Bill No.: SF0002                     Drafter:  JHR

LSO No.:   07LSO-0006                 Effective Date:  7/1/2007

Enrolled Act No.:    SEA0059

Chapter No.:

Prime Sponsor:       Joint Judiciary Interim Committee

Catch Title:         Wyoming Unitrust Act.

Subject:   Creates the Wyoming Unitrust Act.

Summary/Major Elements:

· This Act creates the Wyoming Unitrust Act.  The purpose of a unitrust is to resolve and balance competing interests of trust income beneficiaries and remainder beneficiaries in a way to protect estate tax marital deductions and preservation of trust principal to the extent allowed under the Internal Revenue Code.  This act:

· Provides definitions;

· Establishes procedures for converting income trust into total return unitrusts and vice versa;

· Allows a sole trustee who is not an interested trustee, or a majority of trustees who are not interested trustees, without the approval of the district court to:

· Convert an income trust to a total return unitrust, or vice versa;

· Change the percentage used to calculate the unitrust amount, change the method used to determine the fair market value of the trust if specified requirements are met, or allocate between principal and income;

· Requires notice and opportunity to object to a trustee's actions under the Act;

· Provides procedures for election to make a unitrust when there is no trustee who is not an interested trustee or when a beneficiary requests conversion;

· Authorizes a settlor to create a unitrust;

· Requires an annual determination of the fair market value of a unitrust amount and specifies what property shall be excluded for purposes of valuation;

· Requires the percentage to be used in determining a unitrust amount to be not less than 3% nor more than 5% of current return, taking into account several additional factors;

· Places limitations on allocations of net short-term capital gain to comply with Internal Revenue Code requirements;

· Authorizes the trustee to address overpayments and underpayments to beneficiaries;

· Limits a trustee's liabilities for good faith acts or omissions;

· Limits a court's control of a trustee's discretionary powers;

· Limits elections for conversions under the act to not more frequent than every 2 years, unless otherwise allowed by a district court.