New York: Estates, Powers and Trusts Law (EPTL)

Article 1 General Provisions
- Part 1 Short Title; How Cited; References; Severability; Application
  - § 1-1.1 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 §.
  - § 1-1.2 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.
  - § 1-1.3 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.
  - § 1-1.4 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.
  - § 1-1.5 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.
- Part 2 Definitions
  - § 1-2.1 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.
  - § 1-2.2 Creator
    - A creator is a person who makes a disposition of property.
  - § 1-2.3 Demonstrative disposition
    - A demonstrative disposition is a testamentary disposition of property to be taken out of specified or identified property.
  - § 1-2.4 Disposition
    - A disposition is a transfer of property by a person during his lifetime or by will.
  - § 1-2.5 Distributee
    - A distributee is a person entitled to take or share in the property of a decedent under the statutes governing descent and distribution.
  - § 1-2.6 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.
  - § 1-2.7 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.
  - § 1-2.8 General disposition
    - A general disposition is a testamentary disposition of property not amounting to a demonstrative, residuary or specific disposition.
  - § 1-2.9 Incompetent
    - An incompetent is a person judicially declared to be incapable of managing his affairs.
  - § 1-2.9A 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.
  - § 1-2.10 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.
  - § 1-2.11 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.
  - § 1-2.12 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.
  - § 1-2.13 Personal represenative
    - 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.
  - § 1-2.14 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.
  - § 1-2.15 Property
    - Property is anything that may be the subject of ownership, and is real or personal property.
  - § 1-2.16 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.
  - § 1-2.17 Specific disposition
    - A specific disposition is a disposition of a specified or identified item of the testator's property.
  - § 1-2.18 Testamentary beneficiary
    - A testamentary beneficiary is a person in whose favor a disposition of property is made by will.
  - § 1-2.19 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.
    - (b) Unless the context otherwise requires, the term "will" includes a "codicil".
  - § 1-2.20 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.
Article 2 Rules Governing Dispositions Subject to This Law
- Part 1 Substantive Rules Governing Dipositions
  - § 2-1.1 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.
  - § 2-1.2 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.
  - § 2-1.3 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.
  - § 2-1.4 Words of inheritance unnecessary
    - The word "heirs" or words of inheritance of like import are not necessary to create or dispose of a fee.
  - § 2-1.5 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.
  - § 2-1.6 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.
  - § 2-1.7 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.
  - § 2-1.8 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.
  - § 2-1.9 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.
  - § 2-1.10 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.
  - § 2-1.11 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.
  - § 2-1.12 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.
  - § 2-1.13 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.
  - § 2-1.14 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).
  - § 2-1.15 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.
Article 3 Substantive Law of Wills
- Part 1 Who May Make and Receive Testamentary Dispositions of Property; What Property May Be Disposed of By Will
  - § 3-1.1 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.
  - § 3-1.2 What property may be disposed of by will
    - Every estate in property may be devised or bequeathed.
  - § 3-1.3 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.
- Part 2 Execution of Wills
  - § 3-2.1 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:
      - (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; provided, 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.
  - § 3-2.2 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.
- Part 3 Rules Governing Testamentary Dispositions
  - § 3-3.1 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.
  - § 3-3.2 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.
  - § 3-3.3 Disposition to issue or brothers or sisters of testator not to lapse; application to class dispositions
  - § 3-3.4 Consequences of partly ineffective testamentary dipositions of property to two or more residuary beneficiaries
  - § 3-3.5 Conditions qualifying dispositions; conditions against contest; limitations thereon
    - NOTE: See ➡️ General explanation of EPTL 3-3.5.
    - (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.
    - NOTE: See 🔑 NY: In Terrorem Clauses Enforceable Whether or Not a Gift Over Exists
    - (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.
        
        NOTE: See 🔑 NY: Construction Proceeding Does Not Violate In Terrorem Clause.
  - § 3-3.6 Encumbrances on property of decedent or on proceeds of insurance policy on life of decedent not chargeable against assets of decedent's estate
  - § 3-3.7 Testamentary disposition to trustee under, or in accordance with the terms of existing inter vivos trust
  - § 3-3.8 Validity of purchase of real property notwithstanding its disposition by will
  - § 3-3.9 Testamentary direction to purchase annuities
- Part 4 Revocation of Wills and Related Subjects
  - § 3-4.1 Revocation of wills; effect on codicils
  - § 3-4.2 Agreement to convey property previously disposed of by will not a revocation
  - § 3-4.3 Revocatory effect of a conveyance, settlement or other act affecting property previously disposed of by will
  - § 3-4.4 Conveyance of property of an incompetent or conservatee, previously disposed of specifically by will, not revocation or ademption
  - § 3-4.5 Insurance proceeds from specific disposition not subject to ademption
  - § 3-4.6 Revocation or alteration of later will not to revive prior will or any provisions thereof
- Part 5 Rules Governing Wills Having Relation to Another Jurisdiction
  - § 3-5.1 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 jurisdiction
Article 4 Descent and Distribution of an Intestate Estate
- Part 1 Rules Governing Intestate Succession
  - § 4-1.2 Inheritance by non-marital children
  - § 4-1.3 Inheritance by children conceived after the death of an intended parent
  - § 4-1.4 Disqualification of parent to take intestate share
  - § 4-1.5 Other disqualifications
  - § 4-1.6 Disqualification of joint tenant in certain instances
Article 5 Family Rights
- Part 1 Rights of Surviving Spouse
  - § 5-1.1 Right of election by surviving spouse
  - § 5-1.1-A Right of election by surviving spouse
  - § 5-1.2 Disqualification as surviving spouse
  - § 5-1.3 Revocatory effect of marriage after execution of will
  - § 5-1.4 Revocatory effect of divorce, annulment or declaration of nullity, or dissolution of marriage on disposition, appointment, provision, or nomination regarding a former spouse.
- Part 3 Rights of Family Unit
  - § 5-3.1 Exemption for benefit of family
  - § 5-3.2 Revocatory effect of birth of child after execution of will
  - [§ 5-3.3]
    - NOTE: At one time, EPTL 5-3.3 provided that a child of a testator may set aside a testamentary disposition to charity to the extent it exceeds one-half of the testator's estate.
      EPTL 5-3.3 was repealed in 1981.
      For an example of when a testator's child used EPTL 5-3.3 to set aside a charitable gift, see In re Rothko, 43 N.Y.2d 305 (1977).
  - § 5-3.4 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.
- Part 4 Rights of Members of Family Resulting From Wrongful Act, Neglect or Default Causing Death of Decedent
  - § 5-4.1 Action by personal representative for wrongful act, neglect or default causing death of decedent
  - § 5-4.2 Trial and burden of proof of contributory negligence
  - § 5-4.3 Amount of recovery
  - § 5-4.4 Distribution of damages recovered.
  - § 5-4.5 Non-marital children.
  - § 5-4.6 Application to compromise action.
Article 6 Classification, Creation, Definition of, and Rules Governing Estates in Property
- Part 1 Estates Classified as to Duration
  - § 6-1.1 Estates classified
  - § 6-1.2 Estates tail abolished; future estates limited thereon
  - § 6-1.3 When estate for life of third person is real property; when personal property
- Part 2 Estates Classified as to Number of Persons
  - § 6-2.1 Estates in severalty, joint tenancy, tenancy by the entirety and in common
  - § 6-2.2 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.
- Part 3 Estates Classified as to Time of Enjoyment and Creation
  - § 6-3.1 Estates in possession and future estates
  - § 6-3.2 Kinds of future estates
  - § 6-3.3 Concerning the creation of certain future estates
  - § 6-3.4 When future estates are created
- Part 4 Estates Defined
  - § 6-4.1 Definition of an estate in possession
  - § 6-4.2 Definition of a future estate
  - § 6-4.3 Definition of a remainder
  - § 6-4.4 Definition of reversion
  - § 6-4.5 Definition of a possibility of reverter
  - § 6-4.6 Definition of right of reacquisition
  - § 6-4.7 Definition of a future estate indefeasibly vested
  - § 6-4.8 Definition of a future estate vested subject to open
  - § 6-4.9 Definition of a future estate vested subject to complete defeasance
  - § 6-4.10 Definition of a future estate subject to a condition precedent
- Part 5 Rules Governing Future Estates
  - § 6-5.1 Characteristics of future estates
  - § 6-5.2 Power of appointment not to prevent vesting
  - § 6-5.3 Future estates in the alternative
  - § 6-5.4 Implication of cross remainders between tenants in common
  - § 6-5.5 Future estate valid though contingency improbable
  - § 6-5.6 Meaning of heirs, distributees and issue in certain remainders
  - § 6-5.7 Posthumous children
  - § 6-5.8 Heirs or distributees of life tenant take as purchasers
  - § 6-5.9 Heirs or distributees of creator take as purchasers
  - § 6-5.10 When future estates are defeated
  - § 6-5.11 Non-destructibility of remainders subject to a condition precedent
  - § 6-5.12 Future rents and profits subject to rules governing future estates
- Part 6 Disposition of Community Property Rights at Death
  - § 6-6.1 Application
  - § 6-6.2 Rebuttable presumptions
  - § 6-6.3 Disposition upon death
  - § 6-6.4 Perfection of title
  - § 6-6.5 Purchaser for value or lender
  - § 6-6.6 Effect and construction of part
  - § 6-6.7 Short title
Article 7 Trusts
- Part 1 Rules Governing Trusts
  - § 7-1.1 When trust interests not to merge
  - § 7-1.2 Trustee of passive trust not to make
  - § 7-1.3 Purchase-money resulting trust abolished
  - § 7-1.4 Purposes for which trust may be created
  - § 7-1.5 When trust interest inalienable; exception
  - § 7-1.6 Application of principal to income beneficiary
  - § 7-1.7 Interest remaining in creator of trust
  - § 7-1.8 Duration of trust for benefit of creditors
  - § 7-1.9 Revocation of trusts
  - § 7-1.10 Provision by non-domiciliary creator as to law to govern trust
  - § 7-1.11 Application of principal to creator of trust as reimbursement for taxes
  - § 7-1.12 Supplemental needs trusts established for persons with severe and chronic or persistent disabilities
  - § 7-1.13 Division of trusts and establishment of separate trusts
  - § 7-1.14 Who may make a lifetime trust
  - § 7-1.15 What property may be disposed of by lifetime trust
  - § 7-1.16 Revocation of lifetime trust by will
  - § 7-1.17 Execution, amendment and revocation of lifetime trusts
  - § 7-1.18 Funding of lifetime trust
  - § 7-1.19 Application for termination of uneconomical trust
- Part 2 Rules Governing Trustees
  - § 7-2.1 Extent of trustee's estate
  - § 7-2.2 When estate of trustee ceases
  - § 7-2.3 Trust estate not to descend on death of trustee; appointment, duties and rights of successor trustee
  - § 7-2.4 Act of trustee in contravention of trust
  - § 7-2.5 Suspension of powers of trustee in war service
  - § 7-2.6 Resignation, suspension or removal of trustee
  - § 7-2.7 Accounting by trustee in supreme court
  - § 7-2.8 Commissions of trustee to sell real property for benefit of creditors
- Part 3 Rights of Purchasers, Creditors and Other Persons
  - § 7-3.1 Disposition in trust for creator void as against creditors
  - § 7-3.2 Bona fide purchasers and creditors protected
  - § 7-3.3 Person paying money to the trustee protected
  - § 7-3.4 Excess income from trust property subject to creditors' claims
  - § 7-3.5 Rights of creditors to obtain information concerning beneficiaries
- Part 5 Bank Accounts in Trust Form
  - § 7-5.1 Definitions
  - § 7-5.2 Terms of a trust account
  - § 7-5.3 Payment to beneficiary
  - § 7-5.4 Effect of payment
  - § 7-5.5 Rights not affected
  - § 7-5.6 Joint depositors
  - § 7-5.7 Multiple beneficiaries
  - § 7-5.8 Application
- Part 6 Uniform Transfers to Minors Act
  - § 7-6.1 Definition
  - § 7-6.2 Scope and jurisdiction
  - § 7-6.3 Nomination of custodian
  - § 7-6.4 Transfer by gift or exercise of power of appointment
  - § 7-6.5 Transfer authorized by will or trust
  - § 7-6.6 Other transfer by fiduciary
  - § 7-6.7 Transfer by obligor
  - § 7-6.8 Receipt for custodial property
  - § 7-6.9 Manner of creating custodial property and effecting transfer; designation of initial custodian; control
  - § 7-6.10 Single custodianship
  - § 7-6.11 Validity and effect of transfer
  - § 7-6.12 Care of custodial property
  - § 7-6.13 Powers of custodian
  - § 7-6.14 Use of custodial property
  - § 7-6.15 Custodian's expenses, compensation, and bond
  - § 7-6.16 Exemption of third person from liability
  - § 7-6.17 Liability to third persons
  - § 7-6.18 Renunciation, resignation, death, or removal of custodian; designation of successor custodian
  - § 7-6.19 Accounting by and determination of liability of custodian
  - § 7-6.20 Termination of custodianship
  - § 7-6.21 Age eighteen election
  - § 7-6.22 Effect on existing custodianships
  - § 7-6.23 Applicability
  - § 7-6.24 Uniformity of application and construction
  - § 7-6.25 Short title
  - § 7-6.26 Severability
- Part 7 Child Performer Trust Account
  - § 7-7.1 Child performer trust account
- Part 8 Honorary Trusts For Pets
  - § 7-8.1 Trusts for pets
Article 8 Charitable Trusts
- Part 1 Rules Governing Charitable Trusts
  - § 8-1.1 Disposition of property for charitable purposes
  - § 8-1.2 Certain charitable trusts authorized
  - § 8-1.3 Certain charitable trusts regulated
  - § 8-1.4 Supervision of trustees for charitable purposes
  - § 8-1.5 Trusts for cemetery purposes
  - § 8-1.6 Deposit of money in trust by owner of lots in private unincorporated cemetery
  - § 8-1.7 Authority of trustee to accumulate income
  - § 8-1.8 Private foundations: administration of certain trusts as defined in the United States internal revenue code of 1954
  - § 8-1.9 Trust governance
Article 9 Perpetuities and Accumulations
- Part 1 Perpetuities
  - § 9-1.1 Rule against perpetuities
  - § 9-1.2 Reduction of age contingency
  - § 9-1.3 Rules of construction
  - § 9-1.4 Acquisitition of real property by foreign trust
  - § 9-1.5 Trust with transferable certificates
  - § 9-1.6 Trust for employees
  - § 9-1.7 Trust for self-employed individuals and others
  - § 9-1.8 Trust created by national securities exchange to assistcustomers of members, member firms or member corporations
- Part 2 Accumulations
  - § 9-2.1 Rules governing accumulations
  - § 9-2.2 Anticipation of directed accumulation
  - § 9-2.3 Undistributed income
Article 10 Powers
- Part 1 Common Law of Powers Established with Exceptions
  - § 10-1.1 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.
- Part 2 Definitions
  - § 10-2.1 Power
  - § 10-2.2 Other words defined
- Part 3 Varieties of Powers
  - § 10-3.1 Powers of appointment and other powers
  - § 10-3.2 Classification of powers of appointment as to kind; general and special; exclusive and non-exclusive
  - § 10-3.3 Classification of powers of appointment as to time of exercise; presently exercisable, testamentary and postponed
  - § 10-3.4 Classification of powers of appointment as to duty to exercise; imperative and discretionary
- Part 4 Creation of a Power of Appointment
  - § 10-4.1 Rules for creation of a power of appointment
- Part 5 Extent of Donee's Authority to Appoint or Contract
  - § 10-5.1 Scope of the authority of the donee
  - § 10-5.2 Contract to appoint; power presently exercisable
  - § 10-5.3 Contract to appoint; power not presently exercisable
  - § 10-5.4 Priority
- Part 6 Rules Governing Exercise of a Power of Appointment
  - § 10-6.1 Exercise of a power of appointment; manifestation of intention of donee
  - § 10-6.2 Exercise of a power of appointment; conformity to directions of donor
  - § 10-6.3 Exercise of a power of appointment; type of instrument
  - § 10-6.4 Exercise of a power of appointment; required consents
  - § 10-6.5 Exercise of exclusive and non-exclusive power of appointment
  - § 10-6.6 Exercise of a power of appointment; effect when more extensive or less extensive than authorized; trustee's authority to invade principal in trust
  - § 10-6.7 Exercise by all donees; exceptions
  - § 10-6.8 Imperative power of appointment; effectuation
  - § 10-6.9 Exercise of a power of appointment in further trust
- Part 7 Rights of Creditors in Appointive Property
  - § 10-7.1 Creditors of the donee; special power
  - § 10-7.2 Creditors of the donee; general power presently exercisable
  - § 10-7.3 Creditors of the donee; power subject to a condition
  - § 10-7.4 Creditors of the donee; general power not presently exercisable
- Part 8 Rule Against Perpetuities and Accumulations as Affect by Powers of Appointment
  - § 10-8.1 Rule against perpetuities; time at which permissible period begins
  - § 10-8.2 Rule against perpetuities; law which determines permissible period
  - § 10-8.3 Rule against perpetuities; facts to be considered
  - § 10-8.4 Rule against accumulations; law determining validity in exercise of a power of appointment
- Part 9 Revocation and Release of a Power of Appointment
  - § 10-9.1 Revocability of a power of appointment
  - § 10-9.2 Release of a power of appointment
- Part 10 Provisions Affecting Powers Other than Powers of Appointment
  - § 10-10.1 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.
  - § 10-10.2 Power to lease in tenant for life; scope
  - § 10-10.3 Power to lease in tenant for life; transfer and extinguishment
  - § 10-10.4 Power to lease in tenant for life; effect of mortgage
  - § 10-10.5 Power to sell in a mortgage
  - § 10-10.6 Effect of reserved unqualified power to revoke
  - § 10-10.7 Exercise of powers by multiple fiduciaries; joint and several powers
  - § 10-10.8 Irrevocability of powers other than powers of appointment
Article 11 Fiduciary: Powers, Duties and Limitations; Actions By or Against In Representative or Individual Capacities
- Part 1 Fiduciaries: Powers, Duties and Limitations
  - § 11-1.1 Fiduciaries' powers
    - (a) As used in this section, unless the context or subject matter otherwise requires,
      - (1) the term "estate" means the estate of a decedent;
      - (2) the term "trust" means any express trust of property, created by a will, deed or other instrument, whereby there is imposed upon a trustee the duty to administer property for the benefit of a named or otherwise described income or principal beneficiary, or both. A trust shall not include trusts for the benefit of creditors, resulting or constructive trusts, business trusts where certificates of beneficial interest are issued to the beneficiary, investment trusts, voting trusts, security instruments such as deeds of trust and mortgages, trusts created by the judgment or decree of a court, liquidation or reorganization trusts, trusts for the sole purpose of paying dividends, interest, interest coupons, salaries, wages, pensions or profits, instruments wherein persons are mere nominees for others, or trusts created in deposits in any banking institution or savings and loan institution;
      - (3) the term "fiduciary" means administrators, executors, preliminary executors, administrators d.b.n., administrators c.t.a.d.b.n., administrators c.t.a., ancillary executors, ancillary administrators, ancillary administrators c.t.a and trustees of express trusts, including a corporate as well as a natural person acting as fiduciary, and a successor or substitute fiduciary, whether designated in a trust instrument or otherwise.
    - (b) In the absence of contrary or limiting provisions in the court order or decree appointing a fiduciary, or in a subsequent order or decree, or in the will, deed or other instrument, every fiduciary is authorized:
      - EPTL 11-1.1(b) provides default rules that apply in "the absence of contrary or limiting" rules.
      - (1) To accept additions to any estate or trust from sources other than the estate of the decedent or the settlor of a trust.
      - (2) To acquire the remaining undivided interest in the property of an estate or trust in which the fiduciary, in his fiduciary capacity, holds an undivided interest.
      - (3) To invest and reinvest property of the estate or trust under the provisions of the will, deed or other instrument or as otherwise provided by law.
      - (4) To effect and keep in force fire, rent, title, liability, casualty or other insurance to protect the property of the estate or trust and to protect the fiduciary.
      - (5) With respect to any property or any estate therein owned by an estate or trust, except where such property or any estate therein is specifically disposed of:
        
