THE BUSINESS OF YOUR ASSOCIATION

The most important association business of the year takes place Friday morning – OBA award presentations, updates from judicial and OBA leaders, elections and consideration of resolutions.

If your county has not sent delegate and alternate selections, please help us by sending the names of your delegates and alternates now. In order to have your delegates/alternates certified, mail delegate certifications to OBA Executive Director John Morris Williams, P. O. Box 53036, Oklahoma City, OK 73152-3036, or fax to
405-416-7001.

BOARD OF GOVERNORS VACANCIES

Nominating Petitions have been filed nominating the following candidates. Pursuant to Rule 3 Section 3 of the Oklahoma Bar Association Bylaws, the following nominees
have been deemed elected due to no other person filing for the position. Click the + next to a name to read the full candidate information.

President-Elect

(One-year term: 2018)

Charles W. Chesnut, Miami

A total of 162 signatures appear on the petitions.

A Nominating Resolution has been received from the following county:
Ottawa County

Candidate biography coming soon.

Vice President

(One-year term: 2018)

Richard Stevens, Norman

A total of 76 signatures appear on the petitions.

Nominating Resolutions have been received from the following counties: Cleveland and Seminole

Candidate biography coming soon.

Supreme Court Judicial District One

Craig, Grant, Kay, Nowata, Osage, Ottawa, Pawnee, Rogers and Washington counties

(Three-year term: 2018-2020)

Brian T. Hermanson, Newkirk

A total of 39 signatures appear on the petitions.

Candidate biography coming soon.

Supreme Court Judicial District Six

Tulsa County

(Three-year term: 2018-2020)

D. Kenyon Williams Jr., Tulsa

A total of 26 signatures appear on the petitions.

A Nominating Resolution has been received from the following county: Tulsa

Candidate biography coming soon.

Supreme Court Judicial District Seven

Adair, Cherokee, Creek, Delaware, Mayes, Muskogee, Okmulgee and Wagoner counties

(Three-year term: 2018-2020)

Matthew C. Beese, Muskogee

A total of 30 signatures appear on the petitions.

Candidate biography coming soon.

Member At Large

Statewide

(Three-year term: 2018-2020)

Brian K. Morton, Oklahoma City

A total of 59 signatures appear on the petitions.

Candidate biography coming soon.

SUMMARY OF NOMINATIONS RULES:

Not less than 60 days prior to the Annual Meeting, 25 or more voting members of the OBA within the Supreme Court Judicial District from which the member of the Board of Governors is to be elected that year, shall file with the Executive Director, a signed petition (which may be in parts) nominating a candidate for the office of member of the Board of Governors for and from such Judicial District, or one or more County Bar Associations within the Judicial District may file a nominating resolution nominating such a candidate.

Not less than 60 days prior to the Annual Meeting, 50 or more voting members of the OBA from any or all Judicial Districts shall file with the Executive Director, a signed petition nominating a candidate to the office of Member-At-Large on the Board of Governors, or three or more County Bars may file appropriate
resolutions nominating a candidate for this office.

Not less than 60 days before the opening of the Annual Meeting, 50 or more voting members of the Association may file with the Executive Director a signed petition nominating a candidate for the office of President-Elect or Vice President or three or more County Bar Associations may file appropriate resolutions nominating a candidate for the office.

If no one has filed for one of the vacancies, nominations to any of the above offices shall be received from the House of Delegates on a petition signed by not less than 30 delegates certified to and in attendance at the session at which the election is held.

See Article II and Article III of OBA Bylaws for complete information regarding offices, positions, nominations and election procedure.

Elections for contested positions will be held at the House of Delegates meeting Nov. 3, during the Annual Meeting. Terms of the present OBA officers and governors will terminate Dec. 31.

Nomination and resolution forms can be found at www.okbar.org/members/BOG/BOGvacancies.

RESOLUTIONS

The following resolutions will be submitted to the House of Delegates at the 113th Oklahoma Bar Association Annual Meeting at 10 a.m. Friday, Nov. 3, at the Hyatt Regency Hotel in Tulsa. To read the full resolutions, click the + next to each title.

