CHAPTER 59-18TRUSTEE LIABILITY AND DEALINGS59-18-01. (1001) Remedies for breach of trust.1.A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of<br>trust.2.To remedy a breach of trust that has occurred or may occur, the court may compel<br>the trustee to perform the trustee's duties; enjoin the trustee from committing a<br>breach of trust; compel the trustee to redress a breach of trust by paying money,<br>restoring property, or other means; order a trustee to account; appoint a special<br>fiduciary to take possession of the trust property and administer the trust; suspend<br>the trustee; remove the trustee as provided in section 59-15-06; reduce or deny<br>compensation to the trustee; subject to section 59-18-12, void an act of the trustee,<br>impose a lien or a constructive trust on trust property, or trace trust property<br>wrongfully disposed of and recover the property or its proceeds; or order any other<br>appropriate relief.59-18-01.1. Presumption against trustee. A transaction between a trustee and thetrust's beneficiary during the existence of the trust or while the influence acquired by the trustee<br>remains by which the trustee obtains any advantage from the trust's beneficiary is presumed to<br>be entered by the trust's beneficiary without sufficient consideration and under undue influence.<br>This presumption is a rebuttable presumption.59-18-02. (1002) Damages for breach of trust.1.A trustee who commits a breach of trust is liable to the beneficiaries affected for the<br>greater of the amount required to restore the value of the trust property and trust<br>distributions to what they would have been had the breach not occurred or the profit<br>the trustee made by reason of the breach.2.Except as otherwise provided in this subsection, if more than one trustee is liable to<br>the beneficiaries for a breach of trust, a trustee is entitled to contribution from the<br>other trustee or trustees. A trustee is not entitled to contribution if the trustee was<br>substantially more at fault than another trustee or if the trustee committed the breach<br>of trust in bad faith or with reckless indifference to the purposes of the trust or the<br>interests of the beneficiaries. A trustee who received a benefit from the breach of<br>trust is not entitled to contribution from another trustee to the extent of the benefit<br>received.59-18-03. (1003) Damages in absence of breach. Absent a breach of trust, a trustee isnot liable to a beneficiary for a loss or depreciation in the value of trust property or for not having<br>made a profit.59-18-04. Reserved.59-18-05. (1005) Limitation of action against trustee.1.A beneficiary may not commence a proceeding against a trustee for breach of trust<br>more than one year after the date the beneficiary or a representative of the<br>beneficiary was sent a report that adequately disclosed the existence of a potential<br>claim for breach of trust and informed the beneficiary in the report or in a separate<br>notice accompanying the report of the time allowed for commencing a proceeding.2.A report adequately discloses the existence of a potential claim for breach of trust if<br>it provides sufficient information so that the beneficiary or representative knows of<br>the potential claim or should have inquired into its existence.Page No. 13.If subsection 1 does not apply, a judicial proceeding by a beneficiary against a<br>trustee for breach of trust must be commenced within five years after whichever<br>occurs first: the removal, resignation, or death of the trustee; the termination of the<br>beneficiary's interest in the trust; or the termination of the trust.59-18-06.(1006) Reliance on trust instrument.A trustee who acts in reasonablereliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary<br>for a breach of trust to the extent the breach resulted from the reliance.59-18-07. (1007) Event affecting administration or distribution. If the happening ofan event, including marriage, divorce, performance of educational requirements, or death, affects<br>the administration or distribution of a trust, a trustee who has exercised reasonable care to<br>ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of<br>knowledge.59-18-08. (1008) Exculpation of trustee.1.A term of a trust relieving a trustee of liability for breach of trust is unenforceable to<br>the extent that the term relieves the trustee of liability for breach of trust committed<br>in bad faith or with reckless indifference to the purposes of the trust or was inserted<br>as the result of an abuse by the trustee of a fiduciary or confidential relationship to<br>the settlor.2.Unless the settlor was represented by an attorney not employed by the trustee with<br>respect to the trust containing the exculpatory term, an exculpatory term drafted or<br>caused to be drafted by the trustee is invalid as an abuse of a fiduciary or<br>confidential relationship unless the trustee