55-1A-32. Prosecution or defense of actions and proceedings.
A trustee may prosecute or defend actions, claims or proceedings for the protection of trust assets or of the trustee in the performance of the trustee's duties. However, a trustee has no duty to prosecute, or to defend or continue to defend the trust or its assets in any action, through exercise of judicial process or otherwise, to reach the assets of the trust in satisfaction of a claim against the trust, a beneficiary or the settlor of a trust unless:
(1)The trustee is reasonably satisfied that the readily marketable assets of the trust are sufficient to fully indemnify the trustee for all the liabilities and expenses, including professional fees and expense of counsel, accountants, and expert witnesses, that the trustee may incur in so prosecuting or defending the trust or its assets; or
(2)If the trustee is not satisfied that the settlor or the beneficiaries have provided the trustee with indemnity, supported with such security as may be satisfactory to the trustee in its sole discretion, as is then and will be sufficient to fully indemnify the trustee.
Unless otherwise provided in the trust agreement, a trustee who is no longer serving due to resignation or removal, whether by judicial process or pursuant to the trust agreement, or as a result of the trust terminating, does not have a duty to defend or continue to prosecute or defend the trust or its assets in any action, whether the trust is in existence or not at the time of such action.
Source: SL 1979, ch 336, §32; SL 2017, ch 204, §13; SL 2021, ch 207, § 11.
Structure South Dakota Codified Laws
Title 55 - Fiduciaries and Trusts
Section 55-1A-2 - Trustee defined.
Section 55-1A-5 - Retention of trust property by trustee.
Section 55-1A-6 - Additions to trust assets.
Section 55-1A-7 - Operation of business by trustee.
Section 55-1A-8 - Acquisition of undivided interest in trust asset.
Section 55-1A-9 - Investment of trust assets.
Section 55-1A-9.1 - Affiliated investments.
Section 55-1A-10 - Deposit of trust funds in bank.
Section 55-1A-11 - Disposal of trust assets.
Section 55-1A-12 - Grant or taking of option for disposition of assets.
Section 55-1A-13 - Leases by trustees.
Section 55-1A-14 - Repairs by trustee--Removal or demolition.
Section 55-1A-15 - Razing or erection of party walls or buildings.
Section 55-1A-16 - Land development or dedication--Valuation adjustments.
Section 55-1A-17 - Mineral and natural resource leases and explorations.
Section 55-1A-19 - Voting stock or securities--Voting trust agreements.
Section 55-1A-21 - Corporate powers--Stocks--Reorganizations and mergers--Sales and leases.
Section 55-1A-22 - Holding stock in nominee's name without disclosing fiduciary relationship.
Section 55-1A-23 - Borrowing money against trust assets.
Section 55-1A-24 - Contracts binding upon trust.
Section 55-1A-25 - Claims in favor of or against trust or trustee.
Section 55-1A-26 - Release of claim or lien.
Section 55-1A-27 - Payment of trust administration expenses.
Section 55-1A-28 - Creation of reserves.
Section 55-1A-30 - Distribution of property and money.
Section 55-1A-31 - Employment of agents and assistants.
Section 55-1A-32 - Prosecution or defense of actions and proceedings.
Section 55-1A-33 - Advance of income or loan to beneficiary--Lien.
Section 55-1A-34 - Advance of money for protection of trust--Lien.
Section 55-1A-35 - Execution and delivery of instruments.
Section 55-1A-36 - Holding of two or more trusts with undivided interests.
Section 55-1A-37 - Citation of chapter.
Section 55-1A-38 - Trustee may perform necessary and appropriate acts.
Section 55-1A-39 - Disclaimer of powers by trustee--Time limit.