RESOLUTION NO. ONE: LAWS GOVERNING TRUSTS

BE IT RESOLVED by the House of Delegates of the Oklahoma Bar Association that the Association adopt, as part of its legislative program, as published in The Oklahoma Bar Journal and posted on the OBA website at www.okbar.org, proposed legislation creating a new section of law to be codified in the Oklahoma Statutes as Section 175.58 of Title 60, unless there is created a duplication in numbering, which relates to choice of law relating to trust instruments. (Requires 60% affirmative vote for passage. OBA Bylaws Art. VIII Sec. 5) (Submitted by the Estate Planning, Probate and Trust Section.)

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.58 of Title 60, unless there is
created a duplication in numbering, reads
as follows:

Section 175.58. GOVERNING LAW.

The meaning and effect of the terms of a trust are determined by:

A. The law of the jurisdiction designated in the trust terms; or

B. In the absence of a controlling designation in the trust terms, the law of the jurisdiction where the trust is administered.

SECTION 2. EFFECTIVE DATE. This act shall become effective November 1, 2018.

RESOLUTION NO. TWO: TRUST DECANTING

BE IT RESOLVED by the House of Delegates of the Oklahoma Bar Association that the Association adopt, as part of its legislative program, as published in The Oklahoma Bar Journal and posted on the OBA website at www.okbar.org, proposed legislation creating a new section of law to be codified in the Oklahoma Statutes as Sections 175.700 through 175.718 of Title 60, unless there is created a duplication in numbering, which relates to decanting, or discretion and power to make distribution of money or property held in trust. (Requires 60% affirmative vote for passage. OBA Bylaws Art. VIII Sec. 5) (Submitted by the Estate Planning, Probate and Trust Section.)

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1. NEW LAW A new section of
law to be codified in the Oklahoma Statutes as Section 175.700 of Title 60, unless there is created a duplication in numbering, reads
as follows:

Section 175.700. SHORT TITLE.

This act shall be known and may be cited as the “Oklahoma Decanting Act.”

SECTION 2. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.701 of Title 60, unless there is
created a duplication in numbering, reads
as follows:

Section 175.701 DEFINITIONS.

As used in this act unless the context or subject matter otherwise requires:

A. “Authorized trustee” means a person, other than the settlor, who has authority under the terms of a first trust to distribute the principal of the trust to or for the benefit of one or more current beneficiaries or a special needs fiduciary under Section 175.704 of this title.

B. “Charity” means a charitable entity or a charitable trust, as those terms are defined by Section 301.3 of this title or Sections 552.2(2) or 856 of Title 18 of the Oklahoma Statutes.

C. “Current beneficiary,” with respect to a particular date, means a person who is receiving or is eligible to receive a distribution of income or principal from a trust on that date.

D. “First trust” means an existing irrevocable inter vivos or testamentary trust all or part of the principal of which is distributed in further trust under Sections 175.702 or 175.703 of this title.

E. “Full discretion” means a power to distribute principal to or for the benefit of one or more of the beneficiaries of a trust that is not a trust with limited discretion.

F. “Limited discretion” means:

1. a power to distribute principal according to mandatory distribution provisions under which the trustee has no discretion; or

2. a power to distribute principal to or for the benefit of one or more beneficiaries of a trust that is limited by an ascertainable standard, including the health, education, support or maintenance of the beneficiary.

G. “Presumptive remainder beneficiary,” with respect to a particular date, means a beneficiary of a trust on that date who, in
the absence of notice to the trustee of the exercise of the power of appointment and assuming that any other powers of appointment under the trust are not exercised, would be eligible to receive a distribution from the trust if:

1. The trust terminated on that date; or

2. The interests of all current beneficiaries ended on that date without causing the trust to terminate.

H. “Principal” means property held in trust for distribution to a remainder beneficiary when the trust terminates and includes income of the trust that, at the time of the exercise of a power of distribution under
Sections 175.702 or 175.703 of this title, is not currently required to be distributed.

I. “Second trust” means any irrevocable trust to which principal is distributed under Sections 175.702 or 175.703 of this title.

J. “Successor beneficiary” means a beneficiary other than a current or presumptive remainder beneficiary. The term does not include a potential appointee under a power of appointment held by a beneficiary.

SECTION 3. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.702 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.702 DISTRIBUTION TO SECOND TRUST: TRUSTEE WITH FULL DISCRETION.

A. An authorized trustee who has the full discretion to distribute the principal of a trust may distribute all or part of the principal of that trust in favor of a trustee of a second trust for the benefit of one more than one, or all of the current beneficiaries of the first trust and for the benefit of one, more than one, or all of the successor or presumptive remainder beneficiaries of the first trust.

