NY-EPT Estates, Powers & Trusts Law NY

Short title; how cited

This chapter shall be known as the Estates, Powers and Trusts Law and

may be cited as EPTL. A section of this law may be cited by article,

part and section number, to wit, EPTL 1-1.1, which refers to article 1,

part 1, section 1, without being preceded by the word article, part or

section or the symbol §.

References

Unless otherwise stated, all references in this chapter to article,

part or section number refer to the articles, parts or section numbers

of this chapter, and all references in any section of this chapter to a

lettered or numbered paragraph or subparagraph refer to the paragraph or

subparagraph so lettered or numbered in such section.

Rules governing use of certain words

In this chapter, unless the context otherwise requires:

(a) Words in the singular number include the plural, and in the

plural include the singular.

(b) Words of the masculine gender include the feminine and the

neuter, and when the sense so indicates words of the neuter gender may

refer to any gender.

(c) The word "writing" includes typewritten or printed matter.

Severability

If any provision of this chapter or application thereof to any person

or circumstances is held invalid, such invalidity shall not affect other

provisions or applications of this chapter which can be given effect

without regard to the invalid provision or application, and to this end

the provisions of this chapter are declared to be severable.

Application

Unless otherwise stated therein, the provisions of this chapter apply

to the estates, and to instruments making dispositions or appointments

thereof, of persons living on its effective date or born subsequent

thereto, without regard to the date of execution of any such instrument;

except that the provisions of this chapter shall not impair or defeat

any rights which have accrued under dispositions or appointments in

effect prior to its effective date.

Codicil

A codicil is a supplement to a will, either adding to, taking from or

altering its provisions or confirming it in whole or in part by

republication, but not totally revoking such will.

Creator

A creator is a person who makes a disposition of property.

Demonstrative disposition

A demonstrative disposition is a testamentary disposition of property

to be taken out of specified or identified property.

Disposition

A disposition is a transfer of property by a person during his

lifetime or by will.

Distributee

A distributee is a person entitled to take or share in the property of

a decedent under the statutes governing descent and distribution.

Estate

Depending upon the context, "estate" may mean:

(a) The interest which a person has in property.

(b) The aggregate of property which a person owns.

Fiduciary

A fiduciary is a person who meets the description, in this part, of a

"personal representative" or who is designated by the creator or by the

court to act as an assignee for the benefit of creditors, or a

committee, conservator, curator, custodian, guardian, trustee or donee

of a power during minority.

General disposition

A general disposition is a testamentary disposition of property not

amounting to a demonstrative, residuary or specific disposition.

Incompetent

An incompetent is a person judicially declared to be incapable of

managing his affairs.

Infant or minor

As used in this chapter, the term "infant" or "minor" means a person

who has not attained the age of eighteen years, provided, however, that

such definition shall not be applicable to any provision relating to the

New York Uniform Transfers to Minors Act, nor to section 13-3.4.

Issue

(a) Unless a contrary intention is indicated:

(1) Issue are the descendants in any degree from a common ancestor.

(2) The terms "issue" and "descendants", in subparagraph (1), include

adopted children.

Per capita

A disposition or distribution of property is per capita when it is

made to persons, each of whom is to take in his own right an equal

portion of such property.

Person

The term "person" includes a natural person, an association, board,

any corporation, whether municipal, stock or non-stock, court,

governmental agency, authority or subdivision, partnership or other firm

and the state.

Personal representative

A personal representative is a person who has received letters to

administer the estate of a decedent. The term does not include an

assignee for the benefit of creditors, or a committee, conservator,

curator, custodian, guardian, trustee or donee of a power during

minority.

Per stirpes

A per stirpes disposition or distribution of property is made to

persons who take as issue of a deceased ancestor in the following

manner:

The property so passing is divided into as many equal shares as there

are (i) surviving issue in the generation nearest to the deceased

ancestor which contains one or more surviving issue and (ii) deceased

issue in the same generation who left surviving issue, if any. Each

surviving member in such nearest generation is allocated one share. The

share of a deceased issue in such nearest generation who left surviving

issue shall be distributed in the same manner to such issue.

Property

Property is anything that may be the subject of ownership, and is real

or personal property.

Representation

By representation means a disposition or distribution of property made

in the following manner to persons who take as issue of a deceased

ancestor:

The property so passing is divided into as many equal shares as there

are (i) surviving issue in the generation nearest to the deceased

ancestor which contains one or more surviving issue and (ii) deceased

issue in the same generation who left surviving issue, if any. Each

surviving member in such nearest generation is allocated one share. The

remaining shares, if any, are combined and then divided in the same

manner among the surviving issue of the deceased issue as if the

surviving issue who are allocated a share had predeceased the decedent,

without issue.

Specific disposition.

A specific disposition is a disposition of a specified or identified

item of the testator's property.

Testamentary beneficiary

A testamentary beneficiary is a person in whose favor a disposition of

property is made by will.

Will

* (a) A will is an oral declaration or written instrument, made as

prescribed by 3-2.1 or 3-2.2 to take effect upon death, whereby a person

disposes of property or directs how it shall not be disposed of,

disposes of his body or any part thereof, exercises a power, appoints a

fiduciary or makes any other provision for the administration of his

estate, and which is revocable during his lifetime.

* NB Effective until December 12, 2027

* (a) A will is a written instrument, oral declaration or electronic

record, made as prescribed by 3-2.1, 3-2.2 or 3-6.6, respectively, to

take effect upon death, whereby a person disposes of property or directs

how it shall not be disposed of, disposes of their body or any part

thereof, exercises a power, appoints a fiduciary or makes any other

provision for the administration of their estate, and which is revocable

during their lifetime.

* NB Effective December 12, 2027

(b) Unless the context otherwise requires, the term "will" includes a

"codicil".

Lifetime trust

The term "lifetime trust" shall mean an express trust and all

amendments thereto created other than by will and shall not include; a

trust for the benefit of creditors, a resulting or constructive trust, a

business trust where certificates of beneficial interest are issued to

the beneficiary, an investment trust, voting trust, a security

instrument such as a deed of trust and a mortgage, a trust created by

the judgment or decree of a court, a liquidation or reorganization

trust, a trust for the sole purpose of paying dividends, interest,

interest coupons, salaries, wages, pensions or profits, instruments

wherein persons are mere nominees for others, or a trust created in

deposits in any banking institution or savings and loan institution.

Heirs at law and next of kin defined

Whenever used in a statute or instrument, unless a contrary intention

is expressed therein, the term "heirs", "heirs at law", "next of kin" or

any term of like import means the distributees, as defined in 1-2.5.

Issue to take per capita, per stirpes or by representation

(a) Instruments executed prior to September first, nineteen hundred

ninety-two. Whenever a disposition of property is made to "issue", such

issue, if in equal degree of consanguinity to their common ancestor,

take per capita, but if in unequal degree, per stirpes, unless a

contrary intention is expressed.

(b) Instruments executed on or after September first, nineteen hundred

ninety-two. Whenever a disposition of property is made to "issue", such

issue take by representation as defined in 1-2.16, unless a contrary

intention is expressed.

Adopted children and posthumous children as members of a class

(a) Unless the creator expresses a contrary intention, a disposition

of property to persons described in any instrument as the issue,

children, descendants, heirs, heirs at law, next of kin, distributees

(or by any term of like import) of the creator or of another, includes:

(1) Adopted children and their issue in their adoptive relationship.

The rights of adopted children and their issue to receive a disposition

under wills and lifetime instruments as a member of such class of

persons based upon their birth relationship shall be governed by the

provisions of subdivision two of section one hundred seventeen of the

domestic relations law.

(2) Children conceived before, but born alive after such disposition

becomes effective.

(3) Nonmarital children. For the purposes of this paragraph, a

nonmarital child is the child of a mother and is the child of a father

if the child is entitled to inherit from such father under section 4-1.2

of this chapter. The provisions of this paragraph shall apply to the

wills of persons dying on and after September first, nineteen hundred

ninety-one, to lifetime instruments theretofore executed which on said

date are subject to the grantor's power to revoke or amend, and to all

lifetime instruments executed on or after such date.

Words of inheritance unnecessary

The word "heirs" or words of inheritance of like import are not

necessary to create or dispose of a fee.

Advancements and their adjustment

(a) An advancement is an irrevocable gift intended by the donor as an

anticipatory distribution in complete or partial satisfaction of the

interest of the donee in the donor's estate, either as distributee in

intestacy or as beneficiary under an existing will of the donor.

(b) No advancement shall affect the distribution of the estate of the

donor unless proved by a writing contemporaneous therewith signed by the

donor evidencing his intention that the gift be treated as an

advancement, or by the donee acknowledging that such was the intention.

(c) When so proved, the advancement is part of the estate of the donor

for the purpose of distribution. If such advancement is equal to or

greater than the interest of the donee, whether in intestacy or under

the will, such donee or his successor in interest may not share in the

distribution of the estate; but if less than such intestate share or

testamentary interest, the donee or his successor in interest may take

his intestate share or testamentary interest reduced by the amount of

the advancement.

(d) Unless otherwise provided in a writing contemporaneous with the

advancement and signed by the donor:

(1) An advancement, made as provided in this section, may be adjusted

out of the property of the donor in such manner as may be equitable.

(2) The advancement shall have the value at which it is appraised for

estate tax purposes, or, if not included in the gross taxable estate of

the donor, the value at which it would have been appraised if included

therein.

(e) Nothing in this section shall increase or decrease the elective

share of a surviving spouse under either 5-1.1 or 5-1.1-A except to the

extent authorized by paragraph (b) of those sections.

Disposition of property where a person dies within one hundred

twenty hours of another person or any other event

(a) Except as provided in paragraph (b) of this section:

(1) Where, under articles 4 and 5 of this chapter, the title to

property or the devolution of property depends upon an individual's

survivorship of the death of another individual, an individual who is

not established by clear and convincing evidence to have survived the

other individual by one hundred twenty hours is deemed to have

predeceased the other individual.

(2) For purposes of a provision of a governing instrument that relates

to an individual surviving an event, including the death of another

individual, an individual who is not established by clear and convincing

evidence to have survived the event by one hundred twenty hours is

deemed to have predeceased the event.

(3) Where a disposition of property under a governing instrument (i)

depends upon the time of death of two or more beneficiaries designated

to take alternatively by reason of surviving an event, including the

death of another individual, and (ii) it is not established by clear and

convincing evidence that such beneficiaries have survived the event by

one hundred twenty hours, the property thus disposed of shall be divided

into as many equal portions as there are alternative beneficiaries and

such portions shall be distributed respectively to those who would have

taken the whole property in the event that the designated beneficiary

through whom they take had survived.

(4) Where it is not established by clear and convincing evidence that

one of two co-owners with right of survivorship survived the other

co-owner by one hundred twenty hours, one-half of the property passes as

if one had survived by one hundred twenty hours and one-half as if the

other had survived by one hundred twenty hours. Where there are more

than two co-owners and it is not established by clear and convincing

evidence that at least one of them survived the others by one hundred

twenty hours, the property passes in the proportion that one bears to

the whole number of co-owners.

(b) The survival requirements of paragraph (a) of this section shall

not apply if:

(1) The governing instrument contains language dealing explicitly with

simultaneous deaths or deaths in a common disaster and that language is

operable under the facts of the case.

(2) The governing instrument expressly indicates that an individual is

not required to survive an event, including the death of another

individual, by any specified period or expressly requires the individual

to survive the event for a specified period. However, survival of the

event or the specified period must be established by clear and

convincing evidence.

(3) The imposition of a one hundred twenty-hour requirement of

survival would cause a nonvested property interest or a power of

appointment to be invalid under section 9-1.1 of this chapter. However,

survival must be established by clear and convincing evidence.

(4) The application of a one hundred twenty-hour requirement of

survival to multiple governing instruments would result in an unintended

failure or duplication of a disposition. However, survival must be

established by clear and convincing evidence.

(5) Its application would result in a taking of the intestate estate

by the state.

(6) The surviving spouse exercised the right of election under section

5-1.1-A of this chapter, but died less than one hundred twenty hours

after the death of the deceased spouse.

(c) For purposes of this section, "governing instrument" means a deed,

will, trust, insurance or annuity policy, bank account in trust form,

security registration in beneficiary form (TOD), pension,

profit-sharing, retirement, or similar benefit plan, instrument creating

or exercising a power of appointment or a power of attorney, or a

dispositive, appointive, or nominative instrument of any similar type.

Presumption of death from absence; effect of exposure to

specific peril

(a) A person who is absent for a continuous period of three years,

during which, after diligent search, he or she has not been seen or

heard of or from, and whose absence is not satisfactorily explained

shall be presumed, in any action or proceeding involving any property of

such person, contractual or property rights contingent upon his or her

death or the administration of his or her estate, to have died three

years after the date such unexplained absence commenced, or on such

earlier date as clear and convincing evidence establishes is the most

probable date of death.

(b) The fact that such person was exposed to a specific peril of death

may be a sufficient basis for determining at any time after such

exposure that he or she died less than three years after the date his or

her absence commenced.

(c) The three-year period provided herein shall not apply in any case

in which a different period has been prescribed by statute.

Apportionment of federal and state estate or other death taxes;

fiduciary to collect taxes from property taxed and transferees

thereof

(a) Whenever it appears in any appropriate action or proceeding that a

fiduciary has paid or may be required to pay an estate or other death

tax, under the law of this state or of any other jurisdiction, with

respect to any property required to be included in the gross tax estate

of a decedent under the provisions of any such law (hereinafter called

"the tax"), the amount of the tax, except in a case where a testator

otherwise directs in his will, and except where by any instrument other

than a will (hereinafter called a "non-testamentary instrument")

direction is given for apportionment within the fund of taxes assessed

upon the specific fund dealt with in such non-testamentary instrument,

shall be equitably apportioned among the persons interested in the gross

tax estate, whether residents or non-residents of this state, to whom

such property is disposed of or to whom any benefit therein accrues

(hereinafter called "the persons benefited") in accordance with the

rules of apportionment herein set forth, and the persons benefited shall

contribute the amounts apportioned against them.

(b) Unless otherwise provided, when a disposition is made by which any

person is given an interest in income or an estate for years or for life

or other temporary interest in any property or fund, the tax

apportionable against such temporary interest and the remainder limited

thereon is chargeable against and payable out of the principal of such

property or fund without apportionment between such temporary interest

and remainder. The provisions of this paragraph apply although the

holder of the temporary interest has rights in the principal, but do not

apply to a common law annuity.

(c) Unless otherwise provided in the will or non-testamentary

instrument, and subject to paragraph (d-1) of this section:

(1) The tax shall be apportioned among the persons benefited in the

proportion that the value of the property or interest received by each

such person benefited bears to the total value of the property and

interest received by all persons benefited, the values as finally

determined in the respective tax proceedings being the values to be used

as the basis for apportionment of the respective taxes.

(2) Any exemption or deduction allowed under the law imposing the tax

by reason of the relationship of any person to the decedent, the fact

that the property consists of life insurance proceeds or the charitable

purposes of the gift shall inure to the benefit of the person bearing

such relationship or receiving such insurance proceeds or charitable

gift, as the case may be.

(3) Any deduction for property previously taxed and any credit for

gift taxes paid by the decedent shall inure to the benefit of all

persons benefited and the tax to be apportioned shall be the tax after

allowance of such deduction or credit.

(4) Any interest resulting from the late payment of the tax shall be

apportioned in the same manner as the tax and shall be charged wholly to

principal.

(5) Any discount allowed for prepayment of the tax shall be credited

wholly to the principal of the funds contributing the moneys used for

prepayment in proportion to the contribution made.

(d) Subject to subparagraphs (1), (2) and (3) of this paragraph, any

direction as to apportionment or non-apportionment of the tax, whether

contained in a will or a non-testamentary instrument, relates only to

the property passing thereunder, unless such will or instrument provides

otherwise.

(1) Any such direction in a will which is later in date than a prior

non-testamentary instrument and which contains a contrary direction

shall govern provided that the later will specifically refers to the

direction in such prior instrument.

(2) Any such direction in a non-testamentary instrument which is later

in date than a prior will or non-testamentary instrument and which

contains a contrary direction shall govern provided that the later

instrument specifically refers to the direction in such prior will or

instrument.

(3) Any such direction provided in a non-testamentary instrument only

relates to the payment of the tax from the property passing thereunder

and such direction shall not serve to exonerate such non-testamentary

property from the payment of its proportionate share of the tax, even if

otherwise directed in that non-testamentary instrument.

(d-1)(1)(A) If any part of the gross tax estate consists of property

the value of which is includible in the gross tax estate by reason of

§2044 of the Internal Revenue Code of 1986 as from time to time amended,

the decedent's estate shall be entitled to recover from the person

receiving the property the amount by which the total tax under article

twenty-six of the tax law which has been paid exceeds the total tax

under such article which would have been payable if the value of such

property had not been included in the gross tax estate.

(B) Clause (A) of this subparagraph shall not apply if the decedent

specifically directs otherwise by will.

(2) For the purposes of this paragraph, if there is more than one

person receiving the property, the right of recovery shall be against

each such person.

(3) In the case of penalties and interest attributable to additional

taxes described in subparagraph (1) of this paragraph, rules similar to

subparagraphs (1) and (2) of this paragraph shall apply.

(e) In all cases in which any property required to be included in the

gross tax estate does not come into the possession of the fiduciary, he

is authorized to, and shall recover from the persons benefited or from

any person in possession of such property the ratable amounts of the tax

and any interest payable by the persons benefited. The surrogate may

direct the payment thereof to the fiduciary and may charge such payments

against the interests of the persons benefited in any assets in the

possession of the fiduciary or any other person. If the fiduciary cannot

recover the amount of the tax and interest apportioned against a person

benefited, such amount may be charged in such manner as the surrogate

determines.

(f) No fiduciary is required to pay over or distribute to any person

other than the fiduciary charged with the duty to collect and pay the

tax any fund or property with respect to which the tax is or may be

imposed until the amount of the tax apportioned or which may be

apportioned against such fund or property and any interest due from the

persons entitled thereto is paid or, where the tax has not been

determined or apportionment made, unless and until adequate security for

such payment is furnished to the fiduciary making such payment or

distribution.

(g) The surrogate shall make such preliminary, intermediate or final

decrees or orders in the proceeding, as he shall deem advisable,

tentatively or finally apportioning the tax and any interest, directing

the fiduciary to collect the apportioned amounts from the property or

interests in his possession of any persons against whom such

apportionment has been made and directing all other persons against whom

the tax and any interest are apportioned or from whom any part of the

tax and any interest may be recovered to make payment of such

apportioned amounts to such fiduciary; and if it is ascertained in such

proceeding that the property in the possession of the fiduciary,

otherwise payable to a person liable for any part of the tax and

interest, is insufficient to discharge the liability of such person, the

surrogate may direct that the balance of the apportioned amount due

shall be paid to the fiduciary by such other person. If, in the course

of the proceeding, it is ascertained that more than the ratable amount

of the tax and interest due from any person has been paid by him or in

his behalf the surrogate may direct an appropriate reimbursement of the

overpayment.

(h) If the surrogate apportions any part of the tax against any person

interested in non-testamentary property or apportions the tax among the

respective interests created by any non-testamentary instrument, he may,

in his discretion, assess against such property or interests, an

equitable share of the expense in connection with the determination of

the tax and the apportionment thereof. Whenever an attorney renders

services to the estate or to its personal representative resulting in

the exclusion from the gross taxable estate of any non-testamentary

property or interests created by any non-testamentary instrument, the

surrogate may, in his discretion, assess against such property or

interests an equitable share of the compensation for such legal services

rendered to the estate or to its personal representative in proportion

to the benefit received by such property or interests from such

services, unless the decedent's will or the non-testamentary instrument

contains a direction that no portion of the tax shall be apportioned

against such non-testamentary property or against interests created by

any non-testamentary instrument. The surrogate may retain jurisdiction

of any proceeding until the purposes of this section have been

accomplished.

Distributions in kind by executors and trustees

(a) (1) As used in this section, the terms "pecuniary disposition"

and "transfer in trust of a pecuniary amount" mean, respectively, a

disposition by will or a transfer under a trust agreement of a specific

amount of money, which amount is either expressly stated in the

instrument or determinable by means of a formula which is stated in the

instrument.

(2) Whether a testamentary disposition or transfer in trust is

pecuniary or fractional in character depends upon the intention of the

creator.

(b) Unless the instrument expressly provides otherwise:

(1) Where a will or a trust agreement authorizes the executor or

trustee (hereinafter called the "fiduciary") to satisfy wholly or partly

in kind a pecuniary disposition or transfer in trust of a pecuniary

amount, the assets selected by the fiduciary for that purpose shall be

valued at their respective values on the dates of their distribution.

(2) Where a will or a trust agreement authorizes the fiduciary to

satisfy wholly or partly in kind a pecuniary disposition or transfer in

trust of a pecuniary amount and the instrument requires the fiduciary to

value the assets selected by the fiduciary for such distribution as of a

date other than the dates of their distribution, the assets selected by

the fiduciary for that purpose, together with any cash distributed,

shall have an aggregate value on the dates of their distribution

amounting to no less than, and to the extent practicable no more than,

the amount of such testamentary disposition or transfer in trust as

stated in, or determined by the formula stated in, the instrument.

(c) This section applies to wills of decedents dying before, on or

after its effective date and to trust agreements executed before, on or

after such date, provided, however, that it shall not be applied so as

to require repayment to the fiduciary of any distributions actually made

prior to such date.

Provisions relating to infants and minors

(a) Unless the creator expressly provides to the contrary, in any

instrument executed prior to September first, nineteen hundred

seventy-four, the words "minor", "minority", "infant", "infancy",

"majority", "adult" and words of like import shall mean or refer to a

person or a class of persons under the age of twenty-one years or who

shall have reached such age, according to the context, and, unless

otherwise expressly provided in any instrument executed on or after

September first, nineteen hundred seventy-four shall mean or refer to a

person or a class of persons under the age of eighteen years or who

shall have reached such age, according to the context, except that any

designation of a testamentary guardian of a "minor" or an "infant" shall

refer to a guardianship of a person who has not reached the age of

eighteen years, regardless of the date of the instrument containing the

designation.

(b) This act shall not apply to distributions made subsequent to

September first, nineteen hundred seventy-four and prior to the

effective date of this act.

Renunciation of property interests

(a) A renunciation made in compliance with the provisions of this

section shall not necessarily constitute a qualified disclaimer within

the meaning of section 2518 of the Internal Revenue Code of 1986, as

amended, or for the purposes of the taxes imposed by article twenty-six

of the tax law.

(b) For purposes of this section:

(1) The term "disposition" shall include a disposition created under a

will or trust agreement including, without limitation, the granting of a

power of appointment, a disposition created by the exercise or

nonexercise of a power of appointment, a distributive share under 4-1.1,

a transfer created by a trust account as defined in 7-5.1, a transfer

created by a life insurance or annuity contract, a transfer resulting

from the creation of a joint tenancy or tenancy by the entirety,

succession to an interest occurring by operation of law on the death of

a joint tenant or tenant by the entirety, a transfer under an employee

benefit plan (including, without limitation, any pension, retirement,

death benefit, stock bonus or profit-sharing plan, system or trust), a

transfer of a security to a beneficiary pursuant to part 4 of article 13

of this chapter, any other disposition or transfer created by any

testamentary or nontestamentary instrument, or by operation of law, and

any of the foregoing created or increased by reason of a renunciation

made by another person.

(2) The effective date of the disposition for purposes of this section

shall be:

A. If the disposition is created by will, the exercise or nonexercise

of a testamentary power of appointment, a distribution pursuant to

4-1.1, the deposit of money in a trust account as defined in 7-5.1, the

registration of a security in beneficiary form pursuant to part 4 of

article 13 of this chapter, a life insurance or annuity contract, the

death of a joint tenant or tenant by the entirety, or an employee

benefit plan, the date of death of the deceased testator, holder of the

power of appointment, intestate, creator of the trust account,

registered owner of the security, insured, annuitant, other joint tenant

or tenant by the entirety, or employee, as the case may be;

B. If the disposition is created by trust agreement, the exercise of a

presently exercisable power of appointment, the creation of a joint

tenancy or tenancy by the entirety, or the renunciation of a disposition

created by another, the date as of which the transfer in trust is

irrevocable and is a completed gift for federal gift tax purposes

(regardless of whether a gift tax is imposed on the completed gift), the

date of the exercise of the power of appointment, the creation of a

joint tenancy or tenancy by the entirety, or renunciation, as the case

may be; and

C. If the disposition is created by any other testamentary or

nontestamentary instrument, or by operation of law, the date of the

event by which the beneficiary is finally ascertained.

Notwithstanding the foregoing, the effective date of a disposition which

is of a future estate shall be the date on which it becomes an estate in

possession.

(c) (1) Any beneficiary of a disposition may renounce all or part of

such beneficiary's interest; provided, however, that a surviving joint

tenant or tenant by the entirety may renounce the interest to which such

tenant succeeds, by operation of law upon the death of another joint

tenant or tenant by the entirety, to the extent such interest could be

the subject of a qualified disclaimer under section 2518 of the United

States Internal Revenue Code of 1986, as amended.

(2) Such renunciation shall be in writing, signed and acknowledged by

the person renouncing, and shall be filed in the office of the clerk of

the court having jurisdiction over the will or trust agreement governing

the property of which the disposition would otherwise be made or the

court which issued letters of administration, or if there is no probate

or administration, then in a surrogate's court provided by law as the

place of probate or administration of the decedent's estate, within nine

months after the effective date of the disposition. Such renunciation

shall be accompanied by an affidavit of the renouncing party that such

party has not received and is not to receive any consideration in money

or money's worth for such renunciation from a person or persons whose

interest is to be accelerated, unless payment of such consideration has

been authorized by the court. Notice of such renunciation, which shall

include a copy of the renunciation, shall be served personally or in

such manner as the court may direct upon the fiduciary directed by the

will or trust agreement to make the disposition or upon the

administrator or such other person who was directed to make the

disposition or upon any other person having custody or possession of or

legal title to the property, an interest in which is being renounced,

and by mail or in such manner as the court may direct upon all persons

whose interest may be created or increased by reason of such

renunciation. The time to file and serve such renunciation may be

extended, in the discretion of the court, on a petition showing

reasonable cause and on notice to such persons and in such manner as the

court may direct. The time limited in this section for filing and

serving such renunciation is exclusive, and shall not be suspended or

otherwise affected by any other provision of law; such renunciation

shall be effective as of the date of such filing, notwithstanding that

notice thereof may thereafter be required by the court.

(d) A renunciation may be made by:

(1) The guardian of the property of an infant, when so authorized by

the court having jurisdiction of the estate of the infant.

(2) The committee of an incompetent when so authorized by the court

that appointed the committee.

(3) The conservator of a conservatee, when so authorized by the court

that appointed the conservator.

(4) A guardian appointed under article eighty-one of the mental

hygiene law, when so authorized by the court that appointed the

guardian.

(5) The personal representative of a decedent, provided, however, that

the personal representative may seek authorization from the court having

jurisdiction of the estate of the decedent.

(6) An attorney-in-fact, when so authorized under a duly executed

power of attorney, provided, however, that any renunciation by an

attorney-in-fact of a person under disability shall not be effective

unless it is further authorized by the court with which the renunciation

must be filed under subparagraph two of paragraph (c) of this section,

and provided, further, that a renunciation by an attorney-in-fact of a

person not under disability may be made without court authorization,

unless the property which would have passed under said renunciation is,

by reason of said renunciation, disposed of in favor of such

attorney-in-fact or the spouse or issue of such attorney-in-fact, in

which case such renunciation shall not be effective unless either (A)

the instrument appointing such attorney-in-fact expressly authorizes a

renunciation in favor of such attorney-in-fact or the spouse or issue of

such attorney-in-fact, or (B) such renunciation has been authorized by

the court with which the renunciation must be filed under subparagraph

two of paragraph (c) of this section.

(e) Unless the creator of the disposition has otherwise provided, the

filing of a renunciation, as provided in this section, has the same

effect with respect to the renounced interest as though the renouncing

person had predeceased the creator or the decedent or, if the renounced

interest is a future estate, as though the renouncing person had died at

the time of filing or just prior to its becoming an estate in

possession, whichever is earlier in time, and shall have the effect of

accelerating the possession and enjoyment of subsequent interests, but

shall have no effect upon the vesting of a future estate which by the

terms of the disposition is limited upon a preceding estate other than

the renounced interest. If, pursuant to the preceding sentence, there

would occur a per stirpes disposition of the renounced interest or a

disposition or distribution of the renounced interest by representation,

then solely for purposes of applying 1-2.14 or 1-2.16, as the case may

be, the renouncing person shall be treated as having died on the same

date as, but immediately after, the creator or decedent or, if the

renounced interest is a future estate, as having died on the same date

as, but immediately after, its becoming an estate in possession or, if

the time of filing is earlier in time, on the same date as, but

immediately after, such filing. Such renunciation is retroactive to the

creation of the disposition. A person who has a present and a future

interest in property and renounces the present interest in whole or in

part shall be deemed to have renounced the future interest to the same

extent.

(f) A beneficiary may accept one disposition and renounce another, may

renounce a disposition in whole or in part, or with reference to

specific amounts, parts, fractional shares or assets thereof.

Notwithstanding the provisions of paragraph (e) of this section, a

renunciation by a surviving spouse of a decedent of a disposition

created by said decedent shall not be deemed to be a renunciation by

such spouse of all or any part of any other disposition to or in favor

of such spouse, regardless of whether the property which would have

passed under said renounced disposition is by reason of said

renunciation disposed of to or in favor of such spouse. Unless a

renouncing person has provided otherwise in his renunciation, the effect

of a renunciation of a fractional part of a disposition is to renounce

such fraction of all property to which the renouncing person is entitled

under the disposition.

(g) A renunciation may not be made under this section with respect to

any property which a renouncing person has accepted, except that an

acceptance does not preclude a person from renouncing all or part of any

property to which such person becomes entitled when another person

renounces after such acceptance. For purposes of this paragraph, a

person accepts an interest in property if such person voluntarily

transfers or encumbers, or contracts to transfer or encumber all or part

of such interest, or accepts delivery or payment of, or exercises

control as beneficial owner over all or part thereof, or executes a

written waiver of the right to renounce, or otherwise indicates

acceptance of all or part of such interest. A written waiver of the

right to renounce shall be binding on the person waiving and all parties

claiming by, through or under such person.

(h) A renunciation filed under this section is irrevocable.

(i) This section shall not abridge the right of any beneficiary or any

other person to assign, convey, release or renounce any property or

interest therein arising under any other section of this chapter or

other statute or under common law.

(j) Except as specifically provided in the trust instrument, the will,

any other instrument creating the disposition, or in this section, this

section shall apply to each disposition the effective date of which (as

defined in this section) is on or after the effective date of this

section, except that with respect to the renunciation of a future

interest this section shall apply as well to dispositions created or

increased prior to the effective date of this section.

Credit shelter formula bequests

If: (a) the decedent dies after January thirty-first, two thousand;

and

(b) by reason of the death of the decedent property passes or is

acquired from the decedent under a will executed or a trust created

prior to February first, two thousand which contains a formula

providing, in sum or substance, for a bequest of the maximum amount of

property that can be sheltered from federal estate tax by reason of

available credits against such tax; and

(c) such formula was not amended at any time after January

thirty-first, two thousand and before the death of the decedent,

then, unless the instrument containing such formula specifically

provides that there are non-tax reasons for taking the federal credit

for state death taxes into account, such formula shall be deemed not to

include a reference to the federal credit for state death taxes.

Certain formula clauses to be construed to refer to the federal

estate and generation-skipping transfer tax laws applicable

to estates of decedents dying after December thirty-first,

two thousand nine and before January first, two thousand

eleven

(a)(1) If by reason of the death of a decedent property passes or is

acquired under a beneficiary designation, a will or trust of a decedent

who dies after December thirty-first, two thousand nine and before

January first, two thousand eleven, that contains a bequest or other

disposition based upon the amount of property that can be sheltered from

federal estate tax by referring to the "unified credit", "estate tax

exemption", "applicable exclusion amount", "applicable exemption

amount", "applicable credit amount", "marital deduction", "maximum

marital deduction", "unlimited marital deduction", "charitable

deduction", "maximum charitable deduction" or similar words or phrases

relating to the federal estate tax, or that measures a share of an

estate or trust based on the amount that can pass free of federal estate

taxes, or that is otherwise based on a similar provision of federal

estate tax then such beneficiary designation, will or trust shall be

deemed to refer to the federal estate tax law as applied with respect to

decedents dying in two thousand ten, regardless of whether an election

is made not to have the federal estate tax apply to a particular estate.

(2) If by reason of the death of a decedent property passes or is

acquired under a beneficiary designation, a will or trust of a decedent

who dies after December thirty-first, two thousand nine and before

January first, two thousand eleven, that contains a bequest or other

disposition based upon the amount of property that can be sheltered from

federal generation-skipping transfer tax by referring to the

"generation-skipping transfer tax exemption", "GST exemption",

"generation-skipping transfer tax", "GST tax" or similar words or

phrases that measures a share of an estate or trust based on the amount

that can pass free of federal generation-skipping transfer taxes, or

that is otherwise based on a similar provision of federal

generation-skipping transfer tax law, then such beneficiary designation,

will or trust shall be deemed to refer to the federal

generation-skipping transfer tax law in effect in two thousand ten,

regardless of whether an election is made not to have the federal estate

tax apply to a particular estate.

(3) This paragraph shall not apply to a beneficiary designation, will

or trust that manifests an intent that a contrary rule shall apply.

(b) The executor, trustee or other interested person under a

beneficiary designation, will or trust referred to in paragraph (a) of

this section may bring a proceeding to determine whether the beneficiary

designation, will or trust manifests a contrary intention within the

meaning of subparagraph three of paragraph (a) of this section. In any

such proceeding, extrinsic evidence may be admitted to establish the

decedent's intent.

(c) Any proceeding described in paragraph (b) of this section must be

commenced by the date which is (1) twenty-four months following the date

of death of the decedent, testator or grantor or (2) six months

following the day on which the chapter of the laws of two thousand

eleven which amended this paragraph became a law, whichever date is

later, and not at any time thereafter. Notwithstanding the foregoing,

the time to commence such a proceeding may be extended, in the

discretion of the court, on a petition showing reasonable cause and on

notice to such persons and in such manner as the court may direct.

Right to recover state estate and gift taxes where decedent

retained interest

(a)(1) If any part of the gross tax estate on which tax has been paid

consists of the value of property included in the gross estate by reason

of section two thousand thirty-six of the internal revenue code

(relating to transfers with retained life estate), the decedent's estate

shall be entitled to recover from the person receiving the property the

amount which bears the same ratio to the total tax under this chapter

which has been paid as

(A) the value of such property bears to

(B) the taxable estate.

(2) Paragraph one shall not apply if the decedent otherwise directs in

a provision of his will (or a revocable trust) specifically referring to

this section.

(b) For purposes of this section, if there is more than one person

receiving the property, the right of recovery shall be against each such

person.

(c) In the case of penalties and interest attributable to the

additional taxes described in subsection (a) of this section, rules

similar to the rules of subsections (a) and (b) of this section shall

apply.

(d) No person shall be entitled to recover any amount by reason of

this section from a trust to which section six hundred sixty-four of the

internal revenue code applies (determined without regard to this

section).

Consequences of partly ineffective dispositions of trust

principal to two or more beneficiaries

Whenever the remainder of a lifetime or testamentary trust passes,

whether outright or in further trust, to two or more designated

beneficiaries, and such remainder is ineffective in part and no

effective alternative disposition has been made in the governing

instrument, such ineffective part shall pass to the other designated

beneficiary or, if there are two or more other designated beneficiaries,

to such beneficiaries in the proportions that their respective interests

in such principal bear to the aggregate of the interests of such

designated beneficiaries in such principal.

Who may make wills of, and exercise testamentary powers of

appointment over property

Every person eighteen years of age or over, of sound mind and memory,

may by will dispose of real and personal property and exercise a power

to appoint such property.

What property may be disposed of by will

Every estate in property may be devised or bequeathed.

Who may receive testamentary dispositions of property;

testamentary dispositions to unincorporated associations

(a) A testamentary disposition of property may be made to any person

having capacity to acquire and hold such property.

(b) When a will disposes of property to an association which lacks

capacity to receive such property by will because it is unincorporated

and the association may become incorporated under the law of this state

or of the jurisdiction in which it has its principal office, such

disposition is valid despite the lack of capacity of the beneficiary if

within three years after probate of the will such beneficiary becomes

incorporated with capacity to take such disposition, subject to the

following:

(1) This section does not limit the power of the court to give effect

to the intention of the testator and to preserve dispositions for the

use and benefit of unincorporated associations.

(2) In the case of a testamentary disposition of property to an

unincorporated association in such manner that the estate may lawfully

vest in such association, as provided in paragraph (b), at a future

time, the estate shall be treated as immediately vested either in the

trustee in whom any estate preceding such disposition is vested or, if

there is no such precedent trust, in the personal representative of the

decedent's estate as trustee, subject to any intermediate estate created

by the will. The trust herein created is subject to the direction and

control of the surrogate's court as if it had been created by express

provision in the will. If the association is incorporated and empowered

to receive the disposition, the trustee shall transfer the property

disposed of to the corporation so formed, but if the association is not

incorporated, the trustee shall transfer the property to such persons as

are entitled thereto.

(3) If a testamentary disposition to an association is made in such

manner as to take effect upon the incorporation of such association, as

provided in paragraph (b), and no disposition is made of the rents,

profits or other income accruing prior to such incorporation, the will

shall be construed as directing the trustee described in subparagraph

(2) to receive the rents, profits or other income and to hold them for

the benefit of the corporation when formed or, if such corporation is

not formed within the time prescribed by paragraph (b), for the benefit

of the persons entitled to the property upon the failure of such

disposition.

(4) Notwithstanding any other law of this state governing (A) the

purposes for which trusts may be created, (B) the rule against

perpetuities or (C) the accumulation of income, a trust as provided in

subparagraph (2) is valid.

