59-16.2-03. Designation and powers of investment trust advisor.
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1. An investment trust advisor may be designated in the governing instrument of a trust.
The powers of an investment trust advisor may be exercised or not exercised in the
sole and absolute discretion of the investment trust advisor, and are binding on all
other persons, including each beneficiary, each fiduciary, each excluded fiduciary, and
any other party having an interest in the trust.
2. The governing instrument may use the title "investment trust advisor" or a similar
name or description demonstrating the intent to provide for the office and function of
an investment trust advisor.
3. Unless the terms of the governing instrument provide otherwise, the investment trust
advisor has the authority to:
a. Direct the trustee with respect to the retention, purchase, transfer, assignment,
sale, or encumbrance of trust property and the investment and reinvestment of
principal and income of the trust;
b. Direct the trustee with respect to all management, control, and voting powers
related directly or indirectly to trust assets, including voting proxies for securities
held in trust;
c. Select and determine reasonable compensation of one or more advisors,
managers, consultants, or counselors, including the trustee, and to delegate to
them any of the powers of the investment trust advisor in accordance with section
59-16-07; and
d. Determine the frequency and methodology for valuing an asset for which there is
no readily available market value.
59-16.2-04. Designation and powers of distribution trust advisor. 1. A distribution trust advisor may be designated in the governing instrument of a trust.
The powers of a distribution trust advisor may be exercised or not exercised in the sole
and absolute discretion of the distribution trust advisor, and are binding on all other
persons, including each beneficiary, each fiduciary, each excluded fiduciary, and any
other person having an interest in the trust. 2. The governing instrument may use the title "distribution trust advisor" or a similar
name or description demonstrating the intent to provide for the office and function of a
distribution trust advisor. 3. Unless the terms of the governing instrument provide otherwise, the distribution trust
advisor may direct the trustee with regard to all decisions relating directly or indirectly
to discretionary distributions to or for one or more beneficiaries.
59-16.2-05. Designation and powers of trust protector. 1. A trust protector may be designated in the governing instrument of a trust. 2. The powers of a trust protector may be exercised or not exercised in the sole and
absolute discretion of the trust protector, and are binding on all other persons,
including a beneficiary, an investment trust advisor, a distribution trust advisor, a
fiduciary, an excluded fiduciary, and any other person having an interest in the trust. 3. The governing instrument may use the title "trust protector" or a similar name or
description demonstrating the intent to provide for the office and function of a trust
protector. 4. The powers granted to a trust protector by the governing instrument may include
authority to do one or more of the following:
a. Modify or amend the governing instrument to achieve favorable tax status or
respond to changes in the Internal Revenue Code, federal laws, state laws, or the
rulings and regulations under those laws;
b. Increase, decrease, or modify the interests of a beneficiary or beneficiaries of the
trust;
c. Modify the terms of a power of appointment granted by the trust provided, the
modification or amendment does not grant a beneficial interest to any individual,
class of individuals, or other parties not specifically provided for under the trust
instrument;
d. Remove, or appoint, a trustee, investment trust advisor, distribution trust advisor,
another directing party, investment committee member, or distribution committee
member, including designation of a plan of succession for future holders of that
office;
e. Terminate the trust, including determination of how the trustee is to distribute the
trust property to be consistent with the purposes of the trust;
f. Change the situs of the trust, the governing law of the trust, or both;
g. Appoint one or more successor trust protectors, including designation of a plan of
succession for future trust protectors;
h. Interpret terms of the trust instrument at the request of the trustee;
i. Advise the trustee on matters concerning a beneficiary;
j. Amend or modify the governing instrument to take advantage of laws governing:
(1)Restraints on alienation;
(2)Distribution of trust property; or
(3)Improvement of the administration of the trust;
k. Veto or direct trust distributions; or
l. Provide direction regarding notification of qualified beneficiaries. 5. If a charity is a qualified beneficiary of the trust, a trust protector shall give notice to the
attorney general at least sixty days before taking any action authorized under
subdivisions b through f of subsection 4. The attorney general may waive this notice
requirement.
59-16.2-06. Duty and liability of directing party. 1. A directing party is a fiduciary of the trust subject to the same duties and standards
applicable to a trustee of a trust as provided by applicable law unless the governing
instrument provides otherwise. However, the governing instrument may not relieve or
exonerate a directing party from the duty to act or withhold acting as the directing party
in good faith reasonably believes is in the best interests of the trust. 2. Each directing party must keep the excluded fiduciary and any other directing party
reasonably informed regarding the administration of the trust with respect to any
specific duty or function being performed by the directing party to the extent the duty or
function would normally be performed by the excluded fiduciary or to the extent
providing the information to the excluded fiduciary or other directing party is
reasonably necessary for the excluded fiduciary or other directing party to perform its
duties. The directing party shall provide the information reasonably requested by the
excluded fiduciary or other directing party. 3. Neither the performance nor the failure to perform of a directing party's duty to inform
as provided in this section affects the limitation on the liability of the excluded fiduciary
as provided in this section. 4. The directing party may be made a party to an action or proceeding if issues relate to
a decision or action of the directing party, even if investment advisory agreements or
other related agreement provide otherwise.
