(a) The validity and construction of a trust are determined by the law of the jurisdiction designated in the terms of the trust instrument, which is called a state jurisdiction provision.
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Terms Used In Tennessee Code 35-15-107

  • Charitable trust: means a trust, or portion of a trust, created for a charitable purpose described in §. See Tennessee Code 35-15-103
  • Decedent: A deceased person.
  • Devise: To gift property by will.
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Fiduciary: A trustee, executor, or administrator.
  • Fiduciary: means :
    (A) A trustee, conservator, guardian, agent under any agency agreement or other instrument, an executor, personal representative or administrator of a decedent's estate, or any other party, including a trust advisor or a trust protector, who is acting in a fiduciary capacity for any person, trust, or estate. See Tennessee Code 35-15-103
  • foreign country: means any jurisdiction, subdivision, territory or possession thereof, other than that of the United States of America or of a state. See Tennessee Code 35-15-103
  • Foreign jurisdiction: means any jurisdiction, subdivision, territory or possession thereof, other than this state. See Tennessee Code 35-15-103
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual. See Tennessee Code 35-15-103
  • Property: means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein. See Tennessee Code 35-15-103
  • Settlor: means a person, including a testator, who creates, or contributes property to, a trust. See Tennessee Code 35-15-103
  • Spendthrift provision: means a term of a trust which restrains both voluntary and involuntary transfer of a beneficiary's interest. See Tennessee Code 35-15-103
  • State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Tennessee Code 35-15-103
  • This state: means the state of Tennessee. See Tennessee Code 35-15-103
  • Trust instrument: means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto. 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
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) When a state jurisdiction provision designates that the law of this state controls:

(1) This state and its courts have jurisdiction over a trust created in a foreign jurisdiction;
(2) The validity, construction, and administration of a trust are determined by the laws of this state, including but not limited to:

(A) The capacity of the settlor;
(B) The powers, obligations, liabilities, and rights of the trustees and other fiduciaries;
(C) The appointment and removal of the trustees and other fiduciaries;
(D) The existence and extent of all powers conferred on a trustee or other fiduciary, including but not limited to, any trustee‘s or other fiduciary‘s discretionary powers, as well as the existence and extent of all powers retained by a settlor and the validity of the exercise of any such power, whether conferred on a trustee or other fiduciary or retained by a settlor;
(3)

(A) Neither a trust nor any disposition made subject to the terms of such trust is subject to the laws of any foreign country, nor is any such trust or such disposition void, voidable, liable to be set aside or defective in any manner for any reason including but not limited to:

(i) The law of any foreign country prohibits or does not recognize the concept of a trust; or
(ii) The trust or disposition avoids or defeats any right, claim, or interest conferred by the law of a foreign country upon any person by reason of a personal relationship to the settlor or by way of heirship rights or contravenes any rule or law of a foreign country or any foreign country’s judicial or administrative order or action intended to recognize, protect, enforce, or give effect to such right, claim, or interest;
(B) Relative to any foreign country or any interest in property arising or originating under the laws of any foreign country:

(i) No form of forced heirship, legitime, forced share or any similar heirship rights or form of transmission or transfer of property from a decedent or from a living person, or any restrictions on transmission or transfer of property from a decedent or a living person is recognized by this state; or
(ii) No heirship rights described in subdivision (b)(3)(B)(i) conferred under the law of a foreign country shall constitute an obligation or liability, the transfer, conveyance or devise of which, would violate title 66, chapter 3; and
(C) This subdivision (b)(3) shall apply to all realty or other forms of immovable property physically in this state, as well as to all personal or movable property wherever situated if owned by a trust containing a state jurisdiction provision designating that the law of this state controls such trust;
(4) No judgment or other holding of any judicial body of any foreign country, including but not limited to, any court, administrative body or other entity or organization purportedly having the power to make judicial or administrative decisions of any foreign country, shall be recognized or enforced or give rise to any equitable forms of relief, including but not limited to, estoppel, to the extent such judgment or other holding concerns a trust containing a state jurisdiction provision designating that the law of this state controls such trust or to the extent such judgment or other holding concerns property held by such trust;
(5) If, in any action brought against a trustee or other fiduciary of a trust, any judicial body of any foreign country, including but not limited to, any court, administrative body or other entity or organization purportedly having the power to make judicial or administrative decisions of any foreign country, takes any action whereby such judicial body declines to apply the law of this state in determining the validity, construction, or administration of a trust, or the effect of a spendthrift provision or discretionary interest of a trust, the trustee or other fiduciary, as applicable, shall immediately upon the action of the judicial body of the foreign country and without the further order of any court of this state, cease in all respects to be trustee or other fiduciary, as applicable, of the trust and a vacancy in the office of trustee or other fiduciary, as applicable, shall immediately exist:

(A) Upon the existence of such vacancy, the trustee or other fiduciary, as applicable, has no power or authority other than to convey the trust property to the successor trustee or other fiduciary who fills such vacancy as provided in subdivision (b)(5)(B);
(B) Such vacancy shall be filled in the same manner as would a vacancy in trusteeship that is required to be filled, either as provided by § 35-15-704(c) if the trust is a noncharitable trust, or as provided by § 35-15-704(d) if the trust is a charitable trust; and
(C) Section 35-15-704(e) shall also apply relative to such trustee or other fiduciary, as applicable, in the same manner as § 35-15-704(e) applies to trustees and vacancies in trusteeship in general; provided, however, that when exercising its power provided by § 35-15-704(e), the court shall consider the purposes of this subsection (b) and make any such appointments pursuant to § 35-15-704(e) in a manner designed to give full force and effect to this subsection (b) to the maximum extent allowed by the laws of this state or of the United States.
(c) In the absence of the existence of a state jurisdiction provision, the laws of the jurisdiction where the trust was executed determine the validity of the trust and the laws of descent, while the laws of the principal place of administration determine the administration of the trust.
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