North Dakota Code 26.1-33-42 – Designation of trustee as beneficiary – Prior existence of will not required – Payments – Discharge
1. Under section 26.1-33-41, it is permissible to designate as beneficiary, payee, or owner a trustee named in any inter vivos or testamentary trust whether or not such will or codicil is in existence at the date of such designation. It is not necessary to the validity of the trust that there be in existence a trust corpus other than the right to receive the benefits or to exercise the rights resulting from such a designation.
Terms Used In North Dakota Code 26.1-33-42
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Codicil: An addition, change, or supplement to a will executed with the same formalities required for the will itself.
- Inter vivos: Transfer of property from one living person to another living person.
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Probate: Proving a will
- Property: includes property, real and personal. See North Dakota Code 1-01-49
- Trustee: A person or institution holding and administering property in trust.
- year: means twelve consecutive months. See North Dakota Code 1-01-33
2. It is also permissible to designate as a beneficiary, payee, or owner a trustee named or to be named in, or ascertainable under, the will of the designator. Benefits or rights resulting from such a designation are payable or transferable to the trustee upon admission of the will or codicil to probate. Upon the payment of benefits to the trustee, the benefits must be held, administered, and disposed of in accordance with the terms of the testamentary trust created by the will or codicil. Payment of the benefits does not cause the benefits or rights to be included in the property administered as part of the designator’s estate as subject to the claims of creditors.
3. If a trustee is designated pursuant to this section and no qualified trustee makes claim to the benefits or rights resulting from the designation within one year of the death of the designator, or if it is satisfactory to the person obligated to make the payment or transfer as furnished within the one-year period that there is or will be no trustee to receive the proceeds, payment or transfer must be made to the person or representative of the designator, unless otherwise provided by the designation or other controlling agreement made during the lifetime of the designator.
4. The payment of the benefits due or a transfer of the rights given under a designation pursuant to this section and the receipt of the payment or transfer executed by the trustee or other authorized payee constitutes a full discharge and acquittance of the person or institution obligated to make payment or transfer.