59-16.2-07. Duty and liability of excluded fiduciary. 1. The excluded fiduciary shall act in accordance with the governing instrument and
comply with the directing party's exercise of the powers granted to the directing party
by the governing instrument. 2. Unless otherwise provided in the governing instrument, an excluded fiduciary has no
duty to monitor, review, inquire, investigate, recommend, evaluate, or warn with
respect to a directing party's exercise of or failure to exercise any power granted to the
directing party by the governing instrument, including, any power related to the
acquisition, disposition, retention, management, or valuation of any asset or
investment. 3. Except as otherwise provided in this chapter or the governing instrument, an excluded
fiduciary is not liable, either individually or as a fiduciary, for an action, inaction,
consent, or failure to consent by a directing party, including:
a. If a governing instrument provides an excluded fiduciary is to follow the direction
of a directing party and the excluded fiduciary acts in accordance with this
direction, except in cases of willful misconduct on the part of the excluded
fiduciary in complying with the direction of the directing party, the excluded
fiduciary is not liable for any loss resulting directly or indirectly from following the
direction, including compliance regarding the valuation of assets for which there
is no readily available market value.
b. If a governing instrument provides an excluded fiduciary is to act or omit to act
only with the consent of a directing party, except in cases of willful misconduct on
the part of the excluded fiduciary, the excluded fiduciary is not liable for any loss
resulting directly or indirectly from an act taken or omitted as a result of the
directing party's failure to provide consent after having been requested to do so
by the excluded fiduciary.
c. If a governing instrument so provides, or if for any reason, an excluded fiduciary
is required to assume the role or responsibilities of a directing party, or if the
excluded fiduciary appoints a directing party or successor to a directing party,
except in cases of willful misconduct on the part of the excluded fiduciary, the
excluded fiduciary is not liable for any loss resulting directly or indirectly from its
actions in carrying out the roles and responsibilities of the directing party. 4. An excluded fiduciary does not have an obligation to review or evaluate a direction
from a distribution trust advisor nor to perform investment or suitability reviews,
inquiries, or investigations, nor to make recommendations or evaluations with respect
to investments to the extent the directing party, custodial account owner, or authorized
designee of a custodial account owner had authority to direct the acquisition,
disposition, or retention of the investment. If the excluded fiduciary offers
communication to the directing party or an investment person selected by the
investment trust advisor, the action may not be deemed to constitute an undertaking
by the excluded fiduciary to monitor or otherwise participate in actions within the scope
of the advisor's authority or to constitute a duty to do so. 5. An excluded fiduciary does not have a duty to communicate with, warn, or apprise a
beneficiary or third party concerning instances in which the excluded fiduciary would or
may have exercised the excluded fiduciary's own discretion in a manner different from
the manner directed by the directing party. 6. Absent a contrary provision in the governing instrument, the actions of the excluded
fiduciary, including any communications with the directing party or others, or carrying
out, recording, or reporting actions taken at the directing party's direction pertaining to
matters within the scope of authority of the directing party, must be deemed to be
administrative actions taken by the excluded fiduciary solely to allow the excluded
fiduciary to perform those duties assigned to the excluded fiduciary under the
governing instrument. These administrative actions may not be deemed to constitute
an undertaking by the excluded fiduciary to monitor, participate, or otherwise take a
fiduciary responsibility for actions within the scope of authority of the directing party. 7. An excluded fiduciary may obtain and act upon an opinion of counsel on a matter
relevant to this section.
59-16.2-08. Application. This chapter applies to: 1. Existing and future trusts that appoint or provide for a directing party including a party
granted power or authority effectively comparable in substance to that of a directing
party as provided in this chapter; or 2. An existing or future trusts that:
a. Are modified in accordance with applicable law or the terms of the governing
instrument to appoint or provide for a directing party; or
b. Are modified to appoint or provide for a directing party, including a party granted
power or authority effectively comparable in substance to that of a directing party,
in accordance with a court order, or a nonjudicial settlement agreement whether
the order or agreement specifies this chapter governs the responsibilities,
actions, and liabilities of persons designated as a directing party or excluded
fiduciary.