14-1101. Training

A judicial officer presiding over proceedings brought pursuant to this title must participate in training as prescribed by the supreme court.

14-1102. Purposes; rule of construction

A. This title shall be liberally construed and applied to promote its underlying purposes and policies.

B. The underlying purposes and policies of this title are:

1. To simplify and clarify the law concerning the affairs of decedents, missing persons, protected persons, minors and incapacitated persons.

2. To discover and make effective the intent of a decedent in distribution of his property.

3. To promote a speedy and efficient system for liquidating the estate of the decedent and making distribution to his successors.

4. To facilitate use and enforcement of certain trusts.

5. To make uniform the law among the various jurisdictions.

14-1103. Supplementary general principles of law applicable

Unless displaced by the particular provisions of this title, the principles of law and equity supplement its provisions.

14-1104. Prudent management of costs

In a proceeding brought pursuant to this title:

1. The fiduciary must prudently manage costs, preserve the assets of the ward or protected person for the benefit of the ward or protected person and protect against incurring any costs that exceed probable benefits to the ward, protected person, decedent's estate or trust, except as otherwise directed by a governing instrument or court order.

2. A guardian ad litem, fiduciary, fiduciary's attorney and attorney for the ward or protected person have a duty to:

(a) Act in the best interest of the ward or protected person.

(b) Avoid engaging in excessive or unproductive activities.

(c) Affirmatively assess the financial cost of pursuing any action compared to the reasonably expected benefit to the ward or protected person.

3. Market rates for goods and services are a proper, ongoing consideration for the fiduciary and the court during the initial court appointment of a fiduciary or attorney and relating to a request to substitute a court-appointed fiduciary or attorney.

14-1105. Remedies for unreasonable conduct; definitions

A. If the court finds that a decedent's estate or trust has incurred professional fees or expenses as a result of unreasonable conduct, the court may order the person who engaged in the conduct or the person's attorney, or both, to pay the decedent's estate or trust for some or all of the fees and expenses as the court deems just under the circumstances.

B. In a guardianship or conservatorship case, if the court finds that a ward or protected person has incurred professional fees or expenses as a result of unreasonable conduct, the court may order the person who engaged in the conduct or the person's attorney, or both, to pay the ward or protected person for some or all of the fees and expenses as the court deems just under the circumstances.

C. The remedies permitted pursuant to this section are in addition to any other civil remedy or any other provision of law. The remedies permitted pursuant to this section may be invoked to mitigate the financial burden on a ward, protected person, decedent's estate or trust incurred as a result of unjustified court proceedings or unreasonable or excessive demands made on a fiduciary, fiduciary's attorney, court-appointed attorney or representative.

D. For the purposes of this section:

1. "Court-appointed attorney" means an attorney appointed pursuant to section 14-5303, subsection C, section 14-5310, subsection C, section 14-5401.01, subsection C or section 14-5407, subsection B.

2. "Fiduciary" means an agent under a durable power of attorney, an agent under a health care power of attorney, a guardian, a conservator, a personal representative, a trustee or a guardian ad litem.

3. "Person who engaged in the conduct" includes a fiduciary, an attorney or a guardian ad litem.

4. "Professional" means an accountant, an attorney, a fiduciary, a physician, a psychologist, a registered nurse, a guardian ad litem or an expert witness.

5. "Professional fees or expenses" includes the fiduciary's fees and expenses and the fiduciary's attorney fees and expenses, as well as the fees and expenses of any other professionals hired by the fiduciary or the fiduciary's attorney.

14-1106. Effect of fraud and evasion

If fraud has been perpetrated in connection with any proceeding or in any statement filed under this title or if fraud is used to avoid or circumvent the provisions or purposes of this title, any person injured thereby may obtain appropriate relief against the perpetrator of the fraud or restitution from any person, other than a bona fide purchaser, benefiting from the fraud, whether innocent or not. Any proceeding must be commenced within two years after the discovery of the fraud, but no proceeding may be brought against one not a perpetrator of the fraud later than five years after the time of commission of the fraud. This section has no bearing on remedies relating to fraud practiced on a decedent during his lifetime which affects the succession of his estate.

14-1107. Determination of death and status; rules

In addition to the rules of evidence in courts of general jurisdiction, the following rules relating to a determination of death and status apply:

1. A determination of death must be made in accordance with accepted medical standards.

2. A certified or authenticated copy of a death certificate purporting to be issued by an official or agency of the place where the death purportedly occurred is prima facie evidence of the fact, place, date and time of death and the identity of the decedent.

3. A certified or authenticated copy of any record or report of a governmental agency, domestic or foreign, that a person is missing, detained, dead or alive is prima facie evidence of the status and of the dates, circumstances and places disclosed by the record or report.

4. In the absence of prima facie evidence of death under paragraph 2 or 3, the fact of death may be established by clear and convincing evidence, including circumstantial evidence.

5. A person whose death is not established under paragraphs 1 through 4, who is absent for a continuous period of five years, during which time that person has not been heard from, and whose absence is not satisfactorily explained after diligent search or inquiry is presumed to be dead. That person's death is presumed to have occurred at the end of the period unless there is sufficient evidence for determining that death occurred earlier.

6. In the absence of evidence disputing the time of death stated on a document described in paragraph 2 or 3, a document described in paragraph 2 or 3 that states a time of death one hundred twenty hours or more after the time of death of another person, however the time of death of the other person is determined, establishes by clear and convincing evidence that the person survived the other person by one hundred twenty hours.

14-1108. Arbitration of disputes; alternative dispute resolution

In a proceeding brought pursuant to this title, after the initial appointment of a fiduciary, the court may require arbitration of a dispute pursuant to the requirements of section 12-133, subsections B through L, or order alternative dispute resolution.

14-1109. Repetitive filings; summary denial

If an interested person files a motion or petition that requests the same or substantially similar relief to the relief requested in another motion or petition filed by the same interested person within the preceding twelve months and if the later filed motion or petition does not describe in detail a change in fact or circumstance that supports the requested relief, the court may summarily deny the motion or petition without a response or objection being filed and without a hearing or oral argument being set.

14-1110. Probate advisory panel; report

(Rpld. 7/1/16)

A. The probate advisory panel is established consisting of the following members appointed to staggered three year terms:

1. Two public members who are guardians of an adult child or a sibling who is a ward. The president of the senate and the speaker of the house of representatives shall each appoint one member.

2. Two public members who are conservators of a parent who is a protected person. The president of the senate and the speaker of the house of representatives shall each appoint one member.

3. One public fiduciary who is licensed pursuant to section 14-5651 and who is from a county with a population of less than five hundred thousand persons. The governor shall appoint this member.

4. One fiduciary, other than a public fiduciary, who is licensed pursuant to section 14-5651 and who is from a county with a population of more than five hundred thousand persons. The governor shall appoint this member.

5. One attorney who has a minimum of four years' experience in guardianship and conservatorship proceedings. The governor shall appoint this member.

6. One judicial officer who has a minimum of two years' experience presiding over guardianship and conservatorship proceedings and who is from a county with a population of more than five hundred thousand persons. The chief justice of the supreme court shall appoint this member.

7. One clerk of the superior court. The chief justice of the supreme court shall appoint this member.

B. The panel shall:

1. Select a chairperson at its first annual meeting.

2. Hold a public hearing at least once each year, or at the call of the chairperson, on how to improve the guardianship and conservatorship laws through statutory changes.

3. Submit a report of its findings and recommendations to the governor, the speaker of the house of representatives, the president of the senate and the chief justice of the supreme court on or before November 15 of each year. The panel shall provide a copy of each report to the secretary of state.

C. Panel members are not eligible for compensation or reimbursement of expenses.

D. The legislature shall provide staff support for the panel.

14-1201. Definitions

In this title, unless the context otherwise requires:

1. "Agent" includes an attorney-in-fact under a durable or nondurable power of attorney, a person who is authorized to make decisions concerning another person's health care and a person who is authorized to make decisions for another person under a natural death act.

2. "Application" means a written request to the registrar for an order of informal probate or appointment under chapter 3, article 3 of this title.

3. "Basis for compensation" means hourly rate, a fixed fee or a contingency fee agreement and reimbursable costs.

4. "Beneficiary", as it relates to a trust beneficiary, includes a person who has any present or future interest, vested or contingent, and also includes the owner of an interest by assignment or other transfer. As it relates to a charitable trust, beneficiary includes any person entitled to enforce the trust. As it relates to a beneficiary of a beneficiary designation, beneficiary refers to a beneficiary of an insurance or annuity policy, an account with pay on death designation, a security registered in beneficiary form or a pension, profit sharing, retirement or similar benefit plan, or any other nonprobate transfer at death. As it relates to a beneficiary designated in a governing instrument, beneficiary includes a grantee of a deed, a devisee, a trust beneficiary, a beneficiary of a beneficiary designation, a donee, appointee or taker in default of a power of appointment and a person in whose favor a power of attorney or a power held in any person, fiduciary or representative capacity is exercised.

5. "Beneficiary designation" refers to a governing instrument naming a beneficiary of an insurance or annuity policy, of an account with pay on death designation, of a security registered in beneficiary form or of a pension, profit sharing, retirement or similar benefit plan, or any other nonprobate transfer at death.

6. "Child" includes a person who is entitled to take as a child under this title by intestate succession from the parent whose relationship is involved. Child excludes a person who is only a stepchild, a foster child, a grandchild or a more remote descendant.

7. "Claims", in respect to estates of decedents and protected persons, includes liabilities of the decedent or the protected person, whether arising in contract, in tort or otherwise, and liabilities of the estate that arise at or after the death of the decedent or after the appointment of a conservator, including funeral expenses and expenses of administration. Claims do not include estate or inheritance taxes or demands or disputes regarding title of a decedent or a protected person to specific assets alleged to be included in the estate.

8. "Community property" means that property of a husband and wife that is acquired during the marriage and that is community property as prescribed in section 25-211.

9. "Conservator" means a person who is appointed by a court to manage the estate of a protected person.

10. "Court" means the superior court.

11. "Dependent child" means a minor child whom the decedent was obligated to support or an adult child who was in fact being supported by the decedent at the time of the decedent's death.

12. "Descendant" means all of the decedent's descendants of all generations, with the relationship of parent and child at each generation.

13. "Devise", when used as a noun, means a testamentary disposition of real or personal property and, when used as a verb, means to dispose of real or personal property by will.

14. "Devisee" means a person designated in a will to receive a devise. For the purposes of chapter 3 of this title, in the case of a devise to an existing trust or trustee, or to a trustee on trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees.

15. "Disability" means cause for a protective order as described in section 14-5401.

16. "Distributee" means any person who has received property of a decedent from that person's personal representative other than as a creditor or purchaser. Distributee includes a testamentary trustee only to the extent of distributed assets or increment that remains in that person's hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. For the purposes of this paragraph, "testamentary trustee" includes a trustee to whom assets are transferred by will, to the extent of the devised assets.

17. "Estate" includes the property of the decedent, trust or other person whose affairs are subject to this title as originally constituted and as it exists from time to time during administration. As it relates to a spouse, the estate includes only the separate property and the share of the community property belonging to the decedent or person whose affairs are subject to this title.

18. "Exempt property" means that property of a decedent's estate that is described in section 14-2403.

19. "Fiduciary" includes a personal representative, guardian, conservator and trustee.

20. "Foreign personal representative" means a personal representative appointed by another jurisdiction.

21. "Formal proceedings" means proceedings conducted before a judge with notice to interested persons.

22. "Governing instrument" means a deed, will, trust, insurance or annuity policy, account with pay on death designation, security registered in beneficiary form, pension, profit sharing, retirement or similar benefit plan, instrument creating or exercising a power of appointment or a power of attorney or a dispositive, appointive or nominative instrument of any similar type.

23. "Guardian" means a person who has qualified as a guardian of a minor or incapacitated person pursuant to testamentary or court appointment but excludes a person who is merely a guardian ad litem.

24. "Guardian ad litem" includes a person who is appointed pursuant to section 14-1408.

25. "Heirs", except as controlled by section 14-2711, means persons, including the surviving spouse and the state, who are entitled under the statutes of intestate succession to the property of a decedent.

26. "Incapacitated person" has the same meaning prescribed in section 14-5101.

27. "Informal proceedings" means those proceedings conducted without notice to interested persons by an officer of the court acting as a registrar for probate of a will or appointment of a personal representative.

28. "Interested person" includes any trustee, heir, devisee, child, spouse, creditor, beneficiary, person holding a power of appointment and other person who has a property right in or claim against a trust estate or the estate of a decedent, ward or protected person. Interested person also includes a person who has priority for appointment as personal representative and other fiduciaries representing interested persons. Interested person, as the term relates to particular persons, may vary from time to time and must be determined according to the particular purposes of, and matter involved in, any proceeding.

29. "Issue" of a person means descendant as defined in this section.

30. "Joint tenants with the right of survivorship" and "community property with the right of survivorship" includes co-owners of property held under circumstances that entitle one or more to the whole of the property on the death of the other or others but excludes forms of co-ownership registration in which the underlying ownership of each party is in proportion to that party's contribution.

31. "Lease" includes any oil, gas or other mineral lease.

32. "Letters" includes letters testamentary, letters of guardianship, letters of administration and letters of conservatorship.

33. "Minor" means a person who is under eighteen years of age.

34. "Mortgage" means any conveyance, agreement or arrangement in which property is encumbered or used as security. Mortgage does not include leases or easements.

35. "Nonresident decedent" means a decedent who was domiciled in another jurisdiction at the time of the decedent's death.

36. "Organization" means a corporation, limited liability company, business trust, estate, trust, partnership, joint venture, association, government or governmental subdivision or agency or any other legal or commercial entity.

37. "Parent" includes any person entitled to take, or who would be entitled to take if the child died without a will, as a parent under this title by intestate succession from the child whose relationship is in question and excludes any person who is only a stepparent, foster parent or grandparent.

38. "Payor" means a trustee, insurer, business entity, employer, government, governmental agency or subdivision or any other person who is authorized or obligated by law or a governing instrument to make payments.

39. "Person" means an individual or an organization.

40. "Personal representative" includes executor, administrator, successor personal representative, special administrator and persons who perform substantially the same function under the law governing their status. A general personal representative excludes a special administrator.

41. "Petition" means a written request to the court for an order after notice.

42. "Proceeding" includes action at law and suit in equity.

43. "Property" has the same meaning prescribed in section 14-10103.

44. "Protected person" has the same meaning prescribed in section 14-5101.

45. "Protective proceeding" has the same meaning prescribed in section 14-5101.

46. "Registrar" means the official of the court designated to perform the functions of registrar as provided in section 14-1307.

47. "Security" includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under that title or lease, collateral trust certificate, transferable share or voting trust certificate and, in general, includes any interest or instrument commonly known as a security, or any certificate of interest or participation, any temporary or interim certificate, receipt or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of these securities.

48. "Separate property" means that property of a husband or wife that is the spouse's separate property as defined in section 25-213.

49. "Settlement", in reference to a decedent's estate, includes the full process of administration, distribution and closing.

50. "Special administrator" means a personal representative as described by sections 14-3614 through 14-3618.

51. "State" has the same meaning prescribed in section 14-10103.

52. "Successor personal representative" means a personal representative, other than a special administrator, who is appointed to succeed a previously appointed personal representative.

53. "Successors" means persons, other than creditors, who are entitled to property of a decedent under a will or this title.

54. "Supervised administration" refers to the proceedings described in chapter 3, article 5 of this title.

55. "Survive" means that a person has neither predeceased an event, including the death of another person, nor is deemed to have predeceased an event under section 14-2104 or 14-2702.

56. "Testacy proceeding" means a proceeding to establish a will or determine intestacy.

57. "Testator" includes a person of either sex.

58. "Trust" includes an express trust, private or charitable, with any additions, wherever and however created. Trust also includes a trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. Trust excludes other constructive trusts and excludes resulting trusts, conservatorship, personal representatives, trust accounts, custodial arrangements pursuant to chapter 7, article 7 of this title, business trusts providing for certificates to be issued to beneficiaries, common trust funds, voting trusts, security arrangements, liquidation trusts and trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions or employee benefits of any kind, trusts created by a city or town for the payment of medical insurance, health care benefits or expenses, long-term or short-term disability, self insurance reserves and similar programs administered by a city or town, legal defense trusts and any arrangement under which a person is nominee or escrowee for another.

59. "Trustee" includes an original, additional or successor trustee, whether or not appointed or confirmed by the court.

60. "Ward" has the same meaning prescribed in section 14-5101.

61. "Will" includes a codicil and any testamentary instrument that merely appoints an executor, revokes or revises another will, nominates a guardian or expressly excludes or limits the right of an individual or class to succeed to property of the decedent passing by intestate succession.

14-1301. Territorial application

Except as otherwise provided in this title, the title applies to:

1. The affairs and estates of decedents, missing persons and persons to be protected, domiciled in this state.

2. The property of nonresidents located in this state or property coming into the control of a fiduciary who is subject to the laws of this state.

3. Incapacitated persons and minors in this state.

4. Multiple-party accounts in this state.

5. Trusts subject to administration in this state.

This title does not apply to property of Indians within the jurisdiction of their tribal courts or to lands held in trust by the United States for Indians.

14-1302. Subject matter jurisdiction

A. To the full extent permitted by the constitution, the court has jurisdiction over all subject matter relating to:

1. Estates of decedents, including construction of wills and determination of heirs and successors of decedents, and estates of protected persons.

2. Protection of minors and incapacitated persons.

3. Trusts.

B. The court has general jurisdiction to make orders, judgments and decrees and take all other action necessary and proper to administer justice in the matters which come before it including jurisdiction to:

1. Enforce orders against a fiduciary by contempt proceedings.

2. Compel action by a fiduciary by body attachment.

3. Hear and determine related claims by or against fiduciaries, protected persons or incapacitated persons by or against third parties, including claims for malpractice, breach of contract, personal injury, wrongful death, quiet title and breach of fiduciary duty.

14-1303. Venue; multiple proceedings; transfer

A. Where a proceeding under this title could be maintained in more than one place in this state, the court in which the proceeding is first commenced has the exclusive right to proceed.

B. If proceedings concerning the same estate, protected person, ward or trust are commenced in more than one county of this state, the court in the county in which the proceeding was first commenced shall continue to hear the matter, and the other courts shall hold the matter in abeyance until the question of venue is decided; and if the ruling court determines that venue is properly in another county, it shall transfer the proceeding to the other county.

C. If a court finds that in the interest of justice a proceeding or a file should be located in another county of this state, the court making the finding may transfer the proceeding or file to the other county.

14-1304. Practice in court

Unless specifically provided to the contrary in this title or unless inconsistent with its provisions, the rules of civil procedure including the rules concerning vacation of orders and appellate review govern formal proceedings under this title.

14-1305. Records and certified copies

The clerk of the court shall keep a record for each decedent, ward, protected person or trust involved in any document which may be filed with the court under this title including petitions and applications, demands and any orders or responses relating thereto by the registrar or court, and establish and maintain a system for indexing, filing or recording which is sufficient to enable users of the records to obtain adequate information. Upon payment of the fees required by law the clerk must issue certified copies of any probated wills, letters issued to personal representatives, or any other record or paper filed or recorded. Certificates relating to probated wills must indicate whether the decedent was domiciled in this state and whether the probate was formal or informal. Certificates relating to letters must show the date of appointment. Certified copies of letters shall not be issued if the appointment is terminated or the letters are suspended or revoked.

14-1306. Jury trial

A. If duly demanded, a party is entitled to trial by jury in any proceeding in which any controverted question of fact arises as to which any party has a constitutional right to trial by jury.

B. If there is no right to trial by jury under subsection A or the right is waived, the court in its discretion may call a jury to decide any issue of fact, in which case the verdict is advisory only.

14-1307. Registrar; powers

The acts and orders which this title specifies as performable by the registrar shall be performed by a judge, the clerk of the court, a court commissioner or any of such at the selection of the presiding judge of the county designated by the court by a written order filed and recorded in the office of the clerk of the court.

14-1310. Oath or affirmation on filed documents

Except as otherwise specifically provided in this title or by rule, each document filed with the court or furnished to an interested person under this title including applications, petitions, demands for notice, claims, inventories and accounts shall be deemed to include an oath, affirmation or statement to the effect that its representations are true as far as the person executing or filing it knows or is informed. Each document filed with the court or furnished to an interested person under this title is material and may subject the person executing or filing such document to penalties relating to perjury and subornation of perjury.

14-1311. Standard of proof and burden of persuasion

Except as otherwise provided in this title, the standard of proof required in a judicial proceeding brought pursuant to this title is the preponderance of evidence. Parties have the ultimate burden of persuasion as to matters with respect to which they have the initial burden of proof.

14-1401.01. Notice to attorney general

Whenever it appears by suggestion of any interested person or the court that no taker of the estate exists, either at the commencement of or during proceedings under this title, notification of such proceedings shall be given to the attorney general.

14-1401. Notice; method and time of giving

A. If notice of a hearing on any petition is required and except for specific notice requirements as otherwise provided, the petitioner shall cause notice of the time and place of hearing of any petition to be given to any interested person or his attorney if he has appeared by attorney or requested that notice be sent to his attorney. Notice shall be given either:

1. By mailing a copy thereof at least fourteen days before the time set for the hearing by certified, registered or ordinary first class mail addressed to the person being notified at the post office address given in his demand for notice, if any, or at his office or place of residence, if known.

2. By delivering a copy thereof to the person being notified personally at least fourteen days before the time set for the hearing.

3. If the address or identity of any person is not known and cannot be ascertained with reasonable diligence, or when otherwise required under this title, by publishing at least three times prior to the date set for the hearing a copy thereof in a newspaper having general circulation in the county where the hearing is to be held, the first publication of which is to be at least fourteen days before the hearing.

B. The court for good cause shown may provide for a different method or time of giving notice for any hearing.

C. Proof of the giving of notice shall be made at or before the hearing and filed in the proceeding.

14-1402. Notice; waiver

A person, including a guardian ad litem, conservator or other fiduciary, may waive notice by a writing signed by him or his attorney and filed in the proceeding.

14-1403. Pleadings

In formal proceedings involving trusts or estates of decedents, minors, protected persons or incapacitated persons, interests to be affected must be described in pleadings that give reasonable information to owners by name or class, by reference to the instrument creating the interests or in some other appropriate manner.

14-1404. Representation; basic effect

A. Notice to a person who may represent and bind another person under this article has the same effect as if notice were given directly to the other person.

B. Except as otherwise provided in section 14-10602, subsection E, a person who under this article may represent a settlor who lacks capacity may receive notice and give a binding consent on the settlor's behalf. The consent of a person who may represent and bind another person under this article is binding on the person represented unless the person represented objects to the representation before the consent would otherwise have become effective.

C. For the purposes of this section, notice to a person must include any document required to be sent to a person pursuant to this article.

D. A person who receives notice on behalf of another person pursuant to this section is not liable to the other person unless the person who receives notice is grossly negligent or acts or fails to act with the intent to harm the other person.

14-1405. Representation by holder of general power of appointment

The holder of a general power of appointment, including a general testamentary power of appointment, may represent and bind persons whose interests, as permissible appointees, takers in default or otherwise, are subject to the power.

14-1406. Representation by fiduciaries and parents

To the extent there is no material conflict of interest between the representative and the person represented or among those being represented with respect to a particular question or dispute:

1. A conservator may represent and bind the estate that the conservator controls.

2. A guardian may represent and bind the ward if a conservator of the ward's estate has not been appointed.

3. An agent who has authority to act with respect to the particular question or dispute may represent and bind the principal.

4. A trustee may represent and bind the beneficiaries of the trust.

5. A personal representative of a decedent's estate may represent and bind persons interested in the estate.

6. A parent may represent and bind the parent's minor or unborn child if a conservator or guardian for the child has not been appointed, except that the parent may not represent the child to consent to a modification or a termination of a trust if the parent is the settlor of the trust.

14-1407. Representation by person having substantially identical interest

Unless otherwise represented, a minor, incapacitated person, unborn child or person whose identity or location is unknown and not reasonably ascertainable may be represented by and bound by another person who has a substantially identical interest with respect to the particular question or dispute, but only to the extent there is no material conflict of interest between the representative and the person represented with respect to the particular question or dispute.

14-1408. Appointment of representative

A. If the court determines that an interest is not represented under this article or that the otherwise available representation might be inadequate, the court may appoint a representative to receive notice, give consent and otherwise represent, bind and act on behalf of a minor, incapacitated person, unborn child or person whose identity or location is unknown. The court may appoint a representative for several persons or interests.

B. A representative may act on behalf of the person represented with respect to any matter arising under this title, whether or not a judicial proceeding concerning the trust or estate is pending.

C. In making decisions, a representative may consider general benefit accruing to the living members of the family of the person represented.

14-2101. Intestate estate; modification by will

A. Any part of a decedent's estate not effectively disposed of by will passes by intestate succession to the decedent's heirs as prescribed in this chapter, except as modified by the decedent's will.

B. A decedent by will may expressly exclude or limit the right of a person or class to succeed to property of the decedent that passes by intestate succession. If that person or a member of that class survives the decedent, the share of the decedent's intestate estate to which that person or class would have succeeded passes as if that person or each member of that class had disclaimed that person's intestate share.

14-2102. Intestate share of surviving spouse

The following part of the intestate estate, as to both separate property and the one-half of community property that belongs to the decedent, passes to the surviving spouse:

1. If there is no surviving issue or if there are surviving issue all of whom are issue of the surviving spouse also, the entire intestate estate.

2. If there are surviving issue one or more of whom are not issue of the surviving spouse, one-half of the intestate separate property and no interest in the one-half of the community property that belonged to the decedent.

14-2103. Heirs other than surviving spouse; share in estate

Any part of the intestate estate not passing to the decedent's surviving spouse under section 14-2102 or the entire intestate estate if there is no surviving spouse passes in the following order to the following persons who survive the decedent:

1. To the decedent's descendants by representation.

2. If there is no surviving descendant, to the decedent's parents equally if both survive or to the surviving parent.

3. If there is no surviving descendant or parent, to the descendants of the decedent's parents or either of them by representation.

4. If there is no surviving descendant, parent or descendant of a parent, but the decedent is survived by one or more grandparents or descendants of grandparents, half of the estate passes to the decedent's paternal grandparents equally if both survive or to the surviving paternal grandparent or the descendants of the decedent's paternal grandparents or either of them if both are deceased with the descendants taking by representation. The other half passes to the decedent's maternal relatives in the same manner. If there is no surviving grandparent or descendant of a grandparent on either the paternal or the maternal side, the entire estate passes to the decedent's relatives on the other side in the same manner as the half.

14-2104. Heirs; surviving of decedent; time requirement; presumption; exception

A. A person who does not survive the decedent by at least one hundred twenty hours is deemed to have predeceased the decedent for purposes of homestead allowance, exempt property and intestate succession, and the decedent's heirs are determined accordingly.

B. If it is not established by clear and convincing evidence that a person who would otherwise be an heir survived the decedent by at least one hundred twenty hours, it is deemed that the individual failed to survive for the required period.

C. This section does not apply if its application would result in a taking of intestate estate by the state under section 14-2105.

14-2105. Unclaimed estate; passage to state

If no one is qualified to claim the estate under this article, the intestate estate passes to the state.

14-2106. Passing of estate by representation; assigning of shares; definitions

A. If under section 14-2103, paragraph 1 all or part of a decedent's intestate estate passes by representation to the decedent's descendants, that estate is divided into as many equal shares as there are surviving descendants in the generation nearest to the decedent that contains one or more surviving descendants and to deceased descendants in the same generation who left any surviving descendants. Each surviving descendant in the nearest generation is allocated one share. Any remaining shares are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent.

B. If under section 14-2103, paragraph 3 or 4 all or part of a decedent's intestate estate passes by representation to the descendants of either of the decedent's deceased parents or to the descendants of either of the decedent's deceased paternal or maternal grandparents, all or part of the estate is divided into as many equal shares as there are surviving descendants in the generation nearest the deceased parents or either of them, or the deceased grandparents or either of them, that contains one or more surviving descendants and to deceased descendants in the same generation who left any surviving descendants. Each surviving descendant in the nearest generation is allocated one share. Any remaining shares are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent.

C. For the purposes of this section:

1. "Deceased descendant", "deceased parent" or "deceased grandparent" means a descendant, parent or grandparent who either predeceased the decedent or is deemed to have predeceased the decedent under section 14-2104.

2. "Surviving descendant" means a descendant who neither predeceased the decedent nor is deemed to have predeceased the decedent under section 14-2104.

14-2107. Kindred by half blood; right of inheritance

Relatives of the half blood inherit the same share they would inherit if they were of the whole blood.

14-2108. After-born heirs; requirements

A child in gestation at a particular time is treated as living at that time if the child lives at least one hundred twenty hours after its birth.

14-2109. Advancements of property during lifetime; effect on distribution of estate

A. If a person dies intestate as to all or a portion of that person's estate, property the decedent gave during the decedent's lifetime to a person who, at the decedent's death, is an heir is treated as an advancement against the heir's intestate share only if the decedent declared in a contemporaneous writing or the heir acknowledged in writing that the gift is an advancement or if the decedent's contemporaneous writing or the heir's written acknowledgment otherwise indicates that the gift is to be taken into account in computing the division and distribution of the decedent's intestate estate.

B. For the purposes of this section, property advanced during the decedent's lifetime is valued as of the time the heir came into possession or enjoyment of the property or as of the time of the decedent's death, whichever first occurs.

C. If the recipient of the property fails to survive the decedent the property is not taken into account in computing the division and distribution of the decedent's intestate estate unless the decedent's contemporaneous writing provides otherwise.

14-2110. Debts owed to a decedent; effect on distribution of estate

A debt owed to a decedent is not charged against the intestate share of any person except the debtor. If the debtor fails to survive the decedent, the debt is not taken into account in computing the intestate share of the debtor's descendants.

14-2111. Effect of alienage on distribution of estate

No person is disqualified to take as an heir because that person or a person through whom that person claims is or has been an alien.

14-2113. Heirs related to decedent through two lines; single share

A person who is related to the decedent through two lines of relationship is entitled to only a single share based on the relationship that would entitle the person to the larger share.

14-2114. Parent and child relationship; intestate succession; adopted children

A. Except as provided in subsections B and C of this section, for the purposes of intestate succession, a person is the child of that person's natural parents, regardless of their marital status. If this issue is in dispute the court shall establish that relationship under title 25, chapter 6, article 1.

B. An adopted person is the child of that person's adopting parent or parents and not of the natural parents. Adoption of a child by the spouse of either natural parent has no effect on the relationship between the child and that natural parent or on the right of the child or a descendant of the child to inherit from or through the other natural parent.

C. Inheritance from or through a child by either natural parent or the natural parent's kindred is precluded unless that natural parent has openly treated the child as a natural child and has not refused to support the child.

14-2207. Rights of surviving spouse; waiver; requirements; effect

A. A surviving spouse may waive the person's homestead allowance, exempt property and family allowance rights in whole or in part either before or after marriage by a written contract, agreement or waiver that is signed by the surviving spouse.

B. A surviving spouse's waiver is not enforceable if the surviving spouse provides that either of the following is true:

1. That person did not execute the waiver voluntarily.

2. The waiver was unconscionable when it was executed and before its execution that person:

(a) Was not provided a fair and reasonable disclosure of the property or financial obligations of the decedent.

(b) Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the decedent beyond the disclosure provided.

(c) Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the decedent.

C. The issue of a waiver's unconscionability may only be decided by the court as a matter of law.

D. Unless it provides to the contrary, a waiver that contains the words "all rights" or equivalent language, in relation to the property or estate of a present or prospective spouse or a complete property settlement entered into after or in anticipation of separation or divorce, is a waiver of all rights of homestead allowance, exempt property and family allowance by each spouse in the property of the other and a renunciation by each of all benefits that would otherwise pass to each person from the other by intestate succession or by virtue of any will executed before the waiver or property settlement.

14-2301. Entitlement of spouse; premarital will

A. If a testator's surviving spouse married the testator after the testator executed a will, the surviving spouse is entitled to receive as an intestate share that is not less than the value of the share of the estate the spouse would have received if the testator had died intestate as to any portion of the testator's estate that neither is devised to a child of the testator who was born before the testator married the surviving spouse and who is not a child of the surviving spouse nor is devised to a descendant of that child or that passes under section 14-2603 or 14-2604 to that child or to a descendant of that child, unless:

1. It appears from the will or other evidence that the will was made in contemplation of the testator's marriage to the surviving spouse.

2. The will expresses the intention that it is to be effective notwithstanding any subsequent marriage.

3. The testator provided for the spouse by transfer outside the will and the intent that the transfer is in lieu of a testamentary provision is shown by the testator's statements or can be reasonably inferred from the amount of the transfer or other evidence.

B. In satisfying the share provided by subsection A of this section, any devises made by the will to the testator's surviving spouse are applied first. Other devises abate pursuant to section 14-3902 unless the devise is to a child of the testator who was born before the testator married the surviving spouse and who is not a child of the surviving spouse or is a devise or substitute gift under section 14-2603 or 14-2604 to a descendant of that child.

14-2302. Omitted children; shares; definition

A. Except as provided in subsection C of this section, if a testator fails to provide by will for a child who is born or adopted after the testator executes the will, the omitted child receives a share in the estate as follows:

1. If the testator had no child living when the testator executed the will, an omitted child receives a share in the estate equal in value to what the child would have received if the testator had died intestate, unless the will devised all or substantially all of the estate to the other parent of the omitted child and that other parent survives the testator and is entitled to take under the will.

2. If the testator had one or more children living when the testator executed the will and the will devised property or an interest in property to one or more of the then-living children, an omitted child is entitled to share in the testator's estate as follows:

(a) The portion of the testator's estate in which the omitted child is entitled to share is limited to devises made to the testator's then-living children under the will.

(b) As limited under subdivision (a) of this paragraph, the omitted child is entitled to receive the share of the testator's estate that the child would have received if the testator had included all omitted children with the children to whom devises were made under the will and had given an equal share of the estate to each child.

B. To the extent feasible, the interest granted an omitted child under subsection A, paragraph 2 of this section shall be of the same character, whether equitable or legal, present or future, as that devised to the testator's then-living children under the will.

C. In satisfying a share prescribed by subsection A, paragraph 2 of this section, devises to the testator's children who were living when the will was executed abate ratably. In abating the devises of the then-living children, the court shall preserve to the maximum extent possible the character of the testamentary plan adopted by the testator.

D. Subsection A of this section does not apply if either of the following is true:

1. It appears from the will that the omission was intentional.

2. The testator provided for the omitted child by transfer outside the will and the intent that the transfer be in lieu of a testamentary provision is shown by the testator's statements or can be reasonably inferred from the amount of the transfer or other evidence.

E. If at the time the testator executed the will the testator fails to provide by will for a living child solely because the testator believes the child to be dead, the child is entitled to share in the estate as if the child were an omitted after-born or after-adopted child.

F. In satisfying a share provided by subsection A, paragraph 1 of this section, devises made by the will abate under section 14-3902.

G. For the purposes of this section, "omitted child" means a child who was born or adopted after the testator executed a will.

14-2401. Applicable law

This article applies to the estate of a decedent who dies domiciled in this state. Rights to homestead allowance, exempt property and family allowance for a decedent who is not domiciled in this state at the time of death are governed by the law of the decedent's domicile at death.

14-2402. Homestead allowance

A. A decedent's surviving spouse is entitled to a homestead allowance of eighteen thousand dollars. If there is no surviving spouse each minor child and each dependent child of the decedent are entitled to a homestead allowance of eighteen thousand dollars divided by the number of minor and dependent children of the decedent.

B. The homestead allowance is exempt from and has priority over all claims against the estate, except expenses of administration.

C. The homestead allowance is chargeable against any benefit or share that passes to the surviving spouse or minor or dependent child by the decedent's will, by nonprobate transfer pursuant to section 14-6102 or by intestate succession, unless it is otherwise provided by the decedent's will or by the governing instrument for a nonprobate transfer. To determine the homestead allowance under this section, a survivorship interest in a joint tenancy of real estate is considered a nonprobate transfer pursuant to section 14-6102.

14-2403. Exempt property; value; priority

A. In addition to the homestead allowance, the decedent's surviving spouse is entitled from the estate to a value that is not more than seven thousand dollars in excess of any security interests in that estate in the following:

1. Household furniture.

2. Automobiles.

3. Furnishings.

4. Appliances.

5. Personal effects.

B. If there is no surviving spouse the decedent's minor and dependent children are entitled jointly to the same value as prescribed in subsection A of this section.

C. If encumbered chattels are selected and the value in excess of security interests and that of other exempt property is less than seven thousand dollars or if there is not seven thousand dollars worth of exempt property in the estate, the spouse or minor or dependent children are entitled to any other assets of the estate to the extent necessary to make up the seven thousand dollar value.

D. Rights to exempt property and assets needed to make up a deficiency of exempt property have priority over all claims against the estate except expenses of administration. The right to any assets to make up a deficiency of exempt property abates as necessary to permit earlier payment of the homestead allowance and family allowance. These rights are chargeable against any benefit or share passing to the surviving spouse or minor or dependent children by the decedent's will by a nonprobate transfer pursuant to section 14-6102 or by intestate succession, unless otherwise provided by the decedent's will or by the governing instrument for a nonprobate transfer.

14-2404. Family allowance; use; length; priority; termination by death

A. The decedent's surviving spouse and minor children whom the decedent was obligated to support and children who were in fact being supported by the decedent are entitled to a reasonable allowance in money out of the estate for their maintenance during the period of administration. This allowance shall not continue for longer than one year if the estate is inadequate to discharge allowed claims. The allowance may be paid as a lump sum or in periodic installments. It is payable to the surviving spouse, if living, for the use of the surviving spouse and minor and dependent children. Otherwise this allowance is payable to the children or to persons who have the care and custody of these children. If a minor child or a dependent child is not living with the surviving spouse, the allowance may be made partially to the child or the child's guardian or other person who has the care and custody of the child and partially to the spouse, as their needs may appear.

B. The family allowance is exempt from and has priority over all claims except expenses of administration and except the homestead allowance.

C. The family allowance is chargeable against any benefit or share passing to the surviving spouse or children by the decedent's will, by a nonprobate transfer pursuant to section 14-6102 or by intestate succession unless otherwise provided by the decedent's will or by the governing instrument for a nonprobate transfer.

D. The death of a person entitled to the family allowance terminates the right to allowances not yet paid.

14-2405. Homestead; exempt property and allowances; restriction; source; determination; documentation

A. If the estate is otherwise sufficient, property specifically devised may not be used to satisfy rights to homestead allowance or exempt property. Subject to this restriction, the surviving spouse, guardians of minor children or children who are adults may select property of the estate as homestead allowance and exempt property. The personal representative may make those selections if the surviving spouse, the children or the guardians of the minor children are unable or fail to do so within a reasonable time or if there is no guardian of a minor child.

B. The personal representative may execute an instrument or deed of distribution to establish the ownership of property taken as homestead allowance or exempt property.

C. The personal representative may determine the family allowance in a lump sum that does not exceed twelve thousand dollars or in periodic installments that do not exceed one thousand dollars per month for one year, and may disburse monies of the estate in payment of the family allowance and any part of the homestead allowance payable in cash.

D. The personal representative or an interested person aggrieved by any selection, determination, payment, proposed payment or failure to act under this section may petition the court for appropriate relief including a family allowance other than one that the personal representative determined or could have determined.

14-2501. Who may make a will

A person who is eighteen years of age or older and who is of sound mind may make a will.

14-2502. Execution; witnessed wills; holographic wills

A. Except as provided in sections 14-2503, 14-2506 and 14-2513, a will shall be:

1. In writing.

2. Signed by the testator or in the testator's name by some other individual in the testator's conscious presence and by the testator's direction.

3. Signed by at least two people, each of whom signed within a reasonable time after that person witnessed either the signing of the will as described in paragraph 2 or the testator's acknowledgment of that signature or acknowledgment of the will.

B. Intent that the document constitute the testator's will can be established by extrinsic evidence, including, for holographic wills under section 14-2503, portions of the document that are not in the testator's handwriting.

14-2503. Holographic will

A will that does not comply with section 14-2502 is valid as a holographic will, whether or not witnessed, if the signature and the material provisions are in the handwriting of the testator.

14-2504. Self-proved wills; sample form; signature requirements

A. A will may be simultaneously executed, attested and made self-proved by its acknowledgment by the testator and by affidavits of the witnesses if the acknowledgment and affidavits are made before an officer authorized to administer oaths under the laws of the state in which execution occurs and are evidenced by the officer's certificate, under official seal, in substantially the following form:

I, _______________, the testator, sign my name to this instrument this _____ day of _______________, and being first duly sworn, do declare to the undersigned authority that I sign and execute this instrument as my will and that I sign it willingly, or willingly direct another to sign for me, that I execute it as my free and voluntary act for the purposes expressed in that document and that I am eighteen years of age or older, of sound mind and under no constraint or undue influence.

_______________________

Testator

We, _______________, _______________, the witnesses, sign our names to this instrument being first duly sworn and do declare to the undersigned authority that the testator signs and executes this instrument as his/her will and that he/she signs it willingly, or willingly directs another to sign for him/her, and that each of us, in the presence and hearing of the testator, signs this will as witness to the testator's signing and that to the best of our knowledge the testator is eighteen years of age or older, of sound mind and under no constraint or undue influence.

____________________

Witness

____________________

Witness

The State of ______________

County of _________________

Subscribed, sworn to and acknowledged before me by _______________, the testator, and subscribed and sworn to before me by _______________ and _______________, witnesses, this _____ day of _______________.

(Seal)

(Signed)______________________

______________________________

(Official capacity of officer)

B. An attested will may be made self-proved at any time after its execution by its acknowledgment by the testator and the affidavits of the witnesses, each made before an officer authorized to administer oaths under the laws of the state in which the acknowledgment occurs and evidenced by the officer's certificate, under the official seal, attached or annexed to the will in substantially the following form:

The State of _______________

County of __________________

We, _____________________, _____________________ and _______________, the testator and the witnesses, respectively, whose names are signed to the attached or foregoing instrument being first duly sworn do declare to the undersigned authority that the testator signed and executed the instrument as the testator's will and that he/she signed willingly, or willingly directed another to sign for him/her, and that he/she executed it as his/her free and voluntary act for the purposes expressed in that document, and that each of the witnesses, in the presence and hearing of the testator, signed the will as witness and that to the best of his/her knowledge the testator was at that time eighteen years of age or older, of sound mind and under no constraint or undue influence.

_________________________

Testator

_________________________

Witness

_________________________

Witness

Subscribed, sworn to and acknowledged before me by _______________, the testator, and subscribed and sworn to before me by _______________ and _______________, witnesses, this _____ day of _______________.

(Seal)

(Signed)______________________

______________________________

(Official capacity of officer)

C. A signature affixed to a self-proving affidavit attached to a will is considered a signature affixed to the will, if necessary to prove the will's due execution.

14-2505. Witnesses; requirements

A. A person who is generally competent to be a witness may act as a witness to a will.

B. The signing of a will by an interested witness does not invalidate the will or any provision of it.

14-2506. Execution; choice of law

A written will is valid if executed in compliance with section 14-2502 or if its execution complies with the law at the time of execution of the place where the will is executed, or of the law of the place where at the time of execution or at the time of death the testator is domiciled, has a place of abode or is a national.

14-2507. Revocation of will; requirements

A. A testator may revoke a will in whole or in part:

1. By executing a subsequent will that revokes the previous will or part expressly or by inconsistency.

2. By performing a revocatory act on the will if the testator performs the act with this intent or if another person performs the act in the testator's conscious presence and by the testator's direction. For purposes of this paragraph, "revocatory act on the will" includes burning, tearing, canceling, obliterating or destroying the will or any part of it. A burning, tearing or canceling is a revocatory act on the will whether or not the burn, tear or cancellation touched any of the words on the will.

B. If a subsequent will does not expressly revoke a previous will, the execution of the subsequent will wholly revokes the previous will by inconsistency if the testator intended the subsequent will to replace rather than supplement the previous will.

C. The testator is presumed to have intended a subsequent will to replace rather than supplement a previous will if the subsequent will makes a complete disposition of the testator's estate. If this presumption arises and is not rebutted by clear and convincing evidence, the previous will is revoked and only the subsequent will is operative on the testator's death.

D. The testator is presumed to have intended a subsequent will to supplement rather than replace a previous will if the subsequent will does not make a complete disposition of the testator's estate. If this presumption arises and is not rebutted by clear and convincing evidence, the subsequent will revokes the previous will only to the extent the subsequent will is inconsistent with the previous will and each will is fully operative on the testator's death to the extent they are not inconsistent.

14-2508. Change of circumstances; effect on will

Except as provided in sections 14-2803 and 14-2804, a change of circumstances does not revoke a will or any part of it.

14-2509. Revoking a subsequent will; effect; reviving a revoked will; requirements

A. If a testator revokes a subsequent will that wholly revoked a previous will under section 14-2507, subsection A, paragraph 2, the previous will remains revoked unless it is revived. The previous will is revived if it is evident from the circumstances of the revocation of the subsequent will or from the testator's contemporary or subsequent declarations that the testator intended the previous will to take effect as executed.

B. If a testator revokes a subsequent will that partly revoked a previous will under section 14-2507, subsection A, paragraph 2, the revoked part of the previous will is revived unless it is evident from the circumstances of the revocation of the subsequent will or from the testator's contemporary or subsequent declarations that the testator did not intend the revoked part to take effect as executed.

C. If a testator revokes a subsequent will that revoked a previous will in whole or in part by another later will, the previous will remains revoked in whole or in part, unless the testator revives it or its revoked part. The previous will or its revoked part is revived to the extent it appears from the terms of the later will that the testator intended the previous will to take effect.

14-2510. Incorporating outside document into a will; requirements

A testator may incorporate a written document into the testator's will by reference if the following requirements are met:

1. The document exists at the time the testator executes the will.

2. The will's language manifests the testator's intent to incorporate this document.

3. The will's language describes the document with enough specificity to allow its identification.

14-2511. Testamentary additions to trusts; requirements; effect of revocation

A. A will may validly devise property to the trustee of a trust established or to be established:

1. During the testator's lifetime by the testator alone, by the testator and some other person or by some other person, including a funded or unfunded life insurance trust, even if the settlor has reserved any or all rights of ownership of the insurance contracts.

2. At the testator's death by the testator's devise to the trustee if the trust is identified in the testator's will and its terms are set forth in a written instrument other than a will executed before, concurrently with or after the execution of the testator's will or in another individual's will if that other individual has predeceased the testator, regardless of the existence, size or character of the corpus of the trust. The devise is not invalid because the trust is amendable or revocable or because the trust was amended after the execution of the will or after the testator's death.

B. Unless the testator's will provides otherwise, property devised to a trust described in subsection A is not held under a testamentary trust of the testator but becomes a part of the trust to which it is devised and must be administered and disposed of in accordance with the provisions of the governing instrument that states the terms of the trust, including any amendments made before or after the testator's death.

C. Unless the testator's will provides otherwise, a revocation or termination of the trust before the testator's death causes the devise to lapse.

14-2512. Disposition of property by reference to acts of independent significance

A will may dispose of property by reference to acts, such as the execution or revocation of another person's will, that have significance apart from their effect on the dispositions made by the will whether they occur before or after the execution of the will or before or after the testator's death.

14-2513. References to separate lists; requirements

A. Notwithstanding section 14-2503 relating to holographic wills, a will may refer to a written statement or list to dispose of items of tangible personal property other than money and not otherwise specifically disposed of by the will.

B. To be admissible under this section as evidence of the intended disposition, the writing shall either be in the testator's handwriting or be signed by the testator and shall describe the items and the devisees with reasonable certainty.

C. The writing may be:

1. Referred to as one to be in existence at the time of the testator's death.

2. Prepared before or after the execution of the will.

3. Altered by the testator after its preparation.

4. A writing that has no significance apart from its effect on the dispositions made by the will.

14-2514. Contracts regarding wills; requirements; effect

A. After December 31, 1994, a person may enter into a contract to make a will or devise or not to revoke a will or devise or to die intestate only by:

1. Provisions of a will that state the material provisions of the contract.

2. An express reference in a will to a contract and extrinsic evidence proving the terms of the contract.

3. A writing signed by the decedent evidencing the contract.

B. The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills.

14-2516. Custodian of will; duties; liability

A. After the death of a testator and on request of an interested person, a person having custody of a will of the testator shall deliver it with reasonable promptness to a person able to secure its probate or, if none is known, to an appropriate court.

B. A person who wilfully fails to deliver a will as required by this section is liable to any person aggrieved for any damages caused by this failure.

C. A person who wilfully refuses or fails to deliver a will after being ordered by the court in a proceeding brought for the purpose of compelling delivery is subject to penalty for contempt of court.

14-2517. Penalty clause for contest; restriction

A provision in a will purporting to penalize an interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable if probable cause exists for that action.

14-2601. Scope of article

In the absence of a finding of a contrary intention, the rules of construction in this article control the construction of a will.

14-2602. Passage of existing and after-acquired property by will

A will may provide for the passage of all property the testator owns at death and all property acquired by the estate after the testator's death.

14-2603. Substitute gifts; class gifts; definitions

A. If a devisee fails to survive the testator and is a grandparent, a descendant of a grandparent or a stepchild of either the testator or the donor of a power of appointment exercised by the testator's will, the following apply:

1. Except as provided in paragraph 3 of this subsection, if the devise is not in the form of a class gift and the deceased devisee leaves surviving descendants, a substitute gift is created in the devisee's surviving descendants and they take, by representation, the property to which the devisee would have been entitled if the devisee had survived the testator.

2. Except as provided in paragraph 3 of this subsection, if the devise is in the form of a class gift, other than a devise to issue, descendants, heirs of the body, heirs, next of kin, relatives or family or a class described by similar language, a substitute gift is created in the surviving descendants of the deceased devisee. The property to which the devisees would have been entitled if all of them had survived the testator passes to the surviving devisees and the surviving descendants of the deceased devisees. Each surviving devisee takes the share to which that person would have been entitled if the deceased devisees had survived the testator. Each deceased devisee's surviving descendants who are substituted for the deceased devisee take by representation the share to which the deceased devisee would have been entitled if the deceased devisee had survived the testator. For the purposes of this paragraph, "deceased devisee" means a class member who failed to survive the testator and left one or more surviving descendants.

3. If the will creates an alternative devise with respect to a devise for which a substitute gift is created by paragraph 1 or 2 of this subsection, the substitute gift is superseded by the alternative devise, whether or not an expressly designated devisee of the alternative devise is entitled to take under the will.

B. Unless the language that creates a power of appointment expressly prohibits the substitution of the appointee's descendants for the appointee, a surviving descendant of a deceased appointee can be substituted for the appointee, whether or not the descendant is an object of the power of appointment.

C. For the purposes of section 14-2601, words of survivorship, such as in a devise to an individual "if he survives me", or in a devise to "my surviving children", are, in the absence of clear and convincing evidence to the contrary, a sufficient indication of an intent contrary to the application of this section.

D. For the purposes of this section:

1. "Alternative devise" means a devise that is expressly created by the will and under the terms of the will can take effect instead of another devise on the happening of one or more events, including the survival of the testator or the failure to survive the testator, whether an event is expressed in condition-precedent, condition-subsequent or any other form. A residuary clause may constitute an alternative devise with respect to a nonresiduary devise, whether or not the will specifically provides that, on lapse or failure, the nonresiduary devise or nonresiduary devises in general pass under the residuary clause.

2. "Class member" includes a person who fails to survive the testator but who would have taken under a devise in the form of a class gift if that person had survived the testator.

3. "Devise" includes an alternative devise, a devise in the form of a class gift and an exercise of a power of appointment.

4. "Devisee" includes:

(a) A class member if the devise is in the form of a class gift.

(b) A person or class member who was deceased at the time the testator executed the will as well as a person or class member who was then living but who failed to survive the testator.

(c) An appointee under a power of appointment exercised by the testator's will.

5. "Stepchild" means a child of the surviving, deceased or former spouse of the testator or of the donor of a power of appointment and not of the testator or donor.

6. "Surviving devisee" or "surviving descendant" means a devisee or a descendant who neither predeceased the testator nor is deemed to have predeceased the testator under section 14-2702.

7. "Testator" includes the donee of a power of appointment if the power is exercised in the testator's will.

14-2604. Failure of testamentary provision; effect

A. Except as provided in section 14-2603, a devise, other than a residuary devise, that fails for any reason becomes a part of the residue.

B. Except as provided in section 14-2603, if the residue is devised to two or more persons, the share of a residuary devisee that fails for any reason passes to the other residuary devisee or to other residuary devisees in proportion to the interest of each in the remaining part of the residue.

14-2605. Securities increase in value after death; effect; exception

A. If a testator executes a will that devises securities and the testator then owned securities that meet the description in the will, the devise includes additional securities owned by the testator at death to the extent the additional securities were acquired by the testator after the will was executed as a result of the testator's ownership of the described securities and are securities of any of the following types:

1. Securities of the same organization acquired by reason of action initiated by the organization or any successor, related or acquiring organization, excluding any acquired by exercise of purchase options.

2. Securities of another organization acquired as a result of any merger, consolidation, reorganization or other distribution by the organization or any successor, related or acquiring organization.

3. Securities of the same organization acquired as a result of a plan of reinvestment.

B. Distributions in cash before death with respect to a described security are not part of the devise.

14-2606. Right to specific devises; unpaid proceeds of sale, condemnation or insurance; sale by conservator or agent

A. A specific devisee has a right to the specifically devised property in the testator's estate at death and to the following:

1. Any balance of the purchase price, together with any security agreement, owing from a purchaser to the testator at death by reason of sale of the property.

2. Any amount of a condemnation award for the taking of the property unpaid at death.

3. Any proceeds unpaid at death on fire or casualty insurance on or other recovery for injury to the property.

4. Property owned by the testator at death and acquired as a result of foreclosure or obtained in lieu of foreclosure of the security interest for a specifically devised obligation.

B. If specifically devised property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal or if a condemnation award, insurance proceeds or recovery for injury to the property are paid to a conservator or to an agent acting within the authority of a durable power of attorney for an incapacitated principal, the specific devisee has the right to a general pecuniary devise equal to the net sale price, the amount of the unpaid loan, the condemnation award, the insurance proceeds or the recovery. It is not necessary to adjudicate the issue of incapacity for an agent to act under this subsection. An agent's actions that are within the authority of a durable power of attorney are presumed to be on behalf of the incapacitated principal. For the purposes of this subsection, "incapacitated principal" means a principal who is an incapacitated person.

C. The right of a specific devisee under subsection B is reduced by any right the devisee has under subsection A.

D. The provisions in subsection B that relate to the actions of a conservator do not apply if, after the sale, mortgage, condemnation, casualty or recovery, it was adjudicated that the testator's incapacity ceased and the testator survived the adjudication by one year.

14-2607. Specific devise; nonexoneration

Subject to any mortgage interest existing at the date of death, a specific devise passes without right of exoneration, regardless of a general directive in the will to pay debts.

14-2608. Exercise of power of appointment

In the absence of a requirement that a power of appointment be exercised by a reference or by an express or specific reference to that power, a general residuary clause in a will or a will making general disposition of all of the testator's property expresses an intention to exercise a power of appointment held by the testator only if the power is a general power and the creating instrument does not contain a gift if the power is not exercised or the testator's will manifests an intention to include the property subject to the power.

14-2609. Satisfaction of a devise during the testator's life; requirements; valuation

A. Property a testator gave to a person while the testator was alive is treated as a satisfaction of a devise in whole or in part if any of the following requirements are met:

1. The will provides for deduction of the gift.

2. The testator declared in a contemporaneous writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise.

3. The devisee acknowledged in writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise.

B. For purposes of partial satisfaction, property given while the testator was alive is valued as of the time the devisee came into possession or enjoyment of the property or at the testator's death, whichever occurs first.

C. To satisfy the requirements of sections 14-2603 and 14-2604 if the devisee fails to survive the testator, the gift is treated as a full or partial satisfaction of the devise, as appropriate, unless the testator's contemporaneous writing provides otherwise.

14-2701. Scope of article

In the absence of a finding of a contrary intention, the rules of construction in this article control the construction of a governing instrument. The rules of construction in this article apply to a governing instrument of any type, except as the application of a particular section is limited by its terms to a specific type or types of provision or governing instrument.

14-2702. Devisees; surviving of testator; requirement; exception

A. For the purposes of this article, except as provided in subsection D of this section, a person who is not established by clear and convincing evidence to have survived an event, including the death of another person, by one hundred twenty hours is deemed to have predeceased the event.

B. Except as provided in subsection D of this section, for purposes of a provision of a governing instrument that relates to a person surviving an event, including the death of another person, a person who is not established by clear and convincing evidence to have survived the event by one hundred twenty hours is deemed to have predeceased the event.

C. Except as provided in subsection D of this section, if it is not established by clear and convincing evidence that one of two co-owners with right of survivorship survived the other co-owner by one hundred twenty hours, one-half of the property passes as if one had survived by one hundred twenty hours and one-half as if the other had survived by one hundred twenty hours, and if there are more than two co-owners and it is not established by clear and convincing evidence that at least one of them survived the others by one hundred twenty hours, the property passes in the proportion that one bears to the whole number of co-owners. For the purposes of this subsection, "co-owners with right of survivorship" includes joint tenants, tenants by the entireties and other co-owners of property or accounts held under circumstances that entitle one or more to the whole of the property or account on the death of the other or others.

D. The survival requirements of this section do not apply if:

1. The governing instrument contains language that deals explicitly with simultaneous deaths or deaths in a common disaster and that language is operable under the facts of the case.

2. The governing instrument expressly indicates that a person is not required to survive an event, including the death of another person, by any specified period or expressly requires the person to survive the event by a specified period. However, survival of the event or the specified period must be established by clear and convincing evidence.

3. The imposition of a one hundred twenty hour requirement of survival would cause a nonvested property interest or a power of appointment to fail to qualify for validity, or to become invalid under section 14-2901, subsection A, B or C. However, survival must be established by clear and convincing evidence.

4. The application of a one hundred twenty hour requirement of survival to multiple governing instruments would result in an unintended failure or duplication of a disposition. However, survival must be established by clear and convincing evidence.

E. A payor or other third party is not liable for having made a payment or transferred an item of property or any other benefit to a beneficiary designated in a governing instrument who is not entitled to the payment or item of property or for having taken any other action in good faith reliance on the beneficiary's apparent entitlement under the terms of the governing instrument, before the payor or other third party received written notice of a claimed lack of entitlement under this section. A payor or other third party is liable for a payment made or any other action taken after the payor or other third party received written notice of a claimed lack of entitlement under this section.

F. Written notice of a claimed lack of entitlement under subsection E of this section must be mailed to the payor's or other third party's main office or home by certified mail, return receipt requested, or served on the payor or other third party in the same manner as a summons in a civil action. On receipt of written notice of a claimed lack of entitlement under this section, a payor or other third party may pay any amount owed or transfer or deposit any item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the monies or item of property and, on making its determination under this section, shall order disbursement in accordance with the determination. Payments, transfers or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

G. A person who purchases property for value and without notice or who receives any payment or other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated to return the payment, item of property or benefit nor is liable for the amount of the payment or the value of the item of property or benefit. However, a person who, not for value, receives a payment, an item of property or any other benefit to which the person is not entitled is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who is entitled to it.

14-2703. Choice of law; effect on governing instrument

The meaning and legal effect of a governing instrument is determined by the local law of the state selected in the governing instrument unless the application of that law is contrary to the requirements of article 4 of this chapter relating to exempt property and allowances or is contrary to any other public policy of this state otherwise applicable to the disposition.

14-2704. Power of appointment; exercise by reference; presumption

If a governing instrument that creates a power of appointment expressly requires that the power be exercised by a reference, an express reference or a specific reference to the power or its source, it is presumed that the donor's intention was to prevent an inadvertent exercise of the power.

14-2705. Adopted children; children born out of wedlock; class gifts

A. A person who is adopted or born out of wedlock and that person's descendants, if appropriate to the class, are included in class gifts and other terms of relationship in accordance with the intestate succession under article 1 of this chapter. Terms of relationship that do not differentiate relationships by blood from those by affinity, such as "uncles", "aunts", "nieces" or "nephews", are construed to exclude relatives by affinity. Terms of relationship that do not differentiate relationships by the half blood from those by the whole blood, such as "brothers", "sisters", "nieces" or "nephews", are construed to include both types of relationships.

B. In addition to the requirements of subsection A, in construing a dispositive provision of a transferor who is not the adopting parent, an adopted person is not considered the child of the adopting parent unless the adopted person lived while a minor, either before or after the adoption, as a regular member of the household of the adopting parent at any time.

14-2706. Failure of beneficiary to survive decedent; effect; protection from liability; third parties; definitions

A. If a beneficiary fails to survive the decedent and is a grandparent, a descendant of a grandparent or a stepchild of the decedent, the following apply:

1. Except as provided in paragraph 4 of this subsection, if the beneficiary designation is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's surviving descendants. They take by representation the property to which the beneficiary would have been entitled if the beneficiary had survived the decedent.

2. Except as provided in paragraph 4 of this subsection, if the beneficiary designation is in the form of a class gift, other than a beneficiary designation to issue, descendants, heirs of the body, heirs, next of kin, relatives, or family, or a class described by similar language, a substitute gift is created in the surviving descendants of any deceased beneficiary. The property to which the beneficiaries would have been entitled if all of them had survived the decedent passes to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries. Each surviving beneficiary takes the share to which that beneficiary would have been entitled if the deceased beneficiaries had survived the decedent. Each deceased beneficiary's surviving descendants who are substituted for the deceased beneficiary take by representation the share to which the deceased beneficiary would have been entitled if the deceased beneficiary had survived the decedent. For the purposes of this paragraph, "deceased beneficiary" means a class member who failed to survive the decedent and who left one or more surviving descendants.

3. Words of survivorship, such as in a beneficiary designation to an individual "if he survives me" or in a beneficiary designation to "my surviving children" are, in the absence of clear and convincing evidence to the contrary, a sufficient indication of an intent contrary to the application of this section.

4. If a governing instrument creates an alternative beneficiary designation with respect to a beneficiary designation for which a substitute gift is created by paragraph 1 or 2 of this subsection, the substitute gift is superseded by the alternative beneficiary designation, whether or not an expressly designated beneficiary of the alternative beneficiary designation is entitled to take.

B. A payor is protected from liability in making payments under the terms of the beneficiary designation until the payor has received written notice of a claim to a substitute gift under this section. Payment made before the receipt of written notice of a claim to a substitute gift under this section discharges the payor, but not the recipient, from all claims for the amounts paid. A payor is liable for a payment made after the payor has received written notice of the claim. A recipient is liable for a payment received, whether or not written notice of the claim is given.

C. The written notice of the claim must be mailed to the payor's main office or home by certified mail, return receipt requested, or served on the payor in the same manner as a summons in a civil action. On receipt of written notice of the claim, a payor may pay any amount owed by it to the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the monies and, on its determination under this section, shall order disbursement in accordance with the determination. Payment made to the court discharges the payor from all claims for the amounts paid.

D. A person who purchases property for value and without notice or who receives a payment or other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated under this section to return the payment, item of property or benefit nor is liable under this section for the amount of the payment or the value of the item of property or benefit. However, a person who, not for value, receives a payment, an item of property or any other benefit to which the person is not entitled under this section is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who is entitled to it under this section.

E. For the purposes of this section:

1. "Alternative beneficiary designation" means a beneficiary designation that is expressly created by the governing instrument and, under the terms of the governing instrument, can take effect instead of another beneficiary designation on the happening of one or more events, including survival of the decedent or failure to survive the decedent, whether an event is expressed in condition-precedent, condition-subsequent or any other form.

2. "Beneficiary" means the beneficiary of a beneficiary designation and includes a class member if the beneficiary designation is in the form of a class gift and also includes a person or class member who was deceased at the time the beneficiary designation was executed as well as a person or class member who was then living but who failed to survive the decedent.

3. "Beneficiary designation" includes an alternative beneficiary designation and a beneficiary designation in the form of a class gift.

4. "Class member" includes a person who fails to survive the decedent but who would have taken under a beneficiary designation in the form of a class gift if that person had survived the decedent.

5. "Stepchild" means a child of the decedent's surviving, deceased or former spouse and not of the decedent.

6. "Surviving beneficiary" or "surviving descendant" means a beneficiary or a descendant who neither predeceased the decedent nor is deemed to have predeceased the decedent under section 14-2702.

14-2707. Future interests; trusts; distribution date; passage of property; alternative future interest; definitions

A. A future interest under the terms of a trust is contingent on the beneficiary surviving the distribution date. If a beneficiary of a future interest under the terms of a trust fails to survive the distribution date, the following apply:

1. Except as provided in subsection C of this section, if the future interest is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's surviving descendants. Surviving descendants take by representation the property to which the beneficiary would have been entitled if the beneficiary had survived the distribution date.