B. The authorized trustee may, in connection with the exercise of a power of distribution under this section, grant a power of appointment, including a currently exercisable power of appointment, in the second trust to one or more of the current beneficiaries of the first trust who, at the time the power of appointment is granted, is eligible to receive the principal outright under the terms of the first trust.

C. If the authorized trustee grants a power of appointment to a beneficiary under Subsection B, the class of permissible appointees in whose favor the beneficiary may appoint under that power may be broader or different than the current, successor, and presumptive remainder beneficiaries of the first trust.

D. If the beneficiaries of the first trust are described as a class of persons, the beneficiaries of the second trust may include one or more persons who become members of that class after the distribution to the second trust.

E. The authorized trustee shall exercise a power to distribute under this section in good faith, in accordance with the terms and purposes of the trust, and in the interests of the beneficiaries.

SECTION 4. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.703 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.703 DISTRIBUTION TO SECOND TRUST: TRUSTEE WITH LIMITED DISCRETION.

A. An authorized trustee who has limited discretion to distribute the principal of a trust may distribute all or part of the principal of that trust in favor of a trustee of a second trust as provided by this section.

B. The current beneficiaries of the second trust must be the same as the current beneficiaries of the first trust, and the successor and presumptive remainder beneficiaries of the second trust must be the same as the successor and presumptive remainder beneficiaries of the first trust.

C. The second trust must include the same language authorizing the trustee to distribute the income or principal of the trust that was included in the first trust.

D. If the beneficiaries of the first trust are described as a class of persons, the beneficiaries of the second trust must include all persons who become members of that class after the distribution to the second trust.

E. If the first trust grants a power of appointment to a beneficiary of the trust, the second trust must grant the power of appointment to the beneficiary in the second trust, and the class of permissible appointees under that power must be the same as the class of permissible appointees under the power granted by the first trust.

F. The authorized trustee shall exercise a power of distribution under this section in good faith, in accordance with the terms and purposes of the trust, and in the interests of the beneficiaries.

SECTION 5. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.704 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.704 TRUST FOR BENEFICIARY WITH DISABILITY.

A. In this Section:

1. “Beneficiary with a disability” means a beneficiary of a first trust who the special-needs fiduciary believes may qualify for governmental benefits based on disability, whether or not the beneficiary currently receives those benefits or is an individual who has been adjudicated incompetent.

2. “Governmental benefits” means financial aid or services from a state, federal, or other public agency.

3. “Special-needs fiduciary” means, with respect to a trust that has a beneficiary with a disability:

a. A trustee or other fiduciary, other than a settlor, that has discretion to distribute part or all of the principal of a first trust to one or more current beneficiaries;

b. If no trustee or fiduciary has discretion under paragraph (A)(3)(a) of this Section, a trustee or other fiduciary, other than a settlor, that has discretion to distribute part or all of the income of the first trust to one or more current beneficiaries; or

c. If no trustee or fiduciary has discretion under paragraphs (A)(3)(a) and (A)(3)(b) of this Section, a trustee or other fiduciary, other than a settlor, that is required to distribute part or all of the income or principal of the first trust to one or more current beneficiaries.

4. “Special-needs trust” means a trust the trustee believes would not be considered a resource for purposes of determining whether a beneficiary with a disability is eligible for governmental benefits.

B. A special-needs fiduciary may exercise the decanting power under Section 175.702 of this title over the principal of a first trust as if the fiduciary had authority to distribute principal to a beneficiary with a disability subject to expanded distributive discretion if:

1. A second trust is a special-needs trust that benefits the beneficiary with a disability; and

2. The special-needs fiduciary determines that exercise of the decanting power will further the purposes of the first trust.

C. In an exercise of the decanting power under this section, the following rules apply:

1. Notwithstanding Section 175.702 of this title, the interest in the second trust of a beneficiary with a disability may:

a. Be a pooled trust as defined by Medicaid law for the benefit of the beneficiary with a disability under 42 U.S.C., Section 1396p(d)(4)(C), as amended; or

b. Contain payback provisions complying with reimbursement requirements of Medicaid law under 42 U.S.C., Section 1396p(d)(4)(A), as amended.

2. Except as affected by any change to the interests of the beneficiary with a disability, the second trust, or if there are two or more second trusts, the second trusts in the aggregate, must comply with Sections 175.702 or 175.703 of this title with respect to the interest(s) of each other current beneficiary, presumptive remainder beneficiary, or successor beneficiary.

