N.Y. EPT Law § 11-2.3-A — New York Code / Act EPT / Article 11 / Part 2 / Section 11-2.3-A
Judicial control with respect to fiduciary's power to adjust
Status: in_force

§ 11-2.3-A Judicial control with respect to fiduciary's power to adjust\n  (a) Judicial control of adjustment power.\n  A court shall not change a fiduciary's decision to exercise or not to\nexercise an adjustment power conferred by subparagraph 11-2.3(b)(5)\nunless it determines that the decision was an abuse of the fiduciary's\ndiscretion. A court shall not determine that a fiduciary abused his, her\nor its discretion merely because the court would have exercised the\ndiscretion in a different manner or would not have exercised the\ndiscretion.\n  (b) Applicable decisions.\n  The decisions to which paragraph (a) applies include:\n  (1) A determination under subparagraph 11-2.3(b)(5) of whether and to\nwhat extent an amount should be transferred from principal to income or\nfrom income to principal.\n  (2) A determination of the factors that are relevant to the trust and\nits beneficiaries, the extent to which they are relevant, and the\nweight, if any, to be given to the relevant factors, in deciding whether\nand to what extent to exercise the power conferred by subparagraph\n11-2.3(b)(5).\n  (c) Authorization for court to remedy abuse of discretion.\n  If a court determines that a fiduciary has abused his, her or its\ndiscretion, the court may restore the income and remainder beneficiaries\nto the positions they would have occupied if the fiduciary had not\nabused his, her or its discretion, according to the following rules:\n  (1) To the extent that the abuse of discretion has resulted in no\ndistribution to a beneficiary or a distribution that is too small, the\ncourt shall require the fiduciary to distribute from the trust to the\nbeneficiary an amount that the court determines will restore the\nbeneficiary, in whole or in part, to his or her appropriate position.\n  (2) To the extent that the abuse of discretion has resulted in a\ndistribution to a beneficiary that is too large, the court shall restore\nthe beneficiaries, the trust, or both, in whole or in part, to their\nappropriate positions by requiring the fiduciary to withhold an amount\nfrom one or more future distributions to the beneficiary who received\nthe distribution that was too large or requiring that beneficiary to\nreturn some or all of the distribution to the trust.\n  (3) To the extent that the court is unable, after applying\nsubparagraphs (1) and (2), to restore the beneficiaries, the trust, or\nboth, to the positions they would have occupied if the fiduciary had not\nabused his, her or its discretion, and if the court finds that the\nfiduciary was dishonest or arbitrary and capricious in the exercise of\nhis, her or its discretion, the court may require the fiduciary to pay\nan appropriate amount from his, her or its own funds to one or more of\nthe beneficiaries or the trust or both.\n  (d) Petition by fiduciary.\n  Upon a petition by a fiduciary who is authorized to exercise an\nadjustment power conferred by subparagraph 11-2.3 (b)(5), the court\nhaving jurisdiction over the trust or estate may determine whether a\nproposed exercise or nonexercise by the fiduciary of the adjustment\npower will result in an abuse of the fiduciary's discretion. If the\npetition describes the proposed exercise or nonexercise of the power and\ncontains sufficient information to inform the beneficiaries of the\nreasons for the proposal, the facts upon which the fiduciary relies, and\nan explanation of how the income and remainder beneficiaries will be\naffected by the proposed exercise or nonexercise of the power, a\nbeneficiary who challenges the proposed exercise or nonexercise has the\nburden of establishing that it will result in an abuse of discretion.\n