2005 Legislation
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SENATE BILL NO. 1070 – Purpose trusts, creation

SENATE BILL NO. 1070

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Bill Status



S1070................................................by JUDICIARY AND RULES
TRUSTS - Adds to existing law to set forth provisions applicable to the
creation and enforcement of purpose trusts.
                                                                        
01/31    Senate intro - 1st rdg - to printing
02/01    Rpt prt - to Jud
02/10    Rpt out - rec d/p - to 2nd rdg
02/11    2nd rdg - to 3rd rdg
02/14    3rd rdg - PASSED - 34-0-1
      AYES -- Brandt, Broadsword, Bunderson, Burkett, Burtenshaw, Cameron,
      Coiner, Compton, Corder, Darrington, Davis, Gannon, Geddes, Goedde,
      Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai,
      Marley, McGee, McKenzie, Noble, Pearce, Richardson, Schroeder,
      Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Andreason
    Floor Sponsor - Sweet
    Title apvd - to House
02/15    House intro - 1st rdg - to Jud
03/04    Rpt out - rec d/p - to 2nd rdg
03/07    2nd rdg - to 3rd rdg
03/11    3rd rdg - PASSED - 66-0-4
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon,
      Chadderdon, Clark, Collins, Denney, Edmunson, Ellsworth, Eskridge,
      Field(18), Garrett, Hart, Harwood, Henbest, Henderson, Jaquet, Jones,
      Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin,
      McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart,
      Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sali, Sayler,
      Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30),
      Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Mr. Speaker
      NAYS -- None
      Absent and excused -- Crow, Deal, Field(23), Wood
    Floor Sponsor - Hart
    Title apvd - to Senate
03/14    To enrol
03/15    Rpt enrol - Pres signed
03/16    Sp signed
03/17    To Governor
03/21    Governor signed
         Session Law Chapter 99
         Effective: 07/01/05

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1070
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PURPOSE TRUSTS; AMENDING CHAPTER 7, TITLE 15, IDAHO CODE,  BY  THE
  3        ADDITION  OF  A  NEW PART 6, CHAPTER 7, TITLE 15, IDAHO CODE, TO SET FORTH
  4        PROVISIONS APPLICABLE TO THE CREATION AND ENFORCEMENT OF PURPOSE TRUSTS.
                                                                        
  5    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  6        SECTION 1.  That Chapter 7, Title 15, Idaho Code,  be,  and  the  same  is
  7    hereby  amended  by the addition thereto of a NEW PART, to be known and desig-
  8    nated as Part 6, Chapter 7, Title 15, Idaho Code, and to read as follows:
                                                                        
  9                                       PART 6.
 10                                    PURPOSE TRUSTS
                                                                        
 11        15-7-601.  PURPOSE TRUSTS. (1) A trust may be  created  for  any  purpose,
 12    charitable  or  noncharitable, under the terms of a trust agreement or will. A
 13    noncharitable trust so created is a purpose trust and shall exist to  serve  a
 14    purpose.
 15        (2)  A purpose trust does not need a beneficiary.
 16        (3)  A  purpose  trust  shall be enforceable on the terms set forth in the
 17    trust agreement by the person named to enforce the  trust;  provided  however,
 18    that  the  failure  to  name  a person to enforce the trust shall not void the
 19    trust or otherwise cause it to be unenforceable.
 20        (4)  A person named to enforce a purpose trust may resign or be removed or
 21    replaced in accordance with the trust.
 22        (5)  If the person named to enforce the trust resigns, or is  removed,  or
 23    is unwilling or unable to act, and if no successor is named in accordance with
 24    the  trust, the trustee shall forthwith apply to the court having jurisdiction
 25    of the purpose trust for directions or for a person to  be  appointed  by  the
 26    court to enforce the trust. The court having jurisdiction of the purpose trust
 27    shall  be  empowered to make an order appointing a person to enforce the trust
 28    on such terms as it sees fit and to designate how successors will be named.
 29        (6)  During any period of time when  no  person  is  named  or  acting  to
 30    enforce  a  purpose  trust, the court having jurisdiction of the purpose trust
 31    shall have the right to exercise all powers necessary to enforce the trust  in
 32    order to serve the purpose for which it was created.
 33        (7)  Any  interested  person,  as  defined  in section 15-1-201(24), Idaho
 34    Code, may bring an action under law or equity to enforce a purpose trust.
 35        (8)  Charitable trusts are not governed by this section.
 36        (9)  A purpose trust created prior to July 1, 2005,  shall  be  valid  and
 37    enforceable from the date of the trust's creation.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE

                          RS 14718C-1

Idaho Law currently does not appear to allow the creation of what
are called "purpose trusts".  Nevertheless, such trusts have been
created in Idaho and are being administered by Idaho banks and
other trustees.  This bill clarifies that such trusts may be
created and sets terms and conditions for their operation. 
Specifically, purpose trusts have no beneficiary, but are created
to carry out a specific purpose, such as preservation of a
building.  These trusts expand the estate planning options for
the public at large.  The bill also eliminates any question as to
whether existing purpose trusts currently being administered by
Idaho trustees are valid.

                                
                                
                         FISCAL IMPACT

This bill will have no fiscal impact.




CONTACT:   Robert L. Aldridge
           Trust and Estate Professionals of Idaho, Inc.

Telephone: Office: 336-9880 cell: 631-2481


STATEMENT OF PURPOSE/FISCAL NOTE                   S1070