proves that the exculpatory term is fair<br>under the circumstances and that its existence and contents were adequately<br>communicated to the settlor.59-18-09. (1009) Beneficiary's consent, release, or ratification. A trustee is not liableto a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the<br>breach, released the trustee from liability for the breach, or ratified the transaction constituting the<br>breach, unless the consent, release, or ratification of the beneficiary was induced by improper<br>conduct of the trustee or at the time of the consent, release, or ratification, the beneficiary lacked<br>capacity or did not know of the beneficiary's rights or of the material facts relating to the breach.59-18-10. (1010) Limitation on personal liability of trustee.1.Except as otherwise provided in the contract, a trustee is not personally liable on a<br>contract properly entered into in the trustee's fiduciary capacity in the course of<br>administering the trust if the trustee in the contract disclosed the fiduciary capacity.<br>The addition of the phrase "trustee" or "as trustee" or a similar designation to the<br>signature of a trustee on a written contract is considered prima facie evidence of a<br>disclosure of a fiduciary capacity.2.A trustee is personally liable for torts committed in the course of administering a trust<br>or for obligations arising from ownership or control of trust property, including liability<br>for violation of environmental law, only if the trustee is personally at fault.3.A claim based on a contract entered into by a trustee in the trustee's fiduciary<br>capacity, on an obligation arising from ownership or control of trust property, or on a<br>tort committed in the course of administering a trust, may be asserted in a judicial<br>proceeding against the trustee in the trustee's fiduciary capacity, whether or not the<br>trustee is personally liable for the claim.4.Whenever a trust instrument reserves to the settlor, or vests in an advisory or<br>investment committee, or in any other person, including one or more cotrustees to<br>the exclusion of the trustee or to the exclusion of one or more of several trustees,Page No. 2authority to direct the making or retention of any investment, the excluded trustee or<br>trustees are not liable, either individually or as a fiduciary, for any loss resulting from<br>the making or retention of any investment pursuant to such direction.5.In the absence of actual knowledge or information that would cause a reasonable<br>trustee to inquire further, a trustee may not be held liable for failure to take<br>necessary steps to compel the redress of any breach of trust or fiduciary duty by any<br>predecessor personal representative, trustee, or other fiduciary. This section may<br>not be construed to limit the fiduciary liability of any trustee for the acts or omissions<br>of the trustee with respect to the trust estate.59-18-11. (1011) Interest as general partner.1.Except as otherwise provided in subsection 3 or unless personal liability is imposed<br>in the contract, a trustee who holds an interest as a general partner in a general or<br>limited partnership is not personally liable on a contract entered into by the<br>partnership after the trust's acquisition of the interest if the fiduciary capacity was<br>disclosed:a.In the contract;b.In a registration of the partnership as a limited liability partnership filed pursuant<br>to chapter 45-22 in which the trustee is listed as a managing partner; orc.In a certificate of limited liability limited partnership filed pursuant to chapter<br>45-23 in which the trustee is listed as a general partner.2.Except as otherwise provided in subsection 3, a trustee who holds an interest as a<br>general partner is not personally liable for torts committed by the partnership or for<br>obligations arising from ownership or control of the interest unless the trustee is<br>personally at fault.3.The immunity provided by this section does not apply if an interest in the partnership<br>is held by the trustee in a capacity other than that of trustee or is held by the<br>trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or<br>the spouse of any of them.4.If the trustee of a revocable trust holds an interest as a general partner, the settlor is<br>personally liable for contracts and other obligations of the partnership as if the settlor<br>were a general partner.59-18-12. (1012) Protection of person dealing with trustee.1.A person other than a beneficiary who in good faith assists a trustee, or who in good<br>faith and for value deals with a trustee, without knowledge that the trustee is<br>exceeding or improperly exercising the trustee's powers, is protected from liability as<br>if the trustee properly exercised the power.2.A person other than a beneficiary who in good faith deals with a trustee is not<br>required to inquire into the extent of the trustee's powers or the