        (A) To take possession of, collect the rents from and manage the same.
        
        (B) To sell the same at public or private sale, and on such terms as in the opinion of the fiduciary will be most advantageous to those interested therein.
        
        (C) With respect to fiduciaries other than a trustee, to lease the same for a term not exceeding three years and, in the case of a trustee, to lease the same for a term not exceeding ten years although such term extends beyond the duration of the trust and, in either of such cases, including the right to explore for and remove mineral or other natural resources, and in connection with mineral leases to enter into pooling and unitization agreements.
        
        (D) To mortgage the same.
        
        (E) Any power to take possession of, collect the rent from, manage, sell, lease or mortgage, granted by this subparagraph (5), which is prohibited by the terms of the will, deed or other instrument or by the provisions of this subparagraph (5), nonetheless exists, upon the approval of the surrogate, where such power is necessary for the purposes set forth in SCPA 1902.
        
        (F) A fiduciary acting under a will may exercise all of the powers granted by this subparagraph (5) notwithstanding the effect upon such will of the birth of a child after its execution or of any election by a surviving spouse.
      - (6) To make ordinary repairs to the property of the estate or trust.
      - (7) To grant options for the sale of property for a period not exceeding six months.
      - (8) With respect to any mortgage held by the estate or trust (A) to continue the same upon and after maturity, with or without renewal or extension, upon such terms as the fiduciary deems advisable; (B) to foreclose, as an incident to collection of any bond or note, any mortgage securing such bond or note, and to purchase the mortgaged property or acquire the property by deed from the mortgagor in lieu of foreclosure.
      - (9) To employ any bank or trust company incorporated in this state, any national bank located in this state or any private banker duly authorized by the superintendent of financial services of this state to engage in business here (who, as private banker, maintains a permanent capital of not less than one million dollars) as custodian of any stock or other securities held as a fiduciary, and the cost thereof, except in the case of a corporate fiduciary, shall be a charge upon the estate or trust. The records of such bank, trust company or private banker shall at all times show the ownership of such stock or other securities. Such stock or other securities shall at all times be kept separate from the assets of such bank, trust company or private banker and may be kept by such bank, trust company or private banker
        
        (A) in a manner such that all certificates representing the securities from time to time constituting the assets of a particular estate, trust or other fiduciary account are held separate from those of all other estates, trusts or accounts; or
        
        (B) in a manner such that, without certification as to ownership attached, certificates representing securities of the same class of the same issuer and from time to time constituting assets of particular estates, trusts or other fiduciary accounts are held in bulk, including, to the extent feasible, the merging of certificates of small denomination into one or more certificates of large denomination, provided that a bank, trust company or private banker, when operating under the method of safekeeping security certificates described in this subparagraph (B), shall be subject to such rules and regulations as, in the case of state chartered institutions, the state superintendent of financial services and, in the case of national banking associations, the comptroller of the currency may from time to time issue. Such bank, trust company or private banker shall, on demand by the fiduciary, certify in writing the securities held by it for such estate, trust or fiduciary account.
      - (10) To cause any stock or other securities (hereinafter referred to as "securities") held by any bank or trust company, when acting as fiduciary, whether alone or jointly with an individual, with the consent of the individual fiduciary, if any (who is hereby authorized to give such consent), to be registered and held in the name of a nominee of such bank or trust company without disclosure of the fiduciary relationship; and, in the case of an individual acting as fiduciary, to direct any bank or trust company incorporated under the laws of this state, any national bank located in this state or any private banker duly authorized by the superintendent of financial services of this state to engage in business here (who, as private banker, maintains a permanent capital of not less than one million dollars) to register and hold any securities deposited with such bank, trust company or private banker (hereinafter referred to as "bank") in the name of a nominee of such bank. The bank shall not redeliver such securities to the individual fiduciary, who authorized their registration in the name of a nominee of the bank, without first registering the securities in the name of the individual fiduciary, as such. But, any sale of such securities by the bank at the direction of the individual fiduciary shall not be treated as a redelivery. The bank may make any disposition of such securities which is authorized or directed by an order or decree of the court having jurisdiction of the estate or trust. Any such bank shall be absolutely liable for any loss occasioned by the acts of its nominee with respect to the securities so registered. The records of the bank shall at all times show the ownership of any such securities and of those held in bearer form. Such securities and those held in bearer form shall at all times be kept separate from the assets of the bank and may be kept by such bank
        
        (A) in a manner such that all certificates representing the securities from time to time constituting the assets of a particular estate, trust or other fiduciary account are held separate from those of all other estates, trusts or accounts; or
        
        (B) in a manner such that, without certification as to ownership attached, certificates representing securities of the same class of the same issuer and from time to time constituting assets of particular estates, trusts or other fiduciary accounts are held in bulk, including, to the extent feasible, the merging of certificates of small denomination into one or more certificates of large denomination, provided that a bank, when operating under the method of safekeeping security certificates described in this subparagraph (B), shall be subject to such rules and regulations as, in the case of state chartered institutions, the state superintendent of financial services and, in the case of national banking associations, the comptroller of the currency may from time to time issue. Such bank or trust company shall, on demand by any party to an accounting by such bank or trust company as fiduciary or on demand by the attorney for such party, certify in writing the securities held by such bank or trust company as such fiduciary.
      - (11) In the case of the survivor of two or more fiduciaries, to continue to administer the property of the estate or trust without the appointment of a successor to the fiduciary who has ceased to act and to exercise or perform all of the powers given to the original fiduciaries unless contrary to the express provision of the will, deed or other instrument.
      - (12) As successor or substitute fiduciary, to succeed to all of the powers, duties and discretion of the original fiduciary, with respect to the estate or trust, as were given to the original fiduciary, unless the exercise of such powers, duties or discretion of the original fiduciary are expressly prohibited by the will, deed or other instrument to any successor or substituted fiduciary.
      - (13) To contest, compromise or otherwise settle any claim in favor of the estate, trust or fiduciary or in favor of third persons and against the estate, trust or fiduciary.
      - (14) To vote in person or by proxy, discretionary or otherwise, shares of stock or other securities held by him as fiduciary.
      - (15) To pay calls, assessments and any other sums chargeable or accruing against or on account of shares of stock, bonds, debentures or other corporate securities held by a fiduciary, whenever such payments may be legally enforceable against the fiduciary or any property of the estate or trust or the fiduciary deems payment expedient and for the best interests of the estate or trust.
      - (16) To sell or exercise stock subscription or conversion rights, participate in foreclosures, reorganizations, consolidations, mergers or liquidations, and to consent to corporate sales, leases and encumbrances. In the exercise of such powers the fiduciary is authorized to deposit stocks, bonds or other securities with any protective or other similar committee under such terms and conditions respecting the deposit thereof as the fiduciary may approve.
      - (17) To execute and deliver agreements, assignments, bills of sale, contracts, deeds, notes, receipts and any other instrument necessary or appropriate for the administration of the estate or trust.
      - (18) In the case of a trustee, to hold the property of two or more trusts or parts of such trusts created by the same instrument as an undivided whole without separation as between such trusts or parts, provided that such separate trusts or parts shall have undivided interests and provided further that no such holding shall defer the vesting of any estate in possession or otherwise.
      - (19) When a legacy, a distributive share, the proceeds of any action brought as prescribed by 5-4.1, or the proceeds of a settlement of an action brought in behalf of an infant for personal injuries are payable to an infant, incompetent, conservatee or person under disability and the sum does not exceed ten thousand dollars, to make payment thereof to the father or mother or to some competent adult person with whom the infant, incompetent, conservatee or person under disability resides or who has some interest in his welfare for the use and benefit of such infant, incompetent, conservatee or person under disability. If the sum payable to a patient in an institution in the state department of mental hygiene is not in excess of the amount which the director of the institution is authorized to receive under section 29.23 of the mental hygiene law, to make payment of such sum to such director for use as provided in that section.
      - (20) To make distribution in cash, in kind valued at the fair market value of the property at the date of distribution, or partly in each, without being required to make pro rata distributions of specific property.
      - (21) To join with the surviving spouse or the executor of his will or the administrator of his estate in the execution and filing of a joint income tax return for any period prior to the death of a decedent for which he has not filed a return or a gift tax return on gifts made by the decedent's surviving spouse, and to consent to treat such gifts as being made one-half by the decedent, for any period prior to a decedent's death, and to pay such taxes thereon as are chargeable to the decedent.
      - (22) In addition to those expenses specifically provided for in this paragraph, to pay all other reasonable and proper expenses of administration from the property of the estate or trust, including the reasonable expense of obtaining and continuing his bond and any reasonable counsel fees he may necessarily incur.
    - (c) The court having jurisdiction of the estate or trust may authorize the fiduciary to exercise any other power which in the judgment of the court is necessary for the proper administration of the estate or trust.
    - (d) The powers set forth in this section shall apply to all estates and trusts now in existence or which may hereafter come into existence and are in addition to the powers granted by law or by the will, deed or other instrument.
  - § 11-1.2 Tax elections by personal representatives
  - § 11-1.3 Power and duty of executor before probate
  - § 11-1.4 Validity of execution of power to sell, mortgage or lease real property by less than all qualifying executors
  - § 11-1.5 Payment of testamentary dispositions or distributive shares
  - § 11-1.6 Property held as fiduciary to be kept separate
  - § 11-1.7 Limitations on powers and immunities of executors and testamentary trustees
    - (a) The attempted grant to an executor, testamentary trustee, or inter vivos trustee, or his or her successor, of any of the following enumerated powers or immunities is contrary to public policy:
      - The title of section 11-1.7 suggests that the section is limited to "executors" and "testamentary trustees," but subsection (a) also applies to an "inter vivos trustee."
      - (1) The exoneration of such fiduciary from liability for failure to exercise reasonable care, diligence and prudence.
      - (2) The power to make a binding and conclusive fixation of the value of any asset for purposes of distribution, allocation or otherwise.
    - (b) The attempted grant in any will or trust of any power or immunity in contravention of the terms of this section shall be void but shall not be deemed to render such will or trust invalid as a whole, and the remaining terms of the instrument shall, so far as possible, remain effective.
    - (c) Any person interested in an estate or trust may contest the validity of any purported grant of any power or immunity within the purview of this section without diminishing or affecting adversely his or her interest in the estate or trust any provision in any will or trust to the contrary notwithstanding.
    - Subssection (c) places a limit on in terrorem (also known as no contest) clauses. The Outline discusses this limit 🔑here.
  - § 11-1.8 Power of fiduciary or custodian for fiduciary to deposit United States government and agency securities with a federal reserve bank
  - § 11-1.10 Power of Fiduciary or Custodian to Deposit Securities in a Central Depository
  - § 11-1.11 Power of fiduciary to employ a broker-dealer as custodian
- Part 2 Investments By Fiduciaries: Powers and Duties Relating Thereto
  - § 11-2.1 Principal and income
    - NY based EPTL 11-2.1 on the 1962 Uniform Principal and Income Act.
    - (a) Duty of trustee as to receipts and expenditures.
      - (1) A trust shall be administered with due regard to the respective interests of income beneficiaries and remaindermen. A trust is so administered with respect to the allocation of receipts and expenditures if a receipt is credited or an expense is charged to income or to principal or partly to each
        
