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Oklahoma Revocable Trust Law: Oklahoma Trust Act vs. Oklahoma Uniform Trust Code
By Scott Thompson
This article compares Oklahoma’s current legal framework for revocable trusts, primarily under the Oklahoma Trust Act, against the provisions of House Bill 1850 (“HB 1850”), which enacted the Oklahoma Uniform Trust Code (“OUTC”), now codified at 60 O.S. § 1601.1 et seq. The goal is to highlight key changes and continuities affecting the creation, administration, modification, revocation, and enforcement of revocable trusts in Oklahoma. It is not aiming to be a full and complete analysis of the new statute.
The OUTC modernizes Oklahoma’s trust law by adopting a version of the Uniform Trust Code, a comprehensive model law designed to promote uniformity and clarify trust principles. The OUTC, as enacted by HB 1850 and effective November 1, 2025, will complement the existing Oklahoma Trust Act (“OTA”), 60 O.S. §175.1 et seq., establishing default rules for issues not addressed in trust instruments (60 O.S. §1601.5(A), 60 O.S. § 1610.3(C)). The OUTC is intended to codify much of the common law on trusts, which, along with principles of equity, will supplement the act except where modified. Notably, its provisions apply to all trusts created before, on, or after its effective date (i.e. all trusts), and to judicial proceedings concerning trusts commenced on or after this date, with some transitional provisions (60 O.S. § 1610.3(A)).
I. Current Oklahoma Law Governing Revocable Trusts
The OTA has been the primary statute, defining “trustor,” “trustee,” and “beneficiary,” and allowing trusts for any lawful contractual purpose. It outlines trustee powers (60 O.S. §175.11a), co-trustee administration (§175.17), and trustee liability (§§175.18-175.20).
A. Creation, Revocation and Amendment of Revocable Trusts
Title 60 O.S. §175.6 details creation by written instrument, requiring specification of beneficiaries, trust property, and terms. Oklahoma law presumes revocability. Title 60 O.S. §175.41 states, “Every trust shall be revocable by the trustor, unless expressly made irrevocable…”. If the trust instrument is silent on the method of revocation or amendment, current statutes do not specify a procedure. Common law principles requiring a clear manifestation of intent apply, with the Oklahoma Bar Association advising formal methods. Revocation is also possible with written consent of all living persons with vested or contingent interests (excluding interests by descent). 60 O.S. §175 provides for automatic revocation of spousal benefits upon the trust maker’s death, or upon annulment or divorce, unless the trust states otherwise.
B. Settlor’s Rights and Control
The settlor of a revocable trust retains substantial control, primarily through the power to revoke or amend. While the trust is revocable and the settlor has capacity, trustee duties are owed exclusively to the settlor (60 O.S. §175.57(E)(6)). The trustee may follow the settlor’s written direction, even if contrary to trust terms. Current statutes offer limited guidance if the settlor becomes incapacitated but the trust remains revocable.
C. Creditor’s Rights Against Revocable Trusts
1. During Settlor’s Lifetime:
Title 60 O.S. §175.92(1)(a) makes revocable trust property subject to the settlor’s creditors. Spendthrift provisions are ineffective for the settlor’s interest while the trust is revocable (§175.92(1)(b)). Creditors can reach the maximum distributable amount for the settlor’s benefit (§175.92(2)).
2. After Settlor’s Death:
This area is unsettled under current Oklahoma law. Thomas v. Bank of Oklahoma, N.A., 1984 OK 41, 684 P.2d 553, held a revocable trust could not defeat a surviving spouse’s forced share, but this hasn’t been extended to general creditors. Burford Manor Inc. v. Deel, 1994 OK CIV APP 66, 877 P.2d 623, allowed a creditor to reach trust assets under an implied equitable lien theory in specific circumstances. This ambiguity highlights a need for the OUTC’s clearer rules.
