S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7061

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                             April 30, 2013
                               ___________

Introduced  by  M.  of  A.  BRAUNSTEIN,  WEINSTEIN -- (at request of the
  Office of Court Administration) --  read  once  and  referred  to  the
  Committee on Judiciary

AN  ACT  to amend the estates, powers and trusts law, in relation to the
  exercise of a power of appointment and an authorized trustee's author-
  ity to invade a trust

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The opening paragraph of paragraph (b) of section 10-6.6 of
the  estates, powers and trusts law, as added by chapter 451 of the laws
of 2011, is amended to read as follows:
  An authorized trustee with unlimited discretion to invade trust  prin-
cipal  may  appoint  part  or  all  of such principal to a trustee of an
appointed trust for, and only for the benefit of, one, more than one  or
all  of the current beneficiaries of the invaded trust (to the exclusion
of any one or more of such current  beneficiaries).  The  successor  and
remainder beneficiaries of such appointed trust [shall] MAY be one, more
than  one  or  all  of the successor and remainder beneficiaries of such
invaded trust (to the exclusion of any one [or], more THAN ONE OR ALL of
such successor and remainder beneficiaries).
  S 2. Subparagraphs 5 and 6 of paragraph (j) of section 10-6.6  of  the
estates,  powers  and trusts law, as added by chapter 451 of the laws of
2011, are amended to read as follows:
  (5) The receipt of a copy of the instrument exercising the power shall
not affect the right of any person interested in the  invaded  trust  to
compel  the  authorized  trustee who exercised the power [of appointment
pursuant to] UNDER paragraph (b) or (c) of this section to  account  for
such  exercise  and  shall not foreclose any such interested person from
objecting to an account or compelling a trustee to account.  WHETHER THE
EXERCISE OF A POWER UNDER PARAGRAPH (B) OR (C) OF  THIS  SECTION  BEGINS
THE RUNNING OF THE STATUTE OF LIMITATIONS ON AN ACTION TO COMPEL A TRUS-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08085-03-3
              

