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Indiana House Bill HB1205

Indiana 2022 Regular Session

Indiana House Bill HB1205 Compare Versions

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1+*HB1205.1*
2+January 13, 2022
3+HOUSE BILL No. 1205
4+_____
5+DIGEST OF HB 1205 (Updated January 12, 2022 3:28 pm - DI 140)
6+Citations Affected: IC 30-4; IC 34-30.
7+Synopsis: Uniform trust decanting act and trustee duties. Allows a
8+trustee of an irrevocable trust to appoint a successor trustee or multiple
9+trustees. Provides that a trustee's power to appoint a successor trustee
10+includes the power to allocate trustee powers to one or more trustees.
11+Enacts the uniform trust decanting act. Creates a definition of the
12+decanting power to include a power by a trustee to make limited
13+modifications to an irrevocable trust, including an asset transfer to a
14+new trust. Requires that a modification be consistent with a settlor's or
15+charitable organization's intent. Permits the trustee of an existing trust
16+to make modifications to or distributions from an existing trust for the
17+benefit of a disabled beneficiary. Prohibits a trustee from being
18+required to decant. Requires advanced notice to all qualified
19+beneficiaries. (The introduced version of this bill was prepared by the
20+Probate Code Commission.)
21+Effective: July 1, 2022.
22+Young J
23+January 6, 2022, read first time and referred to Committee on Judiciary.
24+January 13, 2022, reported — Do Pass.
25+HB 1205—LS 6169/DI 107 January 13, 2022
126 Second Regular Session of the 122nd General Assembly (2022)
227 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
328 Constitution) is being amended, the text of the existing provision will appear in this style type,
429 additions will appear in this style type, and deletions will appear in this style type.
530 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
631 provision adopted), the text of the new provision will appear in this style type. Also, the
732 word NEW will appear in that style type in the introductory clause of each SECTION that adds
833 a new provision to the Indiana Code or the Indiana Constitution.
934 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
1035 between statutes enacted by the 2021 Regular Session of the General Assembly.
11-HOUSE ENROLLED ACT No. 1205
12-AN ACT to amend the Indiana Code concerning trusts and
13-fiduciaries.
36+HOUSE BILL No. 1205
37+A BILL FOR AN ACT to amend the Indiana Code concerning trusts
38+and fiduciaries.
1439 Be it enacted by the General Assembly of the State of Indiana:
15-SECTION 1. IC 30-4-3-29.3 IS ADDED TO THE INDIANA CODE
16-AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
17-1, 2022]: Sec. 29.3. (a) The power to appoint a successor trustee
18-under a governing instrument or under section 33 of this chapter
19-includes:
20-(1) the power to appoint multiple successor trustees; and
21-(2) the power to allocate trustee powers to one (1) or more
22-trustees.
23-(b) A trustee to whom powers:
24-(1) have been exclusively allocated under subsection (a) must
25-be a fiduciary only with respect to the powers allocated; and
26-(2) have not been allocated under subsection (a) is not liable
27-for the actions of a trustee to whom the powers, duties, and
28-responsibilities are allocated.
29-(c) The rules governing the rights, powers, duties, and liabilities
30-of a governing instrument under this chapter apply to a trustee
31-appointed under this section unless expressly limited by the terms
32-of a governing instrument.
33-SECTION 2. IC 30-4-3-36 IS REPEALED [EFFECTIVE JULY 1,
34-2022]. Sec. 36. (a) Unless a trust expressly provides otherwise, a
35-trustee who has discretion under the terms of a trust (referred to in this
36-HEA 1205 — Concur 2
37-section as the "first trust") to invade the principal of the trust to make
38-distributions to or for the benefit of one (1) or more persons may
39-instead exercise the power by appointing all or part of the principal of
40-the first trust in favor of a trustee of another trust (referred to in this
41-section as the "second trust") for the benefit of one (1) or more persons
42-under the same trust instrument or under a different trust instrument as
43-long as:
44-(1) the beneficiaries of the second trust are the same as the
45-beneficiaries of the first trust;
46-(2) the second trust does not reduce any income, annuity, or
47-unitrust interest in the assets of the first trust; and
48-(3) if any contributions to the first trust qualified for a marital or
49-charitable deduction for purposes of the federal income, gift, or
50-estate taxes, the second trust does not contain any provision that,
51-if included in the first trust, would have prevented the first trust
52-from qualifying for a deduction or reduced the amount of a
53-deduction.
54-(b) The exercise of a power to invade principal under subsection (a)
55-must be by an instrument that is:
56-(1) in writing;
57-(2) signed and acknowledged by the trustee; and
58-(3) filed with the records of the first trust.
59-(c) The exercise of a power to invade principal under subsection (a)
60-is considered the exercise of a power of appointment, other than a
61-power to appoint to the trustee, the trustee's creditors, the trustee's
62-estate, or the creditors of the trustee's estate. The exercise of the power
63-does not extend the time at which the permissible period of the rule
64-against perpetuities begins and the law that determines the permissible
65-period of the rule against perpetuities of the first trust.
66-(d) The trustee shall notify in writing all qualified beneficiaries of
67-the first trust at least sixty (60) days before the effective date of the
68-trustee's exercise of the power to invade principal under subsection (a)
69-of the manner in which the trustee intends to exercise the power. A
70-copy of the proposed instrument exercising the power satisfies the
71-trustee's notice obligation under this subsection. If all qualified
72-beneficiaries waive the notice period by signed written instrument
73-delivered to the trustee, the trustee's power to invade principal may be
74-exercised immediately. The trustee's notice under this subsection does
75-not limit the right of any beneficiary to object to the exercise of the
76-trustee's power to invade principal, except as otherwise provided by
77-this article.
78-(e) The exercise of the power to invade principal under subsection
79-HEA 1205 — Concur 3
80-(a) is not prohibited by a spendthrift clause or by a provision in the
81-trust instrument that prohibits amending or revoking the trust.
82-(f) This section is not intended to create or imply a duty to exercise
83-a power to invade principal. No inference of impropriety may be made
84-as a result of a trustee not exercising the power to invade principal
85-conferred under subsection (a).
86-(g) This section may not be construed to abridge the right of any
87-trustee who has a power of invasion to appoint property in further trust
88-that arises under the terms of the first trust, under any other provision
89-of this article or any other statute, or under common law.
90-SECTION 3. IC 30-4-10 IS ADDED TO THE INDIANA CODE AS
91-A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
92-1, 2022]:
93-Chapter 10. Uniform Trust Decanting Act
94-Sec. 1. (a) This chapter applies to a trust created before, on, or
95-after July 1, 2022, that:
96-(1) has its principal place of administration in this state,
97-including a trust whose principal place of administration has
98-been changed to this state; or
99-(2) provides by its trust instrument that it is governed by the
100-law of this state or is governed by the law of this state for the
101-purpose of:
102-(A) administration, including administration of a trust
103-whose governing law for purposes of administration has
104-been changed to the law of this state;
105-(B) construction of terms of the trust; or
106-(C) determining the meaning or effect of terms of the trust.
107-(b) Except as provided in subsections (c) and (d), this chapter
108-applies to an express trust that is irrevocable or revocable by the
109-settlor only with the consent of the trustee or a person holding an
110-adverse interest.
111-(c) This chapter does not:
112-(1) apply to a trust held solely for charitable purposes;
113-(2) limit the power of a trustee, powerholder, or other person
114-to distribute or appoint property in further trust;
115-(3) limit the power to modify a trust under the trust
116-instrument, law of this state other than this chapter, common
117-law, a court order, or a nonjudicial settlement agreement; or
118-(4) affect the ability of a settlor to provide in a trust
119-instrument for the distribution of the trust property or
120-appointment in further trust of the trust property or for
121-modification of the trust instrument. Such provisions in the
122-HEA 1205 — Concur 4
123-trust instrument shall control over any applicable provision
124-of this chapter.
125-(d) Subject to section 45 of this chapter, a trust instrument may
126-restrict or prohibit exercise of the decanting power.
127-Sec. 2. As used in this chapter, "appointive property" means the
128-property or property interest subject to a power of appointment.
129-Sec. 3. As used in this chapter, "ascertainable standard" means
130-a standard relating to an individual's health, education, support, or
131-maintenance as defined by 26 U.S.C. 2041(b)(1)(A) or 26 U.S.C.
132-2514(c)(1) and applicable regulations.
133-Sec. 4. As used in this chapter, "authorized fiduciary" means:
134-(1) a trustee, trust director, or other fiduciary, other than a
135-settlor, that has discretion to distribute or direct a trustee to
136-distribute part or all of the principal of the first trust to one
137-(1) or more current beneficiaries;
138-(2) a special fiduciary appointed under section 39 of this
139-chapter; or
140-(3) a special-needs fiduciary under section 43 of this chapter.
141-Sec. 5. As used in this chapter, "beneficiary" means a person
142-that:
143-(1) has a present or future, vested or contingent, beneficial
144-interest in a trust;
145-(2) holds a power of appointment over trust property; or
146-(3) is an identified charitable organization that may receive
147-distributions under the terms of the trust.
148-Sec. 6. As used in this chapter, "beneficiary with disability"
149-means a beneficiary who is determined, in the exercise of an
150-authorized fiduciary's discretion, to have one (1) of the following
151-conditions:
152-(1) Dementia, memory loss, Parkinson's disease, or other
153-progressive condition that, currently or in the future, may
154-impair the ability of the beneficiary to provide self care or
155-manage the beneficiary's assets.
156-(2) A physical or mental condition or infirmity due to age,
157-cognitive impairment, addiction, or disease that impairs the
158-beneficiary's ability to provide self care or manage the
159-beneficiary's assets.
160-(3) The susceptibility of the beneficiary, at any age, to
161-financial exploitation, as defined in IC 23-19-4.1,
162-IC 30-5-5-6.5, or FINRA Rule 2165 approved by the United
163-States Securities and Exchange Commission.
164-(4) A condition requiring essential medical treatment or
165-HEA 1205 — Concur 5
166-prescription medication that the beneficiary cannot
167-reasonably provide for from the beneficiary's resources
168-outside the trust assets.
169-(5) A condition related directly or indirectly to the disability
170-of a beneficiary described in subdivisions (1) through (4) with
171-respect to which the settlor of the trust has expressed the
172-settlor's intent.
173-Sec. 7. As used in this chapter, "charitable interest" means an
174-interest in a trust that:
175-(1) is held by an identified charitable organization and makes
176-the organization a qualified beneficiary;
177-(2) benefits only a charitable organization and, if the interest
178-were held by an identified charitable organization, would
179-make the organization a qualified beneficiary; or
180-(3) is held solely for a charitable purpose and, if the interest
181-were held by an identified charitable organization, would
182-make the organization a qualified beneficiary.
183-Sec. 8. As used in this chapter, "charitable organization" means:
184-(1) a person, other than an individual, organized and operated
185-exclusively for a charitable purpose; or
186-(2) a government or governmental subdivision, agency, or
187-instrumentality to the extent it holds funds exclusively for a
188-charitable purpose.