D. Trustee’s Duties and Powers in the Context of Revocable Trusts
Trustees have general fiduciary duties. However, under 60 O.S. §175.57(E), while the trust is revocable and the settlor has capacity, duties are owed exclusively to the settlor, who can direct the trustee even contrary to trust terms. Specific trustee powers are listed in 60 O.S. §175.11a and §175.24.
E. Interaction with Pour-Over Wills
Title 84 O.S. §301 validates devises to a trust identified in the will, even if the trust is amendable or revocable, or amended after the will’s execution or testator’s death. If the trust is revoked before the testator’s death, the devise lapses.
II. Overview of the Oklahoma Uniform Trust Code (OUTC)
A. Adoption and Purpose of the OUTC
The OUTC codifies common law trust principles and establishes default rules when trust terms are silent (60 O.S. §1601.5(A), complementing, not replacing, the existing Oklahoma Trust Act (60 O.S. § 1610.3(C)).
B. Scope and Application
The OUTC applies to express trusts (charitable or noncharitable) and trusts created by statute, judgment, or decree requiring administration as an express trust. It applies to all trusts created before, on, or after its November 1, 2025 effective date, and to related judicial proceedings, with some exceptions for ongoing cases (60 O.S. §1610.3(A)).
C. Key Definitions and Default vs. Mandatory Rules
OUTC introduces definitions for terms like “ascertainable standard,” “beneficiary,” “settlor,” “revocable,” and “terms of a trust.” A core OUTC concept is the distinction between default rules (which settlors can override) and mandatory rules (which cannot be altered by trust terms) (60 O.S. §1601.5(A), 60 O.S. §1601.5(B)). Mandatory rules reflect public policy, such as requirements for trust creation (60 O.S. §1601.5(B)(1)), the trustee’s duty of good faith (60 O.S. §1601.5(B)(2)), the requirement that a trust be for the benefit of its beneficiaries and have a lawful purpose (60 O.S. §1601.5(B)(3)), the court’s power to modify or terminate trusts (60 O.S. §1601.5(B)(4)), the effect of spendthrift provisions and certain creditor rights (60 O.S. §1601.5(B)(5)), and the duty to respond to information requests from qualified beneficiaries of irrevocable trusts (60 O.S. §1601.5(B)(9)).
D. Relationship with Common Law and Other Statutes
Common law and equity principles supplement the OUTC unless modified by it or other statutes. The OUTC is intended to complement the Oklahoma Trust Act (60 O.S. §1610.3(C)). OUTC also mandates that rules of construction for wills (Title 84) apply to trust interpretation and property disposition. This could mean Oklahoma’s anti-lapse statute (84 O.S. §142) and other will construction rules will more definitively apply to trusts.
III. Comparative Analysis: Revocable Trusts Under Current Law vs. OUTC
A. Presumption of Revocability and Methods of Revocation/Amendment
- Current Law: Presumes revocability unless expressly irrevocable (60 O.S. §175.41). No statutory default method if trust silent so common law applies.
- OUTC Provisions: OUTC defines “Revocable” as “revocable by the settlor without the consent of the trustee or a person holding an adverse interest” (60 O.S. §1601.3(14)). This aligns with the existing Oklahoma presumption. 60 O.S. §1606.1 addresses the capacity to revoke. However, unlike the model law on which it is based, OUTC does not appear to codify specific default methods for revocation or amendment if the trust instrument itself is silent on the method.
- Comparison and Implications: The presumption of revocability continues. While OUTC affirms the settlor’s power to revoke (if capacity is met, per 60 O.S. §1606.1), it does not seem to fill the gap in current Oklahoma law regarding specific default methods for revocation or amendment if the trust instrument is silent. In such cases, common law principles requiring a clear manifestation of the settlor’s intent would likely continue to govern the method.
B. Settlor’s Capacity and Powers
- Current Law: Capacity generally aligned with contract capacity. While settlor has capacity, trustee duties owed exclusively to settlor (60 O.S. §175.57(E)(6)). There is limited guidance on settlor incapacity. An agent under a Power of Attorney (“POA”) acts per terms of the POA and agency law.
