trust property. 75B-1-101(3) “Charitable trust” means a trust, or portion of a trust, created for a charitable purpose described in Subsection 75B-2-405(1). 75B-1-101(4) “Child” means, except as provided in Sections 75B-2-503 and 75B-2-504, the same as that term is defined in Section 75-1-201. 75B-1-101(5) “Claims” means the same as that term is defined in Section 75-1-201. 75B-1-101(6) “Conservator” means the same as that term is defined in Section 75-1-201. 75B-1-101(7) “Court” means a court with jurisdiction under Title 78A, Judiciary and Judicial Administration. 75B-1-101(8) “Descendant” means the same as that term is defined in Section 75-1-201. 75B-1-101(9) “Devise” means the same as that term is defined in Section 75-1-201. 75B-1-101(10) “Distributee” means the same as that term is defined in Section 75-1-201. 75B-1-101(11) “Estate” means the same as that term is defined in Section 75-1-201. 75B-1-101(12) “Fiduciary” means the same as that term is defined in Section 75-1-201. 75B-1-101(13) “Governing instrument” means the same as that term is defined in Section 75-1-201. 75B-1-101(14) “Guardian” means the same as that term is defined in Section 75-1-201. 75B-1-101(15) “Incapacitated” means the same as that term is defined in Section 75-1-201. 75B-1-101(16) “Income” means the same as that term is defined in Section 75A-5-102. 75B-1-101(17) “Interested person” means, except as provided in Section 75B-2-110, the same as that term is defined in Section 75-1-102. 75B-1-101(18) “Lease” means the same as that term is defined in Section 75-1-201. 75B-1-101(19) “Minor” means an individual who is younger than 18 years old. 75B-1-101(20) “Mortgage” means the same as that term is defined in Section 75-1-201. 75B-1-101(21) “Nongeneral power of appointment” means the same as that term is defined in Section 75A-4-102. 75B-1-101(22) “Organization” means the same as that term is defined in Section 75-1-201. 75B-1-101(23) “Parent” means the same as that term is defined in Section 75-1-201. 75B-1-101(24) “Person” means the same as that term is defined in Section 75-1-201. 75B-1-101(25) “Personal representative” means the same as that term is defined in Section 75-1-201. 75B-1-101(26) “Petition” means the same as that term is defined in Section 75-1-201. 75B-1-101(27) “Power of appointment” means the same as that term is defined in Section 75A-4-102. 75B-1-101(28) “Principal” means the same as that term is defined in Section 75A-5-102. 75B-1-101(29) “Property” means the same as that term is defined in Section 75-1-201. 75B-1-101(30) “Protected person” means the same as that term is defined in Section 75-1-201. 75B-1-101(31) “Record” means the same as that term is defined in Section 75-1-201. 75B-1-101(32) “Security” means the same as that term is defined in Section 75-1-201. 75B-1-101(33) “Settlor” means a person, including a testator, who creates, or contributes property to, a trust.If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion. 75B-1-101(34) “Sign” means the same as that term is defined in Section 75-1-201. 75B-1-101(35) “State” means the same as that term is defined in Section 75-1-201. 75B-1-101(36) “Successor” means a person, other than a creditor, that is entitled to property of a decedent under the decedent’s will or Title 75, Utah Uniform Probate Code. 75B-1-101(37) “Testator” means the same as that term is defined in Section 75-1-201. 75B-1-101(38) “Trust” means:a health savings account, as defined in Section 223 of the Internal Revenue Code;an express trust, private or charitable, with additions thereto, wherever and however created; ora trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust.”Trust” does not include:a constructive trust;a resulting trust;a conservatorship;a personal representative;a trust account as defined in Title 75, Chapter 6, Nonprobate Transfers;a custodial arrangement under Title 75A, Chapter 8, Uniform Transfers To Minors Act;a business trust providing for certificates to be issued to beneficiaries;a common trust fund;a voting trust;a preneed funeral plan under Title 58, Chapter 9, Funeral Services Licensing Act;a security arrangement;a liquidation trust;a trust for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind; orany arrangement under which a person is nominee or escrowee for another person. 75B-1-101(39) “Trust company” means the same as that term is defined in Section 7-5-1. 75B-1-101(40) “Trustee” means an original, additional, and successor trustee, and cotrustee, whether or not appointed or confirmed by the court. 75B-1-101(41) “Trust instrument” means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto. 75B-1-101(42) “Ward” means the same as that term is defined in Section 75-1-201. 75B-1-101(43) “Will” means the same as that term is defined in Section 75-1-201.

