Oklahoma § 60-1608.13 - Discretionary powers — Tax savings

§ 60-1608.13. Discretionary powers — Tax savings

A. Notwithstanding the breadth of discretion granted to a

trustee in the terms of the trust, including the use of such terms

as "absolute", "sole", or "uncontrolled", the trustee shall exercise

a discretionary power in good faith and in accordance with the terms

and purposes of the trust and the interests of the beneficiaries.

B. Subject to subsection D of this section, and unless the

terms of the trust expressly indicate that a rule in this subsection

does not apply:

1. A person other than a settlor who is a beneficiary and

trustee of a trust that confers on the trustee a power to make

discretionary distributions to or for the trustee's personal benefit

may exercise the power only in accordance with an ascertainable

standard; and

2. A trustee may not exercise a power to make discretionary

distributions to satisfy a legal obligation of support that the

trustee personally owes another person.

C. A power whose exercise is limited or prohibited by

subsection B of this section may be exercised by a majority of the

remaining trustees whose exercise of the power is not so limited or

prohibited. If the power of all trustees is so limited or

Oklahoma Statutes - Title 60. Property

prohibited, the court may appoint a special fiduciary with authority

to exercise the power.

D. Subsection B of this section does not apply to:

1. A power held by the settlor's spouse who is the trustee of a

trust for which a marital deduction, as defined in Section

2056(b)(5) or 2523(e) of the Internal Revenue Code of 1986, as in

effect on the effective date of this act, or as later amended, was

previously allowed;

2. Any trust during any period that the trust may be revoked or

amended by its settlor; or

3. A trust if contributions to the trust qualify for the annual

exclusion under Section 2503(c) of the Internal Revenue Code of

1986, as in effect on the effective date of this act, or as later

amended.

E. If a distribution to a beneficiary is subject to the

exercise of the trustee’s discretion, whether or not the terms of a

trust include a standard to guide the trustee in making

distributions, then the interest is neither a property interest nor

an enforceable right, but a mere expectancy.

Added by Laws 2025, c. 254, § 61, eff. Nov. 1, 2025.