- OUTC Provisions: 60 O.S. §1606.1 states: “The capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.” 60 O.S. §1606.2(B) affirms that “To the extent a trust is revocable and the settlor has capacity to revoke the trust, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.” The inclusion of “and the settlor has capacity to revoke the trust” is significant. If the settlor loses capacity, 60 O.S. §1606.2(B) would no longer apply, and the trustee’s duties (such as the duty to inform and report under 60 O.S. §1608.12) may then be owed to the other qualified beneficiaries. OUTC does not contain a specific section within its revocable trust provisions (Article 6) detailing how an agent under a power of attorney may exercise a settlor’s powers to revoke or amend a revocable trust if the trust or POA is silent. 60 O.S. §1604.10(A) does address an agent’s power to consent to modification or termination of noncharitable irrevocable trusts, requiring express authorization in the POA or trust terms. For revocable trusts, general agency law and the specific terms of the power of attorney would continue to be paramount in determining an agent’s authority.
- Comparison and Implications: OUTC codifies the testamentary capacity standard for revocable trusts (60 O.S. §1606.1). It provides significant clarification regarding trustee duties during settlor incapacity by virtue of the language in 60 O.S. § 1606.2(B). The rules for an agent under a POA acting on a revocable trust are not specifically detailed in Article 6 beyond general principles of agency.
C. Creditor’s Claims
1. Current Law: During Settlor’s Lifetime: Revocable trust property subject to settlor’s creditors (60 O.S. §175.92). After Settlor’s Death: Unsettled.
2. OUTC Provisions: During Settlor’s Lifetime: 60 O.S. §1605.1(A)(1) states: “Except as provided by the laws of this state, during the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors”.
After Settlor’s Death: 60 O.S. § 1605.1(A)(2) provides that “after the death of a settlor, and subject to the settlor’s right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor’s death is subject to claims of the settlor’s creditors, costs of administration of the settlor’s estate, the expenses of the settlor’s funeral and disposal of remains, and statutory allowances to a surviving spouse and children to the extent the settlor’s probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.”
3. Comparison and Implications:
Lifetime creditor access continues, as codified in 60 O.S. § 1605.1(A)(1). A significant change comes with 60 O.S. § 1605.1(A)(2), which establishes definitive statutory rules for creditor access to assets of a formerly revocable trust after the settlor’s death, resolving current ambiguity.
D. Trustee’s Duties and Powers Specific to Revocable Trusts
1. Current Law: Duties of the trustee are owed exclusively to a settlor with capacity and trustee may follow settlor’s written direction (60 O.S. §175.57(E)). There is a limited duty to inform other beneficiaries.
2. OUTC Provisions: 60 O.S. §1606.2(B) provides that while a trust is revocable and the settlor has capacity to revoke, the duties of the trustee are owed exclusively to the settlor. If the settlor loses capacity or upon death, the trustee’s duty to inform and report under 60 O.S. §1608.12 will extend to the qualified beneficiaries. 60 O.S. § 1606.2(A) permits a trustee to follow a direction of the settlor that is contrary to the terms of the trust while the trust is revocable by that settlor.
3. Comparison and Implications: Primary accountability to competent settlor remains. OUTC clarifies the transition of information rights upon settlor’s incapacity or death. The trustee’s ability to follow a capacitated settlor’s directions for a revocable trust is affirmed.
E. Statute of Limitations for Contesting Revocable Trusts
1. Current Law: No specific statute of limitations (“SOL”) for lifetime contests. Post-death, the will contest SOL (58 O.S. §61) applies for pour-over assets. Less clear what happens for assets already in trust.
