What's happening
This bill allows trustees more discretion to allocate capital gains to trust income under certain circumstances.
Why it matters
Gives trustees greater flexibility in managing trust assets,. potentially allowing them to better serve the interests of current income beneficiaries by allocating capital gains to income rather than principal under certain conditions.
May affect the amount and timing of distributions to trust beneficiaries,. as trustees could choose to allocate capital gains to income, increasing what is available to distribute as income, which could benefit income beneficiaries at the possible expense of future remainder beneficiaries.
Could have tax implications for both trusts and beneficiaries,. since the reallocation of capital gains to income might shift the tax burden (capital gains vs. ordinary income) or affect the character of distributions received by beneficiaries.
Applies to all trusts regardless of when they were created,. meaning both new and existing trusts could be subject to these new rules, potentially altering trust administration and beneficiary expectations retroactively.
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Who cares
Headline styles
Let Trustees Allocate Trust Gains
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to judiciary
- Referred to judiciary
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7521
2019-2020 Regular Sessions
IN ASSEMBLY
May 8, 2019
Introduced by M. of A. ZEBROWSKI, DINOWITZ -- (at request of the Office of Court Administration) -- read once and referred to the Committee on Judiciary
AN ACT to amend the estates, powers and trusts law, in relation to trust accounting income and principal
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 2 of section 11-A-4.4 of the estates, powers and trusts law, as added by chapter 243 of the laws of 2001, is amended to read as follows:
(2) money or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to this part; provided, however, that a trustee may, in a reasonable and impartial exercise of discretion, allocate to income gains from the sale or exchange of a capital asset (as defined in section 1221 of the Internal Revenue Code of 1986, as amended) to the extent that principal is re-characterized as income by the exercise of the power to adjust under subparagraph 11-2.3(b)(5), and provided further, however, that a trustee who has an unlimited discretionary power to distribute principal may, in a reasonable and impartial exercise of discretion, allocate to income any or all gains from the sale or exchange of a capital asset (as defined in section 1221 of the Internal Revenue Code of 1986, as amended);
§ 2. This act shall take effect immediately and shall apply to all trusts, whenever established.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10075-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.