2. Except as provided in subsection C of this section, if the future interest is in the form of a class gift, other than a future interest to issue, descendants, heirs of the body, heirs, next of kin, relatives, or family or a class described by similar language, a substitute gift is created in the surviving descendants of any deceased beneficiary. The property to which the beneficiaries would have been entitled if all of them had survived the distribution date passes to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries. Each surviving beneficiary takes the share to which that person would have been entitled if the deceased beneficiaries had survived the distribution date. Each deceased beneficiary's surviving descendants who are substituted for the deceased beneficiary take by representation the share to which the deceased beneficiary would have been entitled if the deceased beneficiary had survived the distribution date.

B. Words of survivorship attached to a future interest are, in the absence of clear and convincing evidence to the contrary, a sufficient indication of an intent contrary to the application of this section. Words of survivorship include words of survivorship that relate to the distribution date or to an earlier or an unspecified time, whether those words of survivorship are expressed in condition-precedent, condition-subsequent or any other form.

C. If a governing instrument creates an alternative future interest with respect to a future interest for which a substitute gift is created by subsection A of this section, the substitute gift is superseded by the alternative future interest, whether or not an expressly designated beneficiary of the alternative future interest is entitled to take in possession or enjoyment.

D. If after the application of this section there is no surviving taker, the property passes in the following order:

1. If the trust was created in a nonresiduary devise in the transferor's will or in a codicil to the transferor's will, the property passes under the residuary clause in the transferor's will. For purposes of this paragraph, the residuary clause is treated as creating a future interest under the terms of a trust.

2. If no taker is produced by the application of paragraph 1 of this subsection, the property passes to the transferor's heirs under section 14-2711.

E. A residuary clause in a will does not create an alternative future interest with respect to a future interest created in a nonresiduary devise in the will, whether or not the will specifically provides that lapsed or failed devises are to pass under the residuary clause.

F. For the purposes of this section:

1. "Alternative future interest" means an expressly created future interest that can take effect in possession or enjoyment instead of another future interest on the happening of one or more events, including survival of an event or failure to survive an event, whether an event is expressed in condition-precedent, condition-subsequent or any other form.

2. "Beneficiary" means the beneficiary of a future interest and includes a class member if the future interest is in the form of a class gift.

3. "Class member" includes a person who does not survive the distribution date but who would have taken under a future interest in the form of a class gift if that person had survived the distribution date.

4. "Deceased beneficiary" means a class member who failed to survive the distribution date and left one or more surviving descendants.

5. "Distribution date", with respect to a future interest, means the time when the future interest is to take effect in possession or enjoyment. Distribution date does not mean a date that necessarily occurs at the beginning or end of a calendar day but that may occur at a time during the course of a day.

6. "Future interest" includes an alternative future interest and a future interest in the form of a class gift.

7. "Future interest under the terms of a trust" means a future interest that was created by a transfer creating a trust or to an existing trust or by an exercise of a power of appointment to an existing trust, directing the continuance of an existing trust, designating a beneficiary of an existing trust or creating a trust.

8. "Surviving beneficiary" or "surviving descendant" means a beneficiary or a descendant who neither predeceased the distribution date nor is deemed to have predeceased the distribution date under section 14-2702.

14-2708. Class gifts to descendants, issue or heirs of the body; form of distribution if none specified

If a class gift in favor of descendants, issue or heirs of the body does not specify the manner in which the property is to be distributed among the family members who comprise that class, the property that comprises the class gift is distributed among the class members who are living when the interest is to take effect in possession or enjoyment. These class members receive shares they would receive under the applicable law of intestate succession if the designated ancestor had died intestate owning the subject matter of the class gift.

14-2709. Property distribution by representation or per capita at each generation; distribution per stirpes; application of section; definitions

A. If an applicable statute or a governing instrument calls for property to be distributed by representation or per capita at each generation, the property is divided into as many equal shares as there are surviving descendants in the generation nearest to the designated ancestor that contains one or more surviving descendants and deceased descendants in the same generation who left any surviving descendants. Each surviving descendant in the nearest generation is allocated one share. Any remaining shares are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the distribution date.

B. If a governing instrument calls for property to be distributed per stirpes, the property is divided into as many equal shares as there are surviving children of the designated ancestor and deceased children who left surviving descendants. Each surviving child is allocated one share. The share of each deceased child with surviving descendants is divided in the same manner, with subdivision repeating at each succeeding generation until the property is fully allocated among surviving descendants.

C. For the purposes of subsections A and B of this section, a person who is deceased and who left no surviving descendant is disregarded. A person who leaves a surviving ancestor who is a descendant of the designated ancestor is not entitled to a share.

D. This section applies to governing instruments executed after December 31, 1994. In the case of a codicil to a will, an amendment to a trust or another document amending a governing instrument, the date of execution is the date of the codicil, amendment or amending document only if the codicil, amendment or amending document materially affects the dispositive provision being construed under this section.

E. For the purposes of this section:

1. "Deceased child" or "deceased descendant" means a child or a descendant who either predeceased the distribution date or is deemed to have predeceased the distribution date under section 14-2702.

2. "Distribution date" with respect to an interest means the time when the interest is to take effect in possession or enjoyment. Distribution date does not mean a date that necessarily occurs at the beginning or end of a calendar day but that may occur at a time during the course of a day.

3. "Surviving ancestor", "surviving child" or "surviving descendant" means an ancestor, a child or a descendant who neither predeceased the distribution date nor is deemed to have predeceased the distribution date under section 14-2702.

14-2710. Worthier title doctrine; nonrecognition

The common law doctrine of worthier title is not recognized in this state. Therefore, language in a governing instrument that describes the beneficiaries of a disposition as the transferor's heirs, heirs at law, next of kin, distributees, relatives, or family, or by similar language, does not create or presumptively create a reversionary interest in the transferor.

14-2711. Distribution to heirs; effect

A. If an applicable statute or a governing instrument calls for a present or future distribution to or creates a present or future interest in a designated individual's heirs, heirs at law, next of kin, relatives, or family, or by similar language, the property passes to those persons, including the state, who would inherit the designated individual's intestate estate under the intestate succession law of the designated individual's domicile if the designated individual died when the disposition is to take effect in possession or enjoyment. The property passes to those persons in the proportion described by the laws of intestate succession.

B. If the designated individual's surviving spouse is living but is remarried at the time the disposition is to take effect in possession or enjoyment, the surviving spouse is not an heir of the designated individual.

14-2712. Burdens relating to validity of governing instruments

A. A proponent of a governing instrument has the burden of establishing prima facie proof of due execution in all cases.

B. It is a rebuttable presumption that a person who executes a governing instrument is presumed to have capacity to execute the governing instrument and to have done so free from undue influence and duress.

C. If the validity of a governing instrument is challenged on the grounds of revocation by a later governing instrument, the validity of the later governing instrument must be determined first.

D. Except as prescribed pursuant to subsections E and F of this section, a party that challenges the validity of a governing instrument has the burden of establishing the invalidity of that governing instrument by a preponderance of the evidence.

E. A governing instrument is presumed to be the product of undue influence if either:

1. A person who had a confidential relationship to the creator of the governing instrument was active in procuring its creation and execution and is a principal beneficiary of the governing instrument.

2. The preparer of the governing instrument or the preparer's spouse or parents or the issue of the preparer's spouse or parents is a principal beneficiary of the governing instrument. This paragraph does not apply if the governing instrument was prepared for a person who is a grandparent of the preparer, the issue of a grandparent of the preparer or the respective spouses or former spouses of persons related to the preparer.

F. The beneficiary of the governing instrument may overcome a presumption of undue influence by a preponderance of the evidence.

G. For the purposes of this section, determining if a person is a principal beneficiary of a governing instrument or the preparer of a governing instrument is a question of fact to be determined by the totality of the circumstances.

H. This section does not apply to the following:

1. Proceedings to determine the validity of a durable power of attorney pursuant to section 14-5506, subsection B.

2. Proceedings to determine ownership of multiple party accounts pursuant to section 14-6211.

14-2802. Effect of divorce, annulment and decree of separation

A. A person who is divorced from the decedent or whose marriage to the decedent has been annulled is not a surviving spouse unless, by virtue of a subsequent marriage, that person is married to the decedent at the time of death. A decree of separation that does not terminate the status of husband and wife is not a divorce for purposes of this section.

B. For the purposes of this section, "surviving spouse" does not include:

1. A person who obtains or consents to a final decree or judgment of divorce from the decedent or an annulment of the marriage if that decree or judgment is not recognized as valid in this state, unless they subsequently participate in a marriage ceremony purporting to marry each to the other or live together as husband and wife.

2. A person who, after an invalid decree or judgment of divorce or annulment obtained by the decedent, participates in a marriage ceremony with a third person.

3. A person who was a party to a valid proceeding concluded by an order purporting to terminate all marital property rights.

14-2803. Murder of decedent; effect; federal law; definitions

A. A person who feloniously and intentionally kills the decedent forfeits all benefits under this chapter with respect to the decedent's estate, including an intestate share, an elective share, an omitted spouse's or child's share, a homestead allowance, exempt property and a family allowance. If the decedent died intestate, the decedent's intestate estate passes as if the killer disclaimed that person's intestate share.

B. The felonious and intentional killing of the decedent:

1. Revokes any revocable:

(a) Disposition or appointment of property made by the decedent to the killer in a governing instrument.

(b) Provision in a governing instrument conferring a general or nongeneral power of appointment on the killer.

(c) Nomination of the killer in a governing instrument, nominating or appointing the killer to serve in any fiduciary or representative capacity, including a personal representative, executor, trustee or agent.

2. Severs the interests of the decedent and killer in property held by them at the time of the killing as joint tenants with the right of survivorship or as community property with the right of survivorship, transforming the interests of the decedent and killer into tenancies in common.

C. A severance under subsection B, paragraph 2 does not affect any third party interest in property acquired for value and in good faith reliance on an apparent title by survivorship in the killer unless a writing declaring the severance has been noted, registered, filed or recorded in records appropriate to the kind and location of the property that is relied on as evidence of ownership in the ordinary course of transactions involving that property.

D. Provisions of a governing instrument are given effect as if the killer disclaimed all provisions revoked by this section or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the killer predeceased the decedent.

E. A wrongful acquisition of property or interest by a killer not covered by this section shall be treated in accordance with the principle that a killer cannot profit from that person's wrong.

F. After all right to appeal has been exhausted, a judgment of conviction establishing criminal accountability for the felonious and intentional killing of the decedent conclusively establishes the convicted person as the decedent's killer for purposes of this section. In the absence of a conviction, the court, on the petition of an interested person, shall determine whether, under the preponderance of evidence standard, the person would be found criminally accountable for the felonious and intentional killing of the decedent. If the court determines under that standard that the person would be found criminally accountable for the felonious and intentional killing of the decedent, the determination conclusively establishes that person as the decedent's killer for purposes of this section.

G. A payor or other third party is not liable for having made a payment or transferred an item of property or any other benefit to a beneficiary designated in a governing instrument affected by an intentional and felonious killing or for having taken any other action in good faith reliance on the validity of the governing instrument on request and satisfactory proof of the decedent's death and before the payor or other third party received written notice of a claimed forfeiture or revocation under this section. Any payor or other third party is liable for a payment made or any other action taken after the payor or other third party received written notice of a claimed forfeiture or revocation under this section.

H. Written notice of a claimed forfeiture or revocation under subsection G of this section must be mailed to the payor's or other third party's main office or home by certified mail, return receipt requested, or served on the payor or other third party in the same manner as a summons in a civil action. On receipt of written notice of a claimed forfeiture or revocation under this section, a payor or any other third party may pay any amount owed or transfer or deposit any item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate, or if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the monies or item of property and, on its determination under this section, shall order disbursement in accordance with the determination. Payments, transfers or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

I. A person who purchases property for value and without notice or who receives a payment or any other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated under this section to return the payment, item of property or benefit nor is liable under this section for the amount of the payment or the value of the item of property or benefit. However, a person who, not for value, receives a payment, an item of property or any other benefit to which the person is not entitled under this section is obligated to return the payment, item of property or benefit, or is personally liable for the amount of the payment or the value of the item of property or benefit, to the person who is entitled to it under this section.

J. If this section or any part of this section is preempted by federal law with respect to a payment, an item of property or any other benefit covered by this section, a person who, not for value, receives the payment, item of property or any other benefit to which the person is not entitled under this section is obligated to return it to the person who would have been entitled to it if this section or part of this section were not preempted or is personally liable for the amount of the payment or the value of the item of property or benefit.

K. The decedent's estate may petition the court to establish a constructive trust on the property or the estate of the killer, effective from the time of the killer's act that caused the death, in order to secure the payment of all damages and judgments from conduct that, pursuant to subsection F of this section, resulted in criminal conviction of either spouse in which the other spouse or a child was the victim.

L. For the purposes of this section:

1. "Disposition or appointment of property" includes a transfer of an item of property or any other benefit to a beneficiary designated in a governing instrument.

2. "Felonious and intentional" means a conviction or a finding of guilty except insane for a homicide pursuant to section 13-1103, 13-1104 or 13-1105.

3. "Governing instrument" means a governing instrument executed by the decedent.

4. "Revocable", with respect to a disposition, appointment, provision or nomination, means one under which the decedent, at the time of or immediately before death, was alone empowered, by law or under the governing instrument, to cancel the designation in favor of the killer, whether or not the decedent was then empowered to designate the decedent in place of the decedent's killer or the decedent then had capacity to exercise the power.

14-2804. Termination of marriage; effect; revocation of probate and nonprobate transfers; federal law; definitions

A. Except as provided by the express terms of a governing instrument, a court order or a contract relating to the division of the marital estate made between a divorced couple before or after the marriage, divorce or annulment, the divorce or annulment of a marriage:

1. Revokes any revocable:

(a) Disposition or appointment of property made by a divorced person to that person's former spouse in a governing instrument and any disposition or appointment created by law or in a governing instrument to a relative of the divorced person's former spouse.

(b) Provision in a governing instrument conferring a general or nongeneral power of appointment on the divorced person's former spouse or on a relative of the divorced person's spouse.

(c) Nomination in a governing instrument that nominates a divorced person's former spouse or a relative of the divorced person's former spouse to serve in any fiduciary or representative capacity, including a personal representative, executor, trustee, conservator, agent or guardian.

2. Severs the interests of the former spouses in property held by them at the time of the divorce or annulment as joint tenants with the right of survivorship or as community property with the right of survivorship and transforms the interests of the former spouses into tenancies in common.

B. A severance under subsection A, paragraph 2 of this section does not affect any third party interest in property acquired for value and in good faith reliance on an apparent title by survivorship in the survivor of the former spouses unless a writing declaring the severance has been noted, registered, filed or recorded in records appropriate to the kind and location of the property that a person relied on as evidence of ownership in the ordinary course of transactions involving that property.

C. Provisions of a governing instrument are given effect as if the former spouse and relatives of the former spouse disclaimed all provisions revoked by this section or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and relatives of the former spouse died immediately before the divorce or annulment.

D. Provisions revoked solely by this section are revived by the divorced person's remarriage to the former spouse or by a nullification of the divorce or annulment.

E. No change of circumstances other than as described in this section and in section 14-2803 effects a revocation.

F. Any payor or other third party is not liable for making a payment or transferring an item of property or any other benefit to a beneficiary designated in a governing instrument affected by a divorce, annulment or remarriage, or for taking any other action in good faith reliance on the validity of the governing instrument, before the payor or other third party receives written notice of the divorce, annulment or remarriage. Any payor or other third party is liable for a payment made or any other action taken after the payor or other third party receives written notice of a claimed forfeiture or revocation under this section.

G. Written notice of the divorce, annulment or remarriage under subsection F of this section must be mailed to the payor's or other third party's main office or home by certified mail, return receipt requested, or served on the payor or other third party in the same manner as a summons in a civil action. On receipt of written notice of the divorce, annulment or remarriage, a payor or any other third party may pay any amount owed or transfer or deposit any item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the monies or item of property and, on its determination under this section, shall order disbursement or transfer in accordance with the determination. Payments, transfers or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

H. A person who purchases property from a former spouse, a relative of a former spouse or any other person for value and without notice or who receives from a former spouse, a relative of a former spouse or any other person a payment or other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated under this section to return the payment, item of property or benefit nor is liable under this section for the amount of the payment or the value of the item of property or benefit. However, a former spouse, a relative of a former spouse or any other person who, not for value, received a payment, an item of property or any other benefit to which that person is not entitled under this section is obligated to return the payment, item of property or benefit to the person who is entitled to it under this section or is personally liable for the amount of the payment or the value of the item of property or benefit.

I. For the purpose of this section:

1. "Disposition or appointment of property" includes a transfer of an item of property or any other benefit to a beneficiary designated in a governing instrument.

2. "Divorce or annulment" means any divorce or annulment or any dissolution or declaration of invalidity of a marriage that would exclude the spouse as a surviving spouse within the meaning of section 14-2802 but does not include a decree of separation that does not terminate the status of husband and wife.

3. "Divorced person" includes a person whose marriage has been annulled.

4. "Governing instrument" means an instrument executed by the divorced person before the divorce or annulment of that person's marriage to that person's former spouse.

5. "Relative of the divorced person's former spouse" means a person who is related to the divorced person's former spouse by blood, adoption or affinity and who, after the divorce or annulment, is not related to the divorced person by blood, adoption or affinity.

6. "Revocable", with respect to a disposition, appointment, provision or nomination, means one under which the divorced person, at the time of the divorce or annulment, was alone empowered by law or under the governing instrument to cancel a designation in favor of that person's former spouse or former spouse's relative, whether or not the divorced person was then empowered to designate himself or herself in place of that person's former spouse or in place of the former spouse's relative and whether or not the divorced person then had the capacity to exercise the power.

14-2901. Nonvested property interest; general power of appointment; validity; exception

A. A nonvested property interest is invalid unless at least one of the following is true:

1. At the time the interest is created it is certain to vest or to terminate not later than twenty-one years after the death of a person who is then alive.

2. The interest either vests or terminates within five hundred years after its creation.

3. The interest is under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest.

B. A general power of appointment that is not presently exercisable because of a condition precedent is invalid unless any of the following is true:

1. At the time the power is created the condition precedent is certain to be satisfied or becomes impossible to satisfy no later than twenty-one years after the death of a person who is then alive.

2. The condition precedent either is satisfied or becomes impossible to satisfy within five hundred years after its creation.

3. The power is with respect to an interest under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest.

C. A nongeneral power of appointment or a general testamentary power of appointment is invalid unless at least one of the following is true:

1. At the time the power is created it is certain to be irrevocably exercised or otherwise to terminate not later than twenty-one years after the death of a person who is then alive.

2. The power is irrevocably exercised or otherwise terminates within five hundred years after its creation.

3. The power is with respect to an interest under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest.

D. In determining whether a nonvested property interest or a power of appointment is valid under subsection A, paragraph 1, subsection B, paragraph 1 or subsection C, paragraph 1, the possibility that a child will be born to a person after that person's death is disregarded.

E. If the governing instrument seeks to do either of the following after the expiration of the latest period described by subsection A, B or C, that language is inoperative to the extent it produces a period of time that exceeds five hundred years after the creation of the trust:

1. Disallow the vesting or termination of an interest or trust beyond that time.

2. Postpone the vesting or termination of an interest or trust until that time.

14-2902. Nonvested property interest or power of appointment; creation

A. Except as provided in subsections B and C of this section and section 14-2905, subsection A, the time of creation of a nonvested property interest or a power of appointment is determined under general principles of property law.

B. If there is a person who alone can exercise a power created by a governing instrument to become the unqualified beneficial owner of a nonvested property interest or a property interest subject to a power of appointment described in section 14-2901, subsection B or C, the nonvested property interest or power of appointment is created when that person's power to become the unqualified beneficial owner terminates. A joint power with respect to community property or to marital property held by a married couple is a power exercisable by one person alone.

C. A nonvested property interest or a power of appointment arising from a transfer of property to a previously funded trust or any other existing property arrangement is created when the nonvested property interest or power of appointment in the original contribution was created.

14-2903. Reformation of a disposition plan; conditions

On the petition of an interested person, a court shall reform a disposition in the manner that most closely approximates the transferor's manifested plan of distribution and that is within the five hundred years allowed under section 14-2901 if:

1. A nonvested property interest or a power of appointment becomes invalid under section 14-2901.

2. A class gift is not but might become invalid under section 14-2901 and the time has arrived when the share of any class member is to take effect in possession or enjoyment.

3. A nonvested property interest that is not validated by section 14-2901, subsection A, paragraph 1 can vest but not within ninety years after its creation.

14-2904. Statutory rule against perpetuities; exclusion

This article does not apply to:

1. A nonvested property interest or a power of appointment arising out of a nondonative transfer, except for a nonvested property interest or a power of appointment arising out of any of the following:

(a) A premarital or postmarital agreement.

(b) A separation or divorce settlement.

(c) A spouse's election.

(d) A similar arrangement arising out of a prospective, existing or previous marital relationship between the parties.

(e) A contract to make or not to revoke a will or trust.

(f) A contract to exercise or not to exercise a power of appointment.

(g) A transfer in satisfaction of a duty of support.

(h) A reciprocal transfer.

2. A fiduciary's power relating to the administration or management of assets, including the power of a fiduciary to sell, lease or mortgage property, and the power of a fiduciary to determine principal and income.

3. A power to appoint a fiduciary.

4. A discretionary power of a trustee to distribute principal before termination of a trust to a beneficiary who has an indefeasibly vested interest in the income and principal.

5. A nonvested property interest held by a charity, government or governmental agency or subdivision, if the nonvested property interest is preceded by an interest held by another charity, government or governmental agency or subdivision.

6. A nonvested property interest in or a power of appointment with respect to a trust or any other property arrangement forming part of any pension, profit sharing, stock bonus, health, disability, death benefit, income deferral or other current or deferred benefit plan for one or more employees, independent contractors or their beneficiaries or spouses, to which contributions are made for the purpose of distributing to or for the benefit of the participants or their beneficiaries or spouses the property, income or principal in the trust or other property arrangement, except a nonvested property interest or a power of appointment that is created by an election of a participant or a beneficiary or spouse.

7. A property interest, power of appointment or arrangement that was not subject to the common law rule against perpetuities or is excluded by the laws of this state.

14-2905. Nonvested property interest or power of appointment; creation; effective date; judicial reformation

A. Except as otherwise provided, this article applies to a nonvested property interest or a power of appointment that is created on or after December 31, 1994.

B. If a nonvested property interest or a power of appointment is determined in a judicial proceeding to violate this state's rule against perpetuities as that rule existed when the nonvested property interest or power of appointment was created, a court on the petition of an interested person may reform the disposition in the manner that most closely approximates the transferor's manifested plan of distribution and that is within the limits of the requirements of section 14-2901.

C. For purposes of this article, a nonvested property interest or a power of appointment created by the exercise of a power of appointment is created when the power is irrevocably exercised or when a revocable exercise becomes irrevocable.

14-2906. Rule against perpetuities; supersession

This article applies notwithstanding common law rules against perpetuities or section 33-261.

14-2907. Honorary trusts; trusts for pets; conditions

A. If a trust is for a specific lawful noncharitable purpose or for lawful noncharitable purposes to be selected by the trustee and there is no definite or definitely ascertainable beneficiary designated, the trust may be performed by the trustee for not longer than ninety years whether or not the terms of the trust contemplate a longer duration.

B. A trust for the care of a designated domestic or pet animal is valid. The trust terminates when no living animal is covered by the trust. A governing instrument shall be liberally construed to bring the transfer within this subsection, to presume against the merely precatory or honorary nature of the disposition and to carry out the general intent of the transferor. Extrinsic evidence is admissible in determining the transferor's intent.

C. In addition to the provisions of subsection A or B, a trust created under this section is subject to the following:

1. Except as expressly provided otherwise in the trust instrument, no portion of the principal or income may be converted to the use of the trustee or to any use other than for the trust's purposes or for the benefit of a covered animal.

2. On termination, the trustee shall transfer the unexpended trust property in the following order:

(a) As directed in the trust instrument.

(b) If the trust was created in a nonresiduary clause in the transferor's will or in a codicil to the transferor's will, under the residuary clause in the transferor's will.

(c) If no taker is produced by the application of subdivision (a) or (b) of this paragraph, to the transferor's heirs under section 14-2711.

3. For the purposes of section 14-2707, the residuary clause is treated as creating a future interest under the terms of a trust.

4. The intended use of the principal or income can be enforced by a person who is designated for that purpose in the trust instrument or, if none, by a person appointed by a court on application to it by any person.

5. Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment or fee is required by reason of the existence of the fiduciary relationship of the trustee.

6. A court may reduce the amount of the property transferred if it determines that amount substantially exceeds the amount required for the intended use. The amount of the reduction, if any, passes as unexpended trust property under paragraph 2 of this subsection.

7. If no trustee is designated or no designated trustee is willing or able to serve, a court shall name a trustee. A court may order the transfer of the property to another trustee if this is necessary to assure that the intended use is carried out and if no successor trustee is designated in the trust instrument or if no designated successor trustee agrees to serve or is able to serve. A court may also make other orders and determinations that it determines advisable to carry out the intent of the transferor and this section.

14-3101. Devolution of estate at death; administration on deaths of husband and wife

A. The power of a person to leave property by will, and the rights of creditors, devisees and heirs to his property are subject to the restrictions and limitations contained in this title to facilitate the prompt settlement of estates. Upon the death of a person, his separate property and his share of community property devolves to the persons to whom the property is devised by his last will, or to those indicated as substitutes for them in cases involving lapse, renunciation or other circumstances affecting the devolution of testate estates, or in the absence of testamentary disposition to his heirs, or to those indicated as substitutes for them in cases involving renunciation or other circumstances affecting the devolution of intestate estates. The devolution of separate property and decedent's share of community property is subject to rights to the allowance in lieu of homestead, exempt property and family allowance, to rights of creditors and to administration as provided in this title. In addition, the surviving spouse's share of the community property is subject to administration until the time for presentation of claims has expired, and thereafter only to the extent necessary to pay community claims.

B. If a husband and wife both die, and the administration of one of their estates is not completed prior to commencement of administration of the other, their estates may be combined in a single administration with the same personal representative, if feasible. A single application or petition may be made to obtain appointment of a personal representative and to determine testacy. If their estates devolve as if each spouse survived the other because of application of section 14-2702, and their estates are not combined, half of their community property is subject to administration in each estate and community claims will be charged ratably to each half of the community property.

14-3102. Necessity of statement or order of probate for will; exception

Except as provided in section 14-3971, to be effective to prove the transfer of any property or to nominate an executor, a will must be declared to be valid by a statement of informal probate by the registrar, or an adjudication of probate by the court, except that a duly executed and unrevoked will which has not been probated may be admitted as evidence of a devise if both:

1. No court proceeding concerning the succession or administration of the estate has occurred.

2. Either the devisee or his successors and assigns possessed the property devised in accordance with the provisions of the will, or the property devised was not possessed or claimed by anyone by virtue of the decedent's title during the time period for testacy proceedings.

14-3103. Necessity of appointment for administration

Except as otherwise provided in chapter 4 of this title, to acquire the powers and undertake the duties and liabilities of a personal representative of a decedent, a person shall be appointed by order of the court or statement of the registrar, shall qualify and shall be issued letters. Administration of an estate is commenced by the issuance of letters.

14-3104. Claims against decedent; necessity of administration

No proceeding to enforce a claim against the estate of a decedent or his successors may be revived or commenced before the appointment of a personal representative. After the appointment and until distribution, all proceedings and actions to enforce a claim against the estate are governed by the procedure prescribed by this chapter. After distribution a creditor whose claim has not been barred may recover from the distributees as provided in section 14-3934 or from a former personal representative individually liable as provided in section 14-3935. This section has no application to a proceeding by a secured creditor of the decedent to enforce his right to his security except as to any deficiency judgment which might be sought therein.

14-3105. Proceedings affecting devolution and administration; jurisdiction of subject matter

A. Persons interested in decedents' estates may apply to the registrar for determination in the informal proceedings provided in this chapter and may petition the court for orders in formal proceedings within the court's jurisdiction including but not limited to those described in this article.

B. The court may hear and determine any matter affecting the administration and distribution of decedents' estates after notice to interested persons in conformity with section 14-1401 and only in a formal proceeding. Persons notified are bound though less than all interested persons may have been given notice.

C. The court has general jurisdiction that it may exercise in a formal proceeding in any other action or proceeding concerning succession or to which an estate, through a personal representative, may be a party, including:

1. Actions to determine title or to quiet title to property alleged to belong to the estate.

2. Actions for personal injury and wrongful death.

3. Actions to quiet title of property that belongs to the estate.

4. Actions against third parties to recover estate assets.

5. Any action or proceeding in which property distributed by a personal representative or its value is sought to be subjected to rights of creditors or successors of the decedent.

14-3107. Scope of proceedings; proceedings independent; exception

Unless supervised administration as described in article 5 is involved:

1. Each proceeding before the court or registrar is independent of any other proceeding involving the same estate.

2. Petitions for formal orders of the court may combine various requests for relief in a single proceeding if the orders sought may be finally granted without delay. Except as required for proceedings which are particularly described by other sections of this chapter, no petition is defective because it fails to embrace all matters which might then be the subject of a final order.

3. Proceedings for probate of wills or adjudications of no will may be combined with proceedings for appointment of personal representatives.

4. A proceeding for appointment of a personal representative is concluded by an order making or declining the appointment.

14-3108. Probate, testacy and appointment proceedings; ultimate time limit

An informal probate or appointment proceeding or formal testacy or appointment proceeding, other than a proceeding to probate a will previously probated at the testator's domicile and appointment proceedings relating to an estate in which there has been a prior appointment, shall not be commenced more than two years after the decedent's death, except:

1. If a previous proceeding was dismissed because of doubt about the fact of the decedent's death, appropriate probate, appointment or testacy proceedings may be maintained at any time thereafter upon a finding that the decedent's death occurred prior to the initiation of the previous proceeding and the applicant or petitioner has not delayed unduly in initiating the subsequent proceeding.

2. Appropriate probate, appointment or testacy proceedings may be maintained in relation to the estate of an absent, disappeared or missing person for whose estate a conservator has been appointed, at any time within two years after the conservator becomes able to establish the death of the protected person.

3. A proceeding to contest an informally probated will and to secure appointment of the person with legal priority for appointment in the event the contest is successful may be commenced within the later of twelve months from the informal probate or two years from the decedent's death.

4. An informal probate or appointment or a formal testacy or appointment proceeding may be commenced thereafter if no court proceeding concerning the succession or administration has occurred within the two year period. If proceedings are brought under this exception, the personal representative has no right to possess estate assets as provided in section 14-3709 beyond that necessary to confirm title thereto in the rightful successors to the estate. Claims other than expenses of administration shall not be presented against the estate.

These limitations do not apply to proceedings to construe probated wills or determine heirs of an intestate. In cases under paragraph 1 or 2 of this section, the date on which a testacy or appointment proceeding is properly commenced shall be deemed to be the date of the decedent's death for purposes of other limitations provisions of this title which relate to the date of death.

14-3109. Statutes of limitation on decedent's cause of action

Upon the death of a person in whose favor there is a cause of action which has not been barred as of the date of his death, the limitation of the action ceases to run until a personal representative is appointed or until twelve months after the death, whichever first occurs, but shall not bar such action sooner than four months after death even if a personal representative is appointed earlier.

14-3110. Action by or against personal representative; survival of causes of action

Every cause of action, except a cause of action for damages for breach of promise to marry, seduction, libel, slander, separate maintenance, alimony, loss of consortium or invasion of the right of privacy, shall survive the death of the person entitled thereto or liable therefor, and may be asserted by or against the personal representative of such person, provided that upon the death of the person injured, damages for pain and suffering of such injured person shall not be allowed.

14-3201. Venue for first and subsequent estate proceedings; location of property

A. Venue for the first informal or formal testacy or appointment proceedings after a decedent's death is:

1. In the county where the decedent had his domicile at the time of his death.

2. If the decedent was not domiciled in this state, in any county where property of the decedent was located at the time of his death.

B. Venue for all subsequent proceedings within the exclusive jurisdiction of the court is in the place where the initial proceeding occurred, unless the initial proceeding has been transferred as provided in section 14-1303 or subsection C of this section.

C. If the first proceeding was informal, on application of an interested person and after notice to the proponent in the first proceeding, the court, upon finding that venue is elsewhere, may transfer the proceeding and the file to the other court.

D. For the purpose of aiding determinations concerning location of assets which may be relevant in cases involving non-domiciliaries, a debt, other than one evidenced by investment or commercial paper or other instrument in favor of a non-domiciliary, is located where the debtor resides, or if the debtor is a person other than an individual, at the place where it has its principal office. Commercial paper, investment paper and other instruments are located where the instrument is. An interest in property held in trust is located where the trustee may be sued.

14-3202. Appointment or testacy proceedings; conflicting claim of domicile in another state

If conflicting claims as to the domicile of a decedent are made in a formal testacy or appointment proceeding commenced in this state, and in a testacy or appointment proceeding after notice pending at the same time in another state, the court of this state must stay, dismiss or permit suitable amendment in, the proceeding here unless it is determined that the local proceeding was commenced before the proceeding elsewhere. The determination of domicile in the proceeding first commenced must be accepted as determinative in the formal testacy or appointment proceeding in this state.

14-3203. Priority among persons seeking appointment as personal representative

A. Whether the proceedings are formal or informal, persons who are not disqualified have priority for appointment in the following order:

1. The person with priority as determined by a probated will including a person nominated by a power conferred in a will.

2. The surviving spouse of the decedent who is a devisee of the decedent.

3. Other devisees of the decedent.

4. The surviving spouse of the decedent.

5. Other heirs of the decedent.

6. If the decedent was a veteran or the spouse or child of a veteran, the department of veterans' services.

7. Forty-five days after the death of the decedent, any creditor.

8. The public fiduciary.

B. An objection to an appointment can be made only in formal proceedings. In case of objection the priorities stated in subsection A of this section apply, except that:

1. If the estate appears to be more than adequate to meet exemptions and costs of administration but inadequate to discharge anticipated unsecured claims, the court, on petition of creditors, may appoint any qualified person.

2. In case of objection to appointment of a surviving spouse, other than one whose priority is determined by will, by an heir or devisee appearing to have a substantial interest in the estate, and the surviving spouse is found by the court to be unsuitable, the court may appoint a person who is acceptable to heirs and devisees, whose interests in the estate appear to be worth in total more than half of the probable distributable value or, in default of this accord, any suitable person.

3. In case of objection to appointment of a person who is not a surviving spouse, other than one whose priority is determined by will, by an heir or devisee appearing to have a substantial interest in the estate, the court may appoint a person who is acceptable to heirs and devisees whose interests in the estate appear to be worth in total more than half of the probable distributable value, or, in default of this accord any suitable person.

C. A person entitled to letters under subsection A, paragraphs 2 through 5 of this section and a person age fourteen and over who would be entitled to letters but for the person's age may nominate a qualified person to act as personal representative. Any person age eighteen and over may renounce the person's right to nominate or to an appointment by appropriate writing filed with the court. If two or more persons share a priority, those of them who do not renounce must concur in nominating another to act for them, or in applying for appointment.

D. Conservators of the estates of protected persons, or if there is no conservator, any guardian except a guardian ad litem of a minor or incapacitated person, may exercise the same right to nominate, to object to another's appointment, or to participate in determining the preference of a majority in interest of the heirs and devisees that the protected person or ward would have if qualified for appointment.

E. Formal proceedings are required to appoint a personal representative in any of the following situations:

1. If there is a person with a higher order of priority who has not renounced or waived the person's right by appropriate writing filed with the court.

2. If a priority is shared by two or more persons, as devisees under subsection A, paragraph 3 of this section, or as heirs under subsection A, paragraph 5 of this section, and one or more of them has not renounced or concurred in nominating the person whose appointment is applied for.

3. If appointment is sought for a person who does not have any priority under this section, under this paragraph the court shall determine that those having priority do not object to the appointment, and that administration is necessary.

F. A person is not qualified to serve as a personal representative who is:

1. Under the age of majority as defined in section 1-215.

2. A person whom the court finds unsuitable in formal proceedings.

3. A foreign corporation.

G. A personal representative appointed by a court of the decedent's domicile has priority over all other persons except if the decedent's will nominates different persons to be personal representative in this state and in the state of domicile. The domiciliary personal representative may nominate another, who shall have the same priority as the domiciliary personal representative.

H. This section governs priority for appointment of a successor personal representative but does not apply to the selection of a special administrator.

14-3204. Demand for notice of order or filing concerning decedent's estate

Any person desiring notice of any order or filing pertaining to a decedent's estate in which he has a financial or property interest may file a demand for notice with the court at any time after the death of the decedent stating the name of the decedent, the nature of his interest in the estate and the demandant's address or that of his attorney. The demandant shall mail a copy of the demand to the personal representative if one has been appointed. After filing of a demand, no order or filing to which the demand relates shall be made or accepted without notice as prescribed in section 14-1401 to the demandant or his attorney. The validity of an order which is issued or filing which is accepted without compliance with this requirement shall not be affected by the error, but the petitioner receiving the order or the person making the filing may be liable for any damage caused by the absence of notice. The requirement of notice arising from a demand under this provision may be waived in writing by the demandant and shall cease upon the termination of his interest in the estate.

14-3301. Informal probate or appointment proceedings; application; contents

A. Informal probate or informal appointment may be made only by application of one of the following:

1. The surviving spouse of the decedent.

2. An adult child, a parent, a brother or a sister of the decedent.

3. A person who is an heir of the decedent.

4. A person nominated as a personal representative by a probated will or the will for which probate is asked or pursuant to a power conferred by the will.

5. If the decedent was a nonresident, any person who is qualified under paragraphs 1 through 4 of this subsection or a personal representative appointed in the state of domicile or the nominee of such personal representative.

6. If the decedent was a veteran, the department of veterans' services.

7. Forty-five days after the death of the decedent, any creditor.

8. If no person is qualified and willing to serve as personal representative under paragraphs 1 through 7 of this subsection, the public fiduciary.

B. Applications for informal probate or informal appointment shall be directed to the registrar, and verified by the applicant to be accurate and complete to the best of the applicant's knowledge and belief as to the following information:

1. Every application for informal probate of a will or for informal appointment of a personal representative, other than a special or successor representative, shall contain the following:

(a) A statement of the interest of the applicant.

(b) The name and date of death of the decedent, the decedent's age, the county and state of the decedent's domicile at the time of death, the names and addresses of the spouse, children, heirs and devisees and the ages of any who are minors as far as known or ascertainable with reasonable diligence by the applicant.

(c) If the decedent was not domiciled in the state at the time of the decedent's death, a statement showing venue.

(d) A statement identifying and indicating the address of any personal representative of the decedent who is appointed in this state or elsewhere and whose appointment has not been terminated.

(e) A statement indicating whether the applicant has received a demand for notice, or is aware of any demand for notice, of any probate or appointment proceeding concerning the decedent that may have been filed in this state or elsewhere.

(f) A statement that the time limit for informal probate or appointment as provided in this chapter has not expired either because two years or less have passed since the decedent's death, or, if more than two years from death have passed, that circumstances as described by section 14-3108 authorizing tardy probate or appointment have occurred.

2. An application for informal probate of a will shall state the following in addition to the statements required by paragraph 1 of this subsection:

(a) That the original of the decedent's last will is in the possession of the court, or accompanies the application, or that a certified copy of a will probated in another jurisdiction accompanies the application.

(b) That the applicant, to the best of the applicant's knowledge, believes the will to have been validly executed.

(c) That, after the exercise of reasonable diligence, the applicant is unaware of any instrument revoking the will, and that the applicant believes that the instrument that is the subject of the application is the decedent's last will.

3. An application for informal appointment of a personal representative to administer an estate under a will shall describe the will by date of execution and state the time and place of probate or the pending application or petition for probate. The application for appointment shall adopt the statements in the application or petition for probate and state the name, address and priority for appointment of the person whose appointment is sought.

4. An application for informal appointment of an administrator in intestacy shall state in addition to the statements required by paragraph 1 of this subsection:

(a) That, after the exercise of reasonable diligence, the applicant is unaware of any unrevoked testamentary instrument relating to property having a situs in this state under section 14-1301 or a statement why any such instrument of which the applicant may be aware is not being probated.

(b) The priority of the person whose appointment is sought and the names of any other persons having a prior or equal right to the appointment under section 14-3203.

5. An application for appointment of a personal representative to succeed a personal representative appointed under a different testacy status shall refer to the order in the most recent testacy proceeding, state the name and address of both the person whose appointment is sought and of the person whose appointment will be terminated if the application is granted, and describe the priority of the applicant.

6. An application for appointment of a personal representative to succeed a personal representative who has tendered a resignation as provided in section 14-3610, subsection C, or whose appointment has been terminated by death, appointment of a conservator or removal, shall adopt the statements in the application or petition which led to the appointment of the person being succeeded except as specifically changed or corrected, state the name and address of the person who seeks appointment as successor and describe the priority of the applicant.

C. By verifying an application for informal probate, or informal appointment, the applicant submits personally to the jurisdiction of the court in any proceeding for relief from fraud relating to the application, or for perjury, that may be instituted against the applicant.

14-3302. Informal probate; duty of registrar; effect of informal probate

Upon receipt of an application requesting informal probate of a will, the registrar, upon making the findings required by section 14-3303 shall issue a written statement of informal probate if at least one hundred twenty hours have elapsed since the decedent's death. Informal probate is conclusive as to all persons until superseded by an order in a formal testacy proceeding. No defect in the application or procedure relating thereto which leads to informal probate of a will renders the probate void.

14-3303. Informal probate; proof and findings required

A. In an informal proceeding for original probate of a will, the registrar shall determine whether:

1. The application is complete.

2. The applicant has made oath or affirmation that the statements contained in the application are true to the best of his knowledge and belief.

3. The applicant appears from the application to be a person permitted to apply as provided in section 14-3301, subsection A.

4. On the basis of the statements in the application, venue is proper.

5. An original, duly executed and apparently unrevoked will is in the registrar's possession.

6. Any notice required by section 14-3204 has been given and that the application is not within section 14-3304.

7. It appears from the application that the time limit for original probate has not expired.

B. The application shall be denied if it indicates that a personal representative has been appointed in another county of this state or except as provided in subsection D of this section, if it appears that this or another will of the decedent has been the subject of a previous probate order.

C. A will which appears to have the required signatures and which contains an attestation clause showing that requirements of execution under chapter 2, article 5 of this title have been met shall be probated without further proof. In other cases, the registrar may assume execution if the will appears to have been properly executed, or he may accept a sworn statement or affidavit of any person having knowledge of the circumstances of execution, whether or not the person was a witness to the will.

D. Informal probate of a will which has been previously probated in another jurisdiction may be granted at any time upon written application by any interested person, together with deposit of a certified copy of the will and of the statement probating it from the office or court where it was first probated.

E. A will from a place which does not provide for probate of a will after death and which is not eligible for probate under subsection A of this section may be probated in this state upon receipt by the registrar of a duly authenticated copy of the will and a duly authenticated certificate of its legal custodian that the copy filed is a true copy and that the will has become operative under the law of the other place.

14-3304. Informal probate; unavailable in certain cases

An application for informal probate shall be declined if it relates to one or more of a known series of testamentary instruments the latest of which does not expressly revoke the earlier, except that a series consisting of a will with its codicils may be informally probated.

14-3305. Informal probate; registrar not satisfied

If the registrar is not satisfied that a will is entitled to be probated in informal proceedings because of failure to meet the requirements of sections 14-3303 and 14-3304 or any other reason, he may decline the application. A declination of informal probate is not an adjudication and does not preclude formal probate proceedings.

14-3306. Informal probate; notice requirements

A. The applicant must give notice as described by section 14-1401 of the applicant's application for informal probate:

1. To any person demanding it pursuant to section 14-3204.

2. To any personal representative of the decedent whose appointment has not been terminated. No other notice need be given prior to issuance of a statement of informal probate by the registrar.

B. On issuance of a statement of informal probate, the applicant must within thirty days give written information to all heirs and devisees of the admission of the will to probate, together with a copy of the will. The information shall describe the court where papers relating to the estate are on file and state that an heir has four months from receipt of the information within which to commence a formal testacy proceeding if the heir wishes to contest the probate. If a personal representative has been appointed, the information given pursuant to this section may be combined with the information required by section 14-3705 and may in that case be given by either the applicant or the personal representative on behalf of both. This information shall be delivered or sent by mail to each of the heirs and devisees whose address is reasonably available to the applicant. An heir to whom the information is given is barred from commencing a formal testacy proceeding to contest the probate of the will after four months have elapsed from receipt of the information, but an heir is not barred from commencing a formal testacy proceeding to probate a later discovered will. An heir to whom the information is not given may contest the informal probate within the time limit specified in section 14-3108. The applicant shall be liable to any heir or devisee damaged by failure to comply with this subsection. An applicant's failure to give information as required by this section is a breach of the applicant's duty to the heirs and devisees but does not affect the validity of the probate.

14-3307. Informal appointment proceedings; delay in order; duty of registrar; effect of appointment

A. Upon receipt of an application for informal appointment of a personal representative other than a special administrator as provided in section 14-3614, if at least one hundred twenty hours have elapsed since the decedent's death, the registrar, after making the findings required by section 14-3308, shall appoint the applicant subject to qualification and acceptance, except that if the decedent was a nonresident the registrar shall delay the order of appointment until thirty days have elapsed since death unless the personal representative appointed at the decedent's domicile is the applicant or the decedent's will directs that his estate be subject to the laws of this state.

B. The status of personal representative and the powers and duties pertaining to the office are fully established by informal appointment. An appointment, and the office of personal representative created thereby, is subject to termination as provided in sections 14-3608 through 14-3612, but is not subject to retroactive vacation.

14-3308. Informal appointment proceedings; proof and findings required

A. In informal appointment proceedings, the registrar must determine whether:

1. The application for informal appointment of a personal representative is complete.

2. The applicant has made oath or affirmation that the statements contained in the application are true to the best of his knowledge and belief.

3. The applicant appears from the application to be a person permitted to apply as provided in section 14-3301, subsection A.

4. On the basis of the statements in the application, venue is proper.

5. Any will to which the requested appointment relates has been or is being simultaneously formally or informally probated, except this requirement does not apply to the appointment of a special administrator.

6. Any notice required by section 14-3204 has been given.

7. From the statements in the application, the person whose appointment is sought has priority entitling him to the appointment.

8. The will, if any, requires supervised administration.

B. Unless section 14-3612 controls, the application must be denied if it indicates any of the following:

1. A personal representative who has not filed a written statement of resignation as provided in section 14-3610, subsection C has been appointed in this or another county of this state.

2. The decedent was not domiciled in this state, a personal representative whose appointment has not been terminated has been appointed by a court in the state of domicile and the applicant is not the domiciliary personal representative or his nominee.

3. Other requirements of this section have not been met.

14-3309. Informal appointment proceedings; registrar not satisfied

If the registrar is not satisfied that a requested informal appointment of a personal representative should be made because of failure to meet the requirements of sections 14-3307 and 14-3308, or for any other reason, the registrar may decline the application. A declination of informal appointment is not an adjudication and does not preclude appointment in formal proceedings.

14-3310. Informal appointment proceedings; notice requirements

The moving party must give notice as described by section 14-1401 of his intention to seek an appointment informally:

1. To any person demanding it pursuant to section 14-3204.

2. To any person having a prior or equal right to appointment not waived in writing and filed with the court. No other notice of an informal appointment proceeding is required.

14-3311. Informal appointment unavailable in certain cases

If an application for informal appointment indicates the existence of a possible unrevoked testamentary instrument which may relate to property subject to the laws of this state, and which is not filed for probate in this court, the registrar shall decline the application.

14-3401. Formal testacy proceedings; nature; when commenced

A. A formal testacy proceeding is litigation to determine whether a decedent left a valid will. A formal testacy proceeding may be commenced by an interested person filing a petition as described in section 14-3402, subsection A in which he requests that the court, after notice and hearing, enter an order probating a will, or a petition to set aside an informal probate of a will or to prevent informal probate of a will which is the subject of a pending application, or a petition in accordance with section 14-3402, subsection B for an order that the decedent died intestate.

B. A petition may seek formal probate of a will without regard to whether the same or a conflicting will has been informally probated. A formal testacy proceeding may involve a request for appointment of a personal representative.

C. During the pendency of a formal testacy proceeding, the registrar shall not act upon any application for informal probate of any will of the decedent or any application for informal appointment of a personal representative of the decedent.

D. Unless a petition in a formal testacy proceeding also requests confirmation of the previous informal appointment, a previously appointed personal representative, after receipt of notice of the commencement of a formal probate proceeding, must refrain from exercising his power to make any further distribution of the estate during the pendency of the formal proceeding. A petitioner who seeks the appointment of a different personal representative in a formal proceeding also may request an order restraining the acting personal representative from exercising any of the powers of his office and requesting the appointment of a special administrator. In the absence of a request or if the request is denied, the commencement of a formal proceeding has no effect on the powers and duties of a previously appointed personal representative other than those relating to distribution.

14-3402. Formal testacy or appointment proceedings; petition; contents

A. Petitions for formal probate of a will, or for adjudication of intestacy with or without request for appointment of a personal representative, must be directed to the court, request a judicial order after notice and hearing and contain further statements as indicated in this section. A petition for formal probate of a will must:

1. Request an order as to the testacy of the decedent in relation to a particular instrument which may or may not have been informally probated and determining the heirs;

2. Contain the statements required for informal applications as stated in paragraph 1 of subsection B of section 14-3301 and the statements required by subdivisions (b) and (c), paragraph 2 of subsection B of section 14-3301; and

3. State whether the original of the last will of the decedent is in the possession of the court or accompanies the petition. If the original will or a certified copy of a will probated in another jurisdiction neither is in the possession of the court nor accompanies the petition, the petition also must state the contents of the will, and indicate that it is lost, destroyed or otherwise unavailable.

B. A petition for adjudication of intestacy and appointment of an administrator in intestacy must request a judicial finding and order that the decedent left no will and determining the heirs, contain the statements required by paragraphs 1 and 4 of subsection B of section 14-3301 and indicate whether supervised administration is sought. A petition may request an order determining intestacy and heirs without requesting the appointment of an administrator, in which case, the statements required by subdivision (b), paragraph 4 of subsection B of section 14-3301 may be omitted.

14-3403. Formal testacy proceeding; notice of hearing on petition

A. Upon commencement of a formal testacy proceeding, the clerk shall fix a time and place of hearing. Notice shall be given in the manner prescribed by section 14-1401 by the petitioner to the persons specified in this section and to any additional person who has filed a demand for notice under section 14-3204. Notice shall be given to the following persons: the surviving spouse, children and other heirs of the decedent, the devisees and executors named in any will that is being, or has been, probated, or offered for informal or formal probate in the county, or that is known by the petitioner to have been probated, or offered for informal or formal probate in another jurisdiction, and any personal representative of the decedent whose appointment has not been terminated. Notice may be given to other persons. In addition, the petitioner shall give notice by publication one time at least fourteen days before the hearing to all unknown persons and to all known persons whose addresses are unknown who have any interest in the matter being litigated.

B. If it appears by the petition or otherwise that the fact of the death of the alleged decedent may be in doubt, or on the written demand of any interested person, a copy of the notice of the hearing on the petition shall be sent by registered mail to the alleged decedent at his last known address. The court shall direct the petitioner to report the results of, or make and report back concerning, a reasonably diligent search for the alleged decedent in any manner that may seem advisable, including any or all of the following methods:

1. By inserting in one or more suitable periodicals a notice requesting information from any person having knowledge of the whereabouts of the alleged decedent.

2. By notifying law enforcement officials and public welfare agencies in appropriate locations of the disappearance of the alleged decedent.

3. By engaging the services of an investigator. The costs of any search so directed shall be paid by the petitioner if there is no administration or by the estate of the decedent in case there is administration.

14-3404. Formal testacy proceedings; written objections to probate

Any party to a formal proceeding who opposes the probate of a will for any reason shall state in his pleadings his objections to probate of the will.

14-3405. Formal testacy proceedings; uncontested cases; hearings and proof

If a petition in a testacy proceeding is unopposed, the court may order probate or intestacy on the strength of the pleadings if satisfied that the conditions of section 14-3409 have been met, or conduct a hearing in open court and require proof of the matters necessary to support the order sought. If evidence concerning execution of the will is necessary, the affidavit or testimony of one of any attesting witnesses to the instrument is sufficient. If the affidavit or testimony of an attesting witness is not available, execution of the will may be proved by other evidence or affidavit.

14-3406. Formal testacy proceedings; contested cases; testimony of attesting witnesses

A. If evidence concerning execution of an attested will which is not self-proved is necessary in contested cases, the testimony of at least one of the attesting witnesses, if within the state, competent and able to testify, is required. Due execution of an attested or unattested will may be proved by other evidence.

B. If the will is self-proved, compliance with signature requirements for execution is conclusively presumed and other requirements of execution are presumed subject to rebuttal without the testimony of any witness upon filing the will and the acknowledgment and affidavits annexed or attached thereto, unless there is proof of fraud or forgery affecting the acknowledgment or affidavit.

14-3407. Formal testacy proceedings; burdens in contested cases

In contested cases, petitioners who seek to establish intestacy have the burden of establishing prima facie proof of death, venue and heirship. Proponents of a will, if they are also petitioners, have the burden of establishing prima facie proof of death and venue. If a will is opposed by a petition for a declaration of intestacy, it shall be determined first whether the will is entitled to probate.

14-3408. Formal testacy proceedings; will construction; effect of final order in another jurisdiction

A final order of a court of another state determining testacy, the validity or construction of a will, made in a proceeding involving notice to and an opportunity for contest by all interested persons must be accepted as determinative by the courts of this state if it includes, or is based upon, a finding that the decedent was domiciled at his death in the state where the order was made.

14-3409. Formal testacy proceedings; order; foreign will

After the time required for any notice has expired, upon proof of notice, and after any hearing that may be necessary, if the court finds that the testator is dead, venue is proper and that the proceeding was commenced within the limitation prescribed by section 14-3108, it shall determine the decedent's domicile at death, his heirs and his state of testacy. Any will found to be valid and unrevoked shall be formally probated. Termination of any previous informal appointment of a personal representative, which may be appropriate in view of the relief requested and findings, is governed by section 14-3612. The petition shall be dismissed or appropriate amendment allowed if the court is not satisfied that the alleged decedent is dead. A will from a place which does not provide for probate of a will after death, may be proved for probate in this state by a duly authenticated certificate of its legal custodian that the copy introduced is a true copy and that the will has become effective under the law of the other place.

14-3410. Formal testacy proceedings; probate of more than one instrument

If two or more instruments are offered for probate before a final order is entered in a formal testacy proceeding, more than one instrument may be probated if neither expressly revokes the other or contains provisions which work a total revocation by implication. If more than one instrument is probated, the order shall indicate what provisions control in respect to the nomination of an executor, if any. The order may, but need not, indicate how any provisions of a particular instrument are affected by the other instrument. After a final order in a testacy proceeding has been entered, no petition for probate of any other instrument of the decedent may be entertained, except incident to a petition to vacate or modify a previous probate order and subject to the time limits of section 14-3412.

14-3411. Formal testacy proceedings; partial intestacy

If it becomes evident in the course of a formal testacy proceeding that, though one or more instruments are entitled to be probated, the decedent's estate is or may be partially intestate, the court shall enter an order to that effect.

14-3412. Formal testacy proceedings; effect of order; vacation

A. Subject to appeal and subject to vacation as provided in this section and in section 14-3413, a formal testacy order under sections 14-3409 through 14-3411, including an order that the decedent left no valid will and determining heirs, is final as to all persons with respect to all issues concerning the decedent's estate that the court considered or might have considered incident to its rendition relevant to the question of whether the decedent left a valid will, and to the determination of heirs, except that:

1. Not later than sixty days after entry of a formal testacy order probating a will or a formal adjudication of intestacy, any interested person who did not oppose the probate of the will or the allegations of intestacy at the original hearing may petition the court to vacate its order and reopen the matter; the court shall thereupon fix a time and place of hearing, with notice to the heirs, the devisees named in the will, the personal representative, and other persons as directed by the court. The court shall proceed as in any contested testacy case; the court may vacate the original order and make a new order determining the decedent's state of testacy, or deny the petition to vacate and confirm the original order.

2. The court shall entertain a petition for modification or vacation of its order and probate of another will of the decedent if it is shown that the proponents of the later-offered will were unaware of its existence at the time of the earlier proceeding or were unaware of the earlier proceeding and were given no notice thereof, except by publication.

3. If intestacy of all or part of the estate has been ordered, the determination of heirs of the decedent may be reconsidered if it is shown that one or more persons were omitted from the determination and it is also shown that the persons were unaware of their relationship to the decedent, were unaware of his death or were given no notice of any proceeding concerning his estate, except by publication.

4. A petition for vacation under either paragraph 2 or 3 of this subsection must be filed prior to the earlier of the following time limits:

(a) If a personal representative has been appointed for the estate, the time of entry of any order approving final distribution of the estate, or, if the estate is closed by statement, six months after the filing of the closing statement.

(b) Whether or not a personal representative has been appointed for the estate of the decedent, the time prescribed by section 14-3108 when it is no longer possible to initiate an original proceeding to probate a will of the decedent.

(c) Twelve months after the entry of the order sought to be vacated.

5. The order originally rendered in the testacy proceeding may be modified or vacated, if appropriate under the circumstances, by the order of probate of the later-offered will or the order redetermining heirs.

6. The finding of the fact of death is conclusive as to the alleged decedent only if notice of the hearing on the petition in the formal testacy proceeding was sent by registered or certified mail addressed to the alleged decedent at his last known address and the court finds that a search under section 14-3403, subsection B was made.

B. If the alleged decedent is not dead, even if notice was sent and search was made, he may recover estate assets in the hands of the personal representative. In addition to any remedies available to the alleged decedent by reason of any fraud or intentional wrongdoing, the alleged decedent may recover any estate or its proceeds from distributees that is in their hands, or the value of distributions received by them, to the extent that any recovery from distributees is equitable in view of the circumstances.

14-3413. Formal testacy proceedings; vacation of order for other cause

For good cause shown, an order in a formal testacy proceeding may be modified or vacated within the time allowed for appeal.

14-3414. Formal proceedings concerning appointment of personal representative

A. A formal proceeding for adjudication regarding the priority or qualification of one who is an applicant for appointment as personal representative, or of one who previously has been appointed personal representative in informal proceedings, if an issue concerning the testacy of the decedent is or may be involved, is governed by section 14-3402, as well as by this section. In other cases, the petition shall contain or adopt the statements required by section 14-3301, subsection B, paragraph 1 and describe the question relating to priority or qualification of the personal representative which is to be resolved. If the proceeding precedes any appointment of a personal representative, it shall stay any pending informal appointment proceedings as well as any commenced thereafter. If the proceeding is commenced after appointment, the previously appointed personal representative, after receipt of notice thereof, shall refrain from exercising any power of administration except as necessary to preserve the estate or unless the court orders otherwise.

B. After notice to interested persons, including all persons interested in the administration of the estate as successors under the applicable assumption concerning testacy, any previously appointed personal representative and any person having or claiming priority for appointment as personal representative, the court shall determine who is entitled to appointment under section 14-3203, make a proper appointment and, if appropriate, terminate any prior appointment found to have been improper as provided in cases of removal under section 14-3611.

14-3415. Lost and missing wills; wills probated in other jurisdictions

A. If an original will that was last seen in the possession of the testator cannot be found after the testator's death, the testator is presumed to have destroyed the will with the intention of revoking it. This presumption may be rebutted by a preponderance of the evidence. If this presumption arises and is not rebutted the will is revoked.

B. If a will is found to be valid and unrevoked and the original will is not available, its contents can be proved by a copy of the will and the testimony of at least one credible witness that the copy is a true copy of the original. It is not necessary for this person to be an attesting witness to the will.

C. If a will is found to be valid and unrevoked and a copy of the will is not available, its contents can be proved only by clear and convincing evidence. For this purpose it is not necessary for a witness to be an attesting witness to the will. On a finding of clear and convincing evidence of the contents of such a will, the court, by order, shall set forth the contents of the will in reasonable detail.

D. If a certified copy of the will, as probated in another jurisdiction, is not available, the contents of the will can be proved by a copy of the will and the testimony of at least one credible witness that the copy is a true copy of the original, as probated in the other jurisdiction. It is not necessary for this person to be an attesting witness to the will.

14-3501. Supervised administration; nature of proceeding

Supervised administration is a single in rem proceeding to secure complete administration and settlement of a decedent's estate under the continuing authority of the court which extends until entry of an order approving distribution of the estate and discharging the personal representative or other order terminating the proceeding. A supervised personal representative is responsible to the court, as well as to the interested parties, and is subject to directions concerning the estate made by the court on its own motion or on the motion of any interested party. Except as otherwise provided in this article, or as otherwise ordered by the court, a supervised personal representative has the same duties and powers as a personal representative who is not supervised.

14-3502. Supervised administration; petition; order

A petition for supervised administration may be filed by any interested person or by a personal representative at any time or the prayer for supervised administration may be joined with a petition in a testacy or appointment proceeding. If the testacy of the decedent and the priority and qualification of any personal representative have not been adjudicated previously, the petition for supervised administration shall include the matters required of a petition in a formal testacy proceeding and the notice requirements and procedures applicable to a formal testacy proceeding apply. If not previously adjudicated, the court shall adjudicate the testacy of the decedent and questions relating to the priority and qualifications of the personal representative in any case involving a request for supervised administration, even though the request for supervised administration may be denied. After notice to interested persons, the court shall order supervised administration of a decedent's estate:

1. If the decedent's will directs supervised administration, it shall be ordered unless the court finds that circumstances bearing on the need for supervised administration have changed since the execution of the will and that there is no necessity for supervised administration.

2. If the decedent's will directs unsupervised administration, supervised administration shall be ordered only upon a finding that it is necessary for protection of persons interested in the estate.

3. In other cases if the court finds that supervised administration is necessary under the circumstances.

14-3503. Supervised administration; effect on other proceedings

A. The pendency of a proceeding for supervised administration of a decedent's estate stays action on any informal application then pending or thereafter filed.

B. If a will has been previously probated in informal proceedings, the effect of the filing of a petition for supervised administration is as provided for formal testacy proceedings by section 14-3401.

C. After he has received notice of the filing of a petition for supervised administration, a personal representative who has been appointed previously shall not exercise his power to distribute any estate. The filing of the petition does not affect his other powers and duties unless the court restricts the exercise of any of them pending full hearing on the petition.

14-3504. Supervised administration; powers of personal representative

Unless restricted by the court, a supervised personal representative has, without interim orders approving exercise of a power, all powers of personal representatives under this title, but all sales of real property shall be subject to court confirmation and the personal representative shall not exercise his power to make any distribution of the estate without prior order of the court. Any other restriction on the power of a personal representative which may be ordered by the court must be endorsed on his letters of appointment and, unless so endorsed, is ineffective as to persons dealing in good faith with the personal representative.

14-3505. Supervised administration; interim orders; distribution and closing orders; annual accounts; accounting on closing

A. Unless otherwise ordered by the court, supervised administration is terminated by order in accordance with time restrictions, notices and contents of orders prescribed for proceedings under section 14-3931. Interim orders approving or directing partial distributions or granting other relief may be issued by the court at any time during the pendency of a supervised administration on the application of the personal representative or any interested person.

B. A supervised personal representative shall file an account with the court not less than annually during his administration, and on closing shall file a final account to be approved under section 14-3931. He shall also account to the court on resignation or removal. Subject to appeal or vacation within the time permitted, an order made on notice and hearing allowing an intermediate account of a personal representative adjudicates his liabilities concerning matters considered in connection therewith. A copy of the intermediate account must be sent to all interested parties along with notice of hearing on the account. In connection with any account, the court may require the personal representative to submit to physical check of the estate in his control, to be made in any manner the court may specify.

14-3601. Qualification

Prior to receiving letters, a personal representative shall qualify by filing with the appointing court any required bond and a statement of acceptance of the duties of the office.

14-3602. Acceptance of appointment; consent to jurisdiction

By accepting appointment, a personal representative submits personally to the jurisdiction of the court in any proceeding relating to the estate that may be instituted by any interested person. Notice of any proceeding shall be delivered to the personal representative, or mailed to him by ordinary first class mail at his address as listed in the application or petition for appointment or as thereafter reported to the court and to his address as then known to the petitioner.

14-3603. Bond required; exceptions

A. A bond is required of a personal representative unless either:

1. The will expressly waives the bond.

2. All of the heirs if no will has been probated, or all of the devisees under a will which does not provide for waiver of the bond, file with the court a written waiver of the bond requirement. A duly appointed guardian or conservator may waive on behalf of his ward or protected person unless the guardian or conservator is the personal representative.

3. The personal representative is a national banking association, a holder of a banking permit under the laws of this state, a savings and loan association authorized to conduct trust business in this state, a title insurance company which is qualified to do business under the laws of this state, a trust company holding a certificate to engage in trust business from the superintendent of financial institutions or the public fiduciary.

4. The petition for formal or informal appointment alleges that the probable value of the entire estate will permit summary procedures under section 14-3973 and the surviving spouse, or the nominee of the surviving spouse, is applying for appointment as personal representative.

