456.8-814. Discretionary powers--tax savings. - Missouri Statutes

Discretionary powers--tax savings.

456.8-814. 1. Notwithstanding the use of such terms as "absolute,""sole," or "uncontrolled," in the exercise of discretion under anascertainable standard, the trustee shall exercise such discretionary powerin good faith and in accordance with the terms and purposes of the trustand the interests of the beneficiaries.

2. Subject to subsection 4 of this section, and unless the terms ofthe trust expressly indicate that a rule in this subsection does not apply:

(1) a person other than a settlor who is a beneficiary and trustee ofa trust that confers on the trustee a power to make discretionarydistributions to or for the trustee's personal benefit may exercise thepower only in accordance with an ascertainable standard;

(2) a trustee may not exercise a power to make discretionarydistributions to satisfy a legal obligation of support that the trusteepersonally owes another person; and

(3) for purposes of this subsection 2 of this section, the term"trustee" shall include a person who is deemed to have any power of atrustee, whether because such person has the right to remove or replace anytrustee, because a reciprocal trust or power doctrine applies, or for anyother reason.

3. A power whose exercise is limited or prohibited by subsection 2may be exercised by a majority of the remaining trustees whose exercise ofthe power is not so limited or prohibited. If the power of all trustees isso limited or prohibited, the court may appoint a special fiduciary withauthority to exercise the power.

4. Subsection 2 of this section does not apply to:

(1) a power held by the settlor's spouse who is the trustee of atrust for which a marital deduction, as defined in Section 2056(b)(5) or2523(b)(5) of the Internal Revenue Code was previously allowed;

(2) any trust during any period that the trust may be revoked oramended by its settlor; or

(3) a trust if contributions to the trust qualify for the annualexclusion under Section 2503(c) of the Internal Revenue Code.

(L. 2004 H.B. 1511, A.L. 2006 S.B. 892)