189-Sec. 9. As used in this chapter, "charitable purpose" means the
190-relief of poverty, the advancement of education or religion, the
191-promotion of health, a municipal or other governmental purpose,
192-or a purpose that is beneficial to the community.
193-Sec. 10. As used in this chapter, "court" has the meaning set
194-forth in IC 30-4-1-2(6).
195-Sec. 11. As used in this chapter, "current beneficiary" means a
196-beneficiary who, on the date that the beneficiary's qualification is
197-determined, is a distributee or permissible distributee of trust
198-income or principal. The term includes the holder of a presently
199-exercisable general power of appointment but does not include a
200-person that is a beneficiary only because the person holds any
201-other power of appointment.
202-Sec. 12. As used in this chapter, "decanting power" means the
203-power of an authorized fiduciary under this chapter to:
204-(1) distribute property of a first trust to one (1) or more
205-second trusts; or
206-(2) to modify the terms of the first trust.
207-Sec. 13. As used in this chapter, "designated representative" has
208-HEA 1205 — Concur 6
209-the meaning set forth in IC 30-4-1-2(8).
210-Sec. 14. As used in this chapter, "expanded distributive
211-discretion" means a discretionary power of distribution that is not
212-limited to an ascertainable standard or a reasonably definite
213-standard.
214-Sec. 15. As used in this chapter, "first trust" means a trust over
215-which an authorized fiduciary may exercise the decanting power.
216-Sec. 16. As used in this chapter, "first-trust instrument" means
217-the trust instrument for a first trust.
218-Sec. 17. As used in this chapter, "general power of
219-appointment" means a power of appointment exercisable in favor
220-of:
221-(1) a powerholder;
222-(2) a powerholder's estate;
223-(3) a creditor of the powerholder; or
224-(4) a creditor of the powerholder's estate.
225-Sec. 18. As used in this chapter, "jurisdiction" means a
226-geographic area, including a state or country.
227-Sec. 19. As used in this chapter, "person" means:
228-(1) an individual;
229-(2) a corporation;
230-(3) a business trust;
231-(4) an estate;
232-(5) a trust;
233-(6) a partnership;
234-(7) a limited liability company;
235-(8) an association;
236-(9) a joint venture;
237-(10) a government;
238-(11) a governmental subdivision;
239-(12) an agency or instrumentality;
240-(13) a public corporation; or
241-(14) any other legal or commercial entity.
242-Sec. 20. As used in this chapter, "power of appointment" means
243-a power that enables a powerholder acting in a nonfiduciary
244-capacity to designate a recipient of an ownership interest in or
245-another power of appointment over the appointive property. The
246-term does not include a power of attorney.
247-Sec. 21. As used in this chapter, "powerholder" means a person
248-in which a donor creates a power of appointment.
249-Sec. 22. (a) As used in this chapter, "presently exercisable power
250-of appointment" means a power of appointment exercisable by the
251-HEA 1205 — Concur 7
252-powerholder at the relevant time.
253-(b) The term includes a power of appointment exercisable only
254-after the occurrence of a specified event, the satisfaction of an
255-ascertainable standard, or the passage of a specified time.
256-(c) The term does not include a power exercisable only at the
257-powerholder's death.
258-Sec. 23. As used in this chapter, "qualified beneficiary" has the
259-meaning set forth in IC 30-4-1-2(19).
260-Sec. 24. As used in this chapter, "reasonably definite standard"
261-means a clearly measurable standard under which a holder of a
262-power of distribution is legally accountable within the meaning of
263-26 U.S.C. 674(b)(5)(A) and applicable regulations.
264-Sec. 25. As used in this chapter, "record" means information
265-that is inscribed on a tangible medium or that is stored in an
266-electronic or other medium and is retrievable in perceivable form.
267-Sec. 26. As used in this chapter, "second trust" means:
268-(1) a first trust after modification under this chapter; or
269-(2) a trust to which a distribution of property from a first
270-trust is or may be made under this chapter.
271-Sec. 27. As used in this chapter, "second-trust instrument"
272-means the trust instrument for a second trust.
273-Sec. 28. (a) As used in this chapter, except as provided in section
274-55 of this chapter, "settlor" has the meaning set forth in
275-IC 30-4-1-2(21).
276-(b) If more than one (1) person creates or contributes property
277-to a trust, each person is a settlor of the portion of the trust
278-property attributable to the person's contribution except to the
279-extent another person has power to revoke or withdraw that
280-portion.
281-Sec. 29. As used in this chapter, "sign" means with present
282-intent to authenticate or adopt a record to:
283-(1) execute or adopt a tangible symbol; or
284-(2) attach to or logically associate with the record of an
285-electronic symbol, sound, or process.
286-Sec. 30. As used in this chapter, "state" means:
287-(1) a state of the United States;
288-(2) the District of Columbia;
289-(3) Puerto Rico;
290-(4) the United States Virgin Islands; or
291-(5) a territory or insular possession subject to the jurisdiction
292-of the United States.
293-Sec. 31. As used in this chapter, "terms of the trust" has the
294-HEA 1205 — Concur 8
295-meaning set forth in IC 30-4-1-2(22).
296-Sec. 32. As used in this chapter, "trust instrument" has the
297-meaning set forth in IC 30-4-1-2(25). The term includes a written
298-document executed by the settlor to create a trust or by a person
299-to create a second trust that contains some or all of the terms of the
300-trust, including any amendments.
301-Sec. 33. (a) Except as provided in this chapter, an authorized
302-fiduciary may exercise the decanting power without the consent of
303-any person and without court approval.
304-(b) An authorized fiduciary shall act in accordance with its
305-fiduciary duties, including the duty to act in accordance with the
306-purposes of the first trust in exercising the decanting power.
307-(c) This chapter does not create or imply a duty to exercise the
308-decanting power or to inform beneficiaries about the applicability
309-of this chapter.
310-(d) Except as provided in a first-trust instrument, the terms of
311-the first trust are deemed to include the decanting power.
312-Sec. 34. A trustee or person that reasonably relies on:
313-(1) the validity of a distribution of the property of a trust to
314-another trust; or
315-(2) a modification of a trust under this chapter, law of this
316-state other than this article, or the law of another jurisdiction;
317-is not liable to any person for any action or failure to act as a result
318-of the reliance.
319-Sec. 35. (a) Except as provided in subsection (c), an authorized
320-fiduciary shall give notice in a record of the intended exercise of
321-the decanting power not later than sixty (60) days before the
322-exercise of the decanting power to:
323-(1) each settlor of the first trust, if living or then in existence;
324-(2) each qualified beneficiary of the first trust, including the
325-designated representative, if any, or other representative
326-under IC 30-4-6-10.5 of a qualified beneficiary who:
327-(A) is a minor or an incapacitated person;
328-(B) is unborn;
329-(C) is unknown; or
330-(D) cannot be located after a reasonably diligent search;
331-(3) each holder of a presently exercisable power of
332-appointment in the first trust;
333-(4) each person that currently has the right to remove or
334-replace the authorized fiduciary;
335-(5) each fiduciary of the first trust;
336-(6) each fiduciary of the second trust; and
337-HEA 1205 — Concur 9
338-(7) the attorney general, if section 44(c) of this chapter
339-applies.
340-(b) A notice period under subsection (a) begins on the day that
341-the notice is given and ends fifty-nine (59) days later.
342-(c) An authorized fiduciary is not required to give notice under
343-subsection (a) to a person that:
344-(1) is not known to the fiduciary;
345-(2) is known to the fiduciary but cannot be located by the
346-fiduciary after a reasonably diligent search; or
347-(3) has no representative under IC 30-4-6-10.5.
348-(d) The decanting power may be exercised before expiration of
349-the notice period under subsection (a) if all persons entitled to
350-receive notice waive the notice period in a signed record.
351-Sec. 36. A notice under section 35 of this chapter must:
352-(1) specify the manner in which the authorized fiduciary
353-intends to exercise the decanting power;
354-(2) specify the proposed effective date for the exercise of the
355-decanting power;
356-(3) include a copy of the first-trust instrument; and
357-(4) include a copy of the second-trust instrument.
358-Sec. 37. (a) The receipt of notice, waiver of the notice period, or
359-expiration of the notice period does not affect the right of a person
360-to file a petition under section 39 of this chapter asserting that:
361-(1) an exercise of the decanting power:
362-(A) is ineffective because it did not comply with this
363-chapter;
364-(B) was an abuse of discretion; or
365-(C) was a breach of a fiduciary duty; or
366-(2) section 52 of this chapter applies to the exercise of the
367-decanting power.
368-(b) An exercise of the decanting power is not ineffective because
369-of the failure to give notice to one (1) or more persons under
370-section 35 of this chapter if the authorized fiduciary acted with
371-reasonable care to comply with section 35 of this chapter.
372-Sec. 38. (a) Notice to a person with authority to represent and
373-bind another person under a first-trust instrument or this article
374-has the same effect as notice given directly to the person
375-represented.
376-(b) Consent of or waiver by a person with authority to represent
377-and bind another person under a first-trust instrument or this
378-article is binding on the person represented unless the person
379-represented objects to the representation before the consent or
380-HEA 1205 — Concur 10
381-waiver otherwise would become effective.
382-(c) A person with authority to represent and bind another
383-person under a first-trust instrument or this article may file a
384-petition under section 39 of this chapter on behalf of the person
385-represented.
386-(d) A settlor may not represent or bind a beneficiary under this
387-chapter.
388-Sec. 39. (a) Upon a petition by an authorized fiduciary, a
389-beneficiary, or a person entitled to notice under section 35 of this
390-chapter or with respect to a charitable interest by the attorney
391-general or other person that has standing to enforce the charitable
392-interest, the court may:
393-(1) provide instructions to the authorized fiduciary about
394-whether a proposed exercise of the decanting power is
395-permitted under this chapter and consistent with the fiduciary
396-duties of the authorized fiduciary;
397-(2) appoint a special fiduciary and authorize the special
398-fiduciary to determine whether the exercise of the decanting
399-power is proper under this chapter and to exercise the
400-decanting power;
401-(3) approve an exercise of the decanting power;
402-(4) determine that a proposed or attempted exercise of the
403-decanting power is ineffective because:
404-(A) after applying section 52 of this chapter, the proposed
405-or attempted exercise does not comply with this chapter;
406-or
407-(B) the proposed or attempted exercise is an abuse of the
408-fiduciary's discretion or a breach of a fiduciary duty;
409-(5) determine the extent section 52 of this chapter applies to
410-a prior exercise of the decanting power;
411-(6) provide instructions to the trustee regarding the
412-application of section 52 of this chapter to a prior exercise of
413-the decanting power; or
414-(7) order relief to carry out the purposes of this chapter.
415-(b) Upon a petition by an authorized fiduciary, the court may
416-approve:
417-(1) an increase in the fiduciary's compensation under section
418-46 of this chapter; or
419-(2) a modification under section 48 of this chapter of a
420-provision granting a person the right to remove or replace the
421-fiduciary.