SECTION 6. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.705 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.705 NOTICE REQUIRED.

A. An authorized trustee may exercise a power of distribution under Sections 175.702 175.703 of this title without the consent of the settlor or beneficiaries of the first trust and without court approval if the trustee provides to all of the current beneficiaries and presumptive remainder beneficiaries written notice of the trustee’s decision to exercise the power.

B. For the purpose of determining who is a current beneficiary or presumptive remainder beneficiary entitled to the notice, a beneficiary is determined as of the date the notice is sent. A beneficiary includes a person entitled to receive property under the terms of the first trust.

C. Except as provided by paragraph (E)(5) of this Section, in addition to the notice required under paragraph (A) of this Section, the authorized trustee shall give written notice of the trustee’s decision to the attorney general if:

1. A charity is entitled to notice;

2. A charity entitled to notice is no longer in existence;

3. The trustee has the authority to distribute trust assets to one or more charities that are not named in the trust instrument; or

4. The trustee has the authority to make distributions for a charitable purpose described in the trust instrument, but no charity is named as a beneficiary for that purpose.

D. If the beneficiary has a court-appointed guardian or conservator, the notice required to be given by this section must be given to that guardian or conservator. If the beneficiary is a minor for whom no guardian or conservator has been appointed, the notice required to be given by this section must be given to a parent of the minor. For purposes of paragraph (E)(3) of this Section, a beneficiary is considered to have waived the requirement that notice be given under this section if a person to whom notice is required to be given with respect to that beneficiary under this paragraph D waives the requirement that notice be given under this Section.

E. The authorized trustee is not required to provide notice:

1. To a beneficiary who is known to the trustee and cannot be located by the trustee after reasonable diligence;

2. To a beneficiary who is not known to the trustee;

3. To a beneficiary who waives the requirement of the notice under this section;

4. To a beneficiary who is a descendant of a beneficiary to whom the trustee has given notice if the beneficiary and the beneficiary’s ancestor have similar interests in the trust and no apparent conflict of interest exists between them; or

5. To the attorney general under paragraph (C) of this Section if the attorney general waives that requirement in writing.

F. The notice required under paragraph (A) of this Section must:

1. Include a statement that:

a. The authorized trustee intends to exercise the power of distribution;

b. The beneficiary has the right to object to the exercise of the power; and

c. The beneficiary may petition a court to approve, modify, or deny the exercise of the trustee’s power to make a distribution under this Act;

2. Describe the manner in which the trustee intends to exercise the power;

3. Specify the date the trustee proposes to distribute the first trust to the second trust;

4. Include the name and mailing address of the trustee;

5. Include copies of the agreements of the first trust and the proposed second trust;

6. Be given not later than the 90th day before the proposed date of distribution to the second trust; and

7. Be sent by registered or certified mail, return receipt requested, or delivered in person, unless the notice is waived in writing by the person to whom notice is required to be given.

SECTION 7. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.706 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.706 WRITTEN INSTRUMENT REQUIRED.

A distribution under Sections 175.702 or 175.703 of this title must be made by a written instrument that is signed and acknowledged by the authorized trustee and filed with the records of the first trust and the
second trust.

SECTION 8. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.707 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.707 REFERENCE TO TRUST TERMS.

A reference to the governing instrument or terms of the governing instrument of a trust includes the terms of a second trust to which that trust’s principal was distributed under this Act.

SECTION 9. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.708 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.708 SETTLOR OF SECOND TRUST.

A. Except as provided by paragraph (B) of this Section, the settlor of a first trust is considered to be the settlor of a second trust established under this Act.

B. If a settlor of a first trust is not also the settlor of a second trust into which principal of that first trust is distributed, the settlor of the first trust is considered the settlor of the portion of the second trust distributed to the second trust from that first trust under this Act.

SECTION 10. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.709 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.709 COURT-ORDERED
DISTRIBUTION.

A. An authorized trustee may petition a court to order a distribution under this Act.

B. If the authorized trustee receives a written objection to a distribution under this Act from a beneficiary before the proposed effective date of the distribution specified in the notice provided to the beneficiary under Section 175.705 of this title, the trustee or the beneficiary may petition a court to approve, modify, or deny the exercise of the trustee’s power to make a distribution under this Act.