(5) During the continuance of any trust authorized by subparagraph

(2), the unincorporated association to which the disposition is made may

enforce such trust, and any such association has capacity as such,

despite the fact that it is not incorporated, to exercise such right and

to take such proceedings as may be appropriate for the exercise or

waiver of such right or, in the manner permitted by law for renunciation

by a testamentary beneficiary, to renounce the disposition. In the event

of any such renunciation, the trust provided for in subparagraph (2)

shall terminate and the property, including accumulations, shall vest in

the persons otherwise entitled thereto as if no such disposition had

been made.

(6) This section does not limit the effectiveness of 8-1.1 with

respect to a disposition to which that section applies.

Execution and attestation of wills; formal requirements

(a) * Except for nuncupative and holographic wills authorized by

3-2.2, every will must be in writing, and executed and attested in the

following manner:

* NB Effective until December 12, 2027

* Except for nuncupative and holographic wills authorized by 3-2.2 and

electronic wills authorized by part six of this article, every will must

be in writing, and executed and attested in the following manner:

* NB Effective December 12, 2027

(1) It shall be signed at the end thereof by the testator or, in the

name of the testator, by another person in his presence and by his

direction, subject to the following:

(A) The presence of any matter following the testator's signature,

appearing on the will at the time of its execution, shall not invalidate

such matter preceding the signature as appeared on the will at the time

of its execution, except that such matter preceding the signature shall

not be given effect, in the discretion of the surrogate, if it is so

incomplete as not to be readily comprehensible without the aid of matter

which follows the signature, or if to give effect to such matter

preceding the signature would subvert the testator's general plan for

the disposition and administration of his estate.

(B) No effect shall be given to any matter, other than the attestation

clause, which follows the signature of the testator, or to any matter

preceding such signature which was added subsequently to the execution

of the will.

(C) Any person who signs the testator's name to the will, as provided

in subparagraph (1), shall sign his own name and affix his residence

address to the will but shall not be counted as one of the necessary

attesting witnesses to the will. A will lacking the signature of the

person signing the testator's name shall not be given effect; pro-

vided, however, the failure of the person signing the testator's name to

affix his address shall not affect the validity of the will.

(2) The signature of the testator shall be affixed to the will in the

presence of each of the attesting witnesses, or shall be acknowledged by

the testator to each of them to have been affixed by him or by his

direction. The testator may either sign in the presence of, or

acknowledge his signature to each attesting witness separately.

(3) The testator shall, at some time during the ceremony or ceremonies

of execution and attestation, declare to each of the attesting witnesses

that the instrument to which his signature has been affixed is his will.

(4) There shall be at least two attesting witnesses, who shall, within

one thirty day period, both attest the testator's signature, as affixed

or acknowledged in their presence, and at the request of the testator,

sign their names and affix their residence addresses at the end of the

will. There shall be a rebuttable presumption that the thirty day

requirement of the preceding sentence has been fulfilled. The failure of

a witness to affix his address shall not affect the validity of the

will.

(b) The procedure for the execution and attestation of wills need not

be followed in the precise order set forth in paragraph (a) so long as

all the requisite formalities are observed during a period of time in

which, satisfactorily to the surrogate, the ceremony or ceremonies of

execution and attestation continue.

Nuncupative and holographic wills

(a) For the purposes of this section, and as used elsewhere in this

chapter:

(1) A will is nuncupative when it is unwritten, and the making thereof

by the testator and its provisions are clearly established by at least

two witnesses.

(2) A will is holographic when it is written entirely in the

handwriting of the testator, and is not executed and attested in

accordance with the formalities prescribed by 3-2.1.

(b) A nuncupative or holographic will is valid only if made by:

(1) A member of the armed forces of the United States while in actual

military or naval service during a war, declared or undeclared, or other

armed conflict in which members of the armed forces are engaged.

(2) A person who serves with or accompanies an armed force engaged in

actual military or naval service during such war or other armed

conflict.

(3) A mariner while at sea.

(c) A will authorized by this section becomes invalid:

(1) If made by a member of the armed forces, upon the expiration of

one year following his discharge from the armed forces.

(2) If made by a person who serves with or accompanies an armed force

engaged in actual military or naval service, upon the expiration of one

year from the time he has ceased serving with or accompanying such armed

force.

(3) If made by a mariner while at sea, upon the expiration of three

years from the time such will was made.

(d) If any person described in paragraph (c) lacks testamentary

capacity at the expiration of the time limited therein for the validity

of his will, such will shall continue to be valid until the expiration

of one year from the time such person regains testamentary capacity.

(e) Nuncupative and holographic wills, as herein authorized, are

subject to the provisions of this chapter to the extent that such

provisions can be applied to such wills consistently with their

character, or to the extent that any such provision expressly provides

that it is applicable to such wills.

What a testamentary disposition includes

Unless the will provides otherwise, a disposition by the testator of

all his property passes all of the property he was entitled to dispose

of at the time of his death.

Competence of attesting witness who is beneficiary; application

to nuncupative will

(a) An attesting witness to a will to whom a beneficial disposition or

appointment of property is made is a competent witness and compellable

to testify respecting the execution of such will as if no such

disposition or appointment had been made, subject to the following:

(1) Any such disposition or appointment made to an attesting witness

is void unless there are, at the time of execution and attestation, at

least two other attesting witnesses to the will who receive no

beneficial disposition or appointment thereunder.

(2) Subject to subparagraph (1), any such disposition or appointment

to an attesting witness is effective unless the will cannot be proved

without the testimony of such witness, in which case the disposition or

appointment is void.

(3) Any attesting witness whose disposition is void hereunder, who

would be a distributee if the will were not established, is entitled to

receive so much of his intestate share as does not exceed the value of

the disposition made to him in the will, such share to be recovered as

follows:

(A) In case the void disposition becomes part of the residuary

disposition, from the residuary disposition only.

(B) In case the void disposition passes in intestacy, ratibly from the

distributees who succeed to such interest. For this purpose, the void

disposition shall be distributed under 4-1.1 as though the attesting

witness were not a distributee.

(b) The provisions of this section apply to witnesses to a nuncupative

will authorized by 3-2.2.

Disposition to issue or brothers or sisters of testator not to

lapse; application to class dispositions

(a) Unless the will whenever executed provides otherwise:

(1) Instruments executed prior to September first, nineteen hundred

ninety-two. Whenever a testamentary disposition including a disposition

of a future estate other than a future estate subject to a condition

precedent of surviving the testator is made to a beneficiary who is one

of the testator's issue or a brother or sister, and such beneficiary

dies during the lifetime of the testator leaving issue surviving such

testator, such disposition does not lapse but vests in such surviving

issue, by representation.

(2) Instruments executed on or after September first, nineteen hundred

ninety-two. Whenever a testamentary disposition including a disposition

of a future estate other than a future estate subject to a condition

precedent of surviving the testator is made to a beneficiary who is one

of the testator's issue or a brother or sister, and such beneficiary

dies during the lifetime of the testator leaving issue surviving such

testator, such disposition does not lapse but vests in such surviving

issue, by representation.

(3) The provisions of subparagraphs (1) and (2) of this paragraph

apply to a disposition made in the form of a class gift other than a

disposition to "issue,""descendents," or a class described by language

of similar import, as if the disposition were made to the beneficiaries

by their individual names, except that no benefit shall be conferred

hereunder upon the surviving issue of an ancestor who died before the

execution of the will in which the disposition to the class was made.

(b) As used in this section, the terms "issue", "surviving issue" and

"issue surviving" include adopted children and their issue to the extent

they would be included in a disposition to "issue" under 2-1.3 and

subdivision two of section one hundred seventeen of the domestic

relations law, and nonmarital children; for this purpose, a nonmarital

child is the child of his mother and is the child of his father if he is

entitled to inherit from his father under 4-1.2.

Consequences of partly ineffective testamentary dispositions of

property to two or more residuary beneficiaries

Whenever a testamentary disposition of property to two or more

residuary beneficiaries is ineffective in part, as of the date of the

testator's death, and the provisions of 3-3.3 do not apply to such

ineffective part of the residuary disposition nor has an alternative

disposition thereof been made in the will, such ineffective part shall

pass to and vest in the remaining residuary beneficiary or, if there are

two or more remaining residuary beneficiaries, in such beneficiaries,

ratably, in the proportions that their respective interests in the

residuary estate bear to the aggregate of the interests of all remaining

beneficiaries in such residuary estate.

Conditions qualifying dispositions; conditions against contest;

limitations thereon

(a) A condition qualifying a disposition of property is operative

despite the failure of the testator to provide for an alternative gift

to take effect upon the breach or non-occurrence of such condition.

(b) A condition, designed to prevent a disposition from taking effect

in case the will is contested by the beneficiary, is operative despite

the presence or absence of probable cause for such contest, subject to

the following:

(1) Such a condition is not breached by a contest to establish that

the will is a forgery or that it was revoked by a later will, provided

that such contest is based on probable cause.

(2) An infant or incompetent may affirmatively oppose the probate of a

will without forfeiting any benefit thereunder.

(3) The following conduct, singly or in the aggregate, shall not

result in the forfeiture of any benefit under the will:

(A) The assertion of an objection to the jurisdiction of the court in

which the will was offered for probate.

(B) The disclosure to any of the parties or to the court of any

information relating to any document offered for probate as a last will,

or relevant to the probate proceeding.

(C) A refusal or failure to join in a petition for the probate of a

document as a last will, or to execute a consent to, or waiver of notice

of a probate proceeding.

(D) The preliminary examination, under SCPA 1404, of a proponent's

witnesses, the person who prepared the will, the nominated executors and

the proponents in a probate proceeding and, upon application to the

court based upon special circumstances, any person whose examination the

court determines may provide information with respect to the validity of

the will that is of substantial importance or relevance to a decision to

file objections to the will.

(E) The institution of, or the joining or acquiescence in a proceeding

for the construction of a will or any provision thereof.

Encumbrances on property of decedent or on proceeds of insurance

policy on life of decedent not chargeable against assets of

decedent's estate

(a) Where any property, subject, at the time of decedent's death, to

any lien, security interest or other charge, including a lien for unpaid

purchase money, is specifically disposed of by will or passes to a

distributee, or where the proceeds of any policy of insurance on the

life of the decedent are payable to a named beneficiary and such policy

is subject to any lien, security interest or other charge, the personal

representative is not responsible for the satisfaction of such

encumbrance out of the property of the decedent's estate, except as

provided in SCPA 1811, unless, in the case of a will, the testator has

expressly or by necessary implication indicated otherwise. A general

provision in the will for the payment of debts is not such an

indication.

(b) Any such encumbrance is chargeable against the property of the

decedent or the proceeds of a policy of insurance on the life of the

decedent, subject thereto. Nothing in this section imposes upon a

testamentary beneficiary, distributee or named insurance beneficiary any

personal liability for the payment of the debt secured by such

encumbrance.

(c) Where any lien, security interest or other charge encumbers:

(1) Property passing to two or more persons, the interest of each such

person shall, only as between such persons, bear its proportionate share

of the total encumbrance.

(2) Two or more properties, each such property shall, only as between

the recipients thereof, bear its proportionate share of the total

encumbrance.

Testamentary disposition to trustee under, or in accordance with

terms of existing inter vivos trust

(a) A testator may by will dispose of or appoint all or any part of

such testator's estate to a trustee of a trust, the terms of which are

evidenced by a written instrument executed by the testator, the testator

and some other person, or some other person, including a trust

established for the receipt of the proceeds of an annuity or pure

endowment contract, or of a thrift, savings, pension, retirement, death

benefit, stock bonus, or profit-sharing plan or system or a funded or

unfunded life, group life, industrial life or accident and health

insurance trust (although the person establishing such trust has

reserved any or all rights of ownership of the insurance contracts),

regardless of whether any assets have been transferred to the trust

prior to the death of the testator; provided that the trust instrument

is identified in the will and is executed by the person establishing the

trust prior to or contemporaneously with the execution of the will and,

unless such person is the sole trustee, by at least one trustee thereof

prior to the death of the testator, in the manner required by the laws

of this state for the recording of a conveyance of real property or, in

lieu thereof, in the presence of two witnesses who shall affix their

signatures to the trust instrument.

(b) The testamentary disposition or appointment is valid, even though:

(1) The trust instrument is amendable or revocable, or both, provided,

however, that the disposition or appointment shall be given effect in

accordance with the terms of the trust instrument, including an

amendment thereto, as they appear in writing on the date of the

testator's death and, where the testator so directs, including

amendments to the trust instrument after his or her death, if the

instrument evidencing such amendment is executed and acknowledged in the

manner provided for in paragraph (b) of 7-1.17.

(2) The right is reserved in such trust instrument (A) to exercise any

power over any property transferred to or held in the trust or (B) to

direct during the lifetime of the person establishing the trust or any

other person, the persons and organizations to whom or in whose behalf

the income shall be paid or the principal distributed.

(3) The trust instrument or any amendment thereto was not executed and

attested in accordance with the formalities prescribed by 3-2.1.

(c) The property so disposed of or appointed by will becomes a part of

the trust to which it is given, and title thereto vests in the trustee

to be administered and disposed of in accordance with the terms of the

trust instrument.

(d) Any disposition or appointment to the trustee made by a testator

who died prior to the effective date of this section, which would be

invalid under the applicable law of this state pre-existing the

effective date of this section, shall be construed to create a

testamentary trust under and in accordance with the terms of the trust

instrument which the testator originally intended should embrace the

property disposed of or appointed, as such terms appear in such trust

instrument at the date of the testator's death.

(e) A revocation or termination of the trust before the death of the

testator shall cause the disposition or appointment to fail, unless the

testator has made an alternative disposition.

Validity of a purchase of real property notwithstanding its

disposition by will

The title of a purchaser of real property, in good faith and for

valuable consideration, from a distributee of a person who died owning

such property shall not be affected by a testamentary disposition of

such property by the decedent, unless within two years after the

testator's death the will disposing of the property is admitted to

probate. If, however, at the time of the testator's death, the devisee

is either an infant, incompetent, imprisoned for a term less than life,

without the state or if the will was concealed by one or more of the

distributees of the decedent, the two year period prescribed herein does

not commence until the expiration of one year from the time of the

removal of such disability or the delivery of the will to the devisee or

to the surrogate having jurisdiction to admit the will to probate.

Testamentary direction to purchase annuities

If a testator directs in his will the purchase of an annuity, the

beneficiaries to whom the income thereof is to be paid may not elect to

take the capital sum directed to be used for the purchase of such

annuity in lieu thereof, unless the will expressly confers such right or

except as the will expressly provides for the purchase of an assignable

annuity. But nothing contained herein shall impair the right of

election by a surviving spouse under 5-1.1 or 5-1.1-A.

Revocation of wills; effect on codicils

(a) Except as otherwise provided in this chapter, a revocation or

alteration, if intended by the testator, may be effected in the

following manner only:

(1) A will or any part thereof may be revoked or altered by:

(A) Another will.

(B) A writing of the testator clearly indicating an intention to

effect such revocation or alteration, executed with the formalities

prescribed by this article for the execution and attestation of a will.

(2) A will may be revoked by:

(A) An act of burning, tearing, cutting, cancellation, obliteration,

or other mutilation or destruction performed by:

(i) The testator.

(ii) Another person, in the presence and by the direction of the

testator; in which case, the fact that the will was so revoked in the

presence and by the direction of the testator shall be proved by at

least two witnesses, neither of whom shall be the person who performed

the act of revocation.

(b) In addition to the methods set forth in paragraph (a), a will may

be revoked or altered by a nuncupative or holographic declaration of

revocation or alteration made in the circumstances prescribed by 3-2.2

by any person therein authorized to make a nuncupative or holographic

will. Any such nuncupative declaration of revocation or alteration must

be clearly established by at least two witnesses; any such holographic

declaration, by an instrument written entirely in the handwriting of the

testator, although not executed and attested in accordance with the

formalities prescribed by this article for the execution and attestation

of a will.

(c) The revocation of a will, as provided in this section, revokes all

codicils thereto.

Agreement to convey property previously disposed of by will not

a revocation

An agreement made by a testator to convey any property does not revoke

a prior testamentary disposition of such property; but such property

passes under the will to the beneficiaries, subject to whatever rights

were created by such agreement.

Revocatory effect of a conveyance, settlement or other act

affecting property previously disposed of by will

A conveyance, settlement or other act of a testator by which an estate

in his property, previously disposed of by will, is altered but not

wholly divested does not revoke such disposition, but the estate in the

property that remains in the testator passes to the beneficiaries

pursuant to the disposition. However, any such conveyance, settlement

or other act of the testator which is wholly inconsistent with such

previous testamentary disposition revokes it.

Conveyance of property of an incompetent or conservatee,

previously disposed of specifically by will, not revocation or

ademption

In the case of a sale or other transfer by a committee or conservator,

during the lifetime of its incompetent or conservatee, of any property

which such incompetent or conservatee had previously disposed of

specifically by will when he was competent or able to manage his own

affairs, and no order had been entered setting aside the adjudication of

incompetency at the time of such incompetent's death, or the

conservatorship continued through the date of the conservatee's death,

the beneficiary of such specific disposition becomes entitled to receive

any remaining money or other property into which the proceeds from such

sale or transfer may be traced.

Insurance proceeds from specific disposition not subject to

ademption

Where insurance proceeds from property which was the subject of a

specific disposition are paid after the testator's death, such proceeds,

to the extent received by the personal representative, are payable by

him to the beneficiary of such disposition; and such proceeds retain the

character of a specific disposition for all other purposes, including

12-1.2 and 13-1.3.

Revocation or alteration of later will not to revive prior will

or any provisions thereof

(a) If after executing a will the testator executes a later will which

revokes or alters the prior one, a revocation of the later will does

not, of itself, revive the prior will or any provision thereof.

(b) A revival of a prior will or of one or more of its provisions may

be effected by:

(1) The execution of a codicil which in terms incorporates by

reference such prior will or one or more of its provisions.

(2) A writing declaring the revival of such prior will or of one or

more of its provisions, which is executed and attested in accordance

with the formalities prescribed by this article for the execution and

attestation of a will.

(3) A republication of such prior will, whether to the original

witnesses or to new witnesses, which shall require a re-execution and

re-attestation of the prior will in accordance with the formalities

prescribed by 3-2.1.

Formal validity, intrinsic validity, effect, interpretation,

revocation or alteration of testamentary dispositions of, and

exercise of testamentary powers of appointment over property

by wills having relation to another juristion

(a) As used in this section:

(1) "Real property" means land or any estate in land, including

leaseholds, fixtures and mortgages or other liens thereon.

(2) "Personal property" means any property other than real property,

including tangible and intangible things.

(3) "Formal validity" relates to the formalities prescribed by the law

of a jurisdiction for the execution and attestation of a will.

(4) "Intrinsic validity" relates to the rules of substantive law by

which a jurisdiction determines the legality of a testamentary

disposition, including the general capacity of the testator.

(5) "Effect" relates to the legal consequences attributed under the

law of a jurisdiction to a valid testamentary disposition.

(6) "Interpretation" relates to the procedure of applying the law of a

jurisdiction to determine the meaning of language employed by the

testator where his intention is not otherwise ascertainable.

(7) "Local law" means the law which the courts of a jurisdiction apply

in adjudicating legal questions that have no relation to another

jurisdiction.

(b) Subject to the other provisions of this section:

(1) The formal validity, intrinsic validity, effect, interpretation,

revocation or alteration of a testamentary disposition of real property,

and the manner in which such property descends when not disposed of by

will, are determined by the law of the jurisdiction in which the land is

situated.

(2) The intrinsic validity, effect, revocation or alteration of a

testamentary disposition of personal property, and the manner in which

such property devolves when not disposed of by will, are determined by

the law of the jurisdiction in which the decedent was domiciled at

death.

(c) A will disposing of personal property, wherever situated, or real

property situated in this state, made within or without this state by a

domiciliary or non-domiciliary thereof, is formally valid and admissible

to probate in this state, if it is in writing and signed by the

testator, and otherwise executed and attested in accordance with the

local law of:

(1) This state;

(2) The jurisdiction in which the will was executed, at the time of

execution; or

(3) The jurisdiction in which the testator was domiciled, either at

the time of execution or of death.

(d) A testamentary disposition of personal property intrinsically

valid under the law of the jurisdiction in which the testator was

domiciled at the time the will was executed shall not be affected by a

subsequent change in the domicile of the testator to a jurisdiction by

the law of which the disposition is intrinsically invalid.

(e) Interpretation of a testamentary disposition of personal property

shall be made in accordance with the local law of the jurisdiction in

which the testator was domiciled at the time the will was executed.

(f) Whether a testamentary disposition of personal property is

effectively revoked or altered by the provisions of a subsequent

testamentary instrument or by a physical act to or upon the will by

which the testamentary disposition was made is determined by the law of

the jurisdiction in which the testator was domiciled at the time the

subsequent instrument was executed or the physical act performed.

(g) Subject to paragraphs (d), (e) and (f), the intrinsic validity,

effect, revocation or alteration of a testamentary disposition by which

a power of appointment over personal property is exercised, and the

question of whether such power has been exercised at all, are determined

by:

(1) In the case of a presently exercisable general power of

appointment, the law of the jurisdiction in which the donee of such

power was domiciled at the time of death.

(2) In the case of a general power of appointment exercisable by will

alone or a special power of appointment:

(A) If such power was created by will, the law of the jurisdiction in

which the donor of the power was domiciled at the time of death.

(B) If such power was created by inter vivos disposition, the law of

the jurisdiction which the donor of the power intended to govern such

disposition.

(C) If the donor is himself the donee of a general power of

appointment exercisable by will alone, the law of the jurisdiction in

which the donor of the power was domiciled at the time of death.

(3) The formal validity of a will by which any power of appointment

over personal property is exercised is determined in accordance with

paragraph (c) on the basis that the testator referred to therein is the

donee of such power.

(h) Whenever a testator, not domiciled in this state at the time of

death, provides in his will that he elects to have the disposition of

his property situated in this state governed by the laws of this state,

the intrinsic validity, including the testator's general capacity,

effect, interpretation, revocation or alteration of any such disposition

is determined by the local law of this state. The formal validity of the

will, in such case, is determined in accordance with paragraph (c).

(i) Notwithstanding the definition of "real property" in subparagraph

(a) (1), whether an estate in, leasehold of, fixture, mortgage or other

lien on land is real property governed by subparagraph (b) (1) or

personal property governed by subparagraph (b) (2) is determined by the

local law of the jurisdiction in which the land is situated.

* § 3-6.1 Short title

This part may be cited as the New York electronic wills act.

* NB Effective December 12, 2027

* § 3-6.2 Definitions

For purposes of this part the following terms shall have the following

meanings:

(a) "Audit trail data" means data about the activities of data,

including but not limited to the electronic will's creation and

execution.

(b) "Communication technology" means an electric device or process

that allows two or more remotely located individuals to communicate with

each other simultaneously by sight and sound.

(c) "Electronic" shall have the same meaning set forth in subdivision

one of section three hundred two of the state technology law.

(d) "Electronic presence" means the relationship of two or more

individuals in different locations communicating in real time using

communication technology to the same extent as if the individuals were

physically present in the same location.

(e) "Electronic will" means a will executed electronically in

compliance with paragraphs (a) and (b) of section 3-6.6 and subsequently

filed with the New York state unified court system in accordance with

section 3-6.9.

(f) "Record" means information that is inscribed on a tangible medium

or that is stored in an electronic or other medium and is retrievable in

perceivable form.

(g) "Sign", with respect to an electronic record, means, with present

intent to authenticate or adopt a record to affix to or logically

associate with the record an electronic symbol or process.

(h) "State" means a state of the United States, the District of

Columbia, Puerto Rico, the United States Virgin Islands, or any

territory or insular possession subject to the jurisdiction of the

United States. The term shall also include a federally recognized Indian

tribe.

(i) "Will" has the same meaning as in section 1-2.19.

* NB Effective December 12, 2027

* § 3-6.3 Law applicable to electronic will; principles of equity

An electronic will is a will for all purposes of the law of this

state. The law of this state applicable to wills and principles of

equity apply to an electronic will, except as modified by this act.

* NB Effective December 12, 2027

* § 3-6.4 Choice of law regarding execution

A will executed electronically but not in compliance with paragraph

(a) of section 3-6.6 is an electronic will under this act and is

formally valid and admissible to probate if executed in compliance with

the law of the jurisdiction where the testator is:

(a) physically located when the will is executed; or

(b) domiciled when the will is executed or when the testator dies.

* NB Effective December 12, 2027

* § 3-6.5 Caution to the testator

An electronic will shall include a disclosure substantially similar to

the following in twelve-point font or larger, boldface, double-spaced

type:

CAUTION TO THE TESTATOR: YOUR WILL IS AN IMPORTANT DOCUMENT. AS

TESTATOR, YOUR WILL SHOULD REFLECT YOUR FINAL WISHES. TO BE VALID, IT

MUST BE SIGNED BY YOU OR ANOTHER INDIVIDUAL AUTHORIZED BY YOU AND WHO IS

IN YOUR PHYSICAL PRESENCE AT THE TIME OF SIGNING. IT MUST ALSO BE SIGNED

AT YOUR REQUEST BY AT LEAST TWO INDIVIDUALS, EACH OF WHOM IS A

DOMICILIARY OF A STATE, AND EACH OF WHOM SIGNS THE WILL WITHIN A THIRTY

DAY PERIOD AFTER WITNESSING YOU SIGN THE WILL OR ACKNOWLEDGE THAT YOU

SIGNED IT IN EACH OF THEIR PHYSICAL OR ELECTRONIC PRESENCES.

WITHIN THIRTY DAYS AFTER THE ELECTRONIC WILL IS EXECUTED, IT MUST BE

ELECTRONICALLY FILED WITH THE NEW YORK STATE UNIFIED COURT SYSTEM.

YOU MAY REVOKE YOUR ELECTRONIC WILL AT ANY TIME. YOU MAY DO SO BY

EXECUTING A SUBSEQUENT WILL OR SEPARATE WRITING CLEARLY INDICATING YOUR

INTENT TO REVOKE ALL OR PART OF YOUR ELECTRONIC WILL, OR BY REQUESTING

ITS REMOVAL FROM THE NEW YORK STATE UNIFIED COURT SYSTEM. ONCE YOU HAVE

REMOVED YOUR ELECTRONIC WILL FROM THE NEW YORK STATE UNIFIED COURT

SYSTEM, IT IS REVOKED.

* NB Effective December 12, 2027

* § 3-6.6 Execution of electronic will

(a) Subject to paragraph (d) of section 3-6.8, an electronic will must

be:

(1) a record that is readable as text at the time of signing under

subparagraph two;

(2) signed at the end thereof by:

(A) the testator; or

(B) another individual in the testator's name, in the testator's

physical presence and by the testator's direction, in a manner

consistent with section 3-2.1 (a)(1)(C), subject to the following:

(i) The presence of any matter following the testator's signature,

appearing on the will at the time of its execution, shall not invalidate

such matter preceding the signature as appeared on the will at the time

of its execution, except that such matter preceding the signature shall

not be given effect, in the discretion of the surrogate, if it is so

incomplete as not to be readily comprehensible without the aid of matter

which follows the signature, or if to give effect to such matter

preceding this signature would subvert the testator's general plan for

the disposition and administration of their estate.

(ii) No effect shall be given to any matter, other than the

attestation clause, which follows the signature of the testator, or to

any matter preceding such signature which was added subsequently to the

execution of the will;

(3) declared by the testator to each of the attesting witnesses in

their physical or electronic presence that the instrument the testator

has signed is the testator's will; and

(4) signed at the request of the testator by at least two individuals,

each of whom is a domiciliary of a state and within a thirty day period

after witnessing:

(A) the signing of the will under subparagraph two; or

(B) the testator's acknowledgment of the signing of the will under

subparagraph two or acknowledgment of the will.

(b) An electronic will must be created and stored using technology

that reliably evidences to a person inspecting the electronic record:

(1) The authenticity of the testator's signing of the electronic

record;

(2) The identity of that electronic record with the electronic record

attested by the witnesses;

(3) All additions, deletions, or other alterations of the electronic

record after signing by the testator; and

(4) Audit trail data.

(c) Intent of a testator that the record under subparagraph one of

paragraph (a) of this section be the testator's electronic will may be

established by extrinsic evidence.

* NB Effective December 12, 2027

* § 3-6.7 Revocation

(a) An electronic will may revoke all or part of a previous will.

(b) An electronic will is revoked by:

(1) a subsequent will that revokes all or part of the electronic will;

(2) removal of the electronic will from the custody of the New York

state unified court system by:

(i) the testator;

(ii) another person duly authorized by the testator as proved by at

least two witnesses, neither of whom shall be the person removing the

electronic will; or

(iii) as otherwise authorized by the uniform rules of the surrogate's

court; or

(3) a writing of the testator clearly indicating an intention to

effect such a revocation or alteration, executed with the formalities

prescribed by this article for the execution and attestation of a will.

(c) An electronic will may be removed from the custody of the New York

state court system by order of a court of competent jurisdiction which,

if occurring during the lifetime of the testator, shall not be deemed a

revocation of the electronic will.

* NB Effective December 12, 2027

* § 3-6.8 Electronic will attested and made self-proving at time of

execution

(a) An electronic will may be simultaneously executed, attested, and

made self-proving by acknowledgment of the testator and affidavits of

the witnesses.

(b) The acknowledgment and affidavits under paragraph (a) must be:

(1) made before and in the physical or electronic presence of an

officer authorized to administer oaths under law of the state in which

the officer is located; and

(2) evidenced by the officer's certificate under official seal affixed

to or logically associated with the electronic will.

(c) The acknowledgment and affidavits under paragraph (a) must conform

with section fourteen hundred six of the surrogate's court procedure act

and must indicate that the will was signed electronically.

(d) A signature physically or electronically affixed to an affidavit

that is affixed to or logically associated with an electronic will under

this act is deemed a signature of the electronic will under paragraph

(a) of section 3-6.6.

(e) The existence of contemporaneously executed affidavits in

electronic format executed in compliance with the applicable law

governing electronic notaries or other such officers duly authorized to

administer oaths electronically that satisfy paragraphs (a), (b) and (c)

of this section shall create a rebuttable presumption that the

electronic will was created in compliance with paragraph (b) of section

3-6.6.

* NB Effective December 12, 2027

* § 3-6.9 Filing of electronic will

Within thirty days of its execution, an electronic will with audit

trail data shall be electronically filed with the New York state unified

court system either by the testator or another person duly authorized by

the testator. The electronic will shall remain in the custody of the New

York state unified court system until such time as it is removed or

revoked in accordance with section 3-6.7. The failure to timely file an

electronic will with the New York state unified court system shall

result in the unfiled electronic will being deemed invalid.

* NB Effective December 12, 2027

Descent and distribution of a decedent's estate

The property of a decedent not disposed of by will shall be

distributed as provided in this section. In computing said distribution,

debts, administration expenses and reasonable funeral expenses shall be

deducted but all estate taxes shall be disregarded, except that nothing

contained herein relieves a distributee from contributing to all such

taxes the amounts apportioned against him or her under 2-1.8.

Distribution shall then be as follows:

(a) If a decedent is survived by:

(1) A spouse and issue, fifty thousand dollars and one-half of the

residue to the spouse, and the balance thereof to the issue by

representation.

(2) A spouse and no issue, the whole to the spouse.

(3) Issue and no spouse, the whole to the issue, by representation.

(4) One or both parents, and no spouse and no issue, the whole to the

surviving parent or parents.

(5) Issue of parents, and no spouse, issue or parent, the whole to the

issue of the parents, by representation.

(6) One or more grandparents or the issue of grandparents (as

hereinafter defined), and no spouse, issue, parent or issue of parents,

one-half to the surviving grandparent or grandparents of one parental

side, or if neither of them survives the decedent, to their issue, by

representation, and the other one-half to the surviving grandparent or

grandparents of the other parental side, or if neither of them survives

the decedent, to their issue, by representation; provided that if the

decedent was not survived by a grandparent or grandparents on one side

or by the issue of such grandparents, the whole to the surviving

grandparent or grandparents on the other side, or if neither of them

survives the decedent, to their issue, by representation, in the same

manner as the one-half. For the purposes of this subparagraph, issue of

grandparents shall not include issue more remote than grandchildren of

such grandparents.

(7) Great-grandchildren of grandparents, and no spouse, issue, parent,

issue of parents, grandparent, children of grandparents or grandchildren

of grandparents, one-half to the great-grandchildren of the grandparents

of one parental side, per capita, and the other one-half to the

great-grandchildren of the grandparents of the other parental side, per

capita; provided that if the decedent was not survived by

great-grandchildren of grandparents on one side, the whole to the

great-grandchildren of grandparents on the other side, in the same

manner as the one-half.

(b) For all purposes of this section, decedent's relatives of the half

blood shall be treated as if they were relatives of the whole blood.

(c) Distributees of the decedent, conceived before his or her death

but born alive thereafter, take as if they were born in his or her

lifetime.

(d) The right of an adopted child to take a distributive share and the

right of succession to the estate of an adopted child continue as

provided in the domestic relations law.

(e) A distributive share passing to a surviving spouse under this

section is in lieu of any right of dower to which such spouse may be

entitled.

Inheritance by non-marital children

(a) For the purposes of this article:

(1) A non-marital child is the legitimate child of his mother so that

he and his issue inherit from his mother and from his maternal kindred.

(2) A non-marital child is the legitimate child of his father or

non-gestating intended parent so that he and his issue inherit from such

parent and such parent's kindred if:

(A) a court of competent jurisdiction has, during the lifetime of the

father, made an order of filiation or parentage declaring parentage or

the parentage of the child has been established through the execution of

an acknowledgment of parentage pursuant to section four thousand one

hundred thirty-five-b of the public health law, which has been filed

with the registrar of the district in which the birth certificate has

been filed or;

(B) the father of the child has signed an instrument acknowledging

parentage, provided that

(i) such instrument is acknowledged or executed or proved in the form

required to entitle a deed to be recorded in the presence of one or more

witnesses and acknowledged by such witness or witnesses, in either case,

before a notary public or other officer authorized to take proof of

deeds and

(ii) such instrument is filed within sixty days from the making

thereof with the putative father registry established by the state

department of social services pursuant to section three hundred

seventy-two-c of the social services law, as added by chapter six

hundred sixty-five of the laws of nineteen hundred seventy-six and

(iii) the department of social services shall, within seven days of

the filing of the instrument, send written notice by registered mail to

the mother and other legal guardian of such child, notifying them that

an acknowledgment of parentage instrument acknowledged or executed by

such parent has been duly filed or;

(C) parentage has been established by clear and convincing evidence,

which may include, but is not limited to: (i) evidence derived from a

genetic marker test, or (ii) evidence that the parent openly and

notoriously acknowledged the child as his or her own, however nothing in

this section regarding genetic marker tests shall be construed to expand

or limit the current application of subdivision four of section

forty-two hundred ten of the public health law.

(3) The existence of an agreement obligating the father to support the

non-marital child does not qualify such child or his issue to inherit

from the father in the absence of an order of filiation made or

acknowledgement of parentage as prescribed by subparagraph (2).

(4) A motion for relief from an order of filiation may be made only by

the father and a motion for relief from an acknowledgement of parentage

may be made by a parent or other legal guardian of such child, or the

child, provided however, such motion must be made within one year from

the entry of such order or from the date of written notice as provided

for in subparagraph (2).

(b) If a non-marital child dies, his or her surviving spouse, issue,

mother, maternal kindred, father and paternal kindred inherit and are

entitled to letters of administration as if the decedent was a marital

child, provided that the father and paternal kindred may inherit or

obtain such letters only if the parentage of the non-marital child has

been established pursuant to any of the provisions of subparagraph (2)

of paragraph (a).

Inheritance by children conceived after the death of an intended

parent

(a) When used in this article, unless the context or subject matter

manifestly requires a different interpretation:

(1) "Genetic material" shall mean sperm or ova provided by a genetic

parent.

(2) "Child" shall mean a child conceived through assisted

reproduction.

(3) "Intended parent" shall have the same meaning as defined in

section 581-102 of the family court act.

(b) For purposes of this article, a genetic child is the child of his

or her intended parent or parents and, notwithstanding paragraph (c) of

section 4-1.1 of this part, is a distributee of his or her intended

parent or parents and, notwithstanding subparagraph (2) of paragraph (a)

of section 2-1.3 of this chapter, is included in any disposition of

property to persons described in any instrument of which an intended

parent of the genetic child was the creator as the issue, children,

descendants, heirs, heirs at law, next of kin, distributees (or by any

term of like import) of the creator if it is established that:

(1) the intended parent in a written instrument executed pursuant to

the provisions of this section not more than seven years before the

death of the intended parent expressly consented that if assisted

reproduction were to occur after the death of the intended parent, the

deceased individual would be a parent of the child; and

(2) the child was in utero no later than twenty-four months after the

intended parent's death or born no later than thirty-three months after

the intended parent's death.

(c) If the child was conceived using the genetic material of the

intended parent, it must further be established that:

(1) the intended parent in a written instrument executed pursuant to

the provisions of this section not more than seven years before the

death of the intended parent authorized a person to make decisions about

the use of the intended parent's genetic material after the death of the

intended parent;

(2) the person authorized in the written instrument to make decisions

about the use of the intended parent's genetic material gave written

notice, by certified mail, return receipt requested, or by personal

delivery, that the intended parent's genetic material was available for

the purpose of conceiving a child of the intended parent, and such

written notice was given;

(A) within seven months from the date of the issuance of letters

testamentary or of administration on the estate of the intended parent,

as the case may be, to the person to whom such letters have issued, or,

if no letters have been issued within four months of the death of the

intended parent, and

(B) within seven months of the death of the intended parent to a

distributee of the intended parent; and

(3) the person authorized in the written instrument to make decisions

about the use of the intended parent's genetic material recorded the

written instrument within seven months of the intended parent's death in

the office of the surrogate granting letters on the intended parent's

estate, or, if no such letters have been granted, in the office of the

surrogate having jurisdiction to grant them.