422-Sec. 40. An exercise of the decanting power must be made in a
423-HEA 1205 — Concur 11
424-record signed by an authorized fiduciary. The signed record must:
425-(1) directly or indirectly reference the notice required by
426-section 35 of this chapter;
427-(2) identify the first trust and the second trust;
428-(3) identify and state the property of the first trust being
429-distributed to each second trust; and
430-(4) identify the property that remains in the first trust.
431-Sec. 41. (a) As used in this section, "noncontingent right" means
432-a right that is not subject to the:
433-(1) exercise of discretion; or
434-(2) occurrence of a specified event that is not certain to occur.
435-The term does not include a right held by a beneficiary if any
436-person has discretion to distribute property subject to the right of
437-any person other than the beneficiary or the beneficiary's estate.
438-(b) As used in this section, "presumptive remainder
439-beneficiary" means a qualified beneficiary other than a current
440-beneficiary.
441-(c) As used in this section, "successor beneficiary" means a
442-beneficiary that is not a qualified beneficiary on the date the
443-beneficiary's qualification is determined. The term does not include
444-a person that is a beneficiary only because the person holds a
445-nongeneral power of appointment.
446-(d) As used in this section, "vested interest" means a:
447-(1) right to a mandatory distribution that is a noncontingent
448-right as of the date of the exercise of the decanting power;
449-(2) current and noncontingent right, annually or more
450-frequently, to a mandatory distribution of income, a specified
451-dollar amount, or a percentage of value of some or all of the
452-trust property;
453-(3) current and noncontingent right, annually or more
454-frequently, to withdraw income, a specified dollar amount, or
455-a percentage of value of some or all of the trust property;
456-(4) presently exercisable general power of appointment; or
457-(5) right to receive an ascertainable part of the trust property
458-on the trust's termination that is not subject to the exercise of
459-discretion or to the occurrence of a specified event that is not
460-certain to occur.
461-(e) Subject to subsection (f) and section 44 of this chapter, an
462-authorized fiduciary that has expanded distributive discretion over
463-the principal of a first trust for the benefit of one (1) or more
464-current beneficiaries may exercise the decanting power over the
465-principal of the first trust.
466-HEA 1205 — Concur 12
467-(f) Subject to section 43 of this chapter, an exercise of the
468-decanting power under this section must not:
469-(1) except as provided in subsection (g), include as a current
470-beneficiary a person that is not a current beneficiary of the
471-first trust;
472-(2) except as provided in subsection (g), include as a
473-presumptive remainder beneficiary or successor beneficiary
474-a person that is not a current beneficiary, presumptive
475-remainder beneficiary, or successor beneficiary of the first
476-trust; or
477-(3) reduce or eliminate a vested interest.
478-(g) Subject to subsection (f)(3) and section 44 of this chapter, in
479-an exercise of the decanting power under this subsection, a second
480-trust may be a trust created or administered under the law of any
481-jurisdiction and may:
482-(1) retain a power of appointment granted in the first trust;
483-(2) omit a power of appointment granted in the first trust,
484-other than a presently exercisable general power of
485-appointment;
486-(3) create or modify a power of appointment if the
487-powerholder is a current beneficiary of the first trust and the
488-authorized fiduciary has expanded distributive discretion to
489-distribute principal to the beneficiary; and
490-(4) create or modify a power of appointment if the
491-powerholder is a presumptive remainder beneficiary or
492-successor beneficiary of the first trust, but the exercise of the
493-power may take effect only after the powerholder becomes, or
494-would have become a current beneficiary.
495-(h) A power of appointment described in subsections (g)(1)
496-through (g)(4) may be general or nongeneral. The class of
497-permissible appointees in favor of which the power may be
498-exercised may be broader than or different from the beneficiaries
499-of the first trust.
500-(i) If an authorized fiduciary has expanded distributive
501-discretion over part of the principal of a first trust, the fiduciary
502-may exercise the decanting power under this section over the
503-principal that the authorized fiduciary has expanded distributive
504-discretion.
505-Sec. 42. (a) As used in this section, "limited distributive
506-discretion" means a discretionary power of distribution that is
507-limited to an ascertainable standard or a reasonably definite
508-standard.
509-HEA 1205 — Concur 13
510-(b) An authorized fiduciary that has limited distributive
511-discretion over the principal of the first trust for the benefit of one
512-(1) or more current beneficiaries may exercise the decanting power
513-over the principal of the first trust.
514-(c) Under this section and subject to section 44 of this chapter,
515-a second trust may be created or administered under the law of
516-any jurisdiction. A second trust must grant each beneficiary of the
517-first trust beneficial interests that are substantially similar to the
518-beneficial interests of the beneficiary in the first trust.
519-(d) A power to make a distribution under a second trust for the
520-benefit of a beneficiary who is an individual is substantially similar
521-to a power under the first trust to make a distribution directly to
522-the beneficiary. A distribution is for the benefit of a beneficiary if:
523-(1) the distribution is applied for the benefit of the
524-beneficiary;
525-(2) the beneficiary is under a legal disability or the trustee
526-reasonably believes the beneficiary is incapacitated and the
527-distribution is made as permitted under this article; or
528-(3) the distribution is made as permitted under the terms of
529-the first-trust instrument and the second-trust instrument for
530-the benefit of the beneficiary.
531-(e) If an authorized fiduciary has limited distributive discretion
532-of the principal of a first trust, the fiduciary may only exercise the
533-decanting power under this section over the principal that the
534-authorized fiduciary has limited distributive discretion.
535-Sec. 43. (a) This section applies to any trust that has a
536-beneficiary with a disability, without limitation, whenever a
537-special-needs fiduciary for the trust determines that the beneficiary
538-with a disability may qualify for governmental benefits based on a
539-disability, whether the beneficiary currently receives those benefits
540-or has been adjudicated to be an incapacitated person under
541-IC 29-3.
542-(b) As used in this section, "governmental benefits" means
543-financial aid or services from a state, federal, or other public
544-agency.
545-(c) As used in this section, "special-needs fiduciary" means:
546-(1) a trustee or other fiduciary, other than a settlor, that has
547-discretion to distribute part or all of the principal of a first
548-trust to one or more current beneficiaries;
549-(2) if no trustee or fiduciary has discretion under subdivision
550-(1), a trustee or other fiduciary, other than a settlor, that has
551-discretion to distribute part or all of the income of the first
552-HEA 1205 — Concur 14
553-trust to one (1) or more current beneficiaries; or
554-(3) if no trustee or fiduciary has discretion under subdivisions
555-(1) and (2), a trustee or other fiduciary, other than a settlor,
556-that is required to distribute part or all of the income or
557-principal of the first trust to one (1) or more current
558-beneficiaries;
559-with respect to a trust that has a beneficiary with a disability.
560-(d) As used in this section, "special-needs trust" means a trust
561-that the trustee reasonably believes would not be considered a
562-resource for purposes of determining whether a beneficiary with
563-a disability is eligible for governmental benefits.
564-(e) A special-needs fiduciary may exercise the decanting power
565-under section 41 of this chapter over the principal of a first trust
566-as if the fiduciary had authority to distribute principal to a
567-beneficiary with a disability subject to expanded distributive
568-discretion if:
569-(1) a second trust is a special-needs trust or other trust that
570-benefits the beneficiary with a disability; and
571-(2) the special-needs fiduciary determines that an exercise of
572-the decanting power will further the purposes of the first
573-trust.
574-(f) In an exercise of the decanting power under this section, the
575-following rules apply:
576-(1) Except as provided in section 41(f)(2) of this chapter, the
577-interest in the second trust of a beneficiary with a disability
578-may:
579-(A) be a pooled trust as defined by Medicaid law for the
580-benefit of the beneficiary with a disability under 42 U.S.C.
581-1396p(d)(4)(C), as amended and in effect on July 1, 2022;
582-or
583-(B) contain payback provisions complying with
584-reimbursement requirements of Medicaid law under 42
585-U.S.C. 1396p(d)(4)(A), as amended and in effect on July 1,
586-2022.
587-(2) Section 41(f)(3) of this chapter does not apply to the
588-interests of the beneficiary with a disability.
589-(3) Except as affected by a change to the interests of the
590-beneficiary with a disability, the second trust, or if there are
591-two (2) or more second trusts, the second trusts in the
592-aggregate, must grant each other beneficiary of the first trust
593-beneficial interests in the second trusts which are
594-substantially similar to the beneficiary's beneficial interests in
595-HEA 1205 — Concur 15
596-the first trust.
597-Sec. 44. (a) As used in this section, "determinable charitable
598-interest" means a charitable interest that is a right to a mandatory
599-distribution currently, periodically, on the occurrence of a
600-specified event, or after the passage of a specified time and that is
601-unconditional or will be held solely for charitable purposes.
602-(b) As used in this section, "unconditional" means not subject
603-to the occurrence of a specified event that is not certain to occur,
604-other than a requirement in a trust instrument that a charitable
605-organization be in existence or qualify under a particular provision
606-of the United States Internal Revenue Code of 1986, as amended
607-and in effect on July 1, 2022, on the date of the distribution, if the
608-charitable organization meets the requirement on the date of
609-determination.
610-(c) If a first trust contains a determinable charitable interest,
611-the attorney general has the rights of a qualified beneficiary and
612-may represent and bind the charitable interest.
613-(d) If a first trust contains a charitable interest, the second trust
614-must not:
615-(1) diminish the charitable interest;
616-(2) diminish the interest of an identified charitable
617-organization that holds the charitable interest;
618-(3) alter any charitable purpose stated in the first-trust
619-instrument; or
620-(4) alter any condition or restriction related to the charitable
621-interest.
622-(e) If there are two (2) or more second trusts, the second trusts
623-shall be treated as one (1) trust for purposes of determining
624-whether the exercise of the decanting power diminishes the
625-charitable interest or diminishes the interest of an identified
626-charitable organization for purposes of subsection (d).
627-(f) If a first trust contains a determinable charitable interest, the
628-second trust that includes a charitable interest pursuant to
629-subsection (c) must be administered under the law of this state
630-unless:
631-(1) the attorney general, after receiving notice under section
632-35 of this chapter, fails to object in a signed record delivered
633-to the authorized fiduciary within the notice period;
634-(2) the attorney general consents in a signed record to the
635-second trust being administered under the law of another
636-jurisdiction; or
637-(3) the court approves the exercise of the decanting power.
638-HEA 1205 — Concur 16
639-(g) This chapter does not limit the powers and duties of the
640-attorney general under the laws of this state other than this
641-chapter.
642-Sec. 45. (a) An authorized fiduciary may not exercise the
643-decanting power to the extent the first-trust instrument expressly
644-prohibits exercise of:
645-(1) the decanting power; or
646-(2) a power granted by state law to the fiduciary to distribute
647-part or all of the principal of the trust to another trust or to
648-modify the trust.
649-(b) Exercise of the decanting power is subject to a restriction in
650-the first-trust instrument that expressly applies to exercise of:
651-(1) the decanting power; or
652-(2) a power granted by state law to a fiduciary to distribute
653-the principal of the trust to another trust or to modify the
654-trust.