C. If the authorized trustee receives a written objection to the distribution from the attorney general not later than the 30th day after the date the notice required by Section 175.705 of this title was received by the attorney general, the trustee may not make a
distribution under Sections 175.702 or 175.703 of this title without petitioning a court to approve or modify the exercise of the trustee’s power to make a distribution under this Act.

D. In a judicial proceeding under this Section, the authorized trustee may present the trustee’s reasons for supporting or opposing a proposed distribution, including whether the trustee believes the distribution would enable the trustee to better carry out the purposes of the trust.

E. The authorized trustee has the burden of proving that the proposed distribution furthers the purposes of the trust, is in accordance with the terms of the trust, and is in the interests of the beneficiaries.

F. This section does not limit a beneficiary’s right to bring an action against a trustee for a breach of trust.

SECTION 11. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.710 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.710 DIVIDED DISCRETION.

If an authorized trustee has full discretion to distribute the principal of a trust and another trustee has limited discretion to distribute principal under the trust instrument, the authorized trustee having full discretion may exercise the power to distribute the trust’s principal under Section 175.702 of this title.

SECTION 12. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.711 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.711 LATER DISCOVERED ASSETS.

To the extent the authorized trustee does not provide otherwise:

A. The distribution of all of the principal of a first trust to a second trust includes subsequently discovered assets otherwise belonging to the first trust and principal paid to or acquired by the first trust after the distribution of the first trust’s principal to the second trust; and

B. The distribution of part of the principal of a first trust to a second trust does not include subsequently discovered assets belonging to the first trust or principal paid to or acquired by the first trust after the distribution of principal from the first trust to the second trust, and those assets or that principal remain the assets or principal of the first trust.

SECTION 13. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.712 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.712 OTHER AUTHORITY TO
DISTRIBUTE IN FURTHER TRUST NOT LIMITED.

This Act may not be construed to limit the power of an authorized trustee to distribute property in further trust under the terms of the governing instrument of a trust, other law, or a court order.

SECTION 14. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.713 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.713 NEED FOR DISTRIBUTION NOT REQUIRED.

An authorized trustee may exercise the power to distribute principal to a second trust under Sections 175.702 or 175.703 of this title regardless of whether there is a current need to distribute principal under the terms of the first trust.

SECTION 15. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.714 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.714 DUTIES NOT CREATED.

A. This Act does not create or imply a duty for an authorized trustee to exercise a power to distribute principal, and impropriety may not be inferred as a result of the trustee not exercising a power conferred by Sections 175.702 or 175.703 of this title.

B. An authorized trustee does not have a duty to inform beneficiaries about the availability of the authority provided by this Act
or a duty to review the trust to determine whether any action should be taken under this Act.

SECTION 16. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.715 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.715 CERTAIN DISTRIBUTIONS PROHIBITED.

A. Except as provided by paragraph (B) of this Section, an authorized trustee may not exercise a power to distribute principal of a trust otherwise provided by Sections 175.702 or 175.703 of this title if the distribution is expressly prohibited by the terms of the
governing instrument of the trust.

B. A general prohibition of the amendment or revocation of a trust or a provision that constitutes a spendthrift clause does not preclude the exercise of a power to distribute principal of a trust under Sections 175.702 or 175.703 of this title.

SECTION 17. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.716 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.716 EXCEPTIONS TO POWER OF DISTRIBUTION.

An authorized trustee may not exercise a power to distribute principal of a trust under Sections 175.702 or 175.703 of this title to:

A. Reduce, limit, or modify a beneficiary’s current, vested right to:

1. Receive a mandatory distribution of income or principal;

2. Receive a mandatory annuity or unitrust interest;

3. Withdraw a percentage of the value of the trust; or

4. Withdraw a specified dollar amount from the trust;

B. Materially limit a trustee’s fiduciary duty:

1. Under the terms of the trust; or

2. In a manner that would be prohibited by the Oklahoma Trust Act, Section 175.1 et seq. of this title, the Oklahoma Prudent Investor Act, Section 175.60 et seq. of this title, the Oklahoma Principal and Income Act, Section 175.101 et seq. of this title, or the Oklahoma Charitable Fiduciary Act, Section 301.1 et seq. of this title; or

C. Decrease or indemnify against a trustee’s liability or exonerate a trustee from liability; or

D. Add a provision exonerating a trustee for failure to exercise reasonable care, diligence, and prudence; or

E. Eliminate a provision granting another person the right to remove or replace the authorized trustee exercising the distribution power under Sections 175.702 or 175.703 of this title; or

F. Reduce, limit, or modify in the second trust a perpetuities provision included in the first trust, unless expressly permitted by the terms of the first trust.

