With respect to a third person dealing with a trustee, under § 34-41-2.05 or § 34-41-3.08, the existence of trust powers and their proper exercise by the trustee may be assumed without inquiry. A third person is not bound to inquire whether the trustee has power to act as trustee or is properly exercising trust powers, and a third person without actual knowledge that the trustee is exceeding or improperly exercising his or her powers is fully protected in dealing with the trustee as if he or she possessed and were properly exercising the power he or she purports to exercise. A third person is not bound to assure the proper application of trust assets paid or delivered to the trustee in his or her capacity as trustee.
History of Section.
P.L. 1984, ch. 141, § 2.