2. OUTC Provisions: 60 O.S. §1606.3(A) states: “A person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor’s death within three (3) years after the later of either the settlor’s death or actual or constructive notice of the existence and terms of the trust.” 60 O.S. §1606.3(B) allows a trustee to distribute trust property after the settlor’s death unless the trustee knows of a pending contest, certain claims, or has been notified of a possible contest that is then commenced within 60 days.
3. Comparison and Implications: 60 O.S. §1606.3 introduces a specific statute of limitations for contesting revocable trusts after the settlor’s death, promoting finality. Contests are generally deferred until after the settlor’s passing.
F. Nonjudicial Settlement Agreements (NJSAs)
1. Current Law: No comprehensive statutory framework for NJSAs, which are agreements between the trustee and the qualified beneficiaries on matters involving the trust.
2. OUTC Provisions: 60 O.S. § 1601.3(18)(b)(3) defines “Terms of a trust” to include provisions established by “a nonjudicial settlement agreement under Section 1402 of Title 60 of the Oklahoma Statutes.” This integrates NJSAs into the OUTC framework. 60 O.S. §1402 (part of the “Trust Reform Act of 2024,” effective November 1, 2024) authorizes the trustee and “qualified beneficiaries” to enter into binding NJSAs concerning various trust matters, including interpretation, trustee actions, powers, resignation, appointment, compensation, place of administration, and roles of trust protectors and advisors. An NJSA is valid if it doesn’t violate a material trust purpose and includes terms a court could properly approve.
G. Rules of Construction
1. Current Law: There is no specific statutory guidance for interpreting trusts. Instead, reliance on the general common law (settlor’s intent) generally governs interpretation. However, Title 84 has rules covering will interpretation and courts might use these rules by analogy for trusts.
2. OUTC Provisions: 60 O.S. §1601.10 states: “The rules of construction that apply in this state to the interpretation of and disposition of property by will also apply as appropriate to the interpretation of the terms of a trust and the disposition of the trust property.”
3. Comparison and Implications: OUTC creates a formal statutory bridge between interpretation of trusts and the rules for will interpretation. Title 84 rules like anti-lapse (84 O.S. §142), ademption/satisfaction (e.g., 84 O.S. §11, §109), and after-acquired property (84 O.S. §146) will more directly apply to trusts, promoting consistency.
H. Implications for Existing Revocable Trusts
The OUTC’s application to trusts existing before its effective date (60 O.S. §1610.3(A)(1)) carries significant implications:
1. Potential Unintended Consequences: Existing trusts might now be subject to new default rules (e.g., regarding trustee duties upon settlor incapacity) that could conflict with original, perhaps unstated, intentions.
2. Opportunities for Modification: The OUTC may present opportunities to modify existing trusts (by the settlor if capacitated, or perhaps via an NJSA as per 60 O.S. §1402, referenced in 60 O.S. § 1601.3(18)(b)(3) to incorporate new flexible provisions or clarify intent.
I. Conclusion: The enactment of HB 1850, introducing the Oklahoma Uniform Trust Code, marks a pivotal evolution in Oklahoma’s trust law. It moves Oklahoma from a system reliant on the Oklahoma Trust Act and common law to a more comprehensively codified, modern framework. The OUTC aims to bring greater predictability, flexibility, and efficiency, but will require those who draft or review trusts to be familiar with the new code.
Bankers Q&As
By Pauli Loeffler
Reduction of rate, TRID loan
Q. I am reaching out regarding a loan we are doing. We had issued the Loan Estimate at a rate of 8.50%. While we waited on title work on the property, the interest rates dropped .25%. We are going to issue the CD and wanted our customer to get the benefit of the ¼ point drop in rates. Are we ok to go ahead and issue the CD at 8.25% rather than 8.50% as previously disclosed on the LE?