        (A) in accordance with the terms of the trust instrument, notwithstanding any contrary provisions in this section;
        
        (B) in the absence of any contrary terms of the trust instrument, in accordance with the provisions of this section; or
        
        (C) if neither of the preceding rules of administration is applicable, in accordance with what is reasonable and equitable in view of the interests of those entitled to income as well as those entitled to principal and in view of the manner in which men of ordinary prudence, discretion and judgment would act in the management of their own affairs.
      - (2) If the trust instrument gives the trustee discretion in crediting a receipt or charging an expenditure to income or principal or partly to each, no inference that the trustee has or has not improperly exercised such discretion arises from the fact that the trustee has made an allocation contrary to the provisions of this section.
    - (b) What is income and what is principal; definitions.
      - (1) Income is the return in money or property derived from the use of principal, including return received as:
        
        (A) Rent from property, including sums received for the cancellation or renewal of a lease.
        
        (B) Interest on money lent, including sums received as consideration for the privilege of prepayment of principal except as provided in paragraph (f) on bond premium and discount.
        
        (C) Income earned during the administration of a decedent's estate, as provided in paragraph (d).
        
        (D) Corporate distributions, as provided in paragraph (e).
        
        (E) Accrued income on bonds or other obligations issued at a discount, as provided in paragraph (f).(F) Receipts from principal used in business, as provided in paragraph (g).
        
        (F) Receipts from principal used in business, as provided in paragraph (g).
        
        (G) Receipts from disposition of natural resources, as provided in paragraphs (h) and (i).
        
        (H) Receipts from other principal subject to depletion, as provided in paragraph (j).
        
        (I) Receipts from disposition of underproductive property, as provided in paragraph (k).
      - (2) Principal is property, disposed of in trust, the income from which is payable to or to be accumulated for an income beneficiary and the title to which is ultimately to vest in the person entitled to the future estate. Principal includes:
        
        (A) Consideration received by the trustee on the sale or other transfer of principal, on repayment of a loan or as a refund, replacement or change in the form of principal.
        
        (B) Proceeds of property taken on eminent domain proceedings.
        
        (C) Proceeds of insurance upon property forming part of the principal except proceeds of insurance upon a separate interest of an income beneficiary.
        
        (D) Stock dividends, receipts on liquidation of a corporation and other corporate distributions, as provided in paragraph (e).
        
        (E) Receipts with respect to bonds and other obligations, as provided in paragraph (f).
        
        (F) Royalties and other receipts from disposition of natural resources, as provided in paragraphs (h) and (i).
        
        (G) Receipts from other principal subject to depletion, as provided in paragraph (j).
        
        (H) Any profit resulting from any change in the form of principal, except as provided in paragraph (k) on underproductive property.
        
        (I) Receipts from disposition of underproductive property, as provided in paragraph (k).
      - (3) After determining income and principal in accordance with the terms of the trust instrument or of this section the trustee shall charge to income or principal expenses and other charges as provided in paragraph (l).
    - (c) When right to income arises; apportionment of income or other receipt.
      - (1) An income beneficiary is entitled to income from the date specified in the trust instrument or, if none is specified, from the date an asset becomes subject to the trust. In the case of an asset which becomes subject to a trust by reason of a will, it becomes subject to the trust as of the date of the death of the testator even though there is an intervening period of administration of the testator's estate.
      - (2) In the case of a decedent's estate, a testamentary trust or an asset received under a will by a trustee: (A) receipts due but not paid at the date of death of the testator are principal; (B) receipts in the form of periodic payments (other than corporate distributions to stockholders and savings bank and savings and loan association dividends), such as rent, interest or annuities payable from any source, not due at the date of death of the testator, shall be treated as accruing from day to day. That portion of such a receipt accruing before the date of death is principal and the balance is income.
      - (3) In all other cases any receipt from an income producing asset is income even though the receipt was earned or accrued in whole or in part before the date when the asset became subject to the trust.
      - (4) On termination of an income interest, the income beneficiary whose interest is terminated or his estate is entitled to: (A) income undistributed on the date of termination; (B) income due but not paid to the trustee on the date of termination; (C) income in the form of periodic payments (other than corporate distributions to stockholders and savings bank and savings and loan association dividends) such as rent, interest or annuities, not due on the date of termination, accrued from day to day.
    - (d) Income earned during administration of a decedent's estate.
      - (1) Unless the will provides otherwise and subject to subparagraph (2) hereof, all expenses incurred in connection with the settlement of a decedent's estate, including but not limited to debts, funeral expenses, estate taxes, interest and penalties concerning taxes, family allowances, fees of attorneys and commissions of personal representatives (other than commissions on estate income) and court fees, costs and other charges shall be charged against the principal of the estate.
      - (2) Unless the will provides otherwise, income from the assets of a decedent's estate after the death of the testator and before distribution, including income from property used to discharge liabilities, shall be determined in accordance with the rules applicable to a trustee under this section and distributed as follows: (A) to specific beneficiaries the net income from the property disposed of to them respectively; (B) to all other beneficiaries, except beneficiaries of pecuniary dispositions not in trust, the balance of the net income in proportion to their respective interests in the undistributed assets of the estate computed at times of distribution on the basis of inventory value; provided, however, (i) that the amount of income earned during the further administration of the estate from and after the date of payment of any estate or inheritance tax shall be distributed to such beneficiaries in proportion to their respective interests in the undistributed assets of the estate after the making of such payment on the basis of the fair market value of such assets immediately after the making of such payment, and (ii) any amount allowed as a tax deduction to the estate for income payable to a charitable organization shall be paid, without diminution for taxes, to the charitable organization entitled to receive such income. This subparagraph does not apply to any sums made payable in policies of insurance of any description or under any contract for an annuity, including a variable annuity.
      - (3)
        
        (A) The residuary beneficiaries are entitled to the rent from the decedent's real property, not specifically disposed of, from the date of death, in proportion to their respective interests under the will, unless the fiduciary, pursuant to a power to distribute in kind, allocates all or part of such property in whole or partial satisfaction of a pecuniary disposition in trust, in which event the rent from the property so allocated shall be distributed, as of the date of death, to the trustee of such disposition.
        
        (B) This subparagraph applies to wills of decedents dying before, on or after its effective date, provided, however, that it shall not be so applied as to require residuary beneficiaries to repay to the estate any distributions of income from real property, not specifically disposed of, which were actually made to such beneficiaries prior to such effective date.
      - (4) Income and rent received by a trustee under subparagraphs (2) or (3) shall be treated as income of the trust.
    - (e) Distributions of corporations or associations.
      - (1) Notwithstanding the provisions of this paragraph, a will, deed or other instrument which creates or declares a trust may provide with respect to all matters covered by this section, and direct the manner of ascertaining income and principal and the apportionment thereof or grant discretion to the trustee or another person to do so, and such provision or direction, where otherwise not contrary to law, controls.
      - (2) A distribution by a corporation or association made to a trustee in the shares of the distributing corporation or association held in such trust, whether in the form of a stock split or a stock dividend, at the rate of six per cent or less of the shares of such corporation or association upon which the distribution is made, is income. Any such distribution at a greater rate is principal.
      - (3) For the purpose of determining whether a will, deed or other instrument which creates or declares a trust has directed that a distribution of shares described in subparagraph (2) is income in a manner other than that provided in subparagraph (2), the following rules apply unless different rules are provided in the will, deed or other instrument:
        
        (A) A distribution in the shares of the distributing corporation or association means a distribution in such shares, whether in the form of a stock split or a stock dividend, at the rate of six per cent or less of the shares of such corporation or association upon which the distribution is made.
        
        (B) A distribution in the shares of the distributing corporation or association, whether in the form of a stock split or a stock dividend, at the rate of six per cent or less of the shares of such corporation or association upon which the distribution is made, is ordinary and regular and shall be deemed to be in lieu of a cash dividend.
        
        (C) If the will, deed or other instrument which creates or declares a trust grants to the trustee or another person discretion to allocate to income or principal or between income and principal any distribution in the shares of the distributing corporation or association, such discretion may be exercised with respect to any such distribution in the shares of the distributing corporation or association, whether in the form of a stock split or a stock dividend, and no inference of imprudence or partiality shall arise from the fact that the trustee or other person has made an allocation contrary to a provision of subparagraph (2) or of this subparagraph.
      - (4)
        
        (A) A right issued by the distributing corporation or association to subscribe to shares or other securities, whether in the stock or other securities of the distributing corporation or association or of a corporation or association other than the distributing corporation or association, accruing to shareholders on account of their stock ownership, and the proceeds of any sale of such rights, are principal.
        
        (B) A distribution by a corporation or association made to a trustee in the shares of the distributing corporation, but of a different type than the shares held in such trust, or a distribution of shares, securities or obligations of a corporation or association other than those of the distributing corporation or association (or the proceeds of such a distribution) shall be principal.
      - (5) When a corporation or association calls in shares of stock or when a corporation or association succeeds another by merger, consolidation, reorganization or other method of acquiring its assets, shares of stock issued for the shares so called in or shares of stock in the succeeding corporation or association are principal.
      - (6) When a corporation or association is being wholly or partially liquidated, shares of stock and cash or other assets distributed to shareholders are principal, except that if the corporation or association indicates that some part of such distribution is a settlement of preferred or guaranteed dividends, that part of the distribution settling dividends accruing since the trustee became a shareholder is income. For the purposes of this paragraph, a corporation or association is in liquidation if the corporation or association indicates that the distribution is in total or partial liquidation, or if the corporation or association is making a distribution of assets other than cash pursuant to a court decree or final administrative order by a government agency ordering the distribution of the particular assets, unless the distributing corporation or association indicates that a distribution pursuant to such court or administrative order is wholly or partly in lieu of an ordinary cash dividend, in which case the distribution is to that extent income.
      - (7) Distributions made from ordinary income by a regulated investment company or by a trust qualifying and electing under federal law to be taxed as a real estate investment trust are income. All other distributions made by such company or trust, including distributions from capital gains, depreciation or depletion, whether in the form of cash or an option to take new shares or cash or an option to purchase additional shares, are principal.
      - (8) If the distributing corporation or association gives a shareholder an option to receive a distribution, whether in the form of cash or its own shares or cash or an option to purchase new shares, the distribution chosen is income.
      - (9) Except as provided in subparagraphs (2), (4), (5), (6) and (7), all distributions of corporations or associations are income including:
        
        (A) Cash dividends.
        
        (B) Share distributions, as provided in subparagraphs (2) and (3).
        
        (C) Preferred or guaranteed dividends, as provided in subparagraph (6).
        
        (D) Ordinary income from a regulated investment trust or a trust qualifying and electing under federal law to be taxed as a real estate investment trust, as provided in subparagraph (7).
        