propriety of their<br>exercise.3.A person who in good faith delivers assets to a trustee need not ensure their proper<br>application.4.A person other than a beneficiary who in good faith assists a former trustee, or who<br>in good faith and for value deals with a former trustee, without knowledge that the<br>trusteeship has terminated, is protected from liability as if the former trustee were<br>still a trustee.Page No. 35.Comparable protective provisions of other laws relating to commercial transactions<br>or transfer of securities by fiduciaries prevail over the protection provided by this<br>section.59-18-13. (1013) Certification of trust.1.Unless otherwise required by chapter 59-09, 59-10, 59-11, 59-12, 59-13, 59-14,<br>59-15, 59-16, 59-17, 59-18, or 59-19, the trustee may furnish to the person a<br>certification of trust containing information that includes that the trust exists and the<br>effective date of the trust instrument, the name of the trust, if a name is given, the<br>identity of each settlor, the identity and address of the currently acting trustee, the<br>applicable powers of the trustee, which may make reference to the powers set forth<br>in chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18,<br>and 59-19, the revocability or irrevocability of the trust and the identity of any person<br>holding a power to revoke the trust, and the authority of cotrustees to sign or<br>otherwise authenticate and whether all or less than all are required in order to<br>exercise powers of the trustee.2.A certification of trust may be signed or otherwise authenticated by any trustee.3.A certification of trust must state that the trust has not been revoked, modified, or<br>amended in any manner that would cause the representations contained in the<br>certification of trust to be incorrect.4.A certification of trust need not contain the dispositive terms of a trust.5.A recipient of a certification of trust may require the trustee to furnish copies of those<br>excerpts from the original trust instrument and later amendments which designate<br>the trustee and confer upon the trustee the power to act in the pending transaction.6.A person who acts in reliance upon a certification of trust without knowledge that the<br>representations contained therein are incorrect is not liable to any person for so<br>acting and may assume without inquiry the existence of the facts contained in the<br>certification. Knowledge of the terms of the trust may not be inferred solely from the<br>fact that a copy of all or part of the trust instrument is held by the person relying<br>upon the certification.7.A person who in good faith enters into a transaction in reliance upon a certification of<br>trust may enforce the transaction against the trust property as if the representations<br>contained in the certification were correct.8.A person making a demand for the trust instrument in addition to a certification of<br>trust or excerpts is liable for damages if the court determines that the person did not<br>act in good faith in demanding the trust instrument.9.This section does not limit the right of a person to obtain a copy of the trust<br>instrument in a judicial proceeding concerning the trust.Page No. 4Document Outlinechapter 59-18 trustee liability and dealings
CHAPTER 59-18TRUSTEE LIABILITY AND DEALINGS59-18-01. (1001) Remedies for breach of trust.1.A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of<br>trust.2.To remedy a breach of trust that has occurred or may occur, the court may compel<br>the trustee to perform the trustee's duties; enjoin the trustee from committing a<br>breach of trust; compel the trustee to redress a breach of trust by paying money,<br>restoring property, or other means; order a trustee to account; appoint a special<br>fiduciary to take possession of the trust property and administer the trust; suspend<br>the trustee; remove the trustee as provided in section 59-15-06; reduce or deny<br>compensation to the trustee; subject to section 59-18-12, void an act of the trustee,<br>impose a lien or a constructive trust on trust property, or trace trust property<br>wrongfully disposed of and recover the property or its proceeds; or order any other<br>appropriate relief.59-18-01.1. Presumption against trustee. A transaction between a trustee and thetrust's beneficiary during the existence of the trust or while the influence acquired by the trustee<br>remains by which the trustee obtains any advantage from the trust's beneficiary is presumed to<br>be entered by the trust's beneficiary without sufficient consideration and under undue influence.