SECTION 18. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.717 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.717 TAX-RELATED LIMITATIONS.

A. The authorized trustee may not distribute the principal of a trust under Sections 175.702 or 175.703 of this title in a manner that would prevent a contribution to that trust from qualifying for or that would reduce the exclusion, deduction, or other federal tax benefit that was originally claimed for that contribution, including:

1. The annual exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended;

2. A marital deduction under Section 2056(a) or 2523(a) of the Internal Revenue Code of 1986, as amended;

3. The charitable deduction under Sections 170(a), 642(c), 2055(a), or 2522(a) of the Internal Revenue Code of 1986, as amended;

4. Direct skip treatment under Section 2642(c) of the Internal Revenue Code of 1986, as amended; or

5. Any other tax benefit for income, gift, estate, or generation-skipping transfer tax purposes under the Internal Revenue Code of 1986, as amended.

B. Notwithstanding paragraph (A) of this Section, an authorized trustee may distribute the principal of a first trust to a second trust regardless of whether the settlor is treated as the owner of either or both trusts under the Internal Revenue Code, 26 U.S.C., Sections 671 through 679, as amended.

C. If S corporation stock is held in trust, an authorized trustee may not distribute all or part of that stock under Sections 175.702 or 175.703 of this title to a second trust that is not a permitted shareholder under the Internal Revenue Code, 26 U.S.C., Section 1361(c)(2), as amended.

D. If an interest in property that is subject to the minimum distribution rules of the Internal Revenue Code, 26 U.S.C., Section 401(a)(9), as amended, is held in trust, an authorized trustee may not distribute the trust’s interest in the property to a second trust under Sections 175.702 or 175.703 of this title if the distribution would shorten the minimum distribution period applicable to the property.

SECTION 19. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.718 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.718 COMPENSATION OF
TRUSTEE.

A. Except as provided by paragraph (B) of this Section and unless a court, on application of the authorized trustee, directs otherwise, the trustee may not exercise a power under Sections 175.702 or 175.703 of this title solely to change trust provisions regarding the determination of the compensation of any trustee.

B. An authorized trustee, in connection with the exercise of a power under Sections 175.702 or 175.703 of this title for another valid and reasonable purpose, may bring the trustee’s compensation into conformance with reasonable limits authorized by state law.

C. The compensation payable to an authorized trustee of the first trust may continue to be paid to the trustee of the second trust during the term of the second trust and may be determined in the same manner as the compensation would have been determined in the first trust.

D. An authorized trustee may not receive
a commission or other compensation for the distribution of a particular asset from a first trust to a second trust under Sections 175.702 or 175.703 of this title.

SECTION 20. EFFECTIVE DATE. This act shall become effective November 1, 2018.

RESOLUTION NO. THREE: NON-JUDICIAL TRANSFER OF TRUST

BE IT RESOLVED by the House of Delegates of the Oklahoma Bar Association that the Association adopt, as part of its legislative program, as published in The Oklahoma Bar Journal and posted on the OBA website at www.okbar.org, proposed legislation creating a new section of law to be codified in the Oklahoma Statutes as Sections 175.801 through 175.803 of Title 60, unless there is created a duplication in numbering, which relates to administration of trusts and transfer of trust assets to different place of administration. (Requires 60% affirmative vote for passage. OBA Bylaws Art. VIII Sec. 5) (Submitted by the Estate Planning, Probate and Trust Section.)

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.801 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.801. SHORT TITLE.

This act shall be known and may be cited as the “Oklahoma Non-Judicial Transfer of Trust Act.”

SECTION 2. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.802 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.802. PRINCIPAL PLACE OF ADMINISTRATION AND NON-JUDICIAL
TRANSFER OF TRUST.

A. Without precluding other means for establishing a sufficient connection with the designated jurisdiction, terms of a trust designating the principal place of administration are valid and controlling if:

1. A corporate or trust company trustee’s principal place of business is located in or a trustee is a resident of the designated jurisdiction; or

2. All or part of the administration occurs in the designated jurisdiction; for example, physically maintaining trust records in the designated jurisdiction and preparing or arranging for the preparation of, on an exclusive basis or a nonexclusive basis, an income tax return that must be filed by the trust occurs wholly or partly in the designated jurisdiction.

