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The general powers

Without court authorization a trustee may exercise the powers the trust's terms confer and, except as the terms limit them, all powers over the trust property that an unmarried competent owner has over individually owned property, any other powers appropriate to achieve the proper investment, management and distribution of the trust property, and any other powers the Utah Uniform Trust Code confers (Utah Code § 75B-2-813). The exercise of a power is subject to the fiduciary duties of Part 8 — good faith (§ 75B-2-801), loyalty (§ 75B-2-802), impartiality (§ 75B-2-803) and prudence (§ 75B-2-804). A power is not a license: it is exercised for the beneficiaries, by the terms, and recorded (§ 75B-2-808).

The specific powers

Utah Code § 75B-2-814 lists what a trustee may do, without limiting the general powers:

• Collect trust property and accept or reject additions, including from a will or another trust.
• Acquire or sell property, for cash or on credit, at public or private sale; exchange, partition or change the character of property.
• Deposit money in a regulated financial service institution; borrow money, and mortgage or pledge trust property.
• Continue a business and act as its owner; exercise an owner's rights over securities, including voting by proxy.
• Improve, repair, develop or dedicate real property; lease; grant and acquire options; insure; abandon property of no value; address environmental liability.
• Pay, contest, settle or release claims; pay taxes, compensation and expenses; make tax elections; select payment modes under benefit plans and insurance.
• Lend to a beneficiary and pledge trust property to guarantee a beneficiary's loan; appoint an ancillary trustee; pay a distribution for a beneficiary under a disability to a conservator, guardian, custodian or caretaker.
• On distribution, division or termination, distribute in divided or undivided interests and allocate particular assets; resolve disputes by mediation or arbitration; prosecute or defend proceedings; sign and deliver instruments; and on termination wind up and distribute.

Discretion, and the standard that governs it

However broad the discretion the terms grant — "absolute", "sole" or "uncontrolled" — the trustee exercises a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries (Utah Code § 75B-2-812). Unless the terms expressly provide otherwise, a trustee who is also a beneficiary, other than the settlor, may make discretionary distributions to or for the trustee's own benefit only under an ascertainable standard of health, education, support or maintenance, and may not use a discretionary power to satisfy the trustee's own legal obligation of support; a power so limited may be exercised by a majority of the remaining trustees or by a special fiduciary the court appoints. The limits do not apply to a trustee-spouse of a marital-deduction trust, to a trust while it may be revoked by its settlor, or to an annual-exclusion trust.

Delegation and cotrustees

A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate, exercising reasonable care, skill and caution in selecting the agent, establishing the scope and terms of the delegation and periodically reviewing the agent's actions; the agent owes the trust a duty of reasonable care, and a trustee who complies is not liable for the agent's decisions (Utah Code § 75B-2-814(2)). The trustee may employ attorneys, auditors, investment advisers and agents, even if associated with the trustee, and be reimbursed for expenses properly incurred (§ 75B-2-802, § 75B-2-709).

Cotrustees act by majority where they cannot agree; each participates unless unavailable or a function was properly delegated; a delegation of investment functions by individual cotrustees to a regulated financial institution is presumed to accord with the settlor's intent; and a trustee may not delegate to a cotrustee a function the settlor intended the trustees to perform jointly (§ 75B-2-703).

The directed trust

Under Utah's Uniform Directed Trust Act (Utah Code Title 75B, Chapter 3), the terms of a trust may grant a power of direction to a trust director, who may exercise any further power appropriate to it and who, with joint directors, acts by majority (Utah Code § 75B-3-106). A directed trustee takes reasonable action to comply with the director's exercise or nonexercise of the power and is not liable for the action, except to the extent compliance would be willful misconduct; a directed trustee in reasonable doubt may petition the court for instructions (§ 75B-3-109). Unless the terms provide otherwise, a trustee has no duty to monitor a director or to inform or advise that the trustee would have acted differently (§ 75B-3-111). A trust director has the same fiduciary duty and liability as a trustee in a like position (§ 75B-3-108).

Decanting: distributing to a second trust

A trustee with discretion under the instrument to distribute income or principal to or for a beneficiary may distribute part or all of it to a second trust, or modify the terms of the first trust's instrument, unless the first instrument expressly prohibits it — after first determining whether the distribution or modification is necessary or desirable, and, for a modification, after written notice to all beneficiaries at least 20 days before (Utah Code § 75B-2-812.5). A restricted trustee — one who is also a beneficiary, or where a beneficiary holds a general power to change the trustees — may not use the power to benefit the restricted trustee outside an ascertainable standard, and the section's limits on withdrawal rights, marital and charitable interests, powers of appointment and tax consequences apply.

Dealing with banks and title companies: the certification of trust

Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish a certification of trust: the trust's existence and the date of the instrument, the identity of the settlor, the identity and address of the currently acting trustee, the trustee's powers in the pending transaction, whether the trust is revocable and who holds a power to revoke, the cotrustees' signing authority and the name in which title may be taken — signed by any trustee, stating that the trust has not been revoked, modified or amended in a manner that would make its representations incorrect, and without the dispositive terms (Utah Code § 75B-2-1013). A recipient may require the excerpts that designate the trustee and confer the power to act; a person who relies on the certification in good faith is protected, and one who demands the instrument without good faith is liable for the costs (§ 75B-2-1013). A person who assists or deals with a trustee for value in good faith, without knowledge that the trustee is exceeding the powers, is protected as if the power were properly exercised (§ 75B-2-1012).

When a licensed Utah attorney is the right next call

Whether a power is limited by the terms, whether a distribution to yourself fits an ascertainable standard, how to structure a delegation or a decanting, and what a particular bank or title company will accept are questions for a licensed Utah attorney of your choosing. TrusteeClear lists the statute's powers beside your facts and reviews nothing you prepare.