Louisiana Notary

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Trusts

Trusts – Limitation on trust terms

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Trusts – Limitation on trust terms

§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.

Trusts – Trusts for the care and benefit of an animal

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Trusts – Trusts for the care and benefit of an animal

§2263. Trust for the care of an animal. A. A trust may be created to provide for the care of one or more animals that are in being and ascertainable on the date of the creation of the trust.

B. The trust instrument may designate a caregiver for each animal. An animal’s caregiver will have the custody of the animal and be responsible for its care. If no caregiver is designated or if the designated or appointed caregiver is unable or unwilling to serve, the trustee shall appoint or act as the caregiver.

C. The trust instrument may designate a person to enforce the provisions of the trust. If no person is designated or if the designated person is unable or unwilling to serve, the settlor or any of his successors or a caregiver may enforce the trust.

D. Trust property may be used only for the care of each animal and for reasonable compensation and expenses of the trustee and the caregiver.

E. If the proper court determines that the value of the trust substantially exceeds the amount required to care for each animal and for reasonable compensation and expenses of the trustee and the caregiver, the court may terminate the trust as to the excess portion.

F. The trust shall terminate upon the death of the last surviving animal provided for in the trust instrument.

G. The trust instrument may designate a person to receive the property upon partial or complete termination of the trust. In the absence of a designation, the trust property shall be distributed upon termination to the settlor, if living, or to the settlor’s successors.

H. A trust instrument that provides for the care of one or more animals shall be liberally construed to sustain its effectiveness and to fulfill the intent of the settlor.

I. Unless otherwise required by the trust instrument or the proper court, a trustee is not required to post security or provide an accounting.

J. In all matters for which no provision is made in this Section, a trust for the care of an animal shall be governed by the provisions of the Louisiana Trust Code.

Trusts – Providing for disposition of trust property upon refusal by, or death of, a beneficiary

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Trusts – Providing for disposition of trust property upon refusal by, or death of, a beneficiary

§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 proportionate to their interests or, in the absence of other principal beneficiaries, 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) applies, 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.

Trusts – Spendthrift trusts

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Trusts – Spendthrift trusts

§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 prescribed by this sub-part.

§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. A beneficiary will not be deemed to have donated property to a trust merely because he fails to exercise a right of withdrawal from the trust.

§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) Damages arising from a felony criminal offense committed by the beneficiary which results in a conviction or a plea of guilty.

Trusts – Designation of trustee, successive trustees, and multiple trustees

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Trusts – Designation of trustee, successive trustees, and multiple trustees

§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.

§1782. Number of trustees. There may be one or more trustees of a trust.

§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.

§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 dissenting 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.

§2114.1. Allocation of different powers to different trustees. A trust instrument may confer different powers upon different trustees, in which case each trustee acts independently with respect to those powers conferred upon him. As to powers not conferred upon him, he shall have no duties or liabilities as to the actions or inactions of the other trustees.

Trusts – The forced portion in trust

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Trusts – The forced portion 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 heir.

(2) The forced heir’s interest is subject to no charges or conditions except as provided in RS. 9:1843, 1844, 1891 through 1906 and Sub part B of Part III of this Chapter.

(3) Except 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. §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.

Trusts – Invasion of trust principal for income beneficiary

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Trusts – Invasion of trust principal for income beneficiary

§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 purpose. 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 beneficiaries. 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.

§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.

Trusts – Separation of income from principal

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Trusts – Separation of income from principal

§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 Sub part B of Part III of this Chapter, is considered a beneficiary for the purpose of fixing the maximum allowable term of the trust.

§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.

§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) Termination of an ·interest in i come 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. Income not distributed at the time of the termination of the trust is allocated to principal unless the trust instrument provides otherwise.

§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.

§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.

§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.

§2082. Administration in interest of beneficiary; duty of impartialty. A. A trustee shall administer the trust solely in the interest of the beneficiary.

B. When there is more than one beneficiary, a trustee shall administer the trust 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.

Trusts – Recordation

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Trusts – Recordation

§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 persons, a trustee shall file the trust instrument, or an extract thereof, for record in each parish in which the property is located. Nevertheless, if the trust instrument contains a transfer of immovable property or other property the title to which must be recorded in order to affect third persons, a trustee shall file the trust instrument for record in the 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) Any limitation or restriction on the power of the trustee to alienate, lease, or encumber immovable property contained in the trust instrument.

(2) When an extract of trust is recorded pursuant to subsection A of this Section, any limitation or restriction in the trust instrument on the power of the trustee to alienate, lease, or encumber immovable property shall not be effective against third persons unless it is recited in the extract of trust.

(3) The provisions of this Section authorizing the filing of an extract of the trust instrument or a clerk-certified copy of the trust instrument or extract of trust without a description of the property are remedial and shall be applied retroactively to any trust extract or clerk-certified copy of either the trust instrument or extract of trust 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 or clerk-certified copy thereof is recorded, the failure of the trust instrument to be in the form required by R.S. 9:1752 shall not be effective against third persons, 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.