B. A trustee or trust protector of a trust that is not subject to the jurisdiction of an Oklahoma court may transfer the trust’s principal place of administration to another State or to a jurisdiction outside of the United States if expressly authorized by the trust terms without beneficiary or court approval, or if not expressly authorized by the trust terms, then as provided in this Section.

C. Without precluding the right of the court to order, approve, or disapprove a transfer, the trustee or trust protector may transfer the trust’s principal place of administration to another State or to a jurisdiction outside of the United States as provided in this Section.

D. The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust’s principal place of administration not less than 60 days before initiating the transfer. The notice of proposed transfer must include:

1. The name of the jurisdiction to which the principal place of administration is to be transferred;

2. The address and telephone number at the new location at which the trustee can be contacted;

3. An explanation of the reasons for the proposed transfer;

4. The date on which the proposed transfer is anticipated to occur; and

5. The date, not less than 60 days after the giving of the notice, by which the qualified beneficiary must notify the trustee of an objection to the proposed transfer.

E. The authority of a trustee under this section to transfer a trust’s principal place of administration terminates if a qualified beneficiary notifies the trustee of an objection to the proposed transfer on or before the date specified in the notice.

F. In connection with a transfer of the trust’s principal place of administration, the trustee may transfer some or all of the trust property to a successor trustee designated in the terms of the trust or appointed pursuant to
a court order.

G. For purposes of this Section, the term “qualified beneficiary” means a beneficiary who, on the date the beneficiary’s qualification is determined:

1. Is a distributee or permissible distributee of trust income or principal;

2. Would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in subparagraph (a) terminated on that date without causing the trust to terminate; or

3. Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.

SECTION 3. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 175.803 of Title 60, unless there is created a duplication in numbering, reads as follows:

Section 175.803. METHODS AND WAIVER OF NOTICE.

A. Notice to a person under this Act or the sending of a document to a person under this Act must be accomplished in a manner reasonably suitable under the circumstances and likely to result in receipt of the notice or document. Permissible methods of notice or for sending a document include first-class mail, personal delivery, delivery to the person’s last known place of residence or place of business, or a properly directed electronic message.

B. Notice otherwise required under this Act or a document otherwise required to be sent under this Act need not be provided to a person whose identity or location is unknown to and not reasonably ascertainable by the trustee.

C. Notice under this Act or the sending of a document under this Act may be waived by the person to be notified or sent the document.

D. Notice of a judicial proceeding must be given as provided in the applicable rules of civil procedure.

SECTION 4. EFFECTIVE DATE. This act shall become effective November 1, 2018.

RESOLUTION NO. FOUR: CHANGES IN MEMBER CLASSIFICATIONS

Whereas the Strategic Planning Committee of the Oklahoma Bar Association (OBA) is charged with studying and making recommendations regarding the long term financial stability of the OBA;

Whereas the demographics of the OBA have undergone significant changes regarding the age of the members of the Association and the number of members who are reaching age seventy (70) each year and electing Senior Member classification;

Whereas members who reach age seventy (70) and elect Senior Member classification pay no dues;

Whereas the financial projections of the OBA show that over the next ten (10) years the result of a large number of members actively practicing law and not paying any dues will cause a significant drop in revenue to the OBA while expenses to the OBA in support of those members will increase;

Whereas the discontinuation of the Senior Member Classification for members who reach age seventy (70) and allowing non-practicing members to elect Retired Status, and pay no dues, is equitable and necessary to aid in preserving the financial stability of the OBA;

Resolved, by the House of Delegates of the Oklahoma Bar Association to adopt as part of its Legislative Program to recommend to the Supreme Court amendments to Article II, Section 2 of the Rules Creating and Controlling the Oklahoma Bar Association, as published in The Oklahoma Bar Journal and posted to the website www.okbar.org, relating to change in the amount of dues to be paid by active members of the Oklahoma Bar Association. (Requires 60% affirmative vote for passage. OBA Bylaws Art. VIII Sec. 5) (Submitted by the OBA Strategic Planning Committee.)

(a) Active Members. Active members Members shall be all members not enrolled as senior members Senior Members, Retired, or associated members Associate Members.