B. In any case where a bond is not required under subsection A of this section, the court may, upon petition of any interested person and upon reasonable proof that the interest of the petitioning person is in danger of being lost because of the administration of the estate, require a bond in such amount as the court may direct to protect the interest of the petitioner or of the petitioner and others. An heir or devisee who initially waived bond may be a petitioner under this subsection.

C. If a bond is not initially required because the petition for appointment alleges that the probable value of the entire estate will permit summary procedures under section 14-3973, and it later appears from the inventory and appraisal that the value of the estate will not permit use of such procedures, then the personal representative must promptly file a bond unless one is not required for some other reason under subsection A of this section.

14-3604. Bond amount; security; procedure; reduction

A. If bond is required and the provisions of the will or order do not specify the amount, unless stated in his application or petition, the person qualifying shall file a statement under oath with the registrar indicating his best estimate of the value of the personal estate of the decedent, real estate, less encumbrances thereon and of the income expected from the personal and real estate during the next year, and he shall execute and file a bond with the registrar, or give other suitable security, in an amount not less than the estimate provided, however, that said bond may be reduced by the amount of any real estate, less encumbrances thereon, if the letters issued to the personal representative contain the restriction that sales of real property by the personal representative are subject to court confirmation. The registrar shall determine that the bond is duly executed by a corporate surety, or one or more individual sureties whose performance is secured by pledge of personal property, mortgage on real property or other adequate security. The registrar may permit the amount of the bond to be reduced by the value of assets of the estate deposited with the clerk of the court or a domestic financial institution, as defined in section 14-6101, in a manner that prevents their unauthorized disposition. On petition of the personal representative or another interested person the court may excuse a requirement of bond, increase or reduce the amount of the bond, release sureties, or permit the substitution of another bond with the same or different sureties.

B. When a surety of a personal representative desires to be released from responsibility for future acts, he may apply to the court for a release. The court shall cause a citation to be issued to the personal representative, requiring him to appear at a time and place therein specified, and to give other security. Notice shall be given to the personal representative as provided in section 14-3602. If new security is given and approved by the judge he may thereupon order that the surety who applied for release shall not be liable on his bond for any subsequent act, default or misconduct of the personal representative. If the personal representative neglects or refuses to give new and sufficient security on the return of the citation, or within such reasonable time as the judge allows, unless the surety making the application consents to an extension of time, the court shall revoke the letters.

14-3606. Terms and conditions of bonds

A. The following requirements and provisions apply to any bond required by this article:

1. Bonds shall name the state as obligee for the benefit of the persons interested in the estate and shall be conditioned upon the faithful discharge by the fiduciary of all duties according to law.

2. Unless otherwise provided by the terms of the approved bond, sureties are jointly and severally liable with the personal representative and with each other. The address of sureties shall be stated in the bond.

3. By executing an approved bond of a personal representative, the surety consents to the jurisdiction of the court which issued letters to the primary obligor in any proceedings pertaining to the fiduciary duties of the personal representative and naming the surety as a party. Notice of any proceeding shall be delivered to the surety or mailed to him by registered or certified mail at his address as listed with the court where the bond is filed and to his address as then known to the petitioner.

4. On petition of a successor personal representative, any other personal representative of the same decedent, or any interested person, a proceeding in the court may be initiated against a surety for breach of the obligation of the bond of the personal representative.

5. The bond of the personal representative is not void after the first recovery but may be proceeded against from time to time until the whole penalty is exhausted.

B. No action or proceeding may be commenced against the surety on any matter as to which an action or proceeding against the primary obligor is barred by adjudication or limitation.

14-3607. Order restraining personal representative

A. On petition of any person who appears to have an interest in the estate, the court by temporary order may restrain a personal representative from performing specified acts of administration, disbursement or distribution, or may exercise any powers or discharge any duties of his office, or may make any other order to secure proper performance of his duty, if it appears to the court that the personal representative otherwise may take some action which would jeopardize unreasonably the interest of the applicant or of some other interested person. Persons with whom the personal representative may transact business may be made parties.

B. The matter shall be set for hearing within ten days unless the parties otherwise agree. Notice as the court directs shall be given to the personal representative and his attorney of record, if any, and to any other parties named defendant in the petition.

14-3608. Termination of appointment; general

Termination of appointment of a personal representative occurs as indicated in sections 14-3609 through 14-3612. Termination ends the right and power pertaining to the office of personal representative as conferred by this title or any will, except that a personal representative, at any time prior to distribution or until restrained or enjoined by court order, may perform acts necessary to protect the estate and may deliver the assets to a successor representative. Termination does not discharge a personal representative from liability for transactions or omissions occurring before termination, or relieve him of the duty to preserve assets subject to his control, to account therefor and to deliver the assets. Termination does not affect the jurisdiction of the court over the personal representative, but terminates his authority to represent the estate in any pending or future proceeding.

14-3609. Termination of appointment; death or disability

The death of a personal representative or the appointment of a conservator for the estate of a personal representative, terminates his appointment. Until appointment and qualification of a successor or special representative to replace the deceased or protected representative, the representative of the estate of the deceased or protected personal representative, if any, has the duty to protect the estate possessed and being administered by his decedent or ward at the time his appointment terminates, has the power to perform acts necessary for protection and shall account for and deliver the estate assets to a successor or special personal representative upon his appointment and qualification.

14-3610. Termination of appointment; voluntary

A. An appointment of a personal representative terminates as provided in section 14-3933, one year after the filing of a closing statement.

B. An order closing an estate as provided in section 14-3931 or 14-3932 terminates an appointment of a personal representative.

C. A personal representative may resign his position by filing a written statement of resignation with the registrar after he has given at least fifteen days written notice to the persons known to be interested in the estate. If no one applies or petitions for appointment of a successor representative within the time indicated in the notice, the filed statement of resignation is ineffective as a termination of appointment and in any event is effective only upon the appointment and qualification of a successor representative and delivery of the assets to him.

14-3611. Termination of appointment by removal; cause; procedure

A. A person interested in the estate may petition for removal of a personal representative for cause at any time. On filing of the petition, the court shall fix a time and place for a hearing. Notice shall be given by the petitioner to the personal representative, and to other persons as the court may order. Except as otherwise ordered as provided in section 14-3607, after receipt of notice of removal proceedings, the personal representative shall not act except to account, to correct maladministration or to preserve the estate. If removal is ordered, the court also shall direct by order the disposition of the assets remaining in the name of, or under the control of, the personal representative being removed.

B. Cause for removal exists under any of the following circumstances:

1. If removal would be in the best interests of the estate.

2. If it is shown that a personal representative or the person seeking the personal representative's appointment intentionally misrepresented material facts in the proceedings leading to the personal representative's appointment.

3. If it is shown that the personal representative has disregarded an order of the court, has become incapable of discharging the duties of that office, has mismanaged the estate or has failed to perform any duty pertaining to that office.

4. If it is shown that the personal representative has disregarded the reasonable written wishes of the decedent regarding the disposition of the decedent's remains.

C. Unless the decedent's will directs otherwise, a personal representative appointed at the decedent's domicile, incident to securing appointment of himself or his nominee as ancillary personal representative, may obtain removal of another who was appointed personal representative in this state to administer local assets.

14-3612. Termination of appointment; change of testacy status

Except as otherwise ordered in formal proceedings, the probate of a will subsequent to the appointment of a personal representative in intestacy or under a will which is superseded by formal probate of another will, or the vacation of an informal probate of a will subsequent to the appointment of the personal representative thereunder, does not terminate the appointment of the personal representative although his powers may be reduced as provided in section 14-3401. Termination occurs upon appointment in informal or formal appointment proceedings of a person entitled to appointment under the later assumption concerning testacy. If no request for new appointment is made within thirty days after expiration of time for appeal from the order in formal testacy proceedings, or from the informal probate, changing the assumption concerning testacy, the previously appointed personal representative upon request may be appointed personal representative under the subsequently probated will, or as in intestacy as the case may be.

14-3613. Successor personal representative

Articles 3 and 4 of this chapter govern proceedings for appointment of a personal representative to succeed one whose appointment has been terminated. After appointment and qualification, a successor personal representative may be substituted in all actions and proceedings to which the former personal representative was a party, and no notice, process or claim which was given or served upon the former personal representative need be given to or served upon the successor in order to preserve any position or right the person giving the notice or filing the claim may thereby have obtained or preserved with reference to the former personal representative. Except as otherwise ordered by the court, the successor personal representative has the powers and duties in respect to the continued administration which the former personal representative would have had if his appointment had not been terminated.

14-3614. Special administrator; appointment

A special administrator may be appointed:

1. Informally by the registrar on the application of any interested person when necessary to protect the estate of a decedent prior to the appointment of a general personal representative or if a prior appointment has been terminated as provided in section 14-3609.

2. In a formal proceeding by order of the court on the petition of any interested person and finding, after notice and hearing, that appointment is necessary to preserve the estate or to secure its proper administration including its administration in circumstances where a general personal representative cannot or should not act. If it appears to the court that an emergency exists, appointment may be ordered without notice.

14-3615. Special administrator; who may be appointed

A. If a special administrator is to be appointed pending the probate of a will which is the subject of a pending application or petition for probate, the person named executor in the will shall be appointed if available, and qualified.

B. In other cases, any proper person may be appointed special administrator.

14-3616. Special administrator; appointed informally; powers and duties

A special administrator appointed by the registrar in informal proceedings pursuant to section 14-3614, paragraph 1 has the duty to collect and manage the assets of the estate, to preserve them, to account therefor and to deliver them to the general personal representative upon his qualification. The special administrator has the power of a personal representative under this title necessary to perform his duties.

14-3617. Special administrator; formal proceedings; power and duties

A special administrator appointed by order of the court in any formal proceeding has the power of a general personal representative except as limited in the appointment and duties as prescribed in the order. The appointment may be for a specified time, to perform particular acts or on other terms as the court may direct.

14-3618. Termination of appointment; special administrator

The appointment of a special administrator terminates in accordance with the provisions of the order of appointment or on the appointment of a general personal representative. In other cases, the appointment of a special administrator is subject to termination as provided in sections 14-3608 through 14-3611.

14-3701. Time of accrual of duties and powers

The duties and powers of a personal representative commence on appointment. The powers of a personal representative relate back in time to give acts by the person appointed which are beneficial to the estate occurring prior to appointment the same effect as those occurring thereafter. Prior to appointment, a person named personal representative in a will may carry out written instructions of the decedent relating to the decedent's body, funeral and burial arrangements. A personal representative may ratify and accept acts on behalf of the estate done by others where the acts would have been proper for a personal representative.

14-3702. Priority among different letters

A person to whom general letters are issued first has exclusive authority under the letters until his appointment is terminated or modified. If, through error, general letters are afterwards issued to another, the first appointed representative may recover any property of the estate in the hands of the representative subsequently appointed, but the acts of the latter done in good faith before notice of the first letters are not void for want of validity of appointment.

14-3703. General duties; relation and liability to persons interested in estate; standing to sue

A. Except as provided in the will of the decedent, a personal representative is a fiduciary who shall observe the standards of care applicable to trustees as described by sections 14-10804 and 14-10806 and the duties of accounting applicable to trustees as provided in section 14-10813, subsection C. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and this title, and as expeditiously and efficiently as is consistent with the best interests of the estate. The personal representative shall use the authority conferred by this title, the terms of the will, if any, and any order in proceedings to which the personal representative is a party for the best interests of successors to the estate.

B. A personal representative shall not be surcharged for acts of administration or distribution if the conduct in question was authorized at the time. Subject to other obligations of administration, an informally probated will is authority to administer and distribute the estate according to its terms. An order of appointment of a personal representative, whether issued in informal or formal proceedings, is authority to distribute apparently intestate assets to the heirs of the decedent if, at the time of distribution, the personal representative is not aware of a pending testacy proceeding, a proceeding to vacate an order entered in an earlier testacy proceeding, a formal proceeding questioning the personal representative's appointment or fitness to continue, or a supervised administration proceeding. Nothing in this section affects the duty of the personal representative to administer and distribute the estate in accordance with the rights of claimants, the surviving spouse, any minor children, any dependent children and any pretermitted child of the decedent as described elsewhere in this title.

C. Except as to proceedings that do not survive the death of the decedent, a personal representative of a decedent domiciled in this state at death has the same standing to sue and be sued in the courts of this state and the courts of any other jurisdiction as the decedent had immediately prior to death.

14-3704. Personal representative to proceed without court order; exception

A personal representative shall proceed expeditiously with the settlement and distribution of a decedent's estate and, except as otherwise specified or ordered in regard to a supervised personal representative, do so without adjudication, order or direction of the court, but he may invoke the jurisdiction of the court, in proceedings authorized by this title, to resolve questions concerning the estate or its administration.

14-3705. Duty of personal representative; information to heirs and devisees

Not later than thirty days after appointment every personal representative, except any special administrator, shall give information of the appointment to the heirs and devisees, including, if there has been no formal testacy proceeding and if the personal representative was appointed on the assumption that the decedent died intestate, the devisees in any will mentioned in the application for appointment of a personal representative. The information shall be delivered or sent by first class mail to each of the heirs and devisees whose address is reasonably available to the personal representative. If appointment is made in a formal proceeding, information under this section need not be given to persons given notice of the formal proceeding. The duty does not extend to require information to persons who have been adjudicated in a prior formal testacy proceeding to have no interest in the estate. The information shall include the name and address of the personal representative, indicate that it is being sent to persons who have or may have some interest in the estate being administered, indicate whether a bond has been filed and describe the court where papers relating to the estate are on file. The personal representative's failure to give this information is a breach of the personal representative's duty to the persons concerned but does not affect the validity of the appointment or the personal representative's powers or other duties. A personal representative may inform other persons of the appointment by delivery or first class mail. The personal representative shall comply with the provisions of title 43, chapter 13.

14-3706. Duty of personal representative; inventory and appraisement

A. Within ninety days after his appointment, a personal representative, who is not a special administrator or a successor to another representative who has previously discharged this duty, shall prepare an inventory of property owned by the decedent at the time of his death, listing it with reasonable detail, and indicating as to each listed item, its fair market value as of the date of the decedent's death, its nature as community or separate property and the type and amount of any encumbrance that may exist with reference to any item.

B. The personal representative may file the original of the inventory with the court and send a copy of the inventory only to interested persons who request it; or, if he elects not to file the inventory with the court, he must deliver or mail a copy of the inventory to each of the heirs in an intestate estate, or to each of the devisees if a will has been probated, and to any other interested persons who request it.

14-3707. Employment of appraisers

The personal representative may employ a qualified and disinterested appraiser to assist him in ascertaining the fair market value as of the date of the decedent's death of any asset the value of which may be subject to reasonable doubt. Different persons may be employed to appraise different kinds of assets included in the estate. The names and addresses of any appraiser shall be indicated on the inventory with the item or items he appraised.

14-3708. Duty of personal representative; supplementary inventory

If any property not included in the original inventory comes to the knowledge of a personal representative or if the personal representative learns that the value or description indicated in the original inventory for any item is erroneous or misleading, he shall make a supplementary inventory or appraisement showing the market value as of the date of the decedent's death of the new item or the revised market value or descriptions, and the appraisers or other data relied upon, if any, and file it with the court if the original inventory was filed, or furnish copies thereof or information thereof to persons interested in the new information.

14-3709. Duty of personal representative; possession of estate; discovery of concealed assets

A. Except as otherwise provided by a decedent's will, every personal representative has a right to, and shall take possession or control of, the decedent's property, except that any real property or tangible personal property may be left with or surrendered to the person presumptively entitled to it unless or until, in the judgment of the personal representative, possession of the property by the personal representative will be necessary for purposes of administration. The request by a personal representative for delivery of any property possessed by an heir or devisee is conclusive evidence, in any action against the heir or devisee for possession of the property, that the possession of the property by the personal representative is necessary for purposes of administration. The personal representative shall pay taxes on, and take all steps reasonably necessary for the management, protection and preservation of, the estate in the personal representative's possession. The personal representative may maintain an action to recover possession of property or to determine its title.

B. If the personal representative or other person interested in the estate of a decedent complains to the court, on oath, that a person is suspected of having concealed, embezzled, conveyed or disposed of any property of a decedent, or possesses or has knowledge of deeds, bonds, contracts or other writings which contain evidence of or tend to disclose the right, interest or claim of a decedent to any property, or the will of a decedent, the court may cite that person to appear before the court and may examine that person on oath on the complaint. If that person is not in the county where letters have been issued, the person may be cited and examined before the court in the county where the person is found or the court issuing the citation. If the person appears and the court determines that the claim is unfounded, the court shall allow that person necessary expenses out of the estate.

C. If the person cited as provided by subsection B refuses to appear and submit to an examination, or to answer questions relevant to the complaint, the court may commit that person to jail until the person submits to the order of the court or is discharged according to law.

D. If on examination or from other evidence adduced at the hearing it appears that a person has concealed, embezzled, conveyed or disposed of any property of a decedent, or possesses or has knowledge of deeds, bonds, contracts or other writings tending to disclose the right, interest or claim of a decedent to any property, or the will of a decedent, the court may order that person to turn over the documents or disclose knowledge to the personal representative and may commit the person cited to jail until the order is complied with or the person is discharged according to law. The examination shall be reduced to writing and filed in court. The order for the disclosure made on this examination is prima facie evidence of the right of the personal representative to the property in an action brought for recovery of that property, and a judgment shall be for double the value of the property, or for return of the property and damages in addition to the property equal to the value of the property. The court may also award reasonable attorney fees and costs.

14-3710. Power to avoid transfers; action to set aside fraudulent conveyances

A. The property liable for the payment of unsecured debts of a decedent includes all property transferred by him by any means which is in law void or voidable as against his creditors and subject to prior liens. The right to recover this property, so far as necessary for the payment of unsecured debts of the decedent, is exclusively in the personal representative.

B. When there is a deficiency of assets in custody of a personal representative, and decedent in his lifetime has conveyed or transferred property, or any rights or interests therein, with intent to defraud creditors, or to avoid a right, debt or duty of any person, or has conveyed or transferred the property so that the conveyance or transfer by law is void or voidable as against creditors, the personal representative shall commence and prosecute an action for the recovery of the property for the benefit of the creditors, and shall recover property which has been so conveyed or transferred, whatever may have been the manner of the conveyance or transfer.

C. The personal representative is not bound to bring the action unless the creditors pay such part of the costs and expenses of the action, or give such surety to the personal representative therefor as the court on application by the creditors may direct.

D. The property recovered shall be subject to payment of the debts of decedent as other property in custody of the personal representative.

14-3711. Powers of personal representatives; in general

Until termination of his appointment a personal representative has the same power over the title to property of the estate that an absolute owner would have, in trust however, for the benefit of the creditors and others interested in the estate. This power may be exercised without notice, hearing or order of court.

14-3712. Improper exercise of power; breach of fiduciary duty

If the exercise of power concerning the estate is improper, the personal representative is liable to interested persons for damage or loss resulting from breach of his fiduciary duty to the same extent as a trustee of an express trust. The rights of purchasers and others dealing with a personal representative shall be determined as provided in sections 14-3713 and 14-3714.

14-3713. Sale, encumbrance or transaction involving conflict of interest; voidable; exceptions

Any sale or encumbrance to the personal representative, his spouse, agent or attorney, or any corporation or trust in which he has a substantial beneficial interest, or any transaction which is affected by a substantial conflict of interest on the part of the personal representative, is voidable by any person interested in the estate except one who has consented after fair disclosure, unless either:

1. The will or a contract entered into by the decedent expressly authorized the transaction.

2. The transaction is approved by the court after notice to interested persons.

14-3714. Persons dealing with personal representative; protection

A person who in good faith either assists or deals with another person acting as a personal representative, on the basis of a copy of letters certified by or under the direction of the court or an officer thereof within sixty days of the transaction, is protected as if the personal representative properly exercised his power and even though the authority of that person as personal representative has been terminated. The fact that a person knowingly deals with one who purports to act as a personal representative does not alone require the person to inquire into the existence of a power, the propriety of its exercise, or the current authority of the purported personal representative. Except for restrictions on powers of supervised personal representatives which are endorsed on letters as provided in section 14-3504, no provision in any will or order of court purporting to limit the power of a personal representative is effective except as to persons with actual knowledge thereof. A person is not bound to see to the proper application of estate assets paid or delivered to a personal representative. The protection here expressed extends to instances in which some procedural irregularity or jurisdictional defect occurred in proceedings leading to the issuance of letters, including a case in which the alleged decedent is found to be alive. The protection here expressed is not by substitution for that provided by comparable provisions of the laws relating to commercial transactions and laws simplifying transfers of securities by fiduciaries. If property is wrongfully transferred by a person acting as a personal representative to a person who is not in good faith, any person who subsequently purchases the property in good faith is protected as if the original transferee dealt in good faith.

14-3715. Transactions authorized for personal representatives; exceptions

Except as restricted or otherwise provided by the will or by an order in a formal proceeding and subject to the priorities stated in section 14-3902, a personal representative, acting reasonably for the benefit of the interested persons, may properly:

1. Retain assets owned by the decedent pending distribution or liquidation including those in which the representative is personally interested or which are otherwise improper for trust investment.

2. Receive assets from fiduciaries or other sources.

3. Perform, compromise or refuse performance of the decedent's contracts that continue as obligations of the estate, as he may determine under the circumstances. In performing enforceable contracts by the decedent to convey or lease land, the personal representative, among other possible courses of action, may either:

(a) Execute and deliver a deed of conveyance for cash payment of all sums remaining due or the purchaser's note for the sum remaining due secured by a mortgage or deed of trust on the land.

(b) Deliver a deed in escrow with directions that the proceeds, when paid in accordance with the escrow agreement, be paid to the successors of the decedent, as designated in the escrow agreement.

4. Satisfy written charitable pledges of the decedent irrespective of whether the pledges constituted binding obligations of the decedent or were properly presented as claims, if in the judgment of the personal representative the decedent would have wanted the pledges completed under the circumstances.

5. If funds are not needed to meet debts and expenses currently payable and are not immediately distributable, deposit or invest liquid assets of the estate, including monies received from the sale of other assets, in federally insured interest-bearing accounts, readily marketable secured loan arrangements or other prudent investments which would be reasonable for use by trustees generally.

6. Acquire or dispose of an asset, including land in this or another state, for cash or on credit and at public or private sale and manage, develop, improve, exchange, partition, change the character of or abandon an estate asset.

7. Make ordinary or extraordinary repairs or alterations in buildings or other structures, demolish any improvements, raze existing or erect new party walls or buildings.

8. Subdivide, develop or dedicate land to public use, make or obtain the vacation of plats and adjust boundaries, adjust differences in valuation on exchange or partition by giving or receiving considerations or dedicate easements to public use without consideration.

9. 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 period of administration.

10. 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. Abandon property when, in the opinion of the personal representative, it is valueless, is so encumbered, or is in condition that it is of no benefit to the estate.

12. Vote stocks or other securities in person or by general or limited proxy.

13. Pay calls, assessments and other sums chargeable or accruing against or on account of securities, unless barred by the provisions relating to claims.

14. Hold a security in the name of a nominee or in other form without disclosure of the interest of the estate but the personal representative is liable for any act of the nominee in connection with the security so held.

15. Insure the assets of the estate against damage, loss and liability and himself against liability as to third persons.

16. Borrow money with or without security to be repaid from the estate assets or otherwise, and advance money for the protection of the estate.

17. Effect a fair and reasonable compromise with any debtor or obligor, or extend, renew or in any manner modify the terms of any obligation owing to the estate. If the personal representative holds a mortgage, pledge or other lien upon property of another person, he may, in lieu of foreclosure, accept a conveyance or transfer of encumbered assets from the owner thereof in satisfaction of the indebtedness secured by lien.

18. Pay taxes, assessments, compensation of the personal representative and other expenses incident to the administration of the estate.

19. Sell or exercise stock subscription or conversion rights, and consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution or liquidation of a corporation or other business enterprise.

20. Allocate items of income or expense to either estate income or principal, as permitted or provided by law.

21. Employ persons, including attorneys, auditors, investment advisors or agents, even if they are associated with the personal representative, to advise or assist the personal representative in the performance of his administrative duties, act without independent investigation upon their recommendations and instead of acting personally, employ one or more agents to perform any act of administration, whether or not discretionary.

22. Prosecute or defend claims, or proceedings in any jurisdiction for the protection of the estate and of the personal representative in the performance of his duties.

23. Sell, mortgage or lease any real or personal property of the estate or any interest therein for cash or credit or for part cash and part credit, and with or without security for unpaid balances.

24. Continue any unincorporated business or venture in which the decedent was engaged at the time of his death:

(a) In the same business form for a period of not more than four months from the date of appointment of a general personal representative if continuation is a reasonable means of preserving the value of the business including goodwill.

(b) In the same business form for any additional period of time that may be approved by order of the court in a formal proceeding with notice to interested persons.

(c) Throughout the period of administration if the business is incorporated by the personal representative and if none of the probable distributees of the business who are competent adults object to its incorporation and retention in the estate.

25. Incorporate, or create a limited liability company to hold, any business or venture in which the decedent was engaged at the time of his death.

26. Provide for exoneration of the personal representative from personal liability in any contract entered into on behalf of the estate.

27. Satisfy and settle claims and distribute the estate as provided in this title.

14-3716. Powers and duties of successor personal representative

A successor personal representative has the same power and duty as the original personal representative to complete the administration and distribution of the estate, as expeditiously as possible, but he shall not exercise any power expressly made personal to the executor named in the will.

14-3717. Co-representatives; when joint action required

If two or more persons are appointed co-representatives and unless the will provides otherwise, the concurrence of all is required on all acts connected with the administration and distribution of the estate. This restriction does not apply when any co-representative receives and receipts for property due the estate, when the concurrence of all cannot readily be obtained in the time reasonably available for emergency action necessary to preserve the estate, or when a co-representative has been delegated to act for the others. Persons dealing with a co-representative if actually unaware that another has been appointed to serve with him or if advised by the personal representative with whom they deal that he has authority to act alone for any of the reasons mentioned herein, are as fully protected as if the person with whom they dealt had been the sole personal representative.

14-3718. Powers of surviving personal representative

Unless the terms of the will otherwise provide, every power exercisable by personal co-representatives may be exercised by the one or more remaining after the appointment of one or more is terminated, and if one of two or more nominated as co-executors is not appointed, those appointed may exercise all the powers incident to the office.

14-3719. Compensation of personal representative

A personal representative is entitled to reasonable compensation for his services. If a will provides for compensation of the personal representative and there is no contract with the decedent regarding compensation, he may renounce the provision before qualifying and be entitled to reasonable compensation. A personal representative also may renounce his right to all or any part of the compensation. A written renunciation of fee may be filed with the court.

14-3720. Expenses in estate litigation

If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not he is entitled to receive from the estate his necessary expenses and disbursements including reasonable attorneys' fees incurred.

14-3721. Proceedings for review of employment of agents and compensation of personal representatives and employees of estate

After notice to all interested persons, on petition of an interested person, including any person employed by the personal representative, or on appropriate motion if administration is supervised, the court may review the propriety of employment of any person by the personal representative, the reasonableness of the compensation of any person so employed, or the reasonableness of the compensation determined by the personal representative for his own services. Any person who has received excessive compensation from an estate for services rendered may be ordered to make appropriate refund.

14-3722. Compensation of appointees

A. If not otherwise compensated for services rendered, an investigator, accountant or lawyer appointed pursuant to this article is entitled to reasonable compensation from the estate of the decedent. If the court compensates the provider of a service the court may charge the estate for the reasonable cost of the service and shall deposit these monies in the probate fund pursuant to section 14-5433.

B. Notwithstanding subsection A of this section, if compensation by the estate is not feasible the court shall determine and pay reasonable compensation for services rendered by an investigator, accountant or lawyer appointed in a probate administration proceeding.

C. If a county pays for any of these services from general fund appropriations, the county may charge the estate for reasonable compensation. The county treasurer shall deposit monies collected pursuant to this subsection in the same fund from which the expenditure was made.

14-3801. Notice to creditors

A. Unless notice has already been given under this section, at the time of appointment a personal representative shall publish a notice to creditors once a week for three successive weeks in a newspaper of general circulation in the county announcing the appointment and the personal representative's address and notifying creditors of the estate to present their claims within four months after the date of the first publication of the notice or be forever barred.

B. A personal representative shall give written notice by mail or other delivery to all known creditors, notifying the creditors of the personal representative's appointment. The notice shall also notify all known creditors to present the creditor's claim within four months after the published notice, if notice is given as provided in subsection A, or within sixty days after the mailing or other delivery of the notice, whichever is later, or be forever barred. A written notice shall be the notice described in subsection A or a similar notice.

C. The personal representative is not liable to a creditor or to a successor of the decedent for giving or failing to give notice under this section.

14-3802. Statute of limitations

Unless an estate is insolvent the personal representative, with the consent of all successors whose interests would be affected, may waive any defense of limitations available to the estate. If the defense is not waived, no claim which was barred by any statute of limitations at the time of the decedent's death shall be allowed or paid. The running of any statute of limitations measured from some other event than death and advertisement for claims against a decedent is suspended during the four months following the decedent's death but resumes thereafter as to claims not barred pursuant to the sections which follow. For purposes of any statute of limitations, the proper presentation of a claim under section 14-3804 is equivalent to commencement of a proceeding on the claim.

14-3803. Limitations on presentation of claims

A. All claims against a decedent's estate that arose before the death of the decedent, including claims of the state and any of its political subdivisions, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort or other legal basis, if not barred earlier by any other statute of limitations or nonclaim statute, are barred against the estate, the personal representative and the heirs and devisees of the decedent, unless presented within the earlier of either:

1. Two years after the decedent's death plus the time remaining in the period commenced by an actual or published notice pursuant to section 14-3801, subsection A or B.

2. The time prescribed by section 14-3801, subsection B for creditors who are given actual notice and within the time prescribed in section 14-3801, subsection A for all creditors barred by publication.

B. A claim that is described in subsection A of this section and that is barred by the nonclaim statute of the decedent's domicile before the giving of notice to creditors in this state is barred in this state.

C. All claims against a decedent's estate that arise at or after the death of the decedent, including claims of the state and any political subdivision, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort or other legal basis, are barred against the estate, the personal representative and the heirs and devisees of the decedent, unless presented as either of the following:

1. A claim based on a contract with the personal representative, within four months after performance by the personal representative is due.

2. Any other claim, within the later of four months after it arises or the time specified in subsection A, paragraph 1 of this section.

D. This section does not affect or prevent any of the following:

1. Any proceeding to enforce any mortgage, pledge or other lien upon property of the estate.

2. To the limits of the insurance protection only, any proceeding to establish liability of the decedent or the personal representative for which he is protected by liability insurance.

3. Collection of compensation for services rendered and reimbursement for expenses advanced by the personal representative or by the attorney or accountant for the personal representative or the estate.

14-3804. Manner of presentation of claims

Claims against a decedent's estate may be presented as follows:

1. The claimant may deliver or mail to the personal representative a written statement of the claim indicating its basis, the name and address of the claimant and the amount claimed. The claim is deemed presented on receipt of the written statement of claim by the personal representative. If a claim is not yet due, the date when it will become due shall be stated. If the claim is contingent or unliquidated, the nature of the uncertainty shall be stated. If the claim is secured, the security shall be described. Failure to describe correctly the security, the nature of any uncertainty, and the due date of a claim not yet due does not invalidate the presentation made.

2. The claimant may commence a proceeding against the personal representative in any court where the personal representative may be subjected to jurisdiction, to obtain payment of his claim against the estate, but the commencement of the proceeding must occur within the time limited for presenting the claim. No presentation of claim is required in regard to matters claimed in proceedings against the decedent which were pending at the time of his death.

3. If a claim is presented under paragraph 1, no proceeding thereon may be commenced more than sixty days after the personal representative has mailed a notice of disallowance; but, in the case of a claim which is not presently due or which is contingent or unliquidated, the personal representative may consent to an extension of the sixty day period, or to avoid injustice the court, on petition, may order an extension of the sixty day period, except no extension may run beyond the applicable statute of limitations.

14-3805. Priority of claims

A. If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order:

1. Costs and expenses of administration.

2. Reasonable funeral expenses.

3. Debts and taxes with preference under federal law.

4. Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending him.

5. Debts and taxes with preference under the laws of this state.

6. All other claims.

B. No preference shall be given in the payment of any claim over any other claim of the same class and a claim due and payable shall not be entitled to a preference over claims not due.

14-3806. Allowance of claims

A. As to claims presented in the manner described in section 14-3804 within the time limit prescribed in section 14-3803, the personal representative may mail a notice to any claimant stating that the claim has been disallowed. Every claim which is disallowed in whole or in part by the personal representative is barred so far as not allowed unless the claimant files a petition for allowance in the court or commences a proceeding against the personal representative not later than sixty days after the mailing of the notice of disallowance or partial allowance. Failure of the personal representative to mail notice to a claimant of action on his claim for sixty days after the time for original presentation of the claim has expired has the effect of a notice of allowance. The personal representative of the estate of a deceased spouse may classify a claim as a community claim payable out of community property, or as a separate claim payable out of separate property and the balance of the decedent's half of community property. Either classification constitutes a disallowance in part; failure to give notice of the classification to the claimant as provided in this subsection, or failure to classify an allowed claim, has the effect of allowing the claim as payable out of either separate or community property, whichever is more beneficial to the claimant.

B. The personal representative may at any time prior to payment, but not later than six months after presentation of the claim, rescind the allowance of a claim and notify the claimant of the change to a disallowance in whole or in part. The disallowed claim is then subject to bar as provided in subsection A. After allowance of a claim by a court order or judgment, or entry of an order directing payment of an allowed claim, the allowance may not be rescinded by the personal representative. After disallowing a claim, the personal representative may change the disallowance to an allowance prior to expiration of the time within which the claimant may file a petition for allowance or commence a proceeding on the claim under subsection A. After a disallowed claim is barred, it may be allowed and paid only if the estate is solvent and all successors whose interests would be affected consent.

C. Upon the petition of the personal representative or of a claimant in a proceeding for the purpose, the court may allow in whole or in part any claim or claims presented to the personal representative in due time and not barred by subsection A of this section. Notice in this proceeding shall be given to the claimant, the personal representative and those other persons interested in the estate as the court may direct by order entered at the time the proceeding is commenced.

D. A judgment in a proceeding in another court against a personal representative to enforce a claim against a decedent's estate is an allowance of the claim.

E. Unless otherwise provided in any judgment in another court entered against the personal representative, allowed claims bear interest at the legal rate for the period commencing sixty days after the time for original presentation of the claim has expired unless based on a contract making a provision for interest, in which case they bear interest in accordance with that provision.

14-3807. Payment of claims

A. On the expiration of the earlier of the time limitations prescribed in section 14-3803 for the presentation of claims, the personal representative shall proceed to pay the claims allowed against the estate in the order of priority prescribed, after making provision for allowance in lieu of homestead, exempt property and family allowance, for claims already presented which have not yet been allowed or whose allowance has been appealed, and for unbarred claims which may yet be presented, including costs and expenses of administration. By petition to the court in a proceeding for the purpose, or by appropriate motion if the administration is supervised, a claimant whose claim has been allowed but not paid as provided in this section may secure an order directing the personal representative to pay the claim to the extent that funds of the estate are available for the payment.

B. The personal representative at any time may pay any just claim which has not been barred, with or without formal presentation, but the personal representative is personally liable to any other claimant whose claim is allowed and who is injured by such payment if either:

1. The payment was made before the expiration of the time limit stated in subsection A of this section and the personal representative failed to require the payee to give adequate security for the refund of any of the payment necessary to pay other claimants.

2. The payment was made, due to the negligence or wilful fault of the personal representative, in such manner as to deprive the injured claimant of the claimant's priority.

14-3808. Individual liability of personal representative

A. Unless otherwise provided in the contract, a personal representative is not individually liable on a contract properly entered into in his fiduciary capacity in the course of administration of the estate unless he fails to reveal his representative capacity and identify the estate in the contract.

B. A personal representative is individually liable for obligations arising from ownership or control of the estate or for torts committed in the course of administration of the estate only if he is personally at fault.

C. Claims based on contracts entered into by a personal representative in his fiduciary capacity, on obligations arising from ownership or control of the estate, or on torts committed in the course of estate administration may be asserted against the estate by proceeding against the personal representative in his fiduciary capacity, whether or not the personal representative is individually liable therefor.

D. Issues of liability as between the estate and the personal representative individually may be determined in a proceeding for accounting, surcharge or indemnification or other appropriate proceeding.

14-3809. Secured claims

Payment of a secured claim is upon the basis of the amount allowed if the creditor surrenders his security, otherwise payment is upon the basis of one of the following:

1. If the creditor exhausts his security before receiving payment, unless precluded by other law, upon the amount of the claim allowed less the fair value of the security.

2. If the creditor does not have the right to exhaust his security or has not done so, upon the amount of the claim allowed less the value of the security determined by converting it into money according to the terms of the agreement pursuant to which the security was delivered to the creditor, or by the creditor and personal representative by agreement, arbitration, compromise or litigation.

14-3810. Claims not due and contingent or unliquidated claims

A. If a claim which will become due at a future time or a contingent or unliquidated claim becomes due or certain before the distribution of the estate, and if the claim has been allowed or established by a proceeding, it is paid in the same manner as presently due and absolute claims of the same class.

B. In other cases the personal representative or, on petition of the personal representative or the claimant in a special proceeding for the purpose, the court may provide for payment as follows:

1. If the claimant consents, he may be paid the present or agreed value of the claim, taking any uncertainty into account.

2. Arrangement for future payment, or possible payment, on the happening of the contingency or on liquidation may be made by creating a trust, giving a mortgage, obtaining a bond or security from a distributee, or otherwise.

14-3811. Counterclaims

In allowing a claim the personal representative may deduct any counterclaim which the estate has against the claimant. In determining a claim against an estate a court shall reduce the amount allowed by the amount of any counterclaims and, if the counterclaims exceed the claim, render a judgment against the claimant in the amount of the excess. A counterclaim, liquidated or unliquidated, may arise from a transaction other than that upon which the claim is based. A counterclaim may give rise to relief exceeding in amount or different in kind from that sought in the claim.

14-3812. Execution and levies prohibited

No execution may issue upon nor may any levy be made against any property of the estate under any judgment against a decedent or a personal representative, but this section shall not be construed to prevent the enforcement of mortgages, pledges or liens upon real or personal property in an appropriate proceeding.

14-3813. Compromise of claims

When a claim against the estate has been presented in any manner, the personal representative may, if it appears for the best interest of the estate, compromise the claim, whether due or not due, absolute or contingent, liquidated or unliquidated.

14-3814. Encumbered assets

If any assets of the estate are encumbered by mortgage, pledge, lien or other security interest, the personal representative may pay the encumbrance or any part thereof, renew or extend any obligation secured by the encumbrance or convey or transfer the assets to the creditor in satisfaction of his lien, in whole or in part, whether or not the holder of the encumbrance has presented a claim, if it appears to be for the best interest of the estate. Payment of an encumbrance does not increase the share of the distributee entitled to the encumbered assets unless the distributee is entitled to exoneration.

14-3815. Administration in more than one state; duty of personal representative

A. All assets of estates being administered in this state are subject to all claims, allowances and charges existing or established against the personal representative wherever appointed.

B. If the estate either in this state or as a whole is insufficient to cover all family exemptions and allowances determined by the law of the decedent's domicile, prior charges and claims, after satisfaction of the exemptions, allowances and charges, each claimant whose claim has been allowed either in this state or in another jurisdiction in administrations of which the personal representative is aware, is entitled to receive payment of an equal proportion of his claim. If a preference or security in regard to a claim is allowed in another jurisdiction but not in this state, the creditor so benefited is to receive dividends from local assets only upon the balance of his claim after deducting the amount of the benefit.

C. In case the family exemptions and allowances, prior charges and claims of the entire estate exceed the total value of the portions of the estate being administered separately and this state is not the state of the decedent's last domicile, the claims allowed in this state shall be paid their proportion if local assets are adequate for the purpose, and the balance of local assets shall be transferred to the domiciliary personal representative. If local assets are not sufficient to pay all claims allowed in this state the amount to which they are entitled, local assets shall be marshalled so that each claim allowed in this state is paid its proportion as far as possible, after taking into account all dividends on claims allowed in this state from assets in other jurisdictions.

14-3816. Final distribution to domiciliary representative

The estate of a nonresident decedent being administered by a personal representative appointed in this state shall, if there is a personal representative of the decedent's domicile willing to receive it, be distributed to the domiciliary personal representative for the benefit of the successors of the decedent unless any of the following apply:

1. By virtue of the decedent's will, if any, and applicable choice of law rules, the successors are identified pursuant to the local law of this state without reference to the local law of the decedent's domicile.

2. The personal representative of this state, after reasonable inquiry, is unaware of the existence or identity of a domiciliary personal representative.

3. The court orders otherwise in a proceeding for a closing order under section 14-3931 or incident to the closing of a supervised administration. In other cases, distribution of the estate of a decedent shall be made in accordance with the other articles of this chapter.

14-3901. Successors' rights if no administration

In the absence of administration, the heirs and devisees are entitled to the estate in accordance with the terms of a probated will or the laws of intestate succession. Devisees may establish title by the probated will to devised property. Persons entitled to property by allowance in lieu of homestead, exemption or intestacy may establish title thereto by proof of the decedent's ownership, his death and their relationship to the decedent. Successors take subject to all charges incident to administration, including the claims of creditors and allowances of surviving spouse and dependent children, and subject to the rights of others resulting from abatement, retainer, advancement and ademption.

14-3902. Distribution; order in which assets appropriated; abatement

A. Except as provided in subsection B, shares of distributees abate, without any preference or priority as between real and personal property, in the following order:

1. Property not disposed of by the will.

2. Residuary devises.

3. General devises.

4. Specific devises.

For purposes of abatement, a general devise charged on any specific property or fund is a specific devise to the extent of the value of the property on which it is charged, and upon the failure or insufficiency of the property on which it is charged, a general devise to the extent of the failure or insufficiency. Abatement within each classification is in proportion to the amounts of property each of the beneficiaries would have received if full distribution of the property had been made in accordance with the terms of the will.

B. If the will expresses an order of abatement, or if the testamentary plan or the express or implied purpose of the devise would be defeated by the order of abatement stated in subsection A, the shares of the distributees abate as may be found necessary to give effect to the intention of the testator.

C. If an estate of a decedent consists partly of separate property and partly of community property:

1. Community debts shall be charged against community property.

2. Separate debts shall be charged against separate property and against the balance of decedent's half of community property.

3. Expenses of administration shall be charged against separate property and decedent's half of community property in proportion to the relative value thereof, but any special expenses attributable to management of community property may be charged against the entire community property.

D. If the subject of a preferred devise is sold or used incident to administration, abatement shall be achieved by appropriate adjustments in, or contribution from, other interests in the remaining assets.

14-3903. Right of retainer

The amount of a noncontingent indebtedness of a successor to the estate if due, or its present value if not due, shall be offset against the successor's interest, but the successor has the benefit of any defense which would be available to him in a direct proceeding for recovery of the debt.

14-3904. Interest on general pecuniary devise

Unless a contrary intention is indicated by the will, general pecuniary devises bear interest at the legal rate beginning one year after the first appointment of a personal representative until payment.

14-3906. Distribution in kind; valuation; method

A. Unless a contrary intention is indicated by the will, the distributable assets of a decedent's estate shall be distributed in kind to the extent possible through application of the following provisions:

1. A specific devisee is entitled to distribution of the thing devised to him, and a spouse or child who has selected particular assets of an estate as provided in section 14-2403 shall receive the items selected.

2. Any allowance in lieu of homestead or family allowance or devise of a stated sum of money may be satisfied by value in kind if the following are true:

(a) The person entitled to the payment has not demanded payment in cash.

(b) The property distributed in kind is valued at fair market value as of the date of its distribution.

(c) A residuary devisee has not requested that the asset in question remain a part of the residue of the estate.

3. For the purpose of valuation under paragraph 2 securities regularly traded on recognized exchanges, if distributed in kind, are valued at the price for the last sale of like securities traded on the business day prior to distribution, or if there was no sale on that day, at the median between amounts bid and offered at the close of that day. Assets consisting of sums owed the decedent or the estate by solvent debtors as to which there is no known dispute or defense are valued at the sum due with accrued interest or discounted to the date of distribution. For assets which do not have readily ascertainable values, a valuation as of a date not more than thirty days prior to the date of distribution, if otherwise reasonable, controls. For purposes of facilitating distribution, the personal representative may ascertain the value of the assets as of the time of the proposed distribution in any reasonable way, including the employment of qualified appraisers, even if the assets may have been previously appraised.

4. The residuary estate shall be distributed in kind if there is no objection to the proposed distribution and it is practicable to distribute undivided interests. In other cases, residuary property may be converted into cash for distribution.

B. After the probable charges against the estate are known, the personal representative may mail or deliver a proposal for distribution to all persons who have a right to object to the proposed distribution. The right of any distributee to object to the proposed distribution on the basis of the kind or value of asset the person is to receive, if not waived earlier in writing, terminates if the person fails to object in writing received by the personal representative within thirty days after mailing or delivery of the proposal.

14-3907. Distribution in kind; evidence

A. If distribution in kind is made, the personal representative shall execute an instrument or deed of distribution assigning, transferring or releasing the assets to the distributee as evidence of the distributee's title to the property.

B. The names and addresses of each distributee shall be included in any instrument of distribution transferring title to real property recorded by any county recorder.

14-3908. Distribution; right or title of distributee

Proof that a distributee has received an instrument or deed of distribution of assets in kind, or payment in distribution from a personal representative, is conclusive evidence that the distributee has succeeded to the interest of the estate in the distributed assets, as against all persons interested in the estate, except that the personal representative may recover under section 14-3909 the assets or their value if the distribution was improper.

14-3909. Improper distribution; liability of distributee

Unless the distribution or payment no longer can be questioned because of adjudication, estoppel or limitation, a distributee of property or money improperly distributed or paid, or a claimant who was improperly paid, is liable to return the property improperly received and its income since distribution if he has the property. If such a distributee does not have the property, he is liable to return the value as of the date of disposition of the property improperly received and its income and gain received by him.

14-3910. Purchasers from distributees or transferees protected

If property distributed in kind or a security interest therein is acquired for value by a purchaser from or lender to a distributee who has received an instrument or deed of distribution from the personal representative, or is so acquired by a purchaser from or lender to a transferee from such distributee, the purchaser or lender takes title free of rights of any person interested in the estate and incurs no personal liability to the estate, whether or not the distribution was proper or supported by court order and whether or not the authority of the personal representative was terminated prior to execution of the instrument or deed. This section protects a purchaser from or lender to a distributee who as personal representative has executed a deed of distribution to himself, as well as from any other distributee or his transferee. To be protected under this provision, a purchaser or lender need not inquire whether a personal representative acted properly in making the distribution in kind, even if the personal representative and the distributee are the same person, or whether the authority of the personal representative had terminated prior to the distribution.

14-3911. Partition for purpose of distribution

When two or more heirs or devisees are entitled to distribution of undivided interests in any real or personal property of the estate, the personal representative or one or more of the heirs or devisees may petition the court prior to the formal or informal closing of the estate, to make partition. After notice to the interested heirs or devisees, the court shall partition the property in the same manner as provided by the law for civil actions of partition. The court may direct the personal representative to sell any property which cannot be partitioned without prejudice to the owners and which cannot conveniently be allotted to any one party.

14-3912. Private agreements among successors to decedent binding on personal representative

Subject to the rights of creditors and taxing authorities, competent successors may agree among themselves to alter the interests, shares, or amounts to which they are entitled under the will of the decedent or under the laws of intestacy, in any way that they provide in a written contract executed by all who are affected by its provisions. The personal representative shall abide by the terms of the agreement subject to his obligation to administer the estate for the benefit of creditors, to pay all taxes and expenses of administration, and to carry out the responsibilities of his office for the benefit of any successors of the decedent who are not parties. Personal representatives of decedents' estates are not required to see to the performance of trusts if the trustee thereof is another person who is willing to accept the trust. Accordingly, trustees of a testamentary trust are successors for the purposes of this section. This section does not relieve trustees of any duties owed to beneficiaries of trusts.

14-3913. Distributions to trustee

A. Before distributing to a trustee, the personal representative may require that the trustee inform the beneficiaries as provided in section 14-10813, subsection B, paragraph 3, and if the state in which it is to be administered provides for registration, that the trust be registered.

B. If the trust instrument does not excuse the trustee from giving bond, the personal representative may petition the appropriate court to require that the trustee post bond if the personal representative apprehends that distribution might jeopardize the interests of persons who are not able to protect themselves, and the personal representative may withhold distribution until the court has acted.

C. An inference of negligence on the part of the personal representative shall not be drawn from the personal representative's failure to exercise the authority conferred by subsections A and B of this section.

14-3914. Disposition of unclaimed assets

A. If an heir, devisee or claimant cannot be found, the personal representative shall distribute the share of the missing person to his conservator, if any, otherwise in cash to the department of revenue for deposit, pursuant to sections 35-146 and 35-147, in the permanent school fund.

B. If a person later appears and claims as the missing person, he shall proceed in the same manner as an heir, devisee or legatee claiming escheated property under sections 12-886 and 12-887.

14-3915. Distribution to person under disability

A personal representative may discharge his obligation to distribute to any person under legal disability by distributing to his conservator, or any other person authorized by this title or otherwise to give a valid receipt and discharge for the distribution.

14-3916. Community property

In making a division or distribution of community property held in the decedent's estate, the personal representative may consider community property held outside the estate so that the division of community property held in the estate and outside the estate is based on equal value but is not necessarily proportionate.

14-3931. Formal proceedings terminating administration; testate or intestate; order of general protection

A. A personal representative or any interested person may petition for an order of complete settlement of the estate. The personal representative may petition at any time, and any other interested person may petition after one year from the appointment of the original personal representative except that no petition under this section may be entertained until the time for presenting claims which arose prior to the death of the decedent has expired. The petition may request the court to determine testacy, if not previously determined, to consider the final account or compel or approve an accounting and distribution, to construe any will or determine heirs and adjudicate the final settlement and distribution of the estate. Notice must be given to all interested persons, and a copy of the final account must also be sent to the distributees whose interests are affected thereby. After hearing the court may enter an order or orders, on appropriate conditions, determining the persons entitled to distribution of the estate, and, as circumstances require, approving settlement and directing, approving or decreeing distribution of the estate and discharging the personal representative from further claim or demand of any interested person.

B. If one or more heirs or devisees were omitted as parties in, or were not given notice of, a previous formal testacy proceeding, the court, on proper petition for an order of complete settlement of the estate under this section, and after notice to the omitted or unnotified persons and other interested parties determined to be interested on the assumption that the previous order concerning testacy is conclusive as to those given notice of the earlier proceeding, may determine testacy as it affects the omitted persons and confirm or alter the previous order of testacy as it affects all interested persons as appropriate in the light of the new proofs. In the absence of objection by an omitted or unnotified person, evidence received in the original testacy proceeding shall constitute prima facie proof of due execution of any will previously admitted to probate, or of the fact that the decedent left no valid will if the prior proceedings determined this fact.

14-3932. Formal proceedings terminating testate administration; order construing will without adjudicating testacy

A personal representative administering an estate under an informally probated will or any devisee under an informally probated will may petition for an order of settlement of the estate which will not adjudicate the testacy status of the decedent. The personal representative may petition at any time, and a devisee may petition after one year from the appointment of the original personal representative, except that no petition under this section may be entertained until the time for presenting claims which arose prior to the death of the decedent has expired. The petition may request the court to consider the final account or compel or approve an accounting and distribution, to construe the will and adjudicate final settlement and distribution of the estate. After notice to all devisees and the personal representative and hearing, the court may enter an order or orders, on appropriate conditions, determining the persons entitled to distribution of the estate under the will, and, as circumstances require, approving settlement and directing, approving or decreeing distribution of the estate and discharging the personal representative from further claim or demand of any devisee who is a party to the proceeding and those he represents. If it appears that a part of the estate is intestate, the proceedings shall be dismissed or amendments made to meet the provisions of section 14-3931.

14-3933. Closing estates; statement of personal representative

A. Unless prohibited by order of the court and except for estates being administered in supervised administration proceedings, a personal representative may close an estate by filing with the court no earlier than four months after the date of original appointment of a general personal representative for the estate a verified statement stating that the personal representative, or a previous personal representative has:

1. Determined that the time limit for presentation of creditors' claims has expired.

2. Fully administered the estate of the decedent by making payment, settlement or other disposition of all claims that were presented, expenses of administration and estate, inheritance and other death taxes, except as specified in the statement, and that the assets of the estate have been distributed to the persons entitled. If any claims remain undischarged, the statement shall state whether the personal representative has distributed the estate subject to possible liability with the agreement of the distributees or it shall state in detail other arrangements that have been made to accommodate outstanding liabilities.

3. Sent a copy of the statement to all distributees of the estate and to all creditors or other claimants of whom the personal representative is aware whose claims are neither paid nor barred and has furnished a full account in writing of the personal representative's administration to the distributees whose interests are affected thereby.

B. If no proceedings involving the personal representative are pending in the court one year after the closing statement is filed, the appointment of the personal representative terminates.

14-3934. Liability of distributees to claimants

After assets of an estate have been distributed and subject to section 14-3936, an undischarged claim not barred may be prosecuted in a proceeding against one or more distributees. No distributee shall be liable to claimants for amounts received as exempt property, allowance in lieu of homestead or family allowance, or for amounts in excess of the value of his distribution as of the time of distribution. As between distributees, each shall bear the cost of satisfaction of unbarred claims as if the claim had been satisfied in the course of administration. Any distributee who shall have failed to notify other distributees of the demand made upon him by the claimant in sufficient time to permit them to join in any proceeding in which the claim was asserted against him loses his right of contribution against other distributees.

14-3935. Limitations on proceedings against personal representative

Unless previously barred by adjudication and except as provided in the closing statement, the rights of successors and of creditors whose claims against the personal representative for breach of fiduciary duty have not otherwise been barred are barred unless a proceeding to assert the same is commenced within six months after the filing of the closing statement. The rights thus barred do not include rights to recover from a personal representative for fraud, misrepresentation or inadequate disclosure related to the settlement of the decedent's estate.

14-3936. Limitations on actions and proceedings against distributees

A. Unless previously adjudicated in a formal testacy proceeding or in a proceeding settling the accounts of a personal representative or otherwise barred, the claim of a claimant, other than a creditor of the decedent, to recover from a distributee who is liable to pay the claim, and the right of an heir or devisee or of a successor personal representative acting in an heir's or devisee's behalf, to recover property improperly distributed or its value from any distributee is forever barred at the later of three years after the decedent's death or one year after the time of distribution.

B. All claims of the decedent's creditors against distributees are barred after the limitations period for the presentation of claims of the decedent's creditors pursuant to section 14-3803.

C. This section does not bar an action to recover property or value received as the result of fraud.

14-3937. Certificate discharging liens securing fiduciary performance

After his appointment has terminated, the personal representative, his sureties or any successor of either, upon the filing of a verified application showing, so far as is known by the applicant, that no action concerning the estate is pending in any court, is entitled to receive a certificate from the registrar that the personal representative appears to have fully administered the estate in question. The certificate evidences discharge of any lien on any property given to secure the obligation of the personal representative in lieu of bond or any surety, but does not preclude action against the personal representative or the surety.

14-3938. Subsequent administration

If other property of the estate is discovered after an estate has been settled and the personal representative has been discharged or after one year after a closing statement has been filed, the registrar, if the original application was or could have been brought under article 3 of this chapter, or the court, if the original petition was required to have been brought under article 4 or 5 of this chapter, on the application or petition of any interested person and on notice as provided in this chapter, may appoint the same or a successor personal representative to administer the subsequently discovered estate. If a new appointment is made, unless the court orders otherwise, the provisions of this title apply as appropriate, but a claim previously barred may not be asserted in the subsequent administration.

14-3951. Effect of approval of agreements involving trusts, inalienable interests, or interests of third persons

A compromise of any controversy as to admission to probate of any instrument offered for formal probate as the will of a decedent, the construction, validity or effect of any probated will, the rights or interests in the estate of the decedent, of any successor, or the administration of the estate, if approved in a formal proceeding in the court for that purpose, is binding on all the parties thereto including those unborn, unascertained or who could not be located. An approved compromise is binding even though it may affect a trust or an inalienable interest. A compromise does not impair the rights of creditors or of taxing authorities who are not parties to it.

14-3952. Procedure for securing court approval of compromise

The procedure for securing court approval of a compromise is as follows:

1. The terms of the compromise shall be set forth in an agreement in writing which shall be executed by all competent persons and parents acting for any minor child having beneficial interests or having claims which will or may be affected by the compromise. Execution is not required by any person whose identity cannot be ascertained or whose whereabouts is unknown and cannot reasonably be ascertained.

2. Any interested person, including the personal representative or a trustee, then may submit the agreement to the court for its approval and for execution by the personal representative, the trustee of every affected testamentary trust and other fiduciaries and representatives.

3. After notice to all interested persons or their representatives, including the personal representative of the estate and all affected trustees of trusts, the court, if it finds that the contest or controversy is in good faith and that the effect of the agreement upon the interests of persons represented by fiduciaries or other representatives is just and reasonable, shall make an order approving the agreement and directing all fiduciaries under its supervision to execute the agreement. Minor children represented only by their parents may be bound only if their parents join with other competent persons in execution of the compromise. Upon the making of the order and the execution of the agreement, all further disposition of the estate is in accordance with the terms of the agreement.

14-3971. Collection of personal property by affidavit; ownership of vehicles; affidavit of succession to real property

A. At any time after the death of a decedent, any employer owing wages, salary or other compensation for personal services of the decedent shall pay to the surviving spouse of the decedent the amount owing, not in excess of five thousand dollars, on being presented an affidavit made by or on behalf of the spouse stating that the affiant is the surviving spouse of the decedent, or is authorized to act on behalf of the spouse, and that no application or petition for the appointment of a personal representative is pending or has been granted in this state or, if granted, the personal representative has been discharged or more than one year has elapsed since a closing statement has been filed.

B. Thirty days after the death of a decedent, any person indebted to the decedent or having possession of tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action belonging to the decedent shall make payment of the indebtedness or deliver the tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action to a person claiming to be the successor of the decedent upon being presented an affidavit made by or on behalf of the successor and stating that all of the following are true:

1. Thirty days have elapsed since the death of the decedent.

2. Either:

(a) An application or petition for the appointment of a personal representative is not pending and a personal representative has not been appointed in any jurisdiction and the value of all personal property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed fifty thousand dollars as valued as of the date of death.

(b) The personal representative has been discharged or more than one year has elapsed since a closing statement has been filed and the value of all personal property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed fifty thousand dollars as valued as of the date of the affidavit.

3. The claiming successor is entitled to payment or delivery of the property.

C. A transfer agent of any security shall change the registered ownership on the books of a corporation from the decedent to the successor or successors on presentation of an affidavit pursuant to subsection B of this section.

D. The motor vehicle division shall transfer title of a motor vehicle from the decedent to the successor or successors on presentation of an affidavit as provided in subsection B of this section and on payment of the necessary fees.

E. No sooner than six months after the death of a decedent, a person or persons claiming as successor or successors to the decedent's interest in real property, including any debt secured by a lien on real property, may file in the court in the county in which the decedent was domiciled at the time of death, or if the decedent was not domiciled in this state then in any county in which real property of the decedent is located, an affidavit describing the real property and the interest of the decedent in that property and stating that all of the following are true and material and acknowledging that any false statement in the affidavit may subject the person or persons to penalties relating to perjury and subornation of perjury:

1. Either:

(a) An application or petition for the appointment of a personal representative is not pending and a personal representative has not been appointed in any jurisdiction and the value of all real property in the decedent's estate located in this state, less liens and encumbrances against the real property, does not exceed seventy-five thousand dollars as valued at the date of death. The value of the decedent's interest in that real property shall be determined from the full cash value of the property as shown on the assessment rolls for the year in which the decedent died, except that in the case of a debt secured by a lien on real property the value shall be determined by the unpaid principal balance due on the debt as of the date of death.

(b) The personal representative has been discharged or more than one year has elapsed since a closing statement has been filed and the value of all real property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed seventy-five thousand dollars as valued as of the date of the affidavit. The value of the decedent's interest in that real property is determined from the full cash value of the property as shown on the assessment rolls for the year in which the affidavit is given, except that if a debt is secured by a lien on real property, the value is determined by the unpaid principal balance due on the debt as of the date of the affidavit.

2. Six months have elapsed since the death of the decedent as shown in a certified copy of the decedent's death certificate attached to the affidavit.

3. Funeral expenses, expenses of last illness, and all unsecured debts of the decedent have been paid.

4. The person or persons signing the affidavit are entitled to the real property by reason of the allowance in lieu of homestead, exempt property or family allowance, by intestate succession as the sole heir or heirs, or by devise under a valid last will of the decedent, the original of which is attached to the affidavit or has been probated.

5. No other person has a right to the interest of the decedent in the described property.

6. No federal estate tax is due on the decedent's estate.

F. The normal filing fee shall be charged for the filing of an affidavit under subsection E of this section unless waived by the court as provided by section 12-301 or 12-302. On receipt of the affidavit and after determining that the affidavit is complete, the registrar shall cause to be issued a certified copy of the affidavit without attachments, and the copy shall be recorded in the office of the recorder in the county where the real property is located.

G. This section does not limit the rights of heirs and devisees under section 14-3901.

14-3972. Effect of affidavit

A. The person paying, delivering, transferring or issuing personal property or the evidence thereof pursuant to affidavit is discharged and released to the same extent as if he dealt with a personal representative of the decedent. He is not required to see to the application of the personal property or evidence thereof or to inquire into the truth of any statement in the affidavit. If any person to whom an affidavit is delivered refuses to pay, deliver, transfer or issue any personal property or evidence thereof, it may be recovered or its payment, delivery, transfer or issuance compelled upon proof of their right in a proceeding brought for the purpose by or on behalf of the persons entitled thereto. Any person to whom payment, delivery, transfer or issuance is made is answerable and accountable therefor to any personal representative of the estate or to any other person having a superior right.

B. The motor vehicle division issuing title pursuant to affidavit is discharged and released to the same extent as if it dealt with a personal representative of the decedent. It is not required to see to the application of the personal property or evidence thereof or to inquire into the truth of any statement in the affidavit.

C. A purchaser of real property from or lender to the person or persons designated as successor or successors in a certified copy of an affidavit issued under section 14-3971 and recorded in the county in which the real property is located is entitled to the same protection as a person purchasing from or lending to a distributee who has received a deed of distribution from a personal representative, as provided in section 14-3910.

14-3973. Small estates; summary administrative procedure

If it appears from the inventory and appraisal that the value of the entire estate, less liens and encumbrances, does not exceed allowance in lieu of homestead, exempt property, family allowance, costs and expenses of administration, reasonable funeral expenses, and reasonable and necessary medical and hospital expenses of the last illness of the decedent, the personal representative, without giving notice to creditors, may immediately disburse and distribute the estate to the persons entitled thereto and file a closing statement as provided in section 14-3974.

14-3974. Small estates; closing by sworn statement of personal representative

A. Unless prohibited by order of the court and except for estates being administered by supervised personal representatives, a personal representative may close an estate administered under the summary procedures of section 14-3973 by filing with the court, at any time after disbursement and distribution of the estate, a verified statement stating that:

1. To the best knowledge of the personal representative, the value of the entire estate, less liens and encumbrances, did not exceed allowance in lieu of homestead, exempt property, family allowance, costs and expenses of administration, reasonable funeral expenses and reasonable, necessary medical and hospital expenses of the last illness of the decedent.

2. The personal representative has fully administered the estate by disbursing and distributing it to the persons entitled thereto.

3. The personal representative has sent a copy of the closing statement to all distributees of the estate and to all creditors or other claimants of whom he is aware whose claims are neither paid nor barred and has furnished a full account in writing of his administration to the distributees whose interests are affected.

B. If no actions or proceedings involving the personal representative are pending in the court one year after the closing statement is filed, the appointment of the personal representative terminates.

C. A closing statement filed under this section has the same effect as one filed under section 14-3933.

14-4101. Definitions

In this chapter, unless the context otherwise requires:

1. "Local administration" means administration by a personal representative appointed in this state pursuant to appointment proceedings described in chapter 3.

2. "Local personal representative" includes any personal representative appointed in this state pursuant to appointment proceedings described in chapter 3 and excludes foreign personal representatives who acquire the power of a local personal representative pursuant to section 14-4205.

3. "Resident creditor" means a person domiciled in, or doing business in this state, who is, or could be, a claimant against an estate of a nonresident decedent.

14-4201. Payment of debt and delivery of property to domiciliary foreign personal representative without local administration

At any time after the expiration of sixty days from the death of a nonresident decedent, any person indebted to the estate of the nonresident decedent or having possession or control of personal property, or of an instrument evidencing a debt, obligation, stock or chose in action belonging to the estate of the nonresident decedent may pay the debt, deliver the personal property, or the instrument evidencing the debt, obligation, stock or chose in action, to the domiciliary foreign personal representative of the nonresident decedent upon being presented with proof of his appointment and an affidavit made by or on behalf of the representative stating:

1. The date of the death of the nonresident decedent.

2. That no local administration, or application or petition therefor, is pending in this state.

3. That the domiciliary foreign personal representative is entitled to payment or delivery.

The provisions of this section are in addition to, and are not exclusive of, any other provision of law permitting payment of an obligation or delivery of property to a domiciliary foreign personal representative.

