CHAPTER 247

(HB 1178)

Trusts for animals.

         ENTITLED, An Act to  provide for the establishment of certain honorary trusts and of certain trusts for animals.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

     Section  1.  That chapter 29A-2 be amended by adding thereto a NEW SECTION to read as follows:

---

     Subject to the provisions of section 3 of this Act, a trust may be performed by the trustee for twenty-one years but no longer, whether or not the terms of the trust contemplate a longer duration if the trust is for a specific lawful noncharitable purpose or for lawful noncharitable purposes to be selected by the trustee.

     Section  2.  That chapter 29A-2 be amended by adding thereto a NEW SECTION to read as follows:

     Subject to the provisions of section 3 of this Act, a trust for the care of a designated animal is valid. The trust terminates when no living animal is covered by the trust. A governing instrument shall be liberally construed to bring the transfer within this section, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the transferor. Extrinsic evidence is admissible in determining the transferor's intent.

     Section  3.  That chapter 29A-2 be amended by adding thereto a NEW SECTION to read as follows:

     Any trust provided for by sections 1 and 2 of this Act is subject to the following provisions:

             (1)    Except as expressly provided otherwise in the trust instrument, no portion of the principal or income may be converted to the use of the trustee or to any use other than for the trust's purposes or for the benefit of a covered animal;

             (2)    Upon termination, the trustee shall transfer the unexpended trust property in the following order:

             (a)    As directed in the trust instrument;

             (b)    If the trust was created in a nonresiduary clause in the transferor's will or in a codicil to the transferor's will, then under the residuary clause in the transferor's will; and

             (c)    If no beneficiary results from the application of subsection (a) or (b) of this subdivision, then to the transferor's heirs under §  29A-2-711;

             (3)    For the purposes of §  29A-2-707, the residuary clause is treated as creating a future interest under the terms of a trust;

             (4)    The intended use of the principal or income may be enforced by a person designated for that purpose in the trust instrument or, if none, by an individual appointed by a court upon application to it by that person;

             (5)    Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or fee is required by reason of the existence of the fiduciary relationship of the trustee;

             (6)    A court may reasonably reduce the amount of the property transferred if it determines that that amount substantially exceeds the amount required for the intended use. The amount of the reduction, if any, passes as unexpended trust property under subdivision (2) of this section;

             (7)    If no trustee is designated or no designated trustee is willing or able to serve, a court shall name a trustee. A court may order the transfer of the property to another trustee if required to ensure that the intended use is carried out and if no successor trustee is designated in the trust instrument or if no designated successor trustee agrees to serve or is able to serve. A court may also make such other orders and determinations as are advisable to carry out the intent of the transferor and the purpose of this Act.

     Section  4.  Nothing in this Act may be construed to reinstate the rule against perpetuities in South Dakota as to any trust except trusts specifically defined in this Act as honorary trusts or trusts for the care of specific animals.

     Signed February 21, 2006

_______________