655-(c) The decanting power of an authorized fiduciary is not
656-precluded by:
657-(1) a general prohibition of the amendment or revocation of
658-a first trust;
659- (2) a spendthrift clause; or
660-(3) a clause restraining the voluntary or involuntary transfer
661-of a beneficiary's interest.
662-(d) Subject to subsections (a) and (b), an authorized fiduciary
663-may exercise the decanting power under this chapter even if the
664-first-trust instrument permits the authorized fiduciary or another
665-person to modify the first-trust instrument or to distribute the
666-principal of the first trust to another trust.
667-(e) If a first-trust instrument contains an express prohibition
668-described in subsection (a) or an express restriction described in
669-subsection (b), the provision must be included in the second-trust
670-instrument.
671-Sec. 46. (a) If a first-trust instrument specifies an authorized
672-fiduciary's compensation, the fiduciary may not exercise the
673-decanting power to increase the fiduciary's compensation above
674-the specified compensation unless:
675-(1) all qualified beneficiaries of the second trust consent to the
676-increase in a signed record; or
677-(2) the increase is approved by the court.
678-(b) If a first-trust instrument does not specify an authorized
679-fiduciary's compensation, the fiduciary may not exercise the
680-decanting power to increase the fiduciary's compensation above
681-HEA 1205 — Concur 17
682-the compensation permitted by this article unless:
683-(1) all qualified beneficiaries of the second trust consent to the
684-increase in a signed record; or
685-(2) the increase is approved by the court.
686-(c) A change in an authorized fiduciary's compensation that is
687-incidental to other changes made by the exercise of the decanting
688-power is not an increase in the fiduciary's compensation for
689-purposes of subsections (a) and (b).
690-Sec. 47. (a) Except as otherwise provided in this section, a
691-second-trust instrument must not relieve an authorized fiduciary
692-from liability for breach of trust to a greater extent than the
693-first-trust instrument.
694-(b) A second trust instrument may provide for indemnification
695-of an authorized fiduciary of the first trust or another person
696-acting in a fiduciary capacity under the first trust for any liability
697-or claim that would have been payable from the first trust if the
698-decanting power had not been exercised.
699-(c) A second-trust instrument must not reduce fiduciary liability
700-in the aggregate.
701-(d) Subject to subsection (c), a second-trust instrument may
702-divide and reallocate fiduciary powers among fiduciaries, including
703-one (1) or more trustees, distribution advisors, investment
704-advisors, trust protectors, or other persons, and relieve a fiduciary
705-from liability for an act or failure to act of another fiduciary as
706-permitted by the laws of this state other than this chapter.
707-Sec. 48. An authorized fiduciary must not exercise the decanting
708-power to modify a provision in a first-trust instrument granting
709-another person power to remove or replace the fiduciary unless:
710-(1) the person holding the power consents to the modification
711-in a signed record and the modification applies only to the
712-person;
713-(2) the person holding the power and the qualified
714-beneficiaries of the second trust consent to the modification in
715-a signed record and the modification grants a substantially
716-similar power to another person; or
717-(3) the court approves the modification and the modification
718-grants a substantially similar power to another person.
719-Sec. 49. (a) As used in this section, "grantor trust" means a trust
720-as to which a settlor of a first trust is considered the owner under
721-26 U.S.C. 671 through 677, as amended and in effect on July 1,
722-2022, or 26 U.S.C. 679, as amended and in effect on July 1, 2022.
723-(b) As used in this section, "Internal Revenue Code" means the
724-HEA 1205 — Concur 18
725-United States Internal Revenue Code of 1986, as amended and in
726-effect on July 1, 2022.
727-(c) As used in this section "nongrantor trust" means a trust that
728-is not a grantor trust.
729-(d) As used in this section, "qualified benefits property" means
730-property subject to the minimum distribution requirements of 26
731-U.S.C. 401(a)(9), as amended and in effect on July 1, 2022, and any
732-applicable regulations, or to any similar requirements that refer to
733-26 U.S.C. 401(a)(9) or the regulations.
734-(e) An exercise of the decanting power is subject to the following
735-limitations:
736-(1) If a first trust contains property that qualified, or would
737-have qualified but for provisions of this chapter other than
738-this section, for a marital deduction for purposes of the gift or
739-estate tax under the Internal Revenue Code or a state gift,
740-estate, or inheritance tax, the second-trust instrument must
741-not include or omit any term that, if included in or omitted
742-from the trust instrument for the trust to which the property
743-was transferred, would have prevented the transfer from
744-qualifying for the deduction, or would have reduced the
745-amount of the deduction, under the same provisions of the
746-Internal Revenue Code or state law under which the transfer
747-qualified.
748-(2) If the first trust contains property that qualified, or would
749-have qualified but for provisions of this chapter other than
750-this section, for a charitable deduction for purposes of the
751-income, gift, or estate tax under the Internal Revenue Code or
752-a state income, gift, estate, or inheritance tax, the second-trust
753-instrument must not include or omit any term that, if included
754-in or omitted from the trust instrument for the trust to which
755-the property was transferred, would have prevented the
756-transfer from qualifying for the deduction, or would have
757-reduced the amount of the deduction, under the same
758-provisions of the Internal Revenue Code or state law under
759-which the transfer qualified.
760-(3) If the first trust contains property that qualified, or would
761-have qualified but for provisions of this chapter other than
762-this section, for the exclusion from the gift tax described in 26
763-U.S.C. 2503(b), as amended and in effect on July 1, 2022, the
764-second-trust instrument must not include or omit a term that,
765-if included in or omitted from the trust instrument for the
766-trust to which the property was transferred, would have
767-HEA 1205 — Concur 19
768-prevented the transfer from qualifying under 26 U.S.C.
769-2503(b), as amended and in effect on July 1, 2022. If the first
770-trust contains property that qualified, or would have qualified
771-but for provisions of this chapter other than this section, for
772-the exclusion from the gift tax described in 26 U.S.C. 2503(b),
773-as amended and in effect on July 1, 2022, by application of 26
774-U.S.C. 2503(c), as amended and in effect on July 1, 2022, the
775-second-trust instrument must not include or omit a term that,
776-if included in or omitted from the trust instrument for the
777-trust to which the property was transferred, would have
778-prevented the transfer from qualifying under 26 U.S.C.
779-2503(c), as amended and in effect on July 1, 2022.
780-(4) If the property of the first trust includes shares of stock in
781-an S corporation, as defined in 26 U.S.C. 1361, as amended
782-and in effect on July 1, 2022, and the first trust is, or but for
783-provisions of this chapter other than this section would be, a
784-permitted shareholder under any provision of 26 U.S.C. 1361,
785-as amended and in effect on July 1, 2022, an authorized
786-fiduciary may exercise the power with respect to part or all of
787-the S corporation stock only if any second trust receiving the
788-stock is a permitted shareholder under 26 U.S.C. 1361(c)(2),
789-as amended and in effect on July 1, 2022. If the property of
790-the first trust includes shares of stock in an S corporation and
791-the first trust is or, but for provisions of this chapter other
792-than this section, would be a qualified subchapter S trust
793-within the meaning of 26 U.S.C. 1361(d), as amended and in
794-effect on July 1, 2022, the second-trust instrument must not
795-include or omit a term that prevents the second trust from
796-qualifying as a qualified subchapter S trust.
797-(5) If the first trust contains property that qualified, or would
798-have qualified but for provisions of this chapter other than
799-this section, for a zero (0) inclusion ratio for purposes of the
800-generation skipping transfer tax under 26 U.S.C. 2642(c), as
801-amended and in effect on July 1, 2022, the second-trust
802-instrument must not include or omit a term that, if included
803-in or omitted from the first-trust instrument, would have
804-prevented the transfer to the first trust from qualifying for a
805-zero (0) inclusion ratio under 26 U.S.C. 2642(c), as amended
806-and in effect on July 1, 2022.
807-(6) If the first trust is directly or indirectly the beneficiary of
808-qualified benefits property, the second-trust instrument may
809-not include or omit any term that, if included in or omitted
810-HEA 1205 — Concur 20
811-from the first-trust instrument, would have increased the
812-minimum distributions required with respect to the qualified
813-benefits property under 26 U.S.C. 401(a)(9), as amended and
814-in effect on July 1, 2022, and any applicable regulations, or
815-any similar requirements that refer to 26 U.S.C. 401(a)(9), as
816-amended and in effect on July 1, 2022, or the regulations. If
817-an attempted exercise of the decanting power violates this
818-subdivision, the trustee is deemed to have held the qualified
819-benefits property and any reinvested distributions of the
820-property as a separate share from the date of the exercise of
821-the power and section 52 of this chapter applies to the
822-separate share.
823-(7) If the first trust qualifies as a grantor trust because of the
824-application of 26 U.S.C. 672(f)(2)(A), as amended and in effect
825-on July 1, 2022, the second trust may not include or omit a
826-term that, if included in or omitted from the first-trust
827-instrument, would have prevented the first trust from
828-qualifying under 26 U.S.C. 672(f)(2)(A), as amended and in
829-effect on July 1, 2022.
830-(8) As used in this subdivision, "tax benefit" means a federal
831-or state tax deduction, exemption, exclusion, or other benefit
832-not otherwise listed in this section, except for a benefit arising
833-from being a grantor trust. Subject to subdivision (9), a
834-second-trust instrument may not include or omit a term that,
835-if included in or omitted from the first-trust instrument,
836-would have prevented qualification for a tax benefit if:
837-(A) the first-trust instrument expressly indicates an intent
838-to qualify for the benefit or the first-trust instrument is
839-clearly designed to enable the first trust to qualify for the
840-benefit; and
841-(B) the transfer of property held by the first trust or the
842-first trust qualified or, but for provisions of this chapter
843-other than this section, would have qualified for the tax
844-benefit.
845-(9) Subject to subdivision (4):
846-(A) except as provided in subdivision (7), the second trust
847-may be a nongrantor trust, even if the first trust is a
848-grantor trust; and
849-(B) except as otherwise provided in subdivision (10), the
850-second trust may be a grantor trust, even if the first trust
851-is a nongrantor trust.
852-(10) An authorized fiduciary may not exercise the decanting
853-HEA 1205 — Concur 21
854-power if a settlor objects in a signed record delivered to the
855-fiduciary within the notice period and:
856-(A) the first trust and a second trust are both grantor
857-trusts, in whole or in part, the first trust grants the settlor
858-or another person the power to cause the first trust to
859-cease to be a grantor trust, and the second trust does not
860-grant an equivalent power to the settlor or other person;
861-or
862-(B) the first trust is a nongrantor trust and a second trust
863-is a grantor trust, in whole or in part, with respect to the
864-settlor, unless:
865-(i) the settlor has the power at all times to cause the
866-second trust to cease to be a grantor trust; or
867-(ii) the first-trust instrument contains a provision
868-granting the settlor or another person a power that
869-would cause the first trust to cease to be a grantor trust
870-and the second-trust instrument contains the same
871-provision.
