§ 16600

(a) This chapter shall be known, and may be cited, as the California Uniform Directed Trust Act.

(b) The Legislature finds and declares all of the following:

(1) This chapter governs an arrangement commonly known as a directed trust.

(2) In a directed trust, the terms of the trust grant a person other than a trustee a power over some aspect of the trust’s administration.

(3) Under this chapter, this power is called a power of direction, the person that holds the power is called a trust director, a trustee that is subject to the power is called a directed trustee, and the trust is a directed trust.

(4) A directed trustee is required to take reasonable action to comply with a trust director’s exercise or nonexercise of a power of direction.

(5) Except for willful misconduct, a directed trustee is liable only for its own breach of trust in executing a direction and not for the trust director’s breach of trust in exercising or not exercising the power of direction.

(Added by Stats. 2023, Ch. 721, Sec. 3. (SB 801) Effective January 1, 2024.)