75B-1-102 - Transition clause.

If, at the time a trust or another legal document was executed, the document contained a correct citation to a provision in Title 22, Fiduciaries and Trusts, and Title 75, Utah Uniform Probate Code, that, after the execution of the document, was renumbered and amended for inclusion in this title, that citation is a valid citation to the same provision in this title.

75B-1-103 - Death of trustee — Trust estate vests in successor.

Upon the death of a sole or surviving trustee of an express trust: 75B-1-103(1) the trust estate does not descend to the trustee’s heirs or pass to the trustee’s personal representatives; and 75B-1-103(2) the trust estate immediately vests in the successor trustee upon the appointment and qualification of a successor trustee.

Retirement Trust

75B-1-201 - Definitions for part.

As used in this part, “retirement trust” means a trust: 75B-1-201(1) created by an employer as part of a pension, stock bonus, disability, death benefit, profit sharing, retirement, or similar plan primarily for the benefit of an employee or the employee’s family, appointee, or beneficiary; 75B-1-201(2) to which contributions are made by the employer or employee; and 75B-1-201(3) that is created for the purpose of distributing principal or income to the employee or the employee’s family, appointee, or beneficiary.

75B-1-202 - Retirement trusts exempted from rules against perpetuities, accumulations, or suspension of power of alienation.

75B-1-202(1) A retirement trust is not invalid as violating a rule against perpetuities, a rule against accumulations, a rule concerning the suspension of the power of alienation of title to property, or any other law restricting or limiting the duration of trusts. 75B-1-202(2) A retirement trust may continue in perpetuity or for the time that is necessary to accomplish the purposes for which the retirement trust was created.

75B-1-203 - Income permitted to accumulate.

The income arising from or earned by the property held in a retirement trust is permitted to accumulate, in accordance with the terms of the trust: 75B-1-203(1) for the time period permitted by the instrument creating the trust; or 75B-1-203(2) if the instrument creating the trust does not specify a time period, for the time period that is necessary for a trustee of the trust to accomplish the purposes for which the trust was created.

Asset Protection Trust

75B-1-301 - Definitions for part.

As used in this part: 75B-1-301(1) “Asset protection trust” means a trust:that is irrevocable;of which the settlor:is a beneficiary; ormay be made a beneficiary by the act or action of a person other than the settlor; andmeets the requirements of this part. 75B-1-301(2) “Creditor” means:a creditor or other claimant of the settlor existing when the asset protection trust is created; ora person who subsequently becomes a creditor of the settlor, including whether or not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured:holding or seeking to enforce a judgment entered by a court or other body having adjudicative authority; orwith a right to payment. 75B-1-301(3) “Domestic support obligation” means:a child support judgment or order;a spousal support judgment or order; oran unsatisfied claim arising from a property division in a divorce proceeding. 75B-1-301(4) “Insolvent” means:having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute;being unable to pay debts as they become due; orbeing insolvent within the meaning of federal bankruptcy law. 75B-1-301(5) “Paid and delivered” does not include the settlor’s use or occupancy, as a beneficiary, of real property or personal property owned by the asset protection trust if the use or occupancy is in accordance with the trustee’s discretionary authority under the trust instrument. 75B-1-301(6) “Personal property” includes intangible and tangible personal property. 75B-1-301(7) “Transfer” means any form of transfer of property, including gratuitous transfers, whether by deed, conveyance, or assignment.

75B-1-302 - Asset protection trust. — Governing law.

75B-1-302(1) A creditor of a settlor of an asset protection trust may not:satisfy a claim or liability of the settlor in either law or equity out of the settlor’s transfer to the asset protection trust or the settlor’s beneficial interest in the asset protection trust;force or require the trustee to make a distribution to the settlor, as beneficiary; orrequire the trustee to pay any distribution directly to the creditor, or otherwise attach the distribution before the distribution has been paid or delivered by the trustee to the settlor, as beneficiary. 75B-1-302(2) Notwithstanding Subsection (1), this part does not:prohibit a creditor from satisfying a claim or liability from the distribution once the distribution has been paid or delivered by the trustee to the settlor, as beneficiary; ornullify or impair a security interest that was granted by a settlor or a trustee with respect to property that is transferred to the asset protection trust. 75B-1-302(3) A trust is subject to this part if:the trust is governed by the laws of this state as described in Section 75B-2-107; andthe trust meets the requirements of this part. 75B-1-302(4) Notwithstanding Subsection 25-6-402(2), a court of this state has exclusive jurisdiction over an action or claim for relief that is based on a transfer of property to an asset protection trust.