872-Sec. 50. (a) Subject to subsection (b), a second trust may have a
873-duration that is the same as or different from the duration of the
874-first trust.
875-(b) To the extent that property of a second trust is attributable
876-to property of the first trust, the property of the second trust is
877-subject to any rules governing maximum perpetuity, accumulation,
878-or suspension of the power of alienation that apply to property of
879-the first trust.
880-Sec. 51. An authorized fiduciary may exercise the decanting
881-power whether under the first trust's discretionary distribution
882-standard the fiduciary would have made or could have been
883-compelled to make a discretionary distribution of principal at the
884-time of the exercise.
885-Sec. 52. (a) If exercise of the decanting power would be effective
886-under this chapter except that the second-trust instrument in part
887-does not comply with this chapter, the exercise of the power is
888-effective and the following rules apply with respect to the principal
889-of the second trust attributable to the exercise of the power:
890-(1) A provision in the second-trust instrument that is not
891-permitted under this chapter is void to the extent necessary to
892-comply with this chapter.
893-(2) A provision required by this chapter to be in the
894-second-trust instrument that is not contained in the
895-instrument is deemed to be included in the instrument to the
896-HEA 1205 — Concur 22
897-extent necessary to comply with this chapter.
898-(b) If a trustee or other fiduciary of a second trust determines
899-that subsection (a) applies to a prior exercise of the decanting
900-power, the fiduciary shall take corrective action consistent with the
901-fiduciary's duties.
902-Sec. 53. (a) As used in this section, "animal trust" means a trust
903-or an interest in a trust created to provide for the care of one (1) or
904-more animals.
905-(b) As used in this section, "protector" means a person
906-appointed in an animal trust to enforce the trust on behalf of the
907-animal or, if no such person is appointed in the trust, a person
908-appointed by the court for that purpose.
909-(c) The decanting power may be exercised over an animal trust
910-that has a protector to the extent the trust could be decanted under
911-this chapter if each animal that benefits from the trust were an
912-individual, if the protector consents in a signed record to the
913-exercise of the power.
914-(d) A protector for an animal has the rights under this chapter
915-of a qualified beneficiary.
916-(e) If a first trust is an animal trust, in an exercise of the
917-decanting power, the second trust must provide that trust property
918-may be applied only to its intended purpose for the period the first
919-trust benefitted the animal.
920-Sec. 54. A reference in this article to a trust instrument or terms
921-of the trust includes a second-trust instrument and the terms of the
922-second trust.
923-Sec. 55. (a) For purposes of law of this state other than this
924-chapter and subject to subsection (b), a settlor of a first trust is
925-deemed to be the settlor of the second trust with respect to the
926-portion of the principal of the first trust subject to the exercise of
927-the decanting power.
928-(b) In determining settlor intent with respect to a second trust,
929-a settlor of the first trust, a settlor of the second trust, and the
930-authorized fiduciary may be considered.
931-Sec. 56. (a) Except as provided in subsection (c), if exercise of
932-the decanting power was intended to distribute all of the principal
933-of the first trust to one (1) or more second trusts, later discovered
934-property belonging to the first trust and property paid to or
935-acquired by the first trust after the exercise of the power is part of
936-the trust estate of the second trust.
937-(b) Except as provided in subsection (c), if exercise of the
938-decanting power was intended to distribute less than all of the
939-HEA 1205 — Concur 23
940-principal of the first trust to one (1) or more second trusts, later
941-discovered property belonging to the first trust or property paid to
942-or acquired by the first trust after exercise of the power remains
943-part of the trust estate of the first trust.
944-(c) An authorized fiduciary may provide in an exercise of the
945-decanting power or by the terms of a second trust for disposition
946-of later discovered property belonging to the first trust or property
947-paid to or acquired by the first trust after exercise of the power.
948-Sec. 57. A debt, liability, or other obligation enforceable against
949-property of a first trust is enforceable to the same extent against
950-the property when held by the second trust after exercise of the
951-decanting power.
952-Sec. 58. In applying and construing this uniform act,
953-consideration must be given to the need to promote uniformity of
954-the law with respect to its subject matter among states that enact
955-it.
956-Sec. 59. This chapter modifies, limits, or supersedes the
957-Electronic Signatures in Global and National Commerce Act, 15
958-U.S.C. 7001 as amended and in effect on July 1, 2022, but does not
959-modify, limit, or supersede Section 101(c) of that act, 15 U.S.C.
960-7001(c) as amended and in effect on July 1, 2022, or authorize
961-electronic delivery of any of the notices described in Section 103(b)
962-of that act, 15 U.S.C. 7003(b) as amended and in effect on July 1,
963-2022.
964-Sec. 60. If any provision of this chapter or its application to any
965-person or circumstance is held invalid, the invalidity does not affect
966-other provisions or applications of this chapter that can be given
967-effect without the invalid provision or application, and to this end
968-the provisions of this chapter are severable.
969-SECTION 4. IC 34-30-2-132.7 IS ADDED TO THE INDIANA
970-CODE AS A NEW SECTION TO READ AS FOLLOWS
971-[EFFECTIVE JULY 1, 2022]: Sec. 132.7. IC 30-4-10-34 (Concerning
972-a trustee who reasonably relies on a distribution or modification of
973-a trust that transfers property to a second trust and does not act).
974-HEA 1205 — Concur Speaker of the House of Representatives
975-President of the Senate
976-President Pro Tempore
977-Governor of the State of Indiana
978-Date: Time:
979-HEA 1205 — Concur
40+1 SECTION 1. IC 30-4-3-29.3 IS ADDED TO THE INDIANA CODE
41+2 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
42+3 1, 2022]: Sec. 29.3. (a) The power to appoint a successor trustee
43+4 under a governing instrument or under section 33 of this chapter
44+5 includes:
45+6 (1) the power to appoint multiple successor trustees; and
46+7 (2) the power to allocate trustee powers to one (1) or more
47+8 trustees.
48+9 (b) A trustee to whom powers:
49+10 (1) have been exclusively allocated under subsection (a) must
50+11 be a fiduciary only with respect to the powers allocated; and
51+12 (2) have not been allocated under subsection (a) is not liable
52+13 for the actions of a trustee to whom the powers, duties, and
53+14 responsibilities are allocated.
54+15 (c) The rules governing the rights, powers, duties, and liabilities
55+16 of a governing instrument under this chapter apply to a trustee
56+17 appointed under this section unless expressly limited by the terms
57+HB 1205—LS 6169/DI 107 2
58+1 of a governing instrument.
59+2 SECTION 2. IC 30-4-3-36 IS REPEALED [EFFECTIVE JULY 1,
60+3 2022]. Sec. 36. (a) Unless a trust expressly provides otherwise, a
61+4 trustee who has discretion under the terms of a trust (referred to in this
62+5 section as the "first trust") to invade the principal of the trust to make
63+6 distributions to or for the benefit of one (1) or more persons may
64+7 instead exercise the power by appointing all or part of the principal of
65+8 the first trust in favor of a trustee of another trust (referred to in this
66+9 section as the "second trust") for the benefit of one (1) or more persons
67+10 under the same trust instrument or under a different trust instrument as
68+11 long as:
69+12 (1) the beneficiaries of the second trust are the same as the
70+13 beneficiaries of the first trust;
71+14 (2) the second trust does not reduce any income, annuity, or
72+15 unitrust interest in the assets of the first trust; and
73+16 (3) if any contributions to the first trust qualified for a marital or
74+17 charitable deduction for purposes of the federal income, gift, or
75+18 estate taxes, the second trust does not contain any provision that,
76+19 if included in the first trust, would have prevented the first trust
77+20 from qualifying for a deduction or reduced the amount of a
78+21 deduction.
79+22 (b) The exercise of a power to invade principal under subsection (a)
80+23 must be by an instrument that is:
81+24 (1) in writing;
82+25 (2) signed and acknowledged by the trustee; and
83+26 (3) filed with the records of the first trust.
84+27 (c) The exercise of a power to invade principal under subsection (a)
85+28 is considered the exercise of a power of appointment, other than a
86+29 power to appoint to the trustee, the trustee's creditors, the trustee's
87+30 estate, or the creditors of the trustee's estate. The exercise of the power
88+31 does not extend the time at which the permissible period of the rule
89+32 against perpetuities begins and the law that determines the permissible
90+33 period of the rule against perpetuities of the first trust.
91+34 (d) The trustee shall notify in writing all qualified beneficiaries of
92+35 the first trust at least sixty (60) days before the effective date of the
93+36 trustee's exercise of the power to invade principal under subsection (a)
94+37 of the manner in which the trustee intends to exercise the power. A
95+38 copy of the proposed instrument exercising the power satisfies the
96+39 trustee's notice obligation under this subsection. If all qualified
97+40 beneficiaries waive the notice period by signed written instrument
98+41 delivered to the trustee, the trustee's power to invade principal may be
99+42 exercised immediately. The trustee's notice under this subsection does
100+HB 1205—LS 6169/DI 107 3
101+1 not limit the right of any beneficiary to object to the exercise of the
102+2 trustee's power to invade principal, except as otherwise provided by
103+3 this article.
104+4 (e) The exercise of the power to invade principal under subsection
105+5 (a) is not prohibited by a spendthrift clause or by a provision in the
106+6 trust instrument that prohibits amending or revoking the trust.
107+7 (f) This section is not intended to create or imply a duty to exercise
108+8 a power to invade principal. No inference of impropriety may be made
109+9 as a result of a trustee not exercising the power to invade principal
110+10 conferred under subsection (a).
111+11 (g) This section may not be construed to abridge the right of any
112+12 trustee who has a power of invasion to appoint property in further trust
113+13 that arises under the terms of the first trust, under any other provision
114+14 of this article or any other statute, or under common law.
115+15 SECTION 3. IC 30-4-10 IS ADDED TO THE INDIANA CODE AS
116+16 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
117+17 1, 2022]:
118+18 Chapter 10. Uniform Trust Decanting Act
119+19 Sec. 1. (a) This chapter applies to a trust created before, on, or
120+20 after July 1, 2022, that:
121+21 (1) has its principal place of administration in this state,
122+22 including a trust whose principal place of administration has
123+23 been changed to this state; or
124+24 (2) provides by its trust instrument that it is governed by the
125+25 law of this state or is governed by the law of this state for the
126+26 purpose of:
127+27 (A) administration, including administration of a trust
128+28 whose governing law for purposes of administration has
129+29 been changed to the law of this state;
130+30 (B) construction of terms of the trust; or
131+31 (C) determining the meaning or effect of terms of the trust.
132+32 (b) Except as provided in subsections (c) and (d), this chapter
133+33 applies to an express trust that is irrevocable or revocable by the
134+34 settlor only with the consent of the trustee or a person holding an
135+35 adverse interest.
