HB0889_S_Amend

SECTION 1. Modification or termination of noncharitable irrevocable trust by consent. (1) This section will apply to all irrevocable trusts:

(a) Created by a person who is at the time of the execution of an amendment in such trust a bona fide resident of the State of Mississippi; or

(b) Managed by a trustee who at the time of the execution of an amendment to such trust is a resident of the state or is domiciled therein.

(2) (a) A noncharitable irrevocable trust may be modified or terminated upon consent of the persons interested in the trust, without court approval or intervention, even if the modification or termination is inconsistent with a material purpose of the trust.

(b) A noncharitable irrevocable trust may be terminated upon consent of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust. A noncharitable irrevocable trust may be modified upon consent of all the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.

(d) Upon termination of a trust under paragraph (a) or (b), the trustee shall distribute the trust property as agreed by the beneficiaries.

(e) If not all of the beneficiaries consent to a proposed modification or termination of the trust under paragraph (a) or (b), the modification or termination may be approved by the court if the court is satisfied that:

(i) If all of the beneficiaries had consented, the trust could have been modified or terminated under this section; and

(ii) The interests of a beneficiary who does not consent will be adequately protected.

(f) "Persons interested in the trust" means the trustor, if living, all persons beneficially interested in the trust, persons holding powers over the trust assets and any trustee of the trust.

(3) (a) In all cases subject to this section, any amendment shall be reduced to writing and shall be signed by the trustor, the trustee, the living adult beneficiaries and the special representatives named, if any, and filed in the same place as the original trust instrument.

(b) In the event any trust subject to this section provides for a beneficiary, actual or contingent, whose interest has not vested and is either mentally incompetent, a minor, an unborn child or an unconceived child, then the trustor and trustee, acting jointly, shall name a special representative to represent the person.

(4) (a) The special representative so appointed shall carefully consider the interests of the party or parties he is appointed to represent and also consider any actual or apparent conflict of interest which might exist between his own interest and the party or parties he is then representing, and being satisfied no such conflict exists and being further satisfied that the proposed amendment does not adversely affect the interests of the party or parties he represents, he then may give his consent and execute the proposed amendment on behalf of the party or parties.

(b) Before any appointment of a special representative, both the trustor and the trustee shall give careful consideration to the background, education, experience, general reputation, occupation and lack of conflict of interest in the person appointed as special representative.

(c) The special representative named shall be entitled to reasonable compensation as well as recovery of reasonable expenses.

(5) In all cases arising under subsection 3(b), the court may appoint a guardian ad litem to represent the interests of mental incompetents, minors, unborn children and unconceived children who may be or become beneficiaries of the subject trust. A certified copy of the court's decision if any amendment is approved, may be recorded where the original trust was recorded.

(6) From and after approval by all necessary parties or approval by the chancery court, as the case may be, the trust shall be administered in accordance with the original trust as amended by the parties or the court.

SECTION 2. This act shall take effect and be in force from and after July 1, 2005.