Powers of trustees
Sec. 3. (a) Except as provided in the terms of the trust and subject
to subsection (c), a trustee has the power to perform without court
authorization, except as provided in sections 4(b) and 5(a) of this
chapter, every act necessary or appropriate for the purposes of the
trust including, by way of illustration and not of limitation, the
(1) The power to:
(A) deal with the trust estate;
(B) buy, sell, or exchange and convey or transfer all property
(real, personal, or mixed) for cash or on credit and at public
or private sale with or without notice; and
(C) invest and reinvest the trust estate.
(2) The power to receive additions to the assets of the trust.
(3) The power to acquire an undivided interest in a trust asset
in which the trustee, in any trust capacity, holds an undivided
(4) The power to manage real property in every way, including:
(A) the adjusting of boundaries;
(B) erecting, altering, or demolishing buildings;
(C) dedicating of streets, alleys, or other public uses;
(F) obtaining vacation of plats;
(G) granting of easements and rights-of-way;
(I) entering into party wall agreements; and
(J) obtaining title insurance for trust property.
(5) The power to:
(A) grant options concerning disposition of trust property,
including the sale of covered security options; and
(B) take options for acquisition of trust property, including
the purchase back of previously sold covered security
(6) The power to enter into a lease as lessor or lessee, with or
without option to renew.
(7) The power to enter into arrangements for exploration and
removal of minerals or other natural resources and enter into a
pooling or unitization agreement.
(8) The power to continue the operation or management of any
business or other enterprise placed in trust.
(9) The power to:
(A) borrow money, to be repaid from trust property or
(B) encumber, mortgage, pledge, or grant a security interest
in trust property in connection with the exercise of any
(10) The power to:
(A) advance money for the benefit of the trust estate and for
all expenses or losses sustained in the administration of the
(B) collect any money advanced, without interest or with
interest, at no more than the lowest rate prevailing when
(11) The power to prosecute or defend actions, claims, or
proceedings for the protection of:
(A) trust property; and
(B) the trustee in the performance of the trustee's duties.
(12) The power to:
(A) pay or contest any claim;
(B) settle a claim by or against the trust by compromise or
(C) abandon or release, totally or partially, any claim
belonging to the trust.
(13) The power to insure the:
(A) trust estate against damage or loss; and
(B) trustee against liability with respect to third persons.
(14) The power to pay taxes, assessments, and other expenses
incurred in the:
(A) acquisition, retention, and maintenance of the trust
(B) administration of the trust.
(15) The power to:
(A) vote securities, in person or by a general or special
(B) hold the securities in the name of a nominee if the
trustee is a corporate trustee; and
(C) effect or approve, and deposit securities in connection
with, any change in the form of the corporation, including:
(iv) acquisition; and
(16) The power to employ persons, including:
(C) investment advisors; and
to advise and assist the trustee in the performance of the
(17) The power to effect distribution of property in cash, in
kind, or partly in cash and partly in kind, in divided or
(18) The power to execute and deliver all instruments necessary
or appropriate to accomplishing or facilitating the exercise of
the trustee's powers.
(19) With respect to an interest in a proprietorship, partnership,
limited liability company, business trust, corporation, or another
form of business or enterprise, the power to:
(A) continue the business or enterprise; and
(B) take any action that may be taken by shareholders,
members, or property owners, including:
(ii) dissolving; or
(iii) changing the form of business organization or
contributing additional capital.
(20) With respect to possible liability for violation of
environmental law, the power to:
(A) inspect or investigate property:
(i) the trustee holds or has been asked to hold; or
(ii) owned or operated by an organization in which the
trustee holds an interest or has been asked to hold an
to determine the application of environmental law with
respect to the property;
(B) take action to prevent, abate, or remedy an actual or
potential violation of an environmental law affecting
property held directly or indirectly by the trustee before or
after the assertion of a claim or the initiation of
(C) decline to accept property into the 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; and
(E) pay the expense of any inspection, review, abatement, or
remedial action to comply with environmental law.
(21) The power to exercise elections with respect to federal,
state, and local taxes.