(d) The written instrument referred to in subparagraph (1) of

paragraph (b) of this section and subparagraph (1) of paragraph (c) of

this section:

(1) must be signed by the intended parent in the presence of two

witnesses who also sign the instrument referred to in subparagraph (1)

of paragraph (c) of this section, both of whom are at least eighteen

years of age and neither of whom is a person authorized under the

instrument to make decisions about the use of the intended parent's

genetic material;

(2) may be revoked only by a written instrument signed by the intended

parent and executed in the same manner as the instrument it revokes;

(3) may not be altered or revoked by a provision in the will of the

intended parent;

(4) an instrument referred to in subparagraph (1) of paragraph (c) of

this section may authorize an alternate to make decisions about the use

of the intended parent's genetic material if the first person so

designated dies before the intended parent or is unable to exercise the

authority granted;

(5) an instrument referred to in subparagraph (1) of paragraph (b) of

this section may be substantially in the following form and must be

signed and dated by the intended parent and properly witnessed:

I, ____________________________________________________________________,

(Your name and address)

consent to the use of assisted reproduction to conceive a child or

children of mine after my death. I understand that, unless I revoke this

consent and authorization in a written document signed by me in the

presence of two witnesses who also sign the document, this consent and

authorization will remain in effect for seven years from this day and

that I cannot revoke or modify this consent and designation by any

provision in my will.

Signed this day of ,

_____________________________________________

(Your signature)

Statement of witnesses:

I declare that the person who signed this document is personally known

to me and appears to be of sound mind and acting willingly and free from

duress. He or she signed this document in my presence. I am not the

person authorized in this document to control the use of the genetic

material of the person who signed this document.

Witness:

Address:

Date:

Witness:

Address:

Date:

(6) may be substantially in the following form and must be signed and

dated by the intended parent and properly witnessed:

I, ____________________________________________________________________,

(Your name and address)

consent to the use of my (sperm or ova) (referred to below as my

"genetic material") to conceive a child or children of mine after my

death, and I authorize

________________________________________________________________________

(Name and address of person)

to decide whether and how my genetic material is to be used to conceive

a child or children of mine after my death. In the event that the

person authorized above dies before me or is unable to exercise the

authority granted I designate

________________________________________________________________________

(Name and address of person)

to decide whether and how my genetic material is to be used to conceive

a child or children of mine after my death. I understand that, unless I

revoke this consent and authorization in a written document signed by me

in the presence of two witnesses who also sign the document, this

consent and authorization will remain in effect for seven years from

this day and that I cannot revoke or modify this consent and designation

by any provision in my will.

Signed this day of ,

_____________________________________________

(Your signature)

Statement of witnesses:

I declare that the person who signed this document is personally known

to me and appears to be of sound mind and acting willingly and free from

duress. He or she signed this document in my presence. I am not the

person authorized in this document to control the use of the genetic

material of the person who signed this document.

Witness:

Address:

Date:

Witness:

Address:

Date:

(e) Any authority granted in a written instrument authorized by this

section to a person who is the spouse of the intended parent at the time

of execution of the written instrument is revoked by a final decree or

judgment of divorce or annulment, or a final decree, judgment or order

declaring the nullity of the marriage between the intended parent and

the spouse or dissolving such marriage on the ground of absence,

recognized as valid under the law of this state, or a final decree or

judgment of separation, recognized as valid under the law of this state,

which was rendered against the spouse.

(f) Process shall not issue to a child who is a distributee of an

intended parent under sections one thousand three and one thousand four

hundred three of the surrogate's court procedure act unless the child is

in being at the time process issues.

(g) Except as provided in paragraph (b) of this section with regard to

any disposition of property in any instrument of which the intended

parent of a child is the creator, for purposes of section 2-1.3 of this

chapter a child who is entitled to inherit from an intended parent under

this section is a child of the intended parent for purposes of a

disposition of property to persons described in any instrument as the

issue, children, descendants, heirs, heirs at law, next of kin,

distributees (or by any term of like import) of the creator or of

another. This paragraph shall apply to the wills of persons dying on or

after September first, two thousand fourteen, to lifetime instruments

theretofore executed which on said date are subject to the grantor's

power to revoke or amend, and to all lifetime instruments executed on or

after such date.

(h) For purposes of section 3-3.3 of this chapter the terms "issue",

"surviving issue" and "issue surviving" include a child if he or she is

entitled to inherit from his or her intended parent under this section.

(i) Where the validity of a disposition under the rule against

perpetuities depends on the ability of a person to have a child at some

future time, the possibility that such person may have a child conceived

using assisted reproduction shall be disregarded. This provision shall

not apply for any purpose other than that of determining the validity of

a disposition under the rule against perpetuities where such validity

depends on the ability of a person to have a child at some future time.

A determination of validity or invalidity of a disposition under the

rule against perpetuities by the application of this provision shall not

be affected by the later birth of a child conceived using assisted

reproduction disregarded under this provision.

(j) The use of a genetic material after the death of the person

providing such material is subject exclusively to the provisions of this

section and to any valid and binding contractual agreement between such

person and the facility providing storage of the genetic material and

may not be the subject of a disposition in an instrument created by the

person providing such material or by any other person.

Disqualification of parent to take intestate share

(a) No distributive share in the estate of a deceased child shall be

allowed to a parent if the parent, while such child is under the age of

twenty-one years:

(1) has failed or refused to provide for the child or has abandoned

such child, whether or not such child dies before having attained the

age of twenty-one years, unless the parental relationship and duties are

subsequently resumed and continue until the death of the child; or

(2) has been the subject of a proceeding pursuant to section three

hundred eighty-four-b of the social services law which:

(A) resulted in an order terminating parental rights, or

(B) resulted in an order suspending judgment, in which event the

surrogate's court shall make a determination disqualifying the parent on

the grounds adjudicated by the family court, if the surrogate's court

finds, by a preponderance of the evidence, that the parent, during the

period of suspension, failed to comply with the family court order to

restore the parent-child relationship.

(b) Subject to the provisions of subdivision eight of section two

hundred thirteen of the civil practice law and rules, the provisions of

subparagraph one of paragraph (a) of this section shall not apply to a

biological parent who places the child for adoption based upon:

(1) a fraudulent promise, not kept, to arrange for and complete the

adoption of such child, or

(2) other fraud or deceit by the person or agency where, before the

death of the child, the person or agency fails to arrange for the

adoptive placement or petition for the adoption of the child, and fails

to comply timely with conditions imposed by the court for the adoption

to proceed.

(c) In the event that a parent or spouse is disqualified from taking a

distributive share in the estate of a decedent under this section or

5-1.2, the estate of such decedent shall be distributed in accordance

with 4-1.1 as though such spouse or parent had predeceased the decedent.

Other disqualifications

No estate property, whether passing by intestacy or otherwise, which

has its situs in this state, shall pass to any other state or territory

of the United States, or to any foreign country or sovereignty in the

event of the absence of an individual heir, distributee, legatee or

owner of said property, but shall pass as abandoned property to the

state of New York, and shall be held as such property pursuant to the

abandoned property law.

Disqualification of joint tenant in certain instances

Notwithstanding any other provision of law to the contrary, a joint

tenant convicted of murder in the second degree as defined in section

125.25 of the penal law or murder in the first degree as defined in

section 125.27 of the penal law of another joint tenant shall not be

entitled to the distribution of any monies in a joint bank account

created or contributed to by the deceased joint tenant, except for

those monies contributed by the convicted joint tenant.

Upon the conviction of such joint tenant of first or second degree

murder and upon application by the prosecuting attorney, the court, as

part of its sentence, shall issue an order directing the amount of any

joint bank account to be distributed pursuant to the provisions of this

section from the convicted joint tenant and to the deceased joint

tenant's estate. The court and the prosecuting attorney shall each have

the power to subpoena records of a banking institution to determine the

amount of money in such bank account and by whom deposits were made. The

court shall also have the power to freeze such account upon application

by the prosecuting attorney during the pendency of a trial for first or

second degree murder. If, upon receipt of such court orders described in

this section, the banking institution holding monies in such joint

account complies with the terms of the order, such banking institution

shall be held free from all liability for the distribution of such funds

as were in such joint account. In the absence of actual or constructive

notice of such order, the banking institution holding monies in such

account shall be held harmless for distributing the money according to

its ordinary course of business.

For purposes of this section, the term banking institution shall have

the same meaning as provided for in paragraph (b) of subdivision three

of section nine-f of the banking law.

Right of election by surviving spouse

(a) Election by surviving spouse against will executed after August

thirty-first, nineteen hundred thirty and prior to September first,

nineteen hundred sixty-six.

(1) Where a testator executes a will after August thirty-first,

nineteen hundred thirty but prior to September first, nineteen hundred

sixty-six, and is survived by a spouse, a personal right of election is

given to the surviving spouse to take a share of the decedent's estate,

subject to the following:

(A) For the purposes of this section, the elective share of the

surviving spouse is one-third of the net estate if the decedent is

survived by one or more issue and, in all other cases, one-half of such

net estate. In computing the net estate, debts, administration and

reasonable funeral expenses shall be deducted but all estate taxes shall

be disregarded, except that nothing contained herein relieves the

surviving spouse from contributing to all such taxes the amounts

apportioned against him under 2-1.8.

(B) Where the elective share is over twenty-five hundred dollars and

the testator has made a testamentary disposition in trust of an amount

equal to or greater than the elective share, with income therefrom

payable to the surviving spouse for life, the surviving spouse has the

limited right to elect to take the sum of twenty-five hundred dollars

absolutely, which shall be deducted from the principal of such trust and

the terms of the will remain otherwise effective.

(C) Where the elective share of the surviving spouse does not exceed

twenty-five hundred dollars, the surviving spouse has the right to elect

to take his elective share absolutely, which shall be in lieu of any

provision for his benefit in the will.

(D) Where the will contains an absolute disposition to the surviving

spouse of or in excess of the sum of twenty-five hundred dollars and

also a disposition in trust with income payable to such spouse for life

of an amount equal to or greater than the difference between the

absolute disposition and his elective share, the surviving spouse has no

right of election.

(E) Where the will contains an absolute disposition to the surviving

spouse of an amount less than the sum of twenty-five hundred dollars and

also a disposition in trust with income payable to such spouse for life

of an amount equal to or greater than the difference between the

absolute disposition and his elective share, the surviving spouse has

the limited right to elect to take the sum of twenty-five hundred

dollars, inclusive of the amount of such absolute disposition, and the

difference between such disposition and the sum of twenty-five hundred

dollars shall be deducted from the principal of such trust and the terms

of the will remain otherwise effective.

(F) Where the aggregate of the provisions in the will for the

surviving spouse, including the principal of a trust, an absolute

disposition or any other kind of testamentary disposition is less than

the elective share, the surviving spouse has the limited right to elect

to take the difference between such aggregate and the amount of the

elective share, and the terms of the will remain otherwise effective. In

every estate, the surviving spouse has the limited right to withdraw the

sum of twenty-five hundred dollars if the elective share is equal to or

greater than that amount. Such sum, however, is inclusive of any

absolute disposition, whether general or specific. Where a trust is

created for the life of the surviving spouse, such sum of twenty-five

hundred dollars or any lesser amount necessary to make up that sum is

payable from the principal of such trust.

(G) The provisions of this paragraph with respect to trusts with

income payable for the life of the surviving spouse likewise apply to a

legal life estate, to an annuity for life or to any other disposition in

the will by which income is payable for the life of the surviving

spouse. In computing the value of the dispositions in the will, the

capital value of the fund or other property producing the income shall

be taken and not the value of the life estate.

(H) The grant of authority in a will to a fiduciary or his successor

(i) to act without bond, (ii) to name his successor to act without bond,

(iii) to sell assets of the estate upon terms fixed by him, (iv) to

invest the funds of the estate in other than legal investments, (v) to

retain in the assets of the estate investments or property owned by the

testator in his lifetime, (vi) to make distribution in kind, (vii) to

make a binding and conclusive valuation of assets for the purpose of

their distribution, (viii) to allocate assets either outright or in

trust for the life of a surviving spouse or (ix) to conduct the affairs

of the estate with partial or total exoneration from the legal

responsibility of a fiduciary, shall not, either singly or in the

aggregate, give the surviving spouse an absolute right to take his

elective share; but the surrogate's court having jurisdiction of the

estate, notwithstanding the terms of the will, may, in its discretion,

in an appropriate proceeding by the surviving spouse or upon an

accounting, direct and enforce for the protection of the surviving

spouse an equitable distribution, allocation or valuation of the assets,

enforce the liability of a fiduciary under the law and make such other

directions, consistent with the provisions and purposes of this

paragraph, as it may consider necessary for the protection of the

surviving spouse.

(b) Inter vivos dispositions treated as testamentary substitutes for

the purpose of election by surviving spouse.

(1) Where a person dies after August thirty-first, nineteen hundred

sixty-six and is survived by a spouse who exercises a right of election

under paragraph (c), the following transactions effected by such

decedent at any time after the date of the marriage and after August

thirty-first, nineteen hundred sixty-six, whether benefiting the

surviving spouse or any other person, shall be treated as testamentary

substitutes and the capital value thereof, as of the decedent's death,

included in the net estate subject to the surviving spouse's elective

right:

(A) Gifts causa mortis.

(B) Money deposited, after August thirty-first, nineteen hundred

sixty-six, together with all dividends credited thereon, in a savings

account in the name of the decedent in trust for another person, with a

banking organization, savings and loan association, foreign banking

corporation or organization or bank or savings and loan association

organized under the laws of the United States, and remaining on deposit

at the date of the decedent's death.

(C) Money deposited, after August thirty-first, nineteen hundred

sixty-six, together with all dividends credited thereon, in the name of

the decedent and another person and payable on death, pursuant to the

terms of the deposit or by operation of law, to the survivor, with a

banking organization, savings and loan association, foreign banking

corporation or organization or bank or savings and loan association

organized under the laws of the United States, and remaining on deposit

at the date of the decedent's death.

(D) Any disposition of property made by the decedent after August

thirty-first, nineteen hundred sixty-six whereby property is held, at

the date of his death, by the decedent and another person as joint

tenants with a right of survivorship or as tenants by the entirety.

(E) Any disposition of property made by the decedent after August

thirty-first, nineteen hundred sixty-six, in trust or otherwise, to the

extent that the decedent at the date of his death retained, either alone

or in conjunction with another person, by the express provisions of the

disposing instrument, a power to revoke such disposition or a power to

consume, invade or dispose of the principal thereof. The provisions of

this paragraph shall not affect the right of any income beneficiary to

the income undistributed or accrued at the date of death.

(2) Nothing in this paragraph shall affect, impair or defeat the right

of any person entitled to receive (A) payment in money, securities or

other property under a thrift, savings, pension, retirement, death

benefit, stock bonus or profit-sharing plan, system or trust, (B) money

payable by an insurance company or a savings bank authorized to conduct

the business of life insurance under an annuity or pure endowment

contract, a policy of life, group life, industrial life or accident and

health insurance or a contract by such insurer relating to the payment

of proceeds or avails thereof or (C) payment of any United States

savings bond payable to a designated person, and such transactions are

not testamentary substitutes within the meaning of this paragraph.

(3) Transactions described in subparagraphs (C) or (D) shall be

treated as testamentary substitutes in the proportion that the funds on

deposit were the property of the decedent immediately before the deposit

or the consideration for the property held as joint tenants or as

tenants by the entirety was furnished by the decedent. The surviving

spouse shall have the burden of establishing the proportion of the

decedent's contribution. Where the other party to a transaction

described in subparagraphs (C) or (D) is a surviving spouse, such spouse

shall have the burden of establishing the proportion of his

contribution, if any. For the purpose of this subparagraph, the

surrogate's court may accept such evidence as is relevant and competent,

whether or not the person offering such evidence would otherwise be

competent to testify.

(4) The provisions of this paragraph shall not prevent a corporation

or other person from paying or transferring any funds or property to a

person otherwise entitled thereto, unless there has been served

personally upon such corporation or other person a certified copy of an

order enjoining such payment or transfer made by the surrogate's court

having jurisdiction of the decedent's estate or by another court of

competent jurisdiction. Such order may be made, on notice to such

persons and in such manner as the court may direct, upon application of

the surviving spouse or any other interested party and on proof that the

surviving spouse has exercised his right of election under paragraph

(c). Service of a certified copy of such order on the corporation or

other person holding such fund or property shall be a defense to it,

during the effective period of the order, in any action or proceeding

brought against it which involves such fund or property.

(5) This paragraph shall not impair or defeat the rights of creditors

of the decedent with respect to any matter as to which any such creditor

has rights.

(6) In case of a conflict between this paragraph and any other

provision of law affecting the transactions described in subparagraph

(1), this paragraph controls.

(c) Election by surviving spouse against wills executed and

testamentary provisions made after August thirty-first, nineteen hundred

sixty-six; election where decedent dies intestate as to all or any part

of his estate.

(1) Where, after August thirty-first, nineteen hundred sixty-six, a

testator executes a will disposing of his entire estate, and is survived

by a spouse, a personal right of election is given to the surviving

spouse to take a share of the decedent's estate, subject to the

following:

(A) For the purposes of this paragraph, the decedent's estate includes

the capital value, as of the decedent's death, of any property described

in subparagraph (b) (1).

(B) The elective share, as used in this paragraph, is one-third of the

net estate if the decedent is survived by one or more issue and, in all

other cases, one-half of such net estate. In computing the net estate,

debts, administration and reasonable funeral expenses shall be deducted

but all estate taxes shall be disregarded, except that nothing contained

herein relieves the surviving spouse from contributing to all such taxes

the amounts apportioned against him under 2-1.8.

(C) The term "testamentary provision", as used in this paragraph,

includes, in addition to dispositions made by the decedent's will, any

transaction described as a testamentary substitute in subparagraph (b)

(1).

(D) Where the elective share is over ten thousand dollars and the

decedent has by testamentary provision created a trust in an amount

equal to or greater than the elective share, with income therefrom

payable to the surviving spouse for life, the surviving spouse has the

limited right to elect to take the sum of ten thousand dollars

absolutely, which shall be deducted from the principal of such trust and

the terms of the instrument making the testamentary provision remain

otherwise effective.

(E) Where the elective share of the surviving spouse does not exceed

ten thousand dollars, the surviving spouse has the right to take the

elective share absolutely, in lieu of any testamentary provision for his

benefit.

(F) Where an absolute testamentary provision is made for the surviving

spouse of or in excess of ten thousand dollars, and also a provision in

trust with income payable to such spouse for life of an amount equal to

or greater than the difference between such absolute testamentary

provision and his elective share, the surviving spouse has no right of

election.

(G) Where an absolute testamentary provision is made for the surviving

spouse in an amount less than ten thousand dollars, and also a

testamentary provision in trust with income payable to such spouse for

life of an amount equal to or greater than the difference between such

absolute testamentary provision and his elective share, the surviving

spouse has the limited right to take the sum of ten thousand dollars,

inclusive of the amount of such absolute testamentary provision, and the

difference between such absolute testamentary provision and the sum of

ten thousand dollars shall be deducted from the principal of the trust

and the terms of the instrument making the testamentary provision remain

otherwise effective.

(H) Where the aggregate of the testamentary provisions for the

surviving spouse, including the principal of a trust, an absolute

testamentary provision or any other kind of testamentary provision, is

less than the elective share, the surviving spouse has the limited right

to elect to take the difference between such aggregate and the amount of

the elective share, and the terms of the instrument making such

testamentary provisions remain otherwise effective. In every estate, the

surviving spouse has the limited right to withdraw the sum of ten

thousand dollars if the elective share is equal to or greater than that

amount. Such sum, however, is inclusive of any absolute testamentary

provision. Where a trust is created with income payable to the surviving

spouse for life, such sum of ten thousand dollars or any lesser amount

necessary to make up that sum is payable from the principal of such

trust.

(I) The provisions of this paragraph with respect to trusts for the

life of the surviving spouse also apply to a legal life estate, to an

annuity for the life of the surviving spouse, to an annuity trust and a

unitrust as provided in subparagraph (K) of paragraph one of this

subdivision or to any other testamentary provision by which income is

payable for the life of the surviving spouse. In computing the value of

the testamentary provisions the capital value of the fund or other

property producing the income shall be taken and not the value of the

life estate.

(J) The surviving spouse is entitled to take the capital value (in no

case to exceed such spouse's elective share) of the fund or other

property producing the income whenever any instrument making a

testamentary provision of income for his life authorizes:

(i) The reduction of any trust, legal life estate or annuity by

invasion of the principal for another person.

(ii) The termination of any trust, legal life estate or annuity prior

to the death of the surviving spouse by payment of the principal thereof

to another person.

(iii) The fiduciary to pay or apply to the use of the surviving spouse

less than substantially all of the net income from any trust, legal life

estate or annuity.

If an instrument making any such testamentary provision contains

grants of authority to a fiduciary other than the foregoing, the

surrogate's court having jurisdiction of the decedent's estate may, in

its discretion, in an appropriate proceeding by the surviving spouse or

upon an accounting, direct and enforce for the protection of the

surviving spouse an equitable distribution, allocation or valuation of

the assets, enjoin any fiduciary, whether appointed by will or

otherwise, from exercising any power, statutory or otherwise, which

would be prejudicial to the interests of the surviving spouse, enforce

the liability of a fiduciary under the law and make such other

directions, consistent with the provisions and purposes of this

paragraph, as it may consider necessary for the protection of the

surviving spouse.

(K) If any testamentary provision for the surviving spouse provides

that such spouse shall receive, for life and not less often than

annually, from a charitable remainder annuity trust, as defined in

paragraph one of subdivision (d) of section six hundred sixty-four of

the United States Internal Revenue Code, a sum certain (which is not

less than five percent of the initial net fair market value of all

property placed in such trust) or from a charitable remainder unitrust,

as defined in paragraph two of subdivision (d) of section six hundred

sixty-four of such code, a fixed percentage (which is not less than five

percent) of the net fair market value of its assets, valued annually,

such testamentary provisions shall satisfy the provisions of this

paragraph with respect to trusts with income payable to the surviving

spouse for life.

(2) Where, after August thirty-first, nineteen hundred sixty-six, a

person dies intestate as to all or any part of his estate, and, in the

case of part intestacy, executes a will after such date, and is survived

by a spouse, a personal right of election is given to the surviving

spouse to take a share of the testamentary provisions made by the

decedent, as such provisions are defined in subparagraph (1) (C),

subject to the following:

(A) The share of the testamentary provisions to which the surviving

spouse is entitled hereunder is his elective share, as defined in

subparagraphs (1) (A) and (B), reduced by the capital value of all

property passing to such spouse (i) in intestacy under 4-1.1, (ii) by

testamentary substitute as described in subparagraph (b) (1) and (iii)

by disposition under the decedent's last will.

(B) The satisfaction of such elective share shall not reduce the

intestate share of any other distributee of the decedent.

(C) Whenever a testamentary provision for the surviving spouse takes

the form of income payable for his life:

(i) The surviving spouse has the limited right to elect to take,

absolutely, the sum of ten thousand dollars or the share to which he is

entitled hereunder, whichever is less. Such sum, however, is inclusive

of any absolute testamentary provision, as described in subparagraph (1)

(C), and any amount to which the surviving spouse is entitled in

intestacy under 4-1.1, and is payable from the principal of any trust,

legal life estate or annuity created by such testamentary provision, the

terms of which remain otherwise effective.

(ii) The provisions of subparagraph (1) (J) apply.

(d) General provisions governing right of election.

(1) Where an election has been made under this section, the will or

other instrument making a testamentary provision, as the case may be, is

valid as to the residue after the share to which the surviving spouse is

entitled has been deducted, and the terms of such will or instrument

remain otherwise effective so far as possible.

(2) Whenever a will creates a trust, legal life estate or annuity for

the benefit of the surviving spouse for life, and such will commands,

directs, authorizes or permits the fiduciary to allocate, apportion or

charge receipts or expenses to principal or income in such manner as

will or might deprive the spouse of income as defined in section 11-2.1

of this act or in any other law applicable to such trust, legal life

estate or annuity, and where such trust, legal life estate or annuity,

but for such will provision would satisfy the elective share of the

spouse in whole or in part, such command, direction, authorization or

permission shall not of itself give the surviving spouse an absolute

right to take his elective share. The surrogate's court having

jurisdiction of the decedent's estate may, in any appropriate

proceeding, direct and enforce for the protection of the surviving

spouse an allocation, apportionment or charge of all receipts and

expenses in accordance with applicable legal or equitable principles so

as to assure such surviving spouse of all or substantially all of the

income of such trust, legal life estate or annuity consistent with the

purposes and provisions of this section. The court may enjoin any

fiduciary from exercising any power; authority or permission or doing

any act which would be prejudicial to the rights and interests of such

surviving spouse under this section. The court may enforce the

liability of a fiduciary under the law and make such directions,

consistent with the purposes and provisions of this section, as it may

consider necessary for the protection of the surviving spouse.

(3) Except as otherwise expressly provided in the will or other

instrument making a testamentary provision, ratable contribution to the

share to which the surviving spouse is entitled shall be made by the

beneficiaries (including the recipients of any such testamentary

provision), other than the surviving spouse, under:

(A) In the case of an election under paragraph (a), the decedent's

will.

(B) In the case of an election under paragraph (c), the decedent's

will and other instruments making testamentary provisions.

(4) The right of election is personal to the surviving spouse, except

that an election may be made by:

(A) The guardian of the property of an infant spouse, when so

authorized by the surrogate having jurisdiction of the decedent's

estate.

(B) The committee of an incompetent spouse, when so authorized by the

supreme court.

(C) The conservator of conservatee spouse, when so authorized by the

supreme court.

(5) Any question arising as to the right of election shall be

determined by the surrogate's court having jurisdiction of the

decedent's estate in a proceeding brought for that purpose on notice to

all interested persons in such manner as the court may direct, or in a

proceeding for the judicial settlement of the accounts of the personal

representative.

(6) Upon application by a surviving spouse who has made an election

under this section, the surrogate may make an order cancelling such

election, provided that no adverse rights have intervened and no

prejudice is shown to creditors of such spouse or other persons

interested in the estate. Such application shall be made on notice to

such persons and in such manner as the court may direct. A certified

copy of such order shall be indexed and recorded in the same manner as a

notice of pendency of an action in the office of the clerk of the county

in which any real property of the decedent is situated.

(7) The right of election granted by this section is not available to

the spouse of a decedent who was not domiciled in this state at the time

of death, unless such decedent elects, under paragraph (h) of 3-5.1, to

have the disposition of his property situated in this state governed by

the laws of this state.

(8) The decedent's estate shall include all property of the decedent,

wherever situated.

(9) An election made by the surviving spouse under this section is in

lieu of any right of dower to which such spouse may be entitled.

(e) Procedure for exercise of right of election.

(1) An election under this section must be made within six months from

the date of issuance of letters testamentary or of administration, as

the case may be. Written notice of such election shall be served upon

any personal representative in the manner herein provided, or upon a

person named as executor in a will on file in the surrogate's court in a

case where such will has not yet been admitted to probate, and the

original thereof shall be filed and recorded, with proof of service, in

the surrogate's court in which such letters were issued within six

months from the date of the issuance of letters. Such notice may be

served by mailing a copy thereof, addressed to any personal

representative, or to the nominated executor, as the case may be, at the

place of residence stated in the designation required by SCPA 708 or in

such other manner as the surrogate may direct.

(2) The time to make such election may be extended before its

expiration by an order of the surrogate's court from which such letters

issued for a further period not exceeding six months upon any one

application. If a spouse defaults in filing such election within six

months from the date of issuance of such letters, the surrogate's court

may relieve the spouse from such default and authorize the making of an

election within the period fixed by the order, provided that no decree

settling the account of the personal representative has been made and

that twelve months have not elapsed since the issuance of letters. An

application for relief from a default and for an extension of time to

elect shall be made upon a petition showing reasonable cause and on

notice to such persons and in such manner as the surrogate may direct. A

certified copy of such order shall be indexed and recorded in the same

manner as a notice of pendency of an action in the office of the clerk

of each county in which real property of the decedent is situated.

(3) The time limited in this paragraph for making an election is

exclusive and shall not be suspended or otherwise affected by any

provision of law, except that the surrogate may, in his discretion,

permit an election to be made in behalf of an infant or incompetent

spouse at any time up to, but not later than, the entry of the decree of

the first judicial account of the permanent representative of the

estate, made more than seven months after the issuance of letters.

(f) Waiver or release of right of election.

(1) A spouse, during the lifetime of the other, may waive or release a

right of election, granted by this section, against a particular or any

last will or a testamentary substitute, as described in subparagraph (b)

(1), made by the other spouse. A waiver or release of all rights in the

estate of the other spouse is a waiver or release of a right of election

against any such last will or testamentary provision.

(2) To be effective under this section, a waiver or release must be in

writing and subscribed by the maker thereof, and acknowledged or proved

in the manner required by the laws of this state for the recording of a

conveyance of real property.

(3) Such a waiver or release is effective, in accordance with its

terms, whether:

(A) Executed before or after the marriage of the spouses.

(B) Executed before, on or after September first, nineteen hundred

sixty-six.

(C) Unilateral in form, executed only by the maker thereof, or

bilateral in form, executed by both spouses.

(D) Executed with or without consideration.

(E) Absolute or conditional.

Right of election by surviving spouse

(a) Where a decedent dies on or after September first, nineteen

hundred ninety-two and is survived by a spouse, a personal right of

election is given to the surviving spouse to take a share of the

decedent's estate, subject to the following:

(1) For the purpose of this section, the decedent's estate includes

the capital value, as of the decedent's death, of any property described

in subparagraph (b) (1).

(2) The elective share, as used in this paragraph, is the pecuniary

amount equal to the greater of (i) fifty thousand dollars or, if the

capital value of the net estate is less than fifty thousand dollars,

such capital value, or (ii) one third of the net estate. In computing

the net estate, debts, administration expenses and reasonable funeral

expenses shall be deducted, but all estate taxes shall be disregarded,

except that nothing contained herein relieves the surviving spouse from

contributing to all such taxes the amounts apportioned against him or

her under 2-1.8.

(3) The term "testamentary provision", as used in this paragraph,

includes, in addition to dispositions made by the decedent's will,

distributions of property pursuant to 4-1.1 and any transaction

described as a testamentary substitute in subparagraph (b) (1).

(4) The share of the testamentary provisions to which the surviving

spouse is entitled hereunder (the "net elective share") is his or her

elective share, as defined in subparagraphs (1) and (2), reduced by the

capital value of any interest which passes absolutely from the decedent

to such spouse, or which would have passed absolutely from the decedent

to such spouse but was renounced by the spouse, (i) by intestacy, (ii)

by testamentary substitute as described in subparagraph (b) (1), or

(iii) by disposition under the decedent's last will.

(A) Unless the decedent has provided otherwise, if a spouse elects

under this section, such election shall have the same effect with

respect to any interest which passes or would have passed to the spouse,

other than absolutely, as though the spouse died on the same date but

immediately before the death of the decedent.

(B) For the purposes of this subparagraph (4), (i) an interest in

property shall be deemed to pass other than absolutely from the decedent

to the spouse if the interest so passing consists of less than the

decedent's entire interest in that property or consists of any interest

in a trust or trust equivalent created by the decedent; and (ii) an

interest in property shall be deemed to pass absolutely from the

decedent to the spouse if it is not deemed to pass other than

absolutely.

(5) Where a decedent dies before September first, nineteen hundred

ninety-four, paragraphs (c)(1)(D) through (c)(1)(K) of section 5-1.1

shall apply except that the words "fifty thousand dollars" shall be

substituted for the words "ten thousand dollars" wherever they appear in

such paragraphs.

(b) Inter vivos dispositions treated as testamentary substitutes for

the purpose of election by surviving spouse.

(1) Where a person dies after August thirty-first, nineteen hundred

ninety-two and is survived by a spouse who exercises a right of election

under paragraph (a), the transactions affected by and property interests

of the decedent described in clauses (A) through (H), whether benefiting

the surviving spouse or any other person, shall be treated as

testamentary substitutes and the capital value thereof, as of the

decedent's death, shall be included in the net estate subject to the

surviving spouse's elective right except to the extent that the

surviving spouse has executed a waiver of release pursuant to paragraph

(e) with respect thereto. Notwithstanding the foregoing, a transaction,

other than a transaction described in clause (G), that is irrevocable or

is revocable only with the consent of a person having a substantial

adverse interest (including any such transactions with respect to which

the decedent retained a special power of appointment as defined in

10-3.2), will constitute a testamentary substitute only if it is

effected after the date of the marriage.

(A) Gifts causa mortis.

(B) The aggregate transfers of property (including the transfer,

release or relinquishment of any property interest which, but for such

transfer, release or relinquishment, would come within the scope of

clause (F)), other than gifts causa mortis and transfers coming within

the scope of clauses (G) and (H), to or for the benefit of any person,

made after August thirty-first, nineteen hundred ninety-two, and within

one year of the death of the decedent, to the extent that the decedent

did not receive adequate and full consideration in money or money's

worth for such transfers; provided, however, that any portion of any

such transfer that was excludible from taxable gifts pursuant to

subsections (b) and (e) of section two thousand five hundred three of

the United States Internal Revenue Code, including any amounts excluded

as a result of the election by the surviving spouse to treat any such

transfer as having been made one half by him or her, shall not be

treated as a testamentary substitute.

(C) Money deposited, together with all dividends or interest credited

thereon, in a savings account in the name of the decedent in trust for

another person, with a banking organization, savings and loan

association, foreign banking corporation or organization or bank or

savings and loan association organized under the laws of the United

States, and remaining on deposit at the date of the decedent's death.

(D) Money deposited after August thirty-first, nineteen hundred

sixty-six, together with all dividends or interest credited thereon, in

the name of the decedent and another person and payable on death,

pursuant to the terms of the deposit or by operation of law, to the

survivor, with a banking organization, savings and loan association,

foreign banking corporation or organization or bank or savings and loan

association organized under the laws of the United States, and remaining

on deposit at the date of the decedent's death.

(E) Any disposition of property made by the decedent whereby property,

at the date of his or her death, is held (i) by the decedent and another

person as joint tenants with a right of survivorship or as tenants by

the entirety where the disposition was made after August thirty-first,

nineteen hundred sixty-six, or (ii) by the decedent and is payable on

his or her death to a person other than the decedent or his or her

estate.

(F) Any disposition of property or contractual arrangement made by the

decedent, in trust or otherwise, to the extent that the decedent (i)

after August thirty-first, nineteen hundred ninety-two, retained for his

or her life or for any period not ascertainable without reference to his

or her death or for any period which does not in fact end before his or

her death the possession or enjoyment of, or the right to income from,

the property except to the extent that such disposition or contractual

arrangement was for an adequate consideration in money or money's worth;

or (ii) at the date of his or her death retained either alone or in

conjunction with any other person who does not have a substantial

adverse interest, by the express provisions of the disposing instrument,

a power to revoke such disposition or a power to consume, invade or

dispose of the principal thereof. The provisions of this subparagraph

shall not affect the right of any income beneficiary to the income

undistributed or accrued at the date of death nor shall they impair or

defeat any right which has vested on or before August thirty-first,

nineteen hundred ninety-two.

(G) Any money, securities or other property payable under a thrift,

savings, retirement, pension, deferred compensation, death benefit,

stock bonus or profit-sharing plan, account, arrangement, system or

trust, except that with respect to a plan to which subsection (a) (11)

of section four hundred one of the United States Internal Revenue Code

applies or a defined contribution plan to which such subsection does not

apply pursuant to paragraph (B) (iii) thereof, only to the extent of

fifty percent of the capital value thereof. Notwithstanding the

foregoing, a transaction described herein shall not constitute a

testamentary substitute if the decedent designated the beneficiary or

beneficiaries of the plan benefits on or before September first,

nineteen hundred ninety-two and did not change such beneficiary

designation thereafter.

(H) Any interest in property to the extent the passing of the

principal thereof to or for the benefit of any person was subject to a

presently exercisable general power of appointment, as defined in

section two thousand forty-one of the United States Internal Revenue

Code, held by the decedent immediately before his or her death or which

the decedent, within one year of his or her death, released (except to

the extent such release results from a lapse of the power which is not

treated as a release pursuant to section two thousand forty-one of the

United States Internal Revenue Code) or exercised in favor of any person

other than himself or herself or his or her estate.

(I) A transfer of a security to a beneficiary pursuant to part 4 of

article 13 of this chapter.

(2) Transactions described in clause (D) or (E) (i) shall be treated

as testamentary substitutes in the proportion that the funds on deposit

were the property of the decedent immediately before the deposit or the

consideration for the property described in clause (E) (i) was furnished

by the decedent. The surviving spouse shall have the burden of

establishing the proportion of the decedent's contribution; provided,

however, that where the surviving spouse is the other party to the

transaction, it will be conclusively presumed that the proportion of the

decedent's contribution is one-half. For the purpose of this

subparagraph, the court may accept such evidence as is relevant and

competent, whether or not the person offering such evidence would

otherwise be competent to testify.

(3) The property referred to in clause (E) shall include United States

savings bonds and other United States obligations.

(4) The provisions of this paragraph shall not prevent a corporation

or other person from paying or transferring any funds or property to a

person otherwise entitled thereto, unless there has been served

personally upon such corporation or other person a certified copy of an

order enjoining such payment or transfer made by the surrogate's court

having jurisdiction of the decedent's estate or by another court of

competent jurisdiction. A corporation or other person paying or

transferring any funds or property described in clause (G) of

subparagraph one of this paragraph to a person otherwise entitled

thereto, shall be held harmless and free from any liability for making

such payment or transfer, in any action or proceeding which involves

such funds or property. Such order may be made, on notice to such

persons and in such manner as the court may direct, upon application of

the surviving spouse or any other interested party and on proof that the

surviving spouse has exercised his or her right of election under

paragraph (a). Service of a certified copy of such order on the

corporation or other person holding such fund or property shall be a

defense, during the effective period of the order, in any action or

proceeding which involves such fund or property.

(5) This paragraph shall not impair or defeat the rights of creditors

of the decedent with respect to any matter as to which any such creditor

has rights.

(6) In case of a conflict between this paragraph and any other

provision of law affecting the transactions described in subparagraph

(1) of this paragraph, this paragraph controls.

(7) If any part of this section is preempted by federal law with

respect to a payment or an item of property included in the net estate,

a person who, not for value, received that payment or item of property

is obligated to return to the surviving spouse that payment or item of

property or is personally liable to the surviving spouse for the amount

of that payment or the value of that item of property, to the extent

required under this section.

(c) General provisions governing right of election.

(1) Where an election has been made under this section, the will or

other instrument making a testamentary provision, as the case may be, is

valid as to the residue after the share to which the surviving spouse is

entitled has been deducted, and the terms of such will or instrument

remain otherwise effective so far as possible, subject, however, to the

provisions of clause (a)(4)(A).