14-4202. Payment or delivery discharges

Payment or delivery made in good faith on the basis of the proof of authority and affidavit releases the debtor or person having possession of the personal property to the same extent as if payment or delivery had been made to a local personal representative.

14-4203. Resident creditor notice

Payment or delivery under section 14-4201 may not be made if a resident creditor of the nonresident decedent has notified the debtor of the nonresident decedent or the person having possession of the personal property belonging to the nonresident decedent that the debt should not be paid nor the property delivered to the domiciliary foreign personal representative.

14-4204. Proof of authority and bond

If local administration, application or petition is not pending in this state, a domiciliary foreign personal representative may file with a court in this state in a county in which property belonging to the decedent is located certified copies of the appointment and of any official bond that has been given.

14-4205. Powers

A domiciliary foreign personal representative who has complied with section 14-4204 may exercise as to assets in this state all powers of a local personal representative and may maintain actions and proceedings in this state subject to any conditions imposed upon nonresident parties generally.

14-4206. Power of representatives in transition

The power of a domiciliary foreign personal representative under section 14-4201 or section 14-4205 shall be exercised only if there is no administration or application therefor pending in this state. An application or petition for local administration of the estate terminates the power of the foreign personal representative to act under section 14-4205, but the local court may allow the foreign personal representative to exercise limited powers to preserve the estate. No person who, before receiving actual notice of a pending local administration, has changed his position in reliance upon the powers of a foreign personal representative shall be prejudiced by reason of the application or petition for, or grant of, local administration. The local personal representative is subject to all duties and obligations which have accrued by virtue of the exercise of the powers by the foreign personal representative and may be substituted for him in any action or proceedings in this state.

14-4207. Ancillary and other local administrations; provisions governing

In respect to a nonresident decedent, the provisions of chapter 3 of this title govern both:

1. Proceedings, if any, in a court of this state for probate of the will, appointment, removal, supervision and discharge of the local personal representative, and any other order concerning the estate.

2. The status, powers, duties and liabilities of any local personal representative and the rights of claimants, purchasers, distributees and others in regard to a local administration.

14-4301. Jurisdiction by act of foreign personal representative

A. A foreign personal representative submits personally to the jurisdiction of the courts of this state, in any proceeding relating to the estate, by any of the following:

1. Filing certified copies of appointment as provided in section 14-4204.

2. Receiving payment of money or taking delivery of personal property under section 14-4201.

3. Doing any act as a personal representative in this state which would have given the state jurisdiction over him as an individual.

B. Jurisdiction established pursuant to subsection A, paragraph 2 of this section is limited to the money or value of personal property collected.

14-4302. Jurisdiction by act of decedent

In addition to jurisdiction conferred by section 14-4301, a foreign personal representative is subject to the jurisdiction of the courts of this state to the same extent that his decedent was subject to jurisdiction immediately prior to death.

14-4303. Service on foreign personal representative

A. Service of process may be made upon the foreign personal representative by registered or certified mail, addressed to his last reasonably ascertainable address, requesting a return receipt signed by addressee only. Notice by ordinary first class mail is sufficient if registered or certified mail service to the addressee is unavailable. Service may be made upon a foreign personal representative in the manner in which service could have been made under other laws of this state on either the foreign personal representative or his decedent immediately prior to death.

B. If service is made upon a foreign personal representative as provided in subsection A, he shall be allowed at least thirty days within which to appear or respond.

14-4401. Effect of adjudication for or against personal representative

An adjudication rendered in any jurisdiction in favor of or against any personal representative of the estate is as binding on the local personal representative as if he were a party to the adjudication.

14-5101. Definitions

In this title, unless the context otherwise requires:

1. "Incapacitated person" means any person who is impaired by reason of mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication or other cause, except minority, to the extent that he lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person. In cases of limited guardianship only, a person is not deemed an incapacitated person for purposes of voting if the person files a petition, has a hearing and the judge determines by clear and convincing evidence that the person retains sufficient understanding to exercise the right to vote pursuant to section 14-5304.02.

2. "Investigator" means a person who is appointed by the court under section 14-5308.

3. "Physician" means a person licensed pursuant to title 32, chapter 13 or 17.

4. "Protected person" means a minor or any other person for whom a conservator has been appointed or any other protective order has been made.

5. "Protective proceeding" means a proceeding under the provisions of section 14-5401 to determine that a person cannot effectively manage or apply his estate to necessary ends, either because he lacks the ability or is otherwise inconvenienced, or because he is a minor, and to secure administration of his estate by a conservator or other appropriate relief.

6. "Psychologist" means a person licensed pursuant to title 32, chapter 19.1.

7. "Registered nurse" has the same meaning as prescribed in section 32-1601.

8. "Ward" means a person for whom a guardian has been appointed. "Minor ward" means a minor for whom a guardian has been appointed solely because of minority.

14-5102. Jurisdiction of subject matter; consolidation of proceedings

A. The court has jurisdiction over protective proceedings and guardianship proceedings.

B. When both guardianship and protective proceedings as to the same person are commenced or pending in the same court, the proceedings may be consolidated.

14-5103. Facility of payment or delivery

A. Any person under a duty to pay or deliver money or personal property to a minor, including monies related to the settlement of a civil claim, may perform this duty, in amounts not exceeding ten thousand dollars per annum, by paying or delivering the money or property to any of the following:

1. The minor, if the minor is married.

2. Any person having the care and custody of the minor and with whom the minor resides.

3. The guardian of the minor.

4. A financial institution incident to a deposit in a federally insured savings account in the sole name of the minor and giving notice of the deposit to the minor.

B. This section does not apply if the person making payment or delivery has actual knowledge that a conservator has been appointed or proceedings for appointment of a conservator of the estate of the minor are pending.

C. The persons, other than the minor or any financial institution under subsection A, paragraph 4, receiving money or property for a minor are obligated to protect and preserve the money and property unless there are not sufficient resources available to provide for the minor's needs. In that event they shall apply funds as are necessary to the support and education of the minor but shall not pay themselves except by way of reimbursement for out-of-pocket expenses for goods and services necessary for the minor's support.

D. Any balance not used and any property received for the minor shall be turned over to the minor when the minor attains majority. Within three years after the minor attains majority, the person may require an accounting.

E. Persons who pay or deliver in accordance with this section are not responsible for its proper application.

14-5104. Delegation of powers by parent or guardian

A parent or a guardian of a minor or incapacitated person, by a properly executed power of attorney, may delegate to another person, for a period not exceeding six months, any powers he may have regarding care, custody or property of the minor child or ward, except power to consent to marriage or adoption of the minor.

14-5105. Bond of guardian

Guardians coming into the possession or control of funds or other property of persons under disability may be required by the court to furnish a bond in an amount and under the conditions set forth for conservators in section 14-5411 and 14-5412.

14-5106. Disclosure requirements for proposed guardians and conservators; restrictions by local rules

A. Before being appointed as a temporary or permanent guardian or conservator every proposed appointee, except entities referred to in section 14-5411, subsection B, shall provide to the court, under oath, the following information:

1. Whether or not the proposed appointee has been convicted of a felony in any jurisdiction and, if so, the nature of the offense, the name and address of the sentencing court, the case number, the date of conviction, the terms of the sentence, the name and telephone number of any current probation or parole officer and the reasons why the conviction should not disqualify the proposed appointee.

2. Whether or not the proposed appointee has acted as guardian or conservator for another person within three years of the petition and, if so, the number of individuals for whom the proposed appointee is currently serving and the number of individuals for whom the proposed appointee's appointment has been terminated within the three-year period.

3. Whether or not the proposed appointee has a working knowledge of the powers and duties imposed on a guardian or a conservator.

4. Whether or not the proposed appointee has acted within three years of the petition in a fiduciary capacity pursuant to a power of attorney and, if so, the number of persons for whom the appointee has so acted. If the proposed appointee has ever acted in such capacity for the proposed ward or protected person, the proposed appointee shall specify the date of execution of such power of attorney, the place where the power of attorney was executed, the actions taken by the proposed appointee pursuant to such power of attorney and whether or not such power of attorney is currently in effect.

5. Whether or not, to the best of the proposed appointee's knowledge, the proposed appointee or any enterprise in which the proposed appointee has an interest is listed in the registry pursuant to section 46-457.

6. Whether or not, within three years of the petition, the proposed appointee has failed to file any report of guardian or conservatorship accounting for three months following receipt of notice of delinquency.

7. Whether or not the proposed appointee has ever been removed as a guardian or conservator and, if so, for whom and under what circumstances.

8. The nature of the proposed appointee's relationship to the proposed ward or protected person, and how the proposed appointee met the proposed ward or protected person.

9. Whether or not the proposed appointee or any enterprise in which the proposed appointee has an interest ever received anything of value, exceeding a total of one hundred dollars in any one year, by gift, devise or bequest from an individual or the estate of an individual to whom the proposed appointee was not related by blood or marriage and for whom the proposed appointee has at any time served as guardian, conservator, trustee or agent, and, if so, the number of such occasions.

10. Whether or not, to the best of the proposed appointee's knowledge, the proposed appointee or any enterprise in which the proposed appointee has an interest is named as a personal representative, trustee, devisee or other type of beneficiary of any individual to whom the proposed appointee is not related by blood or marriage and for whom the proposed appointee has at any time served as guardian, conservator, trustee or agent and, if so, the number of such occasions.

11. Whether or not the proposed appointee has an interest in any enterprise providing housing, health care or comfort care services to any individual, and, if so, the name and address of each such enterprise and the extent of each such interest.

B. The appointing court may impose restrictions or conditions on the appointment of a guardian or conservator, or of a category of guardian or conservator, that it finds necessary to provide for the appropriate care and supervision of its wards or protected persons.

C. The court may, in its discretion, require proposed appointees to disclose to the court, the investigator and the court-appointed attorney further details concerning the information referred to in subsection A of this section, including, but not limited to, with respect to other occasions in which the proposed appointee has acted as a guardian or conservator, the following information:

1. The identities of the persons for whom the appointee has served as a guardian or conservator.

2. The identity of the court making each appointment and the court case number.

3. The dates of service.

D. The court may, in its discretion, upon a showing of good cause place limitations upon access by the public to any or all of the information disclosed pursuant to this section.

14-5107. Military member power of attorney; definition

A. A military member who is a parent or guardian of a minor child or ward may delegate to another person, for a period not to exceed one year, any powers the parent or guardian have regarding care, custody or property of the minor child or ward, except the power to consent to marriage or adoption of the minor child or ward.

B. For the purposes of this section, "military member" means an active duty member of the army, navy, air force or marines, or a member of the reserve or national guard engaged in the performance of official duties or functions under the authority of title 10 or 32, United States Code.

14-5108. Guardianship of foreign citizens

The court may appoint a guardian of an adult foreign citizen if all of the following are true:

1. The foreign citizen is under twenty-one years of age.

2. The foreign citizen has a temporary visa issued by the United States or is a legal permanent resident.

14-5109. Disclosure of compensation; determining reasonableness and necessity

A. When a guardian, a conservator, an attorney or a guardian ad litem who intends to seek compensation from the estate of a ward or protected person first appears in the proceeding, that person must give written notice of the basis of the compensation by filing a statement with the court and providing a copy of the statement to all persons entitled to notice pursuant to sections 14-5309 and 14-5405. The statement must provide a general explanation of the compensation arrangement and how the compensation will be computed.

B. If during the pendency of the action the basis for compensation changes, the guardian, conservator, attorney or guardian ad litem must provide notice of the change to all persons entitled to notice pursuant to this subsection not less than thirty days before the change becomes effective.

C. Compensation paid from an estate to a guardian, conservator, attorney or guardian ad litem must be reasonable and necessary. To determine the reasonableness and necessity of compensation, the court must consider the best interest of the ward or protected person. The following factors may be considered to the extent applicable:

1. Whether the services provided any benefit or attempted to advance the best interest of the ward or protected person.

2. The usual and customary fees charged in the relevant professional community for the services.

3. The size and composition of the estate.

4. The extent that the services were provided in a reasonable, efficient and cost-effective manner.

5. Whether there was appropriate and prudent delegation to others.

6. Any other factors bearing on the reasonableness of fees.

D. The person seeking compensation has the burden of proving the reasonableness and necessity of compensation and expenses sought.

14-5110. Claim deadline for compensation; definitions

A. In a guardianship, conservatorship or protective proceeding, unless a later claim deadline is established in advance by the court, a claim for compensation by attorneys or guardians ad litem who intend to be paid by the ward or protected person's estate is waived if not submitted to the fiduciary in writing within four months after either rendering the service, incurring the cost, initial appointment of the fiduciary or the effective date of this section, whichever is later. A claim is deemed submitted on delivery, mailing or electronic transmission to the fiduciary. A subsequent appointment of a substitute fiduciary does not renew the claim period.

B. This section does not apply to an attorney seeking compensation based on a contingency fee agreement.

C. For the purposes of this section:

1. "Compensation" includes fees, costs and reimbursable expenses.

2. "Estate" includes any estate established pursuant to this title except a trust unless the trust is supervised by the court and the ward or protected person is a beneficiary.

14-5201. Status of guardian of minor; general

A person becomes a guardian of a minor by acceptance of a testamentary appointment or upon appointment by the court. The guardianship status continues until terminated, without regard to the location from time to time of the guardian and minor ward.

14-5202. Testamentary appointment of guardian of minor

The parent of a minor may appoint by will a guardian of an unmarried minor. Subject to the right of the minor under section 14-5203, a testamentary appointment becomes effective upon filing the guardian's acceptance in the court in which the will is probated, if before acceptance, both parents are dead or the surviving parent is adjudged incapacitated. If both parents are dead, an effective appointment by the parent who died later has priority. This state recognizes a testamentary appointment effected by filing the guardian's acceptance under a will probated in another state which is the testator's domicile. Upon acceptance of appointment, written notice of acceptance must be given by the guardian to the minor and also to either the person having his care or his nearest adult relation.

14-5203. Objection by minor of fourteen or older to testamentary appointment

A minor of fourteen or more years may prevent an appointment of his testamentary guardian from becoming effective, or may cause a previously accepted appointment to terminate, by filing with the court in which the will is probated a written objection to the appointment before it is accepted or within thirty days after notice of its acceptance. An objection may be withdrawn. An objection does not preclude appointment by the court in a proper proceeding of the testamentary nominee or any other suitable person.

14-5204. Court appointment of guardian of minor; conditions for appointment

The court may appoint a guardian for an unmarried minor if all parental rights of custody have been terminated or suspended by circumstances or prior court order. A guardian appointed by will as provided in section 14-5202 whose appointment has not been prevented or nullified under section 14-5203 has priority over any guardian who may be appointed by the court but the court may proceed with an appointment upon a finding that the testamentary guardian has failed to accept the testamentary appointment within thirty days after notice of the guardianship proceeding.

14-5205. Court appointment of guardian of minor; venue

The venue for guardianship proceedings for a minor is in the place where the minor resides or is present.

14-5206. Court appointment of guardian of minor; qualifications; priority of minor's nominee; fingerprints

A. The court shall appoint as guardian a person whose appointment would be in the best interests of the minor. The court may appoint a person nominated by the minor, if the minor is fourteen years of age or older, unless the court finds the appointment contrary to the best interests of the minor.

B. Before the court may appoint as guardian a person unrelated to the minor, the court shall, in order to determine the applicant's suitability as a guardian, require the potential guardian to furnish a full set of fingerprints to the court to enable a criminal background investigation to be conducted. The court shall submit the completed fingerprint card with the fee prescribed in section 41-1750 to the department of public safety. The applicant shall bear the cost of obtaining the criminal background information. The cost shall not exceed the actual cost of obtaining the applicant's criminal background information. The department of public safety shall conduct criminal history records checks pursuant to section 41-1750 and applicable federal law. The department of public safety is authorized to submit fingerprint card information to the federal bureau of investigation for a national criminal history records check.

14-5207. Formal appointment of guardian of minor; procedure

A. Any person interested in the welfare of a minor may petition the court for appointment of a guardian. The court shall then set a hearing date. The petitioner shall give notice of the time and place of the hearing in the manner prescribed by section 14-1401 to:

1. A minor who is at least fourteen years of age.

2. The person who has had the principal care and custody of the minor during the sixty days preceding the date of the petition.

3. Any living parent of the minor.

B. Upon hearing, if the court finds that a qualified person seeks appointment, venue is proper, the required notices have been given, the requirements of section 14-5204 have been met and the welfare and best interests of the minor will be served by the requested appointment, it shall make the appointment and issue letters on the acceptance of the proposed guardian. In other cases the court may dismiss the proceedings or make any other disposition of the matter that will best serve the interests of the minor.

C. If necessary, the court may appoint a temporary guardian, with the status of an ordinary guardian of a minor, but the authority of a temporary guardian shall not last longer than six months.

D. If, at any time in the proceeding, the court determines that the interests of the minor are or may be inadequately represented, it may appoint an attorney to represent the minor, giving consideration to the preference of the minor if the minor is at least fourteen years of age.

14-5208. Consent to service by acceptance of appointment; notice

By accepting a testamentary or court appointment as guardian a guardian submits personally to the jurisdiction of the court in any proceeding relating to the guardianship that may be instituted by any interested person. Notice of any proceeding shall be delivered to the guardian, or mailed to him by ordinary mail at his address as listed in the court records and to his address as then known to the petitioner. Letters of guardianship must indicate whether the guardian was appointed by will or by court order.

14-5209. Powers and duties of guardian of minor

A. A guardian of a minor has the powers and responsibilities of a custodial parent regarding the ward's support, care and education. A guardian is not personally liable for the ward's expenses and is not liable to third persons by reason of the relationship for acts of the ward.

B. In particular, and without qualifying the foregoing, a guardian shall:

1. Become or remain personally acquainted with the ward and maintain sufficient contact with the ward to know of the ward's capacities, limitations, needs, opportunities and physical and mental health.

2. Take reasonable care of the ward's personal effects and commence protective proceedings if necessary to protect other property of the ward.

3. Apply any available monies of the ward to the ward's current needs for support, care and education.

4. Conserve any excess monies for the ward's future needs, but if a conservator has been appointed for the estate of the ward, the guardian, at least quarterly, shall pay to the conservator money of the ward to be conserved for the ward's future needs.

5. Report the condition of the ward and of the ward's estate which has been subject to his possession or control, as ordered by the court on petition of any person interested in the ward's welfare or as required by court rule.

C. A guardian may:

1. Receive monies payable for the support of the ward under the terms of any statutory benefit, insurance system, private contract, devise, trust, conservatorship or custodianship, and monies or property of the ward paid or delivered pursuant to section 14-5103.

2. Take custody of the person of the ward and establish the ward's place of residence in or outside this state, if consistent with the terms of an order of a court of competent jurisdiction relating to the detention or commitment of the ward.

3. If no conservator for the estate of the ward has been appointed, institute proceedings, including administrative proceedings, or take other appropriate action to compel the performance by any person of a duty to support the ward or to pay amounts for the welfare of the ward.

4. Facilitate the ward's education, social or other activities and consent to medical or other professional care, treatment or advice for the ward. A guardian is not liable by reason of this consent for injury to the ward resulting from the negligence or acts of third persons unless a parent would have been liable in the circumstances.

5. Consent to the marriage or adoption of the ward.

6. If reasonable, delegate to the ward certain responsibilities for decisions affecting the ward's well-being.

D. A guardian is entitled to reasonable compensation for services as guardian and to reimbursement for room, board and clothing personally provided to the ward, but only as approved by order of the court. If a conservator, other than the guardian or one who is affiliated with the guardian, has been appointed for the estate of the ward, reasonable compensation and reimbursement to the guardian may be approved and paid by the conservator without order of the court.

E. In the interest of developing self-reliance on the part of a ward or for other good cause, the court, at the time of appointment or later, on its own motion or on appropriate petition or motion of the minor or other interested person may:

1. Create a limited guardianship by limiting the powers of a guardian otherwise conferred by this section. Any limitation on the statutory power of a guardian of a minor must be endorsed on the guardian's letters.

2. Remove a limitation and issue revised letters.

14-5210. Termination of appointment of guardian; general

A guardian's authority and responsibility terminates on the death, resignation or removal of the guardian or on the minor's death, adoption, marriage or attainment of majority. Termination does not affect the guardian's liability for prior acts or the guardian's obligation to account for the ward's monies and assets. Resignation of a guardian does not terminate the guardianship until it has been approved by the court.

14-5211. Proceedings subsequent to appointment; venue

A. The court where the ward resides has concurrent jurisdiction with the court which appointed the guardian, or in which acceptance of a testamentary appointment was filed, over resignation, removal, accounting and other proceedings relating to the guardianship.

B. If the court located where the ward resides is not the court in which acceptance of appointment is filed, the court in which proceedings subsequent to appointment are commenced shall in all appropriate cases notify the other court, in this or another state, and after consultation with that court determine whether to retain jurisdiction or transfer the proceedings to the other court, whichever is in the best interests of the ward. A copy of any order accepting a resignation or removing a guardian shall be sent to the court in which acceptance of appointment is filed.

14-5212. Resignation or removal proceedings

A. Any person interested in the welfare of a ward or the ward, if fourteen or more years of age, may petition for removal of a guardian on the ground that removal would be in the best interests of the ward, or for any other order that is in the best interest of the ward. A guardian may petition for permission to resign. A petition for removal or for permission to resign may, but need not, include a request for appointment of a successor guardian.

B. Notice of a hearing on a petition for an order subsequent to appointment shall be given to a ward who is at least fourteen years of age, the guardian and any other person the court orders to receive the notice.

C. After notice and a hearing on a petition for removal or for permission to resign, the court may terminate the guardianship and make any further order that may be appropriate.

D. If, at any time in the proceeding, the court determines that the interests of the ward are, or may be, inadequately represented, it may appoint an attorney to represent the minor, giving consideration to the preference of the minor if the minor is fourteen or more years of age.

14-5301.01. Appointment of guardian by will or other writing; effectiveness; acceptance; confirmation

A. The appointment of a guardian pursuant to section 14-5301 is effective on the death of the appointing parent or spouse, the adjudication of incapacity of the appointing parent or spouse or a written determination by a physician who has examined the appointing parent or spouse that the appointing parent or spouse is no longer able to care for the incapacitated person, whichever first occurs.

B. A guardian appointed pursuant to section 14-5301 is eligible to act on the filing of an acceptance of appointment, which must be filed within thirty days after the guardian's appointment becomes effective. The guardian must:

1. File the notice of acceptance of appointment and a copy of the will with the court in the county in which the will was or could be probated or, in the case of a signed writing created pursuant to section 14-5301, file the acceptance of appointment and the signed writing with the court in the county in which the incapacitated person resides or is present.

2. Give written notice of the acceptance of appointment to the appointing parent or spouse, if living, the incapacitated person, a person having care or custody of the incapacitated person other than the appointing parent or spouse, and the adult nearest in kinship. Unless the appointment was previously confirmed by the court, the notice given pursuant to this paragraph must include a statement of the right of those notified to terminate the appointment by filing a written objection as provided in section 14-5301.

C. An appointment effected by filing the guardian's acceptance under a will probated in the state of the testator's domicile is effective in this state.

D. Unless the appointment was previously confirmed by the court, within thirty days after filing the notice and the will or signed writing, a guardian appointed pursuant to section 14-5301 must file a petition in the court for confirmation of the appointment. Notice of the filing must be given in the manner as prescribed in section 14-5309.

E. The authority of a guardian appointed under section 14-5301 terminates on the appointment of a guardian by the court or the giving of written notice to the guardian of the filing of an objection pursuant to section 14-5301, whichever first occurs.

F. The appointment of a guardian under this section is not a determination of incapacity.

G. The powers of a guardian who timely complies with the requirements of subsections B and D of this section give acts by the guardian that are of benefit to the incapacitated person and that occurred on or after the date the appointment became effective the same effect as those that occurred after the filing of the acceptance of appointment.

14-5301.02. Appointment and status of guardian

A person becomes a guardian of an incapacitated person by a parental or spousal appointment or on appointment by the court. The guardianship continues until it is terminated, without regard to the location of the guardian or the ward.

14-5301.03. Judicial appointment of guardian; special provision for incapacitated minors approaching adulthood

A. A party that is interested in the welfare of a minor who is at least seventeen years six months of age and who is alleged to be incapacitated may initiate guardianship proceedings pursuant to this article and request that any guardianship order take effect immediately on the minor's eighteenth birthday.

B. The petitioner may provide with the petition a report of an evaluation of the minor by a physician, psychologist or registered nurse that meets the requirements of section 14-5303, subsection D. If the evaluation was conducted within six months after the date the petition is filed with the court, the petitioner may ask in the petition that the court accept this report in lieu of ordering any additional evaluation pursuant to section 14-5303, subsection C, and the court may grant the request.

14-5301.04. Judicial appointment of conservator or protective order; special provision for incapacitated minors approaching adulthood

A party that is interested in the welfare of a minor who is at least seventeen years six months of age and who is alleged to be in need of protection may petition the court for appointment of a conservator or request an appropriate protective order pursuant to section 14-5404 and request that any conservatorship order or protective order take effect immediately on the minor's eighteenth birthday.

14-5301. Appointment of guardian by will or other writing; objections; notice

A. A parent, by will or other signed writing, may appoint a guardian for an unmarried child who the parent believes is an incapacitated person, specify desired limitations on the powers to be given to the guardian and revoke or amend the appointment before confirmation by the court. Appointments become effective only as prescribed pursuant to section 14-5301.01, subsection A.

B. An individual, by will or other signed writing, may appoint a guardian for the individual's spouse who the appointing spouse believes is an incapacitated person, specify desired limitations on the powers to be given to the guardian and revoke or amend the appointment before confirmation by the court. An appointment pursuant to this subsection becomes effective only as prescribed pursuant to section 14-5301.01, subsection A.

C. Unless the court has confirmed the appointment pursuant to subsection D of this section, the incapacitated person, the person having care or custody of the incapacitated person if other than the appointing parent or spouse or the adult nearest in kinship to the incapacitated person may file a written objection to an appointment. The filing of the written objection terminates the appointment. An objection may be withdrawn and, if withdrawn, has no effect. The objection does not preclude judicial appointment of the person selected by the appointing parent or spouse. Notice of the objection must be given to the guardian and any other person entitled to notice of the acceptance of the appointment. The court may treat the filing of an objection as a petition for the appointment of a temporary guardian pursuant to section 14-5310 or for the appointment of a limited or general guardian pursuant to section 14-5303 and proceed accordingly.

D. On petition of the appointing parent or spouse and a finding that the appointing parent or spouse will likely become unable to care for the incapacitated person within two years, before the appointment becomes effective, the court may confirm the appointing parent's or spouse's selection of a guardian and terminate the rights of others to object. Notice must be given to the guardian and any other person entitled to notice of the acceptance of the appointment.

14-5302. Venue

The venue for guardianship proceedings for an incapacitated person is in the county where the incapacitated person resides or is present. If the incapacitated person is admitted to an institution pursuant to order of a court of competent jurisdiction, venue is also in the county in which that court sits.

14-5303. Procedure for court appointment of a guardian of an alleged incapacitated person

A. The alleged incapacitated person or any person interested in that person's affairs or welfare may petition for the appointment of a guardian or for any other appropriate protective order.

B. The petition shall contain a statement that the authority granted to the guardian may include the authority to withhold or withdraw life sustaining treatment, including artificial food and fluid, and shall state, at a minimum and to the extent known, all of the following:

1. The interest of the petitioner.

2. The name, age, residence and address of the alleged incapacitated person.

3. The name, address and priority for appointment of the person whose appointment is sought.

4. The name and address of the conservator, if any, of the alleged incapacitated person.

5. The name and address of the nearest relative of the alleged incapacitated person known to the petitioner.

6. A general statement of the property of the alleged incapacitated person, with an estimate of its value and including any compensation, insurance, pension or allowance to which the person is entitled.

7. The reason why appointment of a guardian or any other protective order is necessary.

8. The type of guardianship requested. If a general guardianship is requested, the petition must state that other alternatives have been explored and why a limited guardianship is not appropriate. If a limited guardianship is requested, the petition also must state what specific powers are requested.

9. If a custodial order was previously entered regarding an alleged incapacitated person in a child custody action or similar proceeding in this state or another jurisdiction and the petitioner or proposed guardian is a parent or nonparent custodian of the alleged incapacitated person, the court and case number for that action or proceeding.

C. On the filing of a petition, the court shall set a hearing date on the issues of incapacity. Unless the alleged incapacitated person is represented by independent counsel, the court shall appoint an attorney to represent that person in the proceeding. The alleged incapacitated person shall be interviewed by an investigator appointed by the court and shall be examined by a physician, psychologist or registered nurse appointed by the court. If the alleged incapacitated person has an established relationship with a physician, psychologist or registered nurse who is determined by the court to be qualified to evaluate the capacity of the alleged incapacitated person, the court may appoint the alleged incapacitated person's physician, psychologist or registered nurse pursuant to this subsection. The investigator and the person conducting the examination shall submit their reports in writing to the court. In addition to information required under subsection D, the court may direct that either report include other information the court deems appropriate. The investigator also shall interview the person seeking appointment as guardian, visit the present place of abode of the alleged incapacitated person and the place where it is proposed that the person will be detained or reside if the requested appointment is made and submit a report in writing to the court. The alleged incapacitated person is entitled to be present at the hearing and to see or hear all evidence bearing on that person's condition. The alleged incapacitated person is entitled to be represented by counsel, to present evidence, to cross-examine witnesses, including the court-appointed examiner and investigator, and to trial by jury. The court may determine the issue at a closed hearing if the alleged incapacitated person or that person's counsel so requests.

D. A report filed pursuant to this section by a physician, psychologist or registered nurse acting within that person's scope of practice shall include the following information:

1. A specific description of the physical, psychiatric or psychological diagnosis of the person.

2. A comprehensive assessment listing any functional impairments of the alleged incapacitated person and an explanation of how and to what extent these functional impairments may prevent that person from receiving or evaluating information in making decisions or in communicating informed decisions regarding that person.

3. An analysis of the tasks of daily living the alleged incapacitated person is capable of performing without direction or with minimal direction.

4. A list of all medications the alleged incapacitated person is receiving, the dosage of the medications and a description of the effects each medication has on the person's behavior to the best of the declarant's knowledge.

5. A prognosis for improvement in the alleged incapacitated person's condition and a recommendation for the most appropriate rehabilitation plan or care plan.

6. Other information the physician, psychologist or registered nurse deems appropriate.

14-5304.01. Effect of appointment of guardian on privilege to operate a motor vehicle

A. On the appointment of a guardian, the court may determine that the ward's privilege to obtain or retain a driver license should be suspended and issue an order suspending the privilege.

B. If the court is presented with sufficient medical or other evidence to establish that the ward's incapacity does not prevent the ward from safely operating a motor vehicle, it may decline to suspend the ward's privilege to obtain or retain a driver license and issue an order allowing the ward to obtain or retain a driver license.

C. The finding of interim incapacity pursuant to section 14-5310 does not cause the suspension of the ward's privilege to obtain or retain a driver license or to operate a motor vehicle pursuant to section 28-3153 unless the court also finds that the interim incapacity affects the ward's ability to safely operate a motor vehicle and that the privilege should be immediately suspended. In lieu of ordering the ward's driver license suspended, the court may order the ward not to drive a motor vehicle until the ward presents sufficient medical or other evidence to establish that the ward's interim incapacity does not affect the ward's ability to safely operate a motor vehicle. The ward may present the medical or other evidence by motion to the court. The court may rule on the motion without hearing if there are no objections to the motion.

D. A ward whose privilege to obtain or retain a driver license has been suspended or revoked by court order may file a request to terminate the suspension or revocation and reinstate the privilege. In reaching its decision the court shall consider medical evidence that the ward's incapacity does not prevent the ward from safely operating a motor vehicle and may consider other evidence, including a certificate of graduation from an accredited driving school with a recommendation that the ward should be extended driving privileges. If the court grants the order terminating the suspension or revocation and reinstating the privilege, the ward may apply to the department of transportation for the issuance or reinstatement of a driver license and must comply with all applicable department rules.

E. An order terminating a temporary or permanent guardianship is an order terminating any incapacity previously adjudicated and vacates any previous orders suspending or revoking the person's privilege to obtain or retain a driver license. The person may apply to the department of transportation for the issuance or reinstatement of a driver license and must comply with all applicable department rules.

14-5304.02. Limited guardianship; voting

A person for whom a limited guardian is appointed shall retain the right to vote if the person files a petition, has a hearing and the judge determines by clear and convincing evidence that the person retains sufficient understanding to exercise the right to vote.

14-5304. Findings; order of appointment; limitations; filing

A. In exercising its appointment authority pursuant to this chapter, the court shall encourage the development of maximum self-reliance and independence of the incapacitated person.

B. The court may appoint a general or limited guardian as requested if the court finds by clear and convincing evidence that:

1. The person for whom a guardian is sought is incapacitated.

2. The appointment is necessary to provide for the demonstrated needs of the incapacitated person.

3. The person's needs cannot be met by less restrictive means, including the use of appropriate technological assistance.

C. In conformity with the evidence regarding the extent of the ward's incapacity, the court may appoint a limited guardian and specify time limits on the guardianship and limitations on the guardian's powers.

D. The guardian shall file an acceptance of appointment with the appointing court.

14-5305. Acceptance of appointment; consent to jurisdiction

By accepting appointment, a guardian submits personally to the jurisdiction of the court in any proceeding relating to the guardianship that may be instituted by any interested person. Notice of any proceeding shall be delivered to the guardian or mailed to him by ordinary mail at his address as listed in the court records and to his address as then known to the petitioner.

14-5306. Termination of guardianship for incapacitated person

The authority and responsibility of a guardian for an incapacitated person terminates on the death of the guardian or ward, a determination of incapacity of the guardian, or substitution or resignation as provided in section 14-5307. Testamentary appointment under an informally probated will terminates if the will is later denied probate in a formal proceeding. Termination does not affect the guardian's liability for prior acts or the guardian's obligation to account for funds and assets of the guardian's ward.

14-5307. Substitution or resignation of guardian; termination of incapacity

A. On petition of the ward or any person interested in the ward's welfare, or on the court's own initiative, the court shall substitute a guardian and appoint a successor if it is in the best interest of the ward. The court does not need to find that the guardian acted inappropriately to find that the substitution is in the ward's best interest. The guardian and the guardian's attorney may be compensated from the ward's estate for defending against a petition for substitution only for the amount ordered by the court and on petition by the guardian or the guardian's attorney. When substituting a guardian and appointing a successor, the court may appoint an individual nominated by the ward if the ward is at least fourteen years of age and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice. On petition of the guardian, the court may accept a resignation and make any other order that may be appropriate.

B. The ward may petition the court for an order that the ward is no longer incapacitated or petition for substitution of the guardian at any time. A request for this order may be made by informal letter to the court or judge. A person who knowingly interferes with the transmission of this request may be found in contempt of court.

C. An interested person, other than the guardian or ward, shall not file a petition for adjudication that the ward is no longer incapacitated earlier than one year after the order adjudicating incapacity was entered unless the court permits it to be made on the basis of affidavits that there is reason to believe that the ward is no longer incapacitated.

D. An interested person, other than the guardian or ward, shall not file a petition to substitute a guardian earlier than one year after the order adjudicating incapacity was entered unless the court permits it to be made on the basis of affidavits that there is reason to believe that the current guardian will endanger the ward's physical, mental or emotional health if not substituted.

E. Before substituting a guardian, accepting the resignation of a guardian or ordering that a ward's incapacity has terminated, the court, following the same procedures to safeguard the rights of the ward as apply to a petition for appointment of a guardian, may send an investigator to the residence of the present guardian and to the place where the ward resides or is detained to observe conditions and report in writing to the court.

14-5308. Court appointed investigators; qualifications; duties

A. An investigator appointed by the court under sections 14-5303 and 14-5407 shall have a background in law, nursing or social work and shall have no personal interest in the proceedings.

B. The investigator shall conduct an investigation before the court appoints a guardian or a conservator to allow the court to determine the appropriateness of that appointment. As directed by the court, the investigator shall conduct additional investigations to determine if it is necessary to continue the appointment.

C. In conducting investigations the investigator shall:

1. Interview the alleged incapacitated person or the protected person and the proposed guardian or conservator.

2. Visit the alleged incapacitated person's or the protected person's current or proposed place of residence.

3. Interview nursing home or care home care givers and the home's manager or administrator.

4. Transport the alleged incapacitated person or the protected person as directed by the court.

D. In conducting interviews under this section the investigator may examine any court record, medical record or financial record that relates to the investigation.

E. As a condition of appointment as an investigator the court shall require the applicant to furnish a full set of fingerprints to enable the court to conduct a criminal background investigation to determine the applicant's suitability. The court shall submit the completed fingerprint card to the department of public safety. The department shall provide the applicant's criminal history record information to the court pursuant to section 41-1750. The department of public safety shall conduct criminal history records checks pursuant to section 41-1750 and applicable federal law. The department of public safety is authorized to submit fingerprint card information to the federal bureau of investigation for a national criminal history records check.

F. An investigator appointed by the court pursuant to sections 14-5303 and 14-5407, and any person or entity closely related to the investigator, shall not be appointed as a fiduciary, attorney or professional in the same case or for the same person who was the subject of the prior investigation unless otherwise ordered by the court for good cause. For the purposes of this subsection, "closely related" includes a spouse, child, parent, sibling, grandparent, aunt, uncle or cousin of the investigator and any business, partnership, corporation, limited liability company, trust or other entity that the investigator or a closely related person has a financial interest in, is employed by or receives compensation or financial benefit from.

14-5309. Notices in guardianship proceedings

A. In a proceeding for the appointment or substitution of a guardian of a ward or an alleged incapacitated person other than the appointment of a temporary guardian or temporary suspension of a guardian, notice of a hearing shall be given to each of the following:

1. The ward or the alleged incapacitated person and that person's spouse, parents and adult children.

2. Any person who is serving as guardian or conservator or who has the care and custody of the ward or the alleged incapacitated person.

3. In case no other person is notified under paragraph 1 of this subsection, at least one of that person's closest adult relatives, if any can be found.

4. Any person who has filed a demand for notice.

B. At least fourteen days before the hearing notice shall be served personally on the ward or the alleged incapacitated person, and that person's spouse and parents if they can be found within the state. Notice to the spouse and parents, if they cannot be found within the state, and to all other persons except the ward or the alleged incapacitated person shall be given as provided in section 14-1401. Waiver of notice by the ward or the alleged incapacitated person is not effective unless that person attends the hearing.

14-5310.01. Adult protective services workers; special visitation warrants

A. Adult protective services workers of the department of economic security charged with responsibilities involving protection of incapacitated and abused, exploited or neglected adults may present themselves before the court to apply for and obtain special visitation warrants. The court shall limit such visitations to the residence of the adult believed to be incapacitated and abused, exploited or neglected. Nothing in this act shall be construed to mean that an adult is abused or neglected or in need of protective services for the sole reason that he relies on treatment from a recognized religious method of healing in lieu of medical treatment.

B. Upon showing by the affidavit of the protective services worker that consent to entry for visitation to an adult believed to be incapacitated and abused, exploited or neglected has been refused a special visitation warrant may be issued by the court for the visitation of the residence of the adult.

C. The warrant shall be in substantially the following form:

County of _______________, state of Arizona, to any peace officer accompanied by an adult protective services worker in the state of Arizona, proof, by affidavit attached hereto and made a part hereof for all purposes, having been this day made before me (by person or persons where affidavit has been taken) that there may exist a reasonable governmental interest to determine if _______________, an adult, may be incapacitated and abused, exploited or neglected. You are therefore commanded in the daytime to visit the residence of _______________, an adult, located at _______________, in the county of __________________, state of Arizona, and to visit ____________________ for the purpose of making a determination if the adult is in need of protective services and what services, if any, are needed.

Given under my hand and dated this ______________ day of _________, 19__.

(signature)

__________________________________

Judge of the superior court

(The endorsement on the warrant shall be:)

Received by us this __________ day of ______________, 19__, at the hour of _____________ a.m./p.m.

A peace officer

Adult protective services worker

Department of economic security

(Return of the warrant shall be:)

We hereby certify that by virtue of the within warrant we visited _______________, and visited his/her residence located at ______________, on the _________ day of _______, 19__, at the hour of ______ a.m./p.m. and found the following:

      Dated this __________ day of ___________________________, 19__.
 ______________________________________          A          peace         officer_,__    o
 ______________________________________
 Adult protective services worker
 

D. All warrants issued are returnable to the issuing judge within seventy-two hours of issuance and shall thereafter be filed in the probate division of the office of the clerk of the superior court.

14-5310. Temporary guardians; appointment; notice; court appointed attorney hearings; duties

A. If an alleged incapacitated person has no guardian and an emergency exists or if an appointed guardian is not effectively performing the duties of a guardian and the welfare of the ward is found to require immediate action, the alleged incapacitated person, the ward or any person interested in the welfare of the alleged incapacitated person or the ward may petition for a finding of interim incapacity and for the appointment of a temporary guardian. No finding and appointment may be made without notice, pursuant to section 14-5309, except as provided in subsection B of this section.

B. The court may enter a finding of interim incapacity and may appoint a temporary guardian without notice to the proposed ward or the proposed ward's attorney only if all of the following conditions are met:

1. It clearly appears from specific facts shown by an affidavit or by the verified petition that immediate and irreparable injury, loss or damage will result before the proposed ward or the proposed ward's attorney can be heard in opposition.

2. The petitioner or the petitioner's attorney certifies to the court in writing any efforts that the petitioner or the petitioner's attorney has made to give the notice or the reasons supporting the claim that notice should not be required.

3. The petitioner files with the court a request for a hearing on the petition for the appointment of a temporary guardian.

4. The petitioner or the petitioner's attorney certifies that that person will give notice of the petition, the order and all filed reports and affidavits to the proposed ward by personal service within the time period the court directs but not in excess of seventy-two hours following entry of the order of appointment.

5. The petitioner files a report from a physician, a registered nurse practitioner or a psychologist detailing the need for a guardian and the basis for the emergency unless the report is waived by the court on a showing of good cause by a party to the action.

C. Unless the proposed ward is represented by independent counsel, the court shall appoint an attorney to represent the proposed ward in the proceeding on receipt of the petition for temporary appointment. The attorney shall visit the proposed ward as soon as practicable and shall be prepared to represent the interest of the proposed ward at any hearing on the petition.

D. Every order finding interim incapacity and appointing a temporary guardian granted without notice expires as prescribed by the court but within a period of not more than thirty days unless within that time the court extends it for good cause shown for the same period or unless the attorney for the ward consents that it may be extended for a longer period. The court shall enter the reasons for the extension on the record.

E. The court shall schedule a hearing on the petition for a finding of interim incapacity and the appointment of a temporary guardian within the time specified in subsection D of this section. If the petitioner does not proceed with the petition the court, on the motion of any party or on its own motion, may dismiss the petition.

F. If the court orders the appointment of a temporary guardian without notice, the ward may appear and move for its dissolution or modification on two days' notice to the petitioner and to the temporary guardian or on such shorter notice as the court prescribes. The court shall proceed to hear and determine that motion as expeditiously as possible.

G. If the ward objects to the person who is temporarily appointed, the court may appoint an individual nominated by the proposed ward if the ward is at least fourteen years of age and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice. The court shall appoint an alternative guardian if available and after finding that the appointment is in the best interest of the ward.

H. The hearing on a petition for the appointment of a temporary guardian shall be held in the same manner as a hearing on a preliminary injunction. The court may order the hearing on the petition for appointment of a permanent guardian to be advanced and consolidated with the hearing of the petition for temporary appointment. If the court does not order this consolidation any evidence received on a petition for temporary appointment that would be admissible at the hearing on a petition for a permanent appointment becomes part of the record and need not be repeated at a later hearing. This subsection does not limit the parties to any rights they may have to trial by jury.

I. After notice and a hearing, if the court finds that a temporary guardian is necessary and the provisions of this section have been met, the court shall make an appointment of a temporary guardian for a specific purpose and for a specific period of time of not more than six months unless the court extends this time period for good cause shown.

J. A temporary guardian is responsible to provide the care and custody of the ward. The authority of a permanent guardian previously appointed by the court is suspended as long as the temporary guardian has authority. A temporary guardian may be removed at any time. A temporary guardian shall make any report the court requires. In all other respects, the provisions of this title concerning guardians apply to temporary guardians.

14-5311. Who may be guardian; priorities

A. Any qualified person may be appointed guardian of an incapacitated person, subject to the requirements of section 14-5106.

B. The court may consider the following persons for appointment as guardian in the following order:

1. A guardian or conservator of the person or a fiduciary appointed or recognized by the appropriate court of any jurisdiction in which the incapacitated person resides.

2. An individual or corporation nominated by the incapacitated person if the person has, in the opinion of the court, sufficient mental capacity to make an intelligent choice.

3. The person nominated to serve as guardian in the incapacitated person's most recent durable power of attorney or health care power of attorney.

4. The spouse of the incapacitated person.

5. An adult child of the incapacitated person.

6. A parent of the incapacitated person, including a person nominated by will or other writing signed by a deceased parent.

7. Any relative of the incapacitated person with whom the incapacitated person has resided for more than six months before the filing of the petition.

8. The nominee of a person who is caring for or paying benefits to the incapacitated person.

9. If the incapacitated person is a veteran, the spouse of a veteran or the minor child of a veteran, the department of veterans' services.

10. A fiduciary who is licensed pursuant to section 14-5651, other than a public fiduciary.

11. A public fiduciary who is licensed pursuant to section 14-5651.

C. A person listed in subsection B, paragraph 4, 5, 6, 7 or 8 of this section may nominate in writing a person to serve in that person's place. With respect to persons who have equal priority, the court shall select the one the court determines is best qualified to serve.

D. For good cause the court may pass over a person who has priority and appoint a person who has a lower priority or no priority. For the purposes of this subsection, "good cause" includes a determination that:

1. The incapacitated person's durable power of attorney or health care power of attorney is invalid.

2. Honoring the incapacitated person's durable power of attorney or health care power of attorney would not be in the physical, emotional or financial best interest of the incapacitated person.

3. The estimated cost of the fiduciary and associated professional fees would adversely affect the ability of the incapacitated person's estate to provide for the incapacitated person's reasonable and necessary living expenses.

E. On a request by a person who was passed over by the court pursuant to subsection D of this section, the court shall make a specific finding regarding the court's determination of good cause and why the person was not appointed. The request must be made within ten days after the entry of the order.

14-5312.01. Inpatient treatment; rights and duties of ward and guardian

A. Except as provided in subsection B of this section, a guardian of an incapacitated person may consent to psychiatric and psychological care and treatment, including the administration of psychotropic medications, if the care and treatment take place outside a level one behavioral health facility licensed by the department of health services.

B. On clear and convincing evidence that the ward is incapacitated as a result of a mental disorder as defined in section 36-501, and is likely to be in need of inpatient mental health care and treatment within the period of the authority granted pursuant to this section, the court may authorize a guardian appointed pursuant to this title to give consent for the ward to receive inpatient mental health care and treatment, including placement in a level one behavioral health facility licensed by the department of health services and medical, psychiatric and psychological treatment associated with that placement. The evidence shall be supported by the opinion of a mental health expert who is either a physician licensed pursuant to title 32, chapter 13 or 17 and who is a specialist in psychiatry or a psychologist who is licensed pursuant to title 32, chapter 19.1.

C. In making its decision to grant authority to a guardian pursuant to subsection B of this section, the court shall consider the cause of the ward's disability and the ward's foreseeable clinical needs. The court shall limit the guardian's authority to what is reasonably necessary to obtain the care required for the ward in the least restrictive treatment alternative. The court may limit the duration of the guardian's authority to consent to inpatient mental health care and treatment and include other orders the court determines necessary to protect the ward's best interests.

D. Within forty-eight hours after placement of the ward pursuant to this section, the guardian shall give notice of this action to the ward's attorney. When the attorney receives this notice the attorney shall assess the appropriateness of the placement pursuant to section 36-537, subsection B and section 36-546, subsection H. If requested by the attorney, the court shall hold a hearing on the appropriateness of the placement within three days after receiving that request.

E. The behavioral health treatment facility shall assess the appropriateness of the ward's placement every thirty days and shall provide a copy of the assessment report to the ward's attorney. The ward's attorney may attend the ward's evaluation, staffing, treatment team and case management meetings.

F. When the ward is admitted to a level one behavioral health treatment facility pursuant to this section, the guardian shall provide the facility with the name, address and telephone number of the ward's attorney. The facility shall include this information in the ward's treatment record.

G. Within twenty-four hours after the facility receives any writing in which the ward requests release from the facility, any change in placement or a change in the type or duration of treatment, the facility shall forward this information to the ward's attorney.

H. All health care providers, treatment facilities and regional behavioral health authorities shall allow the ward's attorney access to all of the ward's medical, psychiatric, psychological and other treatment records.

I. The ward's guardian shall place the ward in a least restrictive treatment alternative within five days after the guardian is notified by the medical director of the inpatient facility that the ward no longer needs inpatient care. The ward, a representative of the inpatient treatment facility, the ward's attorney, the ward's physician or any other interested person may petition the court to order the facility to discharge the ward to a least restrictive treatment alternative if the guardian does not act promptly to do so.

J. If the ward is in a behavioral health treatment facility at the time of the initial hearing on the petition for appointment of a guardian, the court investigator and the ward's attorney shall advise the court of the appropriateness of the placement.

K. An attorney appointed pursuant to section 14-5303, subsection C remains the attorney of record until the attorney is discharged by the court. The court shall ensure that a ward whose guardian has been granted mental health treatment authority is represented by an attorney at all times the guardian has that authority. Unless the court finds that the ward has insufficient assets to meet the ward's reasonable and necessary care and living expenses, the ward shall pay the attorney's reasonable fees.

L. If deemed necessary to adequately assess a request for mental health treatment authority or to review the ward's placement in a behavioral health treatment facility, the court may order an independent evaluation by either a physician who is licensed pursuant to title 32, chapter 13 or 17 and who is a specialist in psychiatry or a psychologist who is licensed pursuant to title 32, chapter 19.1. If the ward has insufficient funds to pay the total cost of this evaluation, the court may deem all or any part of the evaluator's fee to be a county expense after determining the reasonableness of that fee.

M. Instead of ordering an independent evaluation pursuant to subsection L of this section, the court may accept a report conducted on behalf of the behavioral health treatment facility if the court finds that the report meets the requirements of an independent evaluation.

N. The court may decide that the ward's right to retain or obtain a driver license and any other civil right that may be suspended by operation of law is not affected by the appointment of a guardian.

O. If the court grants the guardian the authority to consent to inpatient mental health care and treatment pursuant to this section, the medical director of a level one behavioral health facility licensed by the department of health services may admit the ward at the guardian's request.

P. A guardian who is authorized by the court to consent to inpatient mental health care and treatment pursuant to this section shall file with the annual report of the guardian required pursuant to section 14-5315 an evaluation report by a physician or a psychologist who meets the requirements of subsection B of this section. The evaluation report shall indicate if the ward will likely need inpatient mental health care and treatment within the period of the authority granted pursuant to this section. If the guardian does not file the evaluation report or if the report indicates that the ward will not likely need inpatient mental health care and treatment, the guardian's authority to consent to this treatment ceases on the expiration of the period specified in the prior court order. If the report supports the continuation of the guardian's authority to consent to inpatient treatment, the court may order that the guardian's authority to consent to this treatment continues. If the report supports the continuation of the guardian's authority to consent to this treatment, the ward's attorney shall review the report with the ward. The ward may contest the continuation of the guardian's authority by filing a request for a court hearing within ten business days after the report is filed. The court shall hold this hearing within thirty calendar days after it receives the request. The guardian's authority continues pending the court's ruling on the issue. At the hearing the guardian has the burden of proving by clear and convincing evidence that the ward is likely to be in need of inpatient mental health care and treatment within the period of the authority granted pursuant to this section.

Q. The court may discharge an attorney who was appointed pursuant to section 14-5303, subsection C subsequent to the appointment of a guardian if it clearly appears from specific facts presented by affidavit or verified petition that continued representation of the ward is no longer necessary or desirable. The factual basis must include, at a minimum, consideration of the following:

1. The nature and history of the ward's illness.

2. The ward's history of hospitalization.

3. The ward's current and anticipated living arrangements.

4. Whether the ward's inpatient treatment is anticipated to be a one-time hospitalization for the purpose of stabilizing the ward's condition and further hospitalizations are not likely to be necessary.

5. Whether the ward's current and anticipated living arrangements are the least restrictive alternatives possible.

14-5312.02. Admission for evaluation or treatment by guardian; duties of physician or mental health care provider

A. Notwithstanding the procedures and requirements prescribed in title 36, chapter 5, articles 4 and 5 relating to involuntary court-ordered evaluation or treatment, if the guardian who is granted the authority to consent to inpatient mental health care or treatment pursuant to section 14-5312.01 has reasonable cause to believe that the ward is in need of evaluation or treatment, the guardian may apply for admission of the ward for evaluation or treatment at any level one behavioral health facility. The guardian must present the facility with a certified copy, or a photocopy of the certified copy, of the guardian's letters of guardianship and with a sworn statement under penalty of perjury that the guardian has presented to the facility a certified copy, or a true and correct copy of a certified copy, of letters of guardianship with mental health authority that authorize the guardian to admit the ward to a level one behavioral health facility issued pursuant to 14-5312.01, subsection B and that the letters of guardianship are currently effective and have not been revoked, terminated or rescinded.

B. If the guardian requests admission, the facility to which the guardian applies may admit the person if prior to admission a physician who is licensed pursuant to title 32, chapter 13 or 17 does all of the following:

1. Conducts an investigation that carefully probes the ward's psychiatric and psychological history, diagnosis and treatment needs.

2. Conducts a thorough interview with the ward and the guardian.

3. Obtains the guardian's informed consent. For the purposes of this paragraph, "informed consent" has the same meaning prescribed in section 36-501.

4. Makes a written determination that the ward needs an evaluation or will benefit from inpatient care and treatment of a mental disorder or other personality disorder or emotional condition and that the evaluation or treatment cannot be accomplished in a less restrictive setting.

5. Documents in the ward's medical chart a summary of the doctor's findings and recommendations for treatment.

C. After admission, if the ward refuses treatment or requests discharge and the treating physician believes that further inpatient treatment is necessary or advisable, the facility may rely on the consent of the guardian for treatment, release and discharge decisions pursuant to the guardian's authority under the guardianship.

14-5312. General powers and duties of guardian

A. A guardian of an incapacitated person has the same powers, rights and duties respecting the guardian's ward that a parent has respecting the parent's unemancipated minor child, except that a guardian is not liable to third persons for acts of the ward solely by reason of the guardianship. In particular, and without qualifying the foregoing, a guardian has the following powers and duties, except as modified by order of the court:

1. To the extent that it is consistent with the terms of any order by a court of competent jurisdiction relating to detention or commitment of the ward, the guardian is entitled to custody of the person of the ward and may establish the ward's place of abode within or without this state.

2. If entitled to custody of the ward the guardian shall make provision for the care, comfort and maintenance of the ward and, whenever appropriate, arrange for the ward's training and education. Without regard to custodial rights of the ward's person, the guardian shall take reasonable care of the ward's clothing, furniture, vehicles and other personal effects and commence protective proceedings if other property of the ward is in need of protection.

3. A guardian may give any consents or approvals that may be necessary to enable the ward to receive medical or other professional care, counsel, treatment or service.

4. If no conservator for the estate of the ward has been appointed, the guardian may:

(a) Institute proceedings to compel any person under a duty to support the ward or to pay sums for the welfare of the ward to perform such person's duty.

(b) Receive money and tangible property deliverable to the ward and apply the money and property for support, care and education of the ward, but the guardian may not use funds from his ward's estate for room and board the guardian or the guardian's spouse, parent or child has furnished the ward unless a charge for the service is approved by order of the court made upon notice to at least one of the next of kin of the ward, if notice is possible. He must exercise care to conserve any excess for the ward's needs.

5. A guardian is required to report the condition of the ward and of the estate that has been subject to the guardian's possession or control, as required by the court or court rule.

6. If a conservator has been appointed, all of the ward's estate received by the guardian in excess of those funds expended to meet current expenses for support, care and education of the ward shall be paid to the conservator for management as provided in this chapter and the guardian must account to the conservator for funds expended.

7. If appropriate, a guardian shall encourage the ward to develop maximum self-reliance and independence and shall actively work toward limiting or terminating the guardianship and seeking alternatives to guardianship.

8. A guardian shall find the most appropriate and least restrictive setting for the ward consistent with the ward's needs, capabilities and financial ability.

9. A guardian shall make reasonable efforts to secure appropriate medical and psychological care and social services for the ward.

10. A guardian shall make reasonable efforts to secure appropriate training, education and social and vocational opportunities for his ward in order to maximize the ward's potential for independence.

11. In making decisions concerning his ward, a guardian shall take into consideration the ward's values and wishes.

12. The guardian is authorized to act pursuant to title 36, chapter 32.

13. The guardian of an incapacitated adult who has a developmental disability as defined in section 36-551 shall seek services that are in the best interest of the ward, taking into consideration:

(a) The ward's age.

(b) The degree or type of developmental disability.

(c) The presence of other handicapping conditions.

(d) The guardian's ability to provide the maximum opportunity to develop the ward's maximum potential, to provide a minimally structured residential program and environment for the ward and to provide a safe, secure, and dependable residential and program environment.

(e) The particular desires of the individual.

B. Any guardian of a ward for whom a conservator also has been appointed shall control the custody and care of the ward and is entitled to receive reasonable sums for the guardian's services and for room and board furnished to the ward as agreed upon between the guardian and the conservator if the amounts agreed upon are reasonable under the circumstances. The guardian may request the conservator to expend the ward's estate by payment to third persons or institutions for the ward's care and maintenance.

14-5313. Proceedings subsequent to appointment; venue

A. The court at the place where the ward resides has concurrent jurisdiction with the court that appointed the guardian or in which acceptance of a parental or spousal appointment was filed, over resignation, substitution, accounting and other proceedings relating to the guardianship including proceedings to limit the authority previously conferred on a guardian or to remove limitations previously imposed.

B. If the court located at the place where the ward resides is not the court in which acceptance of appointment is filed, the court in which proceedings subsequent to appointment are commenced shall in all appropriate cases notify the other court, in this or another state, and after consultation with that court shall determine whether to retain jurisdiction or transfer the proceedings to the other court, whichever may be in the best interests of the ward. A copy of any order accepting a resignation, substituting a guardian or altering authority shall be sent to the court in which acceptance of appointment is filed.

14-5314. Compensation of appointees; definitions

A. If not otherwise compensated for services rendered, an investigator, accountant, lawyer, physician, registered nurse, psychologist or guardian who is appointed pursuant to this article, including an independent lawyer representing the alleged incapacitated person pursuant to section 14-5303, subsection C, is entitled to reasonable compensation from the estate of the ward if the petition is granted, or from the petitioner if the petition is denied.

B. If the petitioner withdraws the petition or if the petition is dismissed because of the petitioner's failure to prosecute, the court may order that the compensation of the investigator, accountant, lawyer, physician, registered nurse, psychologist or guardian appointed pursuant to this article, including an independent lawyer representing the alleged incapacitated person pursuant to section 14-5303, subsection C, be paid either from the ward's estate or by the petitioner, depending on the facts and circumstances. In making this determination, the court may consider any evidence it deems appropriate.

C. A lawyer who is employed by the guardian to represent the guardian in the guardian's appointment or duties as guardian is entitled to reasonable compensation from the ward's estate if the petition is granted. If the petitioner withdraws the petition or if the court dismisses the petition because of the petitioner's failure to prosecute, the court may order that the compensation of the proposed guardian's lawyer be paid either from the ward's estate or by the petitioner, depending on the facts and circumstances. In making these determinations, the court may consider any evidence it deems appropriate.

D. A lawyer who is employed by the petitioner to represent the petitioner in seeking the appointment of a guardian is entitled to reasonable compensation from the ward's estate if the petition is granted.

E. If the court compensates the provider of a service, the court may charge the estate for the reasonable cost of the service and shall deposit these monies in the probate fund pursuant to section 14-5433.

F. If compensation by the ward or the petitioner is not feasible the court shall determine and pay reasonable compensation for services rendered by an investigator, accountant, lawyer, physician, registered nurse, psychologist or guardian appointed in a guardianship proceeding.

G. If a county pays for any of these services from general fund appropriations, the county may charge the estate for reasonable compensation. The county treasurer shall deposit monies collected pursuant to this subsection in the same fund from which the expenditure was made.

H. For the purposes of this section:

1. "Guardian" includes both a guardian and a temporary guardian.

2. "Petition" means a petition filed pursuant to section 14-5303, subsection A or section 14-5310, subsection A.

3. "Ward" includes an alleged incapacitated person.

14-5315. Guardian reports; contents

A. A guardian shall submit a written report to the court on each anniversary date of qualification as guardian, on resignation or substitution as guardian and on termination of the ward's disability.

B. The guardian shall mail a copy of the report to:

1. The ward.

2. The ward's conservator.

3. The ward's spouse or the ward's parents if the ward is not married.

4. A court appointed attorney for the ward.

5. Any other interested person who has filed a demand for notice with the court.

C. The report shall include the following:

1. The type, name and address of the home or facility where the ward lives and the name of the person in charge of the home.

2. The number of times the guardian has seen the ward in the last twelve months.

3. The date the guardian last saw the ward.

4. The name and address of the ward's physician or registered nurse practitioner.

5. The date the ward was last seen by a physician or a registered nurse practitioner.

6. A copy of the ward's physician's or registered nurse practitioner's report to the guardian or, if none exists, a summary of the physician's or the registered nurse practitioner's observations on the ward's physical and mental condition.

7. Major changes in the ward's physical or mental condition observed by the guardian in the last year.

8. The guardian's opinion as to whether the guardianship should be continued.

9. A summary of the services provided to the ward by a governmental agency and the name of the individual responsible for the ward's affairs with that agency.

14-5401.01. Temporary conservators; appointment; notice; hearings

A. If a person allegedly in need of protection has no conservator and an emergency exists or if an appointed conservator is not effectively performing the duties of a conservator and the estate or affairs of the protected person are found to require immediate action, the person allegedly in need of protection, the protected person or any person interested in that person's estate or affairs may petition for a finding of a need for interim protection and for the appointment of a temporary conservator. A finding and appointment may not be made without notice, pursuant to section 14-5405, except as provided in subsection B of this section.

B. The court may enter a finding of a need for interim protection and may appoint a temporary conservator without notice to the person allegedly in need of protection or that person's attorney if all of the following conditions are met:

1. It clearly appears from specific facts shown by affidavit or by the verified petition that immediate and irreparable injury, loss or damage will result before the person allegedly in need of protection or that person's attorney can be heard in opposition.

2. The petitioner or the petitioner's attorney certifies to the court in writing any efforts that the petitioner or the attorney has made to give the notice or the reasons supporting the claim that notice should not be required.

3. The petitioner files with the court a request for a hearing on the petition for the appointment of a temporary conservator.

4. The petitioner or the petitioner's attorney certifies that notice of the petition, order and all filed reports and affidavits will be given to the person allegedly in need of protection by personal service within the time period the court directs but not more than seventy-two hours after entry of the order of appointment.

C. Unless the person allegedly in need of protection is represented by independent counsel, the court shall appoint an attorney to represent that person in the proceeding on receipt of the petition for temporary appointment. The attorney shall visit the person allegedly in need of protection as soon as practicable and shall be prepared to represent that person's interests at any hearing on the petition.

D. Every order finding a need for interim protection and appointing a temporary conservator granted without notice expires as prescribed by the court but within a period of not more than thirty days unless within that time the court extends it for good cause shown for the same period or unless the attorney for the person allegedly in need of protection consents that it may be extended for a longer period. The court shall enter the reasons for the extension on the record.

E. The court shall schedule a hearing on the petition for a finding of the need for interim protection and the appointment of a temporary conservator within the time specified in subsection D of this section. If the petitioner does not proceed with the petition the court, on the motion of any party or on its own motion, may dismiss the petition.

F. If the court orders the appointment of a temporary conservator without notice, the person allegedly in need of protection may appear and move for its dissolution or modification on two days' notice to the petitioner and to the temporary conservator, or on such shorter notice as the court prescribes. The court shall proceed to hear and determine that motion as expeditiously as possible. If the person allegedly in need of protection objects to the person who is temporarily appointed, the court may appoint an individual nominated by the person allegedly in need of protection if the person allegedly in need of protection is at least fourteen years of age and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice. The court shall appoint an alternative conservator if available and after finding that the appointment is in the best interest of the person allegedly in need of protection.

