What is the law in New York on majority rules in an irrevocable trust?
Full Question:
What is the law in New York on majority rules in an irrevocable trust? If the trust has three trustees, can the trust be changed or dissolved if two trustees agree? (FYI : The trust does not mention majority rules). If so, New York law would prevail. (I live in Florida now but the trust was made in New York). Also, is there a statue of limitations that would make the majority rules law null and void? More information; the third trustee is no longer a US resident. Not sure if that makes a difference. I believe in some states non U.S. residents/citizens can not inherit their relative's U.S. property or U.S. money.
01/14/2009 |
Category: Trusts ยป Revocable Tr... |
State: Florida |
#14990
Answer:
Trust documents often specify which state's laws apply. In New York you can revoke an irrevocable trust if all the people named in the trust agree in writing that they wish to do so.
The following are NY statutes:
§ 7-1.9 Est. Powers & Trusts. Revocation of trusts.
(a) Upon the written consent, acknowledged or proved in the manner
required by the laws of this state for the recording of a conveyance of
real property, of all the persons beneficially interested in a trust of
property, heretofore or hereafter created, the creater of such trust may
revoke or amend the whole or any part thereof by an instrument in writing
acknowledged or proved in like manner, and thereupon the estate of the
trustees ceases with respect to any part of such trust property, the
disposition of which has been revoked. If the conveyance or other
instrument creating a trust of property was recorded in the office of the
clerk or register of any county of this state, the instrument revoking or
amending such trust, together with the consents thereto, shall be recorded
in the same office of every county in which the conveyance or other
instrument creating such trust was recorded.
(b) For the purposes of this section, a disposition, contained in a trust
created on or after September first, nineteen hundred fifty-one, in favor
of a class of persons described only as the heirs, next of kin or
distributees (or by any term of like import) of the creator of the trust
does not create a beneficial interest in such persons.
(c) A testamentary or lifetime trust wholly benefitting one or more
charitable beneficiaries may be terminated as provided for by
subparagraph two of paragraph (c) of section 8-1.1 of this chapter.
§ 7-1.17 Est. Powers & Trusts. Execution, amendment and revocation of
lifetime trusts.
(a) Every lifetime trust shall be in writing and shall be executed and
acknowledged by the initial creator and, unless such creator is the sole
trustee, by at least one trustee thereof, in the manner required by the
laws of this state for the recording of a conveyance of real property or,
in lieu thereof, executed in the presence of two witnesses who shall affix
their signatures to the trust instrument.
(b) Any amendment or revocation authorized by the trust shall be in
writing and executed by the person authorized to amend or revoke the trust,
and except as otherwise provided in the governing instrument, shall be
acknowledged or witnessed in the manner required by paragraph (a) of this
section, and shall take effect as of the date of such execution. Written
notice of such amendment or revocation shall be delivered to at least one
other trustee within a reasonable time if the person executing such
amendment or revocation is not the sole trustee, but failure to give such
notice shall not affect the validity of the amendment or revocation or the
date upon which same shall take effect. No trustee shall be liable for any
act reasonably taken in reliance on an existing trust instrument prior to
actual receipt of notice of amendment or revocation thereof.
§ 7-1.16 Est. Powers & Trusts. Revocation of lifetime trust by will.
A lifetime trust shall be irrevocable unless it expressly provides that
it is revocable. In addition to the method set forth in 7-1.17, a revocable
lifetime trust can be revoked or amended by an express direction in the
creator's will which specifically refers to such lifetime trust or a
particular provision thereof.
§ 7-1.5 Est. Powers & Trusts. When trust interest inalienable; exception.
(a) The interest of the beneficiary of any trust may be assigned or
otherwise transferred, except that:
(1) The right of a beneficiary of an express trust to receive the income
from property and apply it to the use of or pay it to any person may not be
transferred by assignment or otherwise unless a power to transfer such
right, or any part thereof, is conferred upon such beneficiary by the
instrument creating or declaring the trust.
(2) The proceeds of a life insurance policy which, under a trust or other
agreement, are upon the death of the insured left with the insurance
company may not be (A) transferred, (B) subject to commutation or
encumbrance or (C) subject to legal process except in an action for
necessaries, if provisions to such effect were incorporated in such trust
or other agreement.
(b) Notwithstanding subparagraph (a)(1):
(1) The beneficiary of an express trust to receive income from property
and apply it to the use of or pay it to any person may, unless otherwise
provided in the instrument creating or declaring such trust, transfer any
amount in excess of ten thousand dollars of the annual income to which the
beneficiary is entitled from such trust to the spouse, issue, ancestors,
brothers, sisters, uncles, aunts, nephews or nieces of the beneficiary, or
to a trustee, committee, conservator, curator, custodian, guardian of the
property of a minor, or the donee of a power during minority for the
benefit only of any such person bearing such relationship to the
beneficiary, provided that such transfer is evidenced by a written
instrument signed and acknowledged by the beneficiary and delivered to the
trustee of the trust, together with an affidavit by the beneficiary that
such transfer and any like transfer concurrently in effect are for all or
part of the excess over ten thousand dollars of the annual income from such
trust to which such beneficiary is entitled, and that he has not received
and is not to receive any consideration in money or money's worth for the
transfer.
(2) Any such transfer shall be effective in any year only as to income
from such trust in excess of ten thousand dollars, and for this purpose all
previous like transfers applicable to a given year shall be taken into
account. In the event that two or more transfers are made in or for any
year in a total amount exceeding the income from such trust properly
transferable hereunder, transferees shall be preferred in the order in
which the instruments of transfer were delivered to the trustee.
(3) A trustee shall be exonerated and fully discharged for any payment
made to a transferee in reliance on the affidavit of a beneficiary
described in subparagraph (1).
(4) The provisions of this paragraph do not apply to subparagraph (a)
(2):
(c) A transferee of income may, if he has not received or is not to
receive any consideration in money or money's worth therefor, make a
further transfer of such income only to one or more of the permissible
transferees referred to in subparagraph (b)(1), other than a prior
transferor; provided, however, that upon the death of a transferee any
income not so transferred by him shall be an asset of his estate, subject
to his testamentary disposition or passing to his distributees under the
statutes of descent and distribution.
(d) The beneficiary of an express trust to receive the income from
property and apply it to the use of or pay it to any person is not
precluded by anything contained in this section from transferring or
assigning any part or all of such income to or for the benefit of persons
whom the beneficiary is legally obligated to support.