(2) Except as otherwise expressly provided in the will or other

instrument making a testamentary provision, ratable contribution to the

share to which the surviving spouse is entitled shall be made by the

beneficiaries and distributees (including the recipients of any such

testamentary provision), other than the surviving spouse, under the

decedent's will, by intestacy and other instruments making testamentary

provisions, which contribution may be made in cash or in the specific

property received from the decedent by the person required to make such

contribution or partly in cash and partly in such property as such

person in his or her discretion shall determine.

(3) The right of election is personal to the surviving spouse, except

that an election may be made by:

(A) The guardian of the property of an infant spouse, when so

authorized by the court having jurisdiction of the decedent's estate.

(B) The committee of an incompetent spouse, when so authorized by the

court that appointed the committee.

(C) The conservator of a conservatee spouse, when so authorized by the

court that appointed the conservator.

(D) The guardian ad litem for the surviving spouse when so authorized

by the court that appointed such guardian.

(E) A guardian authorized under Article 81 of the mental hygiene law,

when so authorized by the court that appointed the guardian.

(4) Any question arising as to the right of election shall be

determined by the court having jurisdiction of the decedent's estate in

a proceeding brought for that purpose on notice to all interested

persons in such manner as the court may direct, or in a proceeding for

the judicial settlement of the accounts of the personal representative.

(5) Upon application by a surviving spouse who has made an election

under this section, the court may make an order cancelling such

election, provided that no adverse rights have intervened and no

prejudice is shown to creditors of such spouse or other persons

interested in the estate. Such application shall be made on notice to

such persons and in such manner as the court may direct. A certified

copy of such order shall be indexed and recorded in the same manner as a

notice of pendency of an action in the office of the clerk of the county

in which any real property of the decedent is situated.

(6) The right of election granted by this section is not available to

the spouse of a decedent who was not domiciled in this state at the time

of death, unless such decedent has elected, under paragraph (h) of

3-5.1, to have the disposition of his or her property situated in this

state governed by the laws of this state.

(7) The decedent's estate shall include all property of the decedent

wherever situated.

(8) An election made by the surviving spouse under this section is in

lieu of any right of dower to which such spouse may be entitled.

(9) The references in this paragraph to sections of the United States

Internal Revenue Code are to the Internal Revenue Code of 1986, as

amended. Such references, however, shall be deemed to constitute

references to any corresponding provisions of any subsequent federal tax

code.

(d) Procedure for exercise of right of election.

(1) An election under this section must be made within six months from

the date of issuance of letters testamentary or of administration, as

the case may be, but in no event later than two years after the date of

decedent's death, except as otherwise provided in subparagraph 2 of this

paragraph. Written notice of such election shall be served upon any

personal representative in the manner herein provided, or upon a person

named as executor in a will on file in the surrogate's court in a case

where such will has not yet been admitted to probate, and the original

thereof shall be filed and recorded, with proof of service, in the

surrogate's court in which such letters were issued within six months

from the date of the issuance of letters but in no event later than two

years from the date of decedent's death, except as otherwise provided in

subparagraph 2 of this paragraph. Such notice may be served by mailing a

copy thereof, addressed to any personal representative, or to the

nominated executor, as the case may be, at the place of residence stated

in the designation required by section 708 of the surrogate's court

procedure act, to the domicile address of such nominated executor, or in

such other manner as the surrogate may direct.

(2) The time to make such election may be extended before expiration

by an order of the surrogate's court from which such letters issued for

a further period not exceeding six months upon any one application. If

the spouse defaults in filing such election within the time provided in

subparagraph (1) of this paragraph, the surrogate's court may relieve

the spouse from such default and authorize the making of an election

within the period fixed by the order, provided that no decree settling

the account of the personal representative has been made and that twelve

months have not elapsed since the issuance of the letters, and two years

have not elapsed since the decedent's date of death, in the case of

initial application; except that the court may, in its discretion for

good cause shown, extend the time to make such election beyond such

period of two years. An application for relief from the default and for

an extension of time to elect shall be made upon a petition showing

reasonable cause and on notice to such persons and in such manner as the

surrogate may direct. A certified copy of such order shall be indexed

and recorded in the same manner as a notice of pendency of an action in

the office of the clerk of each county in which real property of the

decedent is situated.

(3) The time limited in this paragraph for making an election is

exclusive and shall not be suspended or otherwise affected by any

provision of law, except that the surrogate may, in his or her

discretion, permit an election to be made in behalf of an infant or

incompetent spouse at any time up to, but no later than, the entry of

the decree of the first judicial account of the representative of the

estate, made more than seven months after the issuance of letters.

(e) Waiver or release of right of election.

(1) A spouse, during the lifetime of the other, may waive or release a

right of election, granted by this section, against a particular or any

last will or a testamentary substitute, as described in subparagraph (b)

(1) made by the other spouse. A waiver or release of all rights in the

estate of the other spouse is a waiver or release of a right of election

against any such last will or testamentary provision.

(2) To be effective under this section, a waiver or release must be in

writing and subscribed by the maker thereof, and acknowledged or proved

in the manner required by the laws of this state for the recording of a

conveyance of real property.

(3) Such a waiver or release is effective, in accordance with its

terms, whether:

(A) Executed before or after the marriage of the spouses.

(B) Executed before, on or after September first, nineteen hundred

sixty-six.

(C) Unilateral in form, executed only by the maker thereof, or

bilateral in form, executed by both spouses.

(D) Executed with or without consideration.

(E) Absolute or conditional.

(4) If there is in effect at the time of the decedent's death a

waiver, or a consent to the decedent's waiver, executed by the surviving

spouse with respect to any survivor benefit, or right to such benefit,

under subsection (a) (11) of section four hundred one or section four

hundred seventeen of the United States Internal Revenue Code, then such

waiver shall be deemed to be a waiver within the meaning of this

paragraph (e) against the testamentary substitute constituting such

benefit.

Disqualification as surviving spouse

(a) A husband or wife is a surviving spouse within the meaning, and

for the purposes of 4-1.1, 5-1.1, 5-1.1-A, 5-1.3, 5-3.1 and 5-4.4,

unless it is established satisfactorily to the court having jurisdiction

of the action or proceeding that:

(1) A final decree or judgment of divorce, of annulment or declaring

the nullity of a marriage or dissolving such marriage on the ground of

absence, recognized as valid under the law of this state, was in effect

when the deceased spouse died.

(2) The marriage was void as incestuous under section five of the

domestic relations law, bigamous under section six thereof, or a

prohibited remarriage under section eight thereof.

(3) The spouse had procured outside of this state a final decree or

judgment of divorce from the deceased spouse, of annulment or declaring

the nullity of the marriage with the deceased spouse or dissolving such

marriage on the ground of absence, not recognized as valid under the law

of this state.

(4) A final decree or judgment of separation, recognized as valid

under the law of this state, was rendered against the spouse, and such

decree or judgment was in effect when the deceased spouse died.

(5) The spouse abandoned the deceased spouse, and such abandonment

continued until the time of death.

(6) A spouse who, having the duty to support the other spouse, failed

or refused to provide for such spouse though he or she had the means or

ability to do so, unless such marital duty was resumed and continued

until the death of the spouse having the need of support.

Revocatory effect of marriage after execution of will

(a) If the testator leaves a will executed prior to September first,

nineteen hundred thirty and marries at any time after such will was

executed, the spouse who survives such testator is entitled to succeed

to the same portion of the testator's estate as would have passed to

such spouse had the testator died intestate, unless provision was made

for the surviving spouse by ante nuptial agreement in writing. No

evidence shall be admissible to impair or defeat the rights of a

surviving spouse hereunder except to establish the existence of such

ante nuptial agreement.

(b) A surviving spouse may recover the portion of the testator's

estate to which he is entitled under this section from the

beneficiaries, ratably, out of the portions of the estate passing to

such persons under the will. In abating the interests of the

beneficiaries the character of the testamentary plan adopted by the

testator shall be preserved to the maximum extent possible.

(c) A surviving spouse may waive his right under this section to an

intestate share of the testator's estate, and may accept in lieu thereof

any benefits he may have received, in whatever status, under the will.

Revocatory effect of divorce, annulment or declaration of

nullity, or dissolution of marriage on disposition, appointment,

provision, or nomination regarding a former spouse

(a) Except as provided by the express terms of a governing instrument,

a divorce (including a judicial separation as defined in subparagraph

(f)(2)) or annulment of a marriage revokes any revocable (1) disposition

or appointment of property made by a divorced individual to, or for the

benefit of, the former spouse, including, but not limited to, a

disposition or appointment by will, by security registration in

beneficiary form (TOD), by beneficiary designation in a life insurance

policy or (to the extent permitted by law) in a pension or retirement

benefits plan, or by revocable trust, including a bank account in trust

form, (2) provision conferring a power of appointment or power of

disposition on the former spouse, and (3) nomination of the former

spouse to serve in any fiduciary or representative capacity, including

as a personal representative, executor, trustee, conservator, guardian,

agent, or attorney-in-fact.

(b)(1) Provisions of a governing instrument are given effect as if the

former spouse had predeceased the divorced individual as of the time of

the revocation.

(2) A disposition, appointment, provision, or nomination revoked

solely by this section shall be revived by the divorced individual's

remarriage to the former spouse.

(c) Except as provided by the express terms of a governing instrument,

a divorce (including a judicial separation as defined in subparagraph

(f)(2)) or annulment of a marriage severs the interests of the divorced

individual and the former spouse in property held by them at the time of

the divorce or annulment as joint tenants with the right of

survivorship, transforming their interests into interests as tenants in

common.

(d)(1) A payor or other third party is not liable for having made a

payment or transferred an item of property or any other benefit to a

beneficiary (including a former spouse) designated in a governing

instrument affected by a divorce, annulment, or remarriage, or for

having taken any other action in good faith reliance on the validity of

the governing instrument, before the payor or other third party received

written notice of the divorce, annulment, or remarriage.

(2) Written notice of a divorce, annulment, or remarriage under

subparagraph (1) must be mailed to the payor's or other third party's

main office or home by registered or certified mail, return receipt

requested, or served upon the payor or other third party in the same

manner as a summons in a civil action and may be filed with the

secretary of state if real property or a cooperative apartment is

affected. Upon receipt of written notice of the divorce, annulment, or

remarriage, a payor or other third party may pay any amount owed or

transfer or deposit any item of property held by it or with the court

having jurisdiction of the probate proceedings relating to the

decedent's estate or, if no proceedings have been commenced, to or with

the court having jurisdiction over the divorce, the real property or

cooperative apartment, securities, bank accounts or other assets

affected by the divorce or annulment under this section. The court shall

hold the funds or item of property and, upon its determination under

this section, shall order disbursement or transfer in accordance with

the determination. Payments, transfers, or deposits made to or with the

court discharge the payor or other third party from all claims for the

value of amounts paid to or items of property transferred to or

deposited with the court.

(e) A person who purchases property from a former spouse or any other

person for value and without notice, or who receives from a former

spouse or any other person, a payment or other item of property in

partial or full satisfaction of a legally enforceable obligation, is

neither obligated under this section to return the payment, item of

property or benefit, nor is liable under this section for the amount of

the payment or the value of the item of property or benefit. But a

former spouse or other person who, not for value, received a payment,

item of property or any other benefit to which that person is not

entitled under this section is obligated to return the payment, item of

property or benefit, with interest thereon, to the person who is

entitled to it under this section.

(f) For purposes of this section, the following terms shall have the

following meaning and effect:

(1) "Disposition or appointment of property" includes a transfer of an

item of property or any other benefit to a beneficiary designated in a

governing instrument.

(2) "Divorce or annulment" means a final decree or judgment of divorce

or annulment, or a final decree, judgment or order declaring the nullity

of a marriage or dissolving such marriage on the ground of absence,

recognized as valid under the law of this state, or a "judicial

separation," which means a final decree or judgment of separation,

recognized as valid under the law of this state, which was rendered

against the spouse.

(3) "Divorced individual" includes an individual whose marriage has

been annulled or subjected to a judicial separation.

(4) "Former spouse" means a person whose marriage to the divorced

individual has been the subject of a divorce, annulment, or judicial

separation.

(5) "Governing instrument" includes, but is not limited to, a will,

testamentary instrument, trust agreement (including, but not limited to

a totten trust account under 7-5.1(d)), insurance policy, thrift,

savings, retirement, pension, deferred compensation, death benefit,

stock bonus or profit-sharing plan, account, arrangement, system or

trust, agreement with a bank, brokerage firm or investment company,

registration of securities in beneficiary form pursuant to part 4 of

article 13 of this chapter, a court order, or a contract relating to the

division of property made between the divorced individuals before or

after the marriage, divorce, or annulment.

(6) "Revocable," with respect to a disposition, appointment,

provision, or nomination, means one under which the divorced individual,

at the time of the divorce or annulment, was empowered, by law or under

governing instrument, either alone or in conjunction with any other

person who does not have a substantial adverse interest, to cancel the

designation in favor of the former spouse, whether or not the divorced

individual was then empowered to designate himself or herself in place

of the former spouse and whether or not the divorced individual then had

the capacity to exercise the power.

Exemption for benefit of family

(a) If a person dies, leaving a surviving spouse or children under the

age of twenty-one years, the following items of property are not assets

of the estate but vest in, and shall be set off to such surviving

spouse, unless disqualified, under 5-1.2, from taking an elective or

distributive share of the decedent's estate. In case there is no

surviving spouse or such spouse, if surviving, is disqualified, such

items of property vest in, and shall be set off to the decedent's

children under the age of twenty-one years:

(1) All housekeeping utensils, musical instruments, sewing machine,

jewelry unless disposed of in the will, clothing of the decedent,

household furniture and appliances, electronic and photographic devices,

and fuel for personal use, not exceeding in aggregate value twenty

thousand dollars. This subparagraph shall not include items used

exclusively for business purposes.

(2) The family bible or other religious books, family pictures, books,

computer tapes, discs and software, DVDs, CDs, audio tapes, record

albums, and other electronic storage devices, including but not limited

to videotapes, used by such family, not exceeding in value two thousand

five hundred dollars.

(3) Domestic and farm animals with their necessary food for sixty

days, farm machinery, one tractor and one lawn tractor, not exceeding in

aggregate value twenty thousand dollars.

(4) The surviving spouse or decedent's children may acquire items

referred to in subparagraphs (1), (2) and (3) of this paragraph, in

excess of the values set forth in such subparagraphs by payment to the

estate of the amount by which the value of the items acquired exceeds

the amounts set forth in such subparagraphs. If any item so acquired by

the spouse or children of the decedent was a specific legacy in

decedent's will, the payment to the estate for such item shall vest in

the specific legatee.

(5) One motor vehicle not exceeding in value twenty-five thousand

dollars. In the alternative, if the decedent shall have been the owner

of one or more motor vehicles each of which exceed twenty-five thousand

dollars in value, the surviving spouse or decedent's children may

acquire one such motor vehicle from the estate, regardless of the fact

that the decedent may also have been the owner of another motor vehicle

of lesser value than twenty-five thousand dollars, by payment to the

estate of the amount by which the value of the motor vehicle exceeds

twenty-five thousand dollars; in lieu of receiving such motor vehicle,

the surviving spouse or children may elect to receive in cash an amount

equal to the value of the motor vehicle, not to exceed twenty-five

thousand dollars. If any motor vehicle so acquired by the spouse or

children of the decedent was a specific legacy in decedent's will, the

payment to the estate of the amount by which the value of the motor

vehicle exceeds twenty-five thousand dollars shall vest in the specific

legatee.

(6) Money including but not limited to cash, checking, savings and

money market accounts, certificates of deposit or equivalents thereof,

and marketable securities, not exceeding in value twenty-five thousand

dollars, reduced by the excess value, if any, of acquired items referred

to in subparagraphs (1), (2), (3) and (5) of this paragraph. However,

where assets are insufficient to pay the reasonable funeral expenses of

the decedent, the personal representative must first apply such money to

defray any deficiency in such expenses.

(7) Any set off to a child under the age of twenty-one years not

exceeding ten thousand dollars shall be covered by the provisions of

section twenty-two hundred twenty of the surrogate's court procedure act

as if the child were a beneficiary of the estate. Any excess amounts

shall be governed by the guardianship statute, if applicable.

(8) The court shall have the authority to issue such documentation as

necessary to effectuate the transfer of any items under this section.

(b) No allowance shall be made in money or other property if the items

of property described in subparagraph (1), (2), (3) or (5) of paragraph

(a) are not in existence when the decedent dies.

(c) The items of property, set off as provided in paragraph (a),

shall, at least to the extent thereof, be deemed reasonably required for

the support of the surviving spouse or children under the age of

twenty-one years of the decedent during the settlement of the estate.

(d) As used in this section, the term "value" shall refer to the fair

market value of each item, reduced by all outstanding security interests

or other encumbrances affecting the decedent's ownership of said item.

Revocatory effect of birth of child after execution of will

(a) Whenever a testator has a child born after the execution of a last

will, and dies leaving the after-born child unprovided for by any

settlement, and neither provided for nor in any way mentioned in the

will, every such child shall succeed to a portion of the testator's

estate as herein provided:

(1) If the testator has one or more children living when he executes

his last will, and:

(A) No provision is made therein for any such child, an after-born

child is not entitled to share in the testator's estate.

(B) Provision is made therein for one or more of such children, an

after-born child is entitled to share in the testator's estate, as

follows:

(i) The portion of the testator's estate in which the after-born child

may share is limited to the disposition made to children under the will.

(ii) The after-born child shall receive such share of the testator's

estate, as limited in subclause (i), as he would have received had the

testator included all after-born children with the children upon whom

benefits were conferred under the will, and given an equal share of the

estate to each such child.

(iii) If it appears from the will that the intention of the testator

was to make a limited provision which specifically applied only to the

testator's children living at the time the will was executed, the

after-born child succeeds to the portion of such testator's estate as

would have passed to such child had the testator died intestate.

(iv) To the extent that it is feasible, the interest of the after-born

child in the testator's estate shall be of the same character, whether

an equitable or legal life estate or in fee, as the interest which the

testator conferred upon his children under the will.

(2) If the testator has no child living when he executes his last

will, the after-born child succeeds to the portion of such testator's

estate as would have passed to such child had the testator died

intestate.

(b) The term "after-born child" shall mean a child of the testator

born during the testator's lifetime or in gestation at the time of the

testator's death and born thereafter. For purposes of this section, a

non-marital child, born after the execution of a last will shall be

considered an after-born child of his or her father where paternity is

established pursuant to section 4-1.2 of this chapter.

(c) The after-born child may recover the share of the testator's

estate to which such child is entitled, either from the other children

under subparagraph (a) (1) (B) or the testamentary beneficiaries under

subparagraph (a) (2), ratably, out of the portions of such estate

passing to such persons under the will. In abating the interests of such

beneficiaries, the character of the testamentary plan adopted by the

testator shall be preserved to the maximum extent possible.

Action in supreme court by child born after execution of will,

by surviving spouse upon revocation of will by marriage or by

subscribing witness with interest under will

In the event that the administration of a decedent's estate in the

surrogate's court has been completed and the estate distributed, an

action may be maintained in the supreme court by an after-born child

under 5-3.2, a surviving spouse under 5-1.3 or an attesting witness

under 3-3.2 to enforce rights under such sections against testamentary

beneficiaries or distributees, as the case may be.

Action by personal representative for wrongful act, neglect or

default causing death of decedent

1. The personal representative, duly appointed in this state or any

other jurisdiction, of a decedent who is survived by distributees may

maintain an action to recover damages for a wrongful act, neglect or

default which caused the decedent's death against a person who would

have been liable to the decedent by reason of such wrongful conduct if

death had not ensued. Such an action must be commenced within two years

after the decedent's death; provided, however, that an action on behalf

of a decedent whose death was caused by the terrorist attacks on

September eleventh, two thousand one, other than a decedent identified

by the attorney general of the United States as a participant or

conspirator in such attacks, must be commenced within two years and six

months after the decedent's death. When the distributees do not

participate in the administration of the decedent's estate under a will

appointing an executor who refuses to bring such action, the

distributees are entitled to have an administrator appointed to

prosecute the action for their benefit.

2. Whenever it is shown that a criminal action has been commenced

against the same defendant with respect to the event or occurrence from

which a claim under this section arises, the personal representative of

the decedent shall have at least one year from the termination of the

criminal action as defined in section 1.20 of the criminal procedure law

in which to maintain an action, notwithstanding that the time in which

to commence such action has already expired or has less than a year

remaining.

Trial and burden of proof of contributory negligence

On the trial of an action accruing before September first, nineteen

hundred seventy-five to recover damages for causing death the

contributory negligence of the decedent shall be a defense, to be

pleaded and proved by the defendant.

Amount of recovery

(a) The damages awarded to the plaintiff may be such sum as the jury

or, where issues of fact are tried without a jury, the court or referee

deems to be fair and just compensation for the pecuniary injuries

resulting from the decedent's death to the persons for whose benefit the

action is brought. In every such action, in addition to any other

lawful element of recoverable damages, the reasonable expenses of

medical aid, nursing and attention incident to the injury causing death

and the reasonable funeral expenses of the decedent paid by the

distributees, or for the payment of which any distributee is

responsible, shall also be proper elements of damage. Interest upon the

principal sum recovered by the plaintiff from the date of the decedent's

death shall be added to and be a part of the total sum awarded.

(b) Where the death of the decedent occurs on or after September

first, nineteen hundred eighty-two, in addition to damages and expenses

recoverable under paragraph (a) above, punitive damages may be awarded

if such damages would have been recoverable had the decedent survived.

(c) (i) In any action in which the wrongful conduct is medical

malpractice or dental malpractice, evidence shall be admissible to

establish the federal, state and local personal income taxes which the

decedent would have been obligated by law to pay.

(ii) In any such action tried by a jury, the court shall instruct the

jury to consider the amount of federal, state and local personal income

taxes which the jury finds, with reasonable certainty, that the decedent

would have been obligated by law to pay in determining the sum that

would otherwise be available for the support of persons for whom the

action is brought.

(iii) In any such action tried without a jury, the court shall

consider the amount of federal, state and local personal income taxes

which the court finds, with reasonable certainty, that the decedent

would have been obligated by law to pay in determining the sum that

would otherwise be available for the support of persons for whom the

action is brought.

Distribution of damages recovered

(a) The damages, as prescribed by 5-4.3, whether recovered in an

action or by settlement without an action, are exclusively for the

benefit of the decedent's distributees and, when collected, shall be

distributed to the persons entitled thereto under 4-1.1 and 5-4.5,

except that where the decedent is survived by a parent or parents and a

spouse and no issue, the parent or parents will be deemed to be

distributees for purposes of this section. The damages shall be

distributed subject to the following:

(1) Such damages shall be distributed by the personal representative

to the persons entitled thereto in proportion to the pecuniary injuries

suffered by them, such proportions to be determined after a hearing, on

application of the personal representative or any distributee, at such

time and on notice to all interested persons in such manner as the court

may direct. If no action is brought, such determination shall be made

by the surrogate of the county in which letters were issued to the

plaintiff; if an action is brought, by the court having jurisdiction of

the action or by the surrogate of the county in which letters were

issued.

(2) The court which determines the proportions of the pecuniary

injuries suffered by the distributees, as provided in subparagraph (1),

shall also decide any question concerning the disqualification of a

parent, under 4-1.4, or a surviving spouse, under 5-1.2, to share in the

damages recovered.

(b) The reasonable expenses of the action or settlement and, if

included in the damages recovered, the reasonable expenses of medical

aid, nursing and attention incident to the injury causing death and the

reasonable funeral expenses of the decedent may be fixed by the court

which determines the proportions of the pecuniary injuries suffered by

the distributees, as provided in subparagraph (1), upon notice given in

such manner and to such persons as the court may direct, and such

expenses may be deducted from the damages recovered. The commissions of

the personal representative upon the residue may be fixed by the

surrogate, upon notice given in such manner and to such persons as the

surrogate may direct or upon the judicial settlement of the account of

the personal representative, and such commissions may be deducted from

the damages recovered.

(c) In the event that an action is brought, as authorized in this

part, and there is no recovery or settlement, the reasonable expenses of

such unsuccessful action, excluding counsel fees, shall be payable out

of the assets of the decedent's estate.

Non-marital children

For the purposes of this part, a non-marital child is the distributee

of his father and paternal kindred and the father and paternal kindred

of a non-marital child are that child's distributees to the extent

permitted by 4-1.2.

Application to compromise action

(a) Within sixty days of the application of an administrator appointed

under 5-4.1 or a personal representative to the court in which an action

for wrongful act, neglect or default causing the death of a decedent is

pending, the court shall, after inquiry into the merits of the action

and the amount of damages proposed as a compromise either disapprove the

application or approve in writing a compromise for such amount as it

shall determine to be adequate including approval of attorneys fees and

other payable expenses as set forth below, and shall order the defendant

to pay all sums payable under the order of compromise, within the time

frames set forth in section five thousand three-a of the civil practice

law and rules, to the attorney for the administrator or personal

representative for placement in an interest bearing escrow account for

the benefit of the distributees. The order shall also provide for the

following:

(1) Upon collection of the settlement funds and creation of an

interest bearing escrow account, the attorney for the administrator or

personal representative shall pay from the account all due and payable

expenses, excluding attorneys fees, approved by the court, such as

medical bills, funeral costs and other liens on the estate.

(2) All attorneys fees approved by the court for the prosecution of

the action for wrongful act, neglect or default, inclusive of all

disbursements, shall be immediately payable from the escrow account upon

submission to the trial court proof of filing of a petition for

allocation and distribution in the surrogate's court on behalf of the

decedent's estate.

(3) The attorney for the administrator or personal representative in

the action for wrongful act, neglect or default who receives payment

under this section shall continue to serve as attorney for the estate

until the entry of a final decree in the surrogate's court.

(b) If any of the distributees is an infant, incompetent, person who

is incarcerated or person under disability, the court shall determine

whether a guardian ad litem is required before any payments are made, in

which case the court will seek an immediate appointment of a guardian ad

litem by the surrogate's court or, if the surrogate's court defers, the

court shall make such appointment. Any guardian appointed for this

purpose shall continue to serve as the guardian ad litem for the person

requiring same for all other purposes.

(c) The filing fee in the surrogate's court shall be computed based on

the amount of the gross estate prior to any payments made under this

paragraph.

(d) The written approval by such court of the compromise is conclusive

evidence of the adequacy of the compromise in any proceeding in the

surrogate's court for the final settlement of the account of such

administrator or personal representative.

(e) Nothing in this section shall be deemed to preclude the attorney

for the administrator or personal representative from petitioning the

surrogate's court for approval of a compromise and for allocation and

distribution thereof.

(f) No letters of administration shall be issued which will in any way

serve to abrogate the rights or obligations of an administrator or

personal representative or an attorney representing an administrator or

personal representative under this section.

(g) In the case of a recovery of an award from the September eleventh

victim compensation fund of two thousand one established pursuant to

title IV of the federal air transportation safety and system

stabilization act, public law 107-42, as amended, where the award

consists solely of non-economic losses (funeral expense reimbursement

being included as non-economic losses herein) a personal representative

may file a consent to the adequacy of the award by all interested

parties in lieu of a compromise proceeding.

Estates classified

(a) Estates in property as to duration are classified as follows:

(1) Fee simple absolute.

(2) Fee on condition.

(3) Fee on limitation.

(4) Estates for life.

(5) Estates for years.

(6) Estates from period to period.

(7) Estates at will.

(8) Estates by sufferance.

Estates tail abolished; future estates limited thereon

Estates tail have been abolished, and every estate which would be a

fee tail, according to the law of this state as it existed before the

twelfth day of July, seventeen hundred eighty-two, shall be a fee

simple; and if no valid future estate is limited thereon, a fee simple

absolute. Where a future estate in fee is limited on any estate which

would be a fee tail, according to the law of this state as it existed

previous to such date, such future estate is valid and vests in

possession on the death of the first taker without issue living at the

time of his death.

When estate for life of third person is real property; when

personal property

A disposition of real property for the life of a third person, whether

limited to heirs or otherwise, is real property only during the life of

the grantee or devisee; after his death it is personal property.

Estates in severalty, joint tenancy, tenancy by the entirety and

in common

Estates as to the number of persons owning an interest therein are

classified as follows:

(1) In severalty.

(2) Joint tenancy.

(3) Tenancy in common.

(4) Only as to real property and, on and after January first, nineteen

hundred ninety-six, as to the shares of stock of a cooperative apartment

corporation allocated to an apartment or unit together with the

appurtenant proprietary lease, tenancy by the entirety.

When estate is in common, in joint tenancy or by the entirety

(a) A disposition of property to two or more persons creates in them a

tenancy in common, unless expressly declared to be a joint tenancy.

(b) A disposition of real property to a husband and wife creates in

them a tenancy by the entirety, unless expressly declared to be a joint

tenancy or a tenancy in common.

(c) A disposition on or after January first, nineteen hundred

ninety-six of the shares of stock of a cooperative apartment corporation

allocated to an apartment or unit together with the appurtenant

proprietary lease to a husband and wife creates in them a tenancy by the

entirety, unless expressly declared to be a joint tenancy or a tenancy

in the common.

(d) A disposition of real property, or a disposition on or after

January first, nineteen hundred ninety-six of the shares of stock of a

cooperative apartment corporation allocated to an apartment or unit

together with the appurtenant proprietary lease, to persons who are not

legally married to one another but who are described in the disposition

as husband and wife, spouses, husbands, or wives creates in them a joint

tenancy, unless expressly declared to be a tenancy in common.

(e) A disposition of property to two or more persons as executors,

trustees or guardians creates in them a joint tenancy.

(f) Property passing in intestacy to two or more persons is taken by

them as tenants in common.

Estates in possession and future estates

Estates in property, as to the time of their enjoyment, are classified

as estates in possession and future estates.

Kinds of future estates

(a) Future estates are divided into:

(1) Estates left in the creator, consisting of:

(A) Reversions.

(B) Possibilities of reverter.

(C) Rights of reacquisition.

(2) Estates in favor of a person other than the creator, namely

remainders, that are:

(A) Indefeasibly vested.

(B) Vested subject to open.

(C) Vested subject to complete defeasance.

(D) Subject to a condition precedent.

Concerning the creation of certain future estates

(a) Subject to the provisions of article 9:

(1) An estate may be created to commence at a future time.

(2) An estate for life may be created in a term of years and a future

estate limited thereon.

(3) A future estate may be limited after a term of years, provided

that, if such future estate is subject to a condition precedent, the

condition must occur within the period prescribed by article 9.

(4) A fee or a lesser estate may be limited on a fee, subject to a

condition precedent which must occur within the period prescribed by

article 9.

When future estates are created

A future estate is created when the disposition creating it becomes

legally effective.

Definition of an estate in possession

An estate in possession is an estate which entitles the owner to the

immediate possession of property.

Definition of a future estate

A future estate is an estate limited to commence in possession at a

future time, either without the intervention of a precedent estate or on

the determination, by lapse of time or otherwise, of a precedent estate

created at the same time.

Definition of a remainder

A remainder is a future estate, as defined in 6-4.2, created in favor

of a person other than the creator.

Definition of a reversion

A reversion is the future estate, other than a possibility of reverter

and a right of reacquisition, left in the creator or in his successors

in interest upon the simultaneous creation of one or more lesser estates

than the creator originally owned.

Definition of a possibility of reverter

A possibility of reverter is the future estate left in the creator or

in his successors in interest upon the simultaneous creation of an

estate that will terminate automatically within a period of time defined

by the occurrence of a specified event.

Definition of a right of reacquisition

A right of reacquisition is the future estate left in the creator or

in his successors in interest upon the simultaneous creation of an

estate on a condition subsequent.

Definition of a future estate indefeasibly vested

A future estate indefeasibly vested is an estate created in favor of

one or more ascertained persons in being which is certain when created

to become an estate in possession whenever and however the preceding

estates end and which can in no way be defeated or abridged.

Definition of a future estate vested subject to open

A future estate vested subject to open is an estate created in favor

of a class of persons, one or more of whom are ascertained and in being,

which is certain when created to become an estate in possession whenever

and however the preceding estates end, and is subject to diminution by

reason of another person becoming entitled to share therein.

Definition of a future estate vested subject to complete

defeasance

A future estate vested subject to complete defeasance is an estate

created in favor of one or more ascertained persons in being, which

would become an estate in possession upon the expiration of the

preceding estates, but may end or may be terminated as provided by the

creator at, before or after the expiration of such preceding estates.

Definition of a future estate subject to a condition precedent

A future estate subject to a condition precedent is an estate created

in favor of one or more unborn or unascertained persons or in favor of

one or more presently ascertainable persons upon the occurrence of an

uncertain event.

Characteristics of future estates

Future estates are descendible, devisable and alienable, in the same

manner as estates in possession.

Power of appointment not to prevent vesting

The existence of an unexecuted power of appointment does not prevent

the vesting of a future estate, limited in default of the execution of

the power.

Future estates in the alternative

Two or more future estates may be created to take effect in the

alternative, so that if the first in order fails to vest, the next in

succession is substituted for it and takes effect accordingly.

Implication of cross remainders between tenants in common

When a limitation, if contained in a will, would create a tenancy in

common, with implied cross remainders, a like limitation, if contained

in a deed, has the same effect.

Future estate valid though contingency improbable

A future estate, otherwise valid, shall not be void on the ground of

the improbability of the contingency on which it is limited to take

effect.

Meaning of heirs, distributees and issue in certain remainders

When a remainder is limited to take effect on the death of any person

without heirs, heirs of the body, distributees or issue, the word

"heirs", "heirs of the body", "distributees" or "issue" mean such

persons living at the death of the person named as ancestor.

Posthumous children

(a) Where a future estate is limited to children, distributees, heirs

or issue, posthumous children are entitled to take in the same manner as

if living at the death of their ancestors.

(b) A future estate conditioned upon the death of a person without

children, distributees, heirs or issue is defeated by the birth of a

child conceived before but born alive after the death of such person.

Heirs or distributees of life tenant take as purchasers

When a remainder is limited to the heirs, heirs of the body or

distributees of a person to whom a life estate in the same property is

given, the persons who, on the termination of the life estate, are the

heirs, heirs of the body or distributees of the life tenant take as

purchasers.

Heirs or distributees of creator take as purchasers

Where a remainder is limited to the heirs or distributees of the

creator of an estate in property, such heirs or distributees take as

purchasers.

When future estates are defeated

A future estate cannot be defeated or barred by any disposition or

other act of the owner of the precedent estate, nor by the destruction

of such precedent estate by disseizen, forfeiture, surrender, merger or

otherwise; but a future estate may be defeated in any manner which the

creator has provided.

Non-destructibility of remainders subject to a condition

precedent

A remainder is not defeated by the determination of a precedent estate

before the occurrence of the condition precedent on which the remainder

was limited to take effect. If such condition precedent subsequently

occurs, the remainder takes effect in the same manner and to the same

extent as if the precedent estate had continued.

Future rents and profits subject to rules governing future

estates

A disposition of the rents, profits or other income from property

accruing at any time subsequent to the execution of the instrument

creating such disposition is subject to the rules governing future

estates in property.

Application

This part applies to the disposition at death by a married person of

all or the proportionate part of any personal property wherever situated

which was acquired as or became, and remained, community property under

the laws of another jurisdiction, and any personal property wherever

situated and real property situated in this state which was acquired

with the rents, issues or income of, the proceeds from, or in exchange

for, property acquired as or which became, and remained, community

property under the laws of another jurisdiction, or property traceable

to that community property.

Rebuttable presumptions

In determining whether this part applies to specific property acquired

during a marriage by a spouse of that marriage the following rebuttable

presumptions apply:

(a) Property acquired while domiciled in a jurisdiction under whose

laws property could then be acquired as community property is presumed

to have been acquired as or have become, and remained, property to which

this part applies; and

(b) Property acquired while domiciled in a jurisdiction under whose

laws property could not then be acquired as community property, title to

which was taken in a form which created rights of survivorship, is

presumed not to be property to which this part applies.

Disposition upon death

Upon the death of a married person, one-half of the property to which

this part applies is the property of the surviving spouse and is not

subject to testamentary disposition by the decedent nor to the laws of

descent and distribution. One-half of that property is the property of

the decedent and is subject to testamentary disposition by the decedent

or the law of descent and distribution. With respect to property to

which this part applies, the one-half of the property which is the

property of the decedent is not subject to the surviving spouse's right

to elect against the will.

Perfection of title

(a) If the title to any property to which this part applies was held

by the decedent at the time of death, title of the surviving spouse may

be perfected by an order of the surrogate's court having jurisdiction

over the decedent's estate or by execution of an instrument by the

personal representative or the testamentary beneficiaries or

distributees of the decedent with the approval of the court, upon due

notice to all persons who would be required to be served with process in

a proceeding under section twenty-two hundred ten of the surrogate's

court procedure act. Neither the personal representative nor the court

has a duty to discover or attempt to discover whether property held by

the decedent is property to which this part applies, unless a written

demand is made by the surviving spouse or the spouse's successor in

interest.

(b) If the title to any property to which this part applies is held by

the surviving spouse at the time of the decedent's death, the personal

representative or a testamentary beneficiary or distributee of the

decedent may institute an action to perfect title to the property. The

personal representative has no fiduciary duty to discover or attempt to

discover whether any property held by the surviving spouse is property

to which this part applies, unless a written demand is made by a

testamentary beneficiary, distributee or creditor of the decedent.

Purchaser for value or lender

(a) If a surviving spouse has apparent title to property to which this

part applies, a purchaser for value or a lender taking a security

interest in the property takes his interest in the property free of any

rights of the personal representative or a testamentary beneficiary or

distributee of the decedent.

(b) If a personal representative or a testamentary beneficiary or

distributee of the decedent has apparent title to property to which this

part applies, a purchaser for value or a lender taking a security

interest in the property takes his interest in the property free of any

rights of the surviving spouse.

(c) A purchaser for value or a lender need not inquire whether a

vendor or borrower acted properly.

(d) The proceeds of a sale or creation of a security interest shall be

treated in the same manner as the property transferred to the purchaser

for value or a lender.