75B-1-303 - Requirements for asset protection trust.

75B-1-303(1) For the protections described in Subsection 75B-1-302(1) to apply to an asset protection trust, the asset protection trust shall comply with this section. 75B-1-303(2) The trust instrument shall:provide that the trust is governed by Utah law and is established in accordance with this part;require that at all times at least one trustee be a Utah resident or Utah trust company;provide that the settlor, as a beneficiary, may not voluntarily or involuntarily transfer:the income or principal of the asset protection trust; orany other beneficial interest of the settlor;require that the trustee notify in writing every person who has a domestic support obligation against the settlor at least 30 days before paying and delivering any distribution to the settlor as a beneficiary; andrequire that the notice described in Subsection (2)(a)(iv) state the date that the distribution will be paid and delivered and the amount of the distribution.The provision described in Subsection (2)(a)(iii) is considered a restriction on the transfer of the settlor’s beneficial interest in the asset protection trust that is enforceable under applicable nonbankruptcy law within the meaning of 11 U.S.C. Sec. 541(c)(2).If the trustee does not send the notice required under Subsections (2)(a)(iv) and (v), the court may authorize any person with a domestic support obligation against the settlor to whom notice was not sent to attach the distribution or future distributions. Notwithstanding Subsection (2)(c)(i), the person described in Subsection (2)(c)(i) may not:satisfy a claim or liability in either law or equity out of the settlor’s transfer to the trust or the settlor’s beneficial interest in the trust; orforce or require the trustee to make a distribution to the settlor as a beneficiary.This Subsection (2) does not require particular language to be used in the trust instrument if the meaning of the trust provision otherwise complies with this section. 75B-1-303(3) The settlor may not have the ability under the trust instrument, without the consent of a person who has a substantial beneficial interest in the trust and whose interest would be adversely affected by the exercise of the power held by the settlor:to revoke, amend, or terminate all or any part of the trust; orto withdraw any property from the trust, except that the settlor, without the approval or consent of any person, may be given the power under the trust instrument to substitute assets of substantially equivalent value. 75B-1-303(4) Except as provided in Subsections 75B-1-304(5)(c) and (6), the trust instrument may not provide for any mandatory distributions of either income or principal to the settlor, as a beneficiary. 75B-1-303(5) At the time the settlor transfers any assets to the asset protection trust, the settlor may not:be in default of making a payment due under a domestic support obligation; orintend to hinder, delay, or defraud a known creditor by transferring the assets to the trust.A settlor’s expressed intention to protect assets in the asset protection trust from the settlor’s potential future creditors is not evidence of an intent to hinder, delay, or defraud a known creditor under Subsection (5)(a)(ii). 75B-1-303(6) A transfer of assets to the asset protection trust may not:render the settlor insolvent; orbe derived from unlawful activities. 75B-1-303(7) A creditor of the settlor has the burden of proving that the requirement in Subsection (5)(a)(ii) or (6)(a) is not satisfied by clear and convincing evidence. 75B-1-303(8) If an asset protection trust does not comply with a requirement described in Subsection (2)(a)(i), (2)(a)(ii), (2)(a)(iii), (3), or (4), none of the property held in the asset protection trust will at any time have the benefit of the protections described in Subsection 75B-1-302(1).If a transfer of assets to an asset protection trust does not comply with the requirement described in Subsection (5)(a)(i), the property transferred to the asset protection trust that does not comply with the requirement does not have the benefit of the protections described in Subsection 75B-1-302(1) with respect to any person with the domestic support obligation.If a transfer of assets to an asset protection trust does not comply with the requirement described in Subsection (5)(a)(ii) or (6), the property transferred to the trust that does not satisfy the requirement may not have the benefit of the protections described in Subsection 75B-1-302(1).

75B-1-304 - Application of asset protection trust.