        (E) An option, as provided in subparagraph (8).
      - (10) The trustee or other person may rely upon any statement of the distributing corporation or association as to any fact, relevant under any provision of this paragraph, concerning the source or character of distributions.
      - (11) Where the shares of stock of a corporation or association of this state or of any other jurisdiction constitute part of an estate, trust or other fund, and the allocation of any other distribution thereof to principal or income, or between successive interests, depends on the date of accrual thereof, the date of accrual of any distribution on such shares shall be the date specified by the corporation or association declaring such distribution as that on which the shareholders of record entitled to such distribution are to be determined, or, if there be no such date specified by the corporation or association, the date of declaration of the distribution. For the purposes of this paragraph, the "date of accrual" of a distribution means that date, on and after which the distribution shall be treated in the same manner as if it had been declared and paid or distributed on such date.
      - (12) If a trustee or other person has heretofore received or shall hereafter receive any shares of stock distributed by any corporation or association and is uncertain as to whether any or all of them are allocable to income, the trustee or other person shall have with respect to all such shares and the proceeds thereof the same duties and powers (including powers of sale, investment and reinvestment) as though all such shares constituted part of the principal of the trust fund. The trustee or other person shall be under no obligation to retain any of such shares in kind even though it may subsequently be determined that some or all of them were allocable to income. If and when it is determined that any or all of such shares were allocable to income, the shares allocable to income shall be distributed in kind to income, except that, if prior to such determination, the trustee or other person had sold any of the new shares comprising the distribution or any of the original shares upon which the distribution was received, income shall be entitled to receive its ratable portion of the shares remaining, if any, on hand and an amount of cash equal to its ratable portion of the proceeds received by the trustee or other person upon the sale of such shares. This subparagraph does not apply in any case in which a trustee or other person has heretofore, in good faith, made any different allocation of the shares or the proceeds of any sale thereof, or both, as between income and principal and has made distribution in accordance with such different allocation to income or to principal, or to both.
      - (13) Subparagraphs (1) to (6) inclusive and (8) to (11) inclusive apply to any trust, whether created or declared before, on or after the effective date hereof, except that subparagraphs (1) through (11) do not apply to any distribution described in this paragraph which accrued prior to such effective date, and subparagraph (7) applies to trusts created on and after its effective date and to the wills of persons dying on and after its effective date.
    - (f) Bond premium and discount.
      - (1) Bonds or other obligations for the payment of money are principal at their inventory value, except as provided in subparagraph (2) for discount bonds. No provision shall be made for amortization of bond premiums or for accumulation of discount, except that in the case of testamentary trusts created by the wills of persons dying, and inter vivos trusts created by instruments executed, prior to September first, nineteen hundred forty-two, premiums may, in the discretion of the trustee, be amortized if the bonds and other obligations for the payment of money were acquired prior to June first, nineteen hundred sixty-five. The proceeds of a sale, redemption or other disposition of bonds or other obligations are principal.
      - (2) The increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable at maturity or at a future time at an amount in excess of the amount in consideration of which it was issued is income. If the income accrues pursuant to a fixed schedule of appreciation such income is distributable to the beneficiary at the time the increment occurs and the trustee may transfer the amount thereof from principal to income on each such date. Whenever unrealized increment is distributed as income but out of principal the principal shall be reimbursed from the income when realized.
    - (g) Business operations. If a trustee uses any part of the principal in the continuance of a business of which the person who created or declared the trust was a sole proprietor or a partner, the net profits of the business, computed in accordance with generally accepted accounting principles for a comparable business, are income. If a loss results in any fiscal or calendar year, the loss falls on principal and shall not be carried into any other fiscal or calendar year for purposes of calculating net income.
    - (h) Disposition of natural resources.
      - (1) If any part of the principal consists of a right to receive royalties, overriding or limited royalties, working interests, production payments, net profit interests or other interests in minerals or other natural resources in, on or under land, the receipts from taking the natural resources from the land shall be allocated as follows: (A) if received as rent on a lease or extension payments on a lease the receipts are income; (B) if received from a production payment, the receipts are income to the extent of any factor for interest or its equivalent provided in the governing instrument. There shall be allocated to principal the fraction of the balance of the receipts which the unrecovered cost of the production payment bears to the balance owed on the production payment, exclusive of any factor for interest or its equivalent. The receipts not allocated to principal are income; (C) if received as a royalty, overriding or limited royalty, or as a bonus, or from a working interest or from any other interest in minerals or other natural resources, receipts not provided for in the preceding subparagraphs shall be apportioned on a yearly basis in accordance with this paragraph whether or not any natural resource was being taken from the land at the time the trust was established. There shall be added to principal as an allowance for depletion such portion of the gross receipts as shall be allowed as a deduction for depletion in computing taxable income for Federal income tax purposes. The balance of the gross receipts, after payment therefrom of all expenses, direct and indirect, is income.
      - (2) If a trustee, on the effective date of this section, held an item of depletable property of a type specified in this paragraph, he shall allocate receipts from the property in the manner used before the effective date of this section but as to all depletable property thereafter acquired by an existing or new trust, the method of allocation provided herein shall be used.
    - (i) Sale of timber. If any part of the principal consists of land from which merchantable timber may be removed, the receipts from taking the timber from the land shall be allocated in accordance with subparagraph (1) (C) of paragraph (a).
    - (j) Other property subject to depletion. Except as provided in paragraphs (h) and (i), if any part of the principal consists of property subject to depletion, including leaseholds, patents, copyrights, royalty rights and rights to receive payments on a contract for deferred compensation, the receipts from such property shall be allocated in accordance with subparagraph (1) (C) of paragraph (a).
    - (k) Underproductive property.
      - (1) Except as otherwise provided in this paragraph (k), a portion of the net proceeds of a sale by a fiduciary as defined in subparagraph three of paragraph (A) of section 11-1.1 of any principal property of an estate or trust, other than securities listed on a national securities exchange or traded in over the counter, held for more than a year which has not produced over the period held an average net income of one per cent per annum of its inventory value (including as income the value of any beneficial use of the property by any income beneficiary), shall be allocated to income as delayed income, as provided in this paragraph (k). The net proceeds of such sale shall be the gross proceeds received, including the value of any property other than cash received, less the expenses of sale, including tax, if any, incurred on the gain realized, and less any carrying charges and expenses paid from the estate or trust while such property was held by the fiduciary and was underproductive.
      - (2) The sum allocated to income as delayed income is the difference between the net proceeds of sale and the amount which, had such amount been invested at simple interest at five per cent per annum while the property was underproductive, would have produced the amount of the net proceeds. Such sum, plus any carrying charges and expenses charged against income while such property was held by such fiduciary and the property was underproductive, less any income actually received from the property during such period and less the value of any beneficial use of the property by any income beneficiary, is income and the balance is principal.
      - (3) The amount allocated to income as delayed income under this paragraph (k) shall be allocated and paid to the beneficiaries (or their respective estates), if any, who were entitled under the governing instrument to receive income from the estate or trust from time to time during the period the property was held by the fiduciary and was underproductive.
      - (4) If, or to the extent to which, any principal property subject to this paragraph (k) is sold or disposed of by conversion, and the proceeds of sale or conversion consist of property which cannot be readily apportioned, including, without limitation, land or mortgages (for example, real property acquired by or in lieu of foreclosure), the income beneficiary shall be entitled to the net income from any form of property or obligation received pursuant to such sale or conversion, while the received property or obligation is held, and when such property or obligation is later sold or otherwise disposed of by conversion into easily apportionable property, no allocation to income as provided in this paragraph (k) shall be made.
      - (5) This paragraph (k) shall not apply if the terms of the governing instrument direct otherwise. A provision in a will or trust instrument authorizing the fiduciary (A) to retain or to invest in property that is unproductive or underproductive of income (described in the instrument by the words "unproductive" or "underproductive" or words of similar import), or to retain or to invest in property expressly without regard to whether it is productive of income, (B) to transfer any portion of receipts from income to principal on account of depreciation, depletion or amortization, or (C) to accumulate income and add it to principal, shall be deemed to be a direction that this paragraph (k) shall not apply.
    - (l) Charges against income and principal.
      - (1) The following charges shall be made against income:
        
        (A) ordinary expenses incurred in connection with the administration, management and preservation of the trust property, including regularly recurring taxes assessed against any portion of the principal, water rates, insurance and bond premiums, interest paid by the trustee and ordinary repairs;
        
        (B) any tax levied upon receipts defined as income under this section or the trust instrument and payable by the trustee.
      - (2) If the court shall find that any judicial proceeding primarily concerns income and that it is equitable to charge the expense of such proceeding, or a part thereof, to income, the court may direct that all or a specified part of the expense of such proceeding, including attorneys' fees, shall be charged to income.
      - (3) If charges against income are of unusual amount, the trustee may by means of reserves or other reasonable means charge them over a reasonable period of time and withhold from distribution sufficient sums to regularize distributions.
      - (4) The following charges shall be made against principal:
        
        (A) charges not provided for in subparagraphs (1) and (2), including court costs and attorneys' fees, the cost of investing and reinvesting principal, payments on principal of an indebtedness (including a mortgage amortized by periodic payments of principal), expenses of preparation of property for sale, and, unless the court directs otherwise, expenses incurred in maintaining or defending any action to protect or construe the trust or the property or assure the title of any trust property;
        
        (B) repairs or expenses incurred in making a capital improvement to principal, including special assessments;
        