Effect and construction of part

This part does not effect rights of creditors nor prevent married

persons from severing or altering their interests in property nor

authorize testamentary dispositions of property otherwise limited or

prohibited by law, and shall be so applied and construed as to

effectuate its general purpose to make uniform the law with respect to

the subject of this part among those states which enact similar

legislation.

Short title

This part may be cited as "The New York uniform disposition of

community property rights at death act".

When trust interests not to merge

A trust is not merged or invalid because a person, including but not

limited to the creator of the trust, is or may become the sole trustee

and the sole holder of the present beneficial interest therein, provided

that one or more other persons hold a beneficial interest therein,

whether such interest be vested or contingent, present or future, and

whether created by express provision of the instrument or as a result of

reversion to the creator's estate.

Trustee of passive trust not to take

Every disposition of property shall be made directly to the person in

whom the right to possession and income is intended to be vested and not

to another in trust for such person, and if made to any person in trust

for another, no estate, legal or equitable, vests in the trustee. But

neither this section nor 7-1.1 shall apply to trusts arising or

resulting by implicaiton of law.

Purchase-money resulting trust abolished

(a) A disposition of property to one person for a valuable

consideration paid, in whole or in part, by another is presumed

fraudulent as against the creditors of the payor at the time of such

disposition and, unless the presumption is rebutted, a trust results in

favor of such creditors to the extent necessary to satisfy their claims;

but title to the property vests in the transferee and no trust results

to the payor unless the transferee either:

(1) Takes such property, in his own name, as an absolute transfer

without the consent or knowledge of the payor; or

(2) In violation of some trust, purchases the property so transferred

with money or property belonging to another.

Purposes for which trust may be created

An express trust may be created for any lawful purpose.

When trust interest inalienable; exception

(a) The interest of the beneficiary of any trust may be assigned or

otherwise transferred, except that:

(1) The right of a beneficiary of an express trust to receive the

income from property and apply it to the use of or pay it to any person

may not be transferred by assignment or otherwise unless a power to

transfer such right, or any part thereof, is conferred upon such

beneficiary by the instrument creating or declaring the trust.

(2) The proceeds of a life insurance policy which, under a trust or

other agreement, are upon the death of the insured left with the

insurance company may not be (A) transferred, (B) subject to commutation

or encumbrance or (C) subject to legal process except in an action for

necessaries, if provisions to such effect were incorporated in such

trust or other agreement.

(b) Notwithstanding subparagraph (a) (1):

(1) The beneficiary of an express trust to receive income from

property and apply it to the use of or pay it to any person may, unless

otherwise provided in the instrument creating or declaring such trust,

transfer any amount in excess of ten thousand dollars of the annual

income to which the beneficiary is entitled from such trust to the

spouse, issue, ancestors, brothers, sisters, uncles, aunts, nephews or

nieces of the beneficiary, or to a trustee, committee, conservator,

curator, custodian, guardian of the property of a minor, or the donee of

a power during minority for the benefit only of any such person bearing

such relationship to the beneficiary, provided that such transfer is

evidenced by a written instrument signed and acknowledged by the

beneficiary and delivered to the trustee of the trust, together with an

affidavit by the beneficiary that such transfer and any like transfer

concurrently in effect are for all or part of the excess over ten

thousand dollars of the annual income from such trust to which such

beneficiary is entitled, and that he has not received and is not to

receive any consideration in money or money's worth for the transfer.

(2) Any such transfer shall be effective in any year only as to income

from such trust in excess of ten thousand dollars, and for this purpose

all previous like transfers applicable to a given year shall be taken

into account. In the event that two or more transfers are made in or for

any year in a total amount exceeding the income from such trust properly

transferable hereunder, transferees shall be preferred in the order in

which the instruments of transfer were delivered to the trustee.

(3) A trustee shall be exonerated and fully discharged for any payment

made to a transferee in reliance on the affidavit of a beneficiary

described in subparagraph (1).

(4) The provisions of this paragraph do not apply to subparagraph (a)

(2):

(c) A transferee of income may, if he has not received or is not to

receive any consideration in money or money's worth therefor, make a

further transfer of such income only to one or more of the permissible

transferees referred to in subparagraph (b) (1), other than a prior

transferor; provided, however, that upon the death of a transferee any

income not so transferred by him shall be an asset of his estate,

subject to his testamentary disposition or passing to his distributees

under the statutes of descent and distribution.

(d) The beneficiary of an express trust to receive the income from

property and apply it to the use of or pay it to any person is not

precluded by anything contained in this section from transferring or

assigning any part or all of such income to or for the benefit of

persons whom the beneficiary is legally obligated to support.

Application of principal to income beneficiary

(a) Notwithstanding any contrary provision of law, the court having

jurisdiction of an express trust, heretofore created or declared, to

receive the income from property and apply it to the use of or pay it to

any person, unless otherwise provided in the disposing instrument, may

in its discretion make an allowance from principal to any income

beneficiary whose support or education is not sufficiently provided for,

to the extent that such beneficiary is indefeasibly entitled to the

principal of the trust or any part thereof or, in case the income

beneficiary is not entitled to the principal of the trust or any part

thereof, to the extent that all persons beneficially interested in the

trust are adult and competent and consent thereto in writing; provided

that the court, after a hearing on notice to all those beneficially

interested in the trust in such manner as the court may direct, is

satisfied that the original purpose of the creator of the trust cannot

be carried out and that such allowance effectuates the intention of the

creator.

(b) Notwithstanding any contrary provision of law, the court having

jurisdiction of an express trust, hereafter created or declared, to

receive income from property and apply it to the use of or pay it to any

person, unless otherwise provided in the disposing instrument, may in

its discretion make an allowance from principal to any income

beneficiary whose support or education is not sufficiently provided for,

whether or not such person is entitled to the principal of the trust or

any part thereof; provided that the court, after a hearing on notice to

all those beneficially interested in the trust in such manner as the

court may direct, is satisfied that the original purpose of the creator

of the trust cannot be carried out and that such allowance effectuates

the intention of the creator.

(c) In the event that an income beneficiary to whom an allowance is

made, as provided in this section, is or becomes entitled to a share of

the principal of the trust, such allowance, without interest thereon,

shall be a charge upon such share.

(d) If the application or the possibility of the application of this

section to any trust would reduce or eliminate a charitable deduction

otherwise available to any person or entity under the income tax, gift

tax or estate tax provisions of the internal revenue code, the

provisions of this section shall not apply to such trust.

(e) A supplemental needs trust which conforms to the provisions of

7-1.12 of this article shall be construed in accordance with the

provisions of that section.

Interest remaining in creator of trust

Every legal estate and interest not embraced in an express trust and

not otherwise disposed of remains in the creator.

Duration of trust for benefit of creditors

(a) Where an estate in real property has heretofore vested or shall

hereafter vest in an assignee or other trustee for the benefit of

creditors, it shall cease at the expiration of ten years from the time

the trust was created, except where a different limitation is contained

in the instrument creating the trust or is otherwise prescribed by law.

Such estate shall thereupon revert to the assignor.

(b) This section does not apply to a trust of personal property or to

a trust of real property created in connection with the salvaging of

mortgage participation certificates. Nor does this section affect any

rights to the proceeds of a sale of real property made by the assignee

or other trustee for the benefit of creditors.

Revocation of trusts

(a) Upon the written consent, acknowledged or proved in the manner

required by the laws of this state for the recording of a conveyance of

real property, of all the persons beneficially interested in a trust of

property, heretofore or hereafter created, the creater of such trust may

revoke or amend the whole or any part thereof by an instrument in

writing acknowledged or proved in like manner, and thereupon the estate

of the trustees ceases with respect to any part of such trust property,

the disposition of which has been revoked. If the conveyance or other

instrument creating a trust of property was recorded in the office of

the clerk or register of any county of this state, the instrument

revoking or amending such trust, together with the consents thereto,

shall be recorded in the same office of every county in which the

conveyance or other instrument creating such trust was recorded.

(b) For the purposes of this section, a disposition, contained in a

trust created on or after September first, nineteen hundred fifty-one,

in favor of a class of persons described only as the heirs, next of kin

or distributees (or by any term of like import) of the creator of the

trust does not create a beneficial interest in such persons.

(c) A testamentary or lifetime trust wholly benefitting one or more

charitable beneficiaries may be terminated as provided for by

subparagraph two of paragraph (c) of section 8-1.1 of this chapter.

Provision by non-domiciliary creator as to law to govern trust

(a) Whenever a person, not domiciled in this state, creates a trust

which provides that it shall be governed by the laws of this state, such

provision shall be given effect in determining the validity, effect and

interpretation of the disposition in such trust of:

(1) Any trust property situated in this state at the time the trust is

created.

(2) Personal property, wherever situated, if the trustee of the trust

is a person residing, incorporated or authorized to do business in this

state or a national bank having an office in this state.

Application of principal to creator of trust as reimbursement

for taxes

(a) Notwithstanding any contrary provision of law, the trustee of an

express trust, unless otherwise provided in the disposing instrument,

may, from time to time, pay from principal to the creator of such trust

an amount equal to any income taxes on any portion of the trust

principal with which he is charged.

(b) The provisions of this section do not apply to any trust by which

a future estate is indefeasibly vested in the United States or a

political subdivision for exclusively public purposes; a corporation

organized exclusively for religious, charitable, scientific, literary or

educational purposes, including the encouragement of art and the

prevention of cruelty to children or animals, no part of the net

earnings of which inures to the benefit of any private shareholder or

individual, and no substantial part of the activities of which is

carrying on propaganda or otherwise attempting to influence legislation;

a trustee, or a fraternal society, order or association operating under

the lodge system, provided the principal or income of such trust is to

be used by such trustee or by such fraternal society, order or

association exclusively for religious, charitable, scientific, literary

or educational purposes, or for the prevention of cruelty to children or

animals, and no substantial part of the activities of such trustee or of

such fraternal society, order or association is carrying on propaganda

or otherwise attempting to influence legislation; or any veteran's

organization incorporated by Act of Congress, or of its department or

local chapters or posts, no part of the net earnings of which inures to

the benefit of any private shareholder or individual.

Supplemental needs trusts established for persons with severe

and chronic or persistent disabilities

(a) Definitions: When used in this section, unless otherwise expressly

stated or unless the context otherwise requires:

(1) "Developmental disability" means developmental disability as

defined in subdivision twenty-two of section 1.03 of the mental hygiene

law.

(2) "Government benefits or assistance" means any program of benefits

or assistance which is intended to provide or pay for support,

maintenance or health care and which is established or administered, in

whole or in part, by any federal, state, county, city or other

governmental entity.

(3) "Mental illness" means mental illness as defined in subdivision

twenty of section 1.03 of the mental hygiene law.

(4) "Person with a severe and chronic or persistent disability" means

a person (i) with mental illness, developmental disability, or other

physical or mental impairment;

(ii) whose disability is expected to, or does, give rise to a

long-term need for specialized health, mental health, developmental

disabilities, social or other related services; and

(iii) who may need to rely on government benefits or assistance.

(5) "Supplemental needs trust" means a discretionary trust established

for the benefit of a person with a severe and chronic or persistent

disability (the "beneficiary") which conforms to all of the following

criteria:

(i) The trust document clearly evidences the creator's intent to

supplement, not supplant, impair or diminish, government benefits or

assistance for which the beneficiary may otherwise be eligible or which

the beneficiary may be receiving, except as provided in clause (ii) of

this subparagraph;

(ii) The trust document prohibits the trustee from expending or

distributing trust assets in any way which may supplant, impair or

diminish government benefits or assistance for which the beneficiary may

otherwise be eligible or which the beneficiary may be receiving;

provided, however, that the trustee may be authorized to make such

distributions to third parties to meet the beneficiary's needs for food,

clothing, shelter or health care but only if the trustee determines (A)

that the beneficiary's basic needs will be better met if such

distribution is made, and (B) that it is in the beneficiary's best

interests to suffer the consequent effect, if any, on the beneficiary's

eligibility for or receipt of government benefits or assistance;

(iii) The beneficiary does not have the power to assign, encumber,

direct, distribute or authorize distributions from the trust;

(iv) If an inter vivos trust, the creator of the trust is a person or

entity other than the beneficiary or the beneficiary's spouse; and

(v) Notwithstanding subparagraph (iv) of this paragraph, the

beneficiary of a supplemental needs trust may be the creator of the

trust if such trust meets the requirements of subparagraph two of

paragraph (b) of subdivision two of section three hundred sixty-six of

the social services law and of the regulations implementing such

clauses. Provided, however, that if the trust is funded with the

proceeds of retroactive payments made as a result of a court action and

due the beneficiary under the federal supplemental security income

program, as established under title XVI of the federal social security

act, the creation of a supplemental needs trust by the beneficiary under

this subparagraph shall not impair nor limit any right under applicable

law of a representative payee to receive reimbursement out of such

proceeds for expenses incurred on behalf of the beneficiary pending the

determination of the beneficiary's eligibility for such federal

supplemental security income program, nor any right under applicable law

of any state or local governmental entity which provided the beneficiary

with interim assistance pending the determination of the beneficiary's

eligibility for such federal supplemental security income program to be

repaid out of such proceeds for the amount of such interim assistance.

(6) A "beneficiary" means a person with a severe and chronic or

persistent disability who is a beneficiary of a supplemental needs

trust.

(b) A supplemental needs trust shall be construed in accordance with

the following:

(1) It shall be presumed that the creator of the trust intended that

neither principal nor income be used to pay for any expense which would

otherwise be paid by government benefits or assistance for which the

beneficiary might otherwise be eligible or which the beneficiary might

be receiving, notwithstanding any authority the trustee may have to make

distributions for food, clothing, shelter or health care as provided in

clause (ii) of subparagraph five of paragraph (a) of this section;

(2) Section 7-1.6 of this article shall not be applicable to the

extent that the application or possible application of that section

would reduce or eliminate the beneficiary's entitlement to government

benefits or assistance;

(3) Neither principal nor income held in trust shall be deemed an

available resource to the beneficiary under any program of government

benefits or assistance; however, actual distributions from the trust may

be considered to be income or resources of the beneficiary to the extent

provided by the terms of any such program;

(4) The trustee of the trust shall not be deemed to be holding assets

for the benefit of the beneficiary for purposes of section 43.03 of the

mental hygiene law or section one hundred four of the social services

law; and

(5) If the trust provides the trustee with the authority to make

distributions for food, clothing, shelter or health care as provided in

clause (ii) of subparagraph five of paragraph (a) of this section, and

if the mere existence of that authority would, under the terms of any

program of government benefits or assistance, result in the

beneficiary's loss of government benefits or assistance, regardless of

whether such authority were actually exercised, then:

(i) if the trust instrument expressly provides, such provision shall

be null and void and the trustee's authority to make such distributions

shall cease and shall be limited as otherwise provided; or

(ii) the trust shall no longer be treated as a supplemental needs

trust under this section and the trust shall be construed, and the trust

assets considered, without regard to the provisions of this section.

(c) (1) Paragraph (b) of this section shall not apply to the extent

that the trust is funded, directly or indirectly, by the beneficiary,

except as provided in clause (v) of subparagraph five of paragraph (a)

of this section, by someone with a legal obligation of support to the

beneficiary, or by someone with another financial obligation to the

beneficiary to the extent of such obligation, at the time the

beneficiary is receiving or applying to receive:

(i) Government benefits or assistance for which an income and resource

calculation is made; or

(ii) Services, care or assistance for which payment or reimbursement

is or may be sought under section 43.03 of the mental hygiene law or

section one hundred four of the social services law.

(2) To the extent that said paragraph (b) does not apply, the trust

shall not be treated as a supplemental needs trust under this section,

and the trust shall be construed, and the trust assets considered,

without regard to the provisions of this section.

(d) The provisions of paragraph (b) of this section shall not apply to

bar claims by government against persons with an interest in or under

the trust other than the beneficiary.

(e) (1) The following language may be used as part of a trust

instrument, but is not required, to qualify a trust as a supplemental

needs trust:

1. The property shall be held, IN TRUST, for the benefit of

________________________ (hereinafter the "beneficiary") and shall be

held, managed, invested and reinvested by the trustee, who shall collect

the income therefrom and, after deducting all charges and expenses

properly attributable thereto, shall, at any time and from time to time,

apply for the benefit of the beneficiary, so much (even to the extent of

the whole) of the net income and/or principal of this trust as the

trustee shall deem advisable, in his or her sole and absolute

discretion, subject to the limitations set forth below. The trustee

shall add to the principal of such trust the balance of net income not

so paid or applied.

2. It is the grantor's intent to create a supplemental needs trust

which conforms to the provisions of section 7-1.12 of the New York

estates, powers and trusts law. The grantor intends that the trust

assets be used to supplement, not supplant, impair or diminish, any

benefits or assistance of any federal, state, county, city, or other

governmental entity for which the beneficiary may otherwise be eligible

or which the beneficiary may be receiving. Consistent with that intent,

it is the grantor's desire that, before expending any amounts from the

net income and/or principal of this trust, the trustee consider the

availability of all benefits from government or private assistance

programs for which the beneficiary may be eligible and that, where

appropriate and to the extent possible, the trustee endeavor to maximize

the collection of such benefits and to facilitate the distribution of

such benefits for the benefit of the beneficiary.

3. None of the income or principal of this trust shall be applied in

such a manner as to supplant, impair or diminish benefits or assistance

of any federal, state, county, city, or other governmental entity for

which the beneficiary may otherwise be eligible or which the beneficiary

may be receiving.

4. The beneficiary does not have the power to assign, encumber,

direct, distribute or authorize distributions from this trust.

(2) (i) If the creator elects, the following additional language may

be used:

5. Notwithstanding the provisions of paragraphs two and three above,

the trustee may make distributions to meet the beneficiary's need for

food, clothing, shelter or health care even if such distributions may

result in an impairment or diminution of the beneficiary's receipt or

eligibility for government benefits or assistance but only if the

trustee determines that (i) the beneficiary's needs will be better met

if such distribution is made, and (ii) it is in the beneficiary's best

interests to suffer the consequent effect, if any, on the beneficiary's

eligibility for or receipt of government benefits or assistance.

(ii) If the trustee is provided with the authority to make the

distributions as described in subparagraph (2) (i), the creator may

elect to add the following clause:

; provided, however, that if the mere existence of the trustee's

authority to make distributions pursuant to this paragraph shall result

in the beneficiary's loss of government benefits or assistance,

regardless of whether such authority is actually exercised, this

paragraph shall be null and void and the trustee's authority to make

such distributions shall cease and shall be limited as provided in

paragraphs two and three above, without exception.

(f) Nothing in this section shall affect the establishment,

interpretation or construction of trust instruments which do not conform

with the provisions of this section, nor shall this section impair the

state's authority to be paid from or seek reimbursement from any trust

which does not conform with the provisions of this section or to deem

the principal or income of such trust an available resource under any

program of government benefits or assistance.

Division of trusts and establishment of separate trusts

(a) Notwithstanding any contrary provision of law, unless expressly

prohibited by the terms of the disposing instrument:

(1) the trustee of an express trust (which term as defined in

paragraph (g) of this section may mean the executor or administrator) is

authorized without prior court approval or the consent of the persons

interested to establish two or more separate trusts in order to

segregate for any of the following purposes:

(A) property held in trust in which a spouse or surviving spouse has a

qualifying income interest with respect to which an election has been or

will be made in whole or in part under section 2056(b)(7), 2056A or

2523(f) of the United States Internal Revenue Code of 1986 from property

with respect to which no election has been or will be made;

(B) property held in trust with respect to which a marital deduction

under section 2056 or 2523 of the United States Internal Revenue Code

would be available, by election or otherwise, from property held in

trust for persons other than the spouse or surviving spouse, so that one

or more of such separate trusts qualify for the deduction under said

sections;

(C) property held in trust with respect to which a charitable

deduction under section 2055 or 2522 of the United States Internal

Revenue Code would be available from property held in trust for persons

not described in said sections, so that one or more of such separate

trusts qualify for the deduction under said sections;

(D) property held in trust which is or would be excepted, excluded or

exempt from or under Chapter 13 (tax on generation-skipping transfers)

of the United States Internal Revenue Code from such property which is

not so excepted, excluded or exempt, so that one or more of such

separate trusts will have an inclusion ratio of zero, or so that one or

more of such separate trusts qualify for the grandchild exception under

section 1433(b)-(d) of the Tax Reform Act of 1986, as amended;

(E) property held in trust for one (of two or more beneficiaries) from

property held in trust for such other beneficiaries, so that one or more

of such separate trusts shall be a qualified subchapter S trust under

section 1361(d) of the United States Internal Revenue Code;

(F) property transferred in trust by a creator (including but not

limited to a transfer treated as made by a spouse by reason of section

2513 of the United States Internal Revenue Code) from property

transferred in trust by one or more different creators; and

(G) property transferred in trust by a creator (including but not

limited to a transfer treated as made by a spouse by reason of section

2513 of the United States Internal Revenue Code) pursuant to a disposing

instrument from property transferred by the same creator pursuant to

another disposing instrument;

(2) the trustee of an express trust may divide such trust into two or

more separate trusts, with the consent of all persons interested in the

trust but without prior court approval, for any reason which is not

directly contrary to the primary purpose of the trust; and

(3) the court having jurisdiction of an express trust, upon the

petition of the trustee or of any person interested in the trust and

upon notice to all such persons, may direct the establishment of two or

more separate trusts for any reason not directly contrary to the primary

purpose of the trust.

(b) Unless the court otherwise directs, the trusts established under

this section shall be deemed to have been established as of the

effective date of the disposing instrument; provided that the

establishment of separate trusts under subparagraph two of paragraph (a)

of this section may become effective upon the date or dates provided in

the instrument filed under paragraph (e) of this section.

(c) Except as implicit in the establishment of separate trusts

authorized by this section, the terms of the disposing instrument,

subject to modifications approved by the court, shall govern each

separate trust established hereunder, except that separate trusts for

one or more members of a class of beneficiaries may be established under

subparagraph two of paragraph (a) of this section without modification

by the court if the property held in trust is distributed to such

separate trusts for one or more members of such class on the basis of

share per stirpes, per capita, or by representation, whichever is

consistent with the terms of the disposing instrument.

(d) Unless the court otherwise directs, and except in the case of the

establishment of separate trusts under clauses (F) and (G) of

subparagraph one of paragraph (a) of this section where the original

assets remain or can be traced, the property distributed to the separate

trust shall be fairly representative of appreciation or depreciation and

shall be based upon the fair market value of the assets on the date or

dates of the distributions of such assets to the separate trusts.

(e) Separate trusts shall be established under subparagraphs one and

two of paragraph (a) of this section by an instrument or instruments in

writing, signed and acknowledged by the trustee and if under

subparagraph two of paragraph (a) of this section shall also be signed

and acknowledged by all the persons interested in the trust (or the

guardian of the property, committee, conservator, adult guardian, or

personal representative of such persons each of whom is hereby empowered

to consent thereto without prior court approval). Such instruments shall

be filed in the office of the clerk of the court having jurisdiction

over the trust; and a copy thereof shall be served on all persons

interested in the trusts (or the guardian of the property, committee,

conservator, adult guardian, or personal representative of such

persons), by registered or certified mail, return receipt requested, or

by personal delivery or upon application of the trustee in any other

manner directed by the court.

(f) The term "disposing instrument" shall mean the will, trust

agreement, instrument exercising a power of appointment or other

instrument creating such a trust or transferring property to such trust;

provided that in the case of an instrument exercising a limited or

testamentary power of appointment, the term "disposing instrument" may

also refer to the instrument creating such power (if applicable under

the circumstances).

(g) In any case where the United States Internal Revenue 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.

(h) 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.

(i) References to sections of the United States Internal Revenue 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 shall also refer to corresponding provisions

of state law.

(j) Unless otherwise provided for in the disposing instrument, the

commissions allowed to a trustee as determined under article

twenty-three of the surrogate's court procedure act, as amended from

time to time, shall not be increased by reason of the establishment of

separate trusts pursuant to subparagraph one of paragraph (a) of this

section unless the court otherwise permits an increase, provided,

however, that such trustee shall be entitled to charge the trust for any

additional reasonable and necessary expenses incurred in the

administration of such separate trusts.

(k) For purposes of subparagraphs (a)(2) and (3) of this section, a

division of a trust into two or more separate trusts to permit one or

more such trusts to be governed by article 11-A and another one or more

such trusts to be governed by 11-2.4 shall be deemed to be for a reason

which is not directly contrary to the primary purpose of the trust

unless such division is expressly prohibited by the terms of the

disposing instrument.

Who may make a lifetime trust

Any person, as defined in 1-2.12, may by lifetime trust dispose of

real and personal property. A natural person who creates a lifetime

trust shall be eighteen years of age or older.

What property may be disposed of by lifetime trust

Every estate in property may be disposed of by lifetime trust.

Revocation of lifetime trust by will

A lifetime trust shall be irrevocable unless it expressly provides

that it is revocable. In addition to the method set forth in 7-1.17, a

revocable lifetime trust can be revoked or amended by an express

direction in the creator's will which specifically refers to such

lifetime trust or a particular provision thereof.

Execution, amendment and revocation of lifetime trusts

(a) Every lifetime trust shall be in writing and shall be executed and

acknowledged by the person establishing such trust and, unless such

person is the sole trustee, by at least one trustee thereof, in the

manner required by the laws of this state for the recording of a

conveyance of real property or, in lieu thereof, executed in the

presence of two witnesses who shall affix their signatures to the trust

instrument.

(b) Any amendment or revocation authorized by the trust shall be in

writing and executed by the person authorized to amend or revoke the

trust, and except as otherwise provided in the governing instrument,

shall be acknowledged or witnessed in the manner required by paragraph

(a) of this section, and shall take effect as of the date of such

execution. Written notice of such amendment or revocation shall be

delivered to at least one other trustee within a reasonable time if the

person executing such amendment or revocation is not the sole trustee,

but failure to give such notice shall not affect the validity of the

amendment or revocation or the date upon which same shall take effect.

No trustee shall be liable for any act reasonably taken in reliance on

an existing trust instrument prior to actual receipt of notice of

amendment or revocation thereof.

Funding of lifetime trust

A lifetime trust shall be valid as to any assets therein to the extent

the assets have been transferred to the trust. For purposes of this

section, (a) transfer is not accomplished by recital of assignment,

holding or receipt in the trust instrument, and (b) in the case of a

trust of which the creator is the sole trustee, transfer shall mean in

the case of assets capable of registration such as real estate, stocks,

bonds, bank and brokerage accounts and the like, the recording of the

deed or the completion of registration of the asset in the name of the

trust or trustee, and in the case of other assets a written assignment

describing the asset with particularity.

Application for termination of uneconomical trust

(a) Notwithstanding sections 7-1.5 and 7-2.4 of this article or any

other contrary provision of law:

(1) Any trustee or beneficiary of a lifetime or testamentary express

trust (other than a wholly charitable trust) may, by application to the

surrogate's court having jurisdiction over the trust, seek a termination

of such trust when the expense of administering the trust is

uneconomical.

(2) If, upon such application, the court finds that continuation of

the trust is economically impracticable, that the express terms of the

disposing instrument do not prohibit its early termination, and that

such termination would not defeat the specified purpose of the trust and

would be in the best interests of the beneficiaries, the court may make

an order or decree terminating the trust and directing the distribution

of the trust assets to and among those beneficiaries who at the time are

entitled (or entitled in the discretion of the trustee) to the income

and/or principal of the trust and those beneficiaries who would be

entitled (or entitled in the discretion of the trustee) to the income

and/or principal of the trust if it were to terminate immediately before

such order or decree. The distribution of the trust assets shall be made

in such manner, proportions and shares as in the judgment of the court

will effectuate the intention of the creator.

(b) Notice of the application shall be given to such persons and at

such time and in such manner as the court, in its discretion, may

direct.

(c) If the application or the possibility of the application of this

section to any trust would reduce or eliminate a charitable deduction

otherwise available to any person under the income tax, gift tax, estate

tax or generation-skipping transfer tax provisions of the United States

Internal Revenue Code, or the laws of any state of the United States or

of the District of Columbia, this section shall not apply to such trust.

(d) This section shall not apply to a supplemental needs trust which

conforms to the provisions of section 7-1.12 of this part.

Extent of trustee's estate

(a) Except as otherwise provided in this article, an express trust

vests in the trustee the legal estate, subject only to the execution of

the trust, and the beneficiary does not take any legal estate in the

property but may enforce the trust.

(b) This section does not prevent the creator of a trust from

providing to whom the property shall belong in the event of the failure

or termination of the trust or from disposing of the property subject to

the execution of the trust. Such a transferee shall have a legal estate

in the property as against all persons except the trustee and those

lawfully claiming under him.

(c) A trust as described in sections 9-1.5, 9-1.6 and 9-1.7 of the

estates, powers and trusts law, including a business trust as defined in

subdivision two of section two of the general associations law, may

acquire property in the name of the trust as such name is designated in

the instrument creating said trust. Any property, so acquired can be

conveyed, encumbered or otherwise disposed of only in such name by a

conveyance, encumbrance or other instrument executed by:

(1) the person or persons authorized by the instrument creating said

trust; or

(2) the person or persons authorized by a resolution duly adopted by

the trustees; or

(3) a majority of the trustees unless the instrument creating said

trust otherwise provides.

Any instrument of conveyance, encumbrance or disposition delivered

prior to the effective date of this section to or by a trust to which

this section applies, in its trust name is hereby validated provided

that no action or proceeding to cancel or disaffirm it shall be

instituted within one year from the effective date hereof, but nothing

herein contained shall affect any such pending action or proceeding.

When estate of trustee ceases

When the purpose for which an express trust is created ceases, the

estate of the trustee also ceases.

Trust estate not to descend on death of trustee; appointment,

duties and rights of successor trustee

(a) On the death of the sole surviving trustee of an express trust,

the trust estate does not vest in his personal representative or pass to

his distributees or devisees, but, in the absence of a contrary

direction by the creator, if the trust has not been executed, the trust

estate vests in the supreme court or the surrogate's court, as the case

may be, and the trust shall be executed by a person appointed by the

court.

(b) Upon such notice to the beneficiaries of the trust as the court

may direct of an application for the appointment of a successor trustee,

unless the creator has directed otherwise, the court may appoint a

successor trustee, even though the trust has terminated, whenever in the

opinion of the court such appointment is necessary for the effective

administration and distribution of the trust estate, subject to the

following:

(1) A successor trustee shall give security in such amount as the

court may direct.

(2) A successor trustee shall be subject to the same duties, as to

accounting and trust administration, as are imposed by law on trustees

and, in addition to the reasonable expenses incurred in the course of

trust administration, shall be entitled to such commissions as may be

fixed by any court having jurisdiction to pass upon such trustee's final

account, which shall in no case exceed the commissions allowable by law

to trustees.

Act of trustee in contravention of trust

If the trust is expressed in the instrument creating the estate of the

trustee, every sale, conveyance or other act of the trustee in

contravention of the trust, except as authorized by this article and by

any other provision of law, is void.

Suspension of powers of trustee in war service

(a) Whenever a trustee of an express trust is engaged in war service,

as defined in this section, such trustee or any other person interested

in the trust estate may present a petition to the supreme court or the

surrogate's court, as the case may be, to suspend the powers of such

trustee while he is so engaged and until the further order of the court,

and if the suspension of such trustee will leave no person acting as

trustee or leave a beneficiary of such trust as the only acting trustee

thereof, the petition must pray for the appointment of a successor

trustee, unless a successor has been named in the trust instrument and

is not engaged in war service or is not for any other reason unable or

unwilling to act as such trustee.

(b) For the purposes of this section, a trustee is engaged in war

service in any of the following cases:

(1) If he is a member of the armed forces of the United States or of

any of its allies, or if he has been accepted for such service and is

awaiting induction.

(2) If he is engaged in any work abroad in connection with a

governmental agency of the United States or with the American Red Cross

Society or any other body with similar objectives.

(3) If he is interned in any enemy country or is in a foreign country

or a possession or dependency of the United States and is unable to

return to this state.

(4) If he is a member of the Merchant Marine or similar service.

(c) Where the application is made by a trustee engaged in war service,

notice shall be given to such persons and in such manner as the court

may direct. Where the application is made by any other person interested

in the trust estate and the trustee is in the armed forces of the United

States, notice shall be given to such trustee in such manner as the

court may direct. In every other case, where the application is made by

a person other than the trustee, notice thereof shall be given to such

persons and in such manner as the court may direct.

(d) Upon the filing of the petition and proof of service of notice

prescribed in paragraph (c), the court may, notwithstanding any other

provision of law, suspend the trustee engaged in war service from the

exercise of all of his powers and duties while engaged in such service

and until the further order of the court. The order may further provide

that the remaining trustee or, if there is none, the successor named in

the trust instrument or appointed by the court may exercise all of the

powers and be subject to all of the duties of the original trustee.

(e) The successor trustee shall be limited to commissions as computed

under SCPA 2308 or 2309, whichever is applicable, upon income received

and disbursed and upon principal disbursed. Commissions may also be

allowed under 2308 or 2309 upon rents if he is authorized or required to

collect the rents of and manage real property. In case of the

resignation or removal of the suspended trustee, or in the event of such

trustee's death, the foregoing basis for computing the commissions shall

not apply and his commissions shall be computed in the same manner as

those of any other trustee.

(f) When the suspended trustee ceases to be engaged in war service he

may, upon application to the court and upon such notice as the court may

direct, be reinstated as trustee if any of the duties of such office

remain unexecuted. If the suspended trustee is reinstated the court

shall thereupon remove his successor and make such other order as

justice requires, but such removal shall not bar the successor from

subsequently qualifying as a trustee if for any reason it thereafter

becomes necessary to appoint a trustee.

Resignation, suspension or removal of trustee

(a) Subject to the relevant provisions of the civil practice law and

rules, the supreme court has power:

(1) On the application of a trustee, to accept his resignation and to

discharge him on such terms as it deems proper.

(2) On the application of any person interested in the trust estate,

to suspend or remove a trustee who has violated or threatens to violate

his trust, who is insolvent or whose insolvency is imminent or

apprehended or who for any reason is a person unsuitable to execute the

trust.

(3) In case of the resignation or removal of a trustee, to appoint a

successor trustee and, if there is no acting trustee, to cause the trust

to be executed by a receiver or other officer under its direction. This

section does not apply to a trust arising or resulting by implication of

law, nor where other provision is made by law for the resignation,

suspension or removal of a trustee or the appointment of a successor

trustee.

Accounting by trustee in supreme court

(a) Any proceeding for an accounting or other relief brought by a

trustee or by a substituted or successor trustee may be commenced by

such notice to the beneficiaries of the trust as the supreme court may

direct.

(b) In case of the resignation, suspension or removal, pursuant to

this article, of any trustee of a trust which includes real property and

mortgage participation certificates held by more than one person and

secured by a mortgage on real property or any estate therein, payment of

which certificates is not guaranteed by the trustee or by any title or

mortgage guaranty or investment company, the court in its discretion may

dispense with a formal accounting by such trustee; but the trustee shall

file with the court a statement of the condition of the trust and of the

security underlying such certificates as of the date of his resignation,

suspension or removal and shall assign, transfer or convey all of the

assets of the trust to the successor trustee or to the receiver or other

officer appointed by the court, as the case may be.

Commissions of trustee to sell real property for benefit of

creditors

A trustee of a trust to sell real property for the benefit of

creditors is entitled to the same commissions as an assignee for the

benefit of creditors.

Disposition in trust for creator void as against creditors

(a) A disposition in trust for the use of the creator is void as

against the existing or subsequent creditors of the creator.

(b) (1) For purposes of paragraph (a) of this section, all trusts,

custodial accounts, annuities, insurance contracts, monies, assets or

interests established as part of, and all payments from, either an

individual retirement account plan which is qualified under section 408

or section 408A of the United States Internal Revenue Code of 1986, as

amended, or a Keogh (HR-10), retirement or other plan established by a

corporation, which is qualified under section 401 of the United States

Internal Revenue Code of 1986, as amended, shall not be considered a

disposition in trust for the use of the creator, even though the creator

is (i) in the case of an individual retirement account plan, an

individual who is the settlor of and depositor to such account plan, or

(ii) a self-employed individual, or (iii) a partner of the entity

sponsoring the Keogh (HR-10) plan, or (iv) a shareholder of the

corporation sponsoring the retirement or other plan.

(2) All trusts, custodial accounts, annuities, insurance contracts,

monies, assets, or interests described in subparagraph one of this

paragraph shall be conclusively presumed to be spendthrift trusts under

this section and the common law of the state of New York for all

purposes, including, but not limited to, all cases arising under or

related to a case arising under sections one hundred one to thirteen

hundred thirty of title eleven of the United States Bankruptcy Code, as

amended.

(3) This section shall not impair any rights an individual has under a

qualified domestic relations order as that term is defined in section

414(p) of the United States Internal Revenue Code of 1986, as amended.

(4) Additions to an asset described in subparagraph one of this

paragraph shall not be exempt from application to the satisfaction of a

money judgment if (i) made after the date that is ninety days before the

interposition of the claim on which such judgment was entered, or (ii)

deemed to be voidable transactions under article ten of the debtor and

creditor law.

(c) A provision in any trust, other than a testamentary trust or a

trust which meets the requirements of subparagraph two of paragraph (b)

of subdivision two of section three hundred sixty-six of the social

services law and of the regulations implementing such clauses, which

provides directly or indirectly for the suspension, termination or

diversion of the principal, income or beneficial interest of either the

creator or the creator's spouse in the event that the creator or

creator's spouse should apply for medical assistance or require medical,

hospital or nursing care or long term custodial, nursing or medical care

shall be void as against the public policy of the state of New York,

without regard to the irrevocability of the trust or the purpose for

which the trust was created.

(d) A disposition in trust shall not be considered to be for the use

of the creator under paragraph (a) of this section by reason of the

trustee's authority to pay trust principal to the creator pursuant to

section 7-1.11 of this article. Nor shall a disposition in trust be

considered to be for the use of the creator under paragraph (a) of this

section where the trustee is authorized under the trust instrument or

any other provision of law to pay or reimburse the creator for any tax

on trust income or trust principal that is payable by the creator under

the law imposing such tax or to pay any such tax directly to the taxing

authorities. No creditor of a trust creator shall be entitled to reach

any trust property based on the discretionary powers described in this

paragraph.