136+36 (c) This chapter does not:
137+37 (1) apply to a trust held solely for charitable purposes;
138+38 (2) limit the power of a trustee, powerholder, or other person
139+39 to distribute or appoint property in further trust;
140+40 (3) limit the power to modify a trust under the trust
141+41 instrument, law of this state other than this chapter, common
142+42 law, a court order, or a nonjudicial settlement agreement; or
143+HB 1205—LS 6169/DI 107 4
144+1 (4) affect the ability of a settlor to provide in a trust
145+2 instrument for the distribution of the trust property or
146+3 appointment in further trust of the trust property or for
147+4 modification of the trust instrument. Such provisions in the
148+5 trust instrument shall control over any applicable provision
149+6 of this chapter.
150+7 (d) Subject to section 45 of this chapter, a trust instrument may
151+8 restrict or prohibit exercise of the decanting power.
152+9 Sec. 2. As used in this chapter, "appointive property" means the
153+10 property or property interest subject to a power of appointment.
154+11 Sec. 3. As used in this chapter, "ascertainable standard" means
155+12 a standard relating to an individual's health, education, support, or
156+13 maintenance as defined by 26 U.S.C. 2041(b)(1)(A) or 26 U.S.C.
157+14 2514(c)(1) and applicable regulations.
158+15 Sec. 4. As used in this chapter, "authorized fiduciary" means:
159+16 (1) a trustee, trust director, or other fiduciary, other than a
160+17 settlor, that has discretion to distribute or direct a trustee to
161+18 distribute part or all of the principal of the first trust to one
162+19 (1) or more current beneficiaries;
163+20 (2) a special fiduciary appointed under section 39 of this
164+21 chapter; or
165+22 (3) a special-needs fiduciary under section 43 of this chapter.
166+23 Sec. 5. As used in this chapter, "beneficiary" means a person
167+24 that:
168+25 (1) has a present or future, vested or contingent, beneficial
169+26 interest in a trust;
170+27 (2) holds a power of appointment over trust property; or
171+28 (3) is an identified charitable organization that may receive
172+29 distributions under the terms of the trust.
173+30 Sec. 6. As used in this chapter, "beneficiary with disability"
174+31 means a beneficiary who is determined, in the exercise of an
175+32 authorized fiduciary's discretion, to have one (1) of the following
176+33 conditions:
177+34 (1) Dementia, memory loss, Parkinson's disease, or other
178+35 progressive condition that, currently or in the future, may
179+36 impair the ability of the beneficiary to provide self care or
180+37 manage the beneficiary's assets.
181+38 (2) A physical or mental condition or infirmity due to age,
182+39 cognitive impairment, addiction, or disease that impairs the
183+40 beneficiary's ability to provide self care or manage the
184+41 beneficiary's assets.
185+42 (3) The susceptibility of the beneficiary, at any age, to
186+HB 1205—LS 6169/DI 107 5
187+1 financial exploitation, as defined in IC 23-19-4.1,
188+2 IC 30-5-5-6.5, or FINRA Rule 2165 approved by the United
189+3 States Securities and Exchange Commission.
190+4 (4) A condition requiring essential medical treatment or
191+5 prescription medication that the beneficiary cannot
192+6 reasonably provide for from the beneficiary's resources
193+7 outside the trust assets.
194+8 (5) A condition related directly or indirectly to the disability
195+9 of a beneficiary described in subdivisions (1) through (4) with
196+10 respect to which the settlor of the trust has expressed the
197+11 settlor's intent.
198+12 Sec. 7. As used in this chapter, "charitable interest" means an
199+13 interest in a trust that:
200+14 (1) is held by an identified charitable organization and makes
201+15 the organization a qualified beneficiary;
202+16 (2) benefits only a charitable organization and, if the interest
203+17 were held by an identified charitable organization, would
204+18 make the organization a qualified beneficiary; or
205+19 (3) is held solely for a charitable purpose and, if the interest
206+20 were held by an identified charitable organization, would
207+21 make the organization a qualified beneficiary.
208+22 Sec. 8. As used in this chapter, "charitable organization" means:
209+23 (1) a person, other than an individual, organized and operated
210+24 exclusively for a charitable purpose; or
211+25 (2) a government or governmental subdivision, agency, or
212+26 instrumentality to the extent it holds funds exclusively for a
213+27 charitable purpose.
214+28 Sec. 9. As used in this chapter, "charitable purpose" means the
215+29 relief of poverty, the advancement of education or religion, the
216+30 promotion of health, a municipal or other governmental purpose,
217+31 or a purpose that is beneficial to the community.
218+32 Sec. 10. As used in this chapter, "court" has the meaning set
219+33 forth in IC 30-4-1-2(6).
220+34 Sec. 11. As used in this chapter, "current beneficiary" means a
221+35 beneficiary who, on the date that the beneficiary's qualification is
222+36 determined, is a distributee or permissible distributee of trust
223+37 income or principal. The term includes the holder of a presently
224+38 exercisable general power of appointment but does not include a
225+39 person that is a beneficiary only because the person holds any
226+40 other power of appointment.
227+41 Sec. 12. As used in this chapter, "decanting power" means the
228+42 power of an authorized fiduciary under this chapter to:
229+HB 1205—LS 6169/DI 107 6
230+1 (1) distribute property of a first trust to one (1) or more
231+2 second trusts; or
232+3 (2) to modify the terms of the first trust.
233+4 Sec. 13. As used in this chapter, "designated representative" has
234+5 the meaning set forth in IC 30-4-1-2(8).
235+6 Sec. 14. As used in this chapter, "expanded distributive
236+7 discretion" means a discretionary power of distribution that is not
237+8 limited to an ascertainable standard or a reasonably definite
238+9 standard.
239+10 Sec. 15. As used in this chapter, "first trust" means a trust over
240+11 which an authorized fiduciary may exercise the decanting power.
241+12 Sec. 16. As used in this chapter, "first-trust instrument" means
242+13 the trust instrument for a first trust.
243+14 Sec. 17. As used in this chapter, "general power of
244+15 appointment" means a power of appointment exercisable in favor
245+16 of:
246+17 (1) a powerholder;
247+18 (2) a powerholder's estate;
248+19 (3) a creditor of the powerholder; or
249+20 (4) a creditor of the powerholder's estate.
250+21 Sec. 18. As used in this chapter, "jurisdiction" means a
251+22 geographic area, including a state or country.
252+23 Sec. 19. As used in this chapter, "person" means:
253+24 (1) an individual;
254+25 (2) a corporation;
255+26 (3) a business trust;
256+27 (4) an estate;
257+28 (5) a trust;
258+29 (6) a partnership;
259+30 (7) a limited liability company;
260+31 (8) an association;
261+32 (9) a joint venture;
262+33 (10) a government;
263+34 (11) a governmental subdivision;
264+35 (12) an agency or instrumentality;
265+36 (13) a public corporation; or
266+37 (14) any other legal or commercial entity.
267+38 Sec. 20. As used in this chapter, "power of appointment" means
268+39 a power that enables a powerholder acting in a nonfiduciary
269+40 capacity to designate a recipient of an ownership interest in or
270+41 another power of appointment over the appointive property. The
271+42 term does not include a power of attorney.
272+HB 1205—LS 6169/DI 107 7
273+1 Sec. 21. As used in this chapter, "powerholder" means a person
274+2 in which a donor creates a power of appointment.
275+3 Sec. 22. (a) As used in this chapter, "presently exercisable power
276+4 of appointment" means a power of appointment exercisable by the
277+5 powerholder at the relevant time.
278+6 (b) The term includes a power of appointment exercisable only
279+7 after the occurrence of a specified event, the satisfaction of an
280+8 ascertainable standard, or the passage of a specified time.
281+9 (c) The term does not include a power exercisable only at the
282+10 powerholder's death.
283+11 Sec. 23. As used in this chapter, "qualified beneficiary" has the
284+12 meaning set forth in IC 30-4-1-2(19).
285+13 Sec. 24. As used in this chapter, "reasonably definite standard"
286+14 means a clearly measurable standard under which a holder of a
287+15 power of distribution is legally accountable within the meaning of
288+16 26 U.S.C. 674(b)(5)(A) and applicable regulations.
289+17 Sec. 25. As used in this chapter, "record" means information
290+18 that is inscribed on a tangible medium or that is stored in an
291+19 electronic or other medium and is retrievable in perceivable form.
292+20 Sec. 26. As used in this chapter, "second trust" means:
293+21 (1) a first trust after modification under this chapter; or
294+22 (2) a trust to which a distribution of property from a first
295+23 trust is or may be made under this chapter.
296+24 Sec. 27. As used in this chapter, "second-trust instrument"
297+25 means the trust instrument for a second trust.
298+26 Sec. 28. (a) As used in this chapter, except as provided in section
299+27 55 of this chapter, "settlor" has the meaning set forth in
300+28 IC 30-4-1-2(21).
301+29 (b) If more than one (1) person creates or contributes property
302+30 to a trust, each person is a settlor of the portion of the trust
303+31 property attributable to the person's contribution except to the
304+32 extent another person has power to revoke or withdraw that
305+33 portion.
306+34 Sec. 29. As used in this chapter, "sign" means with present
307+35 intent to authenticate or adopt a record to:
308+36 (1) execute or adopt a tangible symbol; or
309+37 (2) attach to or logically associate with the record of an
310+38 electronic symbol, sound, or process.
311+39 Sec. 30. As used in this chapter, "state" means:
312+40 (1) a state of the United States;
313+41 (2) the District of Columbia;
314+42 (3) Puerto Rico;
315+HB 1205—LS 6169/DI 107 8
316+1 (4) the United States Virgin Islands; or
317+2 (5) a territory or insular possession subject to the jurisdiction
318+3 of the United States.
319+4 Sec. 31. As used in this chapter, "terms of the trust" has the
320+5 meaning set forth in IC 30-4-1-2(22).
321+6 Sec. 32. As used in this chapter, "trust instrument" has the
322+7 meaning set forth in IC 30-4-1-2(25). The term includes a written
323+8 document executed by the settlor to create a trust or by a person
324+9 to create a second trust that contains some or all of the terms of the
325+10 trust, including any amendments.
326+11 Sec. 33. (a) Except as provided in this chapter, an authorized
327+12 fiduciary may exercise the decanting power without the consent of
328+13 any person and without court approval.
329+14 (b) An authorized fiduciary shall act in accordance with its
330+15 fiduciary duties, including the duty to act in accordance with the
331+16 purposes of the first trust in exercising the decanting power.
332+17 (c) This chapter does not create or imply a duty to exercise the
333+18 decanting power or to inform beneficiaries about the applicability
334+19 of this chapter.
335+20 (d) Except as provided in a first-trust instrument, the terms of
336+21 the first trust are deemed to include the decanting power.
337+22 Sec. 34. A trustee or person that reasonably relies on:
338+23 (1) the validity of a distribution of the property of a trust to
339+24 another trust; or
340+25 (2) a modification of a trust under this chapter, law of this
341+26 state other than this article, or the law of another jurisdiction;
342+27 is not liable in an action for failure to act as a result of the reliance.
