(1) A trust may be created:
(a) By transfer of property to another person as trustee during the settlor’s lifetime or by will or other disposition taking effect upon the settlor’s death;
(b) By declaration by the owner of property that the owner holds identifiable property as trustee;
(c) By exercise of a power of appointment in favor of a trustee;
(d) By an agent or attorney-in-fact under a power of attorney that expressly grants authority to create the trust; or
(e) Pursuant to a statute or judgment that requires property to be administered in the manner of an express trust.
(2) The following apply to trusts for death benefits:
(a) A trustee may be named as beneficiary of any death benefits, and the death benefits shall be paid to the trustee and be held and disposed of by the trustee as provided in a trust created by the designator during the lifetime of the designator. A trust is valid even though the trust does not have a trust corpus other than the right of the trustee to receive death benefits as beneficiary.
(b) A trustee named by will may be designated as beneficiary of death benefits if the designation is made in accordance with the provisions of the policy, contract, plan, trust or other governing instrument. Upon probate of the will, the death benefits are payable to the trustee to be held and disposed of under the terms of the designator’s will in the same manner as other testamentary trusts are administered. Unless otherwise provided by the designator, an obligor may make payment of death benefits to the personal representative of the designator, or to the persons who are otherwise entitled to the death benefits, if a qualified trustee does not claim the death benefits within one year after the death of the designator, or if satisfactory evidence is furnished within the one-year period showing that there is no trustee who can qualify to receive the death benefits. The obligor is discharged from any liability for the death benefits upon making the payment.
(c) Death benefits received by the trustee are not subject to the debts of the designator or to inheritance or estate taxes to any greater extent than if the death benefits were payable to the beneficiaries named in the trust and not to the estate of the designator.
(d) Death benefits held in trust may be commingled with any other assets that may properly become a part of the trust.
(3) As used in this section:
(a) “Death benefits” means death benefits of any kind, including proceeds of life insurance policies, payments under annuity or endowment contracts, and funds payable in connection with pension, retirement, stock bonus or profit-sharing plans, or any trust administered in connection with these arrangements.
(b) “Designator” means the person entitled to designate the beneficiary of death benefits upon the death of the person.
(c) “Obligor” means the insurer or other person obligated to pay death benefits. [2005 c.348 §21]
Section: Previous 130.060 130.065 130.100 130.105 130.110 130.115 130.120 130.150 130.155 130.160 130.165 130.170 130.175 130.180 130.185 NextLast modified: August 7, 2008