75B-1-302(1) may apply to an asset protection trust even if: 75B-1-304(1) the settlor serves as a cotrustee or as an advisor to the trustee, except that the settlor may not determine whether a discretionary distribution will be made; 75B-1-304(2) the settlor participates in a determination regarding whether a discretionary distribution is made to the settlor by:requesting a distribution from the trust;consulting with the trustees regarding whether a discretionary distribution will be made;exercising a right to consent to or veto the distribution under a power described in Subsection (5)(a);signing documentation in the settlor’s capacity as a cotrustee that implements a distribution when the other trustees use discretionary power to independently authorize a distribution; orparticipating in an action authorizing a distribution if the other trustees can authorize the distribution without the settlor’s participation; 75B-1-304(3) the settlor has the authority under the terms of the trust instrument to appoint a nonsubordinate advisor or a trust protector who can remove and appoint trustees and who can direct, consent to, or disapprove distributions; 75B-1-304(4) the settlor has the power under the terms of the trust instrument to serve as an investment director or to appoint an investment director under Section 75B-2-906; 75B-1-304(5) the trust instrument gives the settlor:the power to consent to or veto a distribution from the trust;an inter vivos or a testamentary nongeneral power of appointment or similar power; orthe right to receive the following types of distributions:income, principal, or both in the discretion of a person, including a trustee other than the settlor;principal, subject to an ascertainable standard set forth in the trust;income or principal from a charitable remainder annuity trust or charitable remainder unitrust, as defined in 26 U.S.C. Sec. 664;a percentage of the value of the trust each year as determined under the trust instrument, but not exceeding the amount that may be defined as income under 26 U.S.C. Sec. 643(b);the transferor’s potential or actual use of real property held under a qualified personal residence trust, or potential or actual possession of a qualified annuity interest, within the meaning of 26 U.S.C. Sec. 2702 and the accompanying regulations;income or principal from a grantor retained annuity trust or grantor retained unitrust that is allowed under 26 U.S.C. Sec. 2702; andincome from a trust intended to qualify for the federal estate tax or gift tax marital deduction under 26 U.S.C. Sec. 2056(b)(7) or 2523(f); 75B-1-304(6) the trust instrument authorizes the settlor, as a beneficiary, to use real or personal property owned by the trust; or 75B-1-304(7) with respect to the property held in the trust, the settlor may:give a personal guarantee on a debt or obligation secured by the property;make payments, directly or indirectly, on a debt or obligation secured by the property;pay property taxes, casualty and liability insurance premiums, homeowner association dues, maintenance expenses, or other similar expenses on the property; orpay income tax on income attributable to the portion of property held in the trust, of which the settlor is considered to be the owner under 26 U.S.C. Secs. 671 through 678, which payments will not be considered additional transfers to the trust for purposes of this part.

75B-1-305 - Illusory agreement.

75B-1-306 - Affidavit of solvency.

75B-1-306(1) the settlor has full right, title, and authority to transfer the assets to the trust; 75B-1-306(2) the transfer of the assets to the trust will not render the settlor insolvent; 75B-1-306(3) the settlor does not intend to hinder, delay, or defraud a known creditor by transferring the assets to the trust; 75B-1-306(4) there is no pending or threatened court action against the settlor, except for a court action identified by the settlor on an attachment to the affidavit; 75B-1-306(5) the settlor is not involved in an administrative proceeding that is reasonably expected to have a material adverse effect on the financial condition of the settlor, except an administrative proceeding identified on an attachment to the affidavit; 75B-1-306(6) at the time of the transfer of the assets to the trust, the settlor is not in default of a domestic support obligation; 75B-1-306(7) the settlor does not contemplate filing for relief under the provisions of United States Code, Title 11, Bankruptcy; and 75B-1-306(8) the assets being transferred to the trust were not derived from unlawful activities.

75B-1-307 - Limitations on cause of action for asset protection trust.

