HB 176: Trust Business Modifications - Utah

Substitute #3 → Enrolled · 6 edits · Mar 18, 2026

MODERATE

This bill reorganizes and renumbers Utah's trust business laws to improve clarity and consistency. It updates fee structures for financial institutions, clarifies which entities are exempt from 'trust business' regulations (such as attorneys and escrow agents), and adds specific restrictions on trust directors engaging in trust activities.

Scope change

The bill expands the definition of 'trust business' to include non-fiduciary roles like trust directors and trust advisors, while simultaneously carving out specific exemptions for individuals acting in limited capacities (e.g., guardians with non-financial duties, credit services organizations, and certain court-appointed fiduciaries).

DEFINITION

Added 'trust director', 'trust advisor', and 'trust protector' to the definition of 'trust business', meaning these individuals are now subject to the same regulations as traditional trustees.

Expanded exemptions to include credit services organizations, certain court-appointed fiduciaries with demonstrated competence, and guardians whose duties are limited to non-financial matters.

REQUIREMENT

Reorganized and renumbered multiple sections of Title 7, Chapter 5, to streamline the legal code and ensure consistent cross-referencing.

Added a specific prohibition preventing trust directors from engaging in 'trust business' as defined in the new code.

ENFORCEMENT

Updated fee schedules for trust companies and other financial institutions, including changes to annual fees and examination costs.

TIMELINE

Set the effective date of the new provisions to May 6, 2026.

Introduced → Substitute #1 · 5 edits

MODERATE

This bill reorganizes Utah's trust business laws to clarify who can act as a fiduciary and how they are regulated. It expands exemptions to include individuals acting under court appointment and attorneys/CPAs providing incidental fiduciary services, while strictly prohibiting trust directors from engaging in trust business. The bill also introduces new requirements for attorneys and related parties to obtain explicit settlor acknowledgment before receiving compensation for trust administration roles.

Scope change

The bill broadens the definition of who is exempt from the 'trust business' definition to include individuals appointed by courts and certain professionals, while narrowing the scope of who can act as a 'trust director' to strictly prohibit them from engaging in trust business.

DEFINITION

Added exemptions for individuals appointed by courts (conservators, guardians) and attorneys/CPAs performing incidental fiduciary services from the definition of 'trust business'.

Added a new definition for 'trust director' and clarified that they cannot engage in trust business.

REQUIREMENT

Enacted Section 7-5-117 requiring settlors to provide written acknowledgment that their attorney or related party is eligible for compensation before being appointed to a compensated trust role.

ENFORCEMENT

Added provisions clarifying that attorneys and CPAs exempt from the trust business definition are not subject to enforcement by the financial department but remain subject to their respective professional licensing boards.

TECHNICAL

Renumbered and reorganized sections of Title 7, Chapter 5 to improve clarity and consistency.

Substitute #2 → Substitute #3 · 5 edits

MODERATE

This bill reorganizes and renumbers Utah's trust business laws while making substantive changes to fee structures, exemptions, and attorney compensation rules. It clarifies which entities are exempt from being classified as 'trust businesses' (such as attorneys and escrow agents) and introduces new requirements for attorneys who serve as trustees to receive written acknowledgment from the trust creator regarding their compensation.

Scope change

The bill expands the definition of who is exempt from 'trust business' regulations to include attorneys, certified public accountants, and various other fiduciaries, while simultaneously adding specific restrictions on when attorneys can be compensated for serving as trustees.

DEFINITION

Added specific exemptions for attorneys, certified public accountants, and other professionals from the definition of 'trust business' when acting in their professional capacity, provided they meet certain conditions.

REQUIREMENT

Requires a settlor to provide written acknowledgment to an attorney or attorney-related person before they can be compensated for serving as a trustee, ensuring the settlor understands the role and potential conflicts of interest.

FISCAL

Adjusted the annual fee calculation for credit unions, changing the language to clarify that the reduced fee applies to a credit union's first year of operation.

TECHNICAL

Renumbered and reorganized multiple sections of Title 7, Chapter 5 to improve the structure and readability of the trust business statutes.

TIMELINE

Established May 6, 2026, as the effective date for the new attorney compensation acknowledgment requirements.

Substitute #1 → Substitute #2 · 4 edits

MODERATE

This bill reorganizes Utah's trust business laws by renumbering sections and clarifying definitions to exempt certain professionals (like attorneys and escrow agents) from strict trust company regulations. It introduces new rules allowing a settlor's attorney to be paid for acting as a trustee, provided the client acknowledges this dual role. The bill also updates fee schedules for regulatory oversight and clarifies exemptions for specific financial activities.

Scope change

The bill expands the scope of exemptions from 'trust business' regulations to include attorneys, CPAs, escrow agents, and homeowners' associations, while maintaining strict rules for traditional trust companies.

DEFINITION

Updated the definition of 'trust business' to explicitly exclude attorneys, CPAs, escrow agents, and homeowners' associations when they hold funds in a fiduciary capacity, clarifying that these roles are not considered 'trust business' under the law.

REQUIREMENT

Enacted a new section requiring a settlor to provide written acknowledgment that their attorney is eligible to be paid as a trustee, ensuring the client understands the difference between legal fees and trustee compensation.

ELIGIBILITY

Clarified eligibility criteria for 'trust companies' and updated fee structures for regulatory examinations and applications, including specific adjustments for credit unions in their first year of operation.

TECHNICAL

Renumbered and reorganized multiple sections within Title 7, Chapter 5 to improve the structure and readability of the trust business code.

Trust Business Modifications

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