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Sponsors
Senator · Senate District 42
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.1134
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Provides that adjustments made by a trustee, under the prudent investor act, shall be deemed to be re-characterizations for the purposes of the payment of commissions
In Senate Committee · Judiciary · Sponsor Helene Weinstein
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the estates, powers and trusts law, in relation to a trustee's power to adjust under the prudent investor act
Purpose of bill
The purpose of the bill is to clarify the effective date of a trustee's power to adjust from income to principal or from principal to income.
Summary of provisions of bill
Subparagraph 5 of paragraph (b) of section 11-2.3 of the Estates, Powers and Trusts Law (the EPTL) is amended by adding a new clause (G) stating that the effective date of a trustee's exercise of the power to adjust is the date that such transfer is made.
Justification
The Prudent Investor Act ("PIA"), codified in EPTL 11-2.3, requires a trustee "to pursue an overall strategy to enable the trustee to make appropriate present and future distributions to or for the benefit of the beneficiaries under the governing instrument, in accordance with risk and return objectives reasonably suited to the whole portfolio." (EPTL Section 112.3(b)(3)). The prudent investor standard specifically authorizes a trustee "to adjust between principal and income to the extent the trustee considers advisable to enable the trustee to make present and future distributions in accordance with (EPTL Section 11-2.3(b)(3))...if the trustee determines...that such an adjustment would be fair and reasonable to all the beneficiaries" (EPTL Section 11-2.3 (b)(5)).
However, it is unclear under current law whether and when adjusted amounts should be re-characterized for purposes of calculating trustee's commissions. This uncertainty creates the potential for conflict between co-trustees of a trust as to the method for computing commissions on re-characterized amounts.
Effectuating a re-characterization at the time such adjustment is made is consistent with the precepts of the PIA and serves to clarify the calculation of trustee's commissions in situations where such commissions are based on the amount of the trust's income or the trust's principal. The proposed amendment will result in a consistency of practice, eliminating uncertainty under current law.
Legislative history
New bill, 2016
Fiscal implications for state and local governments
None.
Effective date
This bill shall take effect on the first of January following enactment.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.