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TEE  TO ACCOUNT SHALL BE BASED ON ALL THE FACTS AND CIRCUMSTANCES OF THE
SITUATION.
  (6)  A  copy of the instrument exercising the power shall be kept with
the records of the invaded trust and the original shall be filed in  the
court  having jurisdiction over the invaded trust. Where a trustee of an
inter vivos trust exercises the power and the trust  has  not  been  the
subject of a proceeding in the surrogate's court, no filing is required.
THE INSTRUMENT SHALL STATE THAT IN CERTAIN CIRCUMSTANCES THE APPOINTMENT
WILL  BEGIN THE RUNNING OF THE STATUTE OF LIMITATIONS THAT WILL PRECLUDE
PERSONS INTERESTED IN THE INVADED TRUST FROM COMPELLING AN ACCOUNTING BY
THE TRUSTEES AFTER THE EXPIRATION OF A GIVEN TIME.
  S 3. Subparagraphs 1 and 4 of paragraph (s) of section 10-6.6  of  the
estates,  powers  and trusts law, as added by chapter 451 of the laws of
2011, are amended to read as follows:
  (1) The term  "appointed  trust"  means  an  irrevocable  trust  which
receives  principal  from an invaded trust under paragraph (b) or (c) of
this section including a new trust created by the creator of the invaded
trust or by the trustees, in that capacity, of the  invaded  trust.  For
purposes of creating the new trust, the requirement of section 7-1.17 of
this chapter that the instrument be [signed by the creator] EXECUTED AND
ACKNOWLEDGED  BY  THE  PERSON  ESTABLISHING  SUCH  TRUST shall be deemed
satisfied by the [signature] EXECUTION AND ACKNOWLEDGMENT of the trustee
of the appointed trust.
  (4) The term "current beneficiary or beneficiaries" means  the  person
or  persons  (or  as  to  a class, any person or persons who are or will
become members of such class) to whom the trustees may distribute  prin-
cipal  at  the  time of the exercise of the power, PROVIDED HOWEVER THAT
THE INTEREST OF A BENEFICIARY TO WHOM INCOME, BUT NOT PRINCIPAL, MAY  BE
DISTRIBUTED IN THE DISCRETION OF THE TRUSTEE OF THE INVADED TRUST MAY BE
CONTINUED IN THE APPOINTED TRUST.
  S 4. Paragraph (s) of section 10-6.6 of the estates, powers and trusts
law is amended by adding a new subparagraph 10 to read as follows:
  (10)  THE  CREATOR  SHALL  NOT BE CONSIDERED TO BE A BENEFICIARY OF AN
INVADED OR APPOINTED TRUST BY REASON OF THE TRUSTEE'S AUTHORITY  TO  PAY
TRUST PRINCIPAL TO THE CREATOR PURSUANT TO SECTION 7-1.1 OF THIS CHAPTER
OR  BY  REASON  OF THE TRUSTEE'S AUTHORITY UNDER THE TRUST INSTRUMENT OR
ANY OTHER PROVISION OF LAW TO PAY OR REIMBURSE THE CREATOR FOR  ANY  TAX
ON  TRUST INCOME OR TRUST PRINCIPAL THAT IS PAYABLE BY THE CREATOR UNDER
THE LAW IMPOSING SUCH TAX OR TO PAY ANY SUCH TAX DIRECTLY TO THE  TAXING
AUTHORITIES.
  S  5.  Section 10-6.6 of the estates, powers and trusts law is amended
by adding a new paragraph (t) to read as follows:
  (T) CROSS-REFERENCE. FOR THE EXERCISE OF THE POWER UNDER PARAGRAPH (B)
OR (C) OF THIS SECTION WHERE THERE ARE MULTIPLE TRUSTEES,  SEE  SECTIONS
10-6.7 AND 10-10.7 OF THIS ARTICLE.
  S  6. Section 10-6.7 of the estates, powers and trusts law, as amended
by chapter 686 of the laws of 1967, is amended to read as follows:
S 10-6.7 Exercise by all donees; exceptions
  Whenever a power of appointment, OTHER THAN A POWER IN  A  TRUSTEE  TO
INVADE TRUST PRINCIPAL UNDER SECTION 10-6.6 OF THIS ARTICLE OR UNDER THE
TERMS  OF  THE DISPOSITIVE INSTRUMENT, is created in two or more donees,
all must unite in its exercise,  unless  the  instrument  creating  such
power  provides otherwise.  But, if before its execution, one or more of
such donees dies or becomes incompetent, such power may be exercised  by
the  survivor or the competent donee, unless such exercise is explicitly
barred by the terms of the instrument creating such power.

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  S 7. Section 10-10.7 of the estates, powers and trusts law, as amended
by chapter 904 of the laws of 1973, is amended to read as follows:
S 10-10.7 Exercise  of powers by multiple fiduciaries; joint and several
            powers
  Unless contrary to the express provisions of an  instrument  affecting
the  disposition  of  property,  a  joint  power  other  than a power of
appointment BUT INCLUDING A POWER IN A TRUSTEE TO INVADE TRUST PRINCIPAL
UNDER SECTION 10-6.6 OF THIS ARTICLE OR UNDER THE TERMS OF THE  DISPOSI-
TIVE  INSTRUMENT, conferred upon three or more fiduciaries, as that term
is defined in 11-1.1, by the terms of such instrument, or by statute, or
arising by operation of law, may be exercised  by  a  majority  of  such
fiduciaries,  or by a majority of survivor fiduciaries, or by the survi-
vor fiduciary.  Such a power conferred upon or  surviving  to  two  such
fiduciaries  may be exercised jointly by both such fiduciaries or by the
survivor fiduciary, unless contrary to the express terms of the  instru-
ment creating the power. A fiduciary who fails to act through absence or
disability,  or  a  dissenting  fiduciary  who joins in carrying out the
decision of a majority of the fiduciaries  if  his  OR  HER  dissent  is
expressed promptly in writing to his OR HER co-fiduciaries, shall not be
liable  for  the  consequences  of  any majority decision, provided that
liability for failure to join in administering the estate or trust or to
prevent a breach of the trust may not thus be avoided.   A power  vested
in  one  or  more  persons  under  a  trust  of real property created in
connection with the salvaging of mortgage participation certificates may
be executed by one or more of such persons as provided  in  such  trust.
This  section  shall  not  affect  the  right  of any one of two or more
personal representatives of a decedent to exercise a several power.
  S 8. This act shall take effect immediately.