(a) A person other than a beneficiary who in “good faith”, as defined in § 47-1-201, assists a trustee, or who in “good faith” and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee’s powers is protected from liability as if the trustee properly exercised the power.
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Terms Used In Tennessee Code 35-15-1012

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • 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
  • Beneficiary: means a person that has a present or future beneficial interest in a trust, vested or contingent. See Tennessee Code 35-15-103
  • Person: means an individual. See Tennessee Code 35-15-103
  • Trustee: A person or institution holding and administering property in trust.
  • Trustee: includes an original, additional, and successor trustee, and a cotrustee. See Tennessee Code 35-15-103
(b) A person other than a beneficiary who in “good faith” deals with a trustee is not required to inquire into the extent of the trustee’s powers or the propriety of their exercise.
(c) A person who in “good faith” delivers assets to a trustee need not ensure their proper application.
(d) A person other than a beneficiary who in “good faith” assists a former trustee, or who in “good faith” and for value deals with a former trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.
(e) Comparable protective provisions of other laws, see §§ 47-8-101 – 47-8-407, relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section.
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