        (C) any tax levied upon profits, gain or other receipts allocated to principal notwithstanding denomination of the tax as an income tax by the taxing authority.
      - (5) Regularly recurring charges payable from income shall be apportioned to the same extent and in the same manner that income is apportioned under paragraph (c) hereof.
      - (6) Notwithstanding the provisions of subparagraphs one and four of this paragraph, fees paid at least annually to banks, trust companies and registered investment advisers for investment advisory and custodial services shall be charged one-third against income and two-thirds against principal.
    - (m) Application of section. Except as specifically provided in the trust instrument, the will or in this section, this section shall apply to any receipt or expense received or incurred after its effective date by any trust or decedent's estate whether established before, on or after the effective date of this section and whether the asset involved was acquired by the trustee before, on or after its effective date, provided that this section shall not apply to any receipt or expense received or incurred by any trust or decedent's estate after the effective date of article 11-A.
    - (n) Uniformity of interpretation. This section shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it.
    - (o) Definitions. As used in this section:
      - (1) "Income beneficiary" means any person to whom income is presently payable or for whom it is accumulated for distribution as income.
      - (2) "Remainderman" means any person entitled to principal, including income which has been accumulated and added to principal.
      - (3) "Trustee" means an original trustee and any successor or substituted trustee.
      - (4) "Inventory value" means the cost of property purchased by the trustee and the market value of other property at the time it was made subject to the trust.
  - § 11-2.2 Power to invest
    - (a) Investment of trust funds
      - (1) A fiduciary holding funds for investment may invest the same in such securities as would be acquired by prudent men of discretion and intelligence in such matters who are seeking a reasonable income and preservation of their capital, provided, however, that nothing in this subparagraph shall limit the effect of any will, agreement, court order or other instrument creating or defining the investment powers of a fiduciary, or shall restrict the authority of a court of proper jurisdiction to instruct the fiduciary in the interpretation or administration of the express terms of any will, agreement or other instrument or in the administration of the property under the fiduciary's care. This paragraph shall apply to any investment, made on or after May first, nineteen hundred seventy, of funds held for investment by a fiduciary, and to all estates and trusts now in existence or which may hereafter come into existence. A bank, trust company or paid professional investment advisor (whether or not registered under any federal securities or investment law) which serves as a fiduciary, and any other fiduciary representing that it has special investment skills shall exercise such diligence in investing the funds for which the fiduciary is responsible, as would customarily be exercised by prudent men of discretion and intelligence having special investment skills. This paragraph shall apply to any investment, made on or after January first, nineteen hundred eighty-six, of the funds held for investment by such a fiduciary and to all estates and trusts now in existence or which may hereafter come into existence. This subparagraph shall not apply to any investment, made on or after January first, nineteen hundred ninety-five, of funds held for investment by a fiduciary, and to all estates and trusts in existence or which may come into existence on or after January first, nineteen hundred ninety-five.
      - EPTL 11-2.2 articulates the prudent person rule, which applied to investments before January 1, 1995. New York now follows the prudent investor standard. See EPTL 11-2.3(a).
      - (2) A trustee or other person holding trust funds may require such personal bonds or guaranties of payment of principal or interest or both, or such other bonds or guaranties, to accompany investments as may seem prudent, and may from time to time adjust, reduce, modify, postpone or compound the same, or any terms and conditions thereof, including the rate of interest, or any installments thereof, and may at any time release the same, and all premiums paid on such guaranties or fees for servicing mortgages may be charged to or paid out of income, provided that such charge or payment is not more than at the rate of one-half of one per centum per annum on the par value of such investments. But no trustee shall purchase securities hereunder from himself.
      - (3) Whenever a trustee or other person holding trust funds has heretofore lawfully invested or shall hereafter lawfully invest any trust funds in a share or part of a bond and mortgage or any part interest therein or shall hold any such share, part or part interest by apportionment, transfer, representation or otherwise, if the property subject to such mortgage is purchased pursuant to foreclosure sale or acquired by voluntary conveyance by or in behalf of such trustee or other person holding trust funds and another person, including another such trustee, owning another such share, part or part interest in such bond and mortgage, such trustee or other person holding trust funds or a person purchasing or acquiring title in behalf of such trustee may convey the undivided interest in such real property so purchased or acquired to a corporation, formed for the purpose of acquiring such property, in exchange for a proportionate part of the capital stock and the bonds, if any, of such corporation; provided that the other person, by or in whose behalf such property has been purchased or acquired, shall exchange his undivided interest in such property for a proportionate part of the capital stock and the bonds, if any, of such corporation, issued in exchange for such real property.
      - (4) The corporation formed, as provided in subparagraph (3), for the acquisition of such real property shall be a business corporation, and shall have all the powers of such a corporation, and its stockholders shall have the same power to vote to authorize or confirm any sale, mortgage, lease, option or other disposition of any or all of its property that is ordinarily possessed by shareholders of a business corporation; provided, however, that the certificate of incorporation shall prohibit it from investing in any stocks, bonds or other securities, which are not under the laws of this state a proper subject for the investment of trust funds, and shall provide that upon the sale of the real property acquired by the corporation such corporation shall be dissolved. Such dissolution shall be effectuated by proceedings under article 10 of the business corporation law to be taken promptly after such sale; provided, however, that if any such corporation shall sell real property held by it for a consideration consisting in whole or in part of evidences of indebtedness secured by mortgage upon such real property or shall reacquire such property upon foreclosure of such mortgage, in either of such events, such dissolution proceedings shall not be required to be taken until final liquidation in cash by the corporation of its entire interest in or lien upon such real property.
      - (5) Nothing contained in this section, however, shall affect any lawful investments in shares, parts or part interests in bonds and mortgages heretofore made by any trustee or other person holding trust funds for investment, nor affect any action heretofore taken in accordance with law with respect to such bonds and mortgages or shares, parts or part interests in such bonds and mortgages. Such trustee or other person holding trust funds for investment shall have all the powers heretofore possessed under this section or any other provision of law with respect to part interests in bonds and mortgages for the protection and preservation of the trust property. It is the intention of this section to prohibit any future investments in part interests in bonds, or notes, and mortgages for any estate or fund, for which such trustee or other person may hold funds for investment.
      - (6) A fiduciary holding funds for investment who is directed or authorized by an instrument creating the fiduciary relationship to retain the stock of a bank or trust company that is a member of a bank holding company currently fully registered under an act of Congress entitled "Bank Holding Company Act of l956", as the same may be amended from time to time, shall be considered as being directed or authorized to retain the stock of such bank holding company. Notwithstanding any contrary provision in this section, this subdivision shall apply to any fiduciary relationship now in existence or which may hereafter come into existence and to all investments now held or which may hereafter be acquired in such relationship.
      - EPTL 11-2.2(a)(6) was added in 1972 by bill A11025. • The last sentence begins with "[n]otwithstanding any contrary provisions in this section . . ." because it deviates from the rule that applies the prudent person rule only to future investments. As the explanation for the bills states, "While such a result is appropriate regarding the application of the prudent man rule, it would render this bill meaningless because the bank holding company problem only arises as to pre-existing relationships."
      - (7) No fiduciary holding funds for investment shall be liable for any loss incurred with respect to any investment not eligible by law for the investment of trust funds, if such ineligible investment was received by such fiduciary pursuant to a decree of court or the terms of the will, deed, or other instrument creating the fiduciary relationship, or if such ineligible investment was eligible when received or when the investment was made by the fiduciary; provided such fiduciary exercises due care and prudence in the disposition or retention of any such ineligible investment.
      - (8) Investment by a fiduciary in a limited partnership or investment trust, as defined in 9-1.5 of this chapter, shall not be deemed to be an improper delegation of investment authority.
      - (9) As used in this paragraph, the phrase "person holding trust funds" and the terms "fiduciary" and "trustee" include a personal representative, trustee, guardian, a donee of a power during minority, committee of the property of an incompetent person, and conservator of the property of a conservatee.
    - (b) Rights of fiduciaries to invest in securities of investment companies.
      - (1) A fiduciary holding funds for investment may invest the same in securities of any management type investment company or trust registered pursuant to the federal investment company act of nineteen hundred forty, as amended, in any case in which a court order, the will, agreement or other instrument creating or defining the investment powers of the fiduciary authorizes the investment of such funds in either of the following: (A) Such investments as the fiduciary may, in his discretion, select. (B) Generally in investments other than those in which fiduciaries are by law authorized to invest trust funds, notwithstanding that the fiduciary or an affiliate of the fiduciary acts as investment advisor, custodian, transfer agent, registrar, sponsor, distributor, manager or provides other services to the investment company or trust. Unless the will, lifetime trust or order appointing the fiduciary provides otherwise, the fiduciary shall elect annually either (i) to receive or have its affiliate receive compensation for providing such services to such investment company or trust for the portion of the trust invested in such investment company or trust or (ii) to take annual corporate trustees' commissions with respect to such portion. This subparagraph shall not apply to any investment, made on or after January first, nineteen hundred ninety-five, of funds held for investment by a fiduciary, and to all estates and trusts in existence or which may come into existence on or after January first, nineteen hundred ninety-five.
      - (1-a) In any case in which a court order, will, agreement or other instrument creating or defining the investment powers of the fiduciary directs, requires or authorizes that the funds held for investment be invested in United States government obligations, the fiduciary may invest such funds in securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered pursuant to the federal investment company act of nineteen hundred forty, as amended, provided that the portfolio of such investment company or investment trust is limited to United States government obligations or to repurchase agreements fully collateralized by such obligations and provided further that such investment company or investment trust shall take delivery of such collateral, either directly or through an authorized custodian.
      - (2) As used in this paragraph, the term "fiduciary" includes a personal representative, trustee, guardian, committee of the property of an incompetent and conservator of the property of a conservatee.
  - § 11-2.3 Prudent investor act
    - EPTL 11-2.3 codifies the Prudent investor Act ("PIA").
    - (a)** Prudent investor rule.** A trustee has a duty to invest and manage property held in a fiduciary capacity in accordance with the prudent investor standard defined by this section, except as otherwise provided by the express terms and provisions of a governing instrument within the limitations set forth by section 11-1.7 of this chapter. This section shall apply to any investment made or held on or after January first, nineteen hundred ninety-five by a trustee.
    - (b)** Prudent investor standard.**
      - (1) The prudent investor rule requires a standard of conduct, not outcome or performance. Compliance with the prudent investor rule is determined in light of facts and circumstances prevailing at the time of the decision or action of a trustee. A trustee is not liable to a beneficiary to the extent that the trustee acted in substantial compliance with the prudent investor standard or in reasonable reliance on the express terms and provisions of the governing instrument.
      - (2) A trustee shall exercise reasonable care, skill and caution to make and implement investment and management decisions as a prudent investor would for the entire portfolio, taking into account the purposes and terms and provisions of the governing instrument.
      - (3) The prudent investor standard requires a trustee:
        
        (A) to pursue an overall investment 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 entire portfolio;
        
        (B) to consider, to the extent relevant to the decision or action, the size of the portfolio, the nature and estimated duration of the fiduciary relationship, the liquidity and distribution requirements of the governing instrument, general economic conditions, the possible effect of inflation or deflation, the expected tax consequences of investment decisions or strategies and of distributions of income and principal, the role that each investment or course of action plays within the overall portfolio, the expected total return of the portfolio (including both income and appreciation of capital), and the needs of beneficiaries (to the extent reasonably known to the trustee) for present and future distributions authorized or required by the governing instrument;
        
        (C) to diversify assets unless the trustee reasonably determines that it is in the interests of the beneficiaries not to diversify, taking into account the purposes and terms and provisions of the governing instrument; and
        
        (D) within a reasonable time after the creation of the fiduciary relationship, to determine whether to retain or dispose of initial assets.
      - (4) The prudent investor standard authorizes a trustee:
        
        (A) to invest in any type of investment consistent with the requirements of this paragraph, since no particular investment is inherently prudent or imprudent for purposes of the prudent investor standard;
        
        (B) to consider related trusts, the income and resources of beneficiaries to the extent reasonably known to the trustee, and also an asset's special relationship or value to some or all of the beneficiaries if consistent with the trustee's duty of impartiality;
        
        (C) to delegate investment and management functions if consistent with the duty to exercise skill, including special investment skills; and
        
        The Outline discusses delegation by a trustee 🔑here.
        
        (D) to incur costs only to the extent they are appropriate and reasonable in relation to the purposes of the governing instrument, the assets held by the trustee and the skills of the trustee.
      - (5) Trustee's power to adjust.
        
        (A) Where the rules in article 11-A apply to a trust and the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to the trust's income, the prudent investor standard also authorizes the trustee to adjust between principal and income to the extent the trustee considers advisable to enable the trustee to make appropriate present and future distributions in accordance with clause (b)(3)(A) if the trustee determines, in light of its investment decisions, the consideration factors incorporated in clause (b)(5)(B), and the accounting income expected to be produced by applying the rules in article 11-A, that such an adjustment would be fair and reasonable to all of the beneficiaries.
        
        Notes:
        A trustee's power to adjust under EPTL 11-2.3(b)(5) is discretionary. The statute "authorizes the trustee to adjust between principal and income to the extent the trustee deems advisable."
        
        (B) In deciding whether and to what extent to exercise the power conferred by clause (b)(5)(A), a trustee may consider, in addition to the factors stated in clauses (b)(3)(B) and (b)(4)(B), the following factors to the extent relevant:
        
        (i) the intent of the settlor, as expressed in the governing instrument; the assets held in the trust; the extent to which they consist of financial assets, interests in closely held enterprises, tangible and intangible personal property, or real property; the extent to which an asset is used by a beneficiary; and whether an asset was purchased by the trustee or received from the settlor;
        
        (ii) the net amount allocated to income under article 11-A and the increase or decrease in the value of the principal assets, which the trustee may estimate as to assets for which market values are not readily available; and
        
        (iii) whether and to what extent the terms of the trust give the trustee the power to invade principal or accumulate income or prohibit the trustee from invading principal or accumulating income, and the extent to which the trustee has exercised a power from time to time to invade principal or accumulate income.
        
        (C) A trustee may not make an adjustment:
        
        (i) with respect to a charitable remainder unitrust described in section 664 of the United States internal revenue code of 1986;
        
        (ii) that changes the amount payable to a beneficiary as a fixed annuity or a fixed fraction of the value of the trust's assets;
        
        (iii) from any amount that is permanently set aside for charitable purposes under a will or the terms of a trust unless the income therefrom is also permanently devoted to charitable purposes;
        
        (iv) if possessing or exercising the power to make an adjustment causes an individual to be treated as the owner of all or part of the trust for income tax purposes, and the individual would not be treated as the owner if the trustee did not possess the power to make an adjustment;
        
        (v) if possessing or exercising the power to make an adjustment causes all or part of the trust assets to be included for estate tax purposes in the estate of an individual who has the power to remove a trustee or appoint a trustee, or both, and the assets would not be included in the estate of the individual if the trustee did not possess the power to make an adjustment;
        
        (vi) if the trustee is a current beneficiary or a presumptive remainderman of the trust;
        
        (vii) if the trustee is not a current beneficiary or a presumptive remainderman, but the adjustment would benefit the trustee directly or indirectly (which, however, shall not include the possible effect on a trustee's commission); or
        
        (viii) if the trust is an irrevocable lifetime trust which provides income to be paid for life to the grantor, and possessing or exercising the power to make an adjustment would cause any public benefit program to consider the adjusted principal or income to be an available resource or available income and the principal or income or both would in each case not be considered as an available resource or income if the trustee did not possess the power to make an adjustment;
        
        (D) An adjustment otherwise prohibited by items (b)(5)(C)(i) through (viii) may be made if the terms of the trust, by express reference to this section, provide otherwise. If item (b)(5)(C)(iv), (v), (vi) or (vii) applies to a trustee and there is more than one trustee, the trustee or trustees to whom the provision does not apply may make the adjustment unless the exercise of the power by the remaining trustee or trustees is prohibited by the terms of the trust. If there is no trustee qualified to make the adjustment, it may be made if so directed by the court upon application of the trustee or of an interested party.
        
        (E) A trustee may release the entire power conferred by clause (b)(5)(A) or may release only the power to adjust from income to principal or the power to adjust from principal to income if the trustee is uncertain about whether possessing or exercising the power will cause a result described in items (b)(5)(C)(i)) through (vi) or (b)(5)(C)(viii) or if the trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in clause (b)(5)(C). The release may be permanent or for a specified period, including a period measured by the life of an individual.
        
        (F) Terms of a trust that limit the power of a trustee to make an adjustment between principal and income are not contrary to this section unless it is clear from the terms of the trust that the terms are intended to deny the trustee the power of adjustment conferred by clause (b)(5)(A).
        
        (G) Any exercise of the power to adjust under this subparagraph, whether from income to principal or from principal to income, shall constitute a re-characterization of the transferred amount from income to principal or from principal to income, as the case may be, for purposes of calculating commissions under article twenty-three of the surrogate's court procedure act and, for such purposes, such re-characterization shall be deemed to take effect on the date that such transfer from income to principal or from principal to income, as the case may be, is made on a trust's records.
      - (6) Special investment skills. For a bank, trust company or paid professional investment advisor (whether or not registered under any federal securities or investment law) which serves as a trustee, and any other trustee representing that such trustee has special investment skills, the exercise of skill contemplated by the prudent investor standard shall require the trustee to exercise such diligence in investing and managing assets as would customarily be exercised by prudent investors of discretion and intelligence having special investment skills.
      - The Outline discusses the duty exercise special skills 🔑here.
    - (c) Delegation of investment or management functions.
      - The Outline discusses delegation 🔑here.
      - (1) Delegation of an investment or management function requires a trustee to exercise care, skill and caution in:
        
        (A) selecting a delegee suitable to exercise the delegated function, taking into account the nature and value of the assets subject to such delegation and the expertise of the delegee;
        
        (B) establishing the scope and terms of the delegation consistent with the purposes of the governing instrument;
        
        (C) periodically reviewing the delegee's exercise of the delegated function and compliance with the scope and terms of the delegation; and
        
