NY Est Pow & Trusts L § 11-1.11 (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 1 - Fiduciaries: Powers, Duties and Limitations 11-1.11 - Limited Power of Fiduciary to Amend Trust for Certain Tax Purposes.

§  11-1.11  Limited  power  of  fiduciary to amend trust for certain tax               purposes  (a) Unless  expressly  prohibited  by  the  terms  of  the  instrument creating  an  express  trust, the terms of the trust instrument shall be deemed to include the following provision granting  the  trustee,  which term  as  defined in paragraph (h) of this section may mean the executor or administrator, a limited power to amend:   "The trustees shall have the limited power to amend the administrative and other provisions of the trust which have no significant  dispositive effects  within  the  meaning  of  paragraph  (i)  of this section on an interest described in such paragraph, by an acknowledged  instrument  in writing, in order to:  (i)  achieve  a  qualified reformation of a reformable interest into a qualified interest for purposes of the charitable deduction as permitted by section 2055(e)(3)  or  2522(c)(4)  of  the  United  States  Internal Revenue  Code  ("Code")  and  the  regulations  thereto,  or  achieve  a reformation of a charitable remainder trust permitted by section 664  of the Code and the regulations thereto;  (ii)  meet  the  requirements  of  a  qualified  domestic  trust for a surviving spouse who is  not  a  citizen  of  the  United  States  under sections  2056(d)  and 2056A(a) of the Code and the regulations thereto; and  (iii) meet the  requirements  of  a  personal  residence  trust  under section  2702(a)(3)  or  to  meet the definition of a qualified interest under section 2702(b) of the Code, and the regulations thereto."  (b) (1) No trustee may exercise any power created under paragraph  (a) of  this  section  with  respect  to  any  trust that is exempt from tax imposed by the provisions of chapter 13 of the Code or has an  inclusion ratio,  as  defined  in  section  2642(a)  of  the  Code, of zero if the exercise of such power would cause such trust to lose  in  whole  or  in part  its exemption from the tax imposed by the provisions of chapter 13 of the Code or cause such trust to have an inclusion ratio,  as  defined in section 2642(a) of the Code, of more than zero.  (2)  If  the  creator  of  an  express trust or a beneficiary (whether current, future or contingent) of income  or  principal  of  an  express trust  is serving as a trustee of the express trust, the creator or such beneficiary cannot participate in the exercise of  the  power  to  amend such express trust pursuant to this section. If two or more trustees are serving,  the  power to amend such express trust may be exercised by the trustees who are not so disqualified.  (c) Such amendment shall be embodied in one or  more  writings  signed and  acknowledged  in  the manner required by the laws of this state for the recording of a conveyance of real property by the trustee and  filed in  the  office  of  the clerk of the court having jurisdiction over the instrument. At least thirty (30) days prior to such  filing,  notice  of such  amendment, together with a copy of the amendment, shall be sent by registered or certified mail, return receipt requested, or  by  personal delivery  to  all persons interested in the trust, or to the guardian of the  property,  committee,  conservator,  adult  guardian,  or  personal representative  of any such persons under a disability, or to the parent or person with whom a minor  resides.  Such  notice  shall  include  the following  statement:  "If you wish to object to the proposed amendment, you should notify  the  trustee  (executor  or  administrator)  of  your objections  in  a writing signed and acknowledged by you before a notary in the manner required by the laws of the state  of  New  York  for  the recording  of a conveyance of real property. Such written objection must be  personally  delivered  or  mailed  to  the  trustee   (executor   or administrator)   by   registered   or  certified  mail,  return  receipt  requested, within thirty (30) days of  the  date  when  the  notice  was personally  delivered  or  mailed  to  you.  If no such objection to the proposed amendment is made by any person interested in the  trust,  such amendment  will  become  effective  upon  its filing in the court having jurisdiction over the trust." Proof by  affidavit  of  such  mailing  or delivery  of  the  notice or by signed acknowledgement of receipt by the person noticed, shall be filed in the office of the clerk of  the  court where such amendment is filed prior to or simultaneously with the filing of  such  amendment. If it appears by affidavit that the name or address of any person interested in the trust is unknown, mailing to such person of the notice shall not be required.  (d) Such amendment shall be  effective  upon  filing  as  required  by paragraph  (c)  of  this  section, provided that no written objection to such amendment, signed and acknowledged in the manner  required  by  the laws  of the state for the recording of a conveyance of real property by any person interested in the trust, has  been  received  prior  to  such filing  by  the  trustee,  by  personal  delivery  or  by  registered or certified mail, return receipt requested. If no such  written  objection has  been  received  by  the  trustee  prior to such filing, no judicial proceeding or consent of any person interested in  the  trust  shall  be required.  (e) Unless otherwise provided in the amendment, the amendment shall be deemed  to  have  been effective in the case of a will as of the date of death of the decedent, and in the case of any other  instrument  on  the date it became irrevocable.  (f)  The  limited  power  to  amend  granted  by this section shall be exercised only if acted upon by all of the trustees, except as otherwise provided by subparagraph (b)(2) of this section.  (g) For  the  purposes  of  this  section,  the  phrase  "all  persons interested in the trust" shall mean all the persons upon whom service of process would be required in a proceeding for the judicial settlement of the  account  of  the trustee, taking into account section three hundred fifteen of the surrogate's court procedure act.  (h) In any case where the Code requires  that  an  election  or  other action  be  made  or  taken  by the executor or if no trustee of a trust under a will has qualified, the term "trustee" as used in  this  section shall mean the executor or administrator of an estate. In any such case, the  trustee  shall  comply  with  any  action  taken by the executor or administrator under this section.  (i) An amendment pursuant to paragraph (a) of this  section  shall  be conclusively  deemed  to have "no significant dispositive effect" if the difference between the actuarial value determined as  of  the  effective date of the amendment  (i)  of  the  interest  reformed  pursuant  to  subparagraph (a)(i) or (a)(ii) qualifying for the marital  or  charitable  deduction  which  is involved in a reformation pursuant to subparagraph (a)(i) or (a)(ii); or  (ii)  of  the  interest  retained  by the transferor or any applicable family member reformed pursuant to subparagraph  (a)(iii)  in  order  to qualify  as a "personal residence trust" or a "qualified interest" under section 2702 of the Code; and the actuarial  value  of  the  respective  interest  prior  to  such amendment  does  not  exceed five percent of the actuarial value of such pre-amendment interest.  (j) The term "trust" shall include an arrangement treated as a "trust" for the purposes of the Code.  (k) The fact that a testamentary trust cannot be revoked,  altered  or amended  by  reason  of  the testator's death, or that the will or trust instrument states that the trust is irrevocable and/or cannot be altered  or amended, shall not be deemed to  constitute  an  express  prohibition within  the  meaning  of  the phrase "unless expressly prohibited by the terms of the instrument creating an express trust."  (l)  References to sections of the United States Internal Revenue Code or Code shall refer to the United States Internal Revenue Code  of  1986 as  amended  from  time  to  time,  or  to  corresponding  provisions of subsequent internal revenue laws, and  regulations  thereto;  and  shall also refer to corresponding provisions of state law.