G. The hearing on a petition for the appointment of a temporary conservator shall be held in the same manner as a hearing on a preliminary injunction. The court may order the hearing on the petition for appointment of a permanent conservator to be advanced and consolidated with the hearing on the petition for temporary appointment. If the court does not order this consolidation any evidence received on a petition for temporary appointment that would be admissible at the hearing on a petition for a permanent appointment becomes part of the record and need not be repeated at a later hearing. This subsection does not limit the parties to any rights they may have to trial by jury.

H. After notice and a hearing, if the court finds that a temporary conservator is necessary and the provisions of this section have been met, the court shall make an appointment of a temporary conservator for a specified period of time of not more than six months unless the court extends this time period for good cause shown.

14-5401. Protective proceedings

A. On petition and after notice and a hearing pursuant to this article, the court may appoint a conservator or make another protective order for cause as follows:

1. Appointment of a conservator or other protective order may be made in relation to the estate and affairs of a minor if the court determines that a minor owns money or property that requires management or protection that cannot otherwise be provided or has or may have affairs that may be jeopardized or prevented by minority or that funds are needed for the minor's support and education and that protection is necessary or desirable to obtain or provide funds.

2. Appointment of a conservator or other protective order may be made in relation to the estate and affairs of a person if the court specifically finds on the record both of the following:

(a) The person is unable to manage the person's estate and affairs effectively for reasons such as mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power or disappearance.

(b) The person has property that will be wasted or dissipated unless proper management is provided, or that funds are needed for the support, care and welfare of the person or those entitled to be supported by the person and that protection is necessary or desirable to obtain or provide funds.

B. On petition and after notice and a hearing pursuant to this article, the court may continue a conservatorship or other protective order entered pursuant to subsection A, paragraph 1 of this section beyond the minor's eighteenth birthday if the court determines that the order is appropriate pursuant to subsection A, paragraph 2 of this section. The petition shall comply with the requirements of section 14-5404, subsection B and must be filed after the minor's seventeenth birthday and before termination of the conservatorship by court order.

14-5402. Protective proceedings; jurisdiction of affairs of protected persons

After the service of notice in a proceeding seeking the appointment of a conservator or other protective order and until termination of the proceeding, the court in which the petition is filed has:

1. Exclusive jurisdiction to determine the need for a conservator or other protective order until the proceedings are terminated.

2. Exclusive jurisdiction to determine how the estate of the protected person which is subject to the laws of this state shall be managed, expended or distributed to or for the use of the protected person, the protected person's dependents or other claimants.

3. Concurrent jurisdiction to determine the validity of claims against the person or estate of the protected person and questions of title concerning any estate asset.

14-5403. Venue

Venue for proceedings under this article is:

1. In the county in this state where the person to be protected resides whether or not a guardian has been appointed in another place.

2. If the person to be protected does not reside in this state, in any county where he has property.

14-5404. Original petition for appointment or protective order

A. The person allegedly in need of protection, any person who is interested in that person's estate or affairs, including that person's parent, guardian or custodian, or any person who would be adversely affected by lack of effective management of that person's estate and affairs may petition for the appointment of a conservator or for any other appropriate protective order.

B. The petition shall set forth, at a minimum and to the extent known, all of the following:

1. The interest of the petitioner.

2. The name, age, residence and address of the person allegedly in need of protection.

3. The name, address and priority for appointment of the person whose appointment is sought.

4. The name and address of the guardian, if any, of the person allegedly in need of protection.

5. The name and address of the nearest relative of the person allegedly in need of protection known to the petitioner.

6. A general statement of the estate of the person allegedly in need of protection with an estimate of its value, including any compensation, insurance, pension or allowance to which the person is entitled.

7. The reason why appointment of a conservator or any other protective order is necessary.

14-5405. Notice in conservatorship proceedings

A. In a proceeding for the appointment or substitution of a conservator of a protected person or person allegedly in need of protection, other than the appointment of a temporary conservator or temporary suspension of a conservator, and in a proceeding to continue a conservatorship or other protective order pursuant to section 14-5401, subsection B, notice of the hearing shall be given to each of the following:

1. The protected person or the person allegedly in need of protection if that person is fourteen years of age or older.

2. The spouse, parents and adult children of the protected person or person allegedly in need of protection, or if no spouse, parents or adult children can be located, at least one adult relative of the protected person or the person allegedly in need of protection, if such a relative can be found.

3. Any person who is serving as guardian or conservator or who has the care and custody of the protected person or person allegedly in need of protection.

4. Any person who has filed a demand for notice.

B. At least fourteen days before the hearing notice shall be served personally on the protected person or the person allegedly in need of protection and that person's spouse and parents if they can be found within the state. Notice to the spouse and parents, if they cannot be found within the state, and to all other persons except the protected person or the person allegedly in need of protection shall be given in accordance with section 14-1401. Waiver of notice by the protected person or the person allegedly in need of protection is not effective unless the protected person or the person allegedly in need of protection attends the hearing.

14-5406. Protective proceedings; request for notice; interested person

On payment of any required fee, any interested person who desires to be notified before any order is made in a guardianship or conservatorship proceeding, including any proceeding subsequent to the appointment of a guardian pursuant to section 14-5313, or subsequent to the appointment of a conservator pursuant to section 14-5416, may file a demand for notice with the clerk of the court in which the proceeding is pending. The person demanding notice shall mail a copy of the demand to the guardian and the conservator if one has been appointed. A demand is not effective unless it contains a statement showing the interest of the person making it and the person's address, or that of the person's attorney, and is effective only as to matters occurring after the filing. Any governmental agency paying or planning to pay benefits to the person to be protected is an interested person in protective proceedings.

14-5407. Procedure concerning hearing and order on original petition

A. On the filing of a petition for appointment of a conservator or any other protective order because of minority, the court shall set a hearing date on the matters alleged in the petition. If, at any time in the proceeding, the court determines that the interests of the minor are or may be inadequately represented, it shall appoint an attorney to represent the minor. If the minor is at least fourteen years of age the court shall consider the choice of the minor.

B. On the filing of a petition for appointment of a conservator or any other protective order for reasons other than minority, or on the filing of a petition for continuation of a conservatorship or other protective order pursuant to section 14-5401, subsection B, the court shall set a hearing date. Unless the person to be protected has counsel of that person's own choice, the court shall appoint an attorney to represent that person. If the alleged disability is mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, or chronic intoxication, the court shall appoint an investigator to interview the person to be protected. On petition by an interested person or on the court's own motion, the court may direct that an appropriate medical or psychological evaluation of the person be conducted. The investigator and the person conducting the medical or psychological evaluation shall submit written reports to the court before the hearing date.

C. In any case where the veterans administration is or may be an interested party, a certificate of an authorized official of the veterans administration that the person allegedly in need of protection has been found incapable of handling the benefits payable, on examination in accordance with the laws and regulations governing the veterans administration, is prima facie evidence of the necessity for appointment of a conservator.

D. The person allegedly in need of protection is entitled to be present at the hearing, to be represented by counsel, to present evidence and to cross-examine witnesses, including any court appointed examiner and investigator. The issue may be determined at a closed hearing if the person allegedly in need of protection or that person's counsel so requests.

E. After the hearing, and after making specific findings on the record that a basis for the appointment of a conservator or any other protective order has been established, the court shall make an appointment or other appropriate protective order.

14-5408. Permissible court orders

A. The court has the following powers which may be exercised directly or through a conservator in respect to the estate and affairs of protected persons:

1. While a petition for appointment of a conservator or any other protective order is pending and after a preliminary hearing and without notice to others, the court has power to preserve and apply the estate of the person allegedly in need of protection as may be required for that person's benefit or the benefit of that person's dependents.

2. After a hearing and upon determining that a basis for an appointment or any other protective order exists with respect to a minor without other disability, the court has all those powers over the estate and affairs of the minor which are or might be necessary for the best interests of the minor, the minor's family and members of the minor's household.

3. After a hearing and upon determining that a basis for an appointment or any other protective order exists with respect to a person for reasons other than minority, the court has, for the benefit of the protected person and members of that person's household, all the powers over his estate and affairs which the protected person could exercise if present and not under disability, except the power to make a will or to make gifts other than those authorized by this section.

4. After notice and a hearing the court may authorize the conservator to make gifts on behalf of the protected person out of the estate of the protected person to donees and in amounts that are consistent with the protected person's best interests and intentions. In determining if these gifts are in the protected person's best interests the court shall consider:

(a) The protected person's estate plan, if any.

(b) The protected person's pattern of prior gifts, if any.

(c) The potential tax savings that would result if a gift were authorized.

(d) The size of the estate.

(e) The protected person's income and expenses.

(f) The physical and mental condition and life expectancy of the protected person.

(g) The likelihood that the protected person's disability may cease.

(h) The likelihood that the protected person would make the gift if the person were able to consent.

(i) The ability of the protected person to consent to the proposed gifts.

B. An order made pursuant to this section determining that a basis for appointment of a conservator or other protective order exists has no effect on the capacity of the protected person.

C. To encourage the self-reliance and independence of a protected person, the court may grant the protected person the ability to handle part of the protected person's money or other property without the consent or supervision of the conservator. This may include allowing the protected person to maintain appropriate accounts in any bank or other financial institution.

14-5409. Protective arrangements and single transactions authorized

A. If it is established in a proper proceeding that a basis exists as described in section 14-5401 for affecting the estate and affairs of a person the court, without appointing a conservator, may authorize, direct or ratify any transaction necessary or desirable to achieve any security, service or care arrangement meeting the foreseeable needs of the protected person. Protective arrangements include, but are not limited to, payment, delivery, deposit or retention of funds or property, sale, mortgage, lease or other transfer of property, entry into an annuity contract, a contract for life care, a deposit contract, a contract for training and education, or addition to or establishment of a suitable trust.

B. When it has been established in a proper proceeding that a basis exists as described in section 14-5401 for affecting the estate and affairs of a person the court, without appointing a conservator, may authorize, direct or ratify any contract, trust or other transaction relating to the protected person's financial affairs or involving the protected person's estate if the court determines that the transaction is in the best interests of the protected person.

C. Before approving a protective arrangement or other transaction under this section, the court shall consider the interests of creditors and dependents of the protected person and, in view of the protected person's disability, whether the protected person needs the continuing protection of a conservator. The court may appoint a special conservator to assist in the accomplishment of any protective arrangement or other transaction authorized under this section who shall have the authority conferred by the order and serve until discharged by order after report to the court of all matters done pursuant to the order of appointment.

14-5410. Who may be appointed conservator; priorities

A. The court may appoint an individual or a corporation, with general power to serve as trustee, as conservator of the estate of a protected person subject to the requirements of section 14-5106. The following are entitled to consideration for appointment in the order listed:

1. A conservator, guardian of property or other like fiduciary appointed or recognized by the appropriate court of any other jurisdiction in which the protected person resides.

2. An individual or corporation nominated by the protected person if the protected person is at least fourteen years of age and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice.

3. The person nominated to serve as conservator in the protected person's most recent durable power of attorney.

4. The spouse of the protected person.

5. An adult child of the protected person.

6. A parent of the protected person, or a person nominated by the will of a deceased parent.

7. Any relative of the protected person with whom the protected person has resided for more than six months before the filing of the petition.

8. The nominee of a person who is caring for or paying benefits to the protected person.

9. If the protected person is a veteran, the spouse of a veteran or the minor child of a veteran, the department of veterans' services.

10. A fiduciary who is licensed pursuant to section 14-5651, other than a public fiduciary.

11. A public fiduciary who is licensed pursuant to section 14-5651.

B. A person listed in subsection A, paragraph 4, 5, 6, 7 or 8 of this section may nominate in writing a person to serve in that person's place. With respect to persons having equal priority, the court shall select the one it determines is best qualified to serve. The court, for good cause, may pass over a person having priority and appoint a person having a lower priority or no priority. For the purposes of this subsection, "good cause" includes a determination that:

1. The protected person's durable power of attorney is invalid.

2. Honoring the protected person's durable power of attorney would not be in the physical, emotional or financial best interest of the protected person.

3. The estimated cost of the fiduciary and associated professional fees would adversely affect the ability of the person's estate to provide for the protected person's reasonable and necessary living expenses.

C. On the request of a person who was passed over by the court pursuant to subsection B of this section, the court shall make a specific finding regarding the court's determination of good cause and why the person was not appointed. The request must be made within ten days after the entry of the order.

14-5411. Bond; exception

A. Except as otherwise provided in subsection B, the court shall require a conservator to furnish a bond conditioned upon faithful discharge of all duties according to law, with sureties as it shall specify. Unless otherwise directed, the bond shall be in the amount of the aggregate capital value of the property of the estate in the conservator's control plus one year's estimated income minus the value of securities deposited under arrangements requiring an order of the court for their removal and the value of any land which the fiduciary, by express limitation of power, lacks power to sell or convey without court authorization. For good cause shown the court may reduce or eliminate the bond to the extent of regular fixed expenses paid for the benefit of the protected person. The court in lieu of sureties on a bond may accept other security for the performance of the bond, including a pledge of securities or a mortgage of land.

B. A bond is not required of a conservator which is a national banking association, a holder of a banking permit under the laws of this state, a savings and loan association authorized to conduct trust business in this state, a title insurance company qualified to do business under the laws of this state, a trust company holding a certificate to engage in trust business from the superintendent of financial institutions or the public fiduciary.

14-5412. Terms and requirements of bonds

A. The following requirements and provisions apply to any bond required under section 14-5411:

1. Unless otherwise provided by the terms of the approved bond, sureties are jointly and severally liable with the conservator and with each other.

2. By executing an approved bond of a conservator, the surety consents to the jurisdiction of the court which issued letters to the primary obligor in any proceeding pertaining to the fiduciary duties of the conservator and naming the surety as a party respondent. Notice of any proceeding shall be delivered to the surety or mailed by certified mail to the address listed with the court at the place where the bond is filed and to the address as then known to the petitioner.

3. On petition of a successor conservator or any interested person, a proceeding may be initiated against a surety for breach of the obligation of the bond of the conservator.

4. The bond of the conservator is not void after the first recovery but may be proceeded against from time to time until the whole penalty is exhausted.

B. No proceeding may be commenced against the surety on any matter as to which an action or proceeding against the primary obligor is barred by adjudication or limitation.

14-5413. Acceptance of appointment; consent to jurisdiction

By accepting appointment, a conservator submits personally to the jurisdiction of the court in any proceeding relating to the estate that may be instituted by any interested person. Notice of any proceeding shall be delivered to the conservator, or mailed to him by registered or certified mail at his address as listed in the petition for appointment or as thereafter reported to the court and to his address as then known to the petitioner.

14-5414.01. State veterans' conservatorship fund

A. The state veterans' conservatorship fund is established.

B. All conservatorship monies collected pursuant to section 14-5414, subsection G shall be deposited, pursuant to sections 35-146 and 35-147, by the department of veterans' services in the state veterans' conservatorship fund. On notice from the department of veterans' services, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

14-5414. Compensation and expenses; definitions

A. If not otherwise compensated for services rendered, any investigator, accountant, lawyer, physician, registered nurse, psychologist or conservator who is appointed in a protective proceeding, including a lawyer of the person alleged to be in need of protection pursuant to section 14-5407, subsection B, is entitled to reasonable compensation from the estate of the protected person if the petition is granted or from the petitioner if the petition is denied.

B. If the petitioner withdraws the petition or if the court dismisses the petition because of the petitioner's failure to prosecute, the court may order that the compensation of the investigator, accountant, lawyer, physician, registered nurse, psychologist or conservator who is appointed pursuant to this article, including a lawyer of the person alleged to be in need of protection pursuant to section 14-5407, subsection B, be paid either from the protected person's estate or by the petitioner, depending on the facts and circumstances. In making these determinations, the court may consider any evidence it deems appropriate.

C. A lawyer who is employed by the conservator to represent the conservator in the conservator's appointment or duties as conservator is entitled to reasonable compensation from the estate if the petition is granted. If the petitioner withdraws the petition or if the petition is dismissed because of the petitioner's failure to prosecute, the court may order that the compensation of the proposed conservator's lawyer be paid either from the protected person's estate or by the petitioner, depending on the facts and circumstances. In determining which party shall pay, the court may consider any evidence it deems appropriate.

D. A lawyer who is employed by the petitioner to represent the petitioner in seeking the appointment of a conservator is entitled to reasonable compensation from the protected person's estate if the petition is granted.

E. If the court pays for any of these services it may charge the estate for reasonable compensation. The clerk shall deposit monies it collects in the probate fund pursuant to section 14-5433.

F. If a county pays for any of these services from general fund appropriations, the county may charge the estate for reasonable compensation. The county treasurer shall deposit monies collected pursuant to this subsection in the same fund from which the expenditure was made.

G. Compensation payable to the department of veterans' services, when acting as a conservator of the estate of a veteran or a veteran's surviving spouse or minor child or the incapacitated spouse of a protected veteran, shall not be more than five per cent of the amount of monies received during the period covered by the conservatorship. A copy of the petition and notice of hearing shall be given to the proper officer of the veterans administration in the manner provided in the case of any hearing on a guardian's account or any other pleading. A commission or compensation is not allowed on the monies or other assets received from a prior conservator or on the amount received from liquidation of loans or other investments.

H. For the purposes of this section:

1. "Conservator" includes a conservator, temporary conservator or special conservator.

2. "Petition" means a petition filed pursuant to section 14-5401.01, subsection A or section 14-5404, subsection A.

3. "Protected person" includes a person who is alleged to be in need of protection.

14-5415. Resignation or substitution of conservator

A. On petition of the protected person or any person interested in the protected person's welfare, or on the court's own initiative, the court shall substitute a conservator and appoint a successor if the substitution is in the best interest of the protected person. The court does not need to find that the conservator acted inappropriately to find that the substitution is in the protected person's best interest. The conservator and the conservator's attorney may be compensated from the protected person's estate for defending against a petition for substitution only for the amount ordered by the court and on petition by the conservator or the conservator's attorney. When substituting a conservator and appointing a successor, the court may appoint an individual nominated by the protected person if the person is at least fourteen years of age and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice. On petition of the conservator, the court may accept a resignation and make any other order that may be appropriate.

B. The protected person may petition the court for an order that the protected person is no longer in need of protection or petition for substitution of the conservator at any time. A request for this order may be made by informal letter to the court or judge. A person who knowingly interferes with the transmission of this request may be found in contempt of court.

C. An interested person, other than the conservator or protected person, shall not file a petition for adjudication that the protected person is no longer in need of protection earlier than one year after the entry of a protective order unless the court permits the person to file the petition on the basis of affidavits that there is reason to believe that the protected person is no longer in need of protection.

D. An interested person, other than the conservator or protected person, shall not file a petition to substitute a conservator earlier than one year after the entry of a protective order, unless the court permits the person to file the petition on the basis of affidavits that there is reason to believe that the current conservator will endanger the protected person's estate if the conservator is not substituted.

E. Before it orders that need for protection no longer exists, substituting a conservator or accepting the resignation of a conservator, the court, following the same procedures to safeguard the rights of the protected person that apply to a petition for appointment of a conservator, may require appropriate accounts and enter appropriate orders to preserve and protect the assets of the estate, to require reimbursement or payment as needed and to transfer assets or title thereto to appropriate successors.

14-5416. Petitions for orders subsequent to appointment

A. Any person interested in the estate or affairs of a person for whom a conservator has been appointed may file a petition in the appointing court for an order:

1. Requiring bond or security or additional bond or security, or reducing bond.

2. Requiring an accounting for the administration of the estate of the protected person.

3. Directing distribution.

4. Removing the conservator and appointing a temporary or successor conservator.

5. Continuing the conservatorship pursuant to section 14-5401, subsection B.

6. Granting other appropriate relief.

B. A conservator may petition the appointing court for instructions concerning the fiduciary's responsibility.

C. On notice and a hearing the court may give appropriate instructions or make any appropriate order.

D. When a surety of a conservator desires to be released from responsibility for future acts, the surety may apply to the court for a release. The court shall proceed in the same manner as in a proceeding under section 14-3604, subsection B. Notice shall be given to the conservator as provided in section 14-5413.

14-5417. General duty of conservator

In exercising powers, a conservator is to act as a fiduciary and shall observe the standard of care applicable to trustees as described by sections 14-10804 and 14-10806.

14-5418. Inventory and records

A. Within ninety days after appointment, a conservator shall prepare and file with the court an inventory of the assets of the protected person on the date of the conservator's appointment, listing it with reasonable detail and indicating the fair market value of each asset as of the date of appointment. The conservator shall attach to the inventory a copy of the protected person's consumer credit report from a credit reporting agency that is dated within ninety days before the filing of the inventory.

B. The conservator shall provide a copy of the inventory to the protected person if the protected person can be located, has attained fourteen years of age, and has sufficient mental capacity to understand these matters, and to any parent or guardian with whom the protected person resides. The conservator shall keep suitable records of the conservator's administration and exhibit the records on request of any interested person.

C. Unless otherwise ordered by the court, a person who is entitled to notice of the conservator's annual account pursuant to section 14-5419, subsection C may request in writing that the conservator do one of the following not more than once every thirty days:

1. Allow the person to view the protected person's financial records, the conservator's billing statements, the billing statements of the conservator's attorney or other records related to the protected person under the conservator's control.

2. Provide the requesting person with copies of these documents. Unless otherwise ordered by the court, the conservator shall allow the person to view or provide copies of the requested documents to the person as soon as practicable but no later than thirty days after receiving the request. The requesting party must pay reasonable copying costs.

3. Provide a report of receipts and disbursements of the conservatorship.

14-5419. Accounts; definition

A. Except as provided pursuant to subsection F of this section, every conservator must account to the court for the administration of the estate not less than annually on the anniversary date of qualifying as conservator and also on resignation or substitution, and on termination of the protected person's minority or disability, except that for good cause shown on the application of an interested person, the court may relieve the conservator of filing annual or other accounts by an order entered in the minutes.

B. The court may take any appropriate action on filing of annual or other accounts. In connection with any account, the court may require a conservator to submit to a physical check of the estate in the conservator's control, to be made in any manner the court may specify.

C. An adjudication allowing an intermediate or final account can be made only on petition, notice and a hearing. Notice must be given to:

1. The protected person.

2. A guardian of the protected person if one has been appointed, unless the same person is serving as both guardian and conservator.

3. If no guardian has been appointed or the same person is serving as both guardian and conservator, a spouse or, if the spouse is the conservator, there is no spouse or the spouse is incapacitated, a parent or an adult child who is not serving as a conservator.

4. A representative appointed for the protected person, if the court determines in accordance with section 14-1408 that representation of the interest of the protected person would otherwise be inadequate.

D. An order, made on notice and a hearing, allowing an intermediate account of a conservator, adjudicates as to the conservator's liabilities concerning the matters considered in connection therewith. An order, made on notice and a hearing, allowing a final account adjudicates as to all previously unsettled liabilities of the conservator to the protected person or the protected person's successors relating to the conservatorship.

E. In any case in which the estate consists, in whole or in part, of benefits paid by the veterans administration to the conservator or the conservator's predecessor for the benefit of the protected person, the veterans administration office that has jurisdiction over the area is entitled to a copy of any account filed under this article. Each year in which an account is not filed with the court, the conservator, if requested, shall submit an account to the appropriate veterans administration office. If an account is not submitted as requested, or if it is found unsatisfactory by the veterans administration, the court on receipt of notice of the deficiency shall require the conservator to immediately file an account with the court promptly.

F. Unless prohibited by order of the court, the conservator may file with the court, in lieu of a final account, a verified statement stating that:

1. The protected person has died. The conservator shall attach a certified copy of the protected person's death certificate to the statement.

2. The protected person's successors have all waived in writing their right to have the conservator submit to the court a final account of the conservator's administration of the protected person's estate. The conservator shall attach the originals of the written waivers to the statement.

3. The conservator has delivered a copy of a closing statement to the protected person's successors. The conservator shall attach a copy of the closing statement to the statement.

G. The closing statement that is to be delivered to the protected person's successors shall be a verified statement stating the following:

1. The protected person has died and the date of the person's death.

2. The persons receiving the closing statement have a right to have the conservator submit to the court a final account of the conservator's administration of the protected person's estate.

3. If the person wishes to have the final accounting reviewed by the court, the person should not sign a waiver that waives this right.

4. If all persons receiving the closing statement choose to waive the right to have the conservator submit to the court a final account, the final account will not be reviewed by the court.

5. A list of the property owned by the protected person, as of the date of the protected person's death, is attached to the closing statement and that the list states the fair market value of the property as of the date of the protected person's death.

6. The conservator, by the closing statement, shall inform the protected person's successors that if they waive court review of the conservator's final account, the conservatorship will be terminated, the conservator will be discharged from all liabilities relating to the conservatorship, the bond or other security posted by the conservator will be exonerated and any restrictions previously imposed on the assets of the conservatorship will be lifted.

H. The conservator shall file an affidavit with the court that states that the closing statement was sent or delivered to the protected person's successors on a date before the date that the protected person's successors signed the written waiver.

I. Unless proceedings are pending against the conservator, on the filing of the statement described in subsection F of this section and the affidavit described in subsection H of this section, the court shall enter an order terminating the conservatorship, discharging the conservator from all liabilities relating to the conservatorship, exonerating and releasing any bond or other security posted by the conservator and releasing any restrictions previously imposed on the assets of the conservatorship.

J. For the purposes of this section, "protected person's successors" means:

1. The personal representative of the protected person's estate if the personal representative and the conservator are not the same person.

2. If the conservator and the personal representative of the protected person's estate are the same person and if the protected person died intestate, the protected person's heirs.

3. If the conservator and the personal representative of the protected person's estate are the same person and if the protected person died testate, the devisees under the protected person's will that has been admitted to probate.

14-5420. Conservators; title by appointment

A. The appointment of a conservator vests in the conservator title as trustee to all property or to the part specified in the order of the protected person, presently held or thereafter acquired, including title to any property previously held for the protected person by custodians or attorneys in fact. An order specifying that only part of the property of the protected person vests in the conservator creates a limited conservatorship.

B. The appointment of a conservator is not a transfer or alienation within the meaning of general provisions of any federal or state statute or rule, regulation, insurance policy, pension plan, contract, will or trust instrument, imposing restrictions upon or penalties for transfer or alienation by the protected person of the person's rights or interest.

C. Except as otherwise provided by law, the interest of the protected person in property vested in a conservator is not transferable or assignable by the protected person.

D. Property vested in a conservator by this section and the interest of the protected person in that property are not subject to levy, garnishment or similar process other than by an order issued in the protective proceeding as provided in section 14-5428.

14-5421. Recording of conservator's letters

Letters of conservatorship are evidence of transfer of all assets, or in the case of a limited conservatorship, the part specified in the letters, of a protected person to the conservator. An order terminating a conservatorship is evidence of transfer of all assets subject to the conservatorship from the conservator to the protected person, or the person's successors. Subject to the requirements of general statutes governing the filing or recordation of documents of title to land or other property, letters of conservatorship and orders terminating conservatorships shall be filed or recorded in the county where the property of the protected person is located to give record notice of title as between the conservator and the protected person.

14-5422. Sale, encumbrance or transaction involving conflict of interest; voidable; exceptions

Any sale or encumbrance to a conservator, his spouse, agent or attorney, or any corporation or trust in which he has a substantial beneficial interest, or any transaction which is affected by a substantial conflict of interest is voidable unless the transaction is approved by the court after notice to interested persons and others as directed by the court.

14-5423. Persons dealing with conservators; protection

A. A person who in good faith either assists or deals with a conservator, on the basis of a copy of letters certified by or under the direction of the court or an officer thereof within sixty days of the transaction, is protected as if the conservator properly exercised the conservator's power and even though the authority of that person as conservator has been terminated. The fact that a person knowingly deals with a conservator does not alone require the person to inquire into the existence of a power, the propriety of its exercise, or the current authority of the conservator, except that restrictions on powers of conservators which are endorsed on letters as provided in section 14-5426 are effective as to third persons. A person is not bound to see to the proper application of estate assets paid or delivered to a conservator.

B. The protection expressed in this section extends to any procedural irregularity or jurisdictional defect that occurred in proceedings leading to the issuance of letters. The protection expressed in this section is not a substitution for that provided by comparable provisions of the laws relating to commercial transactions and laws simplifying transfers of securities by fiduciaries.

14-5424. Powers of conservator in administration

A. Subject to the limitations provided in section 14-5425, a conservator has all the powers conferred herein and any additional powers conferred by law on trustees in this state. In addition, a conservator of the estate of an unmarried minor, as to whom no one has parental rights, has the duties and powers of a guardian of a minor described in section 14-5209 until the minor attains the age of majority or marries, but the parental rights so conferred on a conservator do not preclude appointment of a guardian as provided by article 2 of this chapter.

B. A conservator, without court authorization or confirmation, may invest and reinvest funds of the estate as would a trustee.

C. A conservator, acting reasonably in efforts to accomplish the purpose of the appointment, may act without court authorization or confirmation to:

1. Collect, hold and retain assets of the estate including land in another state, until, in the conservator's judgment, disposition of the assets should be made. Assets may be retained even though they include an asset in which the conservator is personally interested.

2. Receive additions to the estate.

3. Continue or participate in the operation of any business or other enterprise.

4. Acquire an undivided interest in an estate asset in which the conservator, in any fiduciary capacity, holds an undivided interest.

5. Invest and reinvest estate assets in accordance with subsection B of this section.

6. Deposit estate funds in a state or federally insured financial institution including one operated by the conservator.

7. Acquire or dispose of an estate asset including land in another state for cash or on credit, at public or private sale, and manage, develop, improve, exchange, partition, change the character of or abandon an estate asset.

8. Make ordinary or extraordinary repairs or alterations in buildings or other structures, demolish any improvements and raze existing or erect new party walls or buildings.

9. Subdivide, develop, or dedicate land to public use, make or obtain the vacation of plats and adjust boundaries, adjust differences in valuation on exchange, partition by giving or receiving considerations and dedicate easements to public use without consideration.

10. Enter for any purpose into a lease as lessor or lessee with or without an option to purchase or renew for a term within or extending beyond the term of the conservatorship.

11. Enter into a lease or arrangement for exploration and removal of minerals or other natural resources or enter into a pooling or unitization agreement.

12. Grant an option involving disposition of an estate asset, or take an option for the acquisition of any asset.

13. Vote a security, in person or by general or limited proxy.

14. Pay calls, assessments and any other sums chargeable or accruing against or on account of securities.

15. Sell or exercise stock subscription or conversion rights and consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution or liquidation of a corporation or other business enterprise.

16. Hold a security in the name of a nominee or in other form without disclosure of the conservatorship so that title to the security may pass by delivery, but the conservator is liable for any act of the nominee in connection with the stock so held.

17. Insure the assets of the estate against damage or loss, and the conservator against liability with respect to third persons.

18. Borrow money to be repaid from estate assets or otherwise, advance money for the protection of the estate or the protected person, and for all expenses, losses, and liability sustained in the administration of the estate or because of the holding or ownership of any estate assets, and the conservator has a lien on the estate as against the protected person for advances so made.

19. Pay or contest any claim, settle a claim by or against the estate or the protected person by compromise, arbitration, or otherwise and release, in whole or in part, any claim belonging to the estate to the extent that the claim is uncollectible except that personal injury or wrongful death claims shall be compromised pursuant to subsection D of this section.

20. Pay taxes, assessments, compensation of the conservator and other expenses incurred in the collection, care, administration and protection of the estate.

21. Allocate items of income or expense to either estate income or principal, as provided by law, including creation of reserves out of income for depreciation, obsolescence or amortization, or for depletion in mineral or timber properties.

22. Pay any sum distributable to a protected person or dependent of the protected person, without liability to the conservator, by paying the sum to the distributee or by paying the sum for the use of the distributee either to the guardian of the distributee or, if none, to a relative or other person having custody of the person.

23. Employ persons, including attorneys, auditors, investment advisors or agents, even though they are associated with the conservator, to advise or assist the conservator in the performance of administrative duties, act upon their recommendation without independent investigation and, instead of acting personally, employ one or more agents to perform any act of administration, whether or not discretionary.

24. Prosecute or defend actions, claims or proceedings in any jurisdiction for the protection of estate assets and of the conservator in the performance of fiduciary duties.

25. Execute and deliver all instruments which will accomplish or facilitate the exercise of the powers vested in the conservator.

D. A conservator may act with court approval to compromise a personal injury or wrongful death claim for a protected person. The conservator may act with court approval to release an alleged tortfeasor if the release is in the best interest of the protected person. If the conservator obtains an order of approval for compromise from a court of competent jurisdiction, the compromise may be in exchange for a lump sum amount or an arrangement that defers the receipt of part or all of the consideration for the compromise until after the protected person reaches majority and may involve a structured settlement or the creation of a trust on the terms that the court approves for any protected person.

14-5425. Distributive duties and powers of conservator

A. A conservator may expend or distribute income or principal of the estate without court authorization or confirmation for the support, education, care or benefit of the protected person and the person's dependents in accordance with the following principles:

1. The conservator shall consider recommendations relating to the appropriate standard of support, education and benefit for the protected person made by a parent or guardian, if any. The conservator may not be surcharged for sums paid to persons or organizations actually furnishing support, education or care to the protected person pursuant to the recommendations of a parent or guardian of the protected person unless the conservator knows that the parent or guardian is deriving personal financial benefit from this action, including relief from any personal duty of support, or unless the recommendations are clearly not in the best interests of the protected person.

2. The conservator shall expend or distribute sums reasonably necessary for the support, education, care or benefit of the protected person and the person's dependents with due regard to:

(a) The size of the estate, the probable duration of the conservatorship and the likelihood that the protected person, at some future time, may be fully able to be wholly self-sufficient and able to manage business affairs and the estate.

(b) The accustomed standard of living of the protected person and the person's dependents.

(c) Other funds or sources used for the support of the protected person.

3. With respect to the affairs and estate of a minor, the conservator shall also consider the following factors in making estate distributions:

(a) The financial responsibility and financial resources of the parents of the child.

(b) Extraordinary custodial responsibilities undertaken by the parent or parents as the result of the child's physical or mental condition and the effect of these extraordinary responsibilities on appropriate gainful employment of the parent.

(c) The physical and mental condition of the child and the child's medical and educational needs. Any incidental benefit to other members of the child's household derived from a distribution is not a disqualifying factor.

(d) If the child is permanently and totally disabled, the standard of living the child should reasonably expect to enjoy given the financial resources available to the child.

4. The conservator may expend funds of the estate for the support of persons legally dependent on the protected person and others who are members of the protected person's household, who are unable to support themselves and who are in need of support. If benefits are being paid by the veterans administration to the conservator, such income may be expended only for the support of the protected person and the person's spouse and minor children, except on petition to and prior order of the court after a hearing.

5. Funds expended under this subsection may be paid by the conservator to any person, including the protected person, to reimburse for expenditures that the conservator might have made, or in advance for services to be rendered to the protected person when it is reasonable to expect that they will be performed and where advance payments are customary or reasonably necessary under the circumstances.

6. A conservator, in discharging the responsibilities conferred by a court order and this section, shall implement the principles described in section 14-5408 to the extent possible.

B. When a minor who has not been adjudged disabled under section 14-5401, paragraph 2 attains majority, the conservator, after meeting all prior claims and expenses of administration, shall pay over and distribute all funds and properties to the former protected person as soon as possible.

C. When the conservator is satisfied that a protected person's disability, other than minority, has ceased, the conservator, after meeting all prior claims and expenses of administration, shall pay over and distribute all funds and properties to the former protected person as soon as possible.

D. If a protected person dies, the conservator may deliver to the court for safekeeping any will of the deceased protected person that may have come into the conservator's possession or deliver the will to the personal representative named in the will. If the will is delivered to the personal representative named in the will, a copy of the will shall be filed with the court in the conservatorship proceeding. If the will is filed with the court, the conservator shall inform the personal representative or a beneficiary named in the will that the conservator has done so, and retain the estate for delivery to a duly appointed personal representative of the decedent or other persons entitled to the estate. If any of the following situations exist, the conservator may apply to exercise the powers and duties of a personal representative so that the conservator may proceed to administer and distribute the decedent's estate without additional or further appointment:

1. Forty days after the death of the protected person another person has not been appointed personal representative and an application or petition for appointment is not before the court.

2. Another person has not been appointed personal representative after the protected person's death, an application or petition for appointment is not before the court and the conservator is the person with priority as determined by a probated will, including a person who is nominated by a power conferred in a will.

3. Another person has not been appointed personal representative after the protected person's death, an application or petition for appointment is not before the court, after the exercise of reasonable diligence the conservator is unaware of any unrevoked testamentary instrument relating to property located in this state and all the heirs of the protected person have nominated the conservator to exercise the powers and duties of a personal representative.

E. The conservator may include in an application made pursuant to subsection D of this section a request to probate the will of the deceased protected person or to adjudicate that the protected person died intestate and to determine the protected person's heirs. On receipt of an application, the registrar, after making the findings required pursuant to section 14-3303, if applicable, shall issue a written statement of informal probate, or a statement of intestacy, and shall endorse the letters of the conservator. The registrar may also enter the will of the deceased protected person to probate. The statement of the registrar under this section shall have the effect of an order of appointment of a personal representative as provided in section 14-3308 and chapter 3, articles 6 through 10 of this title, except that the estate in the name of the conservator, after administration, may be distributed to the decedent's successors without prior retransfer to the conservator as personal representative. In exercising the powers and duties of a personal representative after the death of the protected person, the conservator is not required to account for the administration pursuant to section 14-5419 but is subject to the related duties of a personal representative for the administration.

F. If a protected person dies, and on reasonable inquiry the conservator is unable to locate any person specified in section 36-831, subsection A, paragraphs 1 through 11 willing to assume the duty of burying the body of the decedent or making other funeral and disposition arrangements, the conservator may make reasonable burial or other funeral arrangements, the cost of which is a charge against the estate.

G. The estate of a deceased protected person is liable for any unpaid expenses of the conservator's administration, and such expenses are a lien on property transferred by the conservator to the decedent's personal representative.

14-5426. Enlargement or limitation of powers of conservator

A. Subject to the restrictions in section 14-5408, subsection A, paragraph 4, the court may confer on a conservator at the time of appointment or later, in addition to the powers conferred on him by sections 14-5424 and 14-5425, any power which the court itself could exercise under section 14-5408, subsection A, paragraphs 2 and 3. The court may, at the time of appointment or later, limit the powers of a conservator otherwise conferred by sections 14-5424 and 14-5425, or previously conferred by the court, and may at any time relieve him of any limitation. If the court limits any power conferred on the conservator by section 14-5424 or 14-5425, the limitation shall be endorsed upon his letters of appointment.

B. Upon appointment of a conservator for a protected spouse, the court may determine whether the spouse's share of community property shall be managed by the conservator or by the other spouse. If the court determines that the community property shall be managed by the other spouse, and if the protected spouse is the husband, the wife may become the manager of the community property during the conservatorship and may dispose of community personal property in the interests of the community.

14-5427. Preservation of estate plan

In investing the estate, and in selecting assets of the estate for distribution under section 14-5425, subsection A, in utilizing powers of revocation or withdrawal available for the support of the protected person, and exercisable by the conservator or the court, the conservator and the court shall take into account any known estate plan of the protected person known to them, including the will, any revocable trust of which the person is settlor, and any contract, transfer or joint ownership arrangement originated by the protected person with provisions for payment or transfer of benefits or interests at the person's death to another or other persons. The conservator may examine the will of the protected person.

14-5428. Claims against protected person; enforcement

A. A conservator must pay from the estate all just claims against the estate and against the protected person arising before or after the conservatorship upon their presentation and allowance. A claim may be presented by either of the following methods:

1. The claimant may deliver or mail to the conservator a written statement of the claim indicating its basis, the name and address of the claimant and the amount claimed.

2. The claimant may file a written statement of the claim, in the form prescribed by rule, with the clerk of the court and deliver or mail a copy of the statement to the conservator. A claim is deemed presented on the first to occur of receipt of the written statement of claim by the conservator, or the filing of the claim with the court. A presented claim is allowed if it is not disallowed by written statement mailed by the conservator to the claimant within ninety days after its presentation. The presentation of a claim tolls any statute of limitation relating to the claim until thirty days after its disallowance.

B. A claimant whose claim has not been paid may petition the court for determination of his claim at any time before it is barred by the applicable statute of limitation and, upon due proof, procure an order for its allowance and payment from the estate. If a proceeding is pending against a protected person at the time of appointment of a conservator or is initiated against the protected person thereafter, the moving party must give notice of the proceeding to the conservator if the outcome is to constitute a claim against the estate.

C. If it appears that the estate in conservatorship is likely to be exhausted before all existing claims are paid, preference is to be given to prior claims for the care, maintenance and education of the protected person or his dependents and existing claims for expenses of administration.

14-5429. Personal liability of conservator

A. Unless otherwise provided in the contract, a conservator is not personally liable on a contract properly entered into in the conservator's fiduciary capacity in the course of administration of the estate unless the conservator fails to reveal the representative capacity and identify the estate in the contract.

B. The conservator is individually liable for obligations arising from ownership or control of property of the estate or for torts committed in the course of administration of the estate only if the conservator is personally at fault.

C. Claims based on contracts entered into by a conservator in a fiduciary capacity, on obligations arising from ownership or control of the estate, or on torts committed in the course of administration of the estate may be asserted against the estate by proceeding against the conservator in the conservator's fiduciary capacity, whether or not the conservator is individually liable therefor.

D. Any question of liability between the estate and the conservator individually may be determined in a proceeding for accounting, surcharge or indemnification, or other appropriate proceeding or action.

14-5430. Termination of proceeding

A. The protected person, the conservator or any other interested person may petition the court to terminate the conservatorship. A protected person seeking termination is entitled to the same rights and procedures as in an original proceeding for a protective order.

B. The court, on determining after notice and a hearing that the minority or disability of the protected person has ceased, shall terminate the conservatorship unless the court has continued the conservatorship or other protective order pursuant to section 14-5401, subsection B.

C. On termination, title to assets of the estate passes to the formerly protected person or to the person's successors. The order of termination shall provide for expenses of administration and shall direct the conservator to execute appropriate instruments to evidence the transfer.

14-5431. Payment of debt and delivery of property to foreign conservator without local proceedings

Any person indebted to a protected person, or having possession of property or of an instrument evidencing a debt, stock or chose in action belonging to a protected person may pay or deliver to a conservator, guardian of the estate or other like fiduciary appointed by a court of the state of residence of the protected person, upon being presented with proof of his appointment and an affidavit made by him or on his behalf stating both:

1. That no protective proceeding relating to the protected person is pending in this state.

2. That the foreign conservator is entitled to payment or to receive delivery. If the person to whom the affidavit is presented is not aware of any protective proceeding pending in this state, payment or delivery in response to the demand and affidavit discharges the debtor or possessor.

14-5432. Domiciliary foreign conservator; powers of local conservator

If no local conservator has been appointed and no petition in a protective proceeding is pending in this state, a domiciliary foreign conservator may file with a court in this state in a county in which property belonging to the protected person is located certified copies of his appointment and of any official bond he has given. Thereafter, he may exercise as to assets in this state all powers of a local conservator and may maintain actions and proceedings in this state subject to any conditions imposed upon non-resident parties generally.

14-5433. Probate fund; use

A. The presiding judge of the superior court in each county may establish a probate fund consisting of monies received pursuant to sections 14-3722, 14-5314 and 14-5414.

B. Each month the clerk of the court shall transmit all monies collected pursuant to sections 14-3722, 14-5314 and 14-5414 to the county treasurer for deposit in the probate fund.

C. The presiding judge of the superior court shall administer or spend monies in the fund to preserve, audit and safeguard the estates and wards for whom the court has a fiduciary responsibility.

D. On notice from the superior court the county treasurer shall invest and divest monies in the probate fund, and monies earned from investment shall be credited to the fund.

E. Fund monies supplement and do not supplant local funding that otherwise is made available for probate services.

14-5501. Durable power of attorney; creation; validity

A. A durable power of attorney is a written instrument by which a principal designates another person as the principal's agent. The instrument shall contain words that demonstrate the principal's intent that the authority conferred in the durable power of attorney may be exercised:

1. If the principal is subsequently disabled or incapacitated.

2. Regardless of how much time has elapsed, unless the instrument states a definite termination time.

B. The written instrument may demonstrate the principal's intent required by subsection A of this section using either of the following statements or similar language:

1. "This power of attorney is not affected by subsequent disability or incapacity of the principal or lapse of time."

2. "This power of attorney is effective on the disability or incapacity of the principal."

C. A power of attorney executed in another jurisdiction of the United States is valid in this state if the power of attorney was validly executed in the jurisdiction in which it was created.

D. Except as provided in section 28-370, an adult, known as the principal, may designate another adult, known as the agent, to make financial decisions on the principal's behalf by executing a written power of attorney that satisfies all of the following requirements:

1. Contains language that clearly indicates that the principal intends to create a power of attorney and clearly identifies the agent.

2. Is signed or marked by the principal or signed in the principal's name by some other individual in the principal's conscious presence and at the principal's direction.

3. Is witnessed by a person other than the agent, the agent's spouse, the agent's children or the notary public.

4. Is executed and attested by its acknowledgment by the principal and by an affidavit of the witness before a notary public and evidenced by the notary public's certificate, under official seal, in substantially the following form:

I, __________, the principal, sign my name to this power of attorney this _____ day of __________ and, being first duly sworn, do declare to the undersigned authority that I sign and execute this instrument as my power of attorney and that I sign it willingly, or willingly direct another to sign for me, that I execute it as my free and voluntary act for the purposes expressed in the power of attorney and that I am eighteen years of age or older, of sound mind and under no constraint or undue influence.

______________________

Principal

I, __________, the witness, sign my name to the foregoing power of attorney being first duly sworn and do declare to the undersigned authority that the principal signs and executes this instrument as the principal's power of attorney and that the principal signs it willingly, or willingly directs another to sign for the principal, and that I, in the presence and hearing of the principal, sign this power of attorney as witness to the principal's signing and that to the best of my knowledge the principal is eighteen years of age or older, of sound mind and under no constraint or undue influence.

____________________

Witness

The state of ______________

County of _________________

Subscribed, sworn to and acknowledged before me by __________, the principal, and subscribed and sworn to before me by __________, witness, this _____ day of ____________.

(seal)

(signed) _____________________

______________________________

(notary public)

E. The execution requirements for the creation of a power of attorney provided in subsection D of this section do not apply if the principal creating the power of attorney is:

1. A person other than a natural person.

2. Any person, if the power of attorney to be created is a power coupled with an interest. For the purposes of this paragraph, "power coupled with an interest" means a power that forms a part of a contract and is security for money or for the performance of a valuable act.

F. A person whose license as a fiduciary has been suspended or revoked pursuant to section 14-5651 may not serve as an agent under a power of attorney in any capacity unless the person is related to the principal by blood, adoption or marriage. This prohibition does not apply if the person's license has been reinstated and is in good standing.

14-5502. Effect of lapse of time, disability or incapacity

All acts done by an agent pursuant to a durable power of attorney during any period of disability or incapacity of the principal has the same effect and inures to the benefit of and binds the principal and the principal's successors in interest as if the principal were not incapacitated or disabled.

14-5503. Relation of agent to court appointed fiduciary

A. If, following execution of a durable power of attorney, a court of the principal's domicile appoints any conservator or other fiduciary charged with the management of all of the principal's property or all of the principal's property except for specified exclusions, the agent is accountable to the court appointed fiduciary as well as to the principal. The court appointed fiduciary has the same power to revoke or amend the power of attorney that the principal would have if the principal were not disabled or incapacitated.

B. A principal may nominate, by a durable power of attorney, the conservator or the guardian of the principal for consideration by the court if protective proceedings for the principal or estate are commenced.

14-5504. Revocation; termination; effect; notice

A. The death of a principal who has executed a durable power of attorney does not revoke or terminate the agency as to the agent or other person who, without actual knowledge of the death of the principal, acts in good faith under the power. Any action taken in good faith pursuant to this subsection, unless otherwise invalid or unenforceable, binds successors in interest of the principal.

B. The disability or incapacity of a principal who has previously executed a written power of attorney that is not a durable power does not revoke or terminate the agency as to the agent or other person who, without actual knowledge of the disability or incapacity of the principal, acts in good faith under the power. Any action taken in good faith pursuant to this subsection, unless otherwise invalid or unenforceable, binds the principal and the principal's successors in interest.

14-5505. Continuance of durable powers of attorney by affidavit

A. An affidavit executed by the agent under a durable power of attorney stating that the agent did not have at the time of exercise of the power actual knowledge of the termination of the power by revocation or of the principal's death creates, in the absence of fraud, a rebuttable presumption of the nonrevocation or nontermination of the power at that time.

B. If the exercise of the power of attorney requires execution and delivery of any instrument that is recordable, the affidavit when authenticated for purposes of recording is also recordable.

C. This section does not affect any provision in a power of attorney for its termination by expiration of time or occurrence of an event other than express revocation or a change in the principal's capacity.

14-5506. Powers of attorney; intimidation; deception; definitions

A. If the agent acted with intimidation or deception in procuring the power of attorney or any authority provided in the power of attorney, the agent is subject to prosecution under title 13 and civil penalties pursuant to section 46-456.

B. A power of attorney executed by an adult who does not have capacity is invalid. In a criminal proceeding, the agent has the burden of proving by clear and convincing evidence that the principal had capacity. In a civil proceeding, if the party challenging the validity of a power of attorney on the grounds of lack of capacity proves by a preponderance of the evidence that, at the time the power of attorney was executed, the principal was a vulnerable adult, the agent has the burden of proving by clear and convincing evidence that the principal had capacity. In a civil proceeding, if the party challenging the validity of a power of attorney on the basis of lack of capacity does not prove by a preponderance of the evidence that, at the time the power of attorney was executed, the principal was a vulnerable adult, the agent has the burden of proving by a preponderance of the evidence that the principal had capacity.

C. A person who in good faith either assists or deals with an agent is protected as if the agent properly exercised the agent's power regardless of whether the authority of that person as the agent has been terminated.

D. For the purposes of this section:

1. "Capacity" means that at the time the power of attorney was executed the principal was capable of understanding in a reasonable manner the nature and effect of the act of executing and granting the power of attorney.

2. "Intimidation" includes threatening to deprive a vulnerable adult of food, nutrition, shelter or necessary medication or medical treatment.

3. "Vulnerable adult" has the same meaning prescribed in section 46-451.

14-5507. Applicability of article

This article does not apply to health care directives that are validly executed under section 36-3221 and does not establish authority under a durable power of attorney for the purposes of health care decision making.

14-5601. Establishment of office of public fiduciary; appointments; costs

A. Each county board of supervisors, by resolution or ordinance, shall establish the office of and appoint a public fiduciary. The supreme court shall certify each public fiduciary pursuant to section 14-5651.

B. The public fiduciary, with the consent of and at salaries fixed by the board of supervisors, may appoint assistants, deputies, stenographers, clerks and other employees as necessary to conduct the affairs of the office. The appointments shall be in writing. Assistants and deputies hold office at the pleasure of the public fiduciary and the board of supervisors.

C. Costs incurred in conducting the office of public fiduciary shall be a charge against the county.

14-5602. Duties of public fiduciary; appointment; law enforcement agency; temporary protection of property; definition

A. The court shall appoint a public fiduciary for those persons or decedents' estates in need of guardianship, conservatorship or administration and for whom there is no person or corporation qualified and willing to act in that capacity.

B. On filing a statement of administration pursuant to section 14-5605 or on obtaining an order to preserve and protect property pursuant to section 14-5606, the public fiduciary shall take possession of all properties and perform the duties prescribed in sections 14-5605 and 14-5606 when, in the performance of its duties, a law enforcement agency is unable to determine or locate the heirs or personal representative of a deceased person. Pending action by the public fiduciary, the law enforcement agency shall protect all properties of the deceased person.

C. The public fiduciary may apply for and become a designated payee of benefits payable to a person under federal or state law.

D. The public fiduciary may conduct investigations necessary to carry out the requirements of this section and section 36-831.

E. For the purposes of this section, "law enforcement agency" means either:

1. The police agency of an incorporated city or town.

2. The county sheriff of an unincorporated area of a county.

14-5603. Deposit of funds; investment plan

A. All funds coming into the custody of the public fiduciary shall be deposited in the county treasury and disbursed at the direction of the public fiduciary or shall be deposited or invested in one or more insured banks or in one or more insured credit unions authorized to do business in the county or in one or more insured savings and loan associations authorized to do business in the county, and if there are no such insured banks, insured credit unions or insured savings and loan associations in the county, then the public fiduciary may deposit the funds in any insured bank or insured credit union or insured savings and loan association in the state. Money deposited with the county treasurer or deposited or invested with an insured bank, insured credit union or insured savings and loan association shall be withdrawn only at the direction of the public fiduciary.

B. The public fiduciary may establish or continue an estate or investment plan of the public fiduciary's ward if all of the following apply:

1. The public fiduciary receives the approval of the court for the plan.

2. The plan is consistent with the standard of care imposed on trustees in sections 14-10804 and 14-10806.

3. The public fiduciary has obtained a surety bond in the amount of the assets within the plan if the court finds that a surety bond is necessary or desirable to protect the assets within the plan.

14-5604. Claim against estate for expenses

A. The public fiduciary has a claim for all of the following against the estate of the ward, protected person or decedent:

1. Reasonable expenses incurred in the execution of the guardianship, conservatorship or public administration.

2. Compensation for the fiduciary's services and the fiduciary's attorney that the court in which the accounts are settled deems just and reasonable.

3. An annual assessment in lieu of bond of twenty-five dollars and one-fourth of one per cent of the amount of an estate greater than ten thousand dollars. A fiduciary shall not take this assessment from the ward's or protected person's estate if the ward or protected person is eligible for supplemental security income benefits or would be eligible for these benefits if that person were not in a public institution.

B. The public fiduciary shall pay all funds received pursuant to this section to the county treasurer for deposit in the county general fund.

14-5605. Letter testamentary or of administration not required; statement to be filed; powers and duties

A. Whenever the gross assets of an estate do not exceed in value twenty thousand dollars the public fiduciary may act without the issuance of letters testamentary or of administration by filing with the superior court a statement of administration showing the name and domicile of the decedent, the date and place of death and the name, address and relationship of each known heir or devisee. The filing of this statement has the same effect as the issuance of formal letters testamentary or of administration.

B. In the event the gross assets of an estate in which the public fiduciary commences to act pursuant to a statement of administration later are found to exceed twenty thousand dollars the public fiduciary shall apply for letters for the estate.

C. In the event the public fiduciary, acting in any estate pursuant to subsection A of this section, ascertains the names and whereabouts of persons believed to be heirs or devisees of the estate who are not shown in the statement of administration, the public fiduciary shall file a supplemental statement reflecting the new information.

D. On filing the statement of administration, the public fiduciary may:

1. Take possession of, collect, manage and secure the real and personal property of the decedent.

2. Sell the decedent's real and personal property at private or public sale, without prior court order, if monies are needed to pay expenses of administration, funeral expenses or just claims against the estate and pay these expenses in the order prescribed in section 14-3805.

3. Distribute real or personal property to the estate's personal representative if one is appointed after the statement of administration is filed.

4. Distribute real and personal property to any successor to the decedent who presents an affidavit complying with the requirements of section 14-3971.

5. Sell or abandon perishable property and other property of the decedent if necessary to preserve the estate.

6. Pursuant to section 14-5103, for the use and benefit of a minor heir or devisee who has no guardian, pay the share of an intestate estate or a devise due him if it does not exceed five thousand dollars.

7. Make necessary funeral arrangements for the decedent and pay reasonable funeral charges with estate assets.

8. Distribute allowances and exempt property pursuant to chapter 2, article 4 of this title.

9. Except as otherwise limited by this section, act in accordance with the powers of a court appointed personal representative as prescribed in section 14-3715.

E. No later than twelve months from the filing of the statement of administration, the public fiduciary shall file with the court an accounting and a proposed distribution and claim for fees if the estate is ready to be settled. If the estate is not ready to be settled the accounting shall contain a statement explaining the delay. The public fiduciary shall file subsequent accountings and explanations on an annual basis until the estate is settled.

F. The public fiduciary shall mail a copy of the accounting, the claim for fees and a proposal for distribution to each person entitled to receive this information including heirs, devisees, known creditors and other persons who have demanded notice. Notification shall be by certified mail. Notice is not required if the public fiduciary cannot reasonably ascertain necessary names and addresses.

G. A decree settling the account and approving the distribution and claim for fees may be entered without further notice or proceedings and with the same effect as in an accounting proceeding unless an objection or claim is properly filed with the court within thirty days after the public fiduciary mails an accounting pursuant to subsection F of this section.

14-5606. Additional powers and duties of the public fiduciary

A. If the gross assets of the estate exceed twenty thousand dollars, the public fiduciary may file with the court a verified petition to preserve and protect estate property if action is needed to protect an estate but no probate proceedings have been filed and no affidavit of collection has been tendered pursuant to section 14-3971. The petition shall include the following:

1. The name and domicile of the decedent.

2. The date and the place of death.

3. The names, addresses and relationships of known heirs or devisees.

4. A declaration that the gross assets of the estate are believed to exceed twenty thousand dollars.

5. A declaration that the decedent died in the county or left real or personal property in the county or that personal property arrived in the county after the decedent's death.

6. A declaration that there is no person eligible to act as personal representative or that the personal representative named in the will has refused or neglected to act, is dead or his whereabouts are unknown or is not eligible to receive letters testamentary at the present time.

7. A declaration that immediate action is necessary to make funeral arrangements and pay reasonable funeral charges or to preserve and protect the estate.

B. The court may grant the petition and enter an order without prior notice and a hearing on a finding of good cause.

C. If the court grants the petition, the public fiduciary shall send a copy of the petition and the court order to each known heir, devisee and interested party within ten business days of entry of the order.

D. If the court grants the petition, the public fiduciary may take the following action unless otherwise limited by the court:

1. Take possession of, collect and secure the decedent's real or personal property located in the county.

2. Make necessary funeral arrangements for the decedent and pay the reasonable funeral charges.

3. Institute an inquiry as to any matter affecting the estate of the decedent.

4. Sell perishable property and other property of the decedent if the estate requires this action.

5. Defray the expenses of the fiduciary activities and the expenses incidental to the public fiduciary's application for letters from the decedent's estate.

6. Pursuant to section 14-5103, for the use and benefit of a minor heir or devisee who has no guardian, pay the share of an intestate estate or a devise due that person if that share is less than five thousand dollars.

7. Without prior court order, sell real or personal property with an estimated value of less than five thousand dollars if this is necessary to pay reasonable funeral expenses or to preserve and protect the assets of the estate and prevent waste.

8. With prior court order and on reasonable notice to interested parties, sell real or personal property with an estimated net value of five thousand dollars or more if this is necessary to preserve and protect the assets of the estate and prevent waste.

E. The public fiduciary may obtain subpoenas and subpoenas duces tecum from the court in order to conduct the inquiry under subsection D, paragraph 3 of this section. The court may hold a person in contempt if the person fails to comply with the subpoena.

F. The expenses under subsection D, paragraph 5 of this section are a legal charge against the county if the decedent's estate is incapable of paying them.

G. On receiving notice of the appointment of a personal representative of the estate or on receiving valid affidavits for succession to real or personal property, the public fiduciary shall immediately transfer to the personal representative or affiant the control and possession of the property. The public fiduciary may subtract any monies claimed as fiduciary fees and costs pursuant to section 14-5604. The public fiduciary shall file an accounting and claim for fees with the court and shall send copies by certified mail to the personal representative or the affiant and known heirs, devisees and interested parties. If no objections are filed with the court within thirty days of this notice, the court without further notice or hearing may approve and settle the account, approve claims by the public fiduciary against the estate and discharge the public fiduciary from further duties and liability.

H. A person paying, delivering, transferring or issuing property or evidence of property is discharged and released to the same extent as if that person dealt with a personal representative of the decedent.

I. The public fiduciary may begin an action to probate the decedent's estate if probate has not begun or an affidavit of succession to real and personal property is not submitted at least forty days after the public fiduciary files the petition to preserve and protect the estate.

14-5651. Fiduciaries; licensure; qualifications; conduct; removal; exemption; definitions

A. Except as provided by subsection G of this section, the superior court shall not appoint a fiduciary unless that person is licensed by the supreme court. The supreme court shall administer the licensure program and shall adopt rules and establish and collect fees necessary for its implementation. The supreme court shall deposit, pursuant to sections 35-146 and 35-147, the monies collected pursuant to this subsection in the confidential intermediary and fiduciary fund established by section 8-135. At a minimum the rules adopted pursuant to this subsection shall include the following:

1. A code of conduct.

2. A requirement that fiduciaries post a cash deposit or surety bond with the supreme court.

3. A requirement that on appointment a fiduciary who is serving as a guardian or conservator must provide written information to the ward or protected person and all persons entitled to notice pursuant to section 14-5309 or 14-5405 that the fiduciary is licensed by the supreme court and subject to regulation by the supreme court. The language of the written information provided by the fiduciary shall be prescribed by the supreme court and shall include reference to the code of conduct that all licensed fiduciaries must follow.

4. Minimum qualifications.

5. Biennial renewal of licensure.

B. As a condition of appointment, the supreme court shall require each applicant for the position of fiduciary to submit a full set of fingerprints to the supreme court for the purpose of obtaining a state and federal criminal records check to determine the suitability of the applicant pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.

C. An applicant for licensure must:

1. Be at least twenty-one years of age.

2. Be a citizen of this country.

3. Not have been convicted of a felony.

4. Attest that the applicant has not been found civilly liable in an action that involved fraud, misrepresentation, material omission, misappropriation, theft or conversion.

5. Attend an initial session and thereafter biennial training sessions prescribed by the supreme court on the duties of a fiduciary.

6. Consent in the application form to the jurisdiction of the courts of this state for all actions arising under this article or article 6 of this chapter and appoint the fiduciary program coordinator as the lawful agent for the purpose of accepting service of process in any action, suit or proceeding that relates to the duties of a fiduciary. The program coordinator shall transmit by registered mail to the person's last known address the lawful service of process accepted by the program coordinator. Notwithstanding the provisions of this paragraph, service of process on a public fiduciary or the department of veterans' services shall be made pursuant to the Arizona rules of civil procedure.

D. The superior court shall, and any person may, notify the supreme court if it appears that a fiduciary has violated a rule adopted under this section. The supreme court shall then conduct an investigation and hearing pursuant to its rules. If the supreme court determines that the fiduciary committed the violation it may revoke the fiduciary's license or impose other sanctions, including civil penalties, and shall notify the superior court in each county of this action. The supreme court may then also require the fiduciary to forfeit a cash deposit or surety bond to the extent necessary to compensate the court for the expenses it incurred to conduct the investigation and hearing.

E. A person who in good faith provides information or testimony regarding a fiduciary's misconduct or lack of professionalism is not subject to civil liability.

F. Persons appointed by the chief justice to serve in an advisory capacity to the fiduciary program, staff of the fiduciary program, hearing officers and employees of the administrative office of the courts who participate in the fiduciary program are immune from civil liability for conduct in good faith that relates to their official duties.

G. The requirements of this section do not apply to a financial institution. This exemption does not prevent the superior court from appointing a financial institution as a fiduciary. The supreme court may exempt a fiduciary from the requirements of this section for good cause.

H. This section does not grant any fiduciary or any applicant for a license as a fiduciary the right to a direct appeal to the supreme court.

I. The supreme court may receive and expend monies from the confidential intermediary and fiduciary fund established by section 8-135 for the purposes of performing the duties related to fiduciaries pursuant to this section.

J. This section applies to any supreme court licensed fiduciary who is acting as a guardian, conservator, personal representative, trustee or agent under a power of attorney, whether or not that person is acting pursuant to court appointment.

K. For the purposes of this section:

1. "Fiduciary" means:

(a) A person who for a fee serves as a court appointed guardian or conservator for one or more persons who are unrelated to the fiduciary.

(b) A person who for a fee serves as a court appointed personal representative and who is not related to the decedent, is not nominated in a will or by a power conferred in a will and is not a devisee in the will.

(c) A public fiduciary appointed pursuant to section 14-5601.

(d) The department of veterans' services.

2. "Financial institution" means a bank that is insured by the federal deposit insurance corporation and chartered under the laws of the United States or any state, a trust company that is owned by a bank holding company that is regulated by the federal reserve board or a trust company that is chartered under the laws of the United States or this state.

14-5652. Attorneys; fiduciary duties

A. Except as prescribed pursuant to section 14-1104 and absent an express agreement to the contrary, the performance by an attorney of legal services for a fiduciary, settlor or testator does not by itself establish a duty in contract or tort or otherwise to any third party. For the purposes of this subsection, third party does not apply to the personal representative, settlor or testator.

B. An attorney who acts as a personal representative or trustee shall disclose to all adult persons who have an interest in the estate or trust the names of any person who has an interest in that estate or trust to whom the attorney is currently rendering or has in the past rendered legal services. The attorney must make this disclosure in writing within a reasonable time after learning that a client or former client has an interest in the estate or trust. The representation of an interested person by that attorney is not grounds for removing the attorney as the personal representative or trustee unless the attorney is unable to perform the fiduciary duties as personal representative or trustee without violating the attorney's ethical responsibilities to the client or former client.