        (D) controlling the overall cost by reason of the delegation.
      - (2) The delegee has a duty to the trustee and to the trust to comply with the scope and terms of the delegation and to exercise the delegated function with reasonable care, skill and caution. An attempted exoneration of the delegee from liability for failure to meet such duty is contrary to public policy and void.
      - (3) By accepting the delegation of a trustee's function from the trustee of a trust that is subject to the law of New York, the delegee submits to the jurisdiction of the courts of New York even if a delegation agreement provides otherwise, and the delegee may be made a party to any proceeding in such courts that places in issue the decisions or actions of the delegee.
    - (d) Investment in securities of related investment companies. A trustee holding funds for investment may invest the same in securities of any management type investment company or trust registered pursuant to the federal investment company act of nineteen hundred forty, as amended, notwithstanding that the trustee or an affiliate of the trustee acts as investment advisor, custodian, transfer agent, registrar, sponsor, distributor, manager or provides other services to the investment company or trust. Unless the will, lifetime trust or order appointing the trustee provides otherwise, the trustee shall elect annually either (i) to receive or have its affiliate receive compensation for providing such services to such investment company or trust for the portion of the trust invested in such investment company or trust or (ii) to take annual corporate trustees' commissions with respect to such portion.
    - (e) As used in this section:
      - (1) the term "trustee" includes a personal representative, trustee, guardian, donee of a power during minority, guardian under article eighty-one of the mental hygiene law, committee of the property of an incompetent person, and conservator of the property of a conservatee, but does not include an institutional fund as defined in section 551 of the not-for-profit corporation law;
      - This definition of "trustee" in EPTL 11-2.3(3) applies New York's Prudent Investor Act to executors (and other specified fiduciaries).
      - (2) the term "trust" includes any fiduciary entity with property owned by a trustee as defined in this section;
      - (3) the term "governing instrument" includes a court order; and
      - (4) the term "portfolio" includes all property of every kind and character held by a trustee as defined in this section.
  - § 11-2.3-A Judicial control with respect to fiduciary's power to adjust
    - (a) Judicial control of adjustment power. A court shall not change a fiduciary's decision to exercise or not to exercise an adjustment power conferred by subparagraph 11-2.3(b)(5) unless it determines that the decision was an abuse of the fiduciary's discretion. A court shall not determine that a fiduciary abused his, her or its discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.
    - (b) Applicable decisions. The decisions to which paragraph (a) applies include:
      - (1) A determination under subparagraph 11-2.3(b)(5) of whether and to what extent an amount should be transferred from principal to income or from income to principal.
      - (2) A determination of the factors that are relevant to the trust and its beneficiaries, the extent to which they are relevant, and the weight, if any, to be given to the relevant factors, in deciding whether and to what extent to exercise the power conferred by subparagraph 11-2.3(b)(5).
    - (c) Authorization for court to remedy abuse of discretion. If a court determines that a fiduciary has abused his, her or its discretion, the court may restore the income and remainder beneficiaries to the positions they would have occupied if the fiduciary had not abused his, her or its discretion, according to the following rules:
      - (1) To the extent that the abuse of discretion has resulted in no distribution to a beneficiary or a distribution that is too small, the court shall require the fiduciary to distribute from the trust to the beneficiary an amount that the court determines will restore the beneficiary, in whole or in part, to his or her appropriate position.
      - (2) To the extent that the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court shall restore the beneficiaries, the trust, or both, in whole or in part, to their appropriate positions by requiring the fiduciary to withhold an amount from one or more future distributions to the beneficiary who received the distribution that was too large or requiring that beneficiary to return some or all of the distribution to the trust.
      - (3) To the extent that the court is unable, after applying subparagraphs (1) and (2), to restore the beneficiaries, the trust, or both, to the positions they would have occupied if the fiduciary had not abused his, her or its discretion, and if the court finds that the fiduciary was dishonest or arbitrary and capricious in the exercise of his, her or its discretion, the court may require the fiduciary to pay an appropriate amount from his, her or its own funds to one or more of the beneficiaries or the trust or both.
    - (d) Petition by fiduciary. Upon a petition by a fiduciary who is authorized to exercise an adjustment power conferred by subparagraph 11-2.3 (b)(5), the court having jurisdiction over the trust or estate may determine whether a proposed exercise or nonexercise by the fiduciary of the adjustment power will result in an abuse of the fiduciary's discretion. If the petition describes the proposed exercise or nonexercise of the power and contains sufficient information to inform the beneficiaries of the reasons for the proposal, the facts upon which the fiduciary relies, and an explanation of how the income and remainder beneficiaries will be affected by the proposed exercise or nonexercise of the power, a beneficiary who challenges the proposed exercise or nonexercise has the burden of establishing that it will result in an abuse of discretion.
  - § 11-2.4 Optional unitrust provision
    - (a) Unless the terms of the trust provide otherwise, the net income of any trust to which this section applies shall mean the unitrust amount as determined hereunder.
    - (b) Unitrust amount.
      - (1) For the first year of the trust as a unitrust, including a short year if applicable, the "unitrust amount" for the year shall mean an amount equal to four percent of the net fair market values of the assets held in the trust at the beginning of the first business day of the current valuation year.
      - (2) For the second year of a trust as a unitrust, including a first short year if applicable, the "unitrust amount" for the year shall mean an amount equal to four percent multiplied by a fraction, the numerator of which shall be the sum of (A) the net fair market values of the assets held in the trust at the beginning of the first business day of the current valuation year and (B) the net fair market values of the assets held in the trust at the beginning of the first business day of the prior valuation year, and the denominator of which shall be two.
      - (3) Commencing with the third year of a trust as a unitrust, including a first short year if applicable, the "unitrust amount" for a current valuation year of the trust shall mean an amount equal to four percent multiplied by a fraction, the numerator of which shall be the sum of (A) the net fair market values of the assets held in the trust at the beginning of the first business day of the current valuation year and (B) the net fair market values of the assets held in the trust at the beginning of the first business day of each prior valuation year, and the denominator of which shall be three.
      - (4) The unitrust amount for the current valuation year as computed in accordance with subparagraph (b)(1), (2) or (3), as adjusted in accordance with this subparagraph, shall be proportionately reduced for any corpus distributions to beneficiaries mandated by the terms of the trust, in whole or in part (other than distributions of the unitrust amount), and shall be proportionately increased for the receipt, other than a receipt that represents a return on investment, of any additional corpus into the trust within a current valuation year.
      - (5) For purposes of clause (b)(2)(B), the net fair market values of the assets held in the trust at the beginning of the first business day of a prior valuation year shall be adjusted to reflect any distributions to beneficiaries mandated by the terms of the trust, in whole or in part (other than distributions of the unitrust amount), or receipts (other than receipts that represent a return on investment) of any additional principal into the trust, which have occurred after the first day of such prior valuation year and by the close of the first day of the current valuation year, as if the distribution or receipt had occurred on the first day of such prior valuation year.
      - (6) In the case of a short year, the trustee shall prorate the unitrust amount on a daily basis. The trustee shall prorate any adjustment under subparagraph (b)(4) on a daily basis.
      - (7) In the case where the unitrust amount has been incorrectly determined either in a current valuation year or in a prior valuation year, then within a reasonable time (not to exceed eighteen months) after the error was made, the trustee shall make any non-material adjustments and pay to the underpaid beneficiary (in case of non-material underpayment) or shall recover from the overpaid beneficiary (in case of non-material overpayment) an amount equal to the difference between the unitrust amount properly payable and any amount actually paid for any completed valuation year of the trust and shall properly adjust the unitrust amount for the current valuation year if affected non-materially by prior incorrect determination of a unitrust amount. A material correction shall require approval of the surrogate if applied for by the trustee or an interested party.
    - (c) Other definitions and special rules. For purposes of this section:
      - (1) A "current beneficiary" is a person to whom the income (within the meaning of this section or otherwise) of the trust is payable, or in the discretion of the trustee may be paid, in whole or in part, during the current valuation year.
      - (2) The term "current valuation year" shall mean the year of the trust for which the unitrust amount is being determined.
      - (3) The term "prior valuation year" shall mean each of the two years of the trust immediately preceding the current valuation year.
      - (4) The term "year" means a calendar year. A "short year" constitutes a portion of a calendar year that begins when the interest of the current beneficiary or class of current beneficiaries begins or ends when the interest of the current beneficiary or class of current beneficiaries ends.
      - (5) "Net fair market value" shall mean the fair market value of each asset comprising the trust reduced by the fair market value of any outstanding interest-bearing obligations of the trust, whether allocable to a specific asset or otherwise. Fair market value of an asset may be determined by any appropriate technique adopted and consistently applied by the trustee, and such techniques may include, but are not limited to, use of the asset's value at the close of business on the previous business day, and notwithstanding that such day may be in a prior year or be a day on which the trust was not subject to this section.
      - (6) In determining the sum of the net fair market values of the assets held in the trust for purposes of subparagraphs (b)(1), (2) and (3), and in determining whether an adjustment is required in accordance with subparagraph (b)(4) or (5), there shall not be taken into account the value:
        
        (A) of any residential property or any tangible personal property that, as of the beginning of the first business day of the current valuation year, one or more current beneficiaries of the trust have or had the right to occupy, or have or had the right to possess or control (other than in his or her capacity as a trustee of the trust), and instead the right of occupancy or the right to possession or control shall be deemed to be the unitrust amount with respect to such residential property or such tangible personal property; provided, however, that the unitrust amount shall be adjusted in accordance with subparagraphs (b) (4) and (5) for partial distributions from or receipt into the trust of such residential property or tangible personal property during the current valuation year.
        
        (B) of any asset specifically given to a beneficiary and the return on investment on such property, which return on investment shall be distributable to such beneficiary.
        
        (C) of any assets while held in a testator's estate.
        
        (D) of (i) amounts paid or distributed to the trust by a decedent's estate, another trust or another payor, as income pursuant to article 11-A attributable to an asset or amount due to the trust for a period prior to its payment or distribution to the trust, unless and except to the extent that the unitrust trustee, having the power to accumulate income, shall have determined to accumulate and add such income to principal, and such unaccumulated net income shall be distributable to the beneficiaries of the trust; or (ii) any amount paid or distributed by such decedent's estate, other trust or other payor, directly to beneficiaries of the trust in satisfaction of their ultimate entitlement to such income.
      - (7) In determining the net fair market value of each asset held in the trust pursuant to subparagraphs (b)(1), (2) and (3), the trustee shall, not less often than annually, determine the fair market value of each asset of the trust that consists primarily of real property or other property that is not traded on a regular basis in an active market, and all such determinations shall, if made reasonably and in good faith, be conclusive on all persons interested in the trust. Such determination shall be conclusively presumed to have been made reasonably and in good faith unless proven otherwise in a proceeding commenced by or on behalf of a person interested in the trust within three years after the close of the year in which the determination is made.
      - (8) The term "trustee" does not include a personal representative.
      - (9) The term "trust" does not include an estate.
    - (d) Commencement of current beneficiary's interest.
      - (1) The interest of a current beneficiary or class of current beneficiaries in the unitrust amount begins on the date on which this section becomes applicable to the trust pursuant to clause (e)(4)(A), or if later the date assets first become subject to the trust. An asset becomes subject to a trust:
        
        (A) on the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life;
        
        (B) on the date it is transferred to the trust in the case of an asset that is transferred to a testamentary trust created under a will;
        
        (C) on the date of an individual's death in the case of an asset that is transferred to a trust by a third party by reason of the individual's death;
        
        (D) on the date of an individual's death in the case of a trust that owns life insurance on the individual's life; or
        
        (E) on the date a revocable trust becomes irrevocable in the case of assets then held in the trust.
      - (2) A trust which continues in existence for the benefit of one or more new current beneficiaries or class of current beneficiaries upon the termination of the interests of all prior current beneficiaries or classes of prior current beneficiaries, shall be deemed to be a new trust, and, for purposes of clauses (e)(1)(B) and (e)(4)(A) and subparagraph (d)(1), assets shall be deemed to first become subject to the trust on the date of the termination of such interests.
    - (e) Trusts to which section applies.
      - (1) This section shall apply to any trust if:
        
        (A) the governing instrument provides that this section shall apply to such trust, or
        
        (B)
        
        (i) with respect to a trust in existence prior to January first, two thousand two, on or before December thirty-first, two thousand five, the trustee, with the consent by or on behalf of all persons interested in the trust or in his, her or its discretion, elects to have this section apply to such trust, or
        
        (ii) with respect to a trust not in existence prior to January first, two thousand two, on or before the last day of the second full year of the trust beginning after assets first become subject to the trust, the trustee, with the consent by or on behalf of all persons interested in the trust or in his, her or its discretion, elects to have this section apply to such trust.
        
        (iii) An election in accordance with this subparagraph shall be made by an instrument, executed and acknowledged, and delivered to the creator of the trust, if he or she is then living, to all persons interested in the trust or to their representatives and to the court, if any, having jurisdiction over the trust.
      - (2)
        
        (A) The court having jurisdiction of a trust to which this section otherwise would apply by reason of subparagraph (e)(1) or clause (e)(2)(B), upon the petition of the trustee or any beneficiary of the trust and upon notice to all persons interested in the trust, may direct that article 11-A shall apply to the trust and that this section shall not apply to the trust; and
        
        (B) At any time, the court having jurisdiction of a trust to which this section otherwise would not apply, upon the petition of the trustee or any beneficiary of the trust and upon notice to all persons interested in the trust, may direct that this section shall apply to the trust and that article 11-A shall not apply to the trust.
      - (3) 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. Where a person interested in the trust has the same interest as a person under a disability, it shall not be necessary to obtain the consent of or notify the person under a disability.
      - (4)
        
        (A) This section shall apply to a trust with respect to which there is:
        
        (i) a direction in the governing instrument in accordance with clause (e)(1)(A), as of the date provided for in such governing instrument, or if there is no provision then as of the day on which assets first become subject to the trust;
        
        (ii) an election in accordance with clause (e)(1)(B), as of the date specified in the election, which may be any day within the year in which the election is made or the first day of the year commencing after the election is made; or a
        
        (iii) court decision rendered in accordance with clause (e)(2)(B) as of the date specified by the court in its decision;
        
        Provided, however, that if later than any date set by this clause, this section shall not apply to the trust until January first, two thousand two.
        
        (B) If this section applied to a trust with respect to which a court decision is rendered in accordance with clause (e)(2)(A), this section shall cease to apply to such trust and article 11-A shall apply to the trust as of the first day of the year beginning after the decision of the court becomes final, unless the court in its decision provides otherwise.
      - (5) In the determination of whether article 11-A or this section should apply to a trust:
        
        (A) All of the factors relevant to the trust and its beneficiaries, including the following factors to the extent they are relevant, shall be considered:
        
        (i) the nature, purpose, and expected duration of the trust;
        
        (ii) the intent of the creator of the trust;
        
        (iii) the identity and circumstances of the beneficiaries;
        
        (iv) the needs for liquidity, regularity of payment, and preservation and appreciation of capital;
        
        (v) the assets held in the trust; the extent to which they consist of financial assets, interests in closely held enterprises, tangible and intangible personal property, or real property; the extent to which an asset is used by a beneficiary; and whether an asset was purchased by the trustee or received from the creator of the trust.
        
