N.Y. EPT Law § 11-1.11 — New York Code / Act EPT / Article 11 / Part 1 / Section 11-1.11
Limited power of fiduciary to amend trust for certain tax
Status: in_force

§ 11-1.11 Limited power of fiduciary to amend trust for certain tax\n              purposes\n  (a) Unless expressly prohibited by the terms of the instrument\ncreating an express trust, the terms of the trust instrument shall be\ndeemed to include the following provision granting the trustee, which\nterm as defined in paragraph (h) of this section may mean the executor\nor administrator, a limited power to amend:\n  "The trustees shall have the limited power to amend the administrative\nand other provisions of the trust which have no significant dispositive\neffects within the meaning of paragraph (i) of this section on an\ninterest described in such paragraph, by an acknowledged instrument in\nwriting, in order to:\n  (i) achieve a qualified reformation of a reformable interest into a\nqualified interest for purposes of the charitable deduction as permitted\nby section 2055(e)(3) or 2522(c)(4) of the United States Internal\nRevenue Code ("Code") and the regulations thereto, or achieve a\nreformation of a charitable remainder trust permitted by section 664 of\nthe Code and the regulations thereto;\n  (ii) meet the requirements of a qualified domestic trust for a\nsurviving spouse who is not a citizen of the United States under\nsections 2056(d) and 2056A(a) of the Code and the regulations thereto;\nand\n  (iii) meet the requirements of a personal residence trust under\nsection 2702(a)(3) or to meet the definition of a qualified interest\nunder section 2702(b) of the Code, and the regulations thereto."\n  (b) (1) No trustee may exercise any power created under paragraph (a)\nof this section with respect to any trust that is exempt from tax\nimposed by the provisions of chapter 13 of the Code or has an inclusion\nratio, as defined in section 2642(a) of the Code, of zero if the\nexercise of such power would cause such trust to lose in whole or in\npart its exemption from the tax imposed by the provisions of chapter 13\nof the Code or cause such trust to have an inclusion ratio, as defined\nin section 2642(a) of the Code, of more than zero.\n  (2) If the creator of an express trust or a beneficiary (whether\ncurrent, future or contingent) of income or principal of an express\ntrust is serving as a trustee of the express trust, the creator or such\nbeneficiary cannot participate in the exercise of the power to amend\nsuch express trust pursuant to this section. If two or more trustees are\nserving, the power to amend such express trust may be exercised by the\ntrustees who are not so disqualified.\n  (c) Such amendment shall be embodied in one or more writings signed\nand acknowledged in the manner required by the laws of this state for\nthe recording of a conveyance of real property by the trustee and filed\nin the office of the clerk of the court having jurisdiction over the\ninstrument. At least thirty (30) days prior to such filing, notice of\nsuch amendment, together with a copy of the amendment, shall be sent by\nregistered or certified mail, return receipt requested, or by personal\ndelivery to all persons interested in the trust, or to the guardian of\nthe property, committee, conservator, adult guardian, or personal\nrepresentative of any such persons under a disability, or to the parent\nor person with whom a minor resides. Such notice shall include the\nfollowing statement: "If you wish to object to the proposed amendment,\nyou should notify the trustee (executor or administrator) of your\nobjections in a writing signed and acknowledged by you before a notary\nin the manner required by the laws of the state of New York for the\nrecording of a conveyance of real property. Such written objection must\nbe personally delivered or mailed to the trustee (executor or\nadministrator) by registered or certified mail, return receipt\nrequested, within thirty (30) days of the date when the notice was\npersonally delivered or mailed to you. If no such objection to the\nproposed amendment is made by any person interested in the trust, such\namendment will become effective upon its filing in the court having\njurisdiction over the trust." Proof by affidavit of such mailing or\ndelivery of the notice or by signed acknowledgement of receipt by the\nperson noticed, shall be filed in the office of the clerk of the court\nwhere such amendment is filed prior to or simultaneously with the filing\nof such amendment. If it appears by affidavit that the name or address\nof any person interested in the trust is unknown, mailing to such person\nof the notice shall not be required.\n  (d) Such amendment shall be effective upon filing as required by\nparagraph (c) of this section, provided that no written objection to\nsuch amendment, signed and acknowledged in the manner required by the\nlaws of the state for the recording of a conveyance of real property by\nany person interested in the trust, has been received prior to such\nfiling by the trustee, by personal delivery or by registered or\ncertified mail, return receipt requested. If no such written objection\nhas been received by the trustee prior to such filing, no judicial\nproceeding or consent of any person interested in the trust shall be\nrequired.\n  (e) Unless otherwise provided in the amendment, the amendment shall be\ndeemed to have been effective in the case of a will as of the date of\ndeath of the decedent, and in the case of any other instrument on the\ndate it became irrevocable.\n  (f) The limited power to amend granted by this section shall be\nexercised only if acted upon by all of the trustees, except as otherwise\nprovided by subparagraph (b)(2) of this section.\n  (g) For the purposes of this section, the phrase "all persons\ninterested in the trust" shall mean all the persons upon whom service of\nprocess would be required in a proceeding for the judicial settlement of\nthe account of the trustee, taking into account section three hundred\nfifteen of the surrogate's court procedure act.\n  (h) In any case where the Code requires that an election or other\naction be made or taken by the executor or if no trustee of a trust\nunder a will has qualified, the term "trustee" as used in this section\nshall mean the executor or administrator of an estate. In any such case,\nthe trustee shall comply with any action taken by the executor or\nadministrator under this section.\n  (i) An amendment pursuant to paragraph (a) of this section shall be\nconclusively deemed to have "no significant dispositive effect" if the\ndifference between the actuarial value determined as of the effective\ndate of the amendment\n  (i) of the interest reformed pursuant to subparagraph (a)(i) or\n(a)(ii) qualifying for the marital or charitable deduction which is\ninvolved in a reformation pursuant to subparagraph (a)(i) or (a)(ii); or\n  (ii) of the interest retained by the transferor or any applicable\nfamily member reformed pursuant to subparagraph (a)(iii) in order to\nqualify as a "personal residence trust" or a "qualified interest" under\nsection 2702 of the Code;\nand the actuarial value of the respective interest prior to such\namendment does not exceed five percent of the actuarial value of such\npre-amendment interest.\n  (j) The term "trust" shall include an arrangement treated as a "trust"\nfor the purposes of the Code.\n  (k) The fact that a testamentary trust cannot be revoked, altered or\namended by reason of the testator's death, or that the will or trust\ninstrument states that the trust is irrevocable and/or cannot be altered\nor amended, shall not be deemed to constitute an express prohibition\nwithin the meaning of the phrase "unless expressly prohibited by the\nterms of the instrument creating an express trust."\n  (l) References to sections of the United States Internal Revenue Code\nor Code shall refer to the United States Internal Revenue Code of 1986\nas amended from time to time, or to corresponding provisions of\nsubsequent internal revenue laws, and regulations thereto; and shall\nalso refer to corresponding provisions of state law.\n