<br>This presumption is a rebuttable presumption.59-18-02. (1002) Damages for breach of trust.1.A trustee who commits a breach of trust is liable to the beneficiaries affected for the<br>greater of the amount required to restore the value of the trust property and trust<br>distributions to what they would have been had the breach not occurred or the profit<br>the trustee made by reason of the breach.2.Except as otherwise provided in this subsection, if more than one trustee is liable to<br>the beneficiaries for a breach of trust, a trustee is entitled to contribution from the<br>other trustee or trustees. A trustee is not entitled to contribution if the trustee was<br>substantially more at fault than another trustee or if the trustee committed the breach<br>of trust in bad faith or with reckless indifference to the purposes of the trust or the<br>interests of the beneficiaries. A trustee who received a benefit from the breach of<br>trust is not entitled to contribution from another trustee to the extent of the benefit<br>received.59-18-03. (1003) Damages in absence of breach. Absent a breach of trust, a trustee isnot liable to a beneficiary for a loss or depreciation in the value of trust property or for not having<br>made a profit.59-18-04. Reserved.59-18-05. (1005) Limitation of action against trustee.1.A beneficiary may not commence a proceeding against a trustee for breach of trust<br>more than one year after the date the beneficiary or a representative of the<br>beneficiary was sent a report that adequately disclosed the existence of a potential<br>claim for breach of trust and informed the beneficiary in the report or in a separate<br>notice accompanying the report of the time allowed for commencing a proceeding.2.A report adequately discloses the existence of a potential claim for breach of trust if<br>it provides sufficient information so that the beneficiary or representative knows of<br>the potential claim or should have inquired into its existence.Page No. 13.If subsection 1 does not apply, a judicial proceeding by a beneficiary against a<br>trustee for breach of trust must be commenced within five years after whichever<br>occurs first: the removal, resignation, or death of the trustee; the termination of the<br>beneficiary's interest in the trust; or the termination of the trust.59-18-06.(1006) Reliance on trust instrument.A trustee who acts in reasonablereliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary<br>for a breach of trust to the extent the breach resulted from the reliance.59-18-07. (1007) Event affecting administration or distribution. If the happening ofan event, including marriage, divorce, performance of educational requirements, or death, affects<br>the administration or distribution of a trust, a trustee who has exercised reasonable care to<br>ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of<br>knowledge.59-18-08. (1008) Exculpation of trustee.1.A term of a trust relieving a trustee of liability for breach of trust is unenforceable to<br>the extent that the term relieves the trustee of liability for breach of trust committed<br>in bad faith or with reckless indifference to the purposes of the trust or was inserted<br>as the result of an abuse by the trustee of a fiduciary or confidential relationship to<br>the settlor.2.Unless the settlor was represented by an attorney not employed by the trustee with<br>respect to the trust containing the exculpatory term, an exculpatory term drafted or<br>caused to be drafted by the trustee is invalid as an abuse of a fiduciary or<br>confidential relationship unless the trustee proves that the exculpatory term is fair<br>under the circumstances and that its existence and contents were adequately<br>communicated to the settlor.59-18-09. (1009) Beneficiary's consent, release, or ratification. A trustee is not liableto a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the<br>breach, released the trustee from liability for the breach, or ratified the transaction constituting the<br>breach, unless the consent, release, or ratification of the beneficiary was induced by improper<br>conduct of the trustee or at the time of the consent, release, or ratification, the beneficiary lacked<br>capacity or did not know of the beneficiary's rights or of the material facts relating to the breach.59-18-10. (1010) Limitation on personal liability of trustee.1.Except as otherwise provided in the contract, a trustee is not personally liable on a<br>contract properly entered into in the trustee's fiduciary capacity in the course of<br>administering the trust if the trustee in the contract disclosed the fiduciary capacity.