        (B) In any proceeding brought pursuant to subparagraph (e)(2), there shall be a rebuttable presumption that this section should apply to the trust.
    - (f) Trusts to which this section shall not apply. This section shall not apply to a trust if:
      - (1) the governing instrument provides in substance that this section shall not apply;
      - (2) the trust is a pooled income fund described in section 642(c)(5) of the United States internal revenue code of 1986;
      - (3) the trust is a charitable remainder annuity trust or a charitable remainder unitrust described in section 664 of the United States internal revenue code of 1986; or
      - (4) the trust is an irrevocable lifetime trust which provides for income to be paid for the life of a grantor, and possessing or exercising the power to make this section apply would cause any public benefit program to consider additional amounts of principal or income to be an available resource or available income, and the principal or income or both would in each case not be considered an available resource or income, if there was no power to make this section apply, if, based upon the facts and circumstances surrounding the formation of such trust, it can reasonably be concluded that the primary purpose for the establishment of the trust was to ensure that the trust principal would not be treated as an available resource for the purposes of a governmental assistance program.
- Part 3 Actions By or Against Personal Representatives
  - § 11-3.1 Actions
  - § 11-3.2 Action for injury to person or property survives despite death of person in whose favor or against whom cause of action existed
  - § 11-3.3 Limitations upon recovery where injury causes death
  - § 11-3.4 Action by representative of representative
- Part 4 Procedural Aspects of Actions By or Against Personal Representatives
  - § 11-4.1 How to sue or be sued
  - § 11-4.2 When personal and representative causes of action may be joined
  - § 11-4.3 Separate dockets and executions
  - § 11-4.4 Commencement of action against personal representatives; rule when some of representatives not served
  - § 11-4.5 Want of assets not to be pleaded by personal representative
  - § 11-4.6 Leave to issue execution against personal representative; how procured; order and contents thereof; security before order granted; execution on judgment recovered by predecessor representative
  - § 11-4.7 Liability of the personal representative for claims arising out of the administration of the estate
Article 11-A Uniform Principal and Income Act
- Part 1 Definitions and Fiduciary Duties
  - § 11-A-1.1 Short title
    - This article may be cited as the New York uniform principal and income act.
  - § 11-A-1.2 Definitions
    - In this article:
    - (1) "Accounting period" means a calendar year unless another twelve-month period is selected by a fiduciary. The term includes a portion of a calendar year or other twelve-month period that begins when an income interest begins or ends when an income interest ends.
    - (2) "Beneficiary" includes, in the case of a decedent's estate, a distributee and testamentary beneficiary and, in the case of a trust, an income beneficiary and a remainder beneficiary.
    - (3) "Fiduciary" means a personal representative or trustee. The term includes an executor, administrator, successor personal representative, and a person performing substantially the same function.
    - (4) "Income" means money or property that a fiduciary receives as current return from a principal asset. The term includes a portion of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided in part 4.
    - (5) "Income beneficiary" means a person to whom net income of a trust is or may be payable.
    - (6) "Income interest" means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion.
    - (7) "Mandatory income interest" means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute.
    - (8) "Net income" means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under this article or under subparagraph 11-2.3(b)(5) to or from income during the period.
    - (9) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation, or any other legal or commercial entity.
    - (10) "Principal" means property held in trust for distribution to a remainder beneficiary when the trust terminates.
    - (11) "Remainder beneficiary" means a person entitled to receive principal when an income interest ends.
    - (12) "Terms of a trust" means the manifestation of the intent of a settlor or decedent with respect to the trust, expressed in a manner that admits of its proof in a judicial proceeding, whether by written or spoken words or by conduct.
    - (13) "Trustee" includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court.
  - § 11-A-1.3 Fiduciary duties; general principles
    - (a) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of parts 2 and 3, a fiduciary:
      - (1) shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in this article;
      - (2) may administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this article;
      - (3) shall administer a trust or estate in accordance with this article if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration; and
      - (4) shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust or the will and this article do not provide a rule for allocating the receipt or disbursement to or between principal and income.
    - (b) In exercising a discretionary power of administration regarding a matter within the scope of this article, whether granted by the terms of a trust, a will, or this article, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with this article is presumed to be fair and reasonable to all of the beneficiaries.
- Part 2 Decedent's Estate or Terminating Income Interest
  - § 11-A-2.1 Determination and distribution of net income
    - After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:
    - (1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary under the rules in parts 3 through 5 which apply to trustees and the rules in paragraph (5). The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.
    - (2) A fiduciary shall determine the remaining net income of a decedent's estate or a terminating income interest under the rules in parts 3 through 5 which apply to trustees and by:
      - (A) including in net income all income from property used to discharge liabilities;
      - (B) paying from income or principal, in the fiduciary's discretion, fees of attorneys, accountants, and fiduciaries; court costs and other expenses of administration; and interest on death taxes, but the fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment of those expenses from income will not cause the reduction or loss of the deduction; and
      - (C) paying from principal all other disbursements made or incurred in connection with the settlement of a decedent's estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances, and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust, or applicable law.
    - (3) Unless otherwise provided by the terms of the will or trust, commencing (A) seven months from either the date of death or other date a beneficiary is to receive a pecuniary amount outright if letters are not required, unless the beneficiary is a genetic child, then such date shall be the later of the aforementioned time periods in this subparagraph or the date of birth of the genetic child entitled to inherit from the child's genetic parent under section 4-1.3 of this chapter, or (B) seven months from the time letters, including preliminary or temporary letters, are granted if letters are required, unless the beneficiary is a genetic child, then such date shall be the later of the aforementioned time period in this subparagraph or the date of birth of the genetic child entitled to inherit from the child's genetic parent under section 4-1.3 of this chapter, a fiduciary shall distribute income to a beneficiary who receives a pecuniary amount outright, from net income determined under paragraph (2) or from principal to the extent that net income is insufficient, of an amount equal to the pecuniary amount multiplied by an income factor, which shall be set (or reset) on the first business day of each calendar year and fixed for that calendar year at the target Federal funds rate as announced by the Federal Reserve Board (or in the event the target Federal funds rate is a range of rates, the high of that range) less one percent, but in no event less than one-half of one percent.
    - (4) A fiduciary shall distribute the net income remaining after distributions required by paragraph (3) in the manner described in 11-A-2.2 to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.
    - (5) A fiduciary may not reduce principal or income receipts from property described in paragraph (1) because of a payment described in 11-A-5.1 or 11-A-5.2 to the extent that the will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent that the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the date of a decedent's death or an income interest's terminating event, and by making a reasonable provision for amounts that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed.
  - § 11-A-2.2 Distribution to residuary and remainder beneficiaries
    - (a) Each beneficiary described in paragraph 11-A-2.1 (4) is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date, provided, however, that any amount allowed as a tax deduction to the estate for income payable to a charitable organization shall be paid, without diminution for taxes, to the charitable organization entitled to receive such income. If a fiduciary makes more than one distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one who does not receive part of the distribution, is entitled, as of each distribution date, to the net income the fiduciary has received after the date of death or terminating event or earlier distribution date but has not distributed as of the current distribution date.
    - (b) In determining a beneficiary's share of net income, the following rules apply:
      - (1) The beneficiary is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date, including assets that later may be sold to meet principal obligations.
      - (2) The beneficiary's fractional interest in the undistributed principal assets must be calculated without regard to property specifically given to a beneficiary and property required to pay pecuniary amounts not in trust.
      - (3) The beneficiary's fractional interest in the undistributed principal assets must be calculated on the basis of the aggregate value of those assets as of the distribution date without reducing the value by any unpaid principal obligation.
      - (4) The distribution date for purposes of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which assets are actually distributed.
    - (c) If a fiduciary does not distribute all of the collected but undistributed net income to each person as of a distribution date, the fiduciary shall maintain appropriate records showing the interest of each beneficiary in that net income.
    - (d) A fiduciary may apply the rules in this section, to the extent that the fiduciary considers it appropriate, to net gain or loss realized after the date of death or terminating event or earlier distribution date from the disposition of a principal asset if this section applies to the income from the asset.
    - (e) The portion of a beneficiary determined under paragraph (a) is subject to the fiduciary's further power of adjustment under subparagraph 11-2.3(b)(5), which adjustment if made shall be made to or from the principal of such beneficiary's share. The fiduciary shall maintain appropriate records showing the principal interest of each beneficiary, as adjusted.
- Part 3 Apportionment At Beginning and End of Income Interest
  - § 11-A-3.1 When right to income begins and ends
    - (a) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.
    - (b) An asset becomes subject to a trust:
      - (1) on the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life;
      - (2) on the date of a testator's death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate; or
      - (3) on the date of an individual's death in the case of an asset that is transferred to a fiduciary by a third party because of the individual's death.
    - (c) An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under paragraph (d), even if there is an intervening period of administration to wind up the preceding income interest.
    - (d) An income interest ends on the day before an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.
  - § 11-A-3.2 Apportionment of receipts and disbursements when decedent dies or income interest begins
    - (a) A trustee shall allocate an income receipt or disbursement other than one to which paragraph 11-A-2.1 (1) applies to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.
    - (b) A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins must be allocated to principal and the balance must be allocated to income.
    - (c) An item of income or an obligation is due on the date the payer is required to make a payment. If a payment date is not stated, there is no due date for the purposes of this article. Distributions to shareholders or other owners from an entity to which 11-A-4.1 applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
  - § 11-A-3.3 Apportionment when income interest ends
    - (a) In this section, "undistributed income" means net income received on or before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
    - (b) When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than five percent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked must be added to principal.
    - (c) When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate, or other tax requirements.
- Part 4 Allocation of Receipts During Administration of Trust
  - Subpart 1: Receipts From Entities
    - § 11-A-4.1 Character of receipts
      - (a) In this section, "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a trustee has an interest other than a trust or estate to which 11-A-4.2 applies, a business or activity to which 11-A-4.3 applies, or an asset-backed security to which 11-A-4.15 applies.
      - (b) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.
      - (c) A trustee shall allocate the following receipts from an entity to principal:
        
        (1) property other than money; provided that if a trustee receives the option to receive a distribution in the form of money or property and elects to receive the distribution in the form of property such distribution shall be considered to be a distribution of money;
        (2) money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity;
        
        (3) money received in total or partial liquidation of the entity; and
        
        (4) money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
      - (d) Money is received in partial liquidation:
        
        (1) to the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or
        
        (2) if the total amount of money and property received in a distribution or series of related distributions is greater than twenty percent of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.
      - (e) Money is not received in partial liquidation, nor may it be taken into account under subparagraph (d)(2), to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money.
      - (f) A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.
    - § 11-A-4.2 Distribution from trust or estate
      - A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest, and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in such a trust to a trustee, 11-A-4.1 or 11-A-4.15 applies to a receipt from the trust.
    - § 11-A-4.3 Business and other activities conducted by trustee
      - (a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
      - (b) A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
      - (c) Activities for which a trustee may maintain separate accounting records include:
        
        (1) retail, manufacturing, service, and other traditional business activities;
        
        (2) farming;
        
        (3) raising and selling livestock and other animals;
        
        (4) management of rental properties;
        
        (5) extraction of minerals and other natural resources;
        
        (6) timber operations; and
        
        (7) activities to which 11-A-4.14 applies.
  - Subpart 2: Receipts Not Formally Apportioned
    - § 11-A-4.4 Principal receipts
      - A trustee shall allocate to principal:
      - (1) to the extent not allocated to income under this article, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest, or a payer under a contract naming the trust or its trustee as beneficiary;
      - (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;
      - (3) amounts recovered from third parties to reimburse the trust because of disbursements described in subparagraph 11-A-5.2 (a)(7) or for other reasons to the extent not based on the loss of income;
      - (4) proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income;
      - (5) net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income; and
      - (6) other receipts as provided in subpart 3.
    - § 11-A-4.5 Rental property
      - To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.
    - § 11-A-4.6 Obligation to pay money
      - (a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium.
      - (b) A trustee shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the trustee. The increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable at maturity or at a future time at an amount in excess of the amount in consideration of which it was issued is income. If the income accrues pursuant to a fixed schedule of appreciation, such income is distributable to the beneficiary at the time the increment occurs, and the trustee may transfer the amount thereof from principal to income on each such date. Whenever unrealized increment is distributed as income but out of principal the principal shall be reimbursed from the income when realized.
      - (c) This section does not apply to an obligation to which 11-A-4.9, 11-A-4.10, 11-A-4.11, 11-A-4.12, 11-A-4.14, or 11-A-4.15 applies.
    - § 11-A-4.7 Insurance policies and similar contracts
      - (a) Except as otherwise provided in paragraph (b), a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of, or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal.
      - (b) A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to 11-A-4.3, loss of profits from a business.
      - (c) This section does not apply to a contract to which 11-A-4.9 applies.
  - Subpart 3: Receipts Normally Apportioned
    - § 11-A-4.8 Insubstantial allocations not required
      - If a trustee determines that an allocation between principal and income required by 11-A-4.9, 11-A-4.10, 11-A-4.11, 11-A-4.12, or 11-A-4.15 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in subparagraph 11-2.3 (b)(5) applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in subparagraph 11-2.3 (b)(5) and may be released for the reasons and in the manner described in that section. An allocation is presumed to be insubstantial if:
        
        (1) the amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than ten percent; or
        
        (2) the value of the asset producing the receipt for which the allocation would be made is less than ten percent of the total value of the trust's assets at the beginning of the accounting period.
    - § 11-A-4.9 Deferred compensation, annuities, and similar payments
      - (a) In this section, "payment" means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer, including a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus, or stock-ownership plan.
      - (b) To the extent that a payment is characterized as interest or a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate it to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend, or an equivalent payment.
      - (c) If no part of a payment is characterized as interest, a dividend, or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income ten percent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this paragraph, a payment is not "required to be made" to the extent that it is made because the trustee exercises a right of withdrawal.
      - (d) If, to obtain an estate tax marital deduction for a trust, a trustee must allocate more of a payment to income than provided for by this section, the trustee shall allocate to income the additional amount necessary to obtain the marital deduction.
      - (e) This section does not apply to payments to which 11-A-4.10 applies.
    - § 11-A-4.10 Liquidating asset
      - (a) In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to 11-A-4.9, resources subject to 11-A-4.11, timber subject to 11-A-4.12, an activity subject to 11-A-4.14, an asset subject to 11-A-4.15, or any asset for which the trustee establishes a reserve for depreciation under 11-A-5.3.
      - (b) A trustee shall allocate to income ten percent of the receipts from a liquidating asset and the balance to principal.
    - § 11-A-4.11 Minerals, water, and other natural resources
      - (a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:
        
