§554A-3  Powers of trustees conferred by
this chapter.  (a)  From time of creation of the trust until final
distribution of the assets of the trust, a trustee has the power to perform,
without court authorization, every act which a prudent person would perform for
the purposes of the trust including but not limited to the powers specified in
subsection (c).



(b)  In the exercise of the trustee's powers
including the powers granted by this chapter, a trustee has a duty to act with
due regard to the trustee's obligation as a fiduciary, including a duty not to
exercise any power under this chapter in such a way as to deprive the trust of
an otherwise available tax exemption, deduction, or credit for tax purposes or
deprive a donor of a trust asset of a tax exemption, deduction, or credit or
operate to impose a tax upon a donor or other person as owner of any portion of
the trust.  "Tax" includes, but is not limited to, any federal,
state, or local income, gift, estate, or inheritance tax.



(c)  A trustee has the power, subject to
subsections (a) and (b):



(1)  To collect, hold, and retain trust assets
received from a trustor until, in the judgment of the trustee, disposition of
the assets should be made;



(2)  To receive additions to the assets of the trust;



(3)  To continue or participate in the operation of
any business or other enterprise, and to effect incorporation, dissolution, or
other change in the form of the organization of the business or enterprise;



(4)  To invest and reinvest trust assets in accordance
with the provisions of the trust or as provided by law;



(5)  To deposit trust funds in a bank;



(6)  To acquire or dispose of an asset, for cash or on
credit, at public or private sale; and to manage, develop, improve, exchange,
partition, change the character of, or abandon a trust asset or any interest
therein; and to encumber, mortgage, or pledge a trust asset for a term within
or extending beyond the term of the trust, in connection with the exercise of
any power vested in the trustee;



(7)  To make ordinary or extraordinary repairs or
alterations in buildings or other structures, to demolish any improvements, or
to raze existing or erect new party walls or buildings;



(8)  To subdivide, develop, or dedicate land to public
use; or to make or obtain the vacation of plats and adjust boundaries; or to
adjust differences in valuation on exchange or partition by giving or receiving
consideration; or to dedicate easements to public use without consideration;



(9)  To enter for any purpose into a lease as lessor or
lessee with or without option to purchase or renew for a term within or
extending beyond the term of the trust;



(10)  To enter into a lease or arrangement for
exploration and removal of minerals or other natural resources or enter into a
pooling or unitization agreement;



(11)  To grant an option involving disposition of a
trust asset, or to take an option for the acquisition of any asset;



(12)  To vote a security, in person or by general or
limited proxy;



(13)  To pay calls, assessments, and any other sums
chargeable or accruing against or on account of securities;



(14)  To sell or exercise stock subscription or
conversion rights; to consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution, or liquidation of a
corporation or other business enterprise;



(15)  To hold a security in the name of a nominee or in
other form without disclosure of the trust, so that title to the security may
pass by delivery, but the trustee is liable for any act of the nominee in
connection with the stock so held;



(16)  To insure the assets of the trust against damage
or loss, and the trustee against liability with respect to third persons;



(17)  To borrow money to be repaid from trust assets or
otherwise; to advance money for the protection of the trust, and for all
expenses, losses, and liabilities sustained in the administration of the trust
or because of the holding or ownership of any trust assets, for which advances
with any interest the trustee has a lien on the trust assets as against the
beneficiary;



(18)  To pay or contest any claim; to settle a claim by
or against the trust by compromise, arbitration, or otherwise; and to release,
in whole or in part, any claim belonging to the trust to the extent that the
claim is uncollectible;



(19)  To pay taxes, assessments, compensation of the
trustee, and other expenses incurred in the collection, care, administration,
and protection of the trust;



(20)  To allocate items of income or expense to either
trust income or principal, as provided by chapter 557A, the Uniform Principal
and Income Act, including creation of reserves out of income for depreciation,
obsolescence, or amortization, or for depletion in mineral or timber
properties;



(21)  To pay any sum distributable to a beneficiary
under legal disability, without liability to the trustee, by paying the sum to
the beneficiary or by paying the sum for the use of the beneficiary either to a
legal representative appointed by the court, or if none, to a relative;



(22)  To effect distribution of money and property
(that may be made in kind on a pro rata or non-pro rata basis), in divided or
undivided interests, and to adjust resulting differences in valuation;



(23)  To employ persons, including attorneys, auditors,
investment advisors, or agents, even if they are associated with the trustee,
to advise or assist the trustee in performance of the trustee's administrative
duties; to act without independent investigation upon their recommendations;
and instead of acting personally, to employ one or more agents to perform any
act of administration, whether or not discretionary;



(24)  To prosecute or defend actions, claims, or
proceedings for the protection of trust assets and of the trustee in the
performance of trustee duties;



(25)  To execute and deliver all instruments that will
accomplish or facilitate the exercise of the powers vested in the trustee; and



(26)  To divide, sever, or separate a single trust into
two or more separate trusts for administration or tax purposes, including the
allocation of the generation-skipping transfer exemption; provided the terms of
the new trust provide, in the aggregate, for the same succession of interests
and beneficiaries as are provided in the original trust. [L 1985, c 61, pt of
§1; am L 1998, c 24, §2; am L 2000, c 48, §1 and c 191, §2]