Whenever a trustee shall make a contract which is within his powers as trustee, or a predecessor trustee shall have made such a contract, and a cause of action arises thereon:
1. The party in whose favor the cause of action has accrued may sue the trustee in his representative capacity, and any judgment rendered in such action in favor of the plaintiff shall be collectible by execution out of the trust property. In such an action the plaintiff need not prove that the trustee could have secured reimbursement from the trust fund if he had paid the plaintiff's claim.
2. No judgment shall be rendered in favor of the plaintiff in such action unless he proves that within thirty (30) days after the beginning of such action, or within such other time as the court may fix, and more than thirty (30) days prior to obtaining the judgment, he notified each of the beneficiaries known to the trustee who then had a present or contingent interest, or in the case of a charitable trust the Attorney General and any corporation which is a beneficiary or agency in the performance of such charitable trust, of the existence and nature of the action. Such notice shall be given by mailing copies thereof in postpaid envelopes addressed to the parties to be notified at their last-known addresses. The trustee shall furnish the plaintiff a list of the parties to be notified, and their addresses, within ten (10) days after written demand therefor, and notification of the persons on such list shall constitute compliance with the duty placed on the plaintiff by this section. Any beneficiary, or in the case of charitable trusts, the Attorney General and any corporation which is a beneficiary or agency in the performance of such charitable trust, may intervene in such action and contest the right of the plaintiff to recover. If any beneficiary is a minor or has been adjudged incompetent, the court shall appoint a guardian ad litem, whose duty it shall be to defend such action.
3. The plaintiff may also hold the trustee who made the contract personally liable on such contract, if the contract does not exclude such personal liability. The addition of the word "trustee" or the words "as trustee" after the signature of a trustee to a contract shall be deemed prima facie evidence of an intent to exclude the trustee from personal liability.
4. If a decedent was a partner in a general partnership and the articles of partnership so provide, on the death of a partner, his or her trustee shall be entitled to the place of the deceased partner in the partnership. Likewise, any other trustee contracting to enter into a general partnership in its capacity as trustee shall have its liability limited to the trust assets contributed to the partnership and the other assets of that trust under the control and management of the contract. A trustee so entering the partnership shall be liable to third persons only to the extent of the decedent's capital in the partnership and the funds of the trust under the control and management of the trustee. This paragraph does not exonerate a trustee from liability for negligence.
5. Unless otherwise authorized, directed or restricted by order of court or by the instrument creating the trust, a trustee may contract to enter into a limited partnership pursuant to the Limited Partnership Act and may contribute to the partnership the assets designated by the instrument creating the trust. The trustee shall be liable only to the extent of the assets contributed by the trustee pursuant to the instrument creating the trust, notwithstanding the occurrence of any act or event which would otherwise have the effect of changing the limited partnership into a general partnership. This paragraph does not exonerate a trustee from liability for negligence.
Laws 1941, p. 253, § 18; Laws 1981, c. 196, § 2.