<br>The addition of the phrase "trustee" or "as trustee" or a similar designation to the<br>signature of a trustee on a written contract is considered prima facie evidence of a<br>disclosure of a fiduciary capacity.2.A trustee is personally liable for torts committed in the course of administering a trust<br>or for obligations arising from ownership or control of trust property, including liability<br>for violation of environmental law, only if the trustee is personally at fault.3.A claim based on a contract entered into by a trustee in the trustee's fiduciary<br>capacity, on an obligation arising from ownership or control of trust property, or on a<br>tort committed in the course of administering a trust, may be asserted in a judicial<br>proceeding against the trustee in the trustee's fiduciary capacity, whether or not the<br>trustee is personally liable for the claim.4.Whenever a trust instrument reserves to the settlor, or vests in an advisory or<br>investment committee, or in any other person, including one or more cotrustees to<br>the exclusion of the trustee or to the exclusion of one or more of several trustees,Page No. 2authority to direct the making or retention of any investment, the excluded trustee or<br>trustees are not liable, either individually or as a fiduciary, for any loss resulting from<br>the making or retention of any investment pursuant to such direction.5.In the absence of actual knowledge or information that would cause a reasonable<br>trustee to inquire further, a trustee may not be held liable for failure to take<br>necessary steps to compel the redress of any breach of trust or fiduciary duty by any<br>predecessor personal representative, trustee, or other fiduciary. This section may<br>not be construed to limit the fiduciary liability of any trustee for the acts or omissions<br>of the trustee with respect to the trust estate.59-18-11. (1011) Interest as general partner.1.Except as otherwise provided in subsection 3 or unless personal liability is imposed<br>in the contract, a trustee who holds an interest as a general partner in a general or<br>limited partnership is not personally liable on a contract entered into by the<br>partnership after the trust's acquisition of the interest if the fiduciary capacity was<br>disclosed:a.In the contract;b.In a registration of the partnership as a limited liability partnership filed pursuant<br>to chapter 45-22 in which the trustee is listed as a managing partner; orc.In a certificate of limited liability limited partnership filed pursuant to chapter<br>45-23 in which the trustee is listed as a general partner.2.Except as otherwise provided in subsection 3, a trustee who holds an interest as a<br>general partner is not personally liable for torts committed by the partnership or for<br>obligations arising from ownership or control of the interest unless the trustee is<br>personally at fault.3.The immunity provided by this section does not apply if an interest in the partnership<br>is held by the trustee in a capacity other than that of trustee or is held by the<br>trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or<br>the spouse of any of them.4.If the trustee of a revocable trust holds an interest as a general partner, the settlor is<br>personally liable for contracts and other obligations of the partnership as if the settlor<br>were a general partner.59-18-12. (1012) Protection of person dealing with trustee.1.A person other than a beneficiary who in good faith assists a trustee, or who in good<br>faith and for value deals with a trustee, without knowledge that the trustee is<br>exceeding or improperly exercising the trustee's powers, is protected from liability as<br>if the trustee properly exercised the power.2.A person other than a beneficiary who in good faith deals with a trustee is not<br>required to inquire into the extent of the trustee's powers or the propriety of their<br>exercise.3.A person who in good faith delivers assets to a trustee need not ensure their proper<br>application.4.A person other than a beneficiary who in good faith assists a former trustee, or who<br>in good faith and for value deals with a former trustee, without knowledge that the<br>trusteeship has terminated, is protected from liability as if the former trustee were<br>still a trustee.Page No. 35.Comparable protective provisions of other laws relating to commercial transactions<br>or transfer of securities by fiduciaries prevail over the protection provided by this<br>section.59-18-13. (1013) Certification of trust.1.Unless otherwise required by chapter 59-09, 59-10, 59-11, 59-12, 59-13, 59-14,<br>59-15, 59-16, 59-17, 59-18, or 59-19, the trustee may furnish to the person a<br>certification of trust containing information that includes that the trust exists and the<br>effective date of the trust instrument, the name of the trust, if a name is given, the<br>identity of each settlor, the identity and address of the currently acting trustee, the<br>applicable powers of the trustee, which may make reference to the powers set forth<br>in chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18,<br>and 59-19, the revocability or irrevocability of the trust and the identity of any person<br>holding a power to revoke the trust, and the authority of cotrustees to sign or<br>otherwise authenticate and whether all or less than all are required in order to<br>exercise powers of the trustee.2.A certification of trust may be signed or otherwise authenticated by any trustee.3.A certification of trust must state