(UTC 603) (a) To the extent a trust is revocable by a settlor, a trustee may follow a direction of the settlor that is contrary to the terms of the trust. To the extent a trust is revocable by a settlor in conjunction with a person other than a trustee or person holding an adverse interest, the trustee may follow a direction from the settlor and the other person holding the power to revoke even if the direction is contrary to the terms of the trust.

(b) While a trust is revocable, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.

(c) While the trust is irrevocable and during the period the power may be exercised, the holder of a power of withdrawal has the rights of a settlor of a revocable trust under this section and the duties of the trustee are owed exclusively to the holder of the power to the extent of the property subject to the power.

(d) While the trust is irrevocable and during the period the interest of any beneficiary not having a present interest may be terminated by the exercise of a power of appointment or other power, the duties of the trustee are owed exclusively to the holder of the power to the extent of the property subject to the power.

Annotations

This section does not dictate who may petition for the removal of a trustee, but, rather, describes to whom fiduciary duties are owed. In re Conservatorship of Abbott, 295 Neb. 510, 890 N.W.2d 469 (2017).

Where a trust agreement provided for the discretionary payment of trust principal to beneficiaries for their health, maintenance, support, and education, the beneficiaries had enforceable, present interests in the trust and the trustee owed fiduciary duties to the beneficiaries. In re Conservatorship of Abbott, 295 Neb. 510, 890 N.W.2d 469 (2017).

Where a trust agreement provided limited testamentary power to appoint trust property to or for the benefit of joint descendants, the power of appointment was neither a general power of appointment nor a power of withdrawal. In re Conservatorship of Abbott, 295 Neb. 510, 890 N.W.2d 469 (2017).

Under this section, incapacity of the settlor does not affect the settlor's power to revoke a trust, though it might affect the ability of the settlor to exercise that power. Manon v. Orr, 289 Neb. 484, 856 N.W.2d 106 (2014).

Pursuant to this section, the rights of the beneficiaries of a revocable trust are subject to the continued control of the settlor. In re Trust Created by Haberman, 24 Neb. App. 359, 886 N.W.2d 829 (2016).