14-5701. Fiduciary arrest warrants

A. In an action or proceeding to enforce a court action in a case filed pursuant to this title or title 41, chapter 4, article 1, or on motion by a party or on its own motion, the court may issue a fiduciary arrest warrant if the court finds that all of the following apply to the person for whom the warrant is sought:

1. The person was ordered by the court to appear personally at a specific time and location.

2. The person received actual notice of the order, including a warning that the failure to appear might result in the issuance of a fiduciary arrest warrant.

3. The person failed to appear as ordered.

B. The judicial officer shall order the fiduciary arrest warrant and the clerk shall issue the warrant. The warrant shall contain the name of the person to be arrested and other information required to enter the warrant in the Arizona criminal justice information system. The warrant shall command that the named person be arrested and either remanded to the custody of the sheriff or brought before the judicial officer or, if the judicial officer is absent or unable to act, before the nearest or most accessible judicial officer of the superior court in the same county. The warrant issued pursuant to this section remains in effect until it is executed or extinguished by the court.

C. The warrant shall set forth a bond in a reasonable amount to guarantee the appearance of the arrested person or an order that the arrested person be held without bond until the arrested person is seen by a judicial officer.

D. A peace officer acting pursuant to a fiduciary arrest warrant has the same powers as if acting pursuant to a criminal arrest warrant.

14-5702. Time and manner of execution; information

A. A fiduciary arrest warrant is executed by the arrest of the person named in the warrant. The fiduciary arrest warrant may be executed at any time.

B. When making an arrest pursuant to a fiduciary arrest warrant the arresting officer shall inform the person named in the warrant that the arresting officer has a fiduciary arrest warrant unless:

1. The named person flees or forcibly resists before the arresting officer has an opportunity to inform the named person.

2. Providing this information will imperil the arrest.

C. To execute a fiduciary arrest warrant, the arresting officer may use reasonable force to enter any building in which the person named in the warrant is or is reasonably believed to be.

D. The arresting officer does not need to possess the fiduciary arrest warrant at the time of the arrest. If after the arrest the arrested person requests to see the fiduciary arrest warrant the arresting officer shall show the arrested person a copy of the warrant as soon as practicable.

E. The arrested person shall be brought before the issuing judicial officer as soon as possible or, if that judicial officer is absent or unable to act, before the nearest or most accessible judicial officer of the superior court in the same county. The arrested person shall be brought before a judicial officer of the superior court in the issuing county or the county of arrest within twenty-four judicial business hours after the execution of the warrant. If the arrested person is arrested in a county other than the county in which the fiduciary arrest warrant was issued, the arresting officer shall notify the sheriff in the county of issue who shall take custody of and transport the arrested person to the issuing judicial officer as soon as possible.

14-5703. Procedure after arrest; payment for release from custody

A. When a person who is arrested pursuant to a fiduciary arrest warrant is brought before the court, the judicial officer shall advise the arrested person of the nature of the proceedings and shall set a date for the next court appearance.

B. The arrested person may be released from custody pending the hearing if the arrested person pays the amount set by the court or a larger amount as the court determines. The court may not reduce the amount ordered to be paid. The arrested person shall not be released from custody without paying the amount unless the court finds in writing or on the record that a compelling reason exists to release the arrested person.

C. Monies received pursuant to this section shall be deposited with the clerk of the court until further order of the court unless the court orders that the monies be paid to an estate or other fiduciary.

14-5704. Entry into criminal information system

A fiduciary arrest warrant shall be entered in the wanted person file of the Arizona criminal justice information system.

14-6101. Nonprobate transfers on death; nontestamentary nature

A. A provision for a nonprobate transfer on death in any insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement or other written instrument of a similar nature is nontestamentary.

B. A written instrument is nontestamentary if it contains a provision that:

1. Money or other benefits due to, controlled by or owned by a decedent before death shall be paid after the decedent's death to a person whom the decedent designates either in the instrument or in a separate writing, including a will, executed either before or at the same time as the instrument, or later.

2. Money due or to become due under the written instrument ceases to be payable in the event of death of the promisee or the promisor before payment or demand.

3. Any property that is controlled by or owned by the decedent before death and that is the subject of the written instrument passes to a person the decedent designates either in the written instrument or in a separate writing, including a will, executed either before or at the same time as the instrument or later.

C. This section does not limit rights of creditors under other laws of this state.

14-6102. Nonprobate transferees; liability for creditor claims and statutory allowances

A. Except as otherwise provided by law, a transferee of a nonprobate transfer is subject to liability to the decedent's probate estate for allowed claims against the decedent's probate estate and statutory allowances to the decedent's spouse and children to the extent the decedent's probate estate is insufficient to satisfy those claims and allowances. The liability of a nonprobate transferee may not exceed the value of nonprobate transfers received or controlled by that transferee.

B. Nonprobate transferees are liable for the insufficiency described in subsection A of this section in the following order:

1. As provided in the decedent's will or any other governing instrument.

2. To the extent of the value of the nonprobate transfer received or controlled by the trustee of a trust serving as the principal nonprobate instrument in the decedent's estate plan as shown by its designation as devisee of the decedent's residuary estate or by other facts or circumstances.

3. Other nonprobate transferees, in proportion to the values received.

C. Unless otherwise provided by the trust instrument, interests of beneficiaries in all trusts that incur liabilities under this section abate as necessary to satisfy the liability as if all of the trust interments were a single will and the interest were devises under it.

D. A provision made in one instrument may direct the apportionment of the liability among the nonprobate transferees taking under that or any other governing instrument. If a provision in one instrument conflicts with a provision in another instrument, the later instrument prevails.

E. On due notice to a nonprobate transferee, the liability imposed by this section is enforceable in proceedings in this state, wherever the transferee is located.

F. A proceeding under this section may not be commenced unless the personal representative of the decedent's estate has received from the surviving spouse or a child to the extent that statutory allowances are affected, or from a creditor, a written demand for the proceeding. If the personal representative declines or fails to commence a proceeding after demand, a person making the demand may commence the proceeding in the name of the decedent's estate, at the expense of the person making the demand and not of the estate. A personal representative who declines in good faith to commence a requested proceeding incurs no personal liability for declining.

G. A proceeding under this section must be commenced within two years after the decedent's death, but a proceeding on behalf of a creditor whose claim was allowed after proceedings challenging disallowance of the claim may be commenced within sixty days after final allowance of the claims.

H. Unless a written notice asserting that a decedent's probate estate is insufficient to pay allowed claims and statutory allowances have been received from the decedent's personal representative, the following rules apply:

1. Payment or delivery of assets by any financial institution, registrar or other obligor to a nonprobate transferee in accordance with the terms of the governing instrument controlling the transfer releases the obligor from all claims for amounts paid or assets delivered.

2. A trustee receiving or controlling a nonprobate transfer is released from liability under this section on any assets distributed to the trust's beneficiaries. Each beneficiary to the extent of the distribution received becomes liable for the amount of the trustee's liability attributable to that asset imposed by subsections B and C of this section.

I. For the purposes of this section a nonprobate transfer is a valid transfer effective at death, other than a transfer of a survivorship interest in a joint tenancy of real estate, by a transferor whose last domicile was in this state, and to the extent that the transferor immediately before death had power, acting alone, to prevent the transfer by revocation or withdrawal and to instead use the property for the benefit of the transferor or apply it to discharge claims against the transfer's probate estate. With respect to multiple party accounts, the portion of the account that is a nonprobate transfer is that portion of that account to which the decedent was beneficially entitled immediately before death pursuant to section 14-6211.

14-6103. Notice of death of settlor; filing claim against trust estate

A. After the death of the settlor the trustee of a nontestamentary trust may notify known creditors pursuant to section 14-3801, subsection B and may publish notice to creditors pursuant to section 14-3801, subsection A.

B. A claim against the trust estate that arose before the settlor's death, including claims of the state or any of its political subdivisions, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort or other legal basis, if not barred against the trust estate by any other statute of limitations or nonclaim statute, are barred against the trust estate, the trustee and the beneficiaries of the trust, unless presented within the time prescribed in the written notice for creditors who are given actual notice, or within the time prescribed in the published notice for creditors who are given notice by publication.

C. A claim under this section may be presented as follows:

1. The claimant may deliver or mail to the trustee a written statement of the claim indicating the information prescribed in section 14-3804.

2. If the trustee has distributed the trust estate to beneficiaries of the trust, the trustee shall mail or deliver the claim to any beneficiary that may be liable for the claim because of the receipt of trust assets by that beneficiary.

3. If a claim is presented in a timely manner, section 14-6102 applies.

D. The trustee is not liable to a creditor or to any beneficiary of the trust for giving or failing to give notice under this section.

14-6201. Definitions

In this article, unless the context otherwise requires:

1. "Account" means a contract of deposit between a depositor and a financial institution and includes a checking account, savings account, certificate of deposit and share account.

2. "Agent" means a person who is authorized to make account transactions for a party.

3. "Beneficiary" means a person to whom sums on deposit in an account are payable on request after the death of all parties or for whom a party is named as a trustee.

4. "Financial institution" means an organization authorized to do business under state or federal laws relating to financial institutions and includes a bank, trust company, savings bank, building and loan association, savings and loan company or association and credit union.

5. "Multiple party account" means an account payable on request to one or more of two or more parties, whether or not a right of survivorship is mentioned.

6. "Party" means a person who, by the terms of an account and subject to a request, has a present right other than as a beneficiary or agent to payment from the account.

7. "Pay on death designation" or "POD" means the designation of:

(a) A beneficiary in an account payable on request to one party during the party's lifetime and on the party's death to one or more beneficiaries or to one or more parties during their lifetimes and on the death of all of them to one or more beneficiaries.

(b) A beneficiary in an account in the name of one or more parties as trustee for one or more beneficiaries if the relationship is established by the terms of the account and there is no subject of the trust other than the sums on deposit in the account, whether or not payment to the beneficiary is mentioned.

8. "Payment" or "payable" as it relates to sums on deposit includes withdrawal, payment to a party or third person pursuant to a check or any other request and a pledge of sums on deposit by a party, or any setoff, reduction or other disposition of all or part of an account pursuant to a pledge.

9. "Receive", as it relates to notice to a financial institution, means receipt in the office or branch office of the financial institution in which the account is established. If the terms of the account require notice at a particular place, receive means in the place required by those terms.

10. "Request" means a request for payment that complies with all terms of the account, including special requirements concerning necessary signatures and rules of the financial institution, and that, if terms of the account condition payment on advance notice, is treated as immediately effective. Request includes a notice of intent to withdraw.

11. "Sums on deposit" means the balance payable on an account, including interest and dividends earned, whether or not included in the current balance and any deposit life insurance proceeds added to the account by reason of death of a party.

12. "Terms of the account" includes the deposit agreement and other terms and conditions of the contract of deposit and includes the contract form.

14-6202. Application of article

This article does not apply to:

1. An account established for any partnership, joint venture or other organization for a business purpose.

2. An account controlled by one or more persons as an agent or trustee for a corporation, unincorporated association or charitable or civic organization.

3. A fiduciary or trust account in which the relationship is established other than by the terms of the account.

14-6203. Types of accounts; existing accounts

A. An account may be for a single party or multiple parties. A multiple party account may be with or without a right of survivorship between the parties. Subject to the requirements of section 14-6212, subsection C, either a single party account or a multiple party account may have a pay on death designation or an agency designation, or both.

B. An account established before or after December 31, 1994, whether in the form prescribed in section 14-6204 or in any other form, is either a single party account or a multiple party account, with or without the right of survivorship, and with or without a pay on death designation or designating an agent, within the meaning of this section and is governed by this section.

14-6204. Sample forms

A. A contract of deposit that contains provisions in substantially the following form establishes the type of account provided. The account is governed by the requirements of this section that are applicable to that account of that type:

Uniform Single or Multiple Party Account Form

Parties (Name one or more parties):

____________________ _____________________

Ownership (Select one and initial):

_____ single party account

_____ multiple party account

            Parties own account in proportion to net contributions unless  there  is clear
      and convincing evidence of a
      

different intent.

Rights at death (select one and initial):

_____ single party account

At death of party, ownership passes as part of party's estate.

_____ single party account with POD

(pay on death) designation

(Name of one or more beneficiaries):

_______________________ _________________________

At death of party, ownership passes to POD (pay on death) beneficiaries and is not part of party's estate.

_____ multiple party account with right of survivorship

At death of party, ownership passes to surviving parties.

Multiple party account with right of survivorship and POD (pay on death) designation

(Name one or more beneficiaries):

_________________________ __________________________

At death of last surviving party, ownership passes to POD (pay on death) beneficiaries and is not part of last surviving party's estate.

_____ multiple party account without right of survivorship

At death of party, deceased party's owner ship passes as part of deceased party's estate.

Agency (power of attorney) designation (optional)

Agents may make account transactions for parties but have no ownership or rights at death unless named as POD (pay on death) beneficiaries.

(To add agency designation to account, name one or more agents):

________________________ _________________________

(Select one and initial):

_____ agency designation survives disability or incapacity of parties

_____ agency designation terminates on disability or incapacity of parties

B. A contract of deposit that does not contain provisions in substantially the form provided in subsection A is governed by the requirements of this article that are applicable to the type of account that most nearly conforms to the depositor's intent.

14-6205. Designation of agent; authority; termination

A. By a writing signed by all parties, the parties may designate as an agent for all of the parties on the account a person who is not a party to the account.

B. Unless the terms of an agency designation provide that the authority of the agent terminates on disability or incapacity of a party, the agent's authority survives disability and incapacity. The agent may act for a disabled or incapacitated party until the authority of the agent is terminated. The death of the sole party or last surviving party terminates the authority of an agent.

14-6206. Beneficial ownership; application and limitation of article

The requirements of this article that relate to beneficial ownership as between parties or as between parties and beneficiaries apply only to controversies between those persons and their creditors and other successors and do not apply to the right of those persons to payment as determined by the terms of the account.

14-6211. Ownership of accounts

A. During the lifetime of all parties an account belongs to the parties in proportion to the net contribution of each to the sums on deposit unless there is clear and convincing evidence of a different intent. As between parties married to each other, in the absence of proof otherwise, the net contribution of each is presumed to be an equal amount.

B. A beneficiary in an account having a pay on death designation has no right to sums on deposit during the lifetime of any party.

C. An agent in an account with an agency designation has no beneficial right to sums on deposit.

D. For the purposes of subsection A of this section, "net contribution" means the sum of all deposits to an account made by or for the party, less all payments from the account that are made to or for the party and that have not been paid to or applied to the use of another party and a proportionate share of any charges deducted from the account, plus a proportionate share of any interest or dividends earned, whether or not included in the current balance. Net contribution includes deposit life insurance proceeds added to the account by reason of the death of the party whose net contribution is in question.

14-6212. Death of a party; rights of survivors

A. Except as otherwise provided in this section, on the death of a party, sums on deposit in a multiple party account belong to the surviving party or parties. If two or more parties survive and one is the surviving spouse of the decedent, the amount to which the decedent, immediately before death, was beneficially entitled under section 14-6211 belongs to the surviving spouse. If two or more parties survive and none is the surviving spouse of the decedent, the amount to which the decedent, immediately before death, was beneficially entitled under section 14-6211 belongs to the surviving parties in equal shares and augments the proportion to which each survivor, immediately before the decedent's death, was beneficially entitled under section 14-6211. The right of survivorship continues between the surviving parties.

B. In an account with a pay on death designation:

1. On the death of one of two or more parties, the rights in sums on deposit are governed by subsection A of this section.

2. On the death of the sole party or the last survivor of two or more parties, sums on deposit belong to the surviving beneficiary or beneficiaries. If two or more beneficiaries survive, sums on deposit belong to them in equal and undivided shares. Thereafter there is no right of survivorship in the event of death of a beneficiary. If no beneficiary survives sums on deposit belong to the estate of the last surviving party.

C. Sums on deposit in a single party account without a pay on death designation or in a multiple party account that, by the terms of the account, is without right of survivorship, are not affected by the death of a party. However, the amount to which the decedent, immediately before death, was beneficially entitled under section 14-6211 is transferred as part of the decedent's estate. A pay on death designation in a multiple party account without right of survivorship is ineffective. For purposes of this subsection, designation of an account as a tenancy in common establishes that the account is without right of survivorship.

D. The ownership right of a surviving party or beneficiary or of the decedent's estate in sums on deposit is subject to requests for payment made by a party before the party's death, whether paid by the financial institution before or after death or unpaid. The surviving party or beneficiary or the decedent's estate is liable to the payee of an unpaid request for payment. The liability is limited to a proportionate share of the amount transferred under this section to the extent necessary to discharge the request for payment.

14-6213. Alteration of rights

A. Rights at death under section 14-6212 are determined by the type of account at the death of a party. The type of account may be altered by written notice given by a party to the financial institution to change the type of account or to stop or vary payment under the terms of the account. The notice shall be signed by a party and received by the financial institution during the party's lifetime.

B. A right of survivorship arising from the express terms of the account, section 14-6212 or a pay on death designation may not be altered by will.

14-6214. Accounts; transfers; nontestamentary effect

A transfer of an account pursuant to section 14-6212 is effective by reason of the terms of the account involved and is not testamentary or subject to chapters 1 through 4 of this title.

14-6216. Community property; effect of account; right of survivorship

A. A deposit of community property in an account does not alter the community character of the property or community rights in the property.

B. A right of survivorship between parties married to each other arising from the express terms of the account or section 14-6212 may not be altered by will.

14-6221. Financial institutions; types of accounts

A. A financial institution may enter into a contract of deposit for a multiple party account to the same extent it may enter into a contract of deposit for a single party account and may provide for a pay on death designation and an agency designation in either a single party account or a multiple party account.

B. A financial institution need not inquire as to the source of a deposit to an account or as to the proposed application of a payment from an account.

14-6222. Multiple party accounts; payment; proof of death and survivorship

A financial institution, on request, may pay sums on deposit on a multiple party account to:

1. One or more of the parties, whether or not another party is disabled, incapacitated or deceased when payment is requested and whether or not the party making the request survives another party.

2. The personal representative, or, if there is none, the heirs or devisees of a deceased party who present an affidavit in compliance with section 14-3971, subsection B and proof of death to the financial institution showing that the deceased party was the survivor of all other persons named on the account either as a party or beneficiary, unless the account is without right of survivorship under section 14-6212.

14-6223. Pay on death accounts; payment

A financial institution, on request, may pay sums on deposit in an account with a pay on death designation to:

1. One or more of the parties, whether or not another party is disabled, incapacitated or deceased when the payment is requested and whether or not a party survives another party.

2. The beneficiary or beneficiaries, if proof of death is presented to the financial institution showing that the beneficiary or beneficiaries survived all persons named as parties.

3. The personal representative or, if there is none, the heirs or devisees of a deceased party, if proof of death is presented to the financial institution showing that the deceased party was the survivor of all other persons named on the account either as a party or beneficiary.

14-6224. Agency accounts; payment to designated agent

A financial institution on request of an agent under an agency designation for an account may pay to the agent sums on deposit in the account, whether or not a party is disabled, incapacitated or deceased when the request is made or received, and whether or not the authority of the agent terminates on the disability or incapacity of a party.

14-6225. Payments to minors

If a financial institution is required or permitted to make payment pursuant to this article to a minor designated as a beneficiary, payment may be made pursuant to the uniform transfers to minors act under chapter 7, article 7 of this title.

14-6226. Financial institutions; discharge of claims; exception

A. A payment made pursuant to this article in accordance with the type of account discharges the financial institution from all claims for these amounts, whether or not the payment is consistent with the beneficial ownership of the account as between parties or beneficiaries or their successors. Payment may be made whether or not a party, beneficiary or agent is disabled, incapacitated or deceased when payment is requested, received or made.

B. Protection under this section does not extend to payments made after a financial institution has received written notice from a party or from the deceased party's personal representative, surviving spouse or heir or devisee If this notice states that payments in accordance with the terms of the account, including one having an agency designation, should not be permitted and the financial institution has had a reasonable opportunity to act on it when the payment is made. Unless the notice is withdrawn by the person giving it, the successor of any deceased party shall concur in a request for payment if the financial institution is to be protected under this section. Unless a financial institution has been served with process in an action or proceeding, no other notice or other information shown to have been available to the financial institution affects its right to protection under this section.

C. A financial institution that receives written notice pursuant to this section or otherwise has reason to believe that a dispute exists as to the rights of the parties may refuse, without liability, to make payments in accordance with the terms of the account.

D. Protection of a financial institution under this section does not affect the rights of parties in disputes between themselves or their successors concerning the beneficial ownership of sums on deposit in accounts or payments made from accounts.

14-6227. Financial institutions; right to setoff against account

Without qualifying any other statutory right to setoff or lien and subject to any contractual provision, if a party is indebted to a financial institution the financial institution has a right to a setoff against the account. The amount of the account subject to a setoff is the proportion to which the party is, or immediately before death was, beneficially entitled under section 14-6211 or, in the absence of proof of that proportion, an equal share with all parties.

14-6301. Definitions

In this article, unless the context otherwise requires:

1. "Beneficiary form" means a registration of a security that indicates the present owner of the security and the intention of the owner regarding the person who will become the owner of the security on the owner's death.

2. "Register" means to issue a certificate that shows the ownership of a certificated security or, in the case of an uncertificated security, to initiate or transfer an account that shows ownership of securities.

3. "Registering entity" means a person who originates or transfers a security title by registration and includes a broker who maintains security accounts for customers and a transfer agent or other person who acts for or as an issuer of securities.

4. "Security" means any share, participation or other interest in property, in a business or in an obligation of an enterprise or other issuer and includes a certificated security, an uncertificated security and a security account.

5. "Security account" means:

(a) A reinvestment account associated with a security, a securities account with a broker, a cash balance in a brokerage account, cash, interest, earnings or dividends earned or declared on a security in an account, a reinvestment account or a brokerage account, whether or not credited to the account before the owner's death.

(b) A cash balance or any other property held for or due to the owner of a security as a replacement for or product of an account security, whether or not credited to the account before the owner's death.

(c) An investment management or custody account with a trust company or a trust division of a bank with trust powers, and includes the securities in the account, a cash balance in the account, cash, cash equivalents, interest and earnings or dividends earned or declared on a security in the account, whether or not credited to the account before the owner's death.

14-6302. Registration of securities; form

Only a person whose registration of a security shows sole ownership by one person or multiple ownership by two or more persons with right of survivorship, rather than as tenants in common, may obtain registration in beneficiary form. Multiple owners of a security registered in beneficiary form hold as joint tenants with right of survivorship or as owners of community property held in survivorship form and not as tenants in common.

14-6303. Registration in beneficiary form; applicable law

A. A security may be registered in beneficiary form if the form is authorized by this or a similar statute of the state of organization of the issuer or registering entity, the location of the registering entity's principal office, the office of its transfer agent or its office making the registration or by this or a similar statute of the law of the state listed as the owner's address at the time of registration.

B. A registration governed by the law of a jurisdiction in which a law that is similar to this article is not in force or was not in force when a registration in beneficiary form was made is presumed to be valid and authorized as a matter of contract law.

14-6304. Origination of registration

A security, whether evidenced by certificate or account, is registered in beneficiary form if the registration includes a designation of a beneficiary to take the ownership at the death of the owner or the deaths of all multiple owners.

14-6305. Form of registration

Registration in beneficiary form may be shown by the words "transfer on death" or the abbreviation "TOD" or by the words "pay on death" or the abbreviation "POD" after the name of the registered owner and before the name of a beneficiary.

14-6306. Effect of registration

A. The designation of a transfer on death beneficiary on a registration in beneficiary form has no effect on ownership until the owner's death.

B. A registration of a security in beneficiary form may be canceled or changed at any time by the sole owner or all then surviving owners without the consent of the beneficiary.

14-6307. Ownership on death of owner

A. On death of a sole owner or the last to die of all multiple owners, ownership of securities registered in beneficiary form passes to the beneficiary or beneficiaries who survive all owners. On proof of the death of all of the owners and compliance with any applicable requirements of the registering entity, a security registered in beneficiary form may be reregistered in the name of the beneficiary or beneficiaries who survived the death of all owners.

B. Until division of the security after the death of all owners, multiple beneficiaries surviving the death of all owners hold their interests as tenants in common.

C. If no beneficiary survives the death of all owners, the security belongs to the estate of the deceased sole owner or the estate of the last to die of all multiple owners.

14-6308. Registering entity; obligations; protection

A. A registering entity is not required to offer or to accept a request for security registration in beneficiary form. If a registration in beneficiary form is offered by a registering entity, the owner requesting registration in beneficiary form assents to the protections given to the registering entity by this article.

B. By accepting a request for registration of a security in beneficiary form, the registering entity agrees that it will implement the registration on the death of the deceased owner as provided in this article.

C. A registering entity is discharged from all claims to a security by the estate, creditors, heirs or devisees of a deceased owner if it registers a transfer of the security in accordance with section 14-6307 and does so in good faith reliance on the registration, on the requirements of this article and on information provided to it by affidavit of the personal representative of the deceased owner, the surviving beneficiary or the surviving beneficiary's representatives or by other information available to the registering entity.

D. The protections of this section do not extend to a reregistration or payment made after a registering entity receives written notice that a claimant to any interest in the security objects to implementation of a registration in beneficiary form. No other notice or other information available to the registering entity affects its right to protection under this section.

E. This section does not affect the rights of beneficiaries in disputes between themselves and other claimants to ownership of the security transferred or its value or proceeds.

14-6310. Registrations; terms, conditions and forms

A. A registering entity that offers to accept registrations in beneficiary form may establish the terms and conditions under which it will receive and implement these requests as well as requests for cancellation of previously registered transfer on death beneficiary designations and requests for reregistration to effect a change of beneficiary. The terms and conditions may provide for proving death, avoiding or resolving any problems concerning fractional shares, designating primary and contingent beneficiaries and substituting a named beneficiary's descendants to take in the place of the named beneficiary in the event of the beneficiary's death.

B. The registering entity may indicate a beneficiary substitution by appending to the name of the primary beneficiary the letters "LDPS" or the words "lineal descendants per stirpes". This designation substitutes a deceased beneficiary's descendants who survive the owner for a beneficiary who fails to survive, with the descendants to be identified and to share in accordance with the law of the beneficiary's domicile at the owner's death governing inheritance by descendants of an intestate.

C. Other forms of identifying beneficiaries who are to take on one or more contingencies and rules for providing proofs and assurances needed to satisfy reasonable concerns by registering entities regarding conditions and identities relevant to accurate implementation of registrations in beneficiary form may be contained in a registering entity's terms and conditions.

D. The following are illustrations of registrations in beneficiary form that a registering entity may authorize:

1. Sole owner-sole beneficiary by John S Brown TOD (or POD) John S Brown Jr.

2. Multiple owners-sole beneficiary by John S Brown Mary B Brown JT TEN TOD John S Brown Jr.

3. Multiple owners-primary and secondary (substituted) beneficiaries by either:

(a) John S Brown Mary B Brown JT TEN TOD John S Brown Jr SUB BENE Peter Q Brown.

(b) John S Brown Mary B Brown JT TEN TOD John S Brown Jr LDPS.

14-6311. Application of article

This article applies to registrations of securities in beneficiary form made before or after December 31, 1994, by decedents dying on or after December 31, 1994.

14-7401. Definitions

In this article, unless the context otherwise requires:

1. "Accounting period" means a calendar year unless another twelve month period is selected by a fiduciary and includes a portion of a calendar year or other twelve month period that begins when an income interest begins or ends when an income interest ends.

2. " Beneficiary" includes, in the case of a decedent's estate, an heir, legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.

3. "Fiduciary" means a personal representative or a trustee and includes an executor, an administrator, a successor personal representative, a special administrator and a person performing substantially the same function.

4. " Income" means money or property that a fiduciary receives as current return from a principal asset and includes a portion of receipts from a sale, exchange or liquidation of a principal asset, to the extent provided in sections 14-7410 through 14-7424.

5. " Income beneficiary" means a person to whom net income of a trust is or may be payable.

6. " Income interest" means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion.

7. " Mandatory income interest" means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute.

8. " Net income" means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under this article to or from income during the period.

9. " Person" means any individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or other legal or commercial entity.

10. " Principal" means property held in trust for distribution to a remainder beneficiary when the trust terminates.

11. " Remainder beneficiary " means a person entitled to receive principal when an income interest ends.

12. " Terms of a trust" means the manifestation of the intent of a settlor or decedent with respect to the trust expressed in a manner that admits of its proof in a judicial proceeding, whether by written or spoken words or by conduct.

13. " Trustee" includes an original, additional or successor trustee, whether or not appointed or confirmed by a court.

14-7402. Fiduciary duties; general principles

A. In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of sections 14-7405 through 14-7409, a fiduciary:

1. Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in this article.

2. May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this article.

3. Shall administer a trust or estate in accordance with this article if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration.

4. Shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust and this article do not provide a rule for allocating the receipt or disbursement to or between principal and income.

B. In exercising the power to adjust under section 14-7403, subsection A or a discretionary power of administration regarding a matter within the scope of this article, whether granted by the terms of a trust, a will or this article, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with this article is presumed to be fair and reasonable to all of the beneficiaries.

14-7403. Trustee's power to adjust

A. A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to the trust's income and the trustee determines, after applying the provisions of section 14-7402, subsection A, that the trustee is unable to comply with section 14-7402, subsection B.

B. In deciding whether and to what extent to exercise the power conferred by subsection A of this section, a trustee shall consider all factors relevant to the trust and its beneficiaries, including the following factors to the extent they are relevant:

1. The nature, purpose and expected duration of the trust.

2. The intent of the settlor.

3. The identity and circumstances of the beneficiaries.

4. The need for liquidity, regularity of income and preservation and appreciation of capital.

5. The assets held in the trust and:

(a) The extent to which:

(i) They consist of financial assets, interests in closely held enterprises, tangible and intangible personal property or real property.

(ii) An asset is used by a beneficiary.

(b) Whether an asset was purchased by the trustee or received from the settlor.

6. The net amount allocated to income under this article and the increase or decrease in the value of the principal assets, which the trustee may estimate as to assets for which market values are not readily available.

7. Whether and to what extent the terms of the trust give the trustee the power to invade principal or accumulate income or prohibit the trustee from invading principal or accumulating income, and the extent to which the trustee has exercised a power from time to time to invade principal or accumulate income.

8. The actual and anticipated effect of economic conditions on principal and income and effects of inflation and deflation.

9. The anticipated tax consequences of an adjustment.

10. Whether the trust has been converted to a unitrust pursuant to section 14-11014.

C. A trustee may not make an adjustment:

1. That diminishes the income interest in a trust that requires all of the income to be paid at least annually to a spouse and for which an estate tax or gift tax marital deduction would be allowed, in whole or in part, if the trustee did not have the power to make the adjustment.

2. That reduces the actuarial value of the income interest in a trust to which a person transfers property with the intent to qualify for a gift tax exclusion.

3. That changes the amount payable to a beneficiary as a fixed annuity or a fixed fraction of the value of the trust assets.

4. From any amount that is permanently set aside for charitable purposes under a will or the terms of a trust unless both income and principal are so set aside.

5. If possessing or exercising the power to make an adjustment causes an individual to be treated as the owner of all or part of the trust for income tax purposes and the individual would not be treated as the owner if the trustee did not possess the power to make an adjustment.

6. If possessing or exercising the power to make an adjustment causes all or part of the trust assets to be included for estate tax purposes in the estate of an individual who has the power to remove a trustee or appoint a trustee, or both, and the assets would not be included in the estate of the individual if the trustee did not possess the power to make an adjustment.

7. If the trustee is a beneficiary of the trust.

8. If the trustee is not a beneficiary, but the adjustment would benefit the trustee directly or indirectly.

D. If subsection C, paragraph 5, 6, 7 or 8 of this section applies to a trustee and there is more than one trustee, a cotrustee to whom the provision does not apply may make the adjustment unless the exercise of the power by the remaining trustee or trustees is not permitted by the terms of the trust.

E. A trustee may release the entire power conferred by subsection A of this section or may release only the power to adjust from income to principal or the power to adjust from principal to income if the trustee is uncertain about whether possessing or exercising the power will cause a result described in subsection C, paragraph 1, 2, 3, 4, 5, 6 or 8 of this section, or if the trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in subsection C of this section. The release may be permanent or for a specified period, including a period measured by the life of an individual.

F. Terms of a trust that limit the power of a trustee to make an adjustment between principal and income do not affect the application of this section unless it is clear from the terms of the trust that the terms are intended to deny the trustee the power of adjustment conferred by subsection A of this section.

14-7404. Judicial control of discretionary powers

A. A court shall not change a fiduciary's decision to exercise or not to exercise a discretionary power conferred by this article unless it determines that the decision was an abuse of the fiduciary's discretion. A court shall not determine that a fiduciary abused its discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.

B. The decisions to which subsection A of this section applies include:

1. A determination under section 14-7403, subsection A of whether and to what extent an amount should be transferred from principal to income or from income to principal.

2. A determination of the factors that are relevant to the trust and its beneficiaries, the extent to which they are relevant and the weight, if any, to be given to the relevant factors in deciding whether and to what extent to exercise the power conferred by section 14-7403, subsection A.

C. If a court determines that a fiduciary has abused its discretion, the remedy is to restore the income and remainder beneficiaries to the positions they would have occupied if the fiduciary had not abused its discretion as follows:

1. To the extent that the abuse of discretion has not resulted in a distribution to a beneficiary or a distribution that is too small, the court shall require the fiduciary to distribute from the trust to the beneficiary an amount that the court determines will restore the beneficiary, in whole or in part, to that person's appropriate position.

2. To the extent that the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court shall restore the beneficiaries or the trust, or both, in whole or in part, to their appropriate positions by requiring the fiduciary to withhold an amount from one or more future distributions to the beneficiary who received the distribution that was too large or requiring that beneficiary to return some or all of the distribution to the trust.

3. To the extent that the court is unable, after applying paragraphs 1 and 2 of this subsection, to restore the beneficiaries or the trust, or both, to the positions they would have occupied if the fiduciary had not abused its discretion, the court may require the fiduciary to pay an appropriate amount from its own funds to one or more of the beneficiaries or the trust, or both.

D. On a petition by the fiduciary, the court having jurisdiction over the trust or estate shall determine whether a proposed exercise or nonexercise by the fiduciary of a discretionary power conferred by this article will result in an abuse of the fiduciary's discretion. If the petition describes the proposed exercise or nonexercise of the power and contains sufficient information to inform the beneficiaries of the reasons for the proposal, the facts on which the fiduciary relies and an explanation of how the income and remainder beneficiaries will be affected by the proposed exercise or nonexercise of the power, a beneficiary who challenges the proposed exercise or nonexercise has the burden of establishing that it will result in an abuse of discretion.

14-7405. Determination and distribution of net income

After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following apply:

1. A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary pursuant to the provisions of sections 14-7407 through 14-7430 that apply to trustees and paragraph 5 of this section. The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.

2. A fiduciary shall determine the remaining net income of a decedent's estate or a terminating income interest pursuant to the provisions of section 14-7407 through 14-7430 that apply to trustees and by:

(a) Including in net income all income from property used to discharge liabilities.

(b) Paying from income or principal, in the fiduciary's discretion, fees of attorneys, accountants and fiduciaries, court costs and other expenses of administration and interest on death taxes, but the fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment of those expenses from income will not cause the reduction or loss of the deduction.

(c) Paying from principal all other disbursements made or incurred in connection with the settlement of a decedent's estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust or applicable law.

3. A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright the interest or any other amount provided by the will, the terms of the trust or applicable law from net income determined under paragraph 2 of this section or from principal to the extent that net income is insufficient. If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends and no interest or other amount is provided for by the terms of the trust or applicable law, the fiduciary shall distribute the interest or other amount to which the beneficiary would be entitled under applicable law if the pecuniary amount were required to be paid under a will.

4. A fiduciary shall distribute the net income remaining after distributions required by paragraph 3 of this section in the manner described in section 14-7406 to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.

5. A fiduciary may not reduce principal or income receipts from property described in paragraph 1 of this section because of a payment described in section 14-7425 or 14-7426 to the extent that the will, the terms of the trust or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent that the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on or after the date of a decedent's death or an income interest's terminating event, and by making a reasonable provision for amounts that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed.

14-7406. Distribution to residuary and remainder beneficiaries

A. Each beneficiary described in section 14-7405, paragraph 4 is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one who does not receive part of the distribution, is entitled, as of each distribution date, to the net income the fiduciary has received after the date of death or terminating event or earlier distribution date but has not distributed as of the current distribution date.

B. In determining a beneficiary's share of net income, the following apply:

1. The beneficiary is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date, including assets that later may be sold to meet principal obligations.

2. The beneficiary's fractional interest in the undistributed principal assets must be calculated without regard to property specifically given to a beneficiary and property required to pay pecuniary amounts not in trust.

3. The beneficiary's fractional interest in the undistributed principal assets must be calculated on the basis of the aggregate value of those assets as of the distribution date without reducing the value by any unpaid principal obligation.

4. The distribution date for purposes of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which assets are actually distributed.

C. If a fiduciary does not distribute all of the collected but undistributed net income to each person as of a distribution date, the fiduciary shall maintain appropriate records showing the interest of each beneficiary in that net income.

D. A fiduciary may apply this section to the extent that the fiduciary considers it appropriate, to net gain or loss realized after the date of death or terminating event or earlier distribution date from the disposition of a principal asset if this section applies to the income from the asset.

14-7407. When right to income begins and ends

A. An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.

B. An asset becomes subject to a trust on any of the following dates:

1. The date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life.

2. The date of a testator's death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate.

3. The date of an individual's death in the case of an asset that is transferred to a fiduciary by a third party because of the individual's death.

C. An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection D, even if there is an intervening period of administration to wind up the preceding income interest.

D. An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.

14-7408. Apportionment of receipts and disbursements when decedent dies or income interest begins

A. A trustee shall allocate an income receipt or disbursement other than one to which section 14-7405, paragraph 1 applies to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.

B. A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins must be allocated to principal and the balance must be allocated to income.

C. An item of income or an obligation is due on the date the payer is required to make a payment. If a payment date is not stated, there is no due date for the purposes of this article. Distributions to shareholders or other owners from an entity to which section 14-7410 applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.

14-7409. Apportionment when income interest ends; definition

A. When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than five per cent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked must be added to principal.

B. When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate or other tax requirements.

C. For the purposes of this section, "undistributed income" means net income received before the date on which an income interest ends and does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.

14-7410. Character of receipts; definition

A. Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.

B. A trustee shall allocate the following receipts from an entity to principal:

1. Property other than money.

2. Money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity.

3. Money received in total or partial liquidation of the entity.

4. Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.

C. Money is received in partial liquidation either:

1. To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation.

2. If the total amount of money and property received in a distribution or series of related distributions is greater than twenty per cent of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.

D. Money is not received in partial liquidation, nor may it be taken into account under subsection C, paragraph 2 of this section to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money.

E. A trustee may rely on a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or another person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.

F. For the purposes of this section, " entity" means any corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund or other organization in which a trustee has an interest, other than a trust or estate to which section 14-7411 applies, a business or activity to which section 14-7412 applies or an asset-backed security to which section 14-7424 applies.

14-7411. Distribution from trust or estate

A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity or a decedent or donor transfers an interest in such a trust to a trustee, section 14-7410 or 14-7424 applies to a receipt from the trust.

14-7412. Business and other activities conducted by trustee

A. If a trustee who conducts a business or other activity determines that it is in the best interest of all of the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.

B. A trustee who accounts separately for any business or other activity may determine the extent to which its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets and other reasonably foreseeable needs of the business or activity and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.

C. Activities for which a trustee may maintain separate accounting records include:

1. Retail, manufacturing, service and other traditional business activities.

2. Farming.

3. Raising and selling livestock and other animals.

4. Management of rental properties.

5. Extraction of minerals and other natural resources.

6. Timber operations.

7. Activities to which section 14-7423 applies.

14-7413. Principal receipts

A trustee shall allocate to principal:

1. To the extent not allocated to income under this article, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest or a payer under a contract naming the trust or its trustee as beneficiary.

2. Money or other property received from the sale, exchange, liquidation or change in form of a principal asset, including realized profit, subject to this article.

3. Amounts recovered from third parties to reimburse the trust because of disbursements described in section 14-7426, subsection A, paragraph 7 or for other reasons to the extent not based on the loss of income.

4. Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.

5. Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income.

6. Other receipts as provided in sections 14-7417 through 14-7424.

14-7414. Rental property

To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.

14-7415. Obligation to pay money

A. An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium.

B. A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within one year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income.

C. This section does not apply to an obligation to which section 14-7418, 14-7419, 14-7420, 14-7421, 14-7423 or 14-7424 applies.

14-7416. Insurance policies and similar contracts

A. Except as otherwise provided in subsection B of this section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal.

B. A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income or, subject to section 14-7412, loss of profits from a business.

C. This section does not apply to a contract to which section 14-7418 applies.

14-7417. Insubstantial allocations not required

If a trustee determines that an allocation between principal and income required by section 14-7418, 14-7419, 14-7420, 14-7421 or 14-7424 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in section 14-7403, subsection C applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in section 14-7403, subsection D and may be released for the reasons and in the manner described in section 14-7403, subsection E. An allocation is presumed to be insubstantial if either:

1. The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than ten per cent.

2. The value of the asset producing the receipt for which the allocation would be made is less than ten per cent of the total value of the trust's assets at the beginning of the accounting period.

14-7418. Deferred compensation, annuities and similar payments; definition

A. To the extent that a payment is characterized as interest or a dividend, or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend or an equivalent payment.

B. If no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income ten per cent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For the purposes of this subsection, a payment is not required to be made to the extent that it is made because the trustee exercises a right of withdrawal.

C. If, to obtain an estate tax marital deduction for a trust, a trustee must allocate more of a payment to income than provided for by this section, the trustee shall allocate to income the additional amount necessary to obtain the marital deduction. Except as otherwise provided in subsection D of this section, subsections E and F of this section apply, and subsections A and B of this section do not apply, in determining the allocation of a payment made from a separate fund to:

1. A trust to which an election to qualify for a marital deduction under 26 United States Code section 2056(b)(7), as amended, has been made.

2. A trust that qualifies for the marital deduction under 26 United States Code section 2056(b)(5), as amended.

D. Subsections C, E and F of this section do not apply to the extent that the series of payments, without the application of subsection C of this section, would qualify for the marital deduction under 26 United States Code section 2056(b)(7)(C), as amended.

E. A trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to this article. On request of the surviving spouse, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The trustee shall allocate the balance of the payment to the principal. On request of the surviving spouse, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.

F. If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal four per cent of the fund's value, according to the most recent statement of value preceding the beginning of the accounting period. If the trustee cannot determine the internal income of the separate fund or the fund's value, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under section 7520 of the internal revenue code of 1986, as amended, 26 United States Code section 7520, as amended, for the month preceding the accounting period for which the computation is made.

G. This section does not apply to a payment to which section 14-7419 applies.

H. For the purposes of this section, "payment" means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. Payment includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer, including a private or commercial annuity, an individual retirement account and a pension, profit sharing, stock bonus or stock ownership plan. For purposes of subsections C, D, E and F of this section, payment also includes any payment from any separate fund, regardless of the reason for the payment.

14-7419. Liquidating assets; definition

A. A trustee shall allocate to income ten per cent of the receipts from a liquidating asset and the balance to principal.

B. For the purposes of this section, "liquidating asset":

1. Means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration.

2. Includes a leasehold, patent, copyright, royalty right and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.

3. Does not include:

(a) A payment subject to section 14-7418.

(b) Resources subject to section 14-7420.

(c) Timber subject to section 14-7421.

(d) An activity subject to section 14-7423.

(e) An asset subject to section 14-7424.

(f) Any asset for which the trustee establishes a reserve for depreciation under section 14-7427.

14-7420. Minerals, water and other natural resources

A. To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:

1. If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.

2. If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.

3. If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus or delay rental is more than nominal, ninety per cent must be allocated to principal and the balance to income.

4. If an amount is received from a working interest or any other interest not provided for in paragraph 1, 2 or 3, ninety per cent of the net amount received must be allocated to principal and the balance to income.

B. An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, ninety per cent of the amount must be allocated to principal and the balance to income.

C. This article applies whether or not a decedent or donor was extracting minerals, water or other natural resources before the interest became subject to the trust.

D. If a trust owns an interest in minerals, water or other natural resources on the effective date of this article, the trustee may allocate receipts from the interest as provided in this article or in the manner used by the trustee before the effective date of this article. If the trust acquires an interest in minerals, water or other natural resources after the effective date of this article, the trustee shall allocate receipts from the interest as provided in this article.

14-7421. Timber

A. To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts:

1. To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest.

2. To principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber.

3. To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease or contract and applying paragraphs 1 and 2.

4. To principal to the extent that advance payments, bonuses and other payments are not allocated pursuant to paragraph 1, 2 or 3.

B. In determining net receipts to be allocated pursuant to subsection A, a trustee shall deduct and transfer to principal a reasonable amount for depletion.

C. This article applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.

D. If a trust owns an interest in timberland on the effective date of this article, the trustee may allocate net receipts from the sale of timber and related products as provided in this article or in the manner used by the trustee before the effective date of this article. If the trust acquires an interest in timberland after the effective date of this article, the trustee shall allocate net receipts from the sale of timber and related products as provided in this article.

14-7422. Property not productive of income

A. If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under section 14-7403 and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time or exercise the power conferred by section 14-7403, subsection A. The trustee may decide which action or combination of actions to take.

B. In cases not governed by subsection A of this section, proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.

14-7423. Derivatives and options; definition

A. To the extent that a trustee does not account under section 14-7412 for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.

B. If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized on the exercise of an option, including an option granted to a settlor of the trust for services rendered, must be allocated to principal.

C. For the purposes of this section, " derivative" means a contract or financial instrument or a combination of contracts and financial instruments that gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets or changes in a rate, an index of prices or rates or other market indicator for an asset or a group of assets.

14-7424. Asset-backed securities; definition

A. If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment that the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.

B. If a trust receives one or more payments in exchange for the trust's entire interest in an asset-backed security in one accounting period, the trustee shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust's interest in the security over more than one accounting period, the trustee shall allocate ten per cent of the payment to income and the balance to principal.

C. For the purposes of this section, "asset-backed security":

1. Means an asset whose value is based on the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security.

2. Includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return.

3. Does not include an asset to which section 14-7410 or 14-7418 applies.

14-7425. Disbursements from income

A trustee shall make the following disbursements from income to the extent that they are not disbursements to which section 14-7405, paragraph 2, subdivision (b) or (c) applies:

1. One-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee, whether based on a percentage of income or principal, a fixed amount or an hourly charge.

2. One-half of all expenses for accountings, regularly recurring income tax preparation services, judicial proceedings or other matters that involve both the income and remainder interests.

3. All of the other ordinary expenses incurred in connection with the administration, management or preservation of trust property and the distribution of income, including interest, ordinary repairs, regularly recurring taxes assessed against principal and expenses of a proceeding or other matter that concerns primarily the income interest.

4. Recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.

14-7426. Disbursements from principal

A. A trustee shall make the following disbursements from principal:

1. The remaining one-half of the disbursements described in section 14-7425, paragraphs 1 and 2.

2. All of the trustee's compensation calculated on principal as a fee for acceptance, distribution or termination and disbursements made to prepare property for sale.

3. Payments on the principal of a trust debt.

4. Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property.

5. Premiums paid on a policy of insurance not described in section 14-7425, paragraph 4 of which the trust is the owner and beneficiary.

6. Estate, inheritance and other transfer taxes, including penalties, apportioned to the trust.

7. Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties and defending claims based on environmental matters.

B. If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.

14-7427. Transfers from income to principal for depreciation; definition

A. A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation but may not transfer any amount for depreciation:

1. Of that portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary.

2. During the administration of a decedent's estate.

3. Under this section if the trustee is accounting under section 14-7412 for the business or activity in which the asset is used.

B. An amount transferred to principal need not be held as a separate fund.

C. For the purposes of this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion or gradual obsolescence of a fixed asset having a useful life of more than one year.

14-7428. Transfers from income to reimburse principal

A. If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements.

B. Principal disbursements to which subsection A of this section applies include the following, but only to the extent that the trustee has not been and does not expect to be reimbursed by a third party:

1. An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs.

2. A capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments.

3. Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements and brokers' commissions.

4. Periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments.

5. Disbursements described in section 14-7426, subsection A, paragraph 7.

C. If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends, a trustee may continue to transfer amounts from income to principal as provided in subsection A of this section.

14-7429. Income taxes

A. A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.

B. A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.

C. A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid:

1. From income to the extent that receipts from the entity are allocated to income.

2. From principal to the extent that receipts from the entity are allocated only to principal.

3. Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal.

4. From principal to the extent that the tax exceeds the total receipts from the entity.

D. After applying subsections A, B and C, the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.

14-7430. Adjustments between principal and income because of taxes

A. A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries that arise from:

1. Elections and decisions, other than those described in subsection B, that the fiduciary makes from time to time regarding tax matters.

2. An income tax or any other tax that is imposed on the fiduciary or a beneficiary as a result of a transaction involving or a distribution from the estate or trust.

3. The ownership by an estate or trust of an interest in an entity whose taxable income, whether or not distributed, is includible in the taxable income of the estate, the trust or a beneficiary.

B. If the amount of an estate tax marital deduction or charitable contribution deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes, and as a result estate taxes paid from principal are increased and income taxes paid by an estate, trust or beneficiary are decreased, each estate, trust or beneficiary that benefits from the decrease in income tax shall reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax to the extent that the principal used to pay the increase would have qualified for a marital deduction or charitable contribution deduction but for the payment. The proportionate share of the reimbursement for each estate, trust or beneficiary whose income taxes are reduced must be the same as its proportionate share of the total decrease in income tax. An estate or trust shall reimburse principal from income.

14-7431. Proposed actions; notification; definition

A. A trustee may, but is not required to, give notice of a proposed action regarding a matter governed by this article as provided in this section.

B. The trustee shall mail notice of a proposed action, by certified, registered or ordinary first class mail, to all beneficiaries who are receiving, or are entitled to receive, income from the trust or to receive a distribution of principal if the trust were terminated at the time the notice is given. The trustee must give notice to any beneficiary under any incapacity pursuant to section 14-1403.

C. The trustee is not required to give notice of a proposed action to any person who consents in writing to the proposed action. A person may give consent at any time before or after the proposed action is taken.

D. The notice of the proposed action shall state that it is given pursuant to this article and shall contain all of the following:

1. The name and mailing address of the trustee.

2. The name and telephone number of a person who may be contacted for additional information.

3. A description of the action proposed to be taken and an explanation of the reasons for the action.

4. The time within which objections to the proposed action can be made, which shall be at least thirty days after the mailing of the notice.

5. The date on or after which the proposed action may be taken or is effective.

E. A beneficiary may object to the proposed action by mailing a written objection to the trustee at the address stated in the notice of proposed action within the time period specified in the notice of proposed action.

F. A trustee is not liable to a beneficiary for an action regarding a matter governed by this article if the trustee does not receive a written objection to the proposed action from the beneficiary within the applicable time period and the other requirements of this article are satisfied. If a beneficiary entitled to notice does not object under this section, the trustee is not liable to any current or future beneficiary with respect to the proposed action.

G. If the trustee receives a written objection within the applicable time period, either the trustee or a beneficiary may petition the court to have the proposed action taken as proposed, taken with modifications or not taken at all. An objecting beneficiary has the burden of proving that the trustee's proposed action should not be taken. A beneficiary who has not objected may oppose the proposed action in such a proceeding. If the trustee decides not to implement the proposed action, the trustee shall notify the beneficiaries of the decision not to take the action and the reasons for the decision. The trustee's decision not to implement the proposed action does not give rise to liability to any current or future beneficiary. In such circumstances, a beneficiary may petition the court to have the action taken and has the burden of proving that it should be taken.

H. For the purposes of this section, "proposed action" includes a course of action or a decision not to take a course of action.

14-7501. Definitions

A. In this article, unless the context otherwise requires:

1. "Bank" includes commercial banks, savings banks, trust companies, and any person or association of persons, whether incorporated or not, carrying on the business of banking.

2. "Fiduciary" includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust or estate.

3. "Person" includes a corporation, partnership, or other association, or two or more persons having a joint or common interest.

4. "Principal" includes any person to whom a fiduciary as such owes an obligation.

B. A thing is done "in good faith" within the meaning of this article, when it is in fact done honestly, whether it be done negligently or not.

14-7502. Application of payments made to fiduciaries

A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.

14-7503. Transfer of negotiable instrument by fiduciary

If any negotiable instrument payable or endorsed to a fiduciary as such is endorsed by the fiduciary, or if any negotiable instrument payable or endorsed to his principal is endorsed by a fiduciary empowered to endorse such instrument on behalf of his principal, the endorsee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in endorsing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor or is transferred in any transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in transferring the instrument.

14-7504. Check drawn by fiduciary payable to third person

If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, the payee is not bound to inquire whether the fiduciary is committing a breach of his obligation as a fiduciary in drawing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor or is drawn and delivered in any transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the instrument.

14-7505. Check drawn by and payable to fiduciary

If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, payable to the fiduciary personally, or payable to a third person and by him transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith.

14-7506. Deposit in name of fiduciary as such

If a deposit is made in a bank to the credit of a fiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with the name in which such deposit is entered, without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.

14-7507. Deposit in name of principal

If a check is drawn upon the account of his principal in a bank by a fiduciary who is empowered to draw checks upon his principal's account, the bank is authorized to pay such check without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing such check, or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.

14-7508. Deposit in fiduciary's personal account

If a fiduciary makes a deposit in a bank to his personal credit of checks drawn by him upon an account in his own name as fiduciary, or of checks payable to him as fiduciary, or of checks drawn by him upon an account in the name of his principal if he is empowered to draw checks thereon, or of checks payable to his principal and endorsed by him, if he is empowered to endorse such checks, or if he otherwise makes a deposit of funds held by him as fiduciary, the bank receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of his obligation as fiduciary; and the bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal, unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in making such deposit or in drawing such check, or with knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith.

14-7509. Deposit in names of two or more trustees

When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account by any trustee or trustees authorized by the other trustee or trustees to draw checks upon the trust account, neither the payee nor other holder nor the bank is bound to inquire whether it is a breach of trust to authorize such trustee or trustees to draw checks upon the trust account, and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith.

14-7510. Cases not provided for by article

In any case not provided for in this article the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments and banking, shall continue to apply.

14-7511. Uniformity of interpretation

This article shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.

14-7512. Short title

This article may be cited as the uniform fiduciaries act.

14-7651. Definitions

In this article, unless the context otherwise requires:

1. "Adult" means a person who is at least twenty-one years of age.

2. "Benefit plan" means an employer's plan for the benefit of an employee or partner.

3. "Broker" means a person lawfully engaged in the business of effecting transactions in securities or commodities for the person's own account or for the account of others.

4. "Conservator" means a person appointed or qualified by a court to act as a general, limited or temporary guardian of a minor's property or a person legally authorized to perform substantially the same functions.

5. "Court" means the superior court.

6. "Custodial property" means an interest in property that is transferred to a custodian pursuant to this article and income from and proceeds of that interest in property.

7. "Custodian" means a person designated pursuant to section 14-7659 or a successor or substitute custodian designated pursuant to section 14-7668.

8. "Financial institution" means a bank, trust company, savings institution or credit union, which is chartered and supervised under state or federal law.

9. "Legal representative" means an individual's personal representative or conservator.

10. "Member of the minor's family" means the minor's parent, stepparent, spouse, grandparent, brother, sister, uncle or aunt, whether of the whole or half blood or by adoption.

11. "Minor" means a person under the age of twenty-one years.

12. "Person" means an individual, corporation, organization or other legal entity.

13. "Personal representative" means an executor, administrator, successor personal representative or special administrator of a decedent's estate or a person legally authorized to perform substantially the same functions.

14. "State" includes a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico and a territory or possession subject to the legislative authority of the United States.

15. "Street name or nominee name" means registration used by a broker or financial institution for holding securities if they are not registered in the name of the beneficial owner.

16. "Transfer" means a transaction that creates custodial property pursuant to section 14-7659.

17. "Transferor" means a person who makes a transfer pursuant to this article.

18. "Trust company" means a financial institution, corporation or other legal entity, which is authorized to exercise general trust powers.

14-7652. Scope and jurisdiction

A. This article applies to a transfer that refers to this article in the designation made pursuant to section 14-7659 by which the transfer is made, if at the time of the transfer the transferor, the minor or the custodian is a resident of this state or the custodial property is located in this state. The custodianship so created remains subject to this article despite a subsequent change in the residence of a transferor, the minor or the custodian or the removal of custodial property from this state.

B. A person designated as custodian pursuant to this article is subject to personal jurisdiction in this state with respect to any matter relating to the custodianship.

C. A transfer which purports to be made and is valid under the uniform transfers to minors act, the uniform gifts to minors act or a substantially similar act of another state is governed by the law of the designated state and may be executed and is enforceable in this state if at the time of the transfer the transferor, the minor or the custodian is a resident of the designated state or the custodial property is located in the designated state.

14-7653. Nomination of custodian

A. A person having the right to designate the recipient of property transferable on the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary on the occurrence of the event by naming the custodian followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act". The nomination may name one or more persons as substitute custodians to whom the property must be transferred, in the order named, if the first nominated custodian dies before the transfer or is unable, declines or is ineligible to serve. The nomination may be made in a will, a trust, a deed, an instrument exercising a power of appointment or a writing designating a beneficiary of contractual rights which is registered with or delivered to the payor, issuer or other obligor of the contractual rights.

B. A custodian nominated pursuant to this section must be a person to whom a transfer of property of that kind may be made pursuant to section 14-7659, subsection A.

C. The nomination of a custodian pursuant to this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed pursuant to section 14-7659. Unless the nomination of a custodian has been revoked, on the occurrence of the future event the custodianship becomes effective and the custodian shall enforce a transfer of the custodial property pursuant to section 14-7659.

14-7654. Transfer by gift or exercise of power of appointment

A person may make a transfer by irrevocable gift to, or the irrevocable exercise of a power of appointment in favor of, a custodian for the benefit of a minor pursuant to section 14-7659.

14-7655. Transfer authorized by will or trust

A. A personal representative or trustee may make an irrevocable transfer pursuant to section 14-7659 to a custodian for the benefit of a minor as authorized in the governing will or trust.

B. If the testator or settlor has nominated a custodian pursuant to section 14-7653 to receive the custodial property, the transfer must be made to that person.

C. If the testator or settlor has not nominated a custodian pursuant to section 14-7653, or all persons so nominated as custodian die before the transfer or are unable, decline or are ineligible to serve, the personal representative or the trustee, as the case may be, shall designate the custodian from among those eligible to serve as custodian for property of that kind pursuant to section 14-7659, subsection A.

14-7656. Other transfer by fiduciary

A. Pursuant to subsection C of this section, a personal representative or trustee may make an irrevocable transfer to another adult or trust company as custodian for the benefit of a minor pursuant to section 14-7659 in the absence of a will or under a will or trust that does not contain an authorization to do so.

B. Pursuant to subsection C of this section, a conservator may make an irrevocable transfer to another adult or trust company as custodian for the benefit of the minor pursuant to section 14-7659.

C. A transfer pursuant to subsection A or B of this section may be made only if all of the following apply:

1. The personal representative, trustee or conservator considers the transfer to be in the best interest of the minor.

2. The transfer is not prohibited by or inconsistent with provisions of the applicable will, trust agreement or other governing instrument.

3. The transfer is authorized by the court if it exceeds ten thousand dollars in value.

14-7657. Transfer by obligor

A. Pursuant to subsections B and C of this section, a person who is not subject to section 14-7655 or 14-7656 and who holds property of or owes a liquidated debt to a minor who does not have a conservator may make an irrevocable transfer to a custodian for the benefit of the minor pursuant to section 14-7659.

B. If a person having the right to do so pursuant to section 14-7653 has nominated a custodian under that section to receive the custodial property, the transfer must be made to that person.

C. If no custodian has been nominated pursuant to section 14-7653 or all persons so nominated as custodian die before the transfer or are unable, decline or are ineligible to serve, a transfer pursuant to this section may be made to an adult member of the minor's family or to a trust company unless the property exceeds ten thousand dollars in value.

14-7658. Receipt for custodial property

A written acknowledgement of delivery by a custodian constitutes a sufficient receipt and discharge for custodial property transferred to the custodian pursuant to this article.

14-7659. Manner of creating custodial property and effecting transfer; designation of initial custodian; control

A. Custodial property is created and a transfer is made if:

1. An uncertificated security or a certificated security in registered form is either registered in the name of the transferor, an adult other than the transferor or a trust company, followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act" or delivered if in certificated form or any document necessary for the transfer of an uncertificated security is delivered, together with any necessary endorsement to an adult other than the transferor or to a trust company as custodian, accompanied by an instrument in substantially the form set forth in subsection B.

2. Money is paid or delivered to a broker or financial institution for credit to an account in the name of the transferor, an adult other than the transferor or a trust company, followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act".

3. The ownership of a life or endowment insurance policy or annuity contract is either registered with the issuer in the name of the transferor, an adult other than the transferor or a trust company, followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act" or assigned in a writing delivered to an adult other than the transferor or to a trust company whose name in the assignment is followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act".

4. An irrevocable exercise of a power of appointment or an irrevocable present right to future payment under a contract is the subject of a written notification delivered to the payor, issuer or other obligor that the right is transferred to the transferor, an adult other than the transferor or a trust company, whose name in the notification is followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act".

5. An interest in real property is recorded in the name of the transferor, an adult other than the transferor or a trust company, followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act".

6. A certificate of title issued by a department or agency of a state or of the United States which evidences title to tangible personal property is either issued in the name of the transferor, an adult other than the transferor or a trust company, followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act" or delivered to an adult other than the transferor or to a trust company, endorsed to that person followed in substance by the words, "as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act".

7. An interest in any property not described in paragraphs 1 through 6 is transferred to an adult other than the transferor or to a trust company by a written instrument in substantially the form set forth in subsection B.

B. An instrument satisfies the requirements of subsection A, paragraphs 1 and 7 if it is in the following form:

Transfer under the Arizona uniform

transfers to minors act

I, _______________ (name of transferor or name and representative capacity if a fiduciary) hereby transfer to _______________ (name of custodian), as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act, the following: (insert a description of the custodial property sufficient to identify it).

Dated: _______________.

_______________________________

(Signature)

_______________ (Name of custodian) acknowledges receipt of the property described above as custodian for the minor named above under the Arizona uniform transfers to minors act.

Dated: _______________

____________________________

(Signature of custodian)

C. A transferor shall place the custodian in control of the custodial property as soon as practicable.

14-7660. Single custodianship

A transfer may be made only for one minor and only one person may be the custodian. All custodial property held under this article by the same custodian for the benefit of the same minor constitutes a single custodianship.

14-7661. Validity and effect of transfer

A. The validity of a transfer made in a manner prescribed in this article is not affected by any of the following:

1. Failure of the transferor to comply with section 14-7659, subsection C concerning possession and control.

2. Designation of an ineligible custodian, except designation of the transferor in the case of property for which the transferor is ineligible to serve as custodian pursuant to section 14-7659, subsection A.

3. Death or incapacity of a person nominated pursuant to section 14-7653 or designated under section 14-7659 as custodian or the disclaimer of the office by that person.

B. A transfer made pursuant to section 14-7659 is irrevocable, and the custodial property is indefeasibly vested in the minor. The custodian has all the rights, powers, duties and authority provided in this article, and neither the minor nor the minor's legal representative has any right, power, duty or authority with respect to the custodial property except as provided in this article.

C. By making a transfer, the transferor incorporates in the disposition all the provisions of this article and grants to the custodian and to any third person dealing with a person designated as custodian the respective powers, rights and immunities provided in this article.

14-7662. Care of custodial property; duties of custodian

A. A custodian shall:

1. Take control of custodial property.

2. Register or record title to custodial property if appropriate.

3. Collect, hold, manage, invest and reinvest custodial property.

B. In dealing with custodial property, a custodian shall observe the standard of care that would be observed by a prudent person dealing with property of another and is not limited by any other statute restricting investments by fiduciaries. If a custodian has a special skill or expertise or is named custodian on the basis of representations of a special skill or expertise, the custodian shall use that skill or expertise. However, a custodian, in the custodian's discretion and without liability to the minor or the minor's estate, may retain any custodial property received from a transferor.

C. A custodian may invest in or pay premiums on life insurance or endowment policies on either the life of the minor if the minor or the minor's estate is the sole beneficiary or the life of another person in whom the minor has an insurable interest only to the extent that the minor, the minor's estate or the custodian in the capacity of custodian is the irrevocable beneficiary.

D. A custodian at all times shall keep custodial property separate and distinct from all other property in a manner sufficient to identify it clearly as custodial property of the minor. Custodial property consisting of certificated securities may be held on deposit at a stock brokerage firm or a financial institution registered in a street name or nominee name. Custodial property consisting of an undivided interest is so identified if the minor's interest is held as a tenant in common and is fixed. Custodial property subject to recordation is so identified if it is recorded either by registration or in an account designated, in the name of the custodian, followed in substance by the words, "as a custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act".

