2023 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.