(22) The power to select a mode of payment under any
employee benefit plan or retirement plan, annuity, or life
insurance payable to the trustee and exercise rights under the
plan, annuity, or insurance, including the right to:
(i) for expenses; and
(ii) against liabilities; and
(B) take appropriate action to collect the proceeds.
(23) The power to make loans out of trust property, including
loans to a beneficiary on terms and conditions the trustee
determines fair and reasonable under the circumstances. The
trustee has a lien on future distributions for repayment of the
(24) The power to pledge trust property to guarantee loans made
by others to the beneficiary on terms and conditions the trustee
considers to be fair and reasonable under the circumstances.
The trustee has a lien on future distributions for repayment of
(25) The power to:
(A) appoint a trustee to act in another jurisdiction with
respect to trust property located in the other jurisdiction;
(B) confer on the appointed trustee all the appointing
trustee's powers and duties;
(C) require the appointed trustee to furnish security; and
(D) remove the appointed trustee.
(26) With regard to a beneficiary who is under a legal disability
or whom the trustee reasonably believes is incapacitated, the
power to pay an amount distributable to the beneficiary by:
(A) paying the amount directly to the beneficiary;
(B) applying the amount for the beneficiary's benefit;
(C) paying the amount to the beneficiary's guardian;
(D) paying the amount to the beneficiary's custodian under
IC 30-2-8.5 to create a custodianship or custodial trust;
(E) paying the amount to an adult relative or another person
having legal or physical care or custody of the beneficiary to
be expended on the beneficiary's behalf, if the trustee does
not know of a guardian, custodian, or custodial trustee; or
(F) managing the amount as a separate fund on the
beneficiary's behalf, subject to the beneficiary's continuing
right to withdraw the distribution.
(27) The power to:
(A) combine at least two (2) trusts into one (1) trust; or
(B) divide one (1) trust into at least two (2) trusts;
after notice to the qualified beneficiaries, if the result does not
impair the rights of any beneficiary or adversely affect
achievement of the purposes of the trust.
(b) Any act under subsection (a)(4), an option under subsection
(a)(5), a lease under subsection (a)(6), an arrangement under
subsection (a)(7), and an encumbrance, mortgage, pledge, or security
interest under subsection (a)(9) may be for a term either within or
extending beyond the term of the trust.
(c) In acquiring, investing, reinvesting, exchanging, retaining,
selling, and managing property for any trust, the trustee thereof shall
exercise the judgment and care required by IC 30-4-3.5. Within the
limitations of the foregoing standard, the trustee is authorized to
acquire and retain every kind of property, real, personal, or mixed,
and every kind of investment, including specifically, but without in
any way limiting the generality of the foregoing, bonds, debentures,
and other corporate obligations, stocks, preferred or common, and
real estate mortgages, which persons of prudence, discretion, and
intelligence acquire or retain for their own account, and within the
limitations of the foregoing standard, the trustee is authorized to
retain property properly acquired, without limitation as to time and
without regard to its suitability for original purchase. Within the
limitations of the foregoing standard, the trustee is authorized to sell
covered security options and to purchase back previously sold
covered security options.
(d) If a distribution of particular trust assets is to be made to two
(2) or more beneficiaries entitled to receive fractional shares in those
assets, the trustee may distribute the particular assets without
distributing to each beneficiary a pro rata share of each asset.
However, the trustee shall:
(1) distribute to each beneficiary a pro rata share of the total fair
market value of all of the particular assets as of the date of
(2) cause the distribution to result in a fair and equitable
division among the beneficiaries of capital gain or loss on the
(e) If the trust is terminated or partially terminated, the trustee
may send to the beneficiaries a proposal for distribution. If the
proposal for distribution informs the beneficiary that the beneficiary:
(1) has a right to object to the proposed distribution; and
(2) must object not later than thirty (30) days after the proposal
for distribution was sent;
the right of the beneficiary to object to the proposed distribution
terminates if the beneficiary fails to notify the trustee of an objection
within the time limit set forth in subdivision (2).
(Formerly: Acts 1971, P.L.416, SEC.4.) As amended by Acts 1977,
P.L.300, SEC.1; P.L.277-1983, SEC.1; P.L.137-1999, SEC.1;
Last modified: May 27, 2006