(b) SENIOR MEMBERS Senior Member. An active member Active Member in good standing who is was seventy (70) years of age as of the first day of January of the then current year 2018, may become a senior member and previously became a Senior Member by filing with the Executive Director his or her statement, setting forth the month, day and year of his birth and requesting senior membership Senior Member classification. Thereafter, he or she shall be entitled to all the privileges and advantages of an Active Member active membership in the Association without payment of further dues, with the exception that he or she shall not receive the Bar Journal free of charge. If a senior member Senior Member desires to receive the Bar Journal, the senior he or she shall pay for an annual subscription, the cost of which shall be based upon production and mailing costs. No additional members shall be added to this classification after January 1, 2018. After January 1, 2018, all members who are seventy (70) years of age or older, who are actively engaged in the practice of law, and who are not Senior Members, Associate Members or Retired Members shall pay dues in the amount specified for those in practice for more than three (3) years.

(c) Associate Member. A member in good standing who files, or on whose behalf there is filed, with the Executive Director, a statement that, by reason of illness, infirmity, or other disability, he or she is unable to engage in the practice of law shall become an associate member Associate Member of the Association for the duration of such illness, infirmity or other disability and until he is restored to his the former classification. An associate member Associate Member shall not engage in the practice of law or be required to pay dues during such period. He or she may, on annual request, receive the Bar Journal during his or her disability. The member, on causing an appropriate showing thereof to be made to the Executive Director, shall be reclassified to be an Active Member the membership held prior to such illness, infirmity or other disability and shall be required to pay the dues applicable thereto beginning January 2nd next following such reclassification and to pay the cost of the Bar Journal during such disability if he or she has elected to receive it.

(d) Retired Member. An Active Member in good standing who reaches age seventy (70) on, or after January 2nd, 2018 and is no longer engaged in the practice of law may notify the Executive Director, in writing, that he or she wishes to be designated as a “Retired Member.” Such request shall include a statement that the member is not engaged in the practice of law in any jurisdiction. Members who request Retired Member classification shall be relieved from paying dues and may purchase the Bar Journal and other member benefits that might be made available at a price equal to the cost to the Oklahoma Bar Association in providing the member benefit. An Active Member requesting Retired Member classification must have reached age seventy (70) prior to January 2nd of the year he or she is requesting to be reclassified to Retired Status and relieved from paying dues. Those members who were previously classified as Senior Members prior to the adoption of this subsection may change their classification to Retired Member if a request in writing is submitted to the Executive Director with a request for the reclassification and a statement that the requesting member is no longer engaged in the practice of law.

(d) (e) Reclassification to Active Membership – Showing Competence. Whenever a member seeks restoration to active membership Active Member classification after the lapse of two (2) years or less, he or she may be reinstated as provided in Rule 11.8 of the Rules Governing Disciplinary Proceedings. After the lapse of more that than two (2) years, an associated member Associate Member may be restored to active membership Active Member classification upon compliance with Rule 11.1 through Rule 11.7 of the Rules Governing Disciplinary Proceedings.

(e) (f) Voting Members Defined. Active and senior members Senior Members shall constitute the voting members of the Association. Associate and Retired Members shall not be Voting Members.

REQUIREMENTS:

Proposed resolutions are one of many bar business items discussed during the OBA Annual Meeting. Pursuant to OBA Bylaws, proposed resolutions must meet publication guidelines before Annual Meeting. For any resolution to receive a potential recommendation from the Board of Governors, the proposal must have been received by Sept. 5. A proposal relating to the Legislative Program must be sent in bill format to Executive Director John Morris Williams by Monday, Oct. 2, for publication in the Oklahoma Bar Journal Oct. 21 issue. In order for a resolution to be published in the official General Assembly and House of Delegates publication, it must be received by Oct. 2.

GENERAL ASSEMBLY

Leaders of the Oklahoma Supreme Court and Court of Criminal Appeals will share their current challenges and triumphs. OBA President Linda Thomas will review milestones accomplished by the OBA during the year and give insight on what lies ahead for the association. Come see your colleagues, and maybe your local bar association, honored with OBA awards.

Begins at 9:30 a.m. Friday, Nov. 3. Open to all bar members, not just delegates.

HOUSE OF DELEGATES

Taking place immediately following the General Assembly will be the selection of bar leadership officers and Board of Governors members for 2018. There will also be a vote on resolutions, decisions made about OBA’s legislative program and discussion of other important issues for next year.