Bona fide purchasers and creditors protected

An express trust not declared in the disposition to the trustee or an

implied or resulting trust does not defeat the title of a purchaser from

the trustee for value and without notice of the trust, or the rights of

a creditor who extended credit to the trustee in reliance upon his

apparent ownership of the trust property.

Person paying money to the trustee protected

A person who in good faith transfers money or property to a trustee is

not responsible for the proper application of such money or property;

and any right or title derived by him from the trustee in consideration

of such transfer is not affected by the trustee's misapplication of such

money or property.

Excess income from trust property subject to creditors' claims

Where a trust is created to receive the income from property and no

valid direction for accumulation is given, the income in excess of the

sum necessary for the education and support of the beneficiary is

subject to the claims of his creditors in the same manner as other

property which cannot be reached by execution.

Rights of creditors to obtain information concerning

beneficiaries

(a) Any person who has furnished necessaries to a beneficiary of any

trust may apply to the court having jurisdiction of the trust for an

order directing the trustee thereof to furnish to the applicant the true

and full name and residence address of any such beneficiary. As used in

this section, the term "necessaries" means goods furnished and services

performed suitable to the condition in life of the person to whom they

are furnished or for whose benefit they are performed, and which meet

his actual needs at the time such necessaries are provided.

(b) The application shall be made by a verified petition which states

(1) the name and address of petitioner, (2) the nature and extent of the

necessaries provided, (3) the person by whom and the circumstances under

which they were provided, (4) the amount of the indebtedness claimed to

exist, (5) the name of the person to whom or for whose benefit such

necessaries were provided, (6) a description of the trust of which the

person to whom such necessaries were provided is a beneficiary and (7)

the name of the trustee administering such trust.

(c) Such petition shall also show the efforts made by the petitioner

to locate the beneficiary and that more than ten days have elapsed since

petitioner requested in writing that the trustee furnish the address of

any such beneficiary. The petition may contain such other information as

is relevant to the inquiry.

(d) The proceeding may be initiated by citation or order to show cause

served on the trustee personally or in such manner and at such time as

the court may direct. A copy of the petition shall be served with the

process.

(e) Upon the return of the process the court, if satisfied that the

allegations of the petition are true and that the petitioner is entitled

to the relief sought, may make an order directing the trustee to furnish

to petitioner the true and full name and residence address of any

beneficiary to whom necessaries were provided. The order may fix the

time within which such name and address shall be furnished. Failure to

comply with an order so made shall be punishable as a contempt of court.

Definitions

(a) A "beneficiary" is a person who is described by a depositor as a

person for whom a trust account is established or maintained.

(b) A "depositor" is a person in whose name a trust account subject to

this part is established or maintained.

(c) A "financial institution" is a bank, trust company, national

banking association, savings bank, industrial bank, private banker,

foreign banking corporation, federal savings and loan association, a

savings institution chartered and supervised as a savings and loan or

similar institution under federal law or the laws of a state, a federal

credit union, or a credit union chartered and supervised under the laws

of a state.

(d) A "trust account" includes a savings, share, certificate or

deposit account in a financial institution established by a depositor

describing himself as trustee for another, other than a depositor

describing himself as acting under a will, trust instrument or other

instrument, court order or decree.

Terms of a trust account

The funds in a trust account, which shall include any dividends or

interest thereon, shall be trust funds subject to the following terms:

(1) The trust can be revoked, terminated or modified by the depositor

during his lifetime only by means of, and to the extent of, withdrawals

from or charges against the trust account made or authorized by the

depositor or by a writing which specifically names the beneficiary and

the financial institution. The writing shall be acknowledged or proved

in the manner required to entitle conveyances of real property to be

recorded, and shall be filed with the financial institution wherein the

account is maintained.

(2) A trust can be revoked, terminated or modified by the depositor's

will only by means of, and to the extent of, an express direction

concerning such trust account, which must be described in the will as

being in trust for a named beneficiary in a named financial institution.

Where the depositor has more than one trust account for a particular

beneficiary in a particular financial institution, such a direction will

affect all such accounts, unless the direction is limited to one or more

accounts specifically identified by account number in addition to the

foregoing requirements. A testamentary revocation, termination or

modification under this paragraph can be effected by express words of

revocation, termination or modification, or by a specific bequest of the

trust account, or any part of it, to someone other than the beneficiary.

A bequest of part of a trust account shall operate as a pro tanto

revocation to the extent of the bequest.

(3) If the depositor survives the beneficiary, the trust shall

terminate and title to the funds shall continue in the depositor free

and clear of the trust.

(4) If the beneficiary survives the depositor, and the depositor's

will contains no provision revoking, terminating or modifying the trust

account under paragraph (2), the trust shall terminate and title to the

funds shall vest in the beneficiary free and clear of the trust.

(5) If the beneficiary survives the depositor and the depositor's will

contains language sufficient under paragraph two of this section, to

revoke, terminate or modify the trust, in whole or in part, that part of

the trust which is affected shall terminate and title to the funds shall

be subject to disposition by the depositor's will, free and clear of the

trust.

Payment to beneficiary

(a) If the beneficiary survives the depositor under the circumstances

provided in paragraph four of section 7-5.2, the funds shall be paid to

the beneficiary upon his order, if, at the time of his demand for

payment of all or part of the funds, he is eighteen or more years of

age.

(b) If the beneficiary survives the depositor under the circumstances

provided in paragraph four of section 7-5.2, and if the beneficiary is

under eighteen years of age at the time demand for payment of any part

or all of the funds is made, the funds may be paid to the order of the

parent or parents of the beneficiary to be held for the use and benefit

of such infant beneficiary or to the order of the duly appointed

guardian of the property of the beneficiary, if the funds are equal to

or are less than ten thousand dollars; but if the funds are more than

ten thousand dollars, the funds may be paid only to the order of the

duly appointed guardian of the property of the beneficiary.

Effect of payment

A financial institution which, upon the death of a depositor and prior

to service upon it of a restraining order, injunction or other

appropriate process from a court of competent jurisdiction prohibiting

payment, makes payment to a beneficiary or if the beneficiary is under

eighteen years of age, to the guardian of the property or to the parent

or parents of the infant beneficiary pursuant to section 7-5.3, shall,

to the extent of such payment, be released from liability to any person

claiming a right to the funds and the receipt or acquittance of the

person to whom payment is made shall be a valid and sufficient release

and discharge of the financial institution.

Rights not affected

This part does not affect:

(1) The rights of creditors of the depositor or his estate,

(2) The rights of fiduciaries of the estate of the depositor, or

(3) The rights of the surviving spouse of the depositor.

Joint depositors

If a trust account is established in the names of more than one

depositor, in form to be paid or delivered to any, or the survivor of

them, in trust for another, such account shall be subject to the terms

of this part, except that the title to the funds on deposit, as between

the depositors, shall be governed by article XIII-E of the banking law.

Multiple beneficiaries

(a) Whenever any proceeds of a trust account would pass pursuant to

section 7-5.2 to two or more beneficiaries, such proceeds shall pass to

such beneficiaries in equal proportions, unless the terms of the trust

provide otherwise.

(b) Whenever any proceeds of a trust account would pass pursuant to

section 7-5.2 to two or more beneficiaries, and one or more of the

beneficiaries predeceases the depositor, such proceeds shall pass to the

surviving beneficiary or beneficiaries in equal proportions, unless the

terms of the trust provide otherwise.

Application

This part shall apply to all funds in trust accounts, as defined in

paragraph (d) of section 7-5.1, which are in existence on its effective

date, except that its provisions shall not impair or defeat any rights

which have accrued prior to such date.

Definitions

In this part:

(a) "Adult" means an individual who has attained the age of twenty-one

years.

(b) "Benefit plan" means an employer's plan for the benefit of an

employee or partner or an individual retirement account.

(c) "Broker" means a person lawfully engaged in the business of

effecting transactions in securities or commodities for the person's own

account or for the account of others.

(d) "Court" means the supreme court or the surrogate's court having

jurisdiction over the minor.

(e) "Custodial property" means (i) any interest in property

transferred to a custodian under this part and (ii) the income from and

proceeds of that interest in property.

(f) "Custodian" means a person so designated under 7-6.9 or a

successor or substitute custodian designated under 7-6.18.

(g) "Financial institution" means a bank, trust company, savings

institution, or credit union, chartered and supervised under state or

federal law.

(h) "Guardian" means a person appointed or qualified by a court to act

as general, limited, or temporary guardian of a minor's property or a

person legally authorized to perform substantially the same functions.

(i) "Legal representative" means an individual's personal

representative or guardian.

(j) "Member of the minor's family" means any of the minor's parents,

stepparents, spouse, grandparents, brothers, sisters, uncles, and aunts,

whether of the whole blood or half blood or by or through legal

adoption.

(k) "Minor" means an individual who has not attained the age of

twenty-one years.

(l) "Person" means an individual, corporation, organization, or other

legal entity.

(m) "Personal representative" means a person who has received letters

to administer the estate of a decedent or a person legally authorized to

perform substantially the same functions.

(n) "State" includes any state of the United States, the District of

Columbia, the Commonwealth of Puerto Rico, and any territory or

possession subject to the legislative authority of the United States.

(o) "Transfer" means a transaction that creates custodial property

under 7-6.9.

(p) "Transferor" means a person who makes a transfer under this part.

(q) "Trust company" means a financial institution, corporation, or

other legal entity, authorized to exercise general trust powers in this

state.

Scope and jurisdiction

(a) This part applies to a transfer that refers to this part in the

designation under paragraph (a) of 7-6.9 by which the transfer is made

if at the time of the transfer, the transferor, the minor, or the

custodian is a resident of this state or the custodial property is

located in this state. The custodianship so created remains subject to

this part despite a subsequent change in residence of a transferor, the

minor, or the custodian, or the removal of custodial property from this

state.

(b) A person designated as custodian under this part is subject to

personal jurisdiction in this state with respect to any matter relating

to the custodianship.

(c) A transfer that purports to be made and which is valid under the

Uniform Transfers to Minors Act, the Uniform Gifts to Minors Act, or a

substantially similar act, of another state is governed by the law of

the designated state and may be executed and is enforceable in this

state if at the time of the transfer, the transferor, the minor, or the

custodian is a resident of the designated state or the custodial

property is located in the designated state.

Nomination of custodian

(a) A person having the right to designate the recipient of property

transferable upon the occurrence of a future event may revocably

nominate a custodian to receive the property for a minor beneficiary

upon the occurrence of the event by naming the custodian followed in

substance by the words "as custodian for _________________ (name of

minor) under the New York Uniform Transfers to Minors Act." The

nomination may name one or more persons as substitute custodians to whom

the property must be transferred, in the order named, if the first

nominated custodian dies before the transfer or is unable, declines, or

is ineligible to serve. The nomination may be made in a will, a trust, a

deed, an instrument exercising a power of appointment, or in a writing

designating a beneficiary of contractual rights which is registered with

or delivered to the payor, issuer, or other obligor of the contractual

rights.

(b) A custodian nominated under this section must be a person to whom

a transfer of property of that kind may be made under paragraph (a) of

7-6.9.

(c) The nomination of a custodian under this section does not create

custodial property until the nominating instrument becomes irrevocable

or a transfer to the nominated custodian is completed under 7-6.9.

Unless the nomination of a custodian has been revoked, upon the

occurrence of the future event the custodianship becomes effective and

the custodian shall enforce a transfer of the custodial property

pursuant to 7-6.9.

Transfer by gift or exercise of power of appointment

A person may make a transfer by irrevocable gift to, or the

irrevocable exercise of a power of appointment in favor of, a custodian

for the benefit of a minor pursuant to 7-6.9.

Transfer authorized by will or trust

(a) A personal representative or trustee may make an irrevocable

transfer pursuant to 7-6.9 to a custodian for the benefit of a minor as

authorized in the governing will or trust.

(b) If the testator or settler has nominated a custodian under 7-6.3

to receive the custodial property, the transfer must be made to that

person.

(c) If the testator or settler has not nominated a custodian under

7-6.3, or all persons so nominated as custodian die before the transfer

or are unable, decline, or are ineligible to serve, the personal

representative or the trustee, as the case may be, shall designate the

custodian from among those eligible to serve as custodian for property

of that kind under paragraph (a) of 7-6.9.

Other transfer by fiduciary

(a) Subject to paragraph (c), a personal representative or trustee may

make an irrevocable transfer to another adult or trust company as

custodian for the benefit of a minor pursuant to 7-6.9, in the absence

of a will or under a will or trust that does not contain an

authorization to do so.

(b) Subject to paragraph (c), a guardian may make an irrevocable

transfer to another adult or trust company as custodian for the benefit

of the minor pursuant to 7-6.9.

(c) A transfer under paragraph (a) or (b) may be made only if (i) the

personal representative, trustee, or guardian considers the transfer to

be in the best interest of the minor, (ii) the transfer is not

prohibited by or inconsistent with provisions of the applicable will,

trust agreement, or other governing instrument, and (iii) if the

personal representative is acting in the absence of a will, the transfer

is authorized by the court if it exceeds fifty thousand dollars in

value.

Transfer by obligor

(a) Subject to paragraphs (b) and (c), a person not subject to 7-6.5

or 7-6.6 who holds property of or owes a liquidated debt to a minor not

having a guardian may make an irrevocable transfer to a custodian for

the benefit of the minor pursuant to 7-6.9.

(b) If a person having the right to do so under 7-6.3 has nominated a

custodian under that section to receive the custodial property, the

transfer must be made to that person.

(c) If no custodian has been nominated under 7-6.3, or all persons so

nominated as custodian die before the transfer or are unable, decline,

or are ineligible to serve, a transfer under this section may be made to

an adult member of the minor's family, unless the property exceeds fifty

thousand dollars in value, or to a trust company.

Receipt for custodial property

A written acknowledgement of delivery by a custodian constitutes a

sufficient receipt and discharge for custodial property transferred to a

custodian pursuant to this part.

Manner of creating custodial property and effecting transfer;

designation of initial custodian; control

(a) Custodial property is created and a transfer is made whenever:

(1) an uncertificated security or certificated security in registered

form is either:

(i) registered in the name of the transferor, an adult other than the

transferor, or a trust company, followed in substance by the words: "as

custodian for _______________________ (name of minor) under the New York

Uniform Transfers to Minors Act"; or

(ii) delivered, if in certificated form, or any document necessary for

the transfer of an uncertificated security is delivered, together with

any necessary endorsement, to an adult other than the transferor or to a

trust company, as custodian, accompanied by an instrument in

substantially the form set forth in paragraph (b);

(2) money is paid or delivered, or a security held in the name of a

broker, financial institution, or its nominee is transferred, to a

broker or financial institution for credit to an account in the name of

the transferor, an adult other than the transferor, or a trust company,

followed in substance by the words: "as custodian for

_____________________ (name of minor) under the New York Uniform

Transfers to Minors Act";

(3) the ownership of a life or endowment insurance policy or annuity

contract is either:

(i) registered with the issuer in the name of the transferor, an adult

other than the transferor, or a trust company, followed in substance by

the words: "as custodian for ______________________ (name of minor)

under the New York Uniform Transfers to Minors Act"; or

(ii) assigned in a writing delivered to an adult other than the

transferor, or to a trust company whose name in the assignment is

followed in substance by the words: "as custodian for _________________

(name of minor) under the New York Uniform Transfers to Minors Act";

(4) an irrevocable exercise of a power of appointment or an

irrevocable present right to future payment under a contract is the

subject of a written notification delivered to the payor, issuer, or

other obligor that the right is transferred to the transferor, an adult

other than the transferor, or a trust company, whose name in the

notification is followed in substance by the words: "as custodian for

_____________________ (name of minor) under the New York Uniform

Transfers to Minors Act";

(5) an interest in real property is recorded in the name of the

transferor, an adult other than the transferor, or a trust company,

followed in substance by the words: "as custodian for

______________________ (name of minor) under the New York Uniform

Transfers to Minors Act";

(6) a certificate of title issued by a department or agency of a state

or of the United States which evidences title to tangible personal

property is either:

(i) issued in the name of the transferor, an adult other than the

transferor, or a trust company, followed in substance by the words: "as

custodian for __________________ (name of minor) under the New York

Uniform Transfers to Minors Act"; or

(ii) delivered to an adult other than the transferor or to a trust

company, endorsed to that person followed in substance by the words: "as

custodian for ___________________________ (name of minor) under the New

York Uniform Transfers to Minors Act"; or

(7) an interest in any property not described in subparagraphs (1)

through (6) is transferred to an adult other than the transferor or to a

trust company by a written instrument in substantially the form set

forth in paragraph (b).

(b) An instrument in the following form satisfies the requirements of

clause (ii) of subparagraph (1) and subparagraph (7) of paragraph (a):

"TRANSFER UNDER THE NEW YORK UNIFORM

TRANSFERS TO MINORS ACT

I, __________________ (name of transferor or name and representative

capacity if a fiduciary) hereby transfer to ________________ (name of

custodian), as custodian for ________________ (name of minor) under the

New York Uniform Transfers to Minors Act, the following: (insert a

description of the custodial property sufficient to identify it).

Dated: _____________________

__________________________________

(Signature)

_________________________ (name of custodian) acknowledges receipt of

the property described above as custodian for the minor named above

under the New York Uniform Transfers to Minors Act.

Dated: _____________________

_________________________________"

(Signature of Custodian)

(c) A transferor shall place the custodian in control of the custodial

property as soon as practicable.

Single custodianship

A transfer may be made only for one minor, and only one person may be

the custodian. All custodial property held under this part by the same

custodian for the benefit of the same minor constitutes a single

custodianship.

Validity and effect of transfer

(a) The validity of a transfer made in a manner prescribed in this

part is not affected by:

(1) The failure of the transferor to comply with paragraph (c) of

7-6.9 concerning possession and control;

(2) designation of an ineligible custodian, except designation of the

transferor in the case of property for which the transferor is

ineligible to serve as custodian under paragraph (a) of 7-6.9; or

(3) death or incapacity of a person nominated under 7-6.3 or

designated under 7-6.9 as custodian or the disclaimer of the office by

that person.

(b) A transfer made pursuant to 7-6.9 is irrevocable, and the

custodial property is indefeasibly vested in the minor, but the

custodian has all the rights, powers, duties, and authority provided in

this part, and neither the minor nor the minor's legal representative

has any right, power, duty, or authority with respect to the custodial

property except as provided in this part.

(c) By making a transfer, the transferor incorporates in the

disposition all the provisions of this part and grants to the custodian,

and to any third person dealing with a person designated as custodian,

the respective powers, rights, and immunities provided in this part.

Care of custodial property

(a) A custodian shall:

(1) take control of custodial property;

(2) register or record title to custodial property if appropriate; and

(3) collect, hold, manage, invest, and reinvest custodial property.

(b) In dealing with custodial property, a custodian shall observe the

standard of care that would be observed by a prudent person dealing with

property of another and is not limited by any other statute restricting

investments by fiduciaries and is specifically authorized to delegate

investment and management functions in the manner of a trustee as

provided in section 11-2.3. If a custodian has a special skill or

expertise or is named custodian on the basis of representations of a

special skill or expertise, the custodian shall use that skill or

expertise. However, a custodian, in the custodian's discretion and

without liability to the minor or the minor's estate, may retain any

custodial property received from a transferor.

(c) A custodian may invest in or pay premiums on life insurance or

endowment policies on (1) the life of the minor only if the minor or the

minor's estate is the sole beneficiary, or (2) the life of another

person in whom the minor has an insurable interest only to the extent

that the minor, the minor's estate, or the custodian in the capacity of

custodian, is the irrevocable beneficiary.

(d) A custodian at all times shall keep custodial property separate

and distinct from all other property in a manner sufficient to identify

it clearly as custodial property of the minor. Custodial property

consisting of certificated securities may be held on deposit at a stock

brokerage firm or a financial institution registered in a street name or

nominee name. Custodial property consisting of an undivided interest is

so identified if the minor's interest is held as a tenant in common and

is fixed. Custodial property subject to recordation is so identified if

it is recorded, and custodial property subject to registration is so

identified if it is either registered, or held in an account designated,

in the name of the custodian, followed in substance by the words: "as a

custodian for_______________(name of minor) under the New York Uniform

Transfers to Minors Act."

(e) A custodian shall keep records of all transactions with respect to

custodial property, including information necessary for the preparation

of the minor's tax returns, and shall make them available for inspection

at reasonable intervals by a parent or legal representative of the minor

or by the minor if the minor has attained the age of fourteen years.

Powers of custodian

(a) A custodian, acting in a custodial capacity, has all the rights,

powers, and authority over custodial property that unmarried adult

owners have over their own property, but a custodian may exercise those

rights, powers, and authority in that capacity only.

(b) This section does not relieve a custodian from liability for

breach of 7-6.12.

Use of custodial property

(a) A custodian may deliver or pay to the minor or expend for the

minor's benefit so much of the custodial property as the custodian

considers advisable for the use and benefit of the minor, without court

order and without regard to (1) the duty or ability of the custodian

personally or of any other person to support the minor, or (2) any other

income or property of the minor which may be applicable or available for

the support of the minor.

(b) On petition of an interested person or the minor if the minor has

attained the age of fourteen years, the court may order the custodian to

deliver or pay to the minor or expend for the minor's benefit so much of

the custodial property as the court considers advisable for the use and

benefit of the minor.

(c) A delivery, payment, or expenditure under this section is in

addition to, not in substitution for, and does not affect any obligation

of a person to support the minor.

Custodian's expenses, compensation, and bond

(a) A custodian is entitled to reimbursement from custodial property

for reasonable expenses incurred in the performance of the custodian's

duties.

(b) Except for one who is a transferor under 7-6.4, a custodian has an

election during each calendar year to charge reasonable compensation for

services performed during that year. A custodian's election to charge

reasonable compensation for a calendar year must be exercised during the

calendar year.

(c) Except as provided in paragraph (f) of 7-6.18, a custodian shall

not be required to give a bond.

Exemption of third person from liability

A third person in good faith and without court order may act on the

instructions of or otherwise deal with any person purporting to make a

transfer or purporting to act in the capacity of a custodian and, in the

absence of knowledge, is not responsible for determining:

(a) the validity of the purported custodian's designation;

(b) the propriety of, or the authority under this part for, any act of

the purported custodian;

(c) the validity or propriety under this part of any instrument or

instructions executed or given either by the person purporting to make a

transfer or by the purported custodian; or

(d) the propriety of the application of any property of the minor

delivered to the purported custodian.

Liability to third persons

(a) A claim based on (1) a contract entered into by a custodian acting

in a custodial capacity, (2) an obligation arising from the ownership or

control of custodial property, or (3) a tort committed during the

custodianship, may be asserted against the custodial property by

proceeding against the custodian in the custodial capacity, whether or

not the custodian or the minor is personally liable therefor.

(b) A custodian is not personally liable:

(1) on a contract properly entered into in the custodial capacity

unless the custodian fails to reveal that capacity and to identify the

custodianship in the contract; or

(2) for an obligation arising from control of custodial property or

for a tort committed during the custodianship unless the custodian is

personally at fault.

(c) A minor is not personally liable for an obligation arising from

ownership of custodial property or for a tort committed during the

custodianship unless the minor is personally at fault.

Renunciation, resignation, death, or removal of custodian;

designation of successor custodian

(a) A person nominated under 7-6.3 or designated under 7-6.9 as

custodian may decline to serve by delivering a valid disclaimer to the

person who made the nomination or to the transferor or the transferor's

legal representative. If the event giving rise to a transfer has not

occurred and no substitute custodian able, willing, and eligible to

serve was nominated under 7-6.3, the person who made the nomination may

nominate a substitute custodian under 7-6.3; otherwise the transferor or

the transferor's legal representative shall designate a substitute

custodian at the time of the transfer, in either case from among the

persons eligible to serve as custodian for that kind of property under

paragraph (a) of 7-6.9. The custodian so designated has the rights of a

successor custodian.

(b) A custodian at any time may designate a trust company or an adult

other than a transferor under 7-6.4 as successor custodian by executing

and dating an instrument of designation before a subscribing witness

other than the successor. If the instrument of designation does not

contain or is not accompanied by the resignation of the custodian, the

designation of the successor does not take effect until the custodian

resigns, dies, become incapacitated, or is removed. The transferor may

designate one or more persons as successor custodian to serve in the

designated order of priority, in case the custodian originally

designated or a prior successor custodian is unable, declines, or is

ineligible to serve or resigns, dies, becomes incapacitated, or is

removed.

The designation either (1) shall be made in the same transaction and

by the same document by which the transfer is made, or (2) shall be made

by executing and dating a separate instrument of designation before a

subscribing witness other than a successor as a part of the same

transaction and contemporaneously with the execution of the document by

which the transfer is made. The designation is made by setting forth the

successor custodian's name, followed in substance by the words: "is

designated successor custodian." A successor custodian designated by the

transferor may be a trust company or an adult other than the transferor.

A successor custodian effectively designated by the transferor has

priority over a successor custodian designated by a custodian.

(c) A custodian may resign at any time by delivering written notice to

the minor if the minor has attained the age of fourteen years and to the

successor custodian and by delivering the custodial property to the

successor custodian.

(d) If the transferor has not effectively designated one or more

successor custodians and a custodian is ineligible, dies, or becomes

incapacitated without having effectively designated a successor and the

minor has attained the age of fourteen years, the minor may designate as

successor custodian, in the manner prescribed in paragraph (b), an adult

member of the minor's family, a guardian of the minor, or a trust

company. If the minor has not attained the age of fourteen years or

fails to act within sixty days after the ineligibility, death, or

incapacity, the guardian of the minor becomes successor custodian. If

the minor has no guardian or the guardian declines to act, the

transferor, the legal representative of the transferor or of the

custodian, an adult member of the minor's family, or any other

interested person may petition the court to designate a successor

custodian.

(e) A custodian who declines to serve under paragraph (a) or resigns

under paragraph (c), or the legal representative of a deceased or

incapacitated custodian, as soon as practicable, shall put the custodial

property and records in the possession and control of the successor

custodian. The successor custodian by action may enforce the obligation

to deliver custodial property and records and becomes responsible for

each item as received.

(f) A transferor, the legal representative of a transferor, an adult

member of the minor's family, a guardian of the minor, or the minor if

the minor has attained the age of fourteen years may petition the court

to remove the custodian for cause and to designate a successor custodian

other than a transferor under 7-6.4 or to require the custodian to give

appropriate bond.

Accounting by and determination of liability of custodian

(a) A minor who has attained the age of fourteen years, the minor's

guardian or legal representative, an adult member of the minor's family,

a transferor, or a transferor's legal representative may petition the

court (1) for an accounting by the custodian or the custodian's legal

representative; or (2) for a determination of responsibility, as between

the custodial property and the custodian personally, for claims against

the custodial property unless the responsibility has been adjudicated in

an action under 7-6.17 to which the minor or the minor's legal

representative was a party.

(b) A successor custodian may petition the court for an accounting by

the predecessor custodian.

(c) The court, in a proceeding under this part or in any other

proceeding, may require or permit the custodian or the custodian's legal

representative to account.

(d) If a custodian is removed under paragraph (f) of 7-6.18, the court

shall require an accounting and order delivery of the custodial property

and records to the successor custodian and the execution of all

instruments required for transfer of the custodial property.

Termination of custodianship

The custodian shall transfer in an appropriate manner the custodial

property to the minor or to the minor's estate upon the earlier of:

(a) the minor's attainment of twenty-one years of age with respect to

custodial property transferred under 7-6.4 or 7-6.5;

(b) the minor's attainment of age eighteen or other statutory age of

majority of New York with respect to custodial property transferred

under 7-6.6 or 7-6.7; or

(c) the minor's death.

Age eighteen election

Notwithstanding the foregoing sections of this part, if with respect

to any gift made pursuant to 7-6.9, the designations of the custodian

contains, in substance, the phrase, "until age eighteen", then all

records of the custodian with respect to such gift shall contain such

phrase, and the gift shall be administered under this part as if the

word "eighteen" were substituted for the word "twenty-one" wherever such

word appears in paragraphs (a) and (k) of section 7-6.1 and in section

7-6.20.

Effect on existing custodianships

(a) Any transfer of custodial property made before January first,

nineteen hundred ninety-seven is validated notwithstanding that there

was no specific authority in part 4 of this article for the coverage of

custodial property of that kind or for a transfer from that source at

the time the transfer was made.

(b) All accounts established under part 4 of this article and in

existence on January first, nineteen hundred ninety-seven shall be

governed by the provisions of this part except insofar as such

application impairs constitutionally vested rights. Notwithstanding the

provisions of this paragraph, the age of termination in effect prior to

January first, nineteen hundred ninety-seven shall remain in effect with

respect to such accounts, including any additions made after December

thirty-first, nineteen hundred ninety-six.

(c) To the extent that this part, by virtue of paragraph (b) of this

section, does not apply to transfers made in a manner prescribed in part

4 of this article or to the powers, duties, and immunities conferred by

transfers in that manner upon custodians and persons dealing with

custodians, the repeal of part 4 of this article shall not affect those

transfers or those powers, duties, and immunities.

Applicability

This part applies to a transfer within the scope of 7-6.2 made on or

after January first, nineteen hundred ninety-seven if:

(a) the transfer purports to have been made under the New York Uniform

Gifts to Minor Act; or

(b) the instrument by which the transfer purports to have been made

uses in substance the designation "as custodian under the Uniform Gifts

to Minors Act" or "as custodian under the Uniform Transfers to Minors

Act" of any other state, and the application of this part is necessary

to validate the transfer.

Uniformity of application and construction

This part shall be applied and construed to effectuate its general

purpose to make uniform the law with respect to the subject of this part

among states enacting it.

Short title

This part may be cited as "The New York Uniform Transfers to Minors

Act."

Severability

If any provisions of this part or its application to any person or

circumstances is held invalid, the invalidity does not affect other

provisions or applications of this part which can be given effect

without the invalid provision or application, and to this end provisions

of this part are severable.

Child performer trust account

1. Scope. This section applies to contracts pursuant to which a child

performer:

(a) is employed or agrees to render artistic or creative services for

a fee, either directly or through a third-party individual or personal

services corporation (loan-out company), or through an agency or service

that provides artistic or creative services (casting agency); and

(b) agrees to purchase, or otherwise secure, sell, lease, or otherwise

dispose of literary, musical, or dramatic properties, or use of a

person's likeness, voice recording, performance, or story of or

incidents in his or her life, either tangible or intangible, or any

other rights therein for use in motion pictures, television, the

production of sound recordings in any format now known or hereafter

devised, the legitimate or living stage, or otherwise in the

entertainment field.

2. Establishment of child performer trust account. (a) Employer.

Within thirty days following the final day of employment, except when

the performance contract is a period longer than thirty days, a child

performer's employer is required to transfer fifteen percent of gross

earnings to the custodian of the child performer's child performer trust

account. When the employment is longer than thirty days, the employer

shall make the required transfer every payroll period. Transfers must

conform with part six of this article. The use of an instrument to make

the transfer which substantially conforms with section 7-6.9 is

sufficient. If the child performer's employer has not been notified

within fifteen days of the commencement of employment of the existence

of a child performer trust account, or no such account has been

established, then the child performer's employer shall transfer such

monies together with the child performer's name and last known address

to the state comptroller for placement into the child performer's

holding fund established in section ninety-nine-k of the state finance

law and such monies shall be administered by the state comptroller. Once

transfers have been made to the child performer's trust account or the

child performer's holding fund, as required by this subdivision, the

child performer's employer has no further duty under this section.

(b) Custodian and guardian. Within fifteen days of the commencement of

employment the child performer's guardian or custodian must establish a

child performer trust account in accordance with part six of this

article, unless an account has previously been established. Once the

child performer trust account has been established the child performer's

guardian or custodian shall notify the child performer's employer of the

existence of the account and any additional information required to make

transfers. The custodian of the account shall promptly notify the child

performer's employer of any change in facts which affect the employer's

obligation to set aside funds under this section. Upon request of the

parent, legal guardian or the child performer's guardian ad litem, the

custodian may require the child performer's employer to transfer more

than fifteen percent of the gross earnings to the child performer trust

account. The child performer's parent or legal guardian may serve as

custodian. Once the child performer trust account balance reaches two

hundred fifty thousand dollars or more a trust company shall be

appointed as custodian of the account.

(c) Termination of child performer trust account. The child performer

may terminate the child performer trust account upon reaching the age of

eighteen.

3. Standard for child performer trust accounts. Custodian management

of funds which are required to be placed into a child performer trust

account shall be subject to part six of this article, in all respects

except as provided in this section.

Trusts for pets

(a) A trust for the care of a designated domestic or pet animal is

valid. The intended use of the principal or income may be enforced by an

individual designated for that purpose in the trust instrument or, if

none, by an individual appointed by a court upon application to it by an

individual, or by a trustee. Such trust shall terminate when the living

animal beneficiary or beneficiaries of such trust are no longer alive.

(b) Except as expressly provided otherwise in the trust instrument, no

portion of the principal or income may be converted to the use of the

trustee or to any use other than for the benefit of all covered animals.

(c) Upon termination, the trustee shall transfer the unexpended trust

property as directed in the trust instrument or, if there are no such

directions in the trust instrument, the property shall pass to the

estate of the grantor.

(d) A court may reduce the amount of the property transferred if it

determines that amount substantially exceeds the amount required for the

intended use. The amount of the reduction, if any, passes as unexpended

trust property pursuant to paragraph (c) of this section.

(e) If no trustee is designated or no designated trustee is willing or

able to serve, a court shall appoint a trustee and may make such other

orders and determinations as are advisable to carry out the intent of

the transferor and the purpose of this section.

Disposition of property for charitable purposes

(a) No disposition of property for religious, charitable, educational

or benevolent purposes, otherwise valid under the laws of this state, is

invalid by reason of the indefiniteness or uncertainty of the persons

designated as beneficiaries. If a trustee is named in the disposing

instrument, legal title to the property transferred for such a purpose

vests in such trustee; if no person is named as trustee, title vests in

the court having jurisdiction over the trust.

(b) No disposition of property made in a will, executed and attested

as prescribed by law, is invalid by reason of the incorporation by

reference in the will of any existing written resolution, declaration or

deed of trust, identified in such will and made or adopted by any

corporation authorized by law to execute or accept trusts, to assist,

encourage and promote the well-being and well-doing of mankind in

general or the inhabitants of any community in particular; provided that

a copy of such resolution, declaration or deed of trust, certified,

under its corporate seal, by the secretary or assistant secretary or the

cashier or assistant cashier of such corporation, is filed for record in

the office of the secretary of state and in the office of the clerk or

register of the county of the corporation's principal place of business,

in which the conveyances of real property are required by law to be

filed for record, the secretary of state and the officer in charge of

such record office being hereby authorized and directed to receive and

record such resolution, declaration or deed of trust upon payment of the

fees provided by law. Any such testamentary disposition to a corporation

for the religious, charitable, educational or benevolent purposes set

forth in such resolution, declaration or deed of trust is effective

although the terms, conditions and purposes of such disposition are

established only through such reference in the will.

(c) (1) The supreme court and, where the disposition is made by will,

the surrogate's court in which such will is probated have jurisdiction

over dispositions referred to and authorized by paragraphs (a) and (b),

and whenever it appears to such court that circumstances have so changed

since the execution of an instrument making a disposition for religious,

charitable, educational or benevolent purposes as to render

impracticable or impossible a literal compliance with the terms of such

disposition, the court may, on application of the trustee or of the

person having custody of the property subject to the disposition and on

such notice as the court may direct, make an order or decree directing

that such disposition be administered and applied in such manner as in

the judgment of the court will most effectively accomplish its general

purposes, free from any specific restriction, limitation or direction

contained therein; provided, however, that any such order or decree is

effective only with the consent of the creator of the disposition if he

is living.

(2) (i) The attorney general or any trustee or beneficiary of a

testamentary or lifetime trust wholly benefitting one or more charitable

beneficiaries may petition a court of competent jurisdiction, on notice

to the attorney general and all parties interested in the trust, seeking

a termination of such trust when the trust is comprised of assets, the

market value of which is one hundred thousand dollars or less and the

expense of administering the trust is uneconomic when considered

relative to income. When the court finds upon such application that

continuation of the trust is economically impracticable or is not in the

best interests of the beneficiaries, the court shall make an order or

decree terminating the trust and directing the distribution of the trust

assets to accomplish its charitable purposes, provided, however, that if

the trust is one for the benefit of a particular charitable beneficiary

or beneficiaries named therein, the court shall direct the distribution

of the trust assets to such named charitable beneficiary or

beneficiaries, and provided further that no such proceeding may be

instituted without the consent of the creator of the disposition if he

is living.

(ii) For purposes of this paragraph, the term "charitable beneficiary"

shall mean the beneficiary of a disposition for a religious, charitable,

educational or benevolent purpose.

(d) The power of the supreme court or the surrogate's court, as

provided in paragraph (c), to prevent the failure of, and to give effect

to dispositions for religious, charitable, educational or benevolent

purposes is not defeated by the circumstance that the beneficiary of any

such disposition does not exist or, if in existence, lacks capacity to

take such disposition at the time it would otherwise become effective,

whether or not the disposition creates an express trust to effectuate

its purposes.

(e) Any accumulation of income from property subject to a disposition

in trust for a religious, charitable, educational or benevolent purpose,

or otherwise acquired by such trust, shall in all respects, including

its reasonableness, amount and duration, be within the jurisdiction of

the supreme court or the surrogate's court, as the case may be. In

exercising such jurisdiction, (1) any accumulation of income which might

otherwise be applied for the purposes of the trust may be prohibited or

limited, despite a valid direction therefor in the trust instrument or

authority therefor under 8-1.7 and (2) such an accumulation may be

authorized by order of the court despite the absence of a direction

therefor in the trust instrument. This paragraph shall not restrict in

any manner the ability to release or modify restrictions relating to

institutional funds under section 555 of the not-for-profit corporation

law.

(f) The attorney general shall represent the beneficiaries of such

dispositions for religious, charitable, educational or benevolent

purposes and it shall be his duty to enforce the rights of such

beneficiaries by appropriate proceedings in the courts.