E. A custodian shall keep records of all transactions with respect to custodial property, including information necessary for the preparation of the minor's tax returns, and shall make them available for inspection at reasonable intervals by a parent or legal representative of the minor or by the minor if the minor is at least fourteen years of age.

14-7663. Powers of custodian

A. A custodian, acting in a custodial capacity, has all the rights, powers and authority over custodial property that unmarried adult owners have over their own property, but a custodian may exercise those rights, powers and authority in that capacity only.

B. This section does not relieve a custodian from liability for a breach of section 14-7662.

14-7664. Use of custodial property

A. A custodian may deliver or pay to the minor or expend for the minor's benefit as much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to either the duty or ability of the custodian personally or of any other person to support the minor or any other income or property of the minor which may be applicable or available for that purpose.

B. On petition of an interested person or the minor if the minor is at least fourteen years of age, the court may order the custodian to deliver or pay to the minor or expend for the minor's benefit as much of the custodial property as the court considers advisable for the use and benefit of the minor.

C. A delivery, payment or expenditure made pursuant to this section does not affect an obligation of a person to support the minor.

14-7665. Custodian's expenses, compensation and bond

A. A custodian is entitled to reimbursement from custodial property for reasonable expenses incurred in the performance of the custodian's duties.

B. Except for a person who is a transferor pursuant to section 14-7654, a custodian has a noncumulative election during each calendar year to charge reasonable compensation for services performed during that year.

C. Except as provided in section 14-7668, subsection F, a custodian need not give a bond.

14-7666. Exemption of third person from liability

A third person in good faith and without court order may act on the instructions of or otherwise deal with a person purporting to make a transfer or purporting to act in the capacity of a custodian and, in the absence of knowledge, is not responsible for determining:

1. The validity of the purported custodian's designation.

2. The propriety of, or the authority under this article for, any act of the purported custodian.

3. The validity or propriety pursuant to this article of any instrument or instructions executed or given either by the person purporting to make a transfer or by the purported custodian.

4. The propriety of the application of any property of the minor delivered to the purported custodian.

14-7667. Liability to third persons

A. A claim based on a contract entered into by a custodian acting in a custodial capacity, an obligation arising from the ownership or control of custodial property or a tort committed during the custodianship may be asserted against the custodial property by proceeding against the custodian in the custodial capacity, whether or not the custodian or the minor is personally liable.

B. A custodian is not personally liable for either:

1. A contract properly entered into in the custodial capacity unless the custodian fails to reveal that capacity and to identify the custodianship in the contract.

2. An obligation arising from control of custodial property or for a tort committed during the custodianship unless the custodian is personally at fault.

C. A minor is not personally liable for an obligation arising from ownership of custodial property or for a tort committed during the custodianship unless the minor is personally at fault.

14-7668. Renunciation, resignation, death or removal of custodian; designation of successor

A. A person nominated pursuant to section 14-7653 or designated pursuant to section 14-7659 as custodian may decline to serve by delivering a valid disclaimer to the person who made the nomination or to the transferor or the transferor's legal representative. If the event giving rise to a transfer has not occurred and no substitute custodian who is able, willing and eligible to serve was nominated pursuant to section 14-7653, the person who made the nomination may nominate a substitute custodian pursuant to section 14-7653. Otherwise the transferor or the transferor's legal representative shall designate a substitute custodian at the time of the transfer, in either case from among the persons eligible to serve as custodian for that kind of property pursuant to section 14-7659, subsection A. The custodian so designated has the rights of a successor custodian.

B. A custodian at any time may designate a trust company or an adult other than a transferor pursuant to section 14-7654 as successor custodian by executing and dating an instrument of designation before a subscribing witness other than the successor. If the instrument of designation does not contain or is not accompanied by the resignation of the custodian, the designation of the successor does not take effect until the custodian resigns, dies, becomes incapacitated or is removed.

C. A custodian may resign at any time by delivering written notice to the minor if the minor is at least fourteen years of age and to the successor custodian and by delivering the custodial property to the successor custodian.

D. If a custodian is ineligible, dies or becomes incapacitated without having effectively designated a successor and the minor is at least fourteen years of age, the minor may designate as successor custodian, in the manner prescribed in subsection B of this section, an adult member of the minor's family, a conservator of the minor or a trust company. If the minor is under fourteen years of age or fails to act within sixty days after the ineligibility, death or incapacity, the conservator of the minor becomes successor custodian. If the minor has no conservator or the conservator declines to act, the transferor, the legal representative of the transferor or of the custodian, an adult member of the minor's family or any other interested person may petition the court to designate a successor custodian.

E. A custodian who declines to serve pursuant to subsection A of this section or resigns pursuant to subsection C of this section or the legal representative of a deceased or incapacitated custodian, as soon as practicable, shall put the custodial property and records in the possession and control of the successor custodian. The successor custodian by action may enforce the obligation to deliver custodial property and records and becomes responsible for each item as received.

F. A transferor, the legal representative of a transferor, an adult member of the minor's family, a guardian of the person of the minor, the conservator of the minor or the minor if the minor is at least fourteen years of age may petition the court to remove the custodian for cause and to designate a successor custodian other than a transferor pursuant to section 14-7654 or to require the custodian to give appropriate bond.

14-7669. Accounting by and determination of liability of custodian

A. A minor who is at least fourteen years of age, the minor's guardian of the person or legal representative, an adult member of the minor's family, a transferor or a transferor's legal representative may petition the court for an accounting by the custodian or the custodian's legal representative or for a determination of responsibility, as between the custodial property and the custodian personally, for claims against the custodial property unless the responsibility has been adjudicated in an action pursuant to section 14-7667 to which the minor or the minor's legal representative was a party.

B. A successor custodian may petition the court for an accounting by the predecessor custodian.

C. The court, in a proceeding under this article or in any other proceeding, may require or permit the custodian or the custodian's legal representative to account.

D. If a custodian is removed pursuant to section 14-7668, subsection F, the court shall require an accounting and order delivery of the custodial property and records to the successor custodian and the execution of all instruments required for transfer of the custodial property.

14-7670. Termination of custodianship

The custodian shall transfer in an appropriate manner the custodial property to the minor or the minor's estate on the earlier of:

1. The minor's twenty-first birthday with respect to custodial property transferred pursuant to section 14-7654 or 14-7655.

2. The minor's eighteenth birthday with respect to custodial property transferred pursuant to section 14-7656 or 14-7657.

3. The minor's death.

14-7671. Applicability

This article applies to a transfer within the scope of section 14-7652 made after its effective date if either of the following is true:

1. The transfer purports to have been made under the Arizona uniform gifts to minors act.

2. The instrument by which the transfer purports to have been made uses in substance the designation "as custodian under the Arizona uniform gifts to minors act" or "as custodian under the uniform transfers to minors act" of any other state and the application of this article is necessary to validate the transfer.

14-8101. Adult adoption; agreement; consent of spouse; court procedure; petition

A. Any adult person may adopt either another adult person who is at least eighteen years of age and not more than twenty-one years of age and who consents to the adoption or another adult person who is a stepchild, niece, nephew, cousin or grandchild of the adopting person, by an agreement of adoption approved by a decree of adoption of the court in the county in which either the person adopting or the person adopted resides. A foster parent may adopt an adult who was placed in the foster parent's care when the adult was a juvenile if the foster parent has maintained a continuous familial relationship with that person for five or more years.

B. The agreement of adoption shall be in writing, shall be executed by the person adopting the person to be adopted and shall state that the parties agree to assume toward each other the legal relation of parent and child and to have all of the rights and to be subject to all of the duties and responsibilities of that relation.

C. A married person who is not legally separated from that person's spouse cannot adopt an adult person without the consent of the spouse of the adopting person if the spouse is capable of giving the consent. A married person who is not legally separated from that person's spouse cannot be adopted without the consent of the spouse of the person to be adopted if the spouse is capable of giving that consent. Neither the consent of the natural parent or parents of the person to be adopted, of the division nor of any other person is required.

D. The adopting person and the person to be adopted may file in the court in the county in which either resides a petition for a decree of adoption. The court shall assign the case to a division of the superior court that shall fix a time and place for a hearing on the petition. Both the person adopting and the person to be adopted shall appear at the hearing in person. An attorney may appear on behalf of a person who is not able to appear if the attorney has that person's written authorization. The court may require notice of the time and place of the hearing to be served on any other interested persons. Any interested person may appear and object to the proposed adoption. Before the hearing, a person designated by the court shall submit a written report concerning information that person gathers by observation or investigation regarding the welfare, competency and best interests of the parties and the public. The court in its discretion may require additional investigation if it finds that the welfare of the proposed adoptee will be served or if additional information is necessary to make an appropriate decision regarding the adoption.

E. At the hearing the court shall examine the parties or the attorney of any party who is not present. If the court determines that the adoption will be for the best interests of the parties and in the public interest, the court shall approve the agreement of adoption and make a decree of adoption declaring that the person adopted is the child of the adopting person. If the court determines that the adoption is not in the best interests of the parties and the public interest, the court shall deny the petition for adoption.

F. The petition for adoption shall state:

1. The length and nature of the relationship between the person seeking to adopt and the proposed adoptee.

2. The degree of kinship, if any.

3. The reason the adoption is sought, together with a statement as to why the adoption would be in the best interests of the person seeking to adopt, the proposed adoptee and the public.

4. The names and addresses of any living parents or adult children of the proposed adoptee.

5. Whether the person seeking to adopt or that person's spouse has previously adopted any other adult person and, if so, the name of the person with the date and place of the adoption.

G. In determining whether or not the adoption of any person is in the public interest or the best interests of the persons seeking the adoption, the court may consider evidence without regard to the rules of evidence.

14-9101. Definitions

In this title, unless the context otherwise requires:

1. "Beneficiary" means an individual for whom property has been transferred to, or held under a declaration of trust by, a custodial trustee for the individual's use and benefit under this chapter.

2. "Conservator" means a person who is appointed or qualified by a court to manage the estate of an individual or who is legally authorized to perform substantially the same functions.

3. "Court" means the superior court of this State.

4. "Custodial trust property" means an interest in property transferred to or held under a declaration of trust by a custodial trustee under this chapter and the income from and proceeds of that interest.

5. "Custodial trustee" means a person who is designated as trustee of a custodial trust under this chapter or a substitute or successor to the person designated.

6. "Guardian" means a person who is appointed or qualified by a court as a guardian of an individual, including a limited guardian, but not a person who is only a guardian ad litem.

7. "Incapacitated" means lacking the ability to manage property and business affairs effectively by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, disappearance, minority or other disabling cause.

8. "Legal representative" means a personal representative or conservator.

9. "Member of the beneficiary's family" means a beneficiary's spouse, descendant, stepchild, parent, stepparent, grandparent, brother, sister, uncle or aunt, whether of the whole or half blood or by adoption.

10. "Person" means an individual, corporation, business trust, estate, trust, partnership, joint venture, association or any other legal or commercial entity.

11. "Personal representative" means an executor, administrator or special administrator of a decedent's estate, a person legally authorized to perform substantially the same functions or a successor to any of them.

12. "State" means a state, territory or possession of the United States, the District of Columbia or the Commonwealth of Puerto Rico.

13. "Transferor" means a person who creates a custodial trust by transfer or declaration.

14. "Trust company" means a financial institution, corporation or other legal entity that is authorized to exercise general trust powers.

14-9102. Custodial trust; general

A. A person may create a custodial trust of property by a written transfer of the property to another person that is evidenced by registration or by another instrument of transfer, that is executed in any lawful manner, that names as beneficiary an individual who may be the transferor and that designates the transferee, in substance, as custodial trustee under this chapter.

B. A person may create a custodial trust of property by a written declaration that is evidenced by registration of the property or by another instrument of declaration executed in any lawful manner, that describes the property and that names as beneficiary an individual other than the declarant, and that designates the declarant as titleholder, in substance, as custodial trustee under this chapter. A registration or other declaration of trust for the sole benefit of the declarant is not a custodial trust under this chapter.

C. Title to custodial trust property is in the custodial trustee and the beneficial interest is in the beneficiary.

D. Except as provided in subsection E, a transferor may not terminate a custodial trust.

E. The beneficiary, if not incapacitated, or the conservator of an incapacitated beneficiary may terminate a custodial trust by delivering to the custodial trustee a writing signed by the beneficiary or conservator declaring the termination. If not previously terminated, the custodial trust terminates on the death of the beneficiary.

F. Any person may augment existing custodial trust property by the addition of other property pursuant to this chapter.

G. The transferor may designate or authorize the designation of a successor custodial trustee in the trust instrument.

H. This chapter does not displace or restrict other means of creating trusts. A trust whose terms do not conform to this chapter may be enforceable according to its terms under other law.

14-9103. Custodial trustee for future payment or transfer

A. A person having the right to designate the recipient of property payable or transferable on a future event may create a custodial trust on the occurrence of the future event by designating in writing the recipient, followed in substance by: "as custodial trustee for _______________ (name of beneficiary) under the Uniform Custodial Trust Act pursuant to title 14, chapter 9, Arizona Revised Statutes".

B. Persons may be designated as substitute or successor custodial trustees to whom the property must be paid or transferred in the order named if the first designated custodial trustee is unable or unwilling to serve.

C. A designation under this section may be made in a will, a trust, a deed, a multiple-party account, an insurance policy, an instrument exercising a power of appointment or a writing designating a beneficiary of contractual rights. Otherwise, to be effective, the designation must be registered with or delivered to the fiduciary, payor, issuer or obligor of the future right.

14-9104. Form and effect of receipt and acceptance by custodial trustee; jurisdiction

A. Obligations of a custodial trustee, including the obligation to follow directions of the beneficiary, arise under this chapter on the custodial trustee's acceptance, express or implied, of the custodial trust property.

B. The custodial trustee's acceptance may be evidenced by a writing stating in substance:

Custodial Trustee's Receipt and Acceptance

I, _______________ (name of custodial trustee) acknowledge receipt of the custodial trust property described below or in the attached instrument and accept the custodial trust as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes. I undertake to administer and distribute the custodial trust property pursuant to the Uniform Custodial Trust Act. My obligations as custodial trustee are subject to the directions of the beneficiary unless the beneficiary is designated as, is or becomes incapacitated. The custodial trust property consists of _____________________.

Dated:__________________________

________________________________

(Signature of custodial trustee)

C. On accepting custodial trust property, a person designated as custodial trustee under this chapter is subject to personal jurisdiction of the court with respect to any matter relating to the custodial trust.

14-9105. Transfer to custodial trustee by fiduciary or obligor; facility of payment

A. Unless otherwise directed by an instrument designating a custodial trustee pursuant to section 14-9103, a person, including a fiduciary other than a custodial trustee, who holds property of or owes a debt to an incapacitated individual not having a conservator may make a transfer to an adult member of the beneficiary's family or to a trust company as custodial trustee for the use and benefit of the incapacitated individual. If the value of the property or the debt exceeds twenty thousand dollars, the transfer is not effective unless authorized by the court.

B. A written acknowledgment of delivery, signed by a custodial trustee, is a sufficient receipt and discharge for property transferred to the custodial trustee pursuant to this section.

14-9106. Multiple beneficiaries; separate custodial trusts; survivorship

A. Beneficial interests in a custodial trust created for multiple beneficiaries are deemed to be separate custodial trusts of equal undivided interests for each beneficiary. Except in a transfer or declaration for use and benefit of husband and wife, for whom survivorship is presumed, a right of survivorship does not exist unless the instrument creating the custodial trust specifically provides for survivorship or survivorship is required as to community or marital property.

B. Custodial trust property held under this chapter by the same custodial trustee for the use and benefit of the same beneficiary may be administered as a single custodial trust.

C. A custodial trustee of custodial trust property held for more than one beneficiary shall separately account to each beneficiary pursuant to sections 14-9107 and 14-9115 for the administration of the custodial trust.

14-9107. General duties of custodial trustee

A. If appropriate, a custodial trustee shall register or record the instrument vesting title to custodial trust property.

B. If the beneficiary is not incapacitated, a custodial trustee shall follow the directions of the beneficiary in the management, control, investment or retention of the custodial trust property. In the absence of effective contrary direction by the beneficiary while not incapacitated, the custodial trustee shall observe the standard of care that would be observed by a prudent person dealing with property of another and is not limited by any other law restricting investments by fiduciaries, except that a custodial trustee, in the custodial trustee's discretion, may retain any custodial trust property received from the transferor. If a custodial trustee has a special skill or expertise or is named custodial trustee on the basis of representation of a special skill or expertise, the custodial trustee shall use that skill or expertise.

C. Subject to subsection B, a custodial trustee shall take control of and collect, hold, manage, invest and reinvest custodial trust property.

D. A custodial trustee at all times shall keep custodial trust property of which the custodial trustee has control separate from all other property in a manner sufficient to identify it clearly as custodial trust property of the beneficiary. Custodial trust property, the title to which is subject to recordation, is so identified if an appropriate instrument so identifying the property is recorded, and custodial trust property subject to registration is so identified if it is registered, or held in an account in the name of the custodial trustee, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the Uniform Custodial Trust Act pursuant to title 14, chapter 9, Arizona Revised Statutes".

E. A custodial trustee shall keep records of all transactions with respect to custodial trust property, including information necessary for the preparation of tax returns, and shall make the records and information available at reasonable times to the beneficiary or legal representative of the beneficiary.

F. The exercise of a durable power of attorney for an incapacitated beneficiary is not effective to terminate or direct the administration or distribution of a custodial trust.

14-9108. General powers of custodial trustee

A. A custodial trustee, acting in a fiduciary capacity, has all the rights and powers over custodial trust property that an unmarried adult owner has over individually owned property, but a custodial trustee may exercise those rights and powers in a fiduciary capacity only.

B. This section does not relieve a custodial trustee from liability for a violation of section 14-9107.

14-9109. Use of custodial trust property

A. A custodial trustee shall pay to the beneficiary or expend for the beneficiary's use and benefit as much or all of the custodial trust property as the beneficiary while not incapacitated may direct from time to time.

B. If the beneficiary is incapacitated, the custodial trustee shall expend as much or all of the custodial trust property as the custodial trustee considers advisable for the use and benefit of the beneficiary and individuals who were supported by the beneficiary when the beneficiary became incapacitated or who are legally entitled to support by the beneficiary. Expenditures may be made in the manner, when and to the extent that the custodial trustee determines suitable and proper, without court order and without regard to other support, income or property of the beneficiary.

C. A custodial trustee may establish checking, savings or other similar accounts of reasonable amounts that either the custodial trustee or the beneficiary may withdraw funds from or draw checks against. Funds withdrawn from or checks written against the account by the beneficiary are distributions of custodial trust property by the custodial trustee to the beneficiary.

14-9110. Determination of incapacity; effect

A. The custodial trustee shall administer the custodial trust as for an incapacitated beneficiary if either:

1. The custodial trust was created under section 14-9105.

2. The transferor has so directed in the instrument creating the custodial trust.

3. The custodial trustee has determined that the beneficiary is incapacitated.

B. A custodial trustee may determine that the beneficiary is incapacitated by relying on:

1. Previous direction or authority given by the beneficiary while not incapacitated, including direction or authority pursuant to a durable power of attorney.

2. The certificate of the beneficiary's physician.

3. Other persuasive evidence.

C. If a custodial trustee for an incapacitated beneficiary reasonably concludes that the beneficiary's incapacity has ceased or that circumstances concerning the beneficiary's ability to manage property and business affairs have changed since the creation of a custodial trust directing administration as for an incapacitated beneficiary, the custodial trustee may administer the trust as for a beneficiary who is not incapacitated.

D. On petition of the beneficiary, custodial trustee or other person interested in the custodial trust property or the welfare of the beneficiary, the court shall determine whether the beneficiary is incapacitated.

E. Absent a determination of incapacity of the beneficiary under subsection B or D of this section, a custodial trustee who has reason to believe that the beneficiary is incapacitated shall administer the custodial trust in accordance with the provisions of this chapter applicable to an incapacitated beneficiary.

F. Incapacity of a beneficiary does not terminate:

1. The custodial trust.

2. Any designation of a successor custodial trustee.

3. Rights or powers of the custodial trustee.

4. Any immunities of third persons acting on instructions of the custodial trustee.

14-9111. Exemption of third person from liability

A third person in good faith and without a court order may act on the instructions of or otherwise deal with a person who is purporting to make a transfer as or to act in the capacity of a custodial trustee. In the absence of knowledge to the contrary, the third person is not responsible for determining:

1. The validity of the purported custodial trustee's designation.

2. The propriety of, or the authority under this chapter for, any action of the purported custodial trustee.

3. The validity or propriety of an instrument executed or instruction given pursuant to this chapter either by the person purporting to make a transfer or declaration or by the purported custodial trustee.

4. The propriety of the application of property vested in the purported custodial trustee.

14-9112. Liability to third person

A. A claim based on a contract entered into by a custodial trustee acting in a fiduciary capacity, an obligation arising from the ownership or control of custodial trust property or a tort committed in the course of administering the custodial trust may be asserted by a third person against the custodial trust property by proceeding against the custodial trustee in a fiduciary capacity, whether or not the custodial trustee or the beneficiary is personally liable.

B. A custodial trustee is not personally liable to a third person:

1. On a contract properly entered into in a fiduciary capacity unless the custodial trustee fails to reveal that capacity or to identify the custodial trust in the contract.

2. For an obligation arising from control of custodial trust property or for a tort committed in the course of the administration of the custodial trust unless the custodial trustee is personally at fault.

C. A beneficiary is not personally liable to a third person for an obligation arising from beneficial ownership of custodial trust property or for a tort committed in the course of administration of the custodial trust unless the beneficiary is personally in possession of the custodial trust property giving rise to the liability or is personally at fault.

D. Subsections B and C do not preclude actions or proceedings to establish liability of the custodial trustee or beneficiary to the extent the person sued is protected as the insured by liability insurance.

14-9113. Declination, resignation, incapacity, death or removal of custodial trustee; designation of successor custodial trustee

A. Before accepting the custodial trust property, a person designated as custodial trustee may decline to serve by notifying the person who made the designation, the transferor or the transferor's legal representative. If an event giving rise to a transfer has not occurred, the substitute custodial trustee designated under section 14-9103 becomes the custodial trustee or, if a substitute custodial trustee has not been designated, the person who made the designation may designate a substitute custodial trustee pursuant to section 14-9103. In other cases, the transferor or the transferor's legal representative may designate a substitute custodial trustee.

B. A custodial trustee who has accepted the custodial trust property may resign by doing both of the following:

1. Delivering written notice to a successor custodial trustee, if any, the beneficiary and, if the beneficiary is incapacitated, to the beneficiary's conservator, if any.

2. Transferring or registering, or recording an appropriate instrument relating to, the custodial trust property, in the name of, and delivering the records to, the successor custodial trustee identified under subsection C of this section.

C. If a custodial trustee or successor custodial trustee is ineligible, resigns, dies or becomes incapacitated, the successor who is designated under section 14-9102, subsection G or section 14-9103 becomes the custodial trustee. If there is no effective provision for a successor, the beneficiary, if not incapacitated, may designate a successor custodial trustee. If the beneficiary is incapacitated or fails to act within ninety days after the ineligibility, resignation, death or incapacity of the custodial trustee, the beneficiary's conservator becomes the successor custodial trustee. If the beneficiary does not have a conservator or the conservator fails to act, the resigning custodial trustee may designate a successor custodial trustee.

D. If a successor custodial trustee is not designated pursuant to subsection C of this section, the transferor, the legal representative of the transferor or of the custodial trustee, an adult member of the beneficiary's family, the guardian of the beneficiary, a person interested in the custodial trust property or a person interested in the welfare of the beneficiary may petition the court to designate a successor custodial trustee.

E. A custodial trustee who declines to serve or who resigns or the legal representative of a deceased or incapacitated custodial trustee, as soon as practicable, shall put the custodial trust property and records in the possession and control of the successor custodial trustee. The successor custodial trustee may enforce the obligation to deliver custodial trust property and records and becomes responsible for each item as received.

F. A beneficiary, the beneficiary's conservator, an adult member of the beneficiary's family, a guardian of the person of the beneficiary, a person interested in the custodial trust property or a person interested in the welfare of the beneficiary may petition the court to remove the custodial trustee for cause and designate a successor custodial trustee, to require the custodial trustee to furnish a bond or other security for the faithful performance of fiduciary duties or for other appropriate relief.

14-9114. Expenses, compensation and bond of custodial trustee

Except as otherwise provided in the instrument creating the custodial trust, in an agreement with the beneficiary or by court order, a custodial trustee:

1. Is entitled to reimbursement from custodial trust property for reasonable expenses incurred in the performance of fiduciary services.

2. Has a noncumulative election, to be made not later than six months after the end of each calendar year, to charge a reasonable compensation for fiduciary services performed during that year.

3. Need not furnish a bond or other security for the faithful performance of fiduciary duties.

14-9115. Reporting and accounting by custodial trustee; determination of liability of custodial trustee

A. On the acceptance of custodial trust property, the custodial trustee shall provide a written statement describing the custodial trust property and shall thereafter provide a written statement of the administration of the custodial trust property:

1. Once each year.

2. On request at reasonable times by the beneficiary or the beneficiary's legal representative.

3. On resignation or removal of the custodial trustee.

4. On termination of the custodial trust. The statements must be provided to the beneficiary or to the beneficiary's legal representative, if any. On termination of the beneficiary's interest, the custodial trustee shall furnish a current statement to the person to whom the custodial trust property is to be delivered.

B. A beneficiary, the beneficiary's legal representative, an adult member of the beneficiary's family, a person interested in the custodial trust property or a person interested in the welfare of the beneficiary may petition the court for an accounting by the custodial trustee or the custodial trustee's legal representative.

C. A successor custodial trustee may petition the court for an accounting by a predecessor custodial trustee.

D. In an action or proceeding under this chapter or in any other proceeding, the court may require or permit the custodial trustee or the custodial trustee's legal representative to account. The custodial trustee or the custodial trustee's legal representative may petition the court for approval of final accounts.

E. If a custodial trustee is removed, the court shall require an accounting and order delivery of the custodial trust property and records to the successor custodial trustee and the execution of all instruments required for transfer of the custodial trust property.

F. On petition of the custodial trustee or any person who could petition for an accounting, the court, after notice to interested persons, may issue instructions to the custodial trustee or review the propriety of the acts of a custodial trustee or the reasonableness of compensation determined by the custodial trustee for the services of the custodial trustee or others.

14-9116. Limitations of action against custodial trustee

A. Except as provided in subsection C, unless previously barred by adjudication, consent or limitation, a claim for relief against a custodial trustee for accounting or breach of duty is barred as to a beneficiary, a person to whom custodial trust property is to be paid or delivered or the legal representative of an incapacitated or deceased beneficiary or payee who either:

1. Has received a final account or statement fully disclosing the matter unless an action or proceeding to assert the claim is commenced within two years after receipt of the final account or statement.

2. Has not received a final account or statement fully disclosing the matter unless an action or proceeding to assert the claim is commenced within three years after the termination of the custodial trust.

B. Except as provided in subsection C, a claim for relief to recover from a custodial trustee for fraud, misrepresentation or concealment related to the final settlement of the custodial trust or concealment of the existence of the custodial trust is barred unless an action or proceeding to assert the claim is commenced within five years after the termination of the custodial trust.

C. A claim for relief is not barred by this section if the claimant either:

1. Is a minor, until the earlier of two years after the claimant becomes an adult or dies.

2. Is an incapacitated adult, until the earliest of two years after:

(a) The appointment of a conservator.

(b) The removal of the incapacity.

(c) The death of the claimant.

3. Was an adult, now deceased, who was not incapacitated, until two years after the claimant's death.

14-9117. Distribution on termination

A. On the termination of a custodial trust, the custodial trustee shall transfer the unexpended custodial trust property:

1. To the beneficiary, if not incapacitated or deceased.

2. To the conservator or other recipient designated by the court for an incapacitated beneficiary.

3. On the beneficiary's death, in the following order:

(a) As last directed in a writing signed by the deceased beneficiary while not incapacitated and received by the custodial trustee during the life of the deceased beneficiary.

(b) To the survivor of multiple beneficiaries if survivorship is provided for pursuant to Section 14-9106.

(c) As designated in the instrument creating the custodial trust.

(d) To the estate of the deceased beneficiary.

B. If, when the custodial trust would otherwise terminate, the distributee is incapacitated, the custodial trust continues for the use and benefit of the distributee as beneficiary until the incapacity is removed or the custodial trust is otherwise terminated.

C. The death of a beneficiary does not terminate the power of the custodial trustee to discharge obligations of the custodial trustee or beneficiary incurred before the termination of the custodial trust.

14-9118. Methods and forms for creating custodial trusts

A. If a transaction, including a declaration with respect to or a transfer of specific property, otherwise satisfies applicable law, the criteria of section 14-9102 are satisfied by either:

1. The execution and either delivery to the custodial trustee or recording of an instrument in substantially the following form:

Transfer under the Arizona

Uniform Custodial Trust Act

I, _______________ (name of transferor or name and representative capacity if a fiduciary), transfer to _______________ (name of trustee other than transferor), as custodial trustee for __________________ (name of beneficiary) as beneficiary and ________________ as distributee on termination of the trust in absence of direction by the beneficiary under the Arizona uniform custodial trust act, the following: ______________________________________________________ (insert a description of the custodial trust property legally sufficient to identify and transfer each item of property).

Dated: _______________________

______________________________

(Signature).

2. The execution and the recording or giving notice of its execution to the beneficiary of an instrument in substantially the following form:

Declaration of Trust under the Arizona

Uniform Custodial Trust Act

I, __________________ (name of owner of property), declare that I hold as custodial trustee for ___________________ (name of beneficiary other than transferor) as beneficiary and ______________________ as distributee on termination of the trust in absence of direction by the beneficiary under the Arizona uniform custodial trust act, the following: _______________________________________________________________ (Insert a description of the custodial trust property legally sufficient to identify and transfer each item of property).

Dated: _______________________

______________________________

(Signature)

B. Customary methods of transferring or evidencing ownership of property may be used to create a custodial trust, including any of the following:

1. Registration of a security in the name of a trust company, an adult other than the transferor or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

2. Delivery of a certificated security or a document necessary for the transfer of an uncertificated security, together with any necessary endorsement, to an adult other than the transferor or to a trust company as custodial trustee, accompanied by an instrument in substantially the form prescribed in subsection A of this section.

3. Payment of money or transfer of a security held in the name of a broker or a financial institution or its nominee to a broker or financial institution for credit to an account in the name of a trust company, an adult other than the transferor or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

4. Registration of ownership of a life or endowment insurance policy or annuity contract with the issuer in the name of a trust company, an adult other than the transferor or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

5. Delivery of a written assignment to an adult other than the transferor or to a trust company whose name in the assignment is designated in substance by the words: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

6. Irrevocable exercise of a power of appointment, pursuant to its terms, in favor of a trust company, an adult other than the donee of the power or the donee who holds the power if the beneficiary is other than the donee, whose name in the appointment is designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

7. Delivery of a written notification or assignment of a right to future payment under a contract to an obligor that transfers the right under the contract to a trust company, an adult other than the transferor or the transferor if the beneficiary is other than the transferor, whose name in the notification or assignment is designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

8. Execution, delivery and recordation of a conveyance of an interest in real property in the name of a trust company, an adult other than the transferor or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

9. Issuance of a certificate of title by an agency of a state or of the United States that evidences title to tangible personal property that is either:

(a) Issued in the name of a trust company, an adult other than the transferor or the transferor if the beneficiary is other than the transferor, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

(b) Delivered to a trust company or an adult other than the transferor or endorsed by the transferor to that person, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

10. Execution and delivery of an instrument of gift to a trust company or an adult other than the transferor, designated in substance: "as custodial trustee for _______________ (name of beneficiary) under the uniform custodial trust act pursuant to title 14, chapter 9, Arizona Revised Statutes".

14-9119. Applicable law

A. This chapter applies to a transfer or declaration creating a custodial trust that refers to this chapter if, at the time of the transfer or declaration, the transferor, beneficiary or custodial trustee is a resident of or has its principal place of business in this state or custodial trust property is located in this state. The custodial trust remains subject to this chapter despite a later change in residence or principal place of business of the transferor, beneficiary or custodial trustee, or removal of the custodial trust property from this state.

B. A transfer made pursuant to an act of another state substantially similar to this chapter is governed by the law of that state and may be enforced in this state.

14-10001. Short title

This chapter may be cited as the Arizona uniform disclaimer of property interests act.

14-10002. Definitions

In this chapter, unless the context otherwise requires:

1. "Disclaimant" means the person to whom a disclaimed interest or power would have passed had the disclaimer not been made.

2. "Disclaimed interest" means the interest that would have passed to the disclaimant had the disclaimer not been made.

3. "Disclaimer" means the refusal to accept an interest in or power over property.

4. "Jointly held property" means property held in the name of two or more persons under an arrangement in which all holders have concurrent interests and under which the last surviving holder is entitled to the whole of the property.

14-10003. Scope of chapter

This chapter applies to disclaimers of any interest in or power over property, whenever created.

14-10004. Chapter supplemented by other law

A. Unless displaced by this chapter, the principles of law and equity supplement this chapter.

B. This chapter does not limit any right of a person to waive, release, disclaim or renounce an interest in or power over property under a law other than this chapter.

14-10005. Power to disclaim; general requirements; when irrevocable

A. A person may disclaim, in whole or in part, any interest in or power over property, including a power of appointment. A person may disclaim the interest or power even if its creator imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim.

B. Except to the extent a fiduciary's right to disclaim is expressly restricted or limited by another statute of this state or by the instrument creating the fiduciary relationship, a fiduciary may disclaim, in whole or in part, any interest in or power over property, including a power of appointment, whether acting in a personal or representative capacity. A fiduciary may disclaim the interest or power even if its creator imposed a spendthrift provision or similar restriction on transfer or restriction or limitation on the right to disclaim, or if an instrument other than the instrument that created the fiduciary relationship imposed a restriction or limitation on the right to disclaim.

C. To be effective, a disclaimer must be in a writing or other record, declare the disclaimer, describe the interest or power disclaimed, be signed by the person making the disclaimer and be delivered or filed in the manner provided in section 14-10012. For the purposes of this subsection:

1. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

2. "Signed" means, with present intent to authenticate or adopt a record, to execute or adopt a tangible symbol or to attach to or logically associate with the record an electronic sound, symbol or process.

D. A partial disclaimer may be expressed as a fraction, a percentage, a monetary amount, a term of years, a limitation of a power or any other interest or estate in the property.

E. A disclaimer becomes irrevocable when it is delivered or filed pursuant to section 14-10012 or when it becomes effective as provided in sections 14-10006 through 14-10011, whichever occurs later.

F. A disclaimer made under this chapter is not a transfer, assignment or release.

14-10006. Disclaimer of interest in property; definitions

A. Except for a disclaimer governed by section 14-10007 or 14-10008, the following rules apply to a disclaimer of an interest in property:

1. The disclaimer takes effect as of the time the instrument creating the interest becomes irrevocable or, if the interest arose under the laws of intestate succession, as of the time of the intestate's death.

2. The disclaimed interest passes according to any provision in the instrument creating the interest providing for the disposition of the interest, should it be disclaimed, or of disclaimed interests in general.

3. If the instrument does not contain a provision described in paragraph 2 of this subsection:

(a) If the disclaimant is an individual, the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution. However, if, by law or under the instrument, the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution.

(b) If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.

4. On the disclaimer of a preceding interest, a future interest held by a person other than the disclaimant takes effect as if the disclaimant had died or ceased to exist immediately before the time of distribution, but a future interest held by the disclaimant is not accelerated in possession or enjoyment.

B. For the purposes of this section:

1. "Future interest" means an interest that takes effect in possession or enjoyment, if at all, later than the time of its creation.

2. "Time of distribution" means the time when a disclaimed interest would have taken effect in possession or enjoyment.

14-10007. Disclaimer of rights of survivorship in jointly held property

A. On the death of a holder of jointly held property, a surviving holder may disclaim, in whole or in part, the greater of either:

1. A fractional share of the property determined by dividing the number one by the number of joint holders alive immediately before the death of the holder to whose death the disclaimer relates.

2. All of the property except that part of the value of the entire interest attributable to the contribution furnished by the disclaimant.

B. A disclaimer under subsection A takes effect as of the death of the holder of jointly held property to whose death the disclaimer relates.

C. An interest in jointly held property disclaimed by a surviving holder of the property passes as if the disclaimant predeceased the holder to whose death the disclaimer relates.

14-10008. Disclaimer of interest by trustee

If a trustee disclaims an interest in property that otherwise would have become trust property, the interest does not become trust property.

14-10009. Disclaimer of power of appointment or other power not held in fiduciary capacity

If a holder disclaims a power of appointment or other power not held in a fiduciary capacity, the following rules apply:

1. If the holder has not exercised the power, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable.

2. If the holder has exercised the power and the disclaimer is of a power other than a presently exercisable general power of appointment, the disclaimer takes effect immediately after the last exercise of the power.

3. The instrument creating the power is construed as if the power expired when the disclaimer became effective.

14-10010. Disclaimer by appointee, object or taker in default of exercise of power of appointment

A. A disclaimer of an interest in property by an appointee of a power of appointment takes effect as of the time the instrument by which the holder exercises the power becomes irrevocable.

B. A disclaimer of an interest in property by an object or taker in default of an exercise of a power of appointment takes effect as of the time the instrument creating the power becomes irrevocable.

14-10011. Disclaimer of power held in fiduciary capacity

A. If a fiduciary disclaims a power held in a fiduciary capacity that has not been exercised, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable.

B. If a fiduciary disclaims a power held in a fiduciary capacity that has been exercised, the disclaimer takes effect immediately after the last exercise of the power.

C. A disclaimer under this section is effective as to another fiduciary if the disclaimer so provides and the fiduciary disclaiming has the authority to bind the estate, trust or other person for whom the fiduciary is acting.

14-10012. Delivery or filing; definition

A. Subject to subsections B through K, delivery of a disclaimer may be effected by personal delivery, first class mail or any other method likely to result in its receipt.

B. In the case of an interest created under the law of intestate succession or an interest created by will, other than an interest in a testamentary trust:

1. A disclaimer must be delivered to the personal representative of the decedent's estate.

2. If no personal representative is then serving, it must be filed with a court having jurisdiction to appoint the personal representative.

C. In the case of an interest in a testamentary trust:

1. A disclaimer must be delivered to the trustee then serving, or if no trustee is then serving, to the personal representative of the decedent's estate.

2. If no personal representative is then serving, it must be filed with a court having jurisdiction to enforce the trust.

D. In the case of an interest in an inter vivos trust:

1. A disclaimer must be delivered to the trustee then surviving.

2. If no trustee is then serving, it must be filed with a court having jurisdiction to enforce the trust.

3. If the disclaimer is made before the time the instrument creating the trust becomes irrevocable, it must be delivered to the settlor of a revocable trust or the transferor of the interest.

E. In the case of an interest created by a beneficiary designation made before the time the designation becomes irrevocable, a disclaimer must be delivered to the person making the beneficiary designation.

F. In the case of an interest created by a beneficiary designation made after the time the designation becomes irrevocable, a disclaimer must be delivered to the person obligated to distribute the interest.

G. In the case of a disclaimer by a surviving holder of jointly held property, the disclaimer must be delivered to the person to whom the disclaimed interest passes.

H. In the case of a disclaimer by an object or taker in default of exercise of a power of appointment at any time after the power was created:

1. The disclaimer must be delivered to the holder of the power or to the fiduciary acting under the instrument that created the power.

2. If no fiduciary is then serving, it must be filed with a court having authority to appoint the fiduciary.

I. In the case of a disclaimer by an appointee of a nonfiduciary power of appointment:

1. The disclaimer must be delivered to the holder, to the personal representative of the holder's estate or to the fiduciary under the instrument that created the power.

2. If no fiduciary is then serving, it must be filed with a court having authority to appoint the fiduciary.

J. In the case of a disclaimer by a fiduciary of a power over a trust or estate, the disclaimer must be delivered as provided in subsection B, C or D as if the power disclaimed were an interest in property.

K. In the case of a disclaimer of a power by an agent, the disclaimer must be delivered to the principal or the principal's representative.

L. For the purposes of this section, "beneficiary designation" means an instrument, other than an instrument creating a trust, naming the beneficiary of any of the following:

1. An annuity or insurance policy.

2. An account with a designation for payment on death.

3. A security registered in beneficiary form.

4. A pension, profit sharing retirement or other employment related benefits plan.

5. Any other nonprobate transfer at death.

14-10013. When disclaimer barred or limited

A. A disclaimer is barred by a written waiver of the right to disclaim.

B. A disclaimer of an interest in property is barred if any of the following events occurs before the disclaimer becomes effective:

1. The disclaimant accepts the interest sought to be disclaimed.

2. The disclaimant voluntarily assigns, conveys, encumbers, pledges or transfers the interest sought to be disclaimed or contracts to do so.

3. A judicial sale of the interest sought to be disclaimed occurs.

C. A disclaimer, in whole or in part, of the future exercise of a power held in a fiduciary capacity is not barred by its previous exercise.

D. A disclaimer, in whole or in part, of the future exercise of a power not held in a fiduciary capacity is not barred by its previous exercise unless the power is exercisable in favor of the disclaimant.

E. A disclaimer is barred or limited if so provided by law other than this chapter.

F. A disclaimer of a power over property that is barred by this section is ineffective. A disclaimer of an interest in property that is barred by this section takes effect as a transfer of the interest disclaimed to the person who would have taken the interest under this chapter had the disclaimer not been barred.

14-10014. Tax qualified disclaimer

Notwithstanding any other provision of this chapter, if as a result of a disclaimer or transfer the disclaimed or transferred interest is treated, pursuant to the internal revenue code as defined in section 43-105 and rules adopted pursuant to that section, as never having been transferred to the disclaimant, the disclaimer or transfer is effective as a disclaimer under this chapter.

14-10015. Recording of disclaimer

If an instrument transferring an interest in or power over property subject to a disclaimer is required or permitted by law to be filed, recorded or registered, the disclaimer may be so filed, recorded or registered. Failure to file, record or register the disclaimer does not affect its validity as between the disclaimant and person to whom the property interest or power passes by reason of the disclaimer.

14-10016. Application to existing relationships

Except as otherwise provided in section 14-10013, an interest in or power over property existing on the effective date of this chapter as to which the time for delivering or filing a disclaimer under law superseded by this chapter has not expired may be disclaimed after the effective date of this chapter.

14-10017. Relation to electronic signatures in global and national commerce act

This chapter modifies, limits and supersedes the federal electronic signatures in global and national commerce act (P.L. 106-229; 114 Stat. 464; 15 United States Code sections 7001 through 7006) but does not modify, limit or supersede section 101(c) of that act (15 United States Code section 7001(c)) or authorize electronic delivery of any of the notices described in section 103(b) of that act (15 United States Code section 7003(b)).

14-10018. Uniformity of application and construction

In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact the uniform disclaimer of property interests act and to the comments adopted by the national conference of commissioners on uniform state laws with respect to the uniform disclaimer of property interests act.

14-10101. Short title

This chapter may be cited as the Arizona trust code.

14-10102. Scope

This chapter applies to express trusts, charitable or noncharitable trusts and trusts created pursuant to a statute, judgment or decree that requires the trust to be administered in the manner of an express trust.

14-10103. Definitions

In this chapter, unless the context otherwise requires:

1. "Action", with respect to an act of a trustee, includes a failure to act.

2. "Beneficiary" means a person who either:

(a) Has a present or future beneficial interest in a trust, vested or contingent.

(b) In a capacity other than that of a trustee, holds a power of appointment over trust property.

3. "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in section 14-10405, subsection A.

4. "Conservator" means a person appointed by the court to administer the estate of a minor or an adult.

5. "Distributee" means a person who receives property from a trust other than as a creditor or purchaser.

6. "Environmental law" means a federal, state or local law, rule, regulation or ordinance relating to protection of the environment.

7. "Guardian" means a person appointed by the court to make decisions regarding the support, care, education, health and welfare of a minor or an adult. Guardian does not include a guardian ad litem.

8. "Interests of the beneficiaries" means the beneficial interests provided in the terms of the trust.

9. "Internal revenue code" has the same meaning prescribed in section 43-105.

10. "Jurisdiction", with respect to a geographic area, includes a state or country.

11. "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or any other legal or commercial entity.

12. "Power of withdrawal" means a presently exercisable general power of appointment other than a power exercisable either:

(a) By a trustee and limited by an ascertainable standard.

(b) By a person other than in a fiduciary capacity and only on the consent of the trustee or a person holding an adverse interest.

13. "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest in anything that may be the subject of ownership.

14. "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's qualification is determined:

(a) Is a distributee or permissible distributee of trust income or principal.

(b) Would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in subdivision (a) of this paragraph terminated on that date.

(c) Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.

15. "Revocable", as applied to a trust or a portion of a trust, means revocable by a settlor without the consent of any person, including the trustee or a person who holds an interest that is either adverse or not adverse.

16. "Settlor" means a person, including a testator, who creates or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or withdraw that portion.

17. "Special needs trust" means a trust established for the benefit of one or more disabled persons if one of the purposes of the trust, expressed in the trust instrument or implied from the trust instrument, is to allow the disabled person to qualify or continue to qualify for public, charitable or private benefits that might otherwise be available to the disabled person. The existence of one or more nondisabled remainder beneficiaries of the trust shall not disqualify it as a special needs trust for the purposes of this paragraph. For the purposes of this paragraph, "disabled person" means an individual who is disabled pursuant to 42 United States Code section 1382c.

18. "Spendthrift provision" means a term of a trust that restrains either voluntary or involuntary transfer of a beneficiary's interest.

19. "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States. State includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.

20. "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.

21. "Trust instrument" means an instrument executed by the settlor that contains terms of the trust, including any amendments to that trust.

22. "Trustee" includes an original, additional and successor trustee and a cotrustee.

14-10104. Knowledge

A. Subject to subsection B, a person has knowledge of a fact if any of the following apply:

1. The person has actual knowledge of it.

2. The person has received a notice or notification of it.

3. From all the facts and circumstances known to the person at the time in question, the person has reason to know it.

B. An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act for the trust or would have been brought to the employee's attention if the organization had exercised reasonable diligence. An organization exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the employee having responsibility to act for the trust and there is reasonable compliance with the routines. Reasonable diligence does not require an employee of the organization to communicate information unless the communication is part of the individual's regular duties or the individual knows a matter involving the trust would be materially affected by the information.

14-10105. Default and mandatory rules

A. Except as otherwise provided in the terms of the trust, this chapter governs:

1. The duties, powers, exercise of powers resignation, and appointment of a trustee.

2. Conflicts of interest of a trustee.

3. Relations among trustees.

4. Mergers or divisions of trusts.

5. The rights and interests of a beneficiary.

B. The terms of a trust prevail over any provision of this chapter except:

1. The requirements for creating a trust.

2. The duty of a trustee to act in good faith and in accordance with the purposes of the trust.

3. The requirement that a trust and its terms be for the benefit of its beneficiaries and that the trust have a purpose that is lawful, not contrary to public policy and possible to achieve.

4. The power of the court to modify or terminate a trust under sections 14-10410, 14-10411, 14-10412, 14-10413, 14-10414, 14-10415 and 14-10416.

5. The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in article 5 of this chapter.

6. The power of the court under section 14-10702 to require, dispense with, modify or terminate a bond.

7. The power of the court under section 14-10708, subsection B to adjust a trustee's compensation specified in the terms of the trust that is unreasonably low or high.

8. The duty to respond to the request of a qualified beneficiary of an irrevocable trust for trustee's reports and other information reasonably related to the administration of a trust.

9. The effect of an exculpatory term under section 14-11008.

10. The rights under sections 14-11010, 14-11011, 14-11012 and 14-11013 of a person other than a trustee or beneficiary.

11. Periods of limitation for commencing a judicial proceeding.

12. The power of the court to take action consistent with the settlor's intent and exercise jurisdiction as may be necessary in the interests of justice.

13. The subject matter jurisdiction of the court and venue for commencing a proceeding as provided in sections 14-10203 and 14-10204.

14. The notice provisions of section 14-10110, subsection B.

14-10106. Common law of trusts; principles of equity

A. The common law of trusts and principles of equity supplement this chapter, except to the extent modified by this chapter or another statute of this state.

B. The court shall look to the restatement (second) of trusts for interpretation of the common law and not to subsequent restatements of trusts to determine:

1. The rights and powers of creditors of beneficiaries.

2. The duties of trustees to distribute to those to whom a beneficiary owes any duties.

3. Whether public policy may affect enforceability and effectiveness of the terms of the trust.

4. And effectuate the settlor's intent.

14-10107. Governing law

A. The meaning and effect of the terms of a trust are determined by the law of the jurisdiction designated in the terms of the trust instrument.

B. In the absence of a controlling designation in the terms of the trust, the laws of the jurisdiction where the trust was executed determine the validity of the trust, and the laws of descent and the law of the principal place of administration determine the administration of the trust.

14-10108. Principal place of administration

A. Without precluding other means for establishing a sufficient connection with the designated jurisdiction, terms of a trust designating the principal place of administration are valid and controlling if either:

1. A trustee's principal place of business is located in or a trustee is a resident of the designated jurisdiction.

2. All or part of the administration occurs in the designated jurisdiction.

B. A trustee is under a continuing duty to administer the trust at a place appropriate to its purposes, its administration and the interests of the beneficiaries.

C. Without precluding the right of the court to order, approve or disapprove a transfer, the trustee, in furtherance of the duty prescribed by subsection B of this section, may transfer the trust's principal place of administration to another state or to a jurisdiction outside of the United States and, subject to the requirements of section 14-10818, may change the applicable law governing the trust.

D. The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's principal place of administration at least sixty days before initiating the transfer. Unless a corporate trustee indicates an intent to change the principal place of business in a notice to qualified beneficiaries, a transfer by the corporate trustee of some of the functions of a trust to another state or states is not a transfer of the trust's principal place of business if the corporate trustee maintains an office in this state. The notice of proposed transfer must include:

1. The name of the jurisdiction to which the principal place of administration is to be transferred.

2. The address and telephone number of the new location at which the trustee can be contacted.

3. An explanation of the reasons for the proposed transfer.

4. The date on which the proposed transfer is anticipated to occur.

5. The date, at least sixty days after the giving of the notice, by which the qualified beneficiary must notify the trustee of an objection to the proposed transfer.

E. The authority of a trustee under this section to transfer a trust's principal place of administration terminates if a qualified beneficiary notifies the trustee in writing of a reasonably founded objection to the proposed transfer on or before the date specified in the notice.

F. In connection with a transfer of the trust's principal place of administration, the trustee may transfer some or all of the trust property to a successor trustee designated in the terms of the trust or appointed pursuant to section 14-10704.

14-10109. Methods and waiver of notice

A. Notice to a person under this chapter or the sending of a document to a person under this chapter must be accomplished in a manner reasonably suitable under the circumstances and likely to result in receipt of the notice or document. Permissible methods of notice or for sending a document include first class mail, personal delivery, delivery to the person's last known place of residence or place of business or a properly directed electronic message.

B. Notice otherwise required under this chapter or a document otherwise required to be sent under this chapter need not be provided to a person whose identity or location is unknown to and not reasonably ascertainable by the trustee.

C. Notice under this chapter or the sending of a document under this chapter may be waived by the person to be notified or sent the document.

D. Notice of a judicial proceeding must be given pursuant to section 14-1401.

14-10110. Others treated as qualified beneficiaries

A. A charitable organization that is expressly and irrevocably designated to receive distributions under the terms of a charitable trust or a person appointed to enforce a trust created for the care of an animal or another noncharitable purpose as provided in section 14-10408 or 14-10409 has the rights of a qualified beneficiary under this chapter.

B. With respect to a charitable trust created on or after January 1, 2009 having its principal place of administration in this state, a trustee:

1. Within sixty days after the creation of a charitable trust, shall promptly furnish to the attorney general a copy of the portions of the charitable trust instrument that are necessary to describe the charitable purpose.

2. Within sixty days after accepting a trusteeship for a charitable trust, shall notify the attorney general of the acceptance and of the trustee's name, address and telephone number.

3. At least thirty days in advance, shall notify the attorney general of any of the following:

(a) Any change in the charitable trust's principal place of administration to another state.

(b) Any dissolution of the charitable trust.

(c) Any change in the charitable purpose of the charitable trust.

(d) Any court proceedings regarding the charitable trust.

(e) Any change in the method or rate of the trustee's compensation.

C. For the purposes of subsection B of this section, a "charitable trust" means a trust that is a qualified entity under section 501(c)(3) of the internal revenue code for tax exempt status under section 501(a) of the internal revenue code.

14-10111. Nonjudicial settlement agreements; definition

A. Except as otherwise provided in subsection B of this section, and except for modification or termination of a trust as otherwise permitted pursuant to the trust instrument, interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.

B. A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the court under this chapter or other applicable law.

C. Matters that may be resolved by a nonjudicial settlement agreement include:

1. The interpretation or construction of the terms of the trust.

2. The approval of a trustee's report or accounting.

3. Direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power.

4. The resignation or appointment of a trustee and the determination of a trustee's compensation.

5. The transfer of a trust's principal place of administration.

6. The liability of a trustee for an action relating to the trust.

D. Any interested person may request the court to approve a nonjudicial settlement agreement to determine whether the representation as provided in article 3 of this chapter was adequate and to determine whether the agreement contains terms and conditions the court could have properly approved.

E. For the purposes of this section, "interested person" has the same meaning prescribed in section 14-1201.

14-10112. Rules of construction

The rules of construction that apply in this state to the interpretation of and disposition of property by will also apply as appropriate to the interpretation of the terms of a trust and the disposition of the trust property.

14-10201. Role of court in administration of trust

A. The court may intervene in the administration of a trust to the extent its jurisdiction is invoked by an interested person or as provided by law.

B. A trust is not subject to continuing judicial supervision unless ordered by the court.

C. A judicial proceeding involving a trust may relate to any matter involving the trust's administration, including a request for instructions and an action to declare rights.

14-10202. Jurisdiction over trustee and beneficiary

A. By accepting the trusteeship of a trust having its principal place of administration in this state or by moving the principal place of administration to this state, or until otherwise declared by the trustee if a proceeding regarding a matter involving the trust is not pending in a court of this state, by declaring that the trust is subject to the jurisdiction of the courts of this state, the trustee submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.

B. With respect to their interests in the trust, the beneficiaries of a trust having its principal place of administration in this state are subject to the jurisdiction of the courts of this state regarding any matter involving the trust. By accepting a distribution from such a trust, the recipient submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.

C. This section does not preclude other methods of obtaining jurisdiction over a trustee, beneficiary or other person receiving property from the trust.

14-10203. Subject matter jurisdiction

A. The superior court has exclusive jurisdiction of proceedings in this state brought by a trustee or beneficiary concerning the administration of a trust.

B. The superior court has concurrent jurisdiction with other courts of this state of other proceedings involving a trust.

14-10204. Venue

A. Except as otherwise provided in subsection B, venue for a judicial proceeding involving a trust is in the county of this state in which the trust's principal place of administration is or will be located and, if the trust is created by will and the estate is not yet closed, in the county in which the decedent's estate is being administered.

B. If a trust has no trustee, venue for a judicial proceeding for the appointment of a trustee is in a county of this state in which a beneficiary resides, in a county in which any trust property is located, and if the trust is created by will, in the county in which the decedent's estate was or is being administered.

14-10205. Alternative dispute resolution

A trust instrument may provide mandatory, exclusive and reasonable procedures to resolve issues between the trustee and interested persons or among interested persons with regard to the administration or distribution of the trust.

14-10301. Representation

Sections 14-1404, 14-1405, 14-1406, 14-1407 and 14-1408 apply to trusts governed by this chapter.

14-10401. Methods of creating trust

A trust may be created by:

1. Transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect on the settlor's death.

2. Declaration by the owner of property that the owner holds identifiable property as trustee.

3. Exercise of a power of appointment in favor of a trustee.

14-10402. Requirements for creation

A. Except as provided in section 14-5409, a trust is created only if all of the following are true:

1. The settlor has capacity to create a trust.

2. The settlor indicates an intention to create the trust.

3. The trust has a definite beneficiary or is:

(a) A charitable trust.

(b) A trust for the care of an animal, as provided in section 14-10408.

(c) A trust for a noncharitable purpose, as provided in section 14-10409.

4. The trustee has duties to perform.

5. The same person is not the sole trustee and sole beneficiary.

B. A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.

C. A power in a trustee or other person to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred.

14-10403. Trusts created in other jurisdictions

A trust not created by will is validly created if its creation complies with the law of the jurisdiction in which the trust instrument was executed or the law of the jurisdiction in which, at the time of creation, either:

1. The settlor was domiciled, had a place of abode or was a national.

2. A trustee was domiciled or had a place of business.

3. Any trust property was located.

14-10404. Trust purposes

A trust may be created only to the extent that its purposes are lawful, not contrary to public policy and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries.

14-10405. Charitable purposes; enforcement

A. A charitable trust may be created for the relief of poverty, the advancement of education, religion or science, the promotion of health, governmental or municipal purposes or other purposes, the achievement of which is beneficial to the community, or for the support of one or more organizations that have the purposes prescribed in this section exclusively.

B. If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, the court may select one or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's intention to the extent it can be ascertained.

C. The settlor of a charitable trust, among others, may maintain a proceeding to enforce the trust.

14-10406. Creation of trust induced by fraud, duress or undue influence

A trust is void, in whole or in part, to the extent its creation was induced by fraud, duress or undue influence.

14-10407. Evidence of oral trust

Except as required by a statute other than this chapter, a trust need not be evidenced by a trust instrument, but the creation of an oral trust shall be established only by clear and convincing evidence and the terms of the oral trust shall be established by a preponderance of the evidence. If a trust is created by written instrument, it may be amended or revoked only by written instrument executed by the settlor.

14-10408. Trust for care of animal

A. A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates on the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, on the death of the last surviving animal.

B. A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.

C. Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, or otherwise to the settlor's successors in interest.

14-10409. Noncharitable trust without ascertainable beneficiary

Except as otherwise provided in section 14-10408 or by another statute, the following rules apply:

1. A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee, provided that the trust may not be enforced for more than ninety years after its creation.

2. A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court.

3. Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, or otherwise to the settlor's successors in interest.

14-10410. Modification or termination of trust; proceedings for approval or disapproval

A. In addition to the methods of termination prescribed by sections 14-10411, 14-10412, 14-10413 and 14-10414, a trust terminates to the extent the trust is revoked or expires pursuant to its terms, no purpose of the trust remains to be achieved or the purposes of the trust have become unlawful, contrary to public policy or impossible to achieve.

B. A proceeding to approve or disapprove a proposed modification or termination under sections 14-10411, 14-10412, 14-10413, 14-10414, 14-10415 and 14-10416, or trust combination or division under section 14-10417, may be commenced by a trustee or beneficiary. The settlor of a charitable trust may maintain a proceeding to modify the trust under section 14-10413.

14-10411. Modification or termination of noncharitable irrevocable trust by consent

A. A noncharitable irrevocable trust may be terminated on consent of all 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 on consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.

B. On termination of a trust under subsection A, the trustee shall distribute the trust property as agreed by the beneficiaries.

C. If not all of the beneficiaries consent to a proposed modification or termination of the trust under subsection A, the modification or termination may be approved by the court if the court is satisfied that:

1. If all of the beneficiaries had consented, the trust could have been modified or terminated under this section.

2. The interests of a beneficiary who does not consent will be adequately protected.

14-10412. Modification or termination because of unanticipated circumstances or inability to administer trust effectively

A. The court may modify the administrative or dispositive terms of a trust or terminate the trust if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust. To the extent practicable, the modification must be made in accordance with the settlor's probable intention.

B. The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or would impair the trust's administration.

C. On termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.

14-10413. Cy pres

A. Except as otherwise provided in subsection B, if a particular charitable purpose becomes unlawful, impracticable, impossible to achieve or wasteful:

1. The trust does not fail in whole or in part.

2. The trust property does not revert to the settlor or the settlor's successors in interest.

3. The court may apply cy pres to modify or terminate the trust by directing that the trust property be applied or distributed in whole or in part in a manner consistent with the settlor's charitable purposes.

B. A provision in the terms of a charitable trust that would result in distribution of the trust property to a noncharitable beneficiary prevails over the power of the court under subsection A to apply cy pres to modify or terminate the trust only if, when the provision takes effect:

1. The trust property is to revert to the settlor and the settlor is still living.

2. Fewer than twenty-one years have elapsed since the date of the trust's creation.

14-10414. Modification or termination of uneconomic trust

A. After notice to the qualified beneficiaries, the trustee of a trust that consists of trust property having a total value of less than one hundred thousand dollars or that is uneconomic to administer may terminate the trust if the trustee concludes that the value of the trust property is insufficient to justify the cost of administration. This subsection does not apply to an interested trustee as defined in section 14-11014.

B. The court may modify or terminate a trust or remove the trustee and appoint a different trustee if it determines that the value of the trust property is insufficient to justify the cost of administration.

C. On termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.

D. This section does not apply to an easement for conservation or preservation.

14-10415. Reformation to correct mistakes

The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor's intention if it is proved by clear and convincing evidence that both the settlor's intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.

14-10416. Modification to achieve settlor's tax objectives

To achieve the settlor's tax objectives, the court may modify the terms of a trust in a manner that is not contrary to the settlor's probable intention. The court may provide that the modification has retroactive effect.

14-10417. Combination and division of trusts

Unless the trust instrument provides that notice is not required, after notice to the qualified beneficiaries, a trustee may combine two or more trusts into a single trust or divide a trust into two or more separate trusts, if the result does not impair rights of any beneficiary or adversely affect achievement of the purposes of the trust.

14-10418. Name change

The trustee may modify a trust agreement to change the name of the trustee or beneficiary if the trustee or beneficiary's name has been legally changed.

14-10501. Rights of beneficiary's creditor or assignee; exception

A. The court may authorize a creditor or assignee of the beneficiary to reach the beneficiary's interest by attachment of present or future distributions to or for the benefit of the beneficiary or by other means. The court may limit the award to such relief as is appropriate under the circumstances.

B. This section does not apply and a trustee has no liability to any creditor of a beneficiary for any distributions made to or for the benefit of the beneficiary to the extent a beneficiary's interest is protected by a spendthrift provision or is a discretionary trust interest referred to in section 14-10504.

14-10502. Spendthrift provision

A. A spendthrift provision is valid only if it restrains either voluntary or involuntary transfer of a beneficiary's interest.

B. A term of a trust providing that the interest of a beneficiary is held subject to a spendthrift trust, or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary's interest.

C. A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and, except as otherwise provided in this article, a creditor or assignee of the beneficiary may not attach, garnish, execute on or otherwise reach the interest or a distribution by the trustee before its receipt by the beneficiary.

14-10503. Exceptions to spendthrift provision; definition

A. Even if a trust contains a spendthrift provision, a beneficiary's child who has a judgment or court order against the beneficiary for support or maintenance, or a judgment creditor who has provided services relating to the protection of a beneficiary's interest in the trust, may obtain from a court an order attaching present or future distributions to or for the benefit of the beneficiary only for these matters.

B. The exception prescribed in subsection A is unenforceable against a special needs trust.

C. A spendthrift provision is unenforceable against a claim of this state or the United States only to the extent a statute of this state or federal law so provides.

D. For the purposes of this section, "child" includes any person for whom an order or judgment for child support has been validly entered in this or another state.

14-10504. Discretionary trusts; effect of standard; definition

A. Except as provided in subsection B of this section, whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee's discretion, even if either:

1. The discretion is expressed in the form of a standard of distribution.

2. The trustee has not complied with the applicable standard of distribution or has abused the discretion regarding distributions.

B. To the extent a trustee has not complied with the applicable standard of distribution or has abused the discretion regarding distributions:

1. Except as provided in section 14-10503, a distribution may be ordered by the court to satisfy a judgment or court order against the beneficiary for support or maintenance of the beneficiary's child.

2. The court shall direct the trustee to pay to the child an amount as is equitable under the circumstances but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.

C. This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution, provided that this right may not be exercised by a creditor of the beneficiary or to the extent that any creditor of the beneficiary takes through the name or rights of the beneficiary.

D. Whether or not a trust contains a spendthrift provision:

1. A creditor of a trust beneficiary may not compel a distribution from insurance proceeds payable to the trustee as beneficiary to the extent state law exempts such insurance proceeds from creditors' claims if it had been paid directly to the trust beneficiary.

2. To the extent that under Arizona law life insurance proceeds, policy cash surrender values or other distributions or payments are exempt from attachment or garnishment by, execution on or otherwise the reach of creditors, if the death benefit is payable to an individual beneficiary, the life insurance proceeds, policy cash surrender values or other distributions or payments are also exempt from attachment or garnishment by, execution on or otherwise the reach of creditors if payable to a trust of which a beneficiary is that individual.