        (1) If received as a bonus, delay rental or annual rent on a lease, a receipt of less than one thousand dollars must be allocated to income and a receipt of one thousand dollars or more must be allocated fifteen percent to principal and eighty-five percent to income;
        
        (2) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal;
        
        (3) If received as a royalty, shut-in-well payment, or take-or-pay payment, a receipt must be allocated fifteen percent to principal and eighty-five percent to income;
        
        (4) If an amount is received from a working interest or any other interest not provided for in subparagraph (a)(1), (2), or (3), a receipt must be allocated fifteen percent to principal and eighty-five percent to income.
      - (b) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, ninety percent of the amount must be allocated to principal and the balance to income.
      - (c) This article applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
      - (d) If a trust exists on the effective date of this section, the trustee may allocate receipts from an interest in minerals, water, or other natural resources as provided in this section or in the manner used by the trustee before the effective date of this section. For every trust created after the effective date of this section, the trustee shall allocate receipts from an interest in minerals, water, or other natural resources as provided in this section. If and to the extent that the terms of a trust expressly provide for a different allocation of receipts or grants the trustee discretionary authority to determine the amount of the allocation, this section shall not apply to those receipts.
    - § 11-A-4.12 Timber
    - § 11-A-4.13 Property not productive of income
    - § 11-A-4.14 Derivatives and options
    - § 11-A-4.15 Asset-backed securities
- Part 5 Allocation of Disbursements During Administration of Trust
  - § 11-A-5.1 Disbursements from income
  - § 11-A-5.2 Disbursements from principal
  - § 11-A-5.3 Transfers from income to principal for depreciation
  - § 11-A-5.4 Transfers from income to reimburse principal
  - § 11-A-5.5 Income taxes
  - § 11-A-5.6 Adjustments between principal and income because of taxes
- Part 6 Miscellaneous Provisions
  - § 11-A-6.1 Uniformity of application and construction
  - § 11-A-6.2 Severability clause
  - § 11-A-6.3 Effective date
  - § 11-A-6.4 Application of article
Article 12 Actions By Creditors and Other Persons Against Distributees and Testamentary Beneficiaries
- Part 1 Liability of Distributees and Testamentary Beneficiaries and Action Thereon
  - § 12-1.1 Liability of distributees and testamentary beneficiaries
  - § 12-1.2 Order of liability; preferences
  - § 12-1.3 Extent of liability; judgment debtor's right to indemnity and contribution
- Part 2 Rules Governing Action to Enforce Liability
  - § 12-2.1 Action not impaired by failure of creditor or other person to present claim to representative as prescribed by law
  - § 12-2.2 Action may be a joint or several; right to implead
  - § 12-2.3 Effect of application to surrogate to sell real property
  - § 12-2.4 Effect of judgment
  - § 12-2.5 Title of bona fide purchaser from distributee or testamentary beneficiary protected
Article 13 Other Provisions Affecting Estates
- Part 1 Assets of Decedent's Estate
  - § 13-1.1 Certain assets considered personal property
  - § 13-1.2 Assets; debt due from executor to testator; effect of discharge by will
  - § 13-1.3 Assets chargeable with payment of estate obligations; order in which assets appropriated; abatement
  - §13-1.4 Action in supreme court to compromise controversies between claimants to estate assets
- Part 2 Statute of Frauds Requirements
  - § 13-2.1 Agreements involving a contract to establish a trust, to make a testamentary provision of any kind, and by a personal representative to answer for the debt or default of a decedent, required to be in writing
  - § 13-2.2 Transfers and mortgages of interest in decedents' estates required to be in writing and recorded
  - § 13-2.3 Powers of attorney in relation to decedents' estates required to be in writing and recorded
- Part 3 Miscellaneous Provisions
  - § 13-3.1 Rights of payees in non-transferable United States savings bonds
  - § 13-3.2 Rights of beneficiaries of pension, retirement, death benefit, stock bonus and profit-sharing plans, systems or trusts and of beneficiaries of annuities and supplemental insurance contracts
  - § 13-3.3 Designation of trustee to receive proceeds of thrift, savings, pension, retirement, death benefit, stock bonus and profit-sharing plans, systems or trusts, of life, group life, industrial life or accident and health insurance policies and of annuity, endowment and supplemental insurance contracts, and taxation thereof
  - § 13-3.4 Payment or delivery of property to foreign fiduciaries
  - § 13-3.5 Action or proceeding by foreign personal or other legal representative
  - § 13-3.6 Disaffirmance of fraudulent acts by personal representative and others
- Part 4 Transfer-on-Death Security Registration
  - § 13-4.1 Definitions
  - § 13-4.2 Registration in beneficiary form; sole or joint tenancy ownership
  - § 13-4.3 Applicable law
  - § 13-4.4 Origination of registration in beneficiary form
  - § 13-4.5 Form of registration in beneficiary form
  - § 13-4.6 Effect of registration in beneficiary form
  - § 13-4.7 Ownership on death of owner
  - § 13-4.8 Protection of registering entity
  - § 13-4.9 Nontestamentary transfer on death
  - § 13-4.10 Terms, conditions, and forms
  - § 13-4.11 Rules of construction
  - § 13-4.12 Application
Article 13-A Administration of Digital Assets
- Part 1 Definitions
  - § 13-A-1 Definitions
- Part 2 Applicability, Procedure for Disclosure, User Directions
  - § 13-A-2.1 Applicability
  - § 13-A-2.2 User direction for disclosure of digital assets
  - § 13-A-2.3 Terms-of-service agreement
  - § 13-A-2.4 Procedure for disclosing digital assets
- Part 3 Disclosure of Digital Assets to Fiduciary
  - § 13-A-3.1 Disclosure of content of electronic communications of deceased user
  - § 13-A-3.2 Disclosure of other digital assets of deceased user.
  - § 13-A-3.3 Disclosure of content of electronic communications of principal
  - § 13-A-3.4 Disclosure of other digital assets of principal
  - § 13-A-3.5 Disclosure of digital assets held in trust when trustee is original user
  - § 13-A-3.6 Disclosure of contents of electronic communications held in trust when trustee not original user
  - § 13-A-3.7 Disclosure of other digital assets held in trust when trustee not original user
  - § 13-A-3.8 Disclosure of digital assets to guardian of ward.
- Part 4 Fiduciary Duty and Authority, Compliance and Immunity
  - § 13-A-4.1 Fiduciary duty and authority
  - § 13-A-4.2 Custodian compliance and immunity
- Part 5 Miscellaneous Provisions
  - § 13-A-5.1 Relation to electronic signature in global and national commerce act
  - § 13-A-5.2 Severability
Article 14 Repealer; Derivation and Distribution Tables; Effective Date
- Part 1 Laws Repealed By This Chapter
  - § 14-1.1 Schedule of laws repealed; effect of repeal
    - (a) The following are the laws repealed in their entirety, except as specifically noted:
      - Decedent Estate Law........ All
      - General Obligations Law.... Article 5, section 5-701, subdivisions 4, 7 and 8
      - Personal Property Law...... Article 2 -- All
      - Article 2-A -- All
      - Article 3 -- sections 32, 32-a and 36
      - Article 8-A -- All
      - Article 10-A -- All
      - Real Property Law.......... Article 3 -- All
      - Article 4 -- All, except sections 119, 120, 120-a, 121, 122, 122-a, 123
      - Article 5 -- All
    - (b) Notwithstanding the repeal of the laws prescribed by paragraph (a):
      - (1) Whenever any repealed statute, that has, in substance, been carried over into this chapter, contained a provision which made such statute, or a provision thereof, inapplicable to the estates of persons dying, or to instruments executed, prior to its effective date, such applicability provision is incorporated into this chapter and made part of the specified section thereof to which it relates, as if expressly included therein, to wit:
        
        (A) Decedent Estate Law
        
        (i) Section 26 -- as set forth in Laws of 1955, c.225, §2 .......... 11-1.1 (b) (5) (F)
        
        (ii) Section 28 -- as set forth in Laws of 1931, c.562, §10 .......... 5-3.4
        
        (iii) Section 35 -- as set forth in Laws of 1931, c.562, §10 .......... 5-1.3
        
        (iv) Section 36 -- to the extent that it was made applicable only to wills of persons adjudicated incompetent on or after March 1, 1965 .......... 3-4.4
        
        (v) Section 46 -- as set forth in Laws of 1931, c.562, §10 ..... 3-3.8
        
        (vi) Section 47-a -- to the extent that it was made applicable only to wills of persons dying after April 30, 1921 .......... 2-1.2
        
        (vii) Section 47-b -- to the extent that it was made applicable only to wills of persons dying after May 12, 1936 .......... 3-3.9
        
        (viii) Section 47-c -- to the extent that it has been judicially construed to apply only to wills and inter vivos instruments executed after March 28, 1938 .......... 2-1.1
        
        (ix) Section 47-d -- to the extent that it was made applicable only to wills executed after August 31, 1947 .......... 13-1.3(a) (2)
        
        (x) Subdivision 7 of section 47-e .......... 3-1.3(b)
        
        (xi) Section 47-g -- to the extent that it was made applicable only to wills of persons living on or born subsequent to June 1, 1966 .... 3-3.7
        
        (xii) Section 49 -- to the extent that it was made applicable only to wills of persons dying, or inter vivos instruments executed, on or after March 1, 1964, and to inter vivos instruments executed prior to such date which are, on such date, subject to the creator's power to revoke or amend .......... 2-1.3
        
        (xiii) Section 83 -- as set forth in the Laws of 1959, c.689 and the Laws of 1963, c.712, §2 .......... 4-1.1
        
        (xiv) Section 83-a -- to the extent that it was made applicable to the estates of persons dying on or after March 1, 1964 .......... 4-1.2
        
        (xv) Subdivision 6 of section 89 .......... 2-1.6
        
        (xvi) Subdivision 8 of section 124 .......... 2-1.8
        
        (xvii) Section 125 -- to the extent that it was made applicable only to wills of persons dying after May 2, 1936; and as affected by the Laws of 1966, c. 16, §2, which removed the limitation that the testator could not authorize a fiduciary to name a successor to serve without a bond, and made such change effective on March 8, 1966 and applicable to letters issued after such date to executors and testamentary trustees qualifying under wills of decendents dying after May second, nineteen hundred thirty-six ... 11-1.7
        
        (B) Personal Property Law
        
        (i) Section 11 -- as set forth in Laws of 1960, c.448, §4 .......... 9-1.1
        
        (ii) Section 11-a -- as set forth in Laws of 1960, c.452, §5 .......... 9-1.2
        
        (iii) Section 11-b -- as set forth in Laws of 1960, c.452, §5 .......... 9-1.3
        
        (iv) Section 12 -- as set forth in Laws of 1953, c.715, §3 and Laws of 1961, c.866, §7 .......... 8-1.1
        
        (v) Section 13-e -- as set forth in Laws of 1965, c.401, §2 .......... 9-1.8
        
        (vi) Subdivision 2 of section 15 .......... 7-1.5
        
        (vii) Section 16 -- as set forth in Laws of 1961, c.866, §7 .......... 9-2.1
        
        (viii) Section 16-a -- as set forth in Laws of 1961, c.866, §7 .......... 8-1.7
        
        (ix) Section 17 -- as set forth in Laws of 1959, c.453, §4 .......... 9-2.2
        
        (x) Section 21 -- as set forth in Laws of 1965, c.824 .......... 11-2.2(a)(7)
        
        (C) Real Property Law
        
        (i) Section 42 -- as set forth in Laws of 1958, c.153, §2, as amended by Laws of 1959, c.456, §3 and Laws of 1960, c.448, §4 ........ 9-1.1(a)
        
        (ii) Section 42-b -- as set forth in Laws of 1960, c.452, §5 .......... 9-1.2
        
        (iii) Section 42-c -- as set forth in Laws of 1960, c.452, §5 .......... 9-1.3
        
        (iv) Section 59 -- as set forth in Laws of 1962, c.146, §3 .......... 6-5.1
        
        (v) Section 61 -- as set forth in Laws of 1959, c.454, §4 and Laws of 1961, c.866, §7 .......... 9-2.1
        
        (vi) Section 61-a -- as set forth in Laws of 1959, c.454, §4 and Laws of 1961, c.866, §7 .......... 8-1.7
        
        (vii) Section 62 -- as set forth in Laws of 1959, c.454, §4 .......... 9-2.2
        
        (viii) Section 110 -- as set forth in Laws of 1953, c.131, §2 .......... 7-1.8
        
        (ix) Section 113 -- as set forth in Laws of 1953, c.715, §3 and Laws of 1961, c.866, §7 .......... 8-1.1
      - (2) Any repealed statute shall continue to apply to any instrument to which it would have applied had it not been repealed, whenever, under 1-1.5, such instrument is not subject to the provisions of this chapter either because its creator was not living on the effective date of this chapter or because rights accrued under such instrument which cannot be impaired or defeated by this chapter.
      - (3) A reference in any statute of this state to any repealed law or a provision thereof shall be treated as a reference to the corresponding statute or a provision thereof, if any, of this chapter.
- Part 2 Derivation and Distribution Tables
  - § 14-2.1 Derivation of the estates, powers and trusts law from other laws
  - § 14-2.2 Distribution from other laws to the estates, powers and trusts law
- Part 3 Effective Date
  - § 14-3.1 When act becomes effective
    - This act shall take effect September first, nineteen hundred sixty-seven.

Hani Sarji

New York lawyer who cares about people, is fascinated by technology, and is writing his next book, Estate of Confusion: New York.

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