(g) The supreme court or the surrogate's court, as the case may be,

may authorize the trustee or any person holding title thereto to sell,

mortgage or lease any real property which is the subject of a

disposition for a religious, charitable, educational or benevolent

purpose, whenever it appears to the satisfaction of the court that such

real property, or any part thereof, has become or is likely to become

unproductive, has depreciated or is likely to depreciate in value, that

it is advisable to raise money to improve or erect buildings upon

property so held or that it is expedient for any other reason that such

real property be sold, mortgaged or leased. This paragraph shall not

restrict in any manner the powers or rights any trustee may have by law

or by the terms of any disposition of such real property. The

provisions of this paragraph shall not apply to any corporation which is

subject to sections 509 through 511 of the not-for-profit corporation

law.

(h) The supreme court or the surrogate's court shall not make an order

or decree under paragraph (g) unless it appears that eight days written

notice, stating the time and place of the application for such order or

decree, has been served upon the attorney general, who shall represent

the state, the beneficiaries of any trust and the persons who might

benefit from the religious, charitable, educational or benevolent

purpose for which the real property, which is the subject of the

application, is held. A like eight days notice of such application shall

be given to any adult within the state who has a vested or contingent

future estate in such real property and to any minor, incompetent,

conservatee or absentee who is interested in such property, in such

manner as the court may direct. Before making a final order or decree,

the court shall appoint a guardian ad litem for any minor who is not

represented by a guardian or parent, for any incompetent who is not

represented by a committee, and for any absentee.

(i) A sale, mortgage or lease made, as required by law, in accordance

with an order or decree of a court under this section is effective

against the state as representative of the beneficiaries of such trust

and persons who might benefit from the purposes for which such real

property is held, and against persons with a vested or contingent future

interest in such property and minors, incompetents, conservatees,

absentees and persons not in being who have an interest in such

property, as well as all other persons who, having been made parties to

such proceeding, consent to such order or decree. The purchaser,

mortgagee or lessee, or any person claiming under them, shall not be

responsible for the disposition of the proceeds of any such sale,

mortgage or lease.

(j) Whenever a voluntary association or committee has received, by

public subscription, a fund for a charitable or benevolent purpose from

more than one thousand contributors, a portion of which remains

unexpended after the expiration of five years from the time of its

receipt, and it appears that a literal compliance with the terms of the

subscription is impracticable, the supreme court may make an order

directing that such unexpended balance be transferred for administration

and application to such domestic corporation as in the judgment of the

court will most effectively accomplish the general purpose for which

such fund was collected, free from any restriction, limitation or

direction upon which the subscription was made; and on the transfer of

such fund to the corporation designated in the order, such voluntary

association, its officers and trustees, or such committee and its

officers shall be fully exonerated and discharged from all liability to

account for such fund. This paragraph shall not restrict in any manner

the ability to release or modify restrictions relating to institutional

funds under section 555 of the not-for-profit corporation law.

(k) An order shall be made under paragraph (j) on the application of

the association or the treasurer of the committee, having custody of the

unexpended balance, on twenty days personal notice to the attorney

general and notice by publication once a week for four consecutive weeks

in a newspaper of general circulation published in the county in which

the treasurer of such association or committee resides. If such

treasurer resides outside of the state, such notice shall be published

in the county in which at least ten per cent of the contributors of such

fund resided at the time of its receipt or in such other manner as the

court may direct to the contributors as a class, to ten specified

members of such class and to the trustees of such association or the

surviving members of such committee.

(l) Where public subscriptions for charitable or benevolent purposes

were made or begun prior to the year nineteen hundred twenty and the

total number of subscribers exceeded five hundred but were less than one

thousand, any unexpended balance of a fund obtained for such purpose

which, at the time this section takes effect, is in the custody of a

surviving member of a committee may be transferred for administration,

on the application of such surviving member, in accordance with the

procedure and with the effect set forth in paragraphs (j) and (k).

Certain charitable trusts authorized

(a) Property may be disposed of to any incorporated educational or

literary institution in this state, to be held in trust for any one or

more of the following purposes:

(1) To establish and maintain an observatory;

(2) To found and maintain professorships and scholarships;

(3) To provide and keep in repair a place for the burial of the dead.

(4) For any other specific purpose comprehended in the general objects

authorized by its charter.

(b) The trust may be made subject to such conditions as may be

prescribed by the creator and agreed to by the trustee, and all property

which is hereafter disposed of to any incorporated educational or

literary institution in trust for any of the foregoing purposes, may be

held by such institution under such trust, subject to such conditions as

may be prescribed.

(c) Property may be disposed of to any incorporated city or village of

this state to be held in trust for any educational purpose, the

diffusion of knowledge, or for the relief of distress, or for parks,

gardens, other ornamental grounds or grounds for military parades,

exercise, health and recreation, within or near such incorporated city

or village, upon such conditions as may be prescribed by the creator and

agreed to by such corporation; and all property so transferred to such

corporation may be held by it, under such trust, subject to such

conditions as may be prescribed.

(d) Property may be disposed of to commissioners of common schools of

any town and to trustees of any school district, in trust for the

benefit of such common schools or the schools of such district.

(e) The trusts authorized by this section may continue for such time

as may be necessary to accomplish the purposes for which they are

created.

Certain charitable trusts regulated

(a) Any person desiring in his lifetime to promote the public welfare

by founding, endowing and maintaining, within this state, a public

library, museum or other educational institution, a chapel, crematory or

a board of trade or chamber of commerce may, by a disposition for such

purpose, transfer property to a trustee named in such disposition or to

his successor.

(b) The creator of such disposition may describe:

(1) The nature, object and purpose of the institution to be founded,

endowed and maintained or of the corporation to be benefited thereby.

(2) In case of the founding of an institution, the name by which it

shall be known.

(3) The powers and duties of the trustee and, if accounting is

required, the manner in which and to whom he shall account; but the

powers conferred shall not be exclusive of other powers which may be

necessary to enable such trustee to execute fully the object of such

disposition.

(4) Such rules for the management of the property as the creator may

prescribe; but, unless otherwise provided, such rules shall be advisory

only and shall not preclude the trustee from making such changes as new

circumstances may from time to time require.

(5) The manner and by whom the successor to the trustee named in the

disposition is to be appointed.

(6) The place where, and the time when, the buildings necessary and

proper for the institution shall be erected, and the character and

extent of such buildings. The creator may provide for all matters

necessary and proper to carry out the purposes of the institution, and

may provide for such lectures, exhibitions, instruction or amusement in

connection therewith as he may consider desirable.

(c) The trustee named in the disposition or his successor may sue and

defend, in the name of an institution established by such disposition,

with respect to all matters affecting such institution.

(d) The creator of the disposition may provide for the right, during

his lifetime, to personally perform the duties and exercise the powers

which the disposition imposes and confers upon the trustee, and may

further provide that his surviving spouse may, during her lifetime,

perform such duties and exercise such powers. In all cases in which such

duties and powers are performed and exercised by the creator or his

spouse, during his or her lifetime, upon his death or the death of his

spouse such duties and powers devolve upon and shall be performed and

exercised by the trustee or his successor.

(e) The creator may reserve the right to alter, amend or modify his

disposition with respect to any of the matters described in

subparagraphs (1) to (6). He may also reserve the right, during his

lifetime, to exercise complete control over the property subject to his

disposition, without obligation to account therefor in any manner

whatever, and may further provide that his surviving spouse shall,

during her lifetime, have like control over such property, without

obligation to account therefor in any manner whatever.

(f) A disposition described in this section may be executed,

acknowledged and recorded in the manner provided by the law of this

state for the execution, acknowledgment and recording of conveyances of

real property.

(g) No action or proceeding shall be maintained by any person to

affect, impair, or defeat a disposition described in this section or to

affect the title to property subject to such disposition or the right to

the possession of such property or the income therefrom, unless such

action or proceeding is commenced within two years from the time such

disposition is recorded. Nor shall any defense be made to any action or

proceeding maintained by a trustee or his successor which involves the

legality of such disposition or affects the title to property subject

thereto or the right to the possession of such property or the income

therefrom, unless such defense is made in an action or proceeding

commenced within two years from the time such disposition is recorded.

Supervision of trustees for charitable purposes

(a) For the purposes of this section, "trustee" means (1) any

individual, group of individuals, executor, trustee, corporation or

other legal entity holding and administering property for charitable

purposes, whether pursuant to any will, trust, other instrument or

agreement, court appointment, or otherwise pursuant to law, over which

the attorney general has enforcement or supervisory powers, (2) any

non-profit corporation organized under the laws of this state for

charitable purposes and (3) any non-profit foreign corporation organized

for charitable purposes, doing business or holding property in this

state. Neither a foreign corporation nor a trustee acting under the will

of, or an agreement executed by, a non-resident of this state shall

become subject to the provisions of this section merely by reason of

maintaining a bank, custody, investment or similar account in this

state.

(b) The registration and reporting provisions of this section do not

apply to (1) the United States, any state, territory or possession of

the United States, the District of Columbia, the Commonwealth of Puerto

Rico or to any of their agencies or governmental subdivisions, (2) any

trustee which is required by any other provision of law to render a

full, complete and itemized annual financial report to the congress of

the United States or to the legislature of this state, provided that

such report contains the information required of trustees pursuant to

this article, (3) corporations organized under the religious

corporations law and other religious agencies and organizations, and

charities, agencies and organizations operated, supervised or controlled

by or in connection with a religious organization, (4) educational

institutions incorporated under the education law or by special act, (5)

any hospital, (6) fraternal, patriotic, veterans, volunteer

firefighters, volunteer ambulance workers, social, student or alumni

organizations and historical societies chartered by the New York state

board of regents, (7) a trust for which there is a corporate trustee

acting as sole trustee or co-trustee under the terms of a will of a

decedent who died domiciled in a state other than New York or a trust

instrument executed by a non-resident of the state of New York, (8) any

trust in which and so long as the charitable interest is deferred or

contingent, (9) any person who, in his or her capacity as an officer,

director or trustee of any corporation or organization mentioned in this

paragraph, holds property for the religious, educational or charitable

purposes of such corporation or organization so long as such corporation

or organization is registered with the attorney general pursuant to this

section, (10) any cemetery corporation subject to the provisions of

article fifteen of the not-for-profit corporation law, (11) the state

parent teachers association and any parent teachers association

affiliated with an educational institution that is subject to the

jurisdiction of the state education department, (12) any corporation

organized under article forty-three of the insurance law. The provisions

of this subdivision shall apply only to the registration and reporting

requirements of this section and shall not limit, impair, change or

alter any other provision of this article, the not-for-profit

corporation law or any other provision of law.

(c) The attorney general shall establish and maintain a register of

all trustees containing such information as the attorney general deems

appropriate, and to that end may conduct such investigations as he or

she deems necessary and shall obtain from public records, court

officers, taxing authorities, trustees and other sources without the

payment of any fee or charge, whatever information, copies of

instruments, reports and records are needed for the establishment and

maintenance of the register.

(d) Every trustee shall file with the attorney general, within six

months after any property held by him or her or any income therefrom is

required to be applied to charitable purposes, a copy of the instrument

providing for his or her title, powers and duties; provided, however,

that any trustee currently registered with the department of law

pursuant to article 7-A of the executive law shall be deemed to have

complied with this paragraph. If any property held by a trustee or any

income therefrom is required to be applied to charitable purposes at the

time this section becomes effective, the filing shall be made within six

months thereafter.

(e) (1) Whenever any trustee or other person, holding property or any

income therefrom, which may be required at any time to be devoted to

charitable purposes, shall file in any court in this state (A) any

petition for instructions relating to the administration or use of such

property or income, (B) any petition for the construction of the

instrument under which such property or income is held, (C) any petition

respecting the disposition or distribution of such property or income or

(D) any accounting, due notice of the action or proceeding shall be

served by the petitioner upon the attorney general together with a copy

of any petition, accounting, will or trust instrument.

(2) Whenever any instrument of a testamentary nature which provides

for a disposition for charitable purposes is the subject of (A) an

application for denial of probate, (B) objections to probate or (C) an

application for approval of a compromise agreement in respect of

probate, due notice of the action or proceeding shall be served by the

petitioner upon the attorney general together with a copy of the

instrument and of any such application, objections or agreement.

(f) (1) Every trustee shall, in addition to filing copies of any

instrument required under paragraph (d) of this section, file with the

attorney general and all identified current charitable beneficiaries

written annual financial reports, under penalties for perjury, on forms

prescribed by the attorney general, setting forth information as to the

nature of the assets held for charitable purposes and the administration

thereof by the trustee, and shall, file with the attorney general and

all identified current charitable beneficiaries a notice of the

termination of the interest of any party in a trust that would cause all

or part of the trust assets to be applied to charitable purposes or to

have the income therefrom so applied, in accordance with rules and

regulations of the attorney general.

(2) Trustees required to report to the attorney general under article

7-A of the executive law shall comply with this paragraph by filing with

the attorney general in addition to any other reports required herein,

copies of the financial reports required by section 172-b of the

executive law unless such reports have been filed previously.

(g) Unless the filing of reports is suspended as herein provided, the

first report of any trustee shall be filed no later than six months

after the end of the fiscal year of the trustee during which he or she

becomes subject to this section.

(h) The attorney general shall make rules and regulations necessary

for the administration of this section, including rules and regulations

as to the time for filing reports, the contents thereof, and any manner

of executing and filing them, including but not limited to allowing or

requiring any submission to the attorney general to be effected by

electronic means and electronic signatures. He or she may classify

trusts, estates, corporations and other trustees as to purpose, nature

of assets, duration, amount of assets, amounts to be devoted to

charitable purposes, or otherwise, and may establish different rules for

different classes as to time and nature of the reports required, to the

ends that he or she shall receive current financial reports as to all

such trusts, estates, corporations or other trustees which will enable

him or her to ascertain whether they are being properly administered.

The attorney general may suspend the filing of financial reports as to a

particular trustee for a reasonable, specifically designated time upon

written application of the trustee, signed under penalties for perjury,

and filed with the attorney general and after the attorney general has

filed in the register of trustees a written statement that the interests

of the beneficiaries will not be prejudiced thereby and that periodic

reports during the term of such suspension are not required for proper

supervision by his or her office. The filing of the financial reports

required by this section, or the exemption from such filing or the

suspension therefrom, shall not have the effect of absolving trustees

from any responsibility for accounting for property or income held by

them for charitable purposes. A copy of an account or other financial

report filed by a trustee in any court in this state, if the account or

other financial report substantially complies with the rules and

regulations of the attorney general, may be filed as a financial report

under this section.

(i) The attorney general may investigate transactions and

relationships of trustees for the purpose of determining whether or not

property held for charitable purposes has been and is being properly

administered. The attorney general, his or her assistants, deputies or

such other officers as may be designated by him or her, are empowered to

subpoena any trustee, agent, fiduciary, beneficiary, institution,

association or corporation or other witness, examine any such witness

under oath and, for this purpose, administer the necessary oaths, and

require the production of any books or papers which they deem relevant

to the inquiry.

(j) No person shall be excused from attending such inquiry pursuant to

the mandate of a subpoena, or from producing a paper or book, or from

being examined or required to answer a question on the ground of failure

of tender or payment of a witness fee or mileage, unless at the time of

such appearance or production, as the case may be, such witness makes a

demand for such payment as a condition precedent to the offering of the

testimony or production required by the subpoena and such payment is not

thereupon made. The provisions for payment of a witness fee or mileage

do not apply to any trustee or other person holding funds for charitable

purposes, or to any person in the employ of any such person, whose

conduct or practices are being investigated.

(k) If a person subpoenaed to attend such inquiry fails to obey the

mandate of a subpoena without reasonable cause, or if a person in

attendance upon such inquiry shall without reasonable cause refuse to be

sworn or to be examined or to answer a question or to produce a paper or

book when ordered so to do by the officer conducting such inquiry, he or

she shall be subject to proceedings under subdivision (b) of section

2308 of the civil practice law and rules.

(l) The register, copies of the instruments and the reports filed with

the attorney general shall be open to public inspection, subject to

reasonable rules and regulations adopted by the attorney general, which

may include such limitations as to type of information subject to

inspection or purpose of inspection as the attorney general shall deem

to be in the public interest. The attorney general shall withhold from

public inspection copies of any report filed with any other governmental

agency of this state or of the United States and required by law to be

kept confidential by such agency, and shall, upon request of the

trustee, withhold from public inspection that portion of any instrument

filed which does not relate to charitable purposes and which is not

otherwise of public record.

(m) The attorney general may institute appropriate proceedings to

secure compliance with this section and to secure the proper

administration of any trust, corporation or other relationship to which

this section applies. The powers and duties of the attorney general

provided in this section are in addition to all other powers and duties

he or she may have. No court shall modify or terminate the powers and

responsibilities of any trust, corporation or other trustee unless the

attorney general is a party to the proceeding, but nothing in this

section shall otherwise impair or restrict the jurisdiction of any court

with respect to the matters covered by it. The failure of any trustee to

register or to file reports as required by this section may be ground

for judicial removal of any person responsible for such failure.

(n) This section shall apply regardless of any contrary provisions of

any instrument and shall be liberally construed so as to effectuate its

general purpose of protecting the public interest in charitable uses,

purposes and dispositions.

(o) Every officer, agency, board or commission of this state or

political subdivisions of this state or agencies thereof receiving

applications for exemption from taxation of any trustee subject to this

section shall annually file with the attorney general a list of all

applications received during the year and shall notify the attorney

general of any suspension or revocation of a tax exempt status

previously granted.

(p) The attorney general shall collect from each trustee at the time

of filing of the periodic reports required by this section a fee for the

filing of such reports as follows:

(1) Twenty-five dollars, if the net worth of the property held by such

trustee for charitable purposes is less than fifty thousand dollars,

(2) Fifty dollars if such net worth is fifty thousand dollars or more

but less than two hundred and fifty thousand dollars,

(3) One hundred dollars if such net worth is two hundred and fifty

thousand dollars or more but less than one million dollars,

(4) Two hundred fifty dollars if such net worth is one million dollars

or more but less than ten million dollars,

(5) Seven hundred and fifty dollars if such net worth is ten million

dollars or more but less than fifty million dollars, and

(6) One thousand five hundred dollars if such net worth is fifty

million dollars or more.

(q) Any trustee shall be exempt from the annual reporting requirements

of this section by filing each year with the attorney general a verified

statement executed by such trustee attesting that during the annual

reporting period (1) the gross receipts received by said trustee during

such annual reporting period were less than twenty-five thousand dollars

and that (2) the total assets held by such trustee at no time during

such annual reporting period exceeded twenty-five thousand dollars. For

the purposes of this paragraph, gross receipts mean the total received

during the financial reporting period of (A) gifts, grants, and

contributions; (B) gross income and revenue from all sources; and (C)

gross amounts from sales of assets, other than inventory; and total

assets mean the total principal and the accumulated income, if any, held

by such trustee for purposes of charitable distribution on any day

during such annual reporting period.

(r) A trustee who fails to comply with paragraph (d), (f) or (g) of

this section shall, after notice of said failure served upon him or her

by the attorney general by certified mail, return receipt requested, be

liable to the state of New York for a fine of ten dollars a day not to

exceed one thousand dollars for each failure to comply after the

expiration of the thirty day period following the receipt of the notice

from the attorney general, except that the time to comply may be

extended by the attorney general. Where the attorney general, after such

thirty day period has expired, finds that the failure to comply with

paragraph (d), (f) or (g) of this section is due to excusable ignorance

or inadvertence or other reasonable cause, the attorney general shall

waive the fine imposed by this paragraph.

(s) A trustee shall not be qualified to make application for funds or

grants or to receive such funds from any department or agency of the

state without certifying compliance with paragraphs (d), (f) and (g) of

this section and all applicable registration and reporting requirements

of article seven-A of the executive law.

Trusts for cemetery purposes

Dispositions of property in trust for the purpose of the perpetual

care, maintenance, improvement or embellishment of cemeteries or private

burial lots in cemeteries, and the roadways, lawns, hedges, walks,

fences, monuments, structures and tombs in such cemeteries or on such

private burial lots are permitted and shall be deemed to be for

charitable and benevolent purposes. Such dispositions are not invalid by

reason of any indefiniteness or uncertainty of the persons designated as

beneficiaries, nor shall they be invalid as violating any existing rule

against perpetuities. Nothing herein contained shall affect any existing

authority of the courts to determine the reasonableness of the amount of

such disposition. Any cemetery association may act as trustee of and

execute any such trust with respect to lots, roadways, lawns, hedges,

walks, fences, monuments, structures and tombs both within its own

cemetery limits and outside of any cemetery under its control but within

the county where such cemetery is located, whether or not such power is

included among its corporate powers.

Deposit of money in trust by owner of lots in private

unincorporated cemetery

The owner of lots in any private unincorporated cemetery may deposit

in trust for the care of such lots a sum not exceeding four hundred

dollars for each lot so owned with any bank or banking institution

located in a city, town or village conveniently near such private

unincorporated cemetery, provided such bank or banking institution is

willing to accept such money in trust and agrees to apply the proceeds

of the interest thereon to the care and upkeep of such lots. Such banks

or banking institutions are hereby authorized to accept such money for

the purpose described herein and to apply the proceeds of the interest

thereon to the care and upkeep of any such lots. The provisions of this

section do not apply to savings banks.

Authority of trustee to accumulate income

(a) Where property has been transferred in trust for any religious,

charitable, educational or benevolent purpose, or acquired by the

trustee of a trust for such purpose, the trustee is authorized in his

discretion, notwithstanding the absence of any direction therefor in the

disposition creating the trust, to accumulate the income therefrom to

the extent necessary to carry out the purposes of the trust. The

authority herein granted is subject:

(1) To any express or implied prohibition by the terms of the

disposition creating the trust, by any statute in force at the time of

the accumulation or by the charter of a corporate trustee or other

document or regulation controlling the trustee in the administration of

the trust.

(2) To the supervision of the supreme court or the surrogate's court,

as provided in 8-1.1, and to any contrary direction by order of the

court in an action or proceeding thereunder.

(b) This section shall not restrict in any manner the appropriation

for expenditure or accumulation of endowment funds as set forth in

section 553 of the not-for-profit corporation law.

Private foundations: administration of certain trusts as defined

in the United States internal revenue code of 1954

(a) For purposes of this section, a "trust" means a private foundation

as defined in section 509 of the United States Internal Revenue Code of

1986 ("code") including a private foundation charitable trust as defined

in section 4947(a)(1) of the code, or a split-interest trust as defined

in section 4947(a)(2) of the code, whether heretofore or hereafter

created which is administered by a trustee described in subparagraph

(a)(1) of section 8-1.4. The administration of a trust, as herein

defined, is subject to the following provisions:

(1) The trust shall distribute for each taxable year such amounts at

such time and in such manner as sufficient for such trust to avoid

liability for any tax imposed on undistributed income under section 4942

of the code.

(2) The trust shall not engage in any act of self-dealing which would

result in the taxation of any amount involved with respect to any such

act of self-dealing under section 4941 of the code.

(3) The trust shall not retain any excess business holdings which

would result in the taxation of any such excess business holdings under

section 4943 of the code unless the trust is exempt from section 4943 of

the code pursuant to section 4947(b)(3)(A) or (B) of the code.

(4) The trust shall not make any investments in such a manner as to

jeopardize the carrying out of any such trust's exempt purposes which

would result in the taxation of any such investments under section 4944

of the code unless the trust is exempt from section 4944 of the code

pursuant to section 4947(b)(3)(A) or (B) of the code.

(5) The trust shall not make any taxable expenditures which would

result in the liability of the trust for any tax imposed on any such

taxable expenditures under section 4945 of the code.

Except as provided in paragraph (b), this paragraph applies

notwithstanding any provision of the governing instrument of a trust.

(b) Paragraph (a) shall not apply with respect to assets transferred

in trust prior to the effective date of this section to the extent that

it conflicts with any mandatory direction in the governing instrument of

the trust unless such conflicting direction is removed as impracticable

under this article or in any other manner provided by law. The absence

of a specific provision in the governing instrument of the trust for the

current use of the principal of the fund, or the presence in such an

instrument of a provision, as to the principal of a fund, limited to the

principal's being held, invested and reinvested, is not such a

conflicting mandatory direction.

(b-1) A trust, as defined in paragraph (a) of this section, required

by section 6104(d) of the code to make available for public inspection

its annual return shall publish notice of the availability of such

return for inspection. Such notice shall be published, not later than

the day prescribed for filing such annual return (determined with regard

to any extension of time for filing), in a newspaper designated by the

clerk of the county in which the principal office of the trust is

located, having general circulation in that county. When such county is

located within a city with a population of one million or more, such

designation shall be as though the notice were a notice or advertisement

of judicial proceedings. The notice shall state that the annual return

of the trust is available at its principal office for inspection during

regular business hours by any citizen who requests it within one hundred

eighty days after the date of such publication, and shall state the

address and the telephone number of the trust's principal office and the

name of its principal manager. A copy or notice published in a newspaper

other than the newspaper or newspapers designated by the county clerk

shall not be deemed to be one of the publications required by this

paragraph.

(c) All references in this section to sections of the code shall be to

such sections as amended from time to time, or to corresponding

provisions of subsequent internal revenue laws.

(d) Nothing in this act shall impair the rights and powers of the

courts or the attorney-general of this state.

Trust governance

(a) For purposes of this section:

(1) A "trust" means a trust created solely for charitable purposes, or

a trust that continues solely for such purposes after all non-charitable

interests have terminated.

(2) "Charitable purpose" means any religious, charitable, educational

or benevolent purpose.

(3) "Key person" means any person other than a trustee, whether or not

an employee, who (i) has responsibilities, or exercises powers of

influence over the trust as a whole similar to the responsibilities,

powers, or influence of trustees and officers; (ii) manages the trust,

or a segment of the trust that represents a substantial portion of the

activities, assets, income or expenses of the trust; or (iii) alone or

with others controls or determines a substantial portion of the trust's

capital expenditures or operating budget.

(4) An "affiliate" of a trust means any entity controlled by, or in

control of, such trust.

(5) "Relative" of an individual means (i) his or her spouse or

domestic partner as defined in section twenty-nine hundred ninety-four-a

of the public health law; (ii) his or her ancestors, brothers and

sisters (whether whole or half blood), children (whether natural or

adopted), grandchildren, great-grandchildren; or (iii) the spouse or

domestic partner of his or her brothers, sisters, children,

grandchildren, and great-grandchildren.

(6) "Related party" means (i) any trustee or key person of the trust

or any affiliate of the trust; (ii) any relative of any individual

described in clause (i) of this subparagraph; or (iii) an entity in

which any individual described in clauses (i) and (ii) of this

subparagraph has a thirty-five percent or greater ownership or

beneficial interest or, in the case of a partnership or professional

corporation, a direct ownership interest in excess of five percent.

(7) "Independent trustee" means a trustee who: (i) is not, and has not

been within the last three years, an employee of the trust or an

affiliate of the trust, and does not have a relative who is, or has been

within the last three years, a key person of the trust or an affiliate

of the trust; (ii) has not received, and does not have a relative who

has received, in any of the last three fiscal years, more than ten

thousand dollars in direct compensation from the trust or an affiliate

of the trust; (iii) is not a current employee of or does not have a

substantial financial interest in, and does not have a relative who is a

current officer of or have a substantial financial interest in, any

entity that has provided payments, property or services to, or received

payments, property or services from, the trust or an affiliate of the

trust if the amount paid by the trust to the entity or received by the

trust from the entity for such property or services, in any of the last

three fiscal years, exceeded the lesser of ten thousand dollars or two

percent of such entity's consolidated gross revenue if the entity's

consolidated gross revenue was less than five hundred thousand dollars;

twenty-five thousand dollars if the entity's consolidated gross revenue

was five hundred thousand dollars or more but less than ten million

dollars; one hundred thousand dollars if the entity's consolidated gross

revenue was ten million dollars or more; or (iv) is not and does not

have a relative who is a current owner, whether wholly or partially,

director, officer or employee of the trust's outside auditor or who has

worked on the trust's audit at any time during the past three years. For

purposes of this subparagraph, the terms: "compensation" does not

include reimbursement for expenses or the payment of trustee commissions

or reasonable compensation as permitted by law and the governing

instrument; and "payment" does not include charitable contributions,

dues or fees paid to the trust for services which the trust performs as

part of its nonprofit purposes, or payments made by the trust at fixed

or non-negotiable rates or amounts for services received, provided that

such services by and to the trust are available to individual members of

the public on the same terms, and such services provided to the trust

are not available from another source.

(8) "Related party transaction" means any transaction, agreement or

any other arrangement in which a related party has a financial interest

and in which the trust or any affiliate of the trust is a participant,

except that a transaction shall not be a related party transaction if:

(i) the transaction or the related party's financial interest in the

transaction is de minimis, (ii) the transaction would not customarily be

reviewed by the board, or boards of similar organizations, in the

ordinary course of business and is available to others on the same or

similar terms, or (iii) the transaction constitutes a benefit provided

to a related party solely as a member of a class of the beneficiaries

that the trust intends to benefit as part of the accomplishment of its

mission which benefit is available to all similarly situated members of

the same class on the same terms.

(9) "Independent auditor" means any certified public accountant

performing the audit of the financial statements of a trust required by

subdivision one of section one hundred seventy-two-b of the executive

law.

(b)(1) The trustees or a designated audit committee consisting of one

or more independent trustees of any trust required to file an

independent certified public accountant's audit report with the attorney

general pursuant to subdivision one of section one hundred seventy-two-b

of the executive law shall oversee the accounting and financial

reporting processes of the trust and the audit of the trust's financial

statements. The trustees or designated audit committee shall annually

retain or renew the retention of an independent auditor to conduct the

audit and, upon completion thereof, review the results of the audit and

any related management letter with the independent auditor.

(2) The trustees or a designated audit committee consisting of one or

more independent trustees of any trust required to file an independent

certified public accountant's audit report with the attorney general

pursuant to subdivision one of section one hundred seventy-two-b of the

executive law and that in the prior fiscal year had or in the current

fiscal year reasonably expects to have annual revenue in excess of one

million dollars shall, in addition to those duties set forth in

subparagraph one of this paragraph:

(A) review with the independent auditor the scope and planning of the

audit prior to the audit's commencement;

(B) upon completion of the audit, review and discuss with the

independent auditor: (i) any material risks and weaknesses in internal

controls identified by the auditor; (ii) any restrictions on the scope

of the auditor's activities or access to requested information; (iii)

any significant disagreements between the auditor and management; and

(iv) the adequacy of the trust's accounting and financial reporting

processes;

(C) annually consider the performance and independence of the

independent auditor; and

(D) if the duties required by this section are performed by an audit

committee, report on the committee's activities to the trustees.

(4) If a trust is under the control of another trust or a corporation,

the trustees or designated audit committee of the controlling trust, or

the board or designated audit committee of the board of the controlling

corporation, may perform the duties required by this paragraph.

(5) Only independent trustees may participate in deliberations or

voting relating to matters set forth in this section, provided that

nothing in this paragraph shall prohibit the board or designated audit

committee from requesting that a person with an interest in the matter

present information as background or answer questions at a committee or

board meeting prior to the commencement of deliberations or voting

relating thereto.

(c) (1) Notwithstanding any provision of the trust instrument to the

contrary, no trust shall enter into any related party transaction unless

the transaction is determined by the trustees, or an authorized

committee thereof, to be fair, reasonable and in the trust's best

interest at the time of such determination. Any trustee, officer or key

employee who has an interest in a related party transaction shall

disclose in good faith to the trustees, or an authorized committee

thereof, the material facts concerning such interest.

(2) With respect to any related party transaction in which a related

party has a substantial financial interest, the trustees, or an

authorized committee thereof, shall:

(A) Prior to entering into the transaction, consider alternative

transactions to the extent available;

(B) Approve the transaction by not less than a majority vote of the

trustees or committee members present at the meeting; and

(C) Contemporaneously document in writing the basis for the trustees'

or authorized committee's approval, including consideration of any

alternative transactions.

(3) The trust instrument, by-laws or any policy adopted by the

trustees may contain additional restrictions on related party

transactions and additional procedures necessary for the review and

approval of such transactions, or provide that any transaction in

violation of such restrictions shall be void or voidable.

(4) The attorney general may bring an action to enjoin, void or

rescind any related party transaction or proposed related party

transaction that violates any provision of this article or was otherwise

not reasonable or in the best interests of the trust at the time the

transaction was approved, or to seek restitution, and the removal of

trustees or officers, or seek to require any person or entity to:

(A) Account for any profits made from such transaction, and pay them

to the trust;

(B) Pay the trust the value of the use of any of its property or other

assets used in such transaction;

(C) Return or replace any property or other assets lost to the trust

as a result of such transaction, together with any income or

appreciation lost to the trust by reason of such transaction, or account

for any proceeds of sale of such property, and pay the proceeds to the

trust together with interest at the legal rate; and

(D) Pay, in the case of willful and intentional conduct, an amount up

to double the amount of any benefit improperly obtained.

(5) The powers of the attorney general provided in this section are in

addition to all other powers the attorney general may have under this

chapter or any other law.

(6) No related party may participate in deliberations or voting

relating to a related party transaction in which he or she has an

interest; provided that nothing in this section shall prohibit the

trustees or designated audit committee from requesting that a related

party present information or answer questions concerning a related party

transaction at a trustees or committee meeting prior to the commencement

of deliberations or voting relating to the related party transaction.

(7) In an action by any person or entity other than the attorney

general, it shall be a defense to a claim of violation of any provisions

of this paragraph that a transaction was fair, reasonable and in the

trust's best interest at the time the trust approved the transaction.

(8) In an action by the attorney general with respect to a related

party transaction not approved in accordance with subparagraph one or

two of this paragraph at the time it was entered into, whichever is

applicable, it shall be a defense to a claim of violation of any

provisions of this paragraph that (i) the transaction was fair,

reasonable and in the trust's best interest at the time the trust

approved the transaction and (ii) prior to receipt of any request for

information by the attorney general regarding the transaction, the

trustees have: (A) ratified the transaction by finding in good faith

that it was fair, reasonable and in the trust's best interest at the

time the trustee approved the transaction; and, with respect to any

related party transaction involving a charitable corporation and in

which a related party has a substantial financial interest, considered

alternative transactions to the extent available, approving the

transaction by not less than a majority vote of the trustees or

committee members present at the meeting; (B) documented in writing the

nature of the violation and the basis for the trustees' or committee's

ratification of the transaction; and (C) put into place procedures to

ensure that the trustee complies with subparagraphs one and two of this

paragraph as to related party transactions in the future.

(d) (1) Except as provided in subparagraph four of this paragraph,

every trust shall adopt, and oversee the implementation of, and

compliance with, a conflict of interest policy to ensure that its

trustees, officers and key persons act in the best interest of the trust

and its beneficiaries and comply with applicable legal requirements,

including but not limited to the requirements set forth in this

paragraph.

(2) The conflict of interest policy shall include, at a minimum, the

following provisions:

(A) a definition of the circumstances that constitute a conflict of

interest;

(B) procedures for disclosing a conflict of interest or possible

conflict of interest to the trustees or to a committee of the trustees,

and procedures for the trustees or committee to determine whether a

conflict exists;

(C) a requirement that the person with the conflict of interest not be

present at or participate in any deliberation or vote on the matter

giving rise to such conflict, provided that nothing in this section

shall prohibit the trustees or a committee from requesting that the

person with the conflict of interest present information as background

or answer questions at a trustees or committee meeting prior to the

commencement of deliberations or voting relating thereto;

(D) a prohibition against any attempt by the person with the conflict

to influence the deliberation or voting on the matter giving rise to

such conflict;

(E) a requirement that the existence and resolution of the conflict be

documented in the trust's records, including in the minutes of any

meeting at which the conflict was discussed or voted upon; and

(F) procedures for disclosing, addressing, and documenting related

party transactions in accordance with this paragraph.

(3) The conflict of interest policy shall require that prior to a

trustee's initial appointment, and annually thereafter, such trustee

shall complete, sign and file with the records of the trust a written

statement identifying any entity of which he or she is an officer,

director, trustee, member, owner (either as a sole proprietor or a

partner), or employee and with which the trust has a relationship, and

any transaction in which the trust is a participant and in which the

trustee might have a conflicting interest. The policy shall require that

each trustee annually resubmit such written statement. The trustees

shall provide a copy of all completed statements to the chair of the

audit committee, if there is an audit committee.

(4) A trust that has adopted and possesses a conflict of interest

policy pursuant to federal, state or local laws that is substantially

consistent with the provisions of subparagraph two of this paragraph

shall be deemed in compliance with provisions of this paragraph.

(5) Nothing in this paragraph shall be interpreted to require a trust

to adopt any specific conflict of interest policy not otherwise required

by this paragraph or any other law or rule, or to supersede or limit any

requirement or duty governing conflicts of interest required by any

other law or rule.

(e) (1) Except as provided in subparagraph three of this paragraph,

the trustees of every trust that has twenty or more employees and in the

prior fiscal year had annual revenue in excess of one million dollars

shall adopt, and oversee the implementation of, and compliance with, a

whistleblower policy to protect from retaliation persons who report

suspected improper conduct. Such policy shall provide that no officer,

trustee, employee or volunteer of a trust who in good faith reports any

action or suspected action taken by or within the trust that is illegal,

fraudulent or in violation of any adopted policy of the trust shall

suffer intimidation, harassment, discrimination or other retaliation or,

in the case of employees, adverse employment consequence.

(2) The whistleblower policy shall include the following provisions:

(A) Procedures for the reporting of violations or suspected violations

of laws or trust policies, including procedures for preserving the

confidentiality of reported information;

(B) A requirement that a trustee, officer or employee of the trust be

designated to administer, the whistleblower policy and to report to the

trustees or an authorized committee thereof, except that trustees who

are employees may not participate in any board or committee

deliberations or voting relating to administration of the whistleblower

policy;

(C) A requirement that the person who is the subject of a

whistleblower complaint not be present at or participate in board or

committee deliberation or vote on the matter relating to such complaint,

provided that nothing in this subparagraph shall prohibit the board or

committee from requesting that the person who is subject to the

complaint present information as background or answer questions at a

committee or board meeting prior to the commencement of deliberations or

voting relating thereto; and

(D) A requirement that a copy of the policy be distributed to all

trustees, officers, employees and volunteers, with instructions on how

to comply with the procedures set forth in the policy. For purposes of

this subdivision, posting the policy on the corporation's website or at

the corporation's offices in a conspicuous location accessible to

employees and volunteers are among the methods a corporation may use to

satisfy the distribution requirement.