343+28 Sec. 35. (a) Except as provided in subsection (c), an authorized
344+29 fiduciary shall give notice in a record of the intended exercise of
345+30 the decanting power not later than sixty (60) days before the
346+31 exercise of the decanting power to:
347+32 (1) each settlor of the first trust, if living or then in existence;
348+33 (2) each qualified beneficiary of the first trust, including the
349+34 designated representative, if any, or other representative
350+35 under IC 30-4-6-10.5 of a qualified beneficiary who:
351+36 (A) is a minor or an incapacitated person;
352+37 (B) is unborn;
353+38 (C) is unknown; or
354+39 (D) cannot be located after a reasonably diligent search;
355+40 (3) each holder of a presently exercisable power of
356+41 appointment in the first trust;
357+42 (4) each person that currently has the right to remove or
358+HB 1205—LS 6169/DI 107 9
359+1 replace the authorized fiduciary;
360+2 (5) each fiduciary of the first trust;
361+3 (6) each fiduciary of the second trust; and
362+4 (7) the attorney general, if section 44(c) of this chapter
363+5 applies.
364+6 (b) A notice period under subsection (a) begins on the day that
365+7 the notice is given and ends fifty-nine (59) days later.
366+8 (c) An authorized fiduciary is not required to give notice under
367+9 subsection (a) to a person that:
368+10 (1) is not known to the fiduciary;
369+11 (2) is known to the fiduciary but cannot be located by the
370+12 fiduciary after a reasonably diligent search; or
371+13 (3) has no representative under IC 30-4-6-10.5.
372+14 (d) The decanting power may be exercised before expiration of
373+15 the notice period under subsection (a) if all persons entitled to
374+16 receive notice waive the notice period in a signed record.
375+17 Sec. 36. A notice under section 35 of this chapter must:
376+18 (1) specify the manner in which the authorized fiduciary
377+19 intends to exercise the decanting power;
378+20 (2) specify the proposed effective date for the exercise of the
379+21 decanting power;
380+22 (3) include a copy of the first-trust instrument; and
381+23 (4) include a copy of the second-trust instrument.
382+24 Sec. 37. (a) The receipt of notice, waiver of the notice period, or
383+25 expiration of the notice period does not affect the right of a person
384+26 to file a petition under section 39 of this chapter asserting that:
385+27 (1) an exercise of the decanting power:
386+28 (A) is ineffective because it did not comply with this
387+29 chapter;
388+30 (B) was an abuse of discretion; or
389+31 (C) was a breach of a fiduciary duty; or
390+32 (2) section 52 of this chapter applies to the exercise of the
391+33 decanting power.
392+34 (b) An exercise of the decanting power is not ineffective because
393+35 of the failure to give notice to one (1) or more persons under
394+36 section 35 of this chapter if the authorized fiduciary acted with
395+37 reasonable care to comply with section 35 of this chapter.
396+38 Sec. 38. (a) Notice to a person with authority to represent and
397+39 bind another person under a first-trust instrument or this article
398+40 has the same effect as notice given directly to the person
399+41 represented.
400+42 (b) Consent of or waiver by a person with authority to represent
401+HB 1205—LS 6169/DI 107 10
402+1 and bind another person under a first-trust instrument or this
403+2 article is binding on the person represented unless the person
404+3 represented objects to the representation before the consent or
405+4 waiver otherwise would become effective.
406+5 (c) A person with authority to represent and bind another
407+6 person under a first-trust instrument or this article may file a
408+7 petition under section 39 of this chapter on behalf of the person
409+8 represented.
410+9 (d) A settlor may not represent or bind a beneficiary under this
411+10 chapter.
412+11 Sec. 39. (a) Upon a petition by a person entitled to notice under
413+12 section 35 of this chapter or with respect to a charitable interest by
414+13 the attorney general or other person that has standing to enforce
415+14 the charitable interest, the court may:
416+15 (1) provide instructions to the authorized fiduciary about
417+16 whether a proposed exercise of the decanting power is
418+17 permitted under this chapter and consistent with the fiduciary
419+18 duties of the authorized fiduciary;
420+19 (2) appoint a special fiduciary and authorize the special
421+20 fiduciary to determine whether the exercise of the decanting
422+21 power is proper under this chapter and to exercise the
423+22 decanting power;
424+23 (3) approve an exercise of the decanting power;
425+24 (4) determine that a proposed or attempted exercise of the
426+25 decanting power is ineffective because:
427+26 (A) after applying section 52 of this chapter, the proposed
428+27 or attempted exercise does not comply with this chapter;
429+28 or
430+29 (B) the proposed or attempted exercise is an abuse of the
431+30 fiduciary's discretion or a breach of a fiduciary duty;
432+31 (5) determine the extent section 52 of this chapter applies to
433+32 a prior exercise of the decanting power;
434+33 (6) provide instructions to the trustee regarding the
435+34 application of section 52 of this chapter to a prior exercise of
436+35 the decanting power; or
437+36 (7) order relief to carry out the purposes of this chapter.
438+37 (b) Upon a petition by an authorized fiduciary, the court may
439+38 approve:
440+39 (1) an increase in the fiduciary's compensation under section
441+40 46 of this chapter; or
442+41 (2) a modification under section 48 of this chapter of a
443+42 provision granting a person the right to remove or replace the
444+HB 1205—LS 6169/DI 107 11
445+1 fiduciary.
446+2 Sec. 40. An exercise of the decanting power must be made in a
447+3 record signed by an authorized fiduciary. The signed record must:
448+4 (1) directly or indirectly reference the notice required by
449+5 section 35 of this chapter;
450+6 (2) identify the first trust and the second trust;
451+7 (3) identify and state the property of the first trust being
452+8 distributed to each second trust; and
453+9 (4) identify the property that remains in the first trust.
454+10 Sec. 41. (a) As used in this section, "noncontingent right" means
455+11 a right that is not subject to the:
456+12 (1) exercise of discretion; or
457+13 (2) occurrence of a specified event that is not certain to occur.
458+14 The term does not include a right held by a beneficiary if any
459+15 person has discretion to distribute property subject to the right of
460+16 any person other than the beneficiary or the beneficiary's estate.
461+17 (b) As used in this section, "presumptive remainder
462+18 beneficiary" means a qualified beneficiary other than a current
463+19 beneficiary.
464+20 (c) As used in this section, "successor beneficiary" means a
465+21 beneficiary that is not a qualified beneficiary on the date the
466+22 beneficiary's qualification is determined. The term does not include
467+23 a person that is a beneficiary only because the person holds a
468+24 nongeneral power of appointment.
469+25 (d) As used in this section, "vested interest" means a:
470+26 (1) right to a mandatory distribution that is a noncontingent
471+27 right as of the date of the exercise of the decanting power;
472+28 (2) current and noncontingent right, annually or more
473+29 frequently, to a mandatory distribution of income, a specified
474+30 dollar amount, or a percentage of value of some or all of the
475+31 trust property;
476+32 (3) current and noncontingent right, annually or more
477+33 frequently, to withdraw income, a specified dollar amount, or
478+34 a percentage of value of some or all of the trust property;
479+35 (4) presently exercisable general power of appointment; or
480+36 (5) right to receive an ascertainable part of the trust property
481+37 on the trust's termination that is not subject to the exercise of
482+38 discretion or to the occurrence of a specified event that is not
483+39 certain to occur.
484+40 (e) Subject to subsection (f) and section 44 of this chapter, an
485+41 authorized fiduciary that has expanded distributive discretion over
486+42 the principal of a first trust for the benefit of one (1) or more
487+HB 1205—LS 6169/DI 107 12
488+1 current beneficiaries may exercise the decanting power over the
489+2 principal of the first trust.
490+3 (f) Subject to section 43 of this chapter, an exercise of the
491+4 decanting power under this section must not:
492+5 (1) except as provided in subsection (g), include as a current
493+6 beneficiary a person that is not a current beneficiary of the
494+7 first trust;
495+8 (2) except as provided in subsection (g), include as a
496+9 presumptive remainder beneficiary or successor beneficiary
497+10 a person that is not a current beneficiary, presumptive
498+11 remainder beneficiary, or successor beneficiary of the first
499+12 trust; or
500+13 (3) reduce or eliminate a vested interest.
501+14 (g) Subject to subsection (f)(3) and section 44 of this chapter, in
502+15 an exercise of the decanting power under this subsection, a second
503+16 trust may be a trust created or administered under the law of any
504+17 jurisdiction and may:
505+18 (1) retain a power of appointment granted in the first trust;
506+19 (2) omit a power of appointment granted in the first trust,
507+20 other than a presently exercisable general power of
508+21 appointment;
509+22 (3) create or modify a power of appointment if the
510+23 powerholder is a current beneficiary of the first trust and the
511+24 authorized fiduciary has expanded distributive discretion to
512+25 distribute principal to the beneficiary; and
513+26 (4) create or modify a power of appointment if the
514+27 powerholder is a presumptive remainder beneficiary or
515+28 successor beneficiary of the first trust, but the exercise of the
516+29 power may take effect only after the powerholder becomes, or
517+30 would have become a current beneficiary.
518+31 (h) A power of appointment described in subsections (g)(1)
519+32 through (g)(4) may be general or nongeneral. The class of
520+33 permissible appointees in favor of which the power may be
521+34 exercised may be broader than or different from the beneficiaries
522+35 of the first trust.
523+36 (i) If an authorized fiduciary has expanded distributive
524+37 discretion over part of the principal of a first trust, the fiduciary
525+38 may exercise the decanting power under this section over the
526+39 principal that the authorized fiduciary has expanded distributive
527+40 discretion.
528+41 Sec. 42. (a) As used in this section, "limited distributive
529+42 discretion" means a discretionary power of distribution that is
530+HB 1205—LS 6169/DI 107 13
531+1 limited to an ascertainable standard or a reasonably definite
532+2 standard.
533+3 (b) An authorized fiduciary that has limited distributive
534+4 discretion over the principal of the first trust for the benefit of one
535+5 (1) or more current beneficiaries may exercise the decanting power
536+6 over the principal of the first trust.
537+7 (c) Under this section and subject to section 44 of this chapter,
538+8 a second trust may be created or administered under the law of
539+9 any jurisdiction. A second trust must grant each beneficiary of the
540+10 first trust beneficial interests that are substantially similar to the
541+11 beneficial interests of the beneficiary in the first trust.
542+12 (d) A power to make a distribution under a second trust for the
543+13 benefit of a beneficiary who is an individual is substantially similar
544+14 to a power under the first trust to make a distribution directly to
545+15 the beneficiary. A distribution is for the benefit of a beneficiary if:
546+16 (1) the distribution is applied for the benefit of the
547+17 beneficiary;
548+18 (2) the beneficiary is under a legal disability or the trustee
549+19 reasonably believes the beneficiary is incapacitated and the
550+20 distribution is made as permitted under this article; or
551+21 (3) the distribution is made as permitted under the terms of
552+22 the first-trust instrument and the second-trust instrument for
553+23 the benefit of the beneficiary.
554+24 (e) If an authorized fiduciary has limited distributive discretion
555+25 of the principal of a first trust, the fiduciary may only exercise the
556+26 decanting power under this section over the principal that the
557+27 authorized fiduciary has limited distributive discretion.