that the trust has not been revoked, modified, or<br>amended in any manner that would cause the representations contained in the<br>certification of trust to be incorrect.4.A certification of trust need not contain the dispositive terms of a trust.5.A recipient of a certification of trust may require the trustee to furnish copies of those<br>excerpts from the original trust instrument and later amendments which designate<br>the trustee and confer upon the trustee the power to act in the pending transaction.6.A person who acts in reliance upon a certification of trust without knowledge that the<br>representations contained therein are incorrect is not liable to any person for so<br>acting and may assume without inquiry the existence of the facts contained in the<br>certification. Knowledge of the terms of the trust may not be inferred solely from the<br>fact that a copy of all or part of the trust instrument is held by the person relying<br>upon the certification.7.A person who in good faith enters into a transaction in reliance upon a certification of<br>trust may enforce the transaction against the trust property as if the representations<br>contained in the certification were correct.8.A person making a demand for the trust instrument in addition to a certification of<br>trust or excerpts is liable for damages if the court determines that the person did not<br>act in good faith in demanding the trust instrument.9.This section does not limit the right of a person to obtain a copy of the trust<br>instrument in a judicial proceeding concerning the trust.Page No. 4Document Outlinechapter 59-18 trustee liability and dealings
CHAPTER 59-18TRUSTEE LIABILITY AND DEALINGS59-18-01. (1001) Remedies for breach of trust.1.A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of<br>trust.2.To remedy a breach of trust that has occurred or may occur, the court may compel<br>the trustee to perform the trustee's duties; enjoin the trustee from committing a<br>breach of trust; compel the trustee to redress a breach of trust by paying money,<br>restoring property, or other means; order a trustee to account; appoint a special<br>fiduciary to take possession of the trust property and administer the trust; suspend<br>the trustee; remove the trustee as provided in section 59-15-06; reduce or deny<br>compensation to the trustee; subject to section 59-18-12, void an act of the trustee,<br>impose a lien or a constructive trust on trust property, or trace trust property<br>wrongfully disposed of and recover the property or its proceeds; or order any other<br>appropriate relief.59-18-01.1. Presumption against trustee. A transaction between a trustee and thetrust's beneficiary during the existence of the trust or while the influence acquired by the trustee<br>remains by which the trustee obtains any advantage from the trust's beneficiary is presumed to<br>be entered by the trust's beneficiary without sufficient consideration and under undue influence.<br>This presumption is a rebuttable presumption.59-18-02. (1002) Damages for breach of trust.1.A trustee who commits a breach of trust is liable to the beneficiaries affected for the<br>greater of the amount required to restore the value of the trust property and trust<br>distributions to what they would have been had the breach not occurred or the profit<br>the trustee made by reason of the breach.2.Except as otherwise provided in this subsection, if more than one trustee is liable to<br>the beneficiaries for a breach of trust, a trustee is entitled to contribution from the<br>other trustee or trustees. A trustee is not entitled to contribution if the trustee was<br>substantially more at fault than another trustee or if the trustee committed the breach<br>of trust in bad faith or with reckless indifference to the purposes of the trust or the<br>interests of the beneficiaries. A trustee who received a benefit from the breach of<br>trust is not entitled to contribution from another trustee to the extent of the benefit<br>received.59-18-03. (1003) Damages in absence of breach. Absent a breach of trust, a trustee isnot liable to a beneficiary for a loss or depreciation in the value of trust property or for not having<br>made a profit.59-18-04. Reserved.59-18-05. (1005) Limitation of action against trustee.1.A beneficiary may not commence a proceeding against a trustee for breach of trust<br>more than one year after the date the beneficiary or a representative of the<br>beneficiary was sent a report that adequately disclosed the existence of a potential<br>claim for breach of trust and informed the beneficiary in the report or in a separate<br>notice accompanying the report of the time allowed for commencing a proceeding.2.A report adequately discloses the existence of a potential claim for breach of trust if<br>it provides sufficient information so that the beneficiary or representative knows of<br>the potential claim or should have inquired into its existence.Page No. 13.If subsection 1 does not apply, a judicial proceeding by a beneficiary against a<br>trustee for breach of trust must be commenced within five years after whichever<br>occurs first: the removal, resignation, or death of the trustee; the termination of the<br>beneficiary's interest in the trust; or the termination of the trust.59-18-06.