§ 30-4-10-41 — Exercise of decanting power and distributive discretion; limitations; general or nongeneral appointment

Indiana § 30-4-10-41

• Jurisdiction: Indiana
• Art. 4: TRUST CODE
• Ch. 10: Uniform Trust Decanting Act

Text

(a) As used in this section, "noncontingent
right" means a right that is not subject to the:
(1) exercise of discretion; or
(2) occurrence of a specified event that is not certain to occur.
The term does not include a right held by a beneficiary if any person
has discretion to distribute property subject to the right of any person
other than the beneficiary or the beneficiary's estate.
(b) As used in this section, "presumptive remainder beneficiary"
means a qualified beneficiary other than a current beneficiary.
(c) As used in this section, "successor beneficiary" means a
beneficiary that is not a qualified beneficiary on the date the
beneficiary's qualification is determined. The term does not include a
person that is a beneficiary only because the person holds a nongeneral
power of appointment.
(d) As used in this section, "vested interest" means a:
(1) right to a mandatory distribution that is a noncontingent right
as of the date of the exercise of the decanting power;
(2) current and noncontingent right, annually or more frequently,
to a mandatory distribution of income, a specified dollar amount,
or a percentage of value of some or all of the trust property;
(3) current and noncontingent right, annually or more frequently,
to withdraw income, a specified dollar amount, or a percentage of
value of some or all of the trust property;
(4) presently exercisable general power of appointment; or
(5) right to receive an ascertainable part of the trust property on
the trust's termination that is not subject to the exercise of
discretion or to the occurrence of a specified event that is not
certain to occur.
(e) Subject to subsection (f) and section 44 of this chapter, an
authorized fiduciary that has expanded distributive discretion over the
principal of a first trust for the benefit of one (1) or more current
beneficiaries may exercise the decanting power over the principal of
the first trust.
(f) Subject to section 43 of this chapter, an exercise of the decanting
power under this section must not:
(1) except as provided in subsection (g), include as a current
beneficiary a person that is not a current beneficiary of the first
trust;
(2) except as provided in subsection (g), include as a presumptive
remainder beneficiary or successor beneficiary a person that is not
a current beneficiary, presumptive remainder beneficiary, or
successor beneficiary of the first trust; or
(3) reduce or eliminate a vested interest.
(g) Subject to subsection (f)(3) and section 44 of this chapter, in an
exercise of the decanting power under this subsection, a second trust
may be a trust created or administered under the law of any jurisdiction
and may:
(1) retain a power of appointment granted in the first trust;
(2) omit a power of appointment granted in the first trust, other
than a presently exercisable general power of appointment;
(3) create or modify a power of appointment if the powerholder
is a current beneficiary of the first trust and the authorized
fiduciary has expanded distributive discretion to distribute
principal to the beneficiary; and
(4) create or modify a power of appointment if the powerholder
is a presumptive remainder beneficiary or successor beneficiary
of the first trust, but the exercise of the power may take effect
only after the powerholder becomes, or would have become a
current beneficiary.
(h) A power of appointment described in subsections (g)(1) through
(g)(4) may be general or nongeneral. The class of permissible
appointees in favor of which the power may be exercised may be
broader than or different from the beneficiaries of the first trust.
(i) If an authorized fiduciary has expanded distributive discretion
over part of the principal of a first trust, the fiduciary may exercise the
decanting power under this section over the principal that the
authorized fiduciary has expanded distributive discretion.

Legislative History

As added by P.L.161-2022, SEC.3.