An excluded fiduciary as defined in § 55-1B-1 who receives tax information regarding an asset or entity owned by the trust, any trustee of a trust that holds an asset or entity owned by the trust but who does not manage the asset or entity, and any trustee who receives tax information from the settlor, the settlor’s agents, or other individuals regarding matters that have tax implications to the trust or trust beneficiaries, may rely, without liability, on tax information it receives in any of the above situations. By way of example, if a trustee holds in trust a limited liability company interest but does not manage the limited liability company, the trustee may rely, without limitation, on any tax information received from the manager of the limited liability company or its accountant or agents.

The tax information that a trustee may rely on in the above situations may include the following:

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(1) The accuracy of any information reported on a tax return;

(2) A copy of a tax return provided by the tax return preparer or the taxpayer filing the return;

(3) The representation of another fiduciary or tax advisor who filed or prepared a tax return as to the amount of any item reported on that return;

(4) The settlor’s representation whether or not a gift or generation skipping transfer tax form has ever been filed as well as how much of the respective exemptions have been utilized; or

(5) The direction from the grantor‘s or settlor’s tax advisors based upon any contribution or distribution, or both, for the appropriate tax filings.

An entity, for purposes of this section, shall be defined as set out in subdivisions 47-34A-101(6) and 47-34A-101(13).

This section applies to any trust in existence on or created on or after July 1, 2012.

Source: SL 2012, ch 233, § 21.