§60-1303. Trust instrument defined.
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/ok/title-60-property/60-1303A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A. For the purposes of the Oklahoma Qualified Dispositions into Trust Act, a trust instrument is an instrument appointing a qualified person or qualified persons for the property that is the subject of a disposition, which instrument:
1. Expressly incorporates the law of this state to govern the validity, construction, and administration of the trust;
2. Is irrevocable, but a trust instrument may not be deemed revocable on account of its inclusion of one or more of the following:
a. a transferor's power to veto a distribution from the
trust,
b. an inter vivos power of appointment, other than an
inter vivos power exercisable solely by the transferor
in favor of the transferor, the transferor's
creditors, the transferor's estate, or the creditors
of the transferor's estate,
c. a testamentary power of appointment,
d. the transferor's potential or actual receipt of
income, including rights to such income retained in
the trust instrument,
e. the transferor's potential or actual receipt of income
or principal from a charitable remainder unitrust or
charitable remainder annuity trust as such terms are
defined in Section 664 of the Internal Revenue Code of
1986, 26 U.S.C., Section 664, as of January 1, 2009,
f. the transferor's receipt each year of a percentage of
the value as determined from time to time pursuant to
the trust instrument, but not exceeding the amount
that may be defined as income under Section 643(b) of
the Internal Revenue Code of 1986, 26 U.S.C., Section
643(b), as of January 1, 2009,
g. the transferor's receipt each year of a percentage of
the value as determined from time to time pursuant to
the trust instrument, but not exceeding the amount
that may be defined as income under Section 664 of the
Internal Revenue Code of 1986, 26 U.S.C., Section
643(b), as of January 1, 2009,
h. the transferor's potential or actual receipt or use of
principal if the potential or actual receipt or use of
principal would be the result of a qualified person,
including a qualified person acting at the direction
of a trust advisor described in this act, acting
either in the qualified person's sole discretion or
pursuant to an ascertainable standard contained in the
trust instrument,
i. the transferor's right to remove a trustee, protector,
or trust advisor and to appoint a new trustee,
protector, or trust advisor, other than a trustee who
is a related or subordinate party with respect to the
transferor within the meaning of Section 672(c) of the
Internal Revenue Code of 1986, 26 U.S.C., Section
672(c), as of January 1, 2009,
j. the transferor's potential or actual use of real
property held under a qualified personal residence
trust within the meaning of such term as described in
the regulations promulgated under Section 2702(c) of
the Internal Revenue Code of 1986, 26 U.S.C., Section
2702(c), as of January 1, 2009,
k. a pour-back provision that pours back to the
transferor's will or revocable trust all or part of
the trust assets,
l. the transferor's potential or actual receipt of income
or principal to pay, in whole or in part, income taxes
due on income of the trust if the potential or actual
receipt of income or principal is pursuant to a
provision in the trust instrument that expressly
provides for the payment of the taxes and if the
potential or actual receipt of income or principal
would be the result of a qualified person's acting in
the qualified person's discretion or pursuant to a
mandatory direction in the trust instrument or acting
at the direction of a trust advisor described in
Section 24 of this act,
m. the ability, whether pursuant to discretion,
direction, or the grantor's exercise of a testamentary
power of appointment, of a qualified person to pay,
after the death of the transferor, all or any part of
the debts of the transferor outstanding at the time of
the transferor's death, the expenses of administering
the transferor's estate, or any estate or inheritance
tax imposed on or with respect to the transferor's
estate,
n. a transferor's service as a noncontrolling member of a
distribution committee that functions as a
distribution trust advisor, which is a fiduciary given
authority by the instrument to exercise all or any
portions of the powers and discretions over any
discretionary distributions of income or principal, or
o. a transferor's enjoyment of a power to reacquire the
trust corpus by substituting other property of an
equivalent value within the meaning of Section
675(4)(C) of the Internal Revenue Code of 1986, 26
U.S.C., Section 675(4)(C), as of January 1, 2021, and
3. Provides that the interest of the transferor or other beneficiary in the trust property or the income from the trust property may not be transferred, assigned, pledged, or mortgaged, whether voluntarily or involuntarily, before the qualified person distributes the property or income from the property to the beneficiary, and such provision of the trust instrument constitutes a restriction on the transfer of the transferor's beneficial interest in the trust that is enforceable under applicable nonbankruptcy law within the meaning of Section 541(c)(2) of the Bankruptcy Code, 11 U.S.C., Section 541(c)(2), as of January 1, 2009.
B. A disposition by a trustee that is not a qualified person to a trustee that is a qualified person may not be treated as other than a qualified disposition solely because the trust instrument fails to meet the requirements of paragraph 1 of subsection A of this section. Added by Laws 2024, c. 369, § 21, eff. Nov. 1, 2024.