75B-1-307(1) Except as provided in Subsection (1)(b), a cause of action or claim for relief under this part is not a cause of action or claim for relief under Title 25, Chapter 6, Uniform Voidable Transfers Act.A cause of action or claim for relief under Subsections 75B-1-303(5)(a) and (6)(a) is a cause of action or claim for relief under Section 25-6-202 or 25-6-203.A person, including a creditor, may only bring a cause of action under Subsection 75B-1-303(5)(a) or (6)(a) with regard to the portion of the assets transferred to the trustee of the asset protection trust within the time period described in Subsection (2). 75B-1-307(2) Notwithstanding Section 25-6-305, a cause of action or claim for relief regarding a fraudulent conveyance or other voidable transfer of a settlor’s assets under this part is extinguished unless the action is brought by a creditor of the settlor who was a creditor of the settlor before the assets in question were transferred to the asset protection trust and the action is brought within the earlier of:the later of two years after the transfer is made, or one year after the transfer is or reasonably could have been discovered by the creditor if the creditor:can demonstrate, by clear and convincing evidence, that the creditor asserted a specific claim against the settlor before the transfer; orfiles another action, other than an action alleging a fraudulent conveyance or other voidable transfer against the settlor that asserts a claim based on an act or omission of the settlor that occurred before the transfer, and the action described in this Subsection (2) is filed within two years after the transfer; orwith respect to a creditor known to the settlor, 120 days after the date on which notice of the transfer is mailed to the creditor; orwith respect to a creditor not known to the settlor, 120 days after the date on which notice of the transfer is first published in a newspaper of general circulation in the county in which the settlor then resides, or is published on a public legal notice website as defined in Section 45-1-101. 75B-1-307(3) A notice described in Subsection (2)(b)(i) shall:state the name and address of the settlor or the settlor’s representative;state the name and address of the trustee or the trustee’s representative;describe the assets that were transferred, except that the notice does not need to state the value of the assets if the assets are other than cash; andinform the creditor that the creditor is required to bring the creditor’s cause of action or claim for relief against the settlor and the trustee within 120 days from the mailing of the notice or be forever barred. 75B-1-307(4) A notice described in Subsection (2)(b)(ii) shall:state the name and address of the settlor or the settlor’s representative;state the name and address of the trustee or the trustee’s representative;describe the assets that were transferred, except that the notice does not need to state the value of the assets;be published in accordance with the provisions of Section 45-1-101 for three consecutive weeks; andinform creditors that they are required to bring a cause of action or claim for relief within 120 days from the first publication of the notice or be forever barred. 75B-1-307(5) Failure to give the notice required in Subsection (2)(b) to a creditor does not prevent the shortening of the limitations period under Subsection (2)(b) with respect to another creditor who properly received notice by mail or publication.

75B-1-308 - Claims against beneficiaries of asset protection trust.

75B-1-308(1) With respect to an asset protection trust, a claim brought by a creditor of a beneficiary who is not the settlor is subject to Title 75B, Chapter 2, Part 5, Spendthrift and Discretionary Trusts. 75B-1-308(2) With respect to an irrevocable trust that is not subject to this part, a claim brought by a creditor of a beneficiary who is the settlor is subject to the provisions of Subsection 75B-2-505(2).

75B-1-309 - Liability of participant in asset protection trust.

75B-1-309(1) If the settlor signs an affidavit described in Section 75B-1-306, a person, including a creditor, may not assert a cause of action or claim for relief against a trustee of the asset protection trust, or against a person that was involved in the counseling, drafting, preparation, execution, or funding of the asset protection trust, for:conspiracy to engage in a voidable transfer;aiding and abetting a voidable transfer;participation in the trust transaction; ora similar cause of action or claim for relief described in Subsections (1)(a) through (c). 75B-1-309(2) For purposes of Subsection (1), the counseling, drafting, preparation, execution, or funding of the trust includes the preparation and funding of a limited partnership, a limited liability company, or other entity if interests in the entity are subsequently transferred to the trust. 75B-1-309(3) The creditor or other person prevented from asserting a cause of action or claim for relief described in Subsection (1) may only assert a cause of action against, and is limited to recourse against:the trust and the trust assets; andthe settlor to the extent otherwise allowed under this part.

75B-1-310 - Distributions from asset protection trust.

75B-1-310(1) If the settlor makes more than one transfer to an asset protection trust, a distribution by the trustee is considered to be made from the most recent transfer to the trust. 75B-1-310(2) A trustee of an asset protection trust may convey property that is held in trust to a beneficiary of the trust, including the settlor, for the beneficiary to secure financing with a lien or other encumbrance against the property. 75B-1-310(3) If the property described in Subsection (2) is reconveyed to the trustee of the asset protection trust within 60 days after the day on which the lien or other encumbrance is attached, the reconveyance is not considered a transfer to the asset protection trust for purposes of calculating the limitations period under Subsection 75B-1-307(2) or for any other purpose.