(1006) Reliance on trust instrument.A trustee who acts in reasonablereliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary<br>for a breach of trust to the extent the breach resulted from the reliance.59-18-07. (1007) Event affecting administration or distribution. If the happening ofan event, including marriage, divorce, performance of educational requirements, or death, affects<br>the administration or distribution of a trust, a trustee who has exercised reasonable care to<br>ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of<br>knowledge.59-18-08. (1008) Exculpation of trustee.1.A term of a trust relieving a trustee of liability for breach of trust is unenforceable to<br>the extent that the term relieves the trustee of liability for breach of trust committed<br>in bad faith or with reckless indifference to the purposes of the trust or was inserted<br>as the result of an abuse by the trustee of a fiduciary or confidential relationship to<br>the settlor.2.Unless the settlor was represented by an attorney not employed by the trustee with<br>respect to the trust containing the exculpatory term, an exculpatory term drafted or<br>caused to be drafted by the trustee is invalid as an abuse of a fiduciary or<br>confidential relationship unless the trustee proves that the exculpatory term is fair<br>under the circumstances and that its existence and contents were adequately<br>communicated to the settlor.59-18-09. (1009) Beneficiary's consent, release, or ratification. A trustee is not liableto a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the<br>breach, released the trustee from liability for the breach, or ratified the transaction constituting the<br>breach, unless the consent, release, or ratification of the beneficiary was induced by improper<br>conduct of the trustee or at the time of the consent, release, or ratification, the beneficiary lacked<br>capacity or did not know of the beneficiary's rights or of the material facts relating to the breach.59-18-10. (1010) Limitation on personal liability of trustee.1.Except as otherwise provided in the contract, a trustee is not personally liable on a<br>contract properly entered into in the trustee's fiduciary capacity in the course of<br>administering the trust if the trustee in the contract disclosed the fiduciary capacity.<br>The addition of the phrase "trustee" or "as trustee" or a similar designation to the<br>signature of a trustee on a written contract is considered prima facie evidence of a<br>disclosure of a fiduciary capacity.2.A trustee is personally liable for torts committed in the course of administering a trust<br>or for obligations arising from ownership or control of trust property, including liability<br>for violation of environmental law, only if the trustee is personally at fault.3.A claim based on a contract entered into by a trustee in the trustee's fiduciary<br>capacity, on an obligation arising from ownership or control of trust property, or on a<br>tort committed in the course of administering a trust, may be asserted in a judicial<br>proceeding against the trustee in the trustee's fiduciary capacity, whether or not the<br>trustee is personally liable for the claim.4.Whenever a trust instrument reserves to the settlor, or vests in an advisory or<br>investment committee, or in any other person, including one or more cotrustees to<br>the exclusion of the trustee or to the exclusion of one or more of several trustees,Page No. 2authority to direct the making or retention of any investment, the excluded trustee or<br>trustees are not liable, either individually or as a fiduciary, for any loss resulting from<br>the making or retention of any investment pursuant to such direction.5.In the absence of actual knowledge or information that would cause a reasonable<br>trustee to inquire further, a trustee may not be held liable for failure to take<br>necessary steps to compel the redress of any breach of trust or fiduciary duty by any<br>predecessor personal representative, trustee, or other fiduciary. This section may<br>not be construed to limit the fiduciary liability of any trustee for the acts or omissions<br>of the trustee with respect to the trust estate.59-18-11. (1011) Interest as general partner.1.Except as otherwise provided in subsection 3 or unless personal liability is imposed<br>in the contract, a trustee who holds an interest as a general partner in a general or<br>limited partnership is not personally liable on a contract entered into by the<br>partnership after the trust's acquisition of the interest if the