SB 478 - Trusts Summary

• Redefines "interests of the beneficiaries" to mean beneficial interests intended by the settlor as provided in trust terms, and removes the requirement that trusts must be for beneficiaries' benefit, requiring only that trust purposes be lawful, not contrary to public policy, and achievable.

• Authorizes trustees to send trust documents via secure electronic posting with recipient authorization; documents are deemed received on the earlier of when separate notice is received or when accessed; requires annual reminders that limitations periods may run without actual document access.

• Permits authorized trustees with absolute power to appoint trust principal to second trusts for current beneficiaries while retaining, omitting, or modifying powers of appointment and extending trust terms; prohibits distributions that would reduce federal tax benefits, affect S corporation status, or violate IRC minimum distribution rules.

• Allows authorized trustees without absolute power to distribute principal to second trusts if beneficiaries' beneficial interests remain substantially similar and permits supplemental needs trusts for beneficiaries with disabilities when consistent with original trust purposes.

• Requires trustees to provide written notice to qualified beneficiaries, settlors (if applicable), all trustees, and removal/replacement powers holders at least 60 days before exercising principal invasion powers; clarifies that knowledge of missing trust accountings does not commence limitations periods for accounting claims.