E. A creditor of a beneficiary, whether or not the beneficiary is also a trustee or cotrustee, may not reach the beneficiary's beneficial interest or otherwise compel a distribution if either the trustee's discretion to make distributions for the trustee's own benefit is purely discretionary or is limited by an ascertainable standard, including a standard relating to the beneficiary's health, education, support or maintenance or similar language within the meaning of section 2041(b)(1)(a) of the internal revenue code.

F. For the purposes of this section, "child" includes any person for whom an order or judgment for child support has been entered in this or another state.

14-10505. Creditor's claim against settlor

A. Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:

1. During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors. If a trust has more than one settlor or contributor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This paragraph does not abrogate otherwise applicable laws relating to community property.

2. Subject to the requirements of this section, with respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This paragraph does not apply to any trust from which any distribution to the settlor can be made pursuant to the exercise of a power of appointment held by a third party or abrogate otherwise applicable laws relating to community property. A creditor of a settlor:

(a) Shall not reach any trust property based on a trustee's, trust protector's or third party's power, whether or not discretionary, to pay or reimburse the settlor for any income tax on trust income or trust principal that is payable by the settlor under the law imposing the tax or to pay the tax directly to any taxing authority.

(b) Is not entitled to any payment or reimbursement that is to be made directly to any taxing authority.

(c) Shall not reach or compel distributions to or for the benefit of the beneficiary of a special needs trust.

3. After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor's death is subject to claims of the settlor's creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal of remains and statutory allowances to a surviving spouse and children to the extent the settlor's probate estate is inadequate to satisfy those claims, costs, expenses and allowances, except to the extent that state or federal law exempts any property of the trust from these claims, costs, expenses or allowances. If a trust has more than one settlor or contributor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This paragraph does not abrogate otherwise applicable laws relating to community property.

B. For the purposes of this section:

1. During the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power.

2. On the lapse, release or waiver of a power of withdrawal, the holder is not, by reason of any such lapse, release or waiver, treated as the settlor of the trust.

C. For the purposes of this section, a trust settled or established by a corporation, professional corporation, partnership, limited liability company, governmental entity, trust, foundation or other entity is not deemed to be settled or established by its directors, officers, shareholders, partners, members, managers, employees, beneficiaries or agents.

D. For the purposes of this section, amounts contributed to a trust by a corporation, professional corporation, partnership, limited liability company, governmental entity, trust, foundation or other entity are not deemed to have been contributed by its directors, officers, shareholders, partners, employees, beneficiaries or agents. Powers, duties or responsibilities granted to or reserved by the settlor pursuant to the trust and any actions or omissions taken pursuant to the trust are deemed to be the powers, responsibilities, duties, actions or omissions of the settlor and not those of its directors, officers, shareholders, partners, members, managers, employees, beneficiaries or agents.

E. For the purposes of this section, amounts and property contributed to the following trusts are not deemed to have been contributed by the settlor, and a person who would otherwise be treated as a settlor or a deemed settlor of the following trusts shall not be treated as a settlor:

1. An irrevocable inter vivos marital trust that is treated as qualified terminable interest property under section 2523(f) of the internal revenue code if the settlor is a beneficiary of the trust after the death of the settlor's spouse.

2. An irrevocable inter vivos marital trust that is treated as a general power of appointment trust under section 2523(e) of the internal revenue code if the settlor is a beneficiary of the trust after the death of the settlor's spouse.

3. An irrevocable inter vivos trust for the settlor's spouse if the settlor is a beneficiary of the trust after the death of the settlor's spouse.

4. An irrevocable trust for the benefit of a person, the settlor of which is the person's spouse, regardless of whether or when the person was the settlor of an irrevocable trust for the benefit of that spouse.

5. An irrevocable trust for the benefit of a person to the extent that the property of the trust was subject to a general power of appointment in another person.

F. For the purposes of subsection E, a person is a beneficiary whether so named under the initial trust instrument or through the exercise by that person's spouse or by another person of a limited or general power of appointment.

G. Subsections C and D do not apply to:

1. A trust that has no valid business purpose and that has as its principal purpose the evasion of the claims of the creditors of the persons or entities listed in those subsections.

2. A trust that would be treated as a grantor trust pursuant to sections 671 through 679 of the internal revenue code. This paragraph does not apply to a qualified subchapter S trust that is treated as a grantor trust solely by application of section 1361(d) of the internal revenue code.

14-10506. Overdue distribution; definition

A. Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution on termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the mandated distribution date unless the terms of the trust expressly authorize the trustee to delay the distribution to protect the beneficiary's interest in the distribution.

B. For the purposes of this section, "mandatory distribution" means a distribution of income or principal that the trustee is required to make to a beneficiary under the terms of the trust, including a distribution on termination of the trust. Mandatory distribution does not include a distribution that is subject to the exercise of the trustee's discretion even if:

1. The discretion is expressed in the form of a standard of distribution.

2. The terms of the trust authorizing a distribution couple language of discretion with language of direction.

14-10507. Personal obligations of trustee

Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt.

14-10602. Revocation or amendment of revocable trust

A. Unless the terms of a trust expressly provide that the trust is irrevocable, a settlor may revoke or amend the trust subject to any limitations prescribed in the terms of the trust.

B. If a revocable trust is created or funded by more than one settlor:

1. To the extent the trust consists of community property, the trust may be revoked by either spouse acting alone as to that spouse's share of the community property but may be amended only by joint action of both spouses.

2. To the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard the portion of the trust property attributable to that settlor's contribution.

C. The settlor may revoke or amend a revocable trust either:

1. By substantial compliance with a method provided in the terms of the trust.

2. If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by either:

(a) A later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust.

(b) Any other writing signed by the settlor manifesting clear and convincing evidence of the settlor's intent.

D. On revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.

E. A settlor's powers with respect to revocation, amendment or distribution of trust property may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the trust or, if the terms of the trust do not prohibit an agent from exercising powers on behalf of the settlor, to the extent expressly authorized under the power of attorney. If an agent is not so authorized and the terms of the trust do not prohibit a conservator from exercising powers on behalf of a settlor, a settlor's power to revoke, amend or distribute may be exercised by the settlor's conservator with the approval of the court supervising the conservatorship or by the settlor's guardian with the approval of the court supervising the guardianship if an agent is not so authorized and a conservator has not been appointed.

F. A trustee who does not have actual knowledge that a trust has been revoked or amended is not liable to the settlor or settlor's successors in interest for distributions made and other actions taken on the assumption that the trust had not been amended or revoked.

14-10603. Settlor's powers; powers of withdrawal

A. While a trust is revocable by the settlor, the rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.

B. During the period a power of withdrawal may be exercised, the holder of the power has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.

14-10604. Limitation on actions contesting validity or revocable trust; distribution of trust property

A. A person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor's death within the earlier of:

1. One year after the settlor's death.

2. Four months after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust's existence, of the trustee's name and address and of the time allowed for commencing a proceeding.

B. On the death of the settlor of a trust that was revocable at the settlor's death, the trustee may proceed to distribute the trust property in accordance with the terms of the trust. The trustee is not subject to liability for doing so unless either:

1. The trustee has actual knowledge of a pending judicial proceeding contesting the validity of the trust.

2. A potential contestant has notified the trustee in writing of a possible judicial proceeding to contest the trust and a judicial proceeding is commenced within sixty days after the contestant sent the notification.

C. A beneficiary of a trust that is determined to have been invalid is liable to return any distribution received except to the extent that the beneficiary is a bona fide purchaser for value without notice.

14-10701. Accepting or declining trusteeship

A. Except as otherwise provided in subsection C, a person designated as trustee accepts the trusteeship either:

1. By substantially complying with a method of acceptance provided in the terms of the trust.

2. If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee or otherwise indicating acceptance of the trusteeship.

B. A person designated as trustee who has not yet accepted the trusteeship may reject the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is deemed to have rejected the trusteeship.

C. A person designated as trustee, without accepting the trusteeship, may:

1. Act to preserve the trust property if, within a reasonable time after acting, the person sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to a qualified beneficiary.

2. Inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose.

14-10702. Trustee's bond

A. A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.

B. The court may specify the amount of a bond, its liabilities and whether sureties are necessary. The court may modify or terminate a bond at any time.

C. Notwithstanding the terms of the trust, the following are not required to give a bond:

1. A national banking association.

2. A holder of a banking permit under the laws of this state.

3. A savings and loan association authorized to conduct trust business in this state.

4. A title insurance company qualified to do business under the laws of this state.

5. A trust company holding a certificate to engage in trust business from the state superintendent of banks.

6. The public fiduciary.

14-10703. Cotrustees

A. Cotrustees who are unable to reach a unanimous decision may act by majority decision.

B. If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.

C. A cotrustee must participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification under other law or other temporary incapacity or the cotrustee has properly delegated the performance of the function to another trustee.

D. If a cotrustee is unavailable to perform duties because of absence, illness, disqualification under other law or other temporary incapacity, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.

E. A trustee may delegate to a cotrustee the performance of a function unless the terms of the trust provide that the trustees perform jointly. Unless a delegation was irrevocable, a trustee may revoke a delegation previously made.

F. Except as otherwise provided in subsection G, a trustee who does not join in an action of another trustee is not liable for the action.

G. Each trustee shall exercise reasonable care to:

1. Prevent a cotrustee from committing a material breach of trust.

2. Compel a cotrustee to redress a material breach of trust.

H. A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified any cotrustee of the dissent at or before the time of the action is not liable for the action unless the action is a material breach of trust.

14-10704. Vacancy in trusteeship; appointment of successor

A. A vacancy in a trusteeship occurs if:

1. A person designated as trustee rejects the trusteeship.

2. A person designated as trustee cannot be identified or does not exist.

3. A trustee resigns.

4. A trustee is disqualified or removed.

5. A trustee dies.

6. A guardian or conservator is appointed for an individual serving as trustee.

B. If one or more cotrustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.

C. A vacancy in a trusteeship of a noncharitable trust that is required to be filled must be filled in the following order of priority:

1. By a person designated in the terms of the trust to act as successor trustee or a person who is appointed by a person who has authority in the trust instrument to appoint a successor trustee.

2. By a person appointed by unanimous agreement of the qualified beneficiaries.

3. By a person appointed by the court.

D. A vacancy in a trusteeship of a charitable trust that is required to be filled must be filled in the following order of priority:

1. By a person designated in the terms of the trust to act as successor trustee.

2. By a person selected by the charitable organizations expressly designated to receive distributions under the terms of the trust.

3. By a person appointed by the court.

E. Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust.

14-10705. Resignation of trustee

A. A trustee may resign either:

1. Unless the trust instrument provides otherwise, on at least thirty days' notice to the qualified beneficiaries, the settlor, if living, and all cotrustees.

2. With the approval of the court.

B. In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.

C. Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation.

14-10706. Removal of trustee

A. The settlor, a cotrustee or a beneficiary may request the court to remove a trustee or a trustee may be removed by the court on its own initiative.

B. The court may remove a trustee if:

1. The trustee has committed a material breach of trust.

2. Lack of cooperation among cotrustees substantially impairs the administration of the trust.

3. Because of unfitness, unwillingness or persistent failure of the trustee to administer the trust for the benefit of the beneficiaries, the court determines that removal of the trustee best serves the interests of the beneficiaries.

4. There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust and a suitable cotrustee or successor trustee is available.

C. Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order appropriate relief under section 14-11001, subsection B as may be necessary to protect the trust property or the interests of the beneficiaries.

D. On petition of a beneficiary who is also a settlor of a trust, including a beneficiary for whom a guardian or conservator has been appointed, the court shall substitute a trustee and appoint a successor if the substitution is in the best interest of the beneficiary. The trustee and the trustee's attorney may be compensated from the trust for defending against a petition for substitution only for the amount ordered by the court and on petition by the trustee or the trustee's attorney. When substituting a trustee and appointing a successor, the court may appoint an individual nominated by the beneficiary if the beneficiary has, in the opinion of the court, sufficient mental capacity to make an intelligent choice.

14-10707. Delivery of property by former trustee

A. Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.

B. A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property in the trustee's possession to the cotrustee, successor trustee or other person entitled to it.

14-10708. Compensation of trustee

A. If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to compensation that is reasonable under the circumstances.

B. If the terms of a trust specify the trustee's compensation or refer to another ascertainable source for determining that compensation, the trustee is entitled to be compensated as specified, but the court may allow more or less compensation if either:

1. The duties of the trustee are substantially different from those contemplated when the trust was created.

2. The compensation specified by the terms of the trust would be unreasonably low or high.

14-10709. Reimbursement of expenses

A. A trustee is entitled to be reimbursed out of the trust property, with reasonable interest, for:

1. Expenses that were properly incurred in the administration of the trust.

2. To the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.

B. An advance by the trustee of money for the protection of the trust gives rise to a lien against trust property to secure reimbursement with reasonable interest.

14-10801. Duty to administer trust

On acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries and in accordance with this chapter.

14-10802. Duty of loyalty

A. A trustee shall administer the trust solely in the interests of the beneficiaries.

B. Subject to the rights of persons dealing with or assisting the trustee as provided in section 14-11012, a sale, encumbrance or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or that is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless either:

1. The transaction was authorized by the terms of the trust.

2. The transaction was approved by the court.

3. The beneficiary did not commence a judicial proceeding within the time allowed by section 14-11005.

4. The beneficiary consented to the trustee's conduct, ratified the transaction or released the trustee in compliance with section 14-11009.

5. The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.

C. A sale, encumbrance or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:

1. The trustee's spouse.

2. The trustee's descendants, siblings or parents or their spouses.

3. An agent or attorney of the trustee.

4. A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment.

D. A transaction between a trustee and a beneficiary that does not concern trust property but that occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary and from which the trustee obtains an advantage is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.

E. A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.

F. An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the prudent investor rule of article 9 of this chapter. The trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust if the trustee at least annually notifies the persons entitled under section 14-10813 to receive a copy of the trustee's annual report that the bank or trust company provides services for and receives fees from the investment company or investment trust. This notification may be made in the trustee's statements of the fiduciary account.

G. In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.

H. This section does not preclude the following transactions, if fair to the beneficiaries:

1. An agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee.

2. Payment of reasonable compensation to the trustee.

3. A transaction between a trust and another trust, decedent's estate or conservatorship of which the trustee is a fiduciary or in which a beneficiary has an interest.

4. A deposit of trust money in a regulated financial service institution operated by the trustee.

5. An advance by the trustee of money for the protection of the trust.

I. The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that may violate this section if entered into by the trustee.

14-10803. Impartiality

If a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing and distributing the trust property, giving due regard to the beneficiaries' respective interests.

14-10804. Prudent administration

A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.

14-10805. Costs of administration

In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust and the skills of the trustee.

14-10806. Trustee's skills

A trustee who has special skills or expertise, or who is named trustee in reliance on the trustee's representation that the trustee has special skills or expertise, shall use those special skills or expertise.

14-10807. Delegation by trustee

A. A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill and caution in:

1. Selecting an agent.

2. Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust.

3. Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.

B. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

C. A trustee who complies with subsection A is not liable to the beneficiaries or to the trust for an action of the agent to whom the function was delegated.

D. By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.

14-10808. Powers to direct

A. While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.

B. If the trust provides that the assets in the trust are subject to the direction of the settlor or a cotrustee, beneficiary or third party, the trustee has no duty to review the directions it is directed to make or to notify the beneficiaries regarding any investment action taken pursuant to the direction. The trustee is not responsible for the purchase, monitoring, retention or sale of assets that are subject to the direction of the settlor or a cotrustee, beneficiary or third party. The trustee is not subject to liability if the trustee acts pursuant to the direction, even if the actions constitute a breach of fiduciary duty, unless the trustee acts in bad faith or with reckless indifference.

C. The terms of a trust may confer on a trustee or other person a power to direct the modification or termination of the trust.

D. Unless the trust instrument provides otherwise, a person, other than a beneficiary, who holds a power to direct is presumptively a fiduciary who, as such, is required to act in good faith with regard to the purposes of the trust and the interests of the beneficiaries. The holder of a power to direct is liable for any loss that results from breach of a fiduciary duty.

14-10809. Control and protection of trust property

A trustee shall take reasonable steps to take control of and protect the trust property.

14-10810. Record keeping and identification of trust property

A. A trustee shall keep adequate records of the administration of the trust.

B. A trustee shall keep trust property separate from the trustee's own property.

C. Except as otherwise provided in subsection D, a trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.

D. If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of two or more separate trusts.

14-10811. Enforcement and defense of claims

A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust.

14-10812. Collecting trust property

A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee and to redress a breach of trust known to the trustee to have been committed by a former trustee.

14-10813. Duty to inform and report

A. Unless the trust instrument provides otherwise, a trustee shall keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless the trustee determines that it is unreasonable under the circumstances to do so, a trustee shall promptly respond to a beneficiary's request for information related to the administration of the trust.

B. A trustee:

1. On request of a beneficiary, shall promptly furnish to the beneficiary a copy of the portions of the trust instrument that are necessary to describe the beneficiary's interest.

2. Within sixty days after accepting a trusteeship, shall notify the qualified beneficiaries of the acceptance and of the trustee's name, address and telephone number.

3. Within sixty days after the date the trustee acquires knowledge of the creation of an irrevocable trust or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified beneficiaries of the trust's existence, of the identity of the settlor or settlors, of the trustee's name, address and telephone number, of the right to request a copy of the relevant portions of the trust instrument and of the right to a trustee's report as provided in subsection C.

4. Shall notify the qualified beneficiaries at least thirty days in advance of any change in the method or rate of the trustee's compensation.

C. A trustee shall send to the distributees or permissible distributees of trust income or principal and to other beneficiaries who request it, at least annually and at the termination of the trust, a report of the trust property, liabilities, receipts and disbursements, including the source and amount of the trustee's compensation, a listing of the trust assets and, if feasible, their respective market values. On a vacancy in a trusteeship, unless a cotrustee remains in office, a report must be sent to the qualified beneficiaries by the former trustee. A personal representative, conservator or guardian may send the qualified beneficiaries a report on behalf of a deceased or incapacitated trustee.

D. A beneficiary may waive the right to a trustee's report or other information otherwise required to be furnished under this section. A beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.

E. Subsection B, paragraphs 2 and 3 apply only to a trustee who accepts a trusteeship on or after January 1, 2009, to an irrevocable trust created on or after January 1, 2009 and to a revocable trust that becomes irrevocable on or after January 1, 2009.

14-10814. Discretionary powers; tax savings

A. Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such as absolute, sole or uncontrolled, the trustee shall exercise a discretionary power in good faith as to only beneficiaries of the trust and creditors of the trust and no other persons, including creditors of the beneficiaries, except only to the extent that creditors of beneficiaries are expressly entitled to attachment pursuant to section 14-10504, subsection B and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.

B. Subject to subsection D of this section, and unless the terms of the 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 of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee's personal benefit may exercise the power only in accordance with an ascertainable standard relating to the trustee's individual health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the internal revenue code. This paragraph does not expand the power or duty of a trustee to make distributions and does not apply to a power held in an individual capacity.

2. A trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.

C. A power whose exercise is limited or prohibited by subsection B of this section may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.

D. Subsection B of this section does not apply to:

1. A power held by the settlor's spouse who is the trustee of a trust for which a marital deduction, as defined in section 2056(b)(5) or 2523(e) of the internal revenue code, was previously allowed.

2. Any trust during any period that the trust may be revoked or amended by its settlor.

3. A trust if contributions to the trust qualify for the annual exclusion under section 2503(c) of the internal revenue code.

14-10815. General powers of trustee

A. A trustee, without authorization by the court, may exercise:

1. Powers conferred by the terms of the trust.

2. Except as limited by the terms of the trust:

(a) All powers over the trust property that an unmarried competent owner has over individually owned property.

(b) Any other powers appropriate to achieve the proper investment, management and distribution of the trust property.

(c) Any other powers conferred by this chapter.

B. The exercise of a power by a person acting in a fiduciary capacity is subject to the fiduciary duties prescribed by this article.

14-10816. Specific powers of trustee

Without limiting the authority conferred by section 14-10815, a trustee may:

1. Collect trust property and accept or reject additions to the trust property from a settlor or any other person.

2. Acquire or sell property, for cash or on credit, at public or private sale.

3. Exchange, partition or otherwise change the character of trust property.

4. Deposit trust money in an account in a regulated financial service institution.

5. Borrow money, with or without security, and mortgage or pledge trust property for a period within or extending beyond the duration of the trust.

6. With respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members or property owners, including merging, dissolving or otherwise changing the form of business organization or contributing additional capital.

7. With respect to stocks or other securities, exercise the rights of an absolute owner, including the right to:

(a) Vote, give proxies to vote, with or without power of substitution, or enter into or continue a voting trust agreement.

(b) Hold a security in the name of a nominee or in other form without disclosure of the trust so that title may pass by delivery.

(c) Pay calls, assessments and other sums chargeable or accruing against the securities and sell or exercise stock subscription or conversion rights.

(d) Deposit the securities with a depositary or other regulated financial service institution.

8. With respect to an interest in real property, construct or make ordinary or extraordinary repairs to, alterations to or improvements in buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate land to public use or grant public or private easements and make or vacate plats and adjust boundaries.

9. Enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust.

10. Grant an option involving a sale, lease or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired.

11. Insure the property of the trust against damage or loss and insure the trustee, the trustee's agents and beneficiaries against liability arising from the administration of the trust.

12. Abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration.

13. With respect to possible liability for violation of environmental law:

(a) Inspect or investigate property the trustee holds or has been asked to hold, or property owned or operated by an organization in which the trustee holds or has been asked to hold an interest, for the purpose of determining the application of environmental law with respect to the property.

(b) Take action to prevent, abate or otherwise remedy any actual or potential violation of any environmental law affecting property held directly or indirectly by the trustee, whether taken before or after the assertion of a claim or the initiation of governmental enforcement.

(c) Decline to accept property into trust or disclaim any power with respect to property that is or may be burdened with liability for violation of environmental law.

(d) Compromise claims against the trust that may be asserted for an alleged violation of environmental law.

(e) Pay the expense of any inspection, review, abatement or remedial action to comply with environmental law.

14. Pay or contest any claim, settle a claim by or against the trust and release in whole or in part a claim belonging to the trust.

15. Pay taxes, assessments, compensation of the trustee and of employees and agents of the trust and other expenses incurred in the administration of the trust.

16. Exercise elections with respect to federal, state and local taxes.

17. Select a mode of payment under any employee benefit or retirement plan, annuity or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds.

18. Make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances, and the trustee has a lien on future distributions for repayment of those loans.

19. Pledge trust property to guarantee loans made by others to the beneficiary.

20. Appoint a trustee to act in another jurisdiction with respect to trust property located in the other jurisdiction, confer on the appointed trustee all of the powers and duties of the appointing trustee, require that the appointed trustee furnish security and remove any trustee so appointed.

21. Pay an amount distributable to a beneficiary who is under a legal disability or who the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or applying it for the beneficiary's benefit, or by either:

(a) Paying it to the beneficiary's conservator or, if the beneficiary does not have a conservator, the beneficiary's guardian.

(b) Paying it to the beneficiary's custodian under the uniform transfers to minors act or custodial trustee under the uniform custodial trust act, and, for that purpose, creating a custodianship or custodial trust.

(c) If the trustee does not know of a conservator, guardian, custodian or custodial trustee, paying it to an adult relative or other person having legal or physical care or custody of the beneficiary to be expended on the beneficiary's behalf.

(d) Managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution.

22. On distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets, including community property, in proportionate or disproportionate shares, value the trust property for those purposes and adjust for resulting differences in valuation. In making a division or distribution of community property held in trust, the trustee may consider community property held outside the trust so that the division of community property held in the trust and outside of the trust is made based on equal value but not necessarily proportionately.

23. Resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration or other procedure for alternative dispute resolution.

24. Prosecute or defend an action, claim or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee's duties.

25. Sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the trustee's powers.

26. On termination of the trust, exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it.

14-10817. Distribution on termination; release of trustee

A. On termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within thirty days after the proposal was sent but only if the proposal informed the beneficiary of the right to object and of the time allowed for objection.

B. On the occurrence of an event terminating or partially terminating a trust, the trustee, within a reasonable time, shall distribute the trust property to the persons entitled to it subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses and taxes.

C. A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent:

1. It was induced by improper conduct of the trustee.

2. The beneficiary, at the time of the release, did not know of the beneficiary's rights or of the material facts relating to the breach.

14-10818. Trust protector

A. A trust instrument may provide for the appointment of a trust protector. For the purposes of this section, a person designated with a status or title, other than that of a beneficiary, with powers similar to those specified in subsection B is a trust protector, except to the extent otherwise provided in the trust instrument.

B. A trust protector appointed by the trust instrument has the powers, delegations and functions conferred on the trust protector by the trust instrument. These powers, delegations and functions may include the following:

1. Remove and appoint a trustee.

2. Modify or amend the trust instrument for any valid purpose or reason, including, without limitation, to achieve favorable tax status or to respond to changes in the internal revenue code or state law, or the rulings and regulations under that code or law.

3. Increase, decrease, modify or restrict the interests of any beneficiary of the trust.

4. Modify the terms of a power of appointment granted by the trust.

5. Change the applicable law governing the trust.

C. Except to the extent otherwise specifically provided in the trust instrument, a modification authorized under subsection B may not:

1. Grant a beneficial interest to an individual or a class of individuals unless the individual or class of individuals is specifically provided for under the trust instrument.

2. Modify the beneficial interest of a governmental unit in a special needs trust.

D. Any provision of this title to the contrary, but except to the extent otherwise provided by the trust instrument, a trust protector is not a trustee or fiduciary and is not liable or accountable as a trustee or fiduciary because of an act or omission of the trust protector when performing or failing to perform the duties of a trust protector under the trust instrument. This subsection does not apply to trusts that become irrevocable before January 1, 2009 if the trust instrument allows the settlor to remove and replace the trust protector.

14-10819. Trustee's special power to appoint to other trust

A. Unless the terms of the instrument expressly provide otherwise, a trustee who has the discretion under the terms of a testamentary instrument or irrevocable inter vivos agreement to make distributions, regardless of whether a standard is provided in the instrument or agreement, for the benefit of a beneficiary of the trust may exercise without prior court approval the trustee's discretion by appointing part or all of the estate trust in favor of a trustee of another trust if the exercise of this discretion:

1. Does not reduce any fixed nondiscretionary income payment to a beneficiary.

2. Does not alter any nondiscretionary annuity or unitrust payment to a beneficiary.

3. Is in favor of the beneficiaries of the trust.

4. Results in any ascertainable standard applicable for distributions from the trust being the same or more restrictive standard applicable for distributions from the recipient trust when the trustee exercising the power described in this subsection is a possible beneficiary under the standard.

5. Does not adversely affect the tax treatment of the trust, the trustee, the settlor or the beneficiaries.

6. Does not violate the limitations on validity under sections 14-2901 and 14-2905.

B. This section applies to a trust governed by the laws of this state, including a trust whose governing jurisdiction is transferred to this state.

C. The exercise of the power to invade the principal of a trust under subsection A of this section is considered to be the exercise of a special power of appointment.

D. The trustee, in the trustee's sole discretion, before or after the exercise of the trustee's discretion under this section, may request the court to approve the exercise.

E. The trustee may exercise the discretion to appoint all of the trust estate pursuant to this section by restating the trust.

14-10820. Fiduciaries; service as trustee; limitation

A person whose license as a fiduciary has been suspended or revoked pursuant to section 14-5651 may not serve as a trustee in any capacity unless the person is related to the beneficiary by blood, adoption or marriage. This prohibition does not apply if the person's license has been reinstated and is in good standing.

14-10901. Prudent investor rule

A. Except as provided in subsection B, a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule requirements of this article.

B. The prudent investor rule is a default rule and may be expanded, restricted, eliminated or otherwise altered by the provisions of a trust.

C. A trustee is not liable to a beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the trust.

14-10902. Standard of care; portfolio strategy; risk and return objectives

A. A trustee shall invest and manage trust assets as a prudent investor would by considering the purposes, terms, distribution requirements and other circumstances of the trust. In satisfying this standard the trustee shall exercise reasonable care, skill and caution.

B. A trustee's investment and management decisions respecting individual assets shall not be evaluated in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

C. Among circumstances that a trustee shall consider in investing and managing trust assets are any of the following that are relevant to the trust or its beneficiaries:

1. General economic conditions.

2. The possible effect of inflation or deflation.

3. The expected tax consequences of investment decisions or strategies.

4. The role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, specialty assets, alternative investments, tangible and intangible personal property and real property.

5. The expected total return from income and the appreciation of capital.

6. Other resources of the beneficiaries.

7. Needs for liquidity, regularity of income and preservation or appreciation of capital.

8. An asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.

D. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.

E. A trustee may invest in any kind of property or type of investment consistent with the standards of this article.

14-10903. Diversification

A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

14-10904. Duties at inception of trusteeship

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements and other circumstances of the trust and with the requirements of this article.

14-10905. Reviewing compliance

Compliance with this article is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.

14-10906. Prudent investor rule; language to invoke standard

The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this article:

1. Investments permissible by law for investment of trust funds.

2. Legal investments.

3. Authorized investments.

4. Using the judgment and care under the circumstances then prevailing that persons of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital.

5. Prudent man rule.

6. Prudent trustee rule.

7. Prudent person rule.

8. Prudent investor rule.

14-10907. Delegation of investment and management functions; duties; limitations

A. A fiduciary may delegate investment and management functions that a prudent investor of comparable skills might delegate under the circumstances.

B. A fiduciary is not responsible for the investment decisions or actions of the investment agent to which the investment functions are delegated if the fiduciary exercises reasonable care, skill and caution in selecting the investment agent, in establishing the scope and specific terms of the delegation and in reviewing periodically the investment agent's actions in order to monitor the investment agent's performance and compliance with the scope and specific terms of the delegation.

C. The investment agent must comply with the scope and terms of the delegation and exercise the delegated function with reasonable care, skill and caution and is liable to the trust if the agent fails to do so. An investment agent who represents that the agent has special investment skills must exercise those skills.

D. An investment agent who accepts the delegation of a fiduciary's function from a fiduciary who is subject to the jurisdiction of a court of this state is deemed to have submitted to the jurisdiction of that court even if the delegation agreement provides for a different jurisdiction or venue.

E. A cofiduciary may delegate investment and management functions to another cofiduciary if the delegating cofiduciary reasonably believes that the other cofiduciary has greater investment skills than the delegating cofiduciary with respect to those functions. The delegating cofiduciary is not responsible for the investment decisions or actions of the other cofiduciary to which the investment function are delegated if the delegating cofiduciary exercises reasonable care, skill and caution in establishing the scope and specific terms of the delegation and in reviewing periodically the other cofiduciary's actions in order to monitor the cofiduciary's performance and compliance with the scope and specific terms of the delegation.

F. Investment in a mutual fund is not a delegation of investment function and neither the mutual fund nor its advisor is an investment agent.

14-10908. Life insurance on settlor; liability of trustee

A trustee may acquire or retain a contract of life insurance on the life of the settlor or the settlor's spouse, or both, without liability for a loss arising from the trustee's failure to:

1. Determine whether the contract is or remains a proper investment.

2. Investigate the financial strength of the life insurance company.

3. Exercise nonforfeiture provisions available under the contract.

4. Diversify the contract.

14-10909. Application to existing trusts

A. This article applies to trusts existing on and created after July 20, 1996.

B. As applied to trusts existing on July 20, 1996, this article governs only decisions or actions occurring after that date.

14-11001. Remedies for breach of trust

A. A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.

B. Except as provided in section 14-7404, to remedy a breach of trust that has occurred or may occur, the court may:

1. Compel the trustee to perform the trustee's duties.

2. Enjoin the trustee from committing a breach of trust.

3. Compel the trustee to redress a breach of trust by paying money, restoring property or other means.

4. Order a trustee to account.

5. Appoint a special fiduciary to take possession of the trust property and administer the trust.

6. Suspend the trustee.

7. Remove the trustee as provided in section 14-10706.

8. Reduce or deny compensation to the trustee.

9. Subject to section 14-10706, void an act of the trustee, impose a lien or a constructive trust on trust property or trace trust property wrongfully disposed of and recover the property or its proceeds.

10. Order any other appropriate relief.

14-11002. Damages for breach of trust

A. Except as provided in section 14-7404, a trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of either:

1. The amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred.

2. The profit the trustee made by reason of the breach.

B. Except as otherwise provided in this subsection, if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received.

14-11003. Damages in absence of breach

A. Except as provided in section 14-7404, a trustee is accountable to an affected beneficiary for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust. For the purposes of this subsection, profit does not include:

1. Reasonable compensation to which the trustee is entitled pursuant to section 14-10708.

2. Compensation or fees permitted pursuant to section 14-10802.

3. Reasonable fees or compensation for services rendered that the trustee or an affiliate customarily provides in the normal course of business and that are typical in the geographic area where the trust is administered.

4. Reasonable remuneration for services permitted pursuant to section 6-246.

B. Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for not having made a profit.

14-11004. Attorney fees and costs

A. A trustee or a person who is nominated as a trustee is entitled to reimbursement from the trust for that person's reasonable fees, expenses and disbursement, including attorney fees and costs, that arise out of and that relate to the good faith defense or prosecution of a judicial or alternative dispute resolution proceeding involving the administration of the trust, regardless of whether the defense or prosecution is successful.

B. A court or arbitrator may order that a party's reasonable fees, expenses and disbursements pursuant to subsection A be paid by any other party or the trust that is the subject of the judicial proceeding.

14-11005. Limitation of action against trustee

A. A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding.

B. A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.

C. If subsection A does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within two years after the first to occur of:

1. The removal, resignation or death of the trustee.

2. The termination of the beneficiary's interest in the trust.

3. The termination of the trust.

14-11006. Reliance on trust instrument

A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.

14-11007. Event affecting administration or distribution

If the happening of an event, including marriage, divorce, performance of educational requirements or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of knowledge.

14-11008. Exculpation of trustee

A. A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it either:

1. Relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries.

2. Was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.

B. An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.

C. Subsection B does not apply to an irrevocable trust created before January 1, 2009 or to a revocable trust created before January 1, 2009 that is not amended on or after January 1, 2009.

14-11009. Beneficiary's consent, release or ratification

A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach or ratified the transaction constituting the breach, unless either:

1. The consent, release or ratification of the beneficiary was induced by improper conduct of the trustee.

2. At the time of the consent, release or ratification, the beneficiary did not know of the beneficiary's rights or of the material facts relating to the breach.

14-11010. Limitation on personal liability of trustee

A. Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.

B. A trustee is personally liable for torts committed in the course of administering a trust or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.

C. A claim based on a contract entered into by a trustee in the trustee's fiduciary capacity, on an obligation arising from ownership or control of trust property or on a tort committed in the course of administering a trust may be asserted in a judicial proceeding against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for the claim.

14-11011. Interest as general partner

A. Except to the extent that personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in a statement previously filed pursuant to the uniform partnership act or the uniform limited partnership act.

B. A trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.

14-11012. Protection of person dealing with trustee

A. A person other than a beneficiary who in good faith assists a trustee or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers, is protected from liability as if the trustee properly exercised the power.

B. A person other than a beneficiary who in good faith deals with a trustee is not required to inquire into the extent of the trustee's powers or the propriety of their exercise.

C. A person who in good faith delivers assets to a trustee need not ensure their proper application.

D. A person other than a beneficiary who in good faith assists a former trustee or who in good faith and for value deals with a former trustee, without knowledge that the trusteeship has terminated, is protected from liability as if the former trustee were still a trustee.

E. Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section.

14-11013. Certification of trust

A. Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information:

1. That the trust exists and the date the trust instrument was executed.

2. The identity of the settlor.

3. The identity and address of the currently acting trustee.

4. The powers of the trustee.

5. The revocability or irrevocability of the trust and the identity of any person holding a power to revoke the trust.

6. The authority of cotrustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee.

7. The manner of taking title to trust property.

B. A certification of trust may be signed or otherwise authenticated by any trustee.

C. A certification of trust must state that the trust has not been revoked, modified or amended in any manner that would cause the representations contained in the certification of trust to be incorrect.

D. A certification of trust need not contain the dispositive terms of a trust.

E. A recipient of a certification of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments that designate the trustee and confer on the trustee the power to act in the pending transaction.

F. A person who acts in reliance on a certification of trust without knowledge that the representations contained in the certification are incorrect is not liable to any person for so acting and may assume without inquiry the existence of the facts contained in the certification. Knowledge of the terms of the trust may not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying on the certification.

G. A person who in good faith enters into a transaction in reliance on a certification of trust may enforce the transaction against the trust property as if the representations contained in the certification were correct.

H. A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages if the court determines that the person did not act in good faith in demanding the trust instrument.

I. This section does not limit the right of a person to obtain a copy of the trust instrument in a judicial proceeding concerning the trust.

14-11014. Total return trusts; definitions

A. A trustee, other than an interested trustee, or if two or more persons are acting as trustee, a majority of the trustees who are not an interested trustee, in its sole discretion and without the approval of the court may:

1. Convert an income trust to a total return unitrust.

2. Reconvert a total return unitrust to an income trust.

3. Change the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust, or both, if:

(a) The trustee adopts a written policy for the trust providing either:

(i) In the case of a trust being administered as an income trust, future distributions from the trust will be unitrust amounts rather than net income.

(ii) In the case of a trust being administered as a total return unitrust, future distributions from the trust will be net income rather than unitrust amounts.

(iii) That the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust, or both, will be changed as stated in the policy.

(b) The trustee sends written notice of its intention to take this action, along with copies of the written policy and this section, to:

(i) The settlor of the trust, if living.

(ii) All qualified beneficiaries of the trust.

(iii) All persons acting as adviser or trust protector of the trust.

(c) At least one person receiving notice under subdivision (b), item (ii) or (iii) of this subsection is legally competent.

(d) No person receiving notice objects to the proposed action of the trustee by submitting a written instrument delivered to the trustee within thirty days after receipt of the notice.

B. If there is no trustee of the trust other than an interested trustee, the interested trustee or, if two or more persons are acting as trustee and are interested trustees, a majority of interested trustees, in its sole discretion and without the approval of the probate court may:

1. Convert an income trust to a total return unitrust.

2. Reconvert a total return unitrust to an income trust.

3. Change the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust, or both, if:

(a) The trustee adopts a written policy for the trust providing either:

(i) In the case of a trust being administered as an income trust, that future distributions from the trust will be unitrust amounts rather than net income.

(ii) In the case of a trust being administered as a total return unitrust, that future distributions from the trust will be net income rather than unitrust amounts.

(iii) That the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust, or both, will be changed as stated in the policy.

(b) The trustee appoints a disinterested person who, in its sole discretion but acting in a fiduciary capacity, determines for the trustee:

(i) The percentage to be used to calculate the unitrust amount.

(ii) The method to be used in determining the fair market value of the trust.

(iii) Which assets, if any, are to be excluded in determining the unitrust amount.

(c) The trustee sends written notice of its intention to take such action, along with copies of the written policy and this section, and the determinations of the disinterested person to:

(i) The settlor of the trust, if living.

(ii) All qualified beneficiaries of the trust.

(iii) All persons acting as adviser or protector of the trust.

(d) At least one person receiving notice under subdivision (c), item (ii) or (iii) of this subsection is legally competent.

(e) No person receiving notice objects to the proposed action or the determinations of the disinterested person by submitting a written instrument delivered to the trustee within thirty days after receipt of the notice.

C. If any trustee wishes to convert an income trust to a total return unitrust, reconvert a total return unitrust to an income trust or change the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust, or both, but does not have the ability to or elects not to do it pursuant to subsection A or B of this section, the trustee may petition the probate court for an order as the trustee deems appropriate. If there is only one trustee of such a trust and that trustee is an interested trustee or if there are two or more trustees of such a trust and a majority of them are interested trustees, the court, in its discretion or on petition of the trustee or trustees or of any person interested in the trust, may appoint a disinterested person who, acting in a fiduciary capacity, shall present information to the court necessary to enable the court to make its determinations.

D. The fair market value of the trust shall be determined at least annually, using a valuation date or dates or averages of valuation dates as are deemed appropriate. Assets for which a fair market value cannot be readily ascertained shall be valued using valuation methods as are deemed reasonable and appropriate. Assets used by a trust beneficiary, such as a residence property or tangible personal property, may be excluded from fair market value for computing the unitrust amount.

E. The percentage to be used in determining the unitrust amount shall be a reasonable current return from the trust, but not less than three per cent or more than five per cent, taking into account the intentions of the settlor of the trust as expressed in the governing instrument, the needs of the beneficiaries, general economic conditions, projected current earnings and appreciation for the trust, and projected inflation and its impact on the trust.

F. A trustee may act pursuant to subsection A or B of this section with respect to a trust for which both income and principal have been permanently set aside for charitable purposes under the governing instrument and for which a federal estate or gift tax deduction has been taken, provided that:

1. Instead of sending written notice to the persons described in subsection A, paragraph 3, subdivision (b), item (ii) of this section or pursuant to subsection B, paragraph 3, subdivision (c), item (ii) of this section, as the case may be, the trustee shall send the written notice to the named charity or charities then entitled to receive income of the trust and, if no named charity or charities are entitled to receive all of that income, to the attorney general of this state.

2. Subsection A, paragraph 3, subdivision (c) of this section or subsection B, paragraph 3, subdivision (d) of this section, as the case may be, does not apply to that action.

3. In each taxable year, the trustee must distribute the greater of the unitrust amount and the amount required by section 4942 of the internal revenue code.

G. Following the conversion of an income trust to a total return unitrust, the trustee:

1. Shall consider the unitrust amount as paid from net accounting income determined as if the trust were not a unitrust.

2. Shall then consider the unitrust amount as paid from ordinary income not allocable to net accounting income.

3. After calculating the trust's capital gain net income described in section 1222(9) of the internal revenue code, may consider the unitrust amount as paid from net short-term capital gain described in section 1222(5) of the internal revenue code and then from net long-term capital gain described in section 1222(7) of the internal revenue code.

4. Shall then consider the unitrust amount as coming from the principal of the trust.

H. In administering a total return unitrust, the trustee, in its sole discretion but subject to the provisions of the governing instrument, may determine:

1. The effective date of the conversion.

2. The timing of distributions, including provisions for prorating a distribution for a short year in which a beneficiary's right to payments commences or ceases.

3. Whether distributions are to be made in cash or in kind or partly in cash and partly in kind.

4. If the trust is reconverted to an income trust, the effective date of the reconversion.

5. Any other administrative issues as may be necessary or appropriate to carry out the purposes of this section.

I. Conversion to a total return unitrust under this section does not affect any other provision of the governing instrument, if any, regarding distributions of principal.

J. Notwithstanding anything in this section to the contrary, in the case of a trust for which a marital deduction has been taken for federal tax purposes under section 2056 or 2523 of the internal revenue code, the spouse otherwise entitled to receive the net income of the trust has the right, by written instrument delivered to the trustee, to prohibit conversion to a total return unitrust and to compel the reconversion during that spouse's lifetime of the trust from a total return unitrust to an income trust.

K. This section pertains to the administration of a trust and is available to any trust that is administered in this state under Arizona law or to any trust, regardless of its place of administration, whose governing instrument provides that Arizona law governs matters of construction or administration unless:

1. The governing instrument reflects an intention that the current beneficiary or beneficiaries are to receive an amount other than a reasonable current return from the trust.

2. The trust is a pooled income fund described in section 642(c)(5) of the internal revenue code or a charitable remainder annuity trust described in section 664(d) of the internal revenue code.

3. The governing instrument expressly prohibits use of this section by specific reference to this section or expressly states the settlor's intent that net income not be calculated as a unitrust amount. A provision in the governing instrument that "the provisions of Arizona Revised Statutes, section 14-11014, as amended, or any corresponding provision of future law, shall not be used in the administration of this trust" or "my trustee shall not determine the distributions to the income beneficiary as a unitrust amount" or similar words reflecting such intent shall be sufficient to preclude the use of this section.

L. Any trustee or disinterested person who in good faith takes or fails to take any action under this section is not liable to any person affected by that action or inaction, regardless of whether the person received written notice as prescribed in this section and regardless of whether the person was under a legal disability at the time of the delivery of the notice. The person's exclusive remedy is to obtain a court order directing the trustee to convert an income trust to a total return unitrust, to reconvert from a total return unitrust to an income trust or to change the percentage used to calculate the unitrust amount.

M. This section is available to trusts in existence on October 1, 2008 or created after that date.

N. For the purposes of this section:

1. "Disinterested person" means a person who is not a related or subordinate party pursuant to section 672(c) of the internal revenue code with respect to the person then acting as trustee of the trust and excludes the settlor of the trust and any interested trustee.

2. "Income trust" means a trust that is created by either an inter vivos or a testamentary instrument and that directs or permits the trustee to distribute the net income of the trust to one or more persons, either in required amounts or proportions, or in amounts or proportions determined by the trustee and regardless of whether the trust directs or permits the trustee to distribute the principal of the trust to one or more of these persons.

3. "Interested distributee" means a person to whom distributions of income or principal can currently be made who has the power to remove the existing trustee and designate as successor a person who may be a related or subordinate party pursuant to section 672(c) of the internal revenue code with respect to that distributee.

4. "Interested trustee" means:

(a) An individual trustee to whom the net income or principal of the trust can currently be distributed or would be distributed if the trust were then to terminate and be distributed.

(b) Any trustee who may be removed and replaced by an interested distributee.

(c) An individual trustee whose legal obligation to support a beneficiary may be satisfied by distributions of income and principal of the trust.

5. "Total return unitrust" means an income trust that has been converted under and meets the requirements of this section.

6. "Trustee" means any person acting as trustee of the trust, unless expressly noted otherwise, whether acting in that person's discretion or on the direction of one or more persons acting in a fiduciary capacity.

7. "Unitrust amount" means an amount computed as a percentage of the fair market value of the trust.

14-11015. Express total return unitrusts; definition

A. A unitrust amount may be determined by reference to the net fair market value of the trust's assets in one year or more than one year.

B. Distribution of a fixed percentage unitrust amount is considered a distribution of all of the income of the total return unitrust and is not a fundamental departure from applicable state law, regardless of whether the total return unitrust is created and governed pursuant to section 14-11014 or by the terms of the governing instrument.

C. An express total return unitrust may provide a mechanism for changing the unitrust percentage similar to the mechanism provided under section 14-11014 based on the factors prescribed in that section and may provide for a change from a unitrust to an income trust similar to the mechanism prescribed pursuant to section 14-11014.

D. If an express total return unitrust does not specifically or by reference to section 14-11014 grant a power to change the unitrust percentage or change to an income trust, the trustee shall have no such power.

E. A distribution of the fixed percentage of not less than three per cent nor more than five per cent reasonably apportions the total return of a total return unitrust.

F. An express total return unitrust that provides for a fixed percentage payout in excess of five per cent per year is considered to have paid out all of the income of the total return unitrust and to have paid out principal of the trust to the extent that the fixed percentage payout exceeds five per cent per year.

G. The trust document may grant discretion to the trustee to adopt a consistent practice of treating capital gains as part of the unitrust distribution, to the extent that the unitrust distribution exceeds the net accounting income, or it may specify the ordering of these classes of income.

H. Unless the terms of the trust specifically provide otherwise, a distribution of the unitrust amount is considered to have been made from the following sources in order of priority:

1. From net accounting income determined as if the trust were not a unitrust.

2. From ordinary income not allocable to net accounting income.

3. From net realized short-term capital gains.

4. From net realized long-term capital gains.

5. From the principal of the trust estate.

I. The trust document may provide that assets used by the trust beneficiary, such as a residence property or tangible personal property, may be excluded from the net fair market value for computing the unitrust amount. This use may be considered equivalent to the income or unitrust amount.

J. For the purposes of this section, "express total return unitrust" means a trust that by its governing instrument requires the distribution at least annually of a unitrust amount equal to a fixed percentage of not less than three nor more than five per cent per year of the net fair market value of the trust's assets, valued at least annually.

14-11101. Electronic records and signatures

The provisions of this chapter governing the legal effect, validity or enforceability of electronic records or electronic signatures, and of contracts formed or performed with the use of such records or signatures, conform to the requirements of section 102 of the electronic signatures in global and national commerce act (15 United States Code section 7002) and supersede, modify and limit the requirements of that act.

14-11102. Severability clause

If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

14-12101. Short title

This chapter may be cited as the uniform adult guardianship and protective proceedings jurisdiction act.

14-12102. Definitions

In this chapter, unless the context otherwise requires:

1. "Adult" means an individual who is at least eighteen years of age.

2. "Conservator" means a person appointed by the court to manage the estate of an adult protected person, including a person appointed under chapter 5 of this title.

3. "Court of this state" or "court in this state" means the superior court.

4. "Guardian" means a person who has qualified as a guardian of an incapacitated person pursuant to testamentary or court appointment and includes a person who is appointed under chapter 5, article 3 of this title. Guardian does not include a guardian ad litem or a representative who is appointed pursuant to section 14-1408.

5. "Guardianship order" means an order appointing a guardian.

6. "Guardianship proceeding" means a judicial proceeding in which an order for the appointment of a guardian is sought or has been issued.

7. "Incapacitated person" means an adult for whom a guardian has been appointed.

8. "Person", except in the term incapacitated person or protected person, means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality or any other legal or commercial entity.

9. "Protected person" means an adult for whom a protective order has been issued.

10. "Protective order" means an order appointing a conservator or other order related to management of an adult's property.

11. "Protective proceeding" means a judicial proceeding in which a protective order is sought or has been issued.

12. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

13. "Respondent" means an adult for whom a protective order or the appointment of a guardian is sought.

14. "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, a federally recognized Indian tribe or any territory or insular possession subject to the jurisdiction of the United States.

14-12103. International applications of act

A court of this state may treat a foreign country as if it were a state for the purpose of applying this article and articles 2, 3 and 5 of this chapter.

14-12104. Communication between courts

A. A court of this state may communicate with a court in another state concerning a proceeding arising under this chapter. The court may allow the parties to participate in the communication. Except as provided in subsection B, the court shall make a record of the communication. The record may be limited to the fact that the communication occurred.

B. Courts may communicate concerning schedules, calendars, court records and other administrative matters without making a record.

14-12105. Cooperation between courts

A. In a guardianship or protective proceeding in this state, a court of this state may request the appropriate court of another state to do any of the following:

1. Hold an evidentiary hearing.

2. Order a person in that state to produce evidence or give testimony pursuant to procedures of that state.

3. Order that an evaluation or assessment be made of the respondent.

4. Order any appropriate investigation of a person involved in a proceeding.

5. Forward to the court of this state a certified copy of the transcript or other record of a hearing under paragraph 1 or any other proceeding, any evidence otherwise produced under paragraph 2, and any evaluation or assessment prepared in compliance with an order under paragraph 3 or 4.

6. Issue any order necessary to ensure the appearance in the proceeding of a person whose presence is necessary for the court to make a determination, including the respondent or the incapacitated or protected person.

7. Issue an order authorizing the release of medical, financial, criminal or other relevant information in that state, including protected health information as defined in 45 Code of Federal Regulations section 164.504, as amended.

B. If a court of another state in which a guardianship or protective proceeding is pending requests assistance of the kind provided in subsection A, a court of this state has jurisdiction for the limited purpose of granting the request or making reasonable efforts to comply with the request.

14-12106. Taking testimony in another state

A. In a guardianship or protective proceeding, in addition to other procedures that may be available, testimony of a witness who is located in another state may be offered by deposition or other means allowable in this state for testimony taken in another state. The court on its own motion may order that the testimony of a witness be taken in another state and may prescribe the manner in which and the terms on which the testimony is to be taken.

B. In a guardianship or protective proceeding, a court in this state may permit a witness located in another state to be deposed or to testify by telephone or audiovisual or other electronic means. A court of this state shall cooperate with the court of the other state in designating an appropriate location for the deposition or testimony.

C. Documentary evidence transmitted from another state to a court of this state by technological means that do not produce an original writing may not be excluded from evidence on an objection based on the best evidence rule.

14-12201. Definitions; significant connection factors

A. In this article, unless the context otherwise requires:

1. "Emergency" means a circumstance that likely will result in substantial harm to a respondent's health, safety or welfare, and for which the appointment of a guardian is necessary because no other person has authority and is willing to act on the respondent's behalf.

2. "Home state" means the state in which the respondent was physically present, including any period of temporary absence, for at least six consecutive months immediately before the filing of a petition for a protective order or the appointment of a guardian or, if none, the state in which the respondent was physically present, including any period of temporary absence, for at least six consecutive months ending within the six months before the filing of the petition.

3. "Significant-connection state" means a state, other than the home state, with which a respondent has a significant connection other than mere physical presence and in which substantial evidence concerning the respondent is available.

B. In determining under section 14-12203 and section 14-12301, subsection E whether a respondent has a significant connection with a particular state, the court shall consider:

1. The location of the respondent's family and other persons required to be notified of the guardianship or protective proceeding.

2. The length of time the respondent at any time was physically present in the state and the duration of any absence.

3. The location of the respondent's property.

4. The extent to which the respondent has ties to the state such as voter registration, state or local tax return filing, vehicle registration, driver license, social relationship and receipt of services.

14-12202. Exclusive basis

This article provides the exclusive jurisdictional basis for a court of this state to appoint a guardian or issue a protective order for an adult.

14-12203. Jurisdiction

A court of this state has jurisdiction to appoint a guardian or issue a protective order for a respondent if any of the following is true:

1. This state is the respondent's home state.

2. On the date the petition is filed, this state is a significant-connection state and either:

(a) The respondent does not have a home state or a court of the respondent's home state has declined to exercise jurisdiction because this state is a more appropriate forum.

(b) The respondent has a home state, a petition for an appointment or order is not pending in a court of that state or another significant-connection state and, before the court makes the appointment or issues the order:

(i) A petition for an appointment or order is not filed in the respondent's home state.

(ii) An objection to the court's jurisdiction is not filed by a person required to be notified of the proceeding.

(iii) The court in this state concludes that it is an appropriate forum under the factors set forth in section 14-12206, subsection C.

3. This state does not have jurisdiction under either paragraph 1 or 2 of this section, the respondent's home state and all significant-connection states have declined to exercise jurisdiction because this state is the more appropriate forum and jurisdiction in this state is consistent with the constitutions of this state and the United States.

4. The requirements for special jurisdiction under section 14-12204 are met.

14-12204. Special jurisdiction

A. A court of this state lacking jurisdiction under section 14-12203 has special jurisdiction to do any of the following:

1. Appoint a guardian in an emergency for a term not exceeding ninety days for a respondent who is physically present in this state.

2. Issue a protective order with respect to real or tangible personal property located in this state.

3. Appoint a guardian or conservator for an incapacitated or protected person for whom a provisional order to transfer the proceeding from another state has been issued under procedures similar to section 14-12301.

B. If a petition for the appointment of a guardian in an emergency is brought in this state and this state was not the respondent's home state on the date the petition was filed, the court shall dismiss the proceeding at the request of the court of the home state, if any, whether dismissal is requested before or after the emergency appointment.

14-12205. Exclusive and continuing jurisdiction

Except as otherwise provided in section 14-12204, a court that has appointed a guardian or issued a protective order consistent with this chapter has exclusive and continuing jurisdiction over the proceeding until it is terminated by the court or the appointment or order expires by its own terms.

14-12206. Appropriate forum

A. A court of this state that has jurisdiction under section 14-12203 to appoint a guardian or issue a protective order may decline to exercise its jurisdiction if it determines at any time that a court of another state is a more appropriate forum.

B. If a court of this state declines to exercise its jurisdiction under subsection A of this section, it shall either dismiss or stay the proceeding. The court may impose any condition the court considers just and proper, including the condition that a petition for the appointment of a guardian or issuance of a protective order be filed promptly in another state.

C. In determining whether it is an appropriate forum, the court shall consider all relevant factors, including:

1. Any expressed preference of the respondent.

2. Whether abuse, neglect or exploitation of the respondent has occurred or is likely to occur and which state could best protect the respondent from the abuse, neglect or exploitation.

3. The length of time the respondent was physically present in or was a legal resident of this state or another state.

4. The distance of the respondent from the court in each state.

5. The financial circumstances of the respondent's estate.

6. The nature and location of the evidence.

7. The ability of the court in each state to decide the issue expeditiously and the procedures necessary to present evidence.

8. The familiarity of the court of each state with the facts and issues in the proceeding.

9. If an appointment were made, the court's ability to monitor the conduct of the guardian or conservator.

14-12207. Jurisdiction declined by reason of conduct

A. If at any time a court of this state determines that it acquired jurisdiction to appoint a guardian or issue a protective order because of unjustifiable conduct, the court may:

1. Decline to exercise jurisdiction.

2. Exercise jurisdiction for the limited purpose of fashioning an appropriate remedy to ensure the health, safety and welfare of the respondent or the protection of the respondent's property or prevent a repetition of the unjustifiable conduct, including staying the proceeding until a petition for the appointment of a guardian or issuance of a protective order is filed in a court of another state having jurisdiction.

3. Continue to exercise jurisdiction after considering:

(a) The extent to which the respondent and all persons required to be notified of the proceedings have acquiesced in the exercise of the court's jurisdiction.

(b) Whether it is a more appropriate forum than the court of any other state under the factors prescribed in section 14-12206, subsection C.

(c) Whether the court of any other state would have jurisdiction under factual circumstances in substantial conformity with the jurisdictional standards prescribed in section 14-12203.

B. If a court of this state determines that it acquired jurisdiction to appoint a guardian or issue a protective order because a party seeking to invoke its jurisdiction engaged in unjustifiable conduct, it may assess against that party necessary and reasonable expenses, including attorney fees, investigative fees, court costs, communication expenses, witness fees and expenses, and travel expenses. The court may not assess fees, costs or expenses of any kind against this state or a governmental subdivision, agency or instrumentality of this state unless authorized by law other than this chapter.

14-12208. Notice of proceeding

If a petition for the appointment of a guardian or issuance of a protective order is brought in this state and this state was not the respondent's home state on the date the petition was filed, in addition to complying with the notice requirements of this state, notice of the petition must be given to those persons who would be entitled to notice of the petition if a proceeding were brought in the respondent's home state. The notice must be given in the same manner as notice is required to be given pursuant to chapter 5 of this title.

14-12209. Proceedings in more than one state

Except for a petition for the appointment of a guardian in an emergency or issuance of a protective order limited to property located in this state under section 14-12204, subsection A, paragraph 1 or 2, if a petition for the appointment of a guardian or issuance of a protective order is filed in this state and in another state and neither petition has been dismissed or withdrawn, the following rules apply:

1. If the court in this state has jurisdiction under section 14-12203, it may proceed with the case unless a court in another state acquires jurisdiction under provisions similar to those prescribed in section 14-12203 before the appointment or issuance of the order.

2. If the court in this state does not have jurisdiction under section 14-12203, whether at the time the petition is filed or at any time before the appointment or issuance of the order, the court shall stay the proceeding and communicate with the court in the other state. If the court in the other state has jurisdiction, the court in this state shall dismiss the petition unless the court in the other state determines that the court in this state is a more appropriate forum.

14-12301. Transfer of guardianship or conservatorship to another state

A. Any interested person may petition the court to transfer the guardianship or conservatorship to another state.

B. On the filing of a petition pursuant to subsection A of this section, the court in this state shall set a hearing on the petition and the petitioner shall give notice of the hearing to the persons who pursuant to chapter 5 of this title would be entitled to notice of the hearing on a petition for the appointment of a guardian or conservator.

C. On the court's own motion or on the filing of an objection to a petition filed pursuant to subsection B of this section, the hearing on a petition filed pursuant to subsection A of this section shall be set as an appearance hearing, otherwise the hearing shall be set as a nonappearance hearing.

D. After the hearing held pursuant to subsection C of this section, the court in this state shall enter an order authorizing the guardian or another appropriate person to petition for guardianship in the other state if the court in this state finds all of the following:

1. The incapacitated person is physically present in or is reasonably expected to move permanently to the other state.

2. An objection to the transfer has not been made or, if an objection has been made, the objector has not established that the transfer would be contrary to the interests of the incapacitated person.

3. Plans for care and services for the incapacitated person in the other state are reasonable and sufficient.

E. After the hearing held pursuant to subsection C of this section, the court in this state shall enter an order authorizing the conservator or another appropriate person to petition for conservatorship in the other state if the court finds all of the following:

1. The protected person is physically present in or is reasonably expected to move permanently to the other state, or the protected person has a significant connection to the other state considering the factors prescribed in section 14-12201, subsection B.

2. An objection to the transfer has not been made or, if an objection has been made, the objector has not established that the transfer would be contrary to the interests of the protected person.

3. Adequate arrangements will be made for management of the protected person's property.

F. After notice and a hearing, the court in this state shall enter an order confirming the transfer and terminating the guardianship or conservatorship on its receipt of both of the following:

1. A certified copy of the letters of office or other authority indicating appointment of a guardian or conservator, or both, issued by the appropriate authority in the state to which the proceeding is to be transferred.

2. The documents required to terminate a guardianship or conservatorship in this state, including any required accounting for the period of administration before the transfer of jurisdiction.

14-12302. Accepting guardianship or conservatorship transferred from another state

A. To confirm transfer of a guardianship or conservatorship transferred to this state under provisions similar to those prescribed in section 14-12301, an interested person may petition the court in this state to accept the guardianship or conservatorship. The petition must include a certified copy of the other state's order authorizing the guardian or conservator to petition the court of this state for guardianship, conservatorship or other protective order.

B. Notice of a petition under subsection A of this section must be given to those persons who would be entitled to notice if the petition were a petition for the appointment of a guardian or entry of a protective order in both the transferring state and this state. The notice must be given in the same manner as notice of initial guardianship proceedings and protective proceedings is required to be given pursuant to chapter 5 of this title.

C. On the court's own motion or on the filing of an objection to a petition pursuant to subsection A of this section, the hearing on a petition filed pursuant to subsection A of this section shall be set as an appearance hearing, otherwise the hearing shall be set as a nonappearance hearing.

D. After the hearing held pursuant to subsection C of this section, the court in this state shall enter an order provisionally granting a petition filed under subsection A of this section unless either:

1. An objection to the petition is made and the objector establishes that transfer of the proceeding would be contrary to the best interests of the incapacitated or protected person.

2. The proposed guardian or the proposed conservator is ineligible for appointment in this state.

E. The court in this state shall enter an order accepting the proceeding and appointing a guardian or conservator in this state on its receipt from the court from which the proceeding is being transferred of a final order issued under provisions similar to section 14-12301 transferring the proceeding to this state.

F. Not later than ninety days after entry of an order accepting transfer of a guardianship or conservatorship, the court in this state shall determine whether the guardianship or conservatorship needs to be modified to conform to the law of this state.

G. In granting a petition under this section, the court in this state shall recognize a guardianship or conservatorship order from the other state, including the determination of the incapacitated or protected person's incapacity and the appointment of the guardian or conservator.

H. The denial by a court of this state of a petition to accept a guardianship or conservatorship transferred from another state does not affect the ability of an interested person to seek appointment as a guardian or conservator in this state under chapter 5 of this title if the court in this state has jurisdiction to make an appointment other than by reason of the order of another state's court authorizing the transfer of the guardianship or conservatorship.

14-12401. Registration of guardianship orders

If a guardian has been appointed in another state and a petition for the appointment of a guardian is not pending in this state, the guardian appointed in the other state, after giving notice to the appointing court of an intent to register, may register the guardianship order in this state by filing as a foreign judgment in a court, in any appropriate county of this state, certified copies of the order and letters of office.

14-12402. Registration of protective orders

If a conservator has been appointed in another state and a petition for a protective order is not pending in this state, the conservator appointed in the other state, after giving notice to the appointing court of an intent to register, may register the protective order in this state by filing as a foreign judgment in a court of this state, in any county in which property belonging to the protected person is located, certified copies of the order, the letters of office and of any then current bond required by the appointing court.

14-12403. Effect of registration

A. On registration of a guardianship or conservatorship or any other protective order from another state, the guardian or conservator may exercise in this state all powers authorized in the order of appointment except as prohibited under the laws of this state, including maintaining actions and proceedings in this state and, if the guardian or conservator is not a resident of this state, subject to any conditions imposed on nonresident parties.

B. A court of this state may grant any relief available under this chapter and other law of this state to enforce a registered order.

14-12501. Uniformity of application and construction

In applying and construing this chapter, the courts shall consider the need to promote uniformity of the law with respect to its subject matter among the states that enact the uniform adult guardianship and protective proceedings jurisdiction act.

14-12502. Relation to electronic signatures in global and national commerce act

This chapter modifies, limits and supersedes the electronic signatures in global and national commerce act (15 United States Code section 7001, et sec.) but does not modify, limit or supersede section 101(c) of that act (15 United States Code section 7001(c)) or authorize electronic delivery of any of the notices described in section 103(b) of that act (15 United States Code section 7003(b)).

14-12503. Transitional provision

A. This chapter applies to guardianship and protective proceedings begun on or after the effective date of this chapter.

B. Articles 1, 3 and 4 of this chapter and sections 14-12501 and 14-12502 apply to proceedings begun before the effective date of this chapter regardless of whether a guardianship or protective order has been issued.