Bill Text: NY A09765 | 2017-2018 | General Assembly | Introduced

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Bill Title: Relates to trust accounting income and principal; allows a trustee to allocate to income gains from the sale or exchange or other disposition of specified principal assets.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2018-02-27 - REFERRED TO JUDICIARY [A09765 Detail]

Download: New_York-2017-A09765-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          9765
                   IN ASSEMBLY
                                    February 6, 2018
                                       ___________
        Introduced  by  M.  of A. DINOWITZ -- (at request of the Office of Court
          Administration) -- read once and referred to the Committee on  Judici-
          ary
        AN ACT to amend the estates, powers and trusts law, in relation to trust
          accounting income and principal
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1.  Clause (A) of subparagraph 5 of paragraph (b)  of  section
     2  11-2.3  of the estates, powers and trusts law, as amended by chapter 408
     3  of the laws of 2008, is amended to read as follows:
     4    (A) Where the rules in article 11-A apply to a trust and the terms  of
     5  the trust describe the amount that may or must be distributed to a bene-
     6  ficiary  by referring to the trust's income, the prudent investor stand-
     7  ard also authorizes the trustee to adjust between principal  and  income
     8  to  the  extent the trustee considers advisable to enable the trustee to
     9  make appropriate present and future  distributions  in  accordance  with
    10  clause  (b)(3)(A)  if the trustee determines, in light of its investment
    11  decisions, the consideration factors incorporated in  clause  (b)(5)(B),
    12  and  the accounting income expected to be produced by applying the rules
    13  in article 11-A, that such an adjustment would be fair and reasonable to
    14  all of the beneficiaries.  In adjusting from income to  principal  under
    15  the  power conferred by this clause, the trustee may allocate to princi-
    16  pal any form of receipt which would otherwise be characterized as income
    17  and may specify the particular receipt or receipts  being  allocated  to
    18  principal.  In  adjusting  from  principal to income the trustee (i) may
    19  allocate to income any asset which would otherwise be  characterized  as
    20  principal,  regardless  of whether it constitutes original trust princi-
    21  pal, accumulated income, or realized or  unrealized  appreciation,  (ii)
    22  may  specify  the  particular asset or assets being allocated to income,
    23  and (iii) may specify that what is being allocated to income is part  or
    24  all of the realized gain from the sale, exchange or other disposition of
    25  particular principal assets.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09597-03-8
        A. 9765                             2
     1    § 2. Paragraph 2 of section 11-A-4.4 of the estates, powers and trusts
     2  law,  as added by chapter 243 of the laws of 2001, is amended to read as
     3  follows:
     4    (2)  money  or other property received from the sale, exchange, liqui-
     5  dation, or change in form  of  a  principal  asset,  including  realized
     6  profit, subject to this part; provided, however, that a trustee may vary
     7  this  allocation  as  provided  in  clause 11-2.3(b)(5)(A), and provided
     8  further, that a trustee who has  an  unlimited  discretionary  power  to
     9  distribute principal, as defined in subparagraph 10-6.6(s)(9), may allo-
    10  cate  to income part or all of the realized gain from the sale, exchange
    11  or other disposition of specified principal assets.
    12    § 3. This act shall take effect immediately and  shall  apply  to  all
    13  trusts, whenever established.