A. The answer depends on whether the overstated APR that was previously disclosed on the Closing Disclosure is accurate or inaccurate under Regulation Z. If the overstated APR is accurate under Regulation Z, the creditor must provide a corrected Closing Disclosure, but the creditor is permitted to provide it at or before consummation without a new three business-day waiting period. 12 CFR § 1026.19(f)(2)(i). If the overstated APR is inaccurate under Regulation Z, the creditor must ensure that a consumer receives a corrected Closing Disclosure at least three business days before the loan’s consummation (i.e., the inaccurate APR triggers a new three-business day waiting period). 12 CFR § 1026.19(f)(2)(ii).
A disclosed APR is accurate under Regulation Z if the difference between the disclosed APR and the actual APR for the loan is within an applicable tolerance in Regulation Z, 12 CFR § 1026.22(a). For transactions secured by real property or a dwelling, Regulation Z includes several tolerances that might apply, including a tolerance whereby the disclosed APR is considered accurate if it results from the disclosed finance charge being overstated. See 12 CFR § 1026.22(a)(4). For example, if the APR and finance charge are overstated because the interest rate has decreased, the APR is considered accurate. Thus, the creditor may provide the corrected Closing Disclosure to the consumer at consummation, and is not required to ensure that the consumer receives the corrected Closing Disclosure at least three business days before consummation.
Beneficial ownership of LLC by trusts
Q. We have this new account, and they presented the operating agreement (attached). The first 11 pages looks to be from 2007, with no signature from the “Owners”/”agent” of the LLC, then the 12th and 13th pages are “membership interest assignment” giving it to the two different trusts that were signed and notarized in 2016.
My question is, is this acceptable, or do we need to have the full agreement from 2007 and amendment for 2016?
A. The two trusts are the members, and the trustee of each trust will be the beneficial owners for BOI. The manager of the LLC has been designated.
Unlike a corporation which requires By-laws, an operating agreement is optional for an LLC. There is sufficient documentation to open the account. Apparently, the LLC failed to file its annual certificate and was reinstated in 2017 per documentation not included in the email. I checked status of the LLC on the Oklahoma Secretary of State’s website, and the LLC is in good-standing.
Two accounts opened years apart, deceased POD
Q. We have a customer that is in a nursing home and not doing well (dementia). The beneficiary on her account is deceased. Aggregate balance is over $50k.
Let’s say that the owner of the funds passes away tomorrow. The beneficiary is deceased. Does the money go to the beneficiaries’ estate or how does that work?
First account the beneficiary was added in 2011
Second account the beneficiary was added in 2023
A. As far as the first account, Sec. 901 of the Oklahoma Banking Code provided that: In the event of the death of a beneficiary prior to the death of the owner, the beneficiary’s share shall go to the beneficiary’s estate.
On the other hand, this isn’t true with regard to the second account. Effective on and after November 1, 2021, Sec. 901 was amended as follows:
4. If there is only one primary P.O.D. beneficiary on a deposit account and that beneficiary is an individual, the account owner may designate one or more contingent beneficiaries for whom the funds shall be held or to whom the funds shall be paid if the primary beneficiary is not living when the last surviving owner of the account dies. If there is more than one primary P.O.D. beneficiary on a deposit account, contingent beneficiaries shall not be allowed on that account.
5. If the sole primary P.O.D. beneficiary is not living and one or more contingent beneficiaries have been designated as allowed by paragraph 4 of this subsection, the funds shall be held for or paid to the contingent beneficiaries who are alive at the time of the account owner’s death in equal shares, and shall not belong to the estate of the deceased primary beneficiary. If neither the primary beneficiary nor any contingent beneficiary is living at the time of the account owner’s death, the funds shall be paid to the account owner’s estate .
ATM, check cashing, registration
Private ATM, cashing checks.
Q. We have a convenience store customer in town that who bought an ATM operates an ATM and cashes checks in excess of $1,000. I told the customer he needed to make sure the ATM was registered with the Oklahoma State Banking Department, and that he had to register with FinCen in order to cash checks over $1,000 .