(3) A trust that has adopted and possesses a whistleblower policy

pursuant to federal, state or local laws that is substantially

consistent with the provisions of subparagraph two of this paragraph

shall be deemed in compliance with the provisions of this paragraph.

(4) Nothing in this paragraph shall be interpreted to relieve any

trust from any additional requirements in relation to internal

compliance, retaliation, or document retention required by any other law

or rule.

Rule against perpetuities

(a) (1) The absolute power of alienation is suspended when there are

no persons in being by whom an absolute fee or estate in possession can

be conveyed or transferred.

(2) Every present or future estate shall be void in its creation which

shall suspend the absolute power of alienation by any limitation or

condition for a longer period than lives in being at the creation of the

estate and a term of not more than twenty-one years. Lives in being

shall include a child conceived before the creation of the estate but

born thereafter. In no case shall the lives measuring the permissible

period be so designated or so numerous as to make proof of their end

unreasonably difficult.

(b) No estate in property shall be valid unless it must vest, if at

all, not later than twenty-one years after one or more lives in being at

the creation of the estate and any period of gestation involved. In no

case shall lives measuring the permissible period of vesting be so

designated or so numerous as to make proof of their end unreasonably

difficult.

Reduction of age contingency

Where an estate would, except for this section, be invalid because

made to depend, for its vesting or its duration, upon any person

attaining or failing to attain an age in excess of twenty-one years, the

age contingency shall be reduced to twenty-one years as to any or all

persons subject to such contingency.

Rules of construction

(a) Unless a contrary intention appears, the rules of construction

provided in this section govern with respect to any matter affecting the

rule against perpetuities.

(b) It shall be presumed that the creator intended the estate to be

valid.

(c) Where an estate would, except for this paragraph, be invalid

because of the possibility that the person to whom it is given or

limited may be a person not in being at the time of the creation of the

estate, and such person is referred to in the instrument creating such

estate as the spouse of another without other identification, it shall

be presumed that such reference is to a person in being on the effective

date of the instrument.

(d) Where the duration or vesting of an estate is contingent upon the

probate of a will, the appointment of a fiduciary, the location of a

distributee, the payment of debts, the sale of assets, the settlement of

an estate, the determination of questions relating to an estate or

transfer tax or the occurrence of any specified contingency, it shall be

presumed that the creator of such estate intended such contingency to

occur, if at all, within twenty-one years from the effective date of the

instrument creating such estate.

(e) (1) Where the validity of a disposition depends upon the ability

of a person to have a child at some future time, it shall be presumed,

subject to subparagraph (2), that a male can have a child at fourteen

years of age or over, but not under that age, and that a female can have

a child at twelve years of age or over, but not under that age or over

the age of fifty-five years.

(2) In the case of a living person, evidence may be given to establish

whether he or she is able to have a child at the time in question.

(3) Where the validity of a disposition depends upon the ability of a

person to have a child at some future time, the possibility that such

person may have a child by adoption shall be disregarded.

(4) The provisions of subparagraphs (1), (2) and (3) shall not apply

for any purpose other than that of determining the validity of a

disposition under the rule against perpetuities where such validity

depends on the ability of a person to have a child at some future time.

A determination of validity or invalidity of a disposition under the

rule against perpetuities by the application of subparagraph (1) or (2)

or (3) shall not be affected by the later occurrence of facts in

contradiction to the facts presumed or determined or the possibility of

adoption disregarded under subparagraphs (1) or (2) or (3).

Acquisition of real property by foreign trust

Where real property situated in this state is acquired by a trust

validly created under the law of another jurisdiction, whether there is

a violation of the rule against perpetuities and whether a direction for

the accumulation of rents and profits is valid are determined by the law

of this state in effect at the time of the acquisition of such property.

Trust with transferable certificates

A trust with transferable certificates, heretofore or hereafter

created, is not invalid as violating the rule against perpetuities; but

such trust may continue for such time as may be necessary to accomplish

the purposes for which it is created if the instrument creating such

trust provides that it may be terminated at any time by action of the

trustees or by affirmative vote of the beneficiaries having a specified

percentage of interest therein. This section applies to an investment

trust, which is an unincorporated trust or association managed by

trustees not holding any property for sale to customers in the ordinary

course of its trade or business, the beneficial ownership of which is

evidenced by transferable shares or by transferable certificates of

beneficial interest offered for sale to the public.

Trust for employees

A trust created by an employer, as part of a stock bonus, pension,

disability or death benefit or profit-sharing plan, for the exclusive

benefit of some or all of his employees, to which contributions are made

by such employer or employees, or both, for the purpose of distributing

to such employees the income or principal, or both, of the fund so held

in trust, is not invalid as violating the rule against perpetuities; but

such trust may continue for such time as may be necessary to accomplish

the purposes for which it is created.

Trust for self-employed individuals and others

No trust created under a retirement plan, which is exempt from federal

income taxation under the laws of the United States, is invalid as

violating the rule against perpetuities or the rules governing the

accumulation of income. Such a trust may continue for such time as may

be necessary to accomplish the purposes for which it is created; may

permit the accumulation of income until such time as the income is

distributed to the beneficiaries under the terms of the trust; and may,

according to its terms, be made irrevocable and the interest of its

beneficiaries nontransferable by assignment or otherwise. A trust so

made irrevocable is not subject to revocation upon the written consent

of its beneficiaries as provided in 7-1.9.

Trust created by national securities exchange to assist

customers of members, member firms or member corporations

(a) A trust created by a national securities exchange for the purpose

of enabling the trustees, in their discretion, to provide direct or

indirect assistance to customers of a member, member firm or member

corporation of such exchange, threatened with loss of their money or

securities because such member, member firm or member corporation, in

the opinion of the trustees, is insolvent or may be unable without

assistance to meet its obligations to such customers, is not invalid as

violating the rule against perpetuities or the rules governing the

accumulation of income. Such a trust may continue and may accumulate the

income from the property held therein for such time as may be necessary

to accomplish the purposes for which it is created.

(b) As used in this section, the term "national securities exchange"

means any exchange registered as a national securities exchange under

the federal securities exchange act of nineteen hundred thirty-four, as

the same may be amended from time to time.

Rules governing accumulations

(a) All directions for the accumulation of income are void unless

authorized by statute.

(b) A direction for the accumulation of income is valid if such

accumulation is to begin and terminate within the time allowed by the

rule against perpetuities. An accumulation directed to continue for a

period extending beyond the expiration of such time terminates upon such

expiration.

(c) Where property is disposed of in trust for any religious,

charitable, educational or benevolent purpose and no valid future

estate, except for a similar purpose, is created by such disposition, a

direction for the accumulation by the trustee of income received for

such purpose is valid without regard to the time at which the

accumulation is to begin or to terminate, but the accumulation is

subject to the supervision and control of the supreme court or the

surrogate's court as provided in 8-1.1.

(d) The income from a trust created by an employer, as part of a stock

bonus, a pension, disability or death benefit or profit-sharing plan,

for the exclusive benefit of some or all of his employees, to which

contributions are made by such employer or employees or both, for the

purpose of distributing to such employees the income or principal, or

both, of the trust, may be accumulated until the funds are sufficient,

in the opinion of the employer, to accomplish the purposes of such plan.

Anticipation of directed accumulation

(a) When a valid accumulation is directed for the benefit of a person

without other sufficient means to support or educate himself, the

supreme court or, if such accumulation was directed by will, the

surrogate's court of the county in which such will is admitted to

probate, on the application of such person, his guardian, committee, or

conservator may direct that a suitable sum from the income accumulated

or to be accumulated be applied for the support or education of such

person.

(b) When the proceeds of a life insurance policy issued or delivered

in this state are being retained under an agreement by the insurer to

credit interest thereon for the benefit of a person without other

sufficient means to support or educate himself, the supreme court, on

the application of such person, his guardian, committee, or conservator

may direct that a suitable sum from the interest credited or agreed to

be credited be applied for the support or education of such person.

Undistributed income

When income is not disposed of and no valid direction is given for its

accumulation it passes to the persons presumptively entitled to the next

eventual estate.

Common law of powers retained, except as modified by this

article

The common law of powers as embodied in this article and as to matters

not included herein, as heretofore established, is retained as the law

of this state except as modified by the provisions of this article.

Power

A power is an authority to do any act in relation to property,

including the creation or revocation of an estate therein or a charge

thereon, which the donor of the power might himself do, except that the

term, as used in this article, does not apply to a power of attorney to

convey property in the name of the owner, regulated by other statutes.

Other words defined

(a) Donor. A donor is the person who creates or reserves a power.

(b) Donee. A donee is the person to whom a power is given or in whose

favor a power is reserved.

(c) Appointee. An appointee is the person in whose favor a power of

appointment is exercisable.

(d) Appointive property. Appointive property is property which is the

subject of a power of appointment.

Powers of appointment and other powers

(a) This article applies to powers of appointment. A power of

appointment, as the term is used in this article, is an authority

created or reserved by a person having property subject to his

disposition, enabling the donee to designate, within such limits as may

be prescribed by the donor, the appointees of the property or the shares

or the manner in which such property shall be received.

(b) This article applies, generally, to powers which are not powers of

appointment, such as a power to revoke a disposition previously made, a

power during minority to manage property vested in an infant, a power to

disburse the principal of a trust, a power to sell in a mortgage and a

power in a life tenant to make leases. This enumeration is not exclusive

but illustrative.

Classification of powers of appointment as to kind; general and

special; exclusive and non-exclusive

(a) A power of appointment is:

(1) general or special.

(2) exclusive or non-exclusive.

(b) A power of appointment is general to the extent that it is

exercisable wholly in favor of the donee, his estate, his creditors or

the creditors of his estate.

(c) All other powers of appointment are special.

(d) A special power of appointment is exclusive if it may be exercised

in favor of one or more of the appointees to the exclusion of the

others.

(e) A special power of appointment is non-exclusive if it must be

exercised in favor of all the appointees.

Classification of powers of appointment as to time of exercise;

presently exercisable, testamentary and postponed

(a) A power of appointment, as to the time of its exercise, is either

presently exercisable, testamentary or postponed.

(b) A power of appointment is presently exercisable if it may be

exercised by the donee, during his lifetime or by his written will, at

any time after its creation, and does not include a postponed power as

described in paragraph (d).

(c) A power of appointment is testamentary if it is exercisable only

by a written will of the donee.

(d) A power of appointment is postponed if it is exercisable by the

donee only after the expiration of a stated time or after the occurrence

or non-occurrence of a specified event.

Classification of powers of appointment as to duty to exercise;

imperative and discretionary

(a) A power of appointment is either imperative or discretionary.

(b) A power of appointment is imperative if the instrument creating it

imposes on the donee a duty to exercise it, and it may be imperative

even though it is exclusive.

(c) A power of appointment is discretionary if the donee is authorized

to exercise or not to exercise it.

Rules for creation of a power of appointment.

(a) The donor of a power of appointment:

(1) Must be a person capable of transferring the appointive property.

(2) Must have created or reserved the power by a written instrument

executed by him in the manner required by law.

(3) Must manifest his intention to confer the power on a person

capable of holding the appointive property.

(4) Cannot nullify or alter the rights of creditors of the donee, as

defined in this article, by any language in the instrument creating or

reserving the power purporting to give the interest of such donee a

spendthrift character.

Scope of the authority of the donee

The scope of the donee's authority as to appointees and as to the time

and manner of the appointment is unlimited except as the donor manifests

a contrary intention.

Contract to appoint; power presently exercisable

The donee of a power of appointment which is presently exercisable, or

of a postponed power which has become exercisable, can contract to make

an appointment to the extent that the contract or the promised

appointment does not confer a benefit upon a person who is not a

permissible appointee under the power.

Contract to appoint; power not presently exercisable

(a) The donee of a power of appointment which is not presently

exercisable, or of a postponed power which has not become exercisable,

cannot contract to make an appointment; except that this prohibition

shall not apply if the donor and donee are the same person. Such a

prohibited contract, if made, cannot be the basis of an action for

specific performance or damages, but the promisee can obtain restitution

of the value given by him for the promise unless the donee has exercised

the power pursuant to the contract.

(b) The provisions of this section shall not abridge the ability of

the donee of a power of appointment which is not presently exercisable

to release his power pursuant to 10-9.2 or to make the power, after

release, an imperative power, except that where the donor designated

persons or a class to take in default of the donee's exercise of the

power, a release with respect to appointive property must serve to

benefit all those so designated as provided by the donor.

Priority

The interest of the donee of a power of appointment, and of any

appointee thereunder, has priority with respect to real property subject

thereto, as against creditors, purchasers or incumbrancers, in good

faith and without notice, of or from a person having an estate in such

property, only from the time at which the instrument creating the power

is duly recorded. As against all other persons, such interest has

priority from the time at which the instrument creating the power takes

effect.

Exercise of a power of appointment; manifestation of intention

of donee

(a) Subject to paragraph (b), an effective exercise of a power of

appointment does not require an express reference to such power. A power

is effectively exercised if the donee manifests his intention to

exercise it. Such a manifestation exists when the donee:

(1) Declares in substance that he is exercising all the powers he has;

(2) Sufficiently identifying the appointive property or any part

thereof, executes an instrument purporting to dispose of such property

or part;

(3) Makes a disposition which, when read with reference to the

property he owned and the circumstances existing at the time of its

making, manifests his understanding that he was disposing of the

appointive property; or

(4) Leaves a will disposing of all of his property or all of his

property of the kind covered by the power, unless the intention that the

will is not to operate as an execution of the power appears expressly or

by necessary implication.

(b) If the donor has expressly directed that no instrument shall be

effective to exercise the power unless it contains a specific reference

to the power, an instrument not containing such reference does not

validly exercise the power.

Exercise of a power of appointment; conformity to directions of

donor

(a) Subject to the power of a court of competent jurisdiction to

remedy a defective execution of an imperative power of appointment, the

directions of the donor as to the manner, time and conditions of the

exercise of a power must be observed, except that:

(1) Where the donor has authorized it to be exercised by an instrument

legally insufficient to dispose of the appointive property, the manner

of exercise is to be determined by the provisions of this article.

(2) Where the donor has directed any formality to be observed in its

exercise, in addition to those which would be legally sufficient to

dispose of the appointive property, such additional formality is not

necessary to a valid exercise of such power.

(3) Where the donor has made the power exercisable only by deed, it is

also exercisable by a written will unless exercise by will is expressly

excluded.

(4) Where the donor of a general power of appointment has not

expressly imposed a requirement of good faith or of reasonableness with

respect to the donee's exercise of such power, neither such requirement

shall be implied.

Exercise of a power of appointment; type of instrument

A power of appointment can be exercised only by a written instrument

which would be sufficient to dispose of the estate intended to be

appointed if the donee were the actual owner.

Exercise of a power of appointment; required consents

(a) When the consent of the donor or of a third person to the exercise

of a power of appointment is required, such consent shall be expressed

in a written instrument, subscribed by the person whose consent is

required; and to entitle the instrument of exercise to be recorded, the

signatures of the donee and of the person consenting must be

acknowledged or proved in the manner required by the laws of this state

for the recording of a deed of real property.

(b) Unless the donor expressly provides otherwise:

(1) When the consents of two or more persons are required for the

exercise of a power of appointment, all must consent.

(2) If before the exercise of the power:

(A) One or more of such persons die, the consent of the survivor is

sufficient.

(B) One or more of such persons become incompetent, the consent of the

competent person is sufficient.

Exercise of exclusive and non-exclusive power of appointment

(a) Unless the donor expressly provides otherwise:

(1) The donee of an exclusive power may appoint all or any part of the

appointive property to one or more of the appointees to the exclusion of

the others.

(2) The donee of a non-exclusive power must appoint in favor of all of

the appointees equally.

Exercise of a power of appointment; effect when more extensive

or less extensive than authorized; trustee's authority to

invade principal in trust.

(a) An exercise of a power of appointment is not void because its

exercise is:

(1) More extensive than was authorized but is valid to the extent

authorized by the instrument creating the power.

(2) Less extensive than authorized by the instrument creating the

power, unless the donor has manifested a contrary intention.

(b) An authorized trustee with unlimited discretion to invade trust

principal may appoint part or all of such principal to a trustee of an

appointed trust for, and only for the benefit of, one, more than one or

all of the current beneficiaries of the invaded trust (to the exclusion

of any one or more of such current beneficiaries). The successor and

remainder beneficiaries of such appointed trust may be one, more than

one or all of the successor and remainder beneficiaries of such invaded

trust (to the exclusion of any one, more than one or all of such

successor and remainder beneficiaries).

(1) An authorized trustee exercising the power under this paragraph

may grant a discretionary power of appointment as defined in paragraph

(c) of section 10-3.4 of this article (including a presently exercisable

power of appointment) in the appointed trust to one or more of the

current beneficiaries of the invaded trust, provided that the

beneficiary granted a power to appoint could receive the principal

outright under the terms of the invaded trust.

(2) If the authorized trustee grants a power of appointment under

subparagraph (l) of this paragraph, except as otherwise provided in

subparagraph (3) of this paragraph, the granted power may only exclude

as permissible appointees one or more of the beneficiary, the creator,

or the creator's spouse, or any of the estates, creditors, or creditors

of the estates of the beneficiary, the creator or the creator's spouse.

(3) If the authorized trustee exercises the power under this

paragraph, the appointed trust may grant any power of appointment

included in the invaded trust provided such power has the same class of

permissible appointees as the power of appointment in the invaded trust

and is exercisable in the same fashion as the power of appointment in

the invaded trust.

(4) If the beneficiary or beneficiaries of the invaded trust are

described by a class, the beneficiary or beneficiaries of the appointed

trust may include present or future members of such class.

(c) An authorized trustee with the power to invade trust principal but

without unlimited discretion may appoint part or all of the principal of

the trust to a trustee of an appointed trust, provided that the current

beneficiaries of the appointed trust shall be the same as the current

beneficiaries of the invaded trust and the successor and remainder

beneficiaries of the appointed trust shall be the same as the successor

and remainder beneficiaries of the invaded trust.

(1) If the authorized trustee exercises the power under this

paragraph, the appointed trust shall include the same language

authorizing the trustee to distribute the income or invade the principal

of the appointed trust as in the invaded trust.

(2) If the authorized trustee exercises the power under this paragraph

to extend the term of the appointed trust beyond the term of the invaded

trust, for any period after the invaded trust would have otherwise

terminated under the provisions of the invaded trust, the appointed

trust, in addition to the language required to be included in the

appointed trust pursuant to subparagraph (1) of this paragraph, may also

include language providing the trustees with unlimited discretion to

invade the principal of the appointed trust during such extended term.

(3) If the beneficiary or beneficiaries of the invaded trust are

described by a class, the beneficiary or beneficiaries of the appointed

trust shall include present or future members of such class.

(4) If the authorized trustee exercises the power under this paragraph

and if the invaded trust grants a power of appointment to a beneficiary

of the trust, the appointed trust shall grant such power of appointment

in the appointed trust and the class of permissible appointees shall be

the same as in the invaded trust.

(d) An exercise of the power to invade trust principal under

paragraphs (b) and (c) of this section shall be considered the exercise

of a special power of appointment as defined in section 10-3.2 of this

article.

(e) The appointed trust to which an authorized trustee appoints the

assets of the invaded trust may have a term that is longer than the term

set forth in the invaded trust, including, but not limited to, a term

measured by the lifetime of a current beneficiary.

(f) If an authorized trustee has unlimited discretion to invade the

principal of a trust and the same trustee or another trustee has the

power to invade principal under the trust instrument which power is not

subject to unlimited discretion, such authorized trustee having

unlimited discretion may exercise the power of appointment under

paragraph (b) of this section.

(g) An authorized trustee may exercise the power to appoint in favor

of an appointed trust under paragraphs (b) and (c) of this section

whether or not there is a current need to invade principal under the

terms of the invaded trust.

(h) An authorized trustee exercising the power under this section has

a fiduciary duty to exercise the power in the best interests of one or

more proper objects of the exercise of the power and as a prudent person

would exercise the power under the prevailing circumstances. The

authorized trustee may not exercise the power under this section if

there is substantial evidence of a contrary intent of the creator and it

cannot be established that the creator would be likely to have changed

such intention under the circumstances existing at the time of the

exercise of the power. The provisions of the invaded trust alone are not

to be viewed as substantial evidence of a contrary intent of the creator

unless the invaded trust expressly prohibits the exercise of the power

in the manner intended by the authorized trustee.

(i) Unless the authorized trustee provides otherwise:

(1) The appointment of all of the assets comprising the principal of

the invaded trust to an appointed trust shall include subsequently

discovered assets of the invaded trust and undistributed principal of

the invaded trust acquired after the appointment to the appointed trust;

and

(2) The appointment of part but not all of the assets comprising the

principal of the invaded trust to an appointed trust shall not include

subsequently discovered assets belonging to the invaded trust and

principal paid to or acquired by the invaded trust after the appointment

to the appointed trust; such assets shall remain the assets of the

invaded trust.

(j) The exercise of the power to appoint to an appointed trust under

paragraph (b) or (c) of this section shall be evidenced by an instrument

in writing, signed, dated and acknowledged by the authorized trustee.

The exercise of the power shall be effective thirty days after the date

of service of the instrument as specified in subparagraph (2) of this

paragraph, unless the persons entitled to notice consent in writing to a

sooner effective date. The exercise of the power is irrevocable on such

effective date, either thirty days following service of the notice or

the effective date as set forth in the written consent.

(1) An authorized trustee may exercise the power authorized by

paragraphs (b) and (c) of this section without the consent of the

creator, or of the persons interested in the invaded trust, and without

court approval, provided that the authorized trustee may seek court

approval for the exercise with notice to all persons interested in the

invaded trust.

(2) A copy of the instrument exercising the power and a copy of each

of the invaded trust and the appointed trust shall be delivered (A) to

the creator, if living, of the invaded trust, (B) to any person having

the right, pursuant to the terms of the invaded trust, to remove or

replace the authorized trustee exercising the power under paragraph (b)

or (c) of this section, and (C) to any persons interested in the invaded

trust and the appointed trust (or, in the case of any persons interested

in the trust, to any guardian of the property, conservator or personal

representative of any such person or the parent or person with whom any

such minor person resides), by registered or certified mail, return

receipt requested, or by personal delivery or in any other manner

directed by the court having jurisdiction over the invaded trust.

(3) The instrument exercising the power shall state whether the

appointment is of all the assets comprising the principal of the invaded

trust or a part but not all the assets comprising the principal of the

invaded trust and if a part, the approximate percentage of the value of

the principal of the invaded trust that is the subject of the

appointment.

(4) A person interested in the invaded trust may object to the

trustee's exercise of the power under this section by serving a written

notice of objection upon the trustee prior to the effective date of the

exercise of the power. The failure to object shall not constitute a

consent.

(5) The receipt of a copy of the instrument exercising the power shall

not affect the right of any person interested in the invaded trust to

compel the authorized trustee who exercised the power under paragraph

(b) or (c) of this section to account for such exercise and shall not

foreclose any such interested person from objecting to an account or

compelling a trustee to account. Whether the exercise of a power under

paragraph (b) or (c) of this section begins the running of the statute

of limitations on an action to compel a trustee to account shall be

based on all the facts and circumstances of the situation.

(6) A copy of the instrument exercising the power shall be kept with

the records of the invaded trust and, within twenty days of the

effective date, the original shall be filed in the court having

jurisdiction over the invaded trust. Where a trustee of an inter vivos

trust exercises the power and the trust has not been the subject of a

proceeding in the surrogate's court, no filing is required. The

instrument shall state that in certain circumstances the appointment

will begin the running of the statute of limitations that will preclude

persons interested in the invaded trust from compelling an accounting by

the trustees after the expiration of a given time.

(7) Prior to the effective date as provided herein, a trustee may

revoke the exercise of the power to invade to a new trust. Where a

trustee has served notice of the exercise of the power pursuant to

subparagraph (2) of this paragraph, the trustee shall serve notice of

the revocation of the exercise of the power to persons interested in the

invaded trust and the appointed trust by registered or certified mail,

return receipt requested, or by personal delivery or in any other manner

directed by the court having jurisdiction over the invaded trust. Where

the notice of the exercise of the power was filed with the court, the

trustee shall file the notice of revocation of the exercise of the power

with such court.

(k) This section shall not be construed to abridge the right of any

trustee to appoint property in further trust that arises under the terms

of the governing instrument of a trust or under any other provision of

law or under common law, or as directed by any court having jurisdiction

over the trust.

(1) Nothing in this section is intended to create or imply a duty to

exercise a power to invade principal, and no inference of impropriety

shall be made as a result of an authorized trustee not exercising the

power conferred under paragraph (b) or (c) of this section.

(m) A power authorized by paragraph (b) or (c) of this section may be

exercised, subject to the provisions of paragraph (h) of this section,

unless expressly prohibited by the terms of the governing instrument,

but a general prohibition of the amendment or revocation of the invaded

trust or a provision that constitutes a spendthrift clause shall not

preclude the exercise of a power under paragraph (b) or (c) of this

section.

(n) An authorized trustee may not exercise a power authorized by

paragraph (b) or (c) of this section to effect any of the following:

(1) To reduce, limit or modify any beneficiary's current right to a

mandatory distribution of income or principal, a mandatory annuity or

unitrust interest, a right to withdraw a percentage of the value of the

trust or a right to withdraw a specified dollar amount, provided that

such mandatory right has come into effect with respect to the

beneficiary. Notwithstanding the foregoing, but subject to the other

limitations in this section, an authorized trustee may exercise a power

authorized by paragraph (b) or (c) of this section to appoint to an

appointed trust that is a supplemental needs trust that conforms to the

provisions of section 7-1.12 of this chapter;

(2) To decrease or indemnify against a trustee's liability or

exonerate a trustee from liability for failure to exercise reasonable

care, diligence and prudence;

(3) To eliminate a provision granting another person the right to

remove or replace the authorized trustee exercising the power under

paragraph (b) or (c) of this section unless a court having jurisdiction

over the trust specifies otherwise;

(4) To make a binding and conclusive fixation of the value of any

asset for purposes of distribution, allocation or otherwise; or

(5) To jeopardize (A) the deduction or exclusion originally claimed

with respect to any contribution to the invaded trust that qualified for

the annual exclusion under section 2503(b) of the internal revenue code,

the marital deduction under section 2056(a) or 2523(a) of the internal

revenue code, or the charitable deduction under section 170(a), 642(c),

2055(a) or 2522(a) of the internal revenue code, (B) the qualification

of a transfer as a direct skip under section 2642(c) of the internal

revenue code, or (C) any other specific tax benefit for which a

contribution originally qualified for income, gift, estate, or

generation-skipping transfer tax purposes under the internal revenue

code.

(o) An authorized trustee shall consider the tax implications of the

exercise of the power under paragraph (b) or (c) of this section.

(p) An authorized trustee may not exercise a power described in

paragraph (b) or (c) of this section in violation of the limitations

under sections 9-1.1, 10-8.1 and 10-8.2 of this chapter, and any such

exercise shall void the entire exercise of such power.

(q)(1) Unless a court otherwise directs, an authorized trustee may not

exercise a power authorized by paragraph (b) or (c) of this section to

change the provisions regarding the determination of the compensation of

any trustee; the commissions or other compensation payable to the

trustees of the invaded trust may continue to be paid to the trustees of

the appointed trust during the term of the appointed trust and shall be

determined in the same manner as in the invaded trust.

(2) No trustee shall receive any paying commission or other

compensation for appointing of property from the invaded trust to an

appointed trust pursuant to paragraph (b) or (c) of this section.

(r) Unless the invaded trust expressly provides otherwise, this

section applies to:

(1) Any trust governed by the laws of this state, including a trust

whose governing law has been changed to the laws of this state; and

(2) Any trust that has a trustee who is an individual domiciled in

this state or a trustee which is an entity having an office in this

state, provided that a majority of the trustees select this state as the

location for the primary administration of the trust by an instrument in

writing, signed and acknowledged by a majority of the trustees. The

instrument exercising this selection shall be kept with the records of

the invaded trust.

(s) For purposes of this section:

(1) The term "appointed trust" means an irrevocable trust which

receives principal from an invaded trust under paragraph (b) or (c) of

this section including a new trust created by the creator of the invaded

trust or by the trustees, in that capacity, of the invaded trust. For

purposes of creating the new trust, the requirement of section 7-1.17 of

this chapter that the instrument be executed and acknowledged by the

person establishing such trust shall be deemed satisfied by the

execution and acknowledgment of the trustee of the appointed trust.

(2) The term "authorized trustee" means, as to an invaded trust, any

trustee or trustees with authority to pay trust principal to or for one

or more current beneficiaries other than (i) the creator, or (ii) a

beneficiary to whom income or principal must be paid currently or in the

future, or who is or will become eligible to receive a distribution of

income or principal in the discretion of the trustee (other than by the

exercise of a power of appointment held in a non-fiduciary capacity).

(3) References to sections of the "internal revenue code" 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 also refer to corresponding provisions of state law.

(4) The term "current beneficiary or beneficiaries" means the person

or persons (or as to a class, any person or persons who are or will

become members of such class) to whom the trustees may distribute

principal at the time of the exercise of the power, provided however

that the interest of a beneficiary to whom income, but not principal,

may be distributed in the discretion of the trustee of the invaded trust

may be continued in the appointed trust.

(5) The term "invade" shall mean the power to pay directly to the

beneficiary of a trust or make application for the benefit of the

beneficiary.

(6) The term "invaded trust" means any existing irrevocable inter

vivos or testamentary trust whose principal is appointed under paragraph

(b) or (c) of this section.

(7) The term "person or persons interested in the invaded trust" shall

mean any person or 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.

(8) The term "principal" shall include the income of the trust at the

time of the exercise of the power that is not currently required to be

distributed, including accrued and accumulated income.

(9) The term "unlimited discretion" means the unlimited right to

distribute principal that is not modified in any manner. A power to pay

principal that includes words such as best interests, welfare, comfort,

or happiness shall not be considered a limitation or modification of the

right to distribute principal.

(10) The creator shall not be considered to be a beneficiary of an

invaded or appointed trust by reason of the trustee's authority to pay

trust principal to the creator pursuant to section 7-1.11 of this

chapter or by reason of the trustee's authority under the trust

instrument or any other provision of law to pay or reimburse the creator

for any tax on trust income or trust principal that is payable by the

creator under the law imposing such tax or to pay any such tax directly

to the taxing authorities.

(t) Cross-reference. For the exercise of the power under paragraph (b)

or (c) of this section where there are multiple trustees, see sections

10-6.7 and 10-10.7 of this article.

Exercise by all donees; exceptions

Whenever a power of appointment, other than a power in a trustee to

invade trust principal under section 10-6.6 of this article or under the

terms of the dispositive instrument, is created in two or more donees,

all must unite in its exercise, unless the instrument creating such

power provides otherwise. But, if before its execution, one or more of

such donees dies or becomes incompetent, such power may be exercised by

the survivor or the competent donee, unless such exercise is explicitly

barred by the terms of the instrument creating such power.

Imperative power of appointment; effectuation

(a) The exercise of an imperative power of appointment devolves upon

the supreme court or, in the case of a will, the surrogate's court in

the following cases:

(1) Failure to designate the donee.

(2) Death of the designated donee without exercising the power.

(3) Incompetence of the sole donee.

(4) Defective exercise of the power, either wholly or in part, by the

donee.

(b) Where an imperative power of appointment:

(1) Is exclusive, and the donee dies without exercising the power, it

must be exercised for the benefit of all of the appointees equally.

(2) Has been exercised defectively by the donee, it may be properly

exercised in favor of persons intended to be benefited by the donee.

(3) Has been exercised defectively by the donee, a purchaser for a

valuable consideration claiming under such defective exercise is

entitled to the same relief as a similar purchaser claiming under a

defective disposition from an actual owner.

(4) Is non-exclusive, and the right of the appointee is assignable,

creditors or assignees of such appointee can compel the exercise of such

power for their benefit.

(5) Is non-exclusive, the committee of an appointee or his assignee

for the benefit of creditors can compel the exercise of such power.

Exercise of a power of appointment in further trust

If the donee of a power of appointment exercises the power in favor of

the trustee of a trust under a will or deed other than that under which

the power was created, and if said exercise is otherwise valid, the

appointive property shall be paid over to and administered by the

trustee of, and under the terms of, the trust under such will or deed

and jurisdiction over said appointive property shall thereafter be in

the court having jurisdiction of the trust under such will or deed.

Creditors of the donee; special power

Property covered by a special power of appointment (or a general power

of appointment that is exercisable solely for the support, maintenance,

health and education of the donee within the meaning of sections 2041

and 2514 of the Internal Revenue Code) is not subject to the payment of

the claims of creditors of the donee, his estate or the expenses of

administering his estate.

Creditors of the donee; general power presently exercisable

Property covered by a general power of appointment (other than one

exercisable solely for the support, maintenance, health and education of

the donee within the meaning of sections 2041 and 2514 of the Internal

Revenue Code) which is presently exercisable, or of a postponed power

which has become exercisable, is subject to the payment of the claims of

creditors of the donee, his estate and the expenses of administering his

estate. It is immaterial whether the power was created in the donee by

himself or by some other person, or whether the donee has or has not

purported to exercise the power.

Creditors of the donee; power subject to a condition

A general power of appointment may be created subject to a condition

precedent or subsequent, and until the condition is fulfilled, it is not

subject to the provisions of 10-7.2.

Creditors of the donee; general power not presently exercisable

(a) Property covered by a general power of appointment which, when

created, is not presently exercisable is subject to the payment of the

claims of creditors of the donee, his estate and the expenses of

administering his estate, only:

(1) If the power was created by the donee in favor of himself; or

(2) If a postponed power becomes exercisable in accordance with the

terms of the creating instrument, except in the case of a testamentary

general power.

Rule against perpetuities; time at which permissible period

begins

(a) Where an estate is created by an instrument exercising a power of

appointment, the permissible period of the rule against perpetuities

begins:

(1) In the case of an instrument exercising a general power which is

presently exercisable, on the effective date of the instrument of

exercise.

(2) In all other cases, at the time of the creation of the power.

(b) Where the creator of a trust reserves to himself an unqualified

power to revoke, the permissible period of the rule against perpetuities

begins when the power to revoke terminates by reason of the death of the

creator, by a release of such power or otherwise.

Rule against perpetuities; law which determines permissible

period

In all cases covered by 10-8.1, the permissible period of the rule

against perpetuities is determined by the law in effect when the power

is exercised or the unqualified power to revoke is terminated, and not

by the law in effect when the power was created.

Rule against perpetuities; facts to be considered

When the permissible period of the rule against perpetuities must be

computed from the time of the creation of the power of appointment,

facts and circumstances existing on the effective date of the instrument

exercising the power shall be taken into account in determining the

validity of interests created by the instrument exercising the power.

Rule against accumulations; law determining validity in

exercise of a power of appointment

When a direction for the accumulation of income is contained in an

instrument exercising a power, heretofore or hereafter created, the

validity of such direction is determined by the law in effect when the

power is exercised, and not by the law in effect when the power was

created.

Revocability of a power of appointment

(a) A power of appointment is irrevocable unless the donor reserves

the right to revoke it.

(b) An exercise of power of appointment is irrevocable whenever:

(1) The donor of a special power manifests his intention that its

exercise be irrevocable, or

(2) The donee does not manifest in the instrument exercising the power

his intention to reserve a power of revocation.

(c) If the donee in exercising a power reserves a power to revoke the

appointment, but does not expressly reserve a power to reappoint, upon

the exercise of the power of revocation, the donee can reappoint.

(d) An instrument exercising a power of appointment is affected by

fraud in the same manner as a deed or will, executed by an owner or by a

trustee of property.

Release of a power of appointment

(a) Any power of appointment, whether exercisable only by deed, only

by will, or by either deed or will, and whether general or special,

exclusive or nonexclusive other than a power which is imperative, is

releasable, either with or without consideration, by written instrument

signed by the donee of such power and delivered as hereinafter provided.

(b) A releasable power of appointment may be released with respect to

all or any part of the appointive property and may also be released in

such manner as to reduce or limit the appointees, or classes of

appointees, in whose favor such power is exercisable. No release of any

power of appointment shall cause the power to become imperative when

such power was not imperative prior to such release, unless the

instrument of release expressly so provides.

(c) Such release may be delivered to any of the following:

(1) Any person specified for such purpose in the instrument creating

the power.

(2) Any trustee of the property subject to such power.

(3) Any person, other than the donee, who might be adversely affected

by an exercise of the power.

(4) The county clerk of the county in which the donee resides or has a

place of business or in which the instrument creating the power is

filed, to be duly filed by such clerk upon the payment to him of the

fees due for such filing or, if the power was created by will, to the

clerk of the surrogate's court having jurisdiction of the estate of the

donor.

(d) This section applies to releases delivered on or after July first,

nineteen hundred forty-two.

Power to distribute principal or allocate income; restriction

on exercise

A power held by a person as trustee of an express trust to make a

discretionary distribution of either principal or income to such person

as a beneficiary, or to make discretionary allocations in such person's

favor of receipts or expenses as between principal and income, cannot be

exercised by such person unless (1) such person is the grantor of the

trust and the trust is revocable by such person during such person's

lifetime, or (2) the power is a power to provide for such person's

health, education, maintenance or support within the meaning of sections

2041 and 2514 of the Internal Revenue Code, or (3) the trust instrument,

by express reference to this section, provides otherwise. If the power

is conferred on two or more trustees, it may be exercised by the trustee

or trustees who are not so disqualified. If there is no trustee

qualified to exercise the power, its exercise devolves on the supreme

court or the surrogate's court, except that if the power is created by

will, its exercise devolves on the surrogate's court having jurisdiction

of the estate of the donor of the power.

Power to lease in tenant for life; scope

A power may be conferred upon a tenant for life to make leases of real

property for a term of not more than twenty-one years to commence in

possession during his lifetime. If the power authorizes, or the life

tenant makes, a lease for a term in excess of twenty-one years, such

power or lease is valid for twenty-one years, but is void as to the

excess.

Power to lease in tenant for life; transfer and extinguishment

The power of a tenant for life to make leases is not assignable as a

separate interest, but is annexed to his estate and passes by a

disposition of such estate unless expressly excepted. If so excepted,

it is extinguished. Such a power may be released by the tenant to a

person entitled to a future estate in the property, and shall thereupon