Powers of Trustees

Article 1 deals with general provisions. Section 16200 provides that a trustee has three specified powers without the need to obtain court authorization.

Section 16201 provides that this chapter does not affect the power of a court to relieve a trustee from restrictions on the exercise of powers under the trust instrument.

Section 16202 states that the grant of a power to a trustee, whether by the trust instrument, by statute, or by the court, does not in itself require or permit the exercise of the power. The exercise of a power by a trustee is subject to the trustee’s fiduciary duties.

Section 16203 explains that an instrument that incorporates the powers provided in former former law is to be deemed to refer to the powers provided in law.

Article 2 deals with specific powers of trustees. Section 16220 provides that the trustee has the power to collect, hold, and retain trust property received from a settlor or any other person until, in the judgment of the trustee, disposition of the property should be made. The property may be retained even though it includes property in which the trustee is personally interested.

Section 16221 explains that the trustee has the power to accept additions to the property of the trust from a settlor or any other person.

Section 16222 provides that the trustee has the power to continue or participate in the operation of any business or other enterprise that is part of the trust property and may effect incorporation, dissolution, or other change in the form of the organization of the business or enterprise.

Section 16224 states that, in the absence of an express provision to the contrary in a trust instrument, where the instrument directs or permits investment in obligations of the United States government, the trustee has the power to invest in those obligations directly or in the form of an interest in a money market mutual fund registered under the Investment Company Act of 1940 or an investment vehicle authorized for the collective investment of trust funds, the portfolios of which are limited to United States government obligations maturing not later than five years from the date of investment or reinvestment and to repurchase agreements fully collateralized by United States government obligations.

Section 16225 states that the trustee has the power to deposit trust funds at reasonable interest in any of the specified accounts. A trustee may deposit trust funds in a financial institution operated by, or that is an affiliate of, the trustee. The term “affiliate” is defined.

Section 16226 provides that the trustee has the power to acquire or dispose of property, for cash or on credit, at public or private sale, or by exchange.

Section 16227 notes that the trustee has the power to manage, control, divide, develop, improve, exchange, partition, change the character of, or abandon trust property or any interest therein.

Section 16228 states that the trustee has the power to encumber, mortgage, or pledge trust property for a term within or extending beyond the term of the trust in connection with the exercise of any power vested in the trustee.

Section 16229 explains that the trustee has the power to do any of three specified actions.

Section 16230 states that the trustee has the power to do any of five specified actions.

Section 16231 provides that the trustee has the power to enter into a lease for any purpose as lessor or lessee with or without the option to purchase or renew and for a term within or extending beyond the term of the trust.

Section 16232 specifies that the trustee has the power to enter into a lease or arrangement for exploration and removal of gas, oil, or other minerals or geothermal energy, and to enter into a community oil lease or a pooling or unitization agreement, and for a term within or extending beyond the term of the trust.

Section 16233 says that the trustee has the power to grant an option involving disposition of trust property or to take an option for the acquisition of any property, and an option may be granted or taken that is exercisable beyond the term of the trust.

Section 16234 provides that, with respect to any shares of stock of a domestic or foreign corporation, any membership in a nonprofit corporation, or any other property, a trustee has the power to do any of three specified actions.

Section 16235 explains that the trustee has the power to pay calls, assessments, and any other sums chargeable or accruing against or on account of securities.

Section 16236 states that the trustee has the power to sell or exercise stock subscription or conversion rights.

Section 16237 specifies that the trustee has the power to consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise, and to participate in voting trusts, pooling arrangements, and foreclosures, and in connection therewith, to deposit securities with and transfer title and delegate discretion to any protective or other committee as the trustee may deem advisable.

Section 16238 says that the trustee has the power to hold a security in the name of a nominee or in other form without disclosure of the trust so that title to the security may pass by delivery.

Section 16239 states that the trustee has the power to deposit securities in a securities depository.

Section 16240 says that the trustee has the power to insure the property of the trust against damage or loss and to insure the trustee against liability with respect to third persons.

Section 16241 states that the trustee has the power to borrow money for any trust purpose to be repaid from trust property. The lender may include a bank holding company, affiliate, or subsidiary of the trustee.

Section 16242 says that the trustee has the power to do any of three specified actions.

Section 16243 sets forth that the trustee has the power to pay taxes, assessments, reasonable compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the collection, care, administration, and protection of the trust.

Section 16244 explains that the trustee has two specified powers.

Section 16245 states that the trustee has the power to pay any sum of principal or income distributable to a beneficiary, without regard to whether the beneficiary is under a legal disability, by paying the sum to the beneficiary or by paying the sum to another person for the use or benefit of the beneficiary.

Section 16246 says that the trustee has the power to effect distribution of property and money in divided or undivided interests and to adjust resulting differences in valuation. A distribution in kind may be made pro rata or non pro rata.

Section 16247 notes that the trustee has the power to hire persons, including accountants, attorneys, auditors, investment advisers, appraisers, or other agents, even if they are associated or affiliated with the trustee, to advise or assist the trustee in the performance of administrative duties.

Section 16248 states that the trustee has the power to execute and deliver all instruments which are needed to accomplish or facilitate the exercise of the powers vested in the trustee.

Section 16249 explains that the trustee has the power to prosecute or defend actions, claims, or proceedings for the protection of trust property and of the trustee in the performance of the trustee’s duties.