North Dakota Code 59-16.1-02 – Definitions
For purposes of this chapter, unless the context otherwise requires:
Terms Used In North Dakota Code 59-16.1-02
- 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
- Individual: means a human being. See North Dakota Code 1-01-49
- Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
- Trustee: A person or institution holding and administering property in trust.
1. “Appointed trust” means an irrevocable trust which receives principal from an invaded trust under this chapter, including a trust created by the settlor of the invaded trust, under the terms of the invaded trust or any other trust instrument, or by the trustees, acting in that capacity, of the invaded trust. For purposes of creating another trust, a requirement that a trust instrument be signed by the settlor is deemed satisfied by the signature of the trustee of the appointed trust.
2. “Authorized trustee” means, as to an invaded trust, a trustee with authority to pay trust principal to or for one or more current beneficiaries other than a trustee who is the settlor, or a beneficiary to whom income or principal must be paid currently or in the future, or who is or will become eligible to receive a distribution of income or principal in the discretion of the trustee, other than by the exercise of a power of appointment held in a nonfiduciary capacity.
3. “Current beneficiary” or “beneficiaries” means individual, or as to a class, an individual who is or will become members of that class, to whom the trustees may distribute principal at the time of the exercise of the power, provided that the interest of a beneficiary to whom income, but not principal, may be distributed at the discretion of the trustee of the invaded trust, may be continued in the appointed trust.
4. “Invade” means the power to pay directly to the beneficiary of a trust or make application for the benefit of the beneficiary.
5. “Invaded trust” means an existing irrevocable inter vivas or testamentary trust whose principal is appointed under this chapter.
6. “Person or persons interested in the invaded trust” means all qualified beneficiaries as defined in subsection 16 of section 59-09-06.
7. “Principal” includes the income of the trust at the time of the exercise of the power which is not currently required to be distributed, including accrued and accumulated income.
8. “Unlimited discretion” means the unlimited power to distribute principal. A power to distribute principal which includes words, such as best interests, welfare, comfort, or happiness may not be considered a limitation of the power to distribute principal.