fiduciary capacity was<br>disclosed:a.In the contract;b.In a registration of the partnership as a limited liability partnership filed pursuant<br>to chapter 45-22 in which the trustee is listed as a managing partner; orc.In a certificate of limited liability limited partnership filed pursuant to chapter<br>45-23 in which the trustee is listed as a general partner.2.Except as otherwise provided in subsection 3, a trustee who holds an interest as a<br>general partner is not personally liable for torts committed by the partnership or for<br>obligations arising from ownership or control of the interest unless the trustee is<br>personally at fault.3.The immunity provided by this section does not apply if an interest in the partnership<br>is held by the trustee in a capacity other than that of trustee or is held by the<br>trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or<br>the spouse of any of them.4.If the trustee of a revocable trust holds an interest as a general partner, the settlor is<br>personally liable for contracts and other obligations of the partnership as if the settlor<br>were a general partner.59-18-12. (1012) Protection of person dealing with trustee.1.A person other than a beneficiary who in good faith assists a trustee, or who in good<br>faith and for value deals with a trustee, without knowledge that the trustee is<br>exceeding or improperly exercising the trustee's powers, is protected from liability as<br>if the trustee properly exercised the power.2.A person other than a beneficiary who in good faith deals with a trustee is not<br>required to inquire into the extent of the trustee's powers or the propriety of their<br>exercise.3.A person who in good faith delivers assets to a trustee need not ensure their proper<br>application.4.A person other than a beneficiary who in good faith assists a former trustee, or who<br>in good faith and for value deals with a former trustee, without knowledge that the<br>trusteeship has terminated, is protected from liability as if the former trustee were<br>still a trustee.Page No. 35.Comparable protective provisions of other laws relating to commercial transactions<br>or transfer of securities by fiduciaries prevail over the protection provided by this<br>section.59-18-13. (1013) Certification of trust.1.Unless otherwise required by chapter 59-09, 59-10, 59-11, 59-12, 59-13, 59-14,<br>59-15, 59-16, 59-17, 59-18, or 59-19, the trustee may furnish to the person a<br>certification of trust containing information that includes that the trust exists and the<br>effective date of the trust instrument, the name of the trust, if a name is given, the<br>identity of each settlor, the identity and address of the currently acting trustee, the<br>applicable powers of the trustee, which may make reference to the powers set forth<br>in chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18,<br>and 59-19, the revocability or irrevocability of the trust and the identity of any person<br>holding a power to revoke the trust, and the authority of cotrustees to sign or<br>otherwise authenticate and whether all or less than all are required in order to<br>exercise powers of the trustee.2.A certification of trust may be signed or otherwise authenticated by any trustee.3.A certification of trust must state that the trust has not been revoked, modified, or<br>amended in any manner that would cause the representations contained in the<br>certification of trust to be incorrect.4.A certification of trust need not contain the dispositive terms of a trust.5.A recipient of a certification of trust may require the trustee to furnish copies of those<br>excerpts from the original trust instrument and later amendments which designate<br>the trustee and confer upon the trustee the power to act in the pending transaction.6.A person who acts in reliance upon a certification of trust without knowledge that the<br>representations contained therein are incorrect is not liable to any person for so<br>acting and may assume without inquiry the existence of the facts contained in the<br>certification. Knowledge of the terms of the trust may not be inferred solely from the<br>fact that a copy of all or part of the trust instrument is held by the person relying<br>upon the certification.7.A person who in good faith enters into a transaction in reliance upon a certification of<br>trust may enforce the transaction against the trust property as if the representations<br>contained in the certification were correct.8.A person making a demand for the trust instrument in addition to a certification of<br>trust or excerpts is liable for damages if the court determines that the person did not<br>act in good faith in demanding the trust instrument.9.This section does not limit the right of a person to obtain a copy of the trust<br>instrument in a judicial proceeding concerning the trust.Page No. 4Document Outlinechapter 59-18 trustee liability and dealings