A. Businesses that cash checks for over $1,000 for a single customer in a single day are regulated as Money Services Businesses (MSBs) by the Financial Crimes Enforcement Network (FinCEN) and are required to register with FinCEN. Per FinCEN definition, this appears to be a Money Services Business (MSB) and is required to report transactions:
(ff) Money services business. A person wherever located doing business, whether or not on a regular basis or as an organized or licensed business concern, wholly or in substantial part within the United States, in one or more of the capacities listed in paragraphs (ff)(1) through (ff)(7) of this section. This includes but is not limited to maintenance of any agent, agency, branch, or office within the United States.
(1) Dealer in foreign exchange. A person that accepts the currency, or other monetary instruments, funds, or other instruments denominated in the currency, of one or more countries in exchange for the currency, or other monetary instruments, funds, or other instruments denominated in the currency, of one or more other countries in an amount greater than $1,000 for any other person on any day in one or more transactions, whether or not for same-day delivery.
(2) Check casher—(i) In general. A person that accepts checks (as defined in the Uniform Commercial Code), or monetary instruments (as defined at § 1010.100(dd)(1)(ii), (iii), (iv), and
(v)) in return for currency or a combination of currency and other monetary instruments or other instruments, in an amount greater than $1,000 for any person on any day in one or more transactions.
(ii) Facts and circumstances; Limitations. Whether a person is a check casher as described in this section is a matter of facts and circumstances. The term “check casher” shall not include:
(A) A person that sells prepaid access in exchange for a check (as defined in the Uniform Commercial Code), monetary instrument or other instrument;
(B) A person that solely accepts monetary instruments as payment for goods or services other than check cashing services;
(C) A person that engages in check cashing for the verified maker of the check who is a customer otherwise buying goods and services;
(D) A person that redeems its own checks; or
(E) A person that only holds a customer’s check as collateral for repayment by the customer of a loan.
(ii)(D) allows a business to cash its own checks regardless of the amount.
Mandatory 5 consecutive vacation days for bank employees
Q. I have a question regarding the annual five consecutive days of leave rule. Our Employment Policy states new employees are not eligible for vacation until they have completed one full year of service. I feel there are several things in our Policy that are not clear.
Is it compliant that the employee does not take the five days until they are in the second year of employment?
A. The objective is that employee shall not have direct nor indirect have control (i.e., the substitute should not call or email the employee on vacation over his/her duties for a consecutive period as a matter of internal control to ferret out wrong-doing such as embezzlement and the like, including an employee who was putting loan applications into his/her drawer without processing. Although you are a national bank, the Oklahoma Administrative Code and the FDIC requirements are:
85:10-5-3. Minimum control elements for bank internal control program
All internal control programs adopted by banks shall contain as a minimum the following:
(1) A requirement that each officer and employee, when eligible for vacation, be absent from the institution at least five consecutive business days each calendar year, unless otherwise approved in writing by the bank’s bonding company for bank officers and employees generally and then each officer and employee who may be excepted from this requirement must be specifically approved by the bank’s board of directors and it shall be recorded in the board of directors minutes, that the officer or the employee may be absent less than the five consecutive banking days. During the absence of an officer or employee, the duties of the absent officer or employee must be performed by other bank officers and employees…
The FDIC’s recommendation is for two weeks, but offers alternatives:
Vacation Policy
Supervisory agencies and auditors have long recommended the practice whereby personnel are required to be continuously absent from their jobs or duties for a given amount of time and their duties assumed by another employee. During such an absence, the possibility of detecting irregularities is much greater, as the employee who is absent is unable to effectively control the situation. The FDIC has encouraged an uninterrupted absence of at least two weeks. However, compensating controls, such as the rotation of personnel among different jobs and duties, can constitute an acceptable alternative to a policy requiring a continuous two week absence.
https://www.fdic.gov/news/financial-institution-letters/1995/fil9552.html
I applaud cross-training since I get a ton of calls when the employee in charge of garnishments, subpoenas, CTRs, etc. is off, and the employee filling the gap has little or no training. Training an employee to be able to fill in is a great idea.