NY Est Pow & Trusts L § 11-2.3-A (2021)
2021 New York Laws EPT - Estates, Powers and Trusts Article 11 - Fiduciary: Powers, Duties and Limitations; Actions by or Against in Representative or Individual Capacities Part 2 - Investments by Fiduciaries: Powers and Duties Relating Thereto 11-2.3-A - Judicial Control With Respect to Fiduciary's Power to Adjust

§ 11-2.3-A Judicial control with respect to fiduciary's power to adjust  (a) Judicial control of adjustment power.   A  court shall not change a fiduciary's decision to exercise or not to exercise an adjustment  power  conferred  by  subparagraph  11-2.3(b)(5) unless  it  determines that the decision was an abuse of the fiduciary's discretion. A court shall not determine that a fiduciary abused his, her or its discretion merely because the  court  would  have  exercised  the discretion  in  a  different  manner  or  would  not  have exercised the discretion.  (b) Applicable decisions.   The decisions to which paragraph (a) applies include:  (1) A determination under subparagraph 11-2.3(b)(5) of whether and  to what  extent an amount should be transferred from principal to income or from income to principal.  (2) A determination of the factors that are relevant to the trust  and its  beneficiaries,  the  extent  to  which  they  are relevant, and the weight, if any, to be given to the relevant factors, in deciding whether and to what extent to  exercise  the  power  conferred  by  subparagraph 11-2.3(b)(5).  (c) Authorization for court to remedy abuse of discretion.   If  a  court  determines  that  a fiduciary has abused his, her or its discretion, the court may restore the income and remainder beneficiaries to the positions they would have  occupied  if  the  fiduciary  had  not abused his, her or its discretion, according to the following rules:  (1)  To  the  extent  that  the abuse of discretion has resulted in no distribution to a beneficiary or a distribution that is too  small,  the court  shall  require  the fiduciary to distribute from the trust to the beneficiary an  amount  that  the  court  determines  will  restore  the beneficiary, in whole or in part, to his or her appropriate position.  (2)  To  the  extent  that  the  abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court shall restore the beneficiaries, the trust, or both, in whole or  in  part,  to  their appropriate  positions  by requiring the fiduciary to withhold an amount from one or more future distributions to the  beneficiary  who  received the  distribution  that  was  too large or requiring that beneficiary to return some or all of the distribution to the trust.  (3)  To  the  extent  that  the  court  is  unable,   after   applying subparagraphs  (1)  and (2), to restore the beneficiaries, the trust, or both, to the positions they would have occupied if the fiduciary had not abused his, her or its discretion, and  if  the  court  finds  that  the fiduciary  was  dishonest or arbitrary and capricious in the exercise of his, her or its discretion, the court may require the fiduciary  to  pay an  appropriate  amount from his, her or its own funds to one or more of the beneficiaries or the trust or both.  (d) Petition by fiduciary.   Upon a petition by a  fiduciary  who  is  authorized  to  exercise  an adjustment  power  conferred  by  subparagraph  11-2.3 (b)(5), the court having jurisdiction over the trust or estate  may  determine  whether  a proposed  exercise  or  nonexercise  by  the fiduciary of the adjustment power will result in an abuse of  the  fiduciary's  discretion.  If  the petition describes the proposed exercise or nonexercise of the power and contains  sufficient  information  to  inform  the  beneficiaries of the reasons for the proposal, the facts upon which the fiduciary relies, and an explanation of how the income and  remainder  beneficiaries  will  be affected  by  the  proposed  exercise  or  nonexercise  of  the power, a beneficiary who challenges the proposed exercise or nonexercise has  the burden of establishing that it will result in an abuse of discretion.