Bill Text: NY A09765 | 2017-2018 | General Assembly | Introduced
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
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. LBD09597-03-8A. 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.
