Relates to the effectiveness of the exercise of a power of appointment and an authorized trustee's authority to invade trust principal

BILL NUMBER:S3789

Title of bill

An act to amend chapter 451 of the laws of 2011, amending the estates, powers and trusts law relating to the exercise of a power of appointment and an authorized trustee's authority to invade trust principal, in relation to the effectiveness thereof

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Surrogate's Court Advisory Committee. This measure would make one technical correction to the effective date of chapter 451 of the Laws of 2011, which substantially altered New York's so-called "decanting statute" - EPTL 10-6.6, enacted in 1992. Section 10-6.6(b) codifies decisional law that permitted a trustee who has authority to invade the trust principal to exercise that power by creating new trusts. This effectively allows the rewriting of an irrevocable trust by permitting trust assets to be "appointed" or "decanted" to another trust. Chapter 451 enacted provisions to make the statute more flexible and more explicit with respect to the procedure required to effect a decanting.

The effective date provisions of L.2011, c. 451 are as fellows:

"This act shall take effect immediately and shall apply to trusts whether created prior to or after such effective date. "(emphasis added.)

The effective date of the new statute was August 17, 2011 and the question has arisen whether the statute applies to a trust created on that date. To clarify this issue it is proposed that there be a chapter amendment to L. 2011, c. 451 enacting the following effective date provisions:

This act shall take effect immediately and shall apply to trusts whether created prior to, on, or after such effective date.

Legislative History: None. New proposal.