558+28 Sec. 43. (a) This section applies to any trust that has a
559+29 beneficiary with a disability, without limitation, whenever a
560+30 special-needs fiduciary for the trust determines that the beneficiary
561+31 with a disability may qualify for governmental benefits based on a
562+32 disability, whether the beneficiary currently receives those benefits
563+33 or has been adjudicated to be an incapacitated person under
564+34 IC 29-3.
565+35 (b) As used in this section, "governmental benefits" means
566+36 financial aid or services from a state, federal, or other public
567+37 agency.
568+38 (c) As used in this section, "special-needs fiduciary" means:
569+39 (1) a trustee or other fiduciary, other than a settlor, that has
570+40 discretion to distribute part or all of the principal of a first
571+41 trust to one or more current beneficiaries;
572+42 (2) if no trustee or fiduciary has discretion under subdivision
573+HB 1205—LS 6169/DI 107 14
574+1 (1), a trustee or other fiduciary, other than a settlor, that has
575+2 discretion to distribute part or all of the income of the first
576+3 trust to one (1) or more current beneficiaries; or
577+4 (3) if no trustee or fiduciary has discretion under subdivisions
578+5 (1) and (2), a trustee or other fiduciary, other than a settlor,
579+6 that is required to distribute part or all of the income or
580+7 principal of the first trust to one (1) or more current
581+8 beneficiaries;
582+9 with respect to a trust that has a beneficiary with a disability.
583+10 (d) As used in this section, "special-needs trust" means a trust
584+11 that the trustee reasonably believes would not be considered a
585+12 resource for purposes of determining whether a beneficiary with
586+13 a disability is eligible for governmental benefits.
587+14 (e) A special-needs fiduciary may exercise the decanting power
588+15 under section 41 of this chapter over the principal of a first trust
589+16 as if the fiduciary had authority to distribute principal to a
590+17 beneficiary with a disability subject to expanded distributive
591+18 discretion if:
592+19 (1) a second trust is a special-needs trust or other trust that
593+20 benefits the beneficiary with a disability; and
594+21 (2) the special-needs fiduciary determines that an exercise of
595+22 the decanting power will further the purposes of the first
596+23 trust.
597+24 (f) In an exercise of the decanting power under this section, the
598+25 following rules apply:
599+26 (1) Except as provided in section 41(f)(2) of this chapter, the
600+27 interest in the second trust of a beneficiary with a disability
601+28 may:
602+29 (A) be a pooled trust as defined by Medicaid law for the
603+30 benefit of the beneficiary with a disability under 42 U.S.C.
604+31 1396p(d)(4)(C), as amended and in effect on July 1, 2022;
605+32 or
606+33 (B) contain payback provisions complying with
607+34 reimbursement requirements of Medicaid law under 42
608+35 U.S.C. 1396p(d)(4)(A), as amended and in effect on July 1,
609+36 2022.
610+37 (2) Section 41(f)(3) of this chapter does not apply to the
611+38 interests of the beneficiary with a disability.
612+39 (3) Except as affected by a change to the interests of the
613+40 beneficiary with a disability, the second trust, or if there are
614+41 two (2) or more second trusts, the second trusts in the
615+42 aggregate, must grant each other beneficiary of the first trust
616+HB 1205—LS 6169/DI 107 15
617+1 beneficial interests in the second trusts which are
618+2 substantially similar to the beneficiary's beneficial interests in
619+3 the first trust.
620+4 Sec. 44. (a) As used in this section, "determinable charitable
621+5 interest" means a charitable interest that is a right to a mandatory
622+6 distribution currently, periodically, on the occurrence of a
623+7 specified event, or after the passage of a specified time and that is
624+8 unconditional or will be held solely for charitable purposes.
625+9 (b) As used in this section, "unconditional" means not subject
626+10 to the occurrence of a specified event that is not certain to occur,
627+11 other than a requirement in a trust instrument that a charitable
628+12 organization be in existence or qualify under a particular provision
629+13 of the United States Internal Revenue Code of 1986, as amended
630+14 and in effect on July 1, 2022, on the date of the distribution, if the
631+15 charitable organization meets the requirement on the date of
632+16 determination.
633+17 (c) If a first trust contains a determinable charitable interest,
634+18 the attorney general has the rights of a qualified beneficiary and
635+19 may represent and bind the charitable interest.
636+20 (d) If a first trust contains a charitable interest, the second trust
637+21 must not:
638+22 (1) diminish the charitable interest;
639+23 (2) diminish the interest of an identified charitable
640+24 organization that holds the charitable interest;
641+25 (3) alter any charitable purpose stated in the first-trust
642+26 instrument; or
643+27 (4) alter any condition or restriction related to the charitable
644+28 interest.
645+29 (e) If there are two (2) or more second trusts, the second trusts
646+30 shall be treated as one (1) trust for purposes of determining
647+31 whether the exercise of the decanting power diminishes the
648+32 charitable interest or diminishes the interest of an identified
649+33 charitable organization for purposes of subsection (d).
650+34 (f) If a first trust contains a determinable charitable interest, the
651+35 second trust that includes a charitable interest pursuant to
652+36 subsection (c) must be administered under the law of this state
653+37 unless:
654+38 (1) the attorney general, after receiving notice under section
655+39 35 of this chapter, fails to object in a signed record delivered
656+40 to the authorized fiduciary within the notice period;
657+41 (2) the attorney general consents in a signed record to the
658+42 second trust being administered under the law of another
659+HB 1205—LS 6169/DI 107 16
660+1 jurisdiction; or
661+2 (3) the court approves the exercise of the decanting power.
662+3 (g) This chapter does not limit the powers and duties of the
663+4 attorney general under the laws of this state other than this
664+5 chapter.
665+6 Sec. 45. (a) An authorized fiduciary may not exercise the
666+7 decanting power to the extent the first-trust instrument expressly
667+8 prohibits exercise of:
668+9 (1) the decanting power; or
669+10 (2) a power granted by state law to the fiduciary to distribute
670+11 part or all of the principal of the trust to another trust or to
671+12 modify the trust.
672+13 (b) Exercise of the decanting power is subject to a restriction in
673+14 the first-trust instrument that expressly applies to exercise of:
674+15 (1) the decanting power; or
675+16 (2) a power granted by state law to a fiduciary to distribute
676+17 the principal of the trust to another trust or to modify the
677+18 trust.
678+19 (c) A general prohibition of the amendment or revocation of:
679+20 (1) a first trust;
680+21 (2) a spendthrift clause; or
681+22 (3) a clause;
682+23 restraining the voluntary or involuntary transfer of a beneficiary's
683+24 interest does not preclude exercise of the decanting power.
684+25 (d) Subject to subsections (a) and (b), an authorized fiduciary
685+26 may exercise the decanting power under this chapter even if the
686+27 first-trust instrument permits the authorized fiduciary or another
687+28 person to modify the first-trust instrument or to distribute the
688+29 principal of the first trust to another trust.
689+30 (e) If a first-trust instrument contains an express prohibition
690+31 described in subsection (a) or an express restriction described in
691+32 subsection (b), the provision must be included in the second-trust
692+33 instrument.
693+34 Sec. 46. (a) If a first-trust instrument specifies an authorized
694+35 fiduciary's compensation, the fiduciary may not exercise the
695+36 decanting power to increase the fiduciary's compensation above
696+37 the specified compensation unless:
697+38 (1) all qualified beneficiaries of the second trust consent to the
698+39 increase in a signed record; or
699+40 (2) the increase is approved by the court.
700+41 (b) If a first-trust instrument does not specify an authorized
701+42 fiduciary's compensation, the fiduciary may not exercise the
702+HB 1205—LS 6169/DI 107 17
703+1 decanting power to increase the fiduciary's compensation above
704+2 the compensation permitted by this article unless:
705+3 (1) all qualified beneficiaries of the second trust consent to the
706+4 increase in a signed record; or
707+5 (2) the increase is approved by the court.
708+6 (c) A change in an authorized fiduciary's compensation that is
709+7 incidental to other changes made by the exercise of the decanting
710+8 power is not an increase in the fiduciary's compensation for
711+9 purposes of subsections (a) and (b).
712+10 Sec. 47. (a) Except as otherwise provided in this section, a
713+11 second-trust instrument must not relieve an authorized fiduciary
714+12 from liability for breach of trust to a greater extent than the
715+13 first-trust instrument.
716+14 (b) A second trust instrument may provide for indemnification
717+15 of an authorized fiduciary of the first trust or another person
718+16 acting in a fiduciary capacity under the first trust for any liability
719+17 or claim that would have been payable from the first trust if the
720+18 decanting power had not been exercised.
721+19 (c) A second-trust instrument must not reduce fiduciary liability
722+20 in the aggregate.
723+21 (d) Subject to subsection (c), a second-trust instrument may
724+22 divide and reallocate fiduciary powers among fiduciaries, including
725+23 one (1) or more trustees, distribution advisors, investment
726+24 advisors, trust protectors, or other persons, and relieve a fiduciary
727+25 from liability for an act or failure to act of another fiduciary as
728+26 permitted by the laws of this state other than this chapter.
729+27 Sec. 48. An authorized fiduciary must not exercise the decanting
730+28 power to modify a provision in a first-trust instrument granting
731+29 another person power to remove or replace the fiduciary unless:
732+30 (1) the person holding the power consents to the modification
733+31 in a signed record and the modification applies only to the
734+32 person;
735+33 (2) the person holding the power and the qualified
736+34 beneficiaries of the second trust consent to the modification in
737+35 a signed record and the modification grants a substantially
738+36 similar power to another person; or
739+37 (3) the court approves the modification and the modification
740+38 grants a substantially similar power to another person.
741+39 Sec. 49. (a) As used in this section, "grantor trust" means a trust
742+40 as to which a settlor of a first trust is considered the owner under
743+41 26 U.S.C. 671 through 677, as amended and in effect on July 1,
744+42 2022, or 26 U.S.C. 679, as amended and in effect on July 1, 2022.
745+HB 1205—LS 6169/DI 107 18
746+1 (b) As used in this section, "Internal Revenue Code" means the
747+2 United States Internal Revenue Code of 1986, as amended and in
748+3 effect on July 1, 2022.
749+4 (c) As used in this section "nongrantor trust" means a trust that
750+5 is not a grantor trust.
751+6 (d) As used in this section, "qualified benefits property" means
752+7 property subject to the minimum distribution requirements of 26
753+8 U.S.C. 401(a)(9), as amended and in effect on July 1, 2022, and any
754+9 applicable regulations, or to any similar requirements that refer to
755+10 26 U.S.C. 401(a)(9) or the regulations.
756+11 (e) An exercise of the decanting power is subject to the following
757+12 limitations:
758+13 (1) If a first trust contains property that qualified, or would
759+14 have qualified but for provisions of this chapter other than
760+15 this section, for a marital deduction for purposes of the gift or
761+16 estate tax under the Internal Revenue Code or a state gift,
762+17 estate, or inheritance tax, the second-trust instrument must
763+18 not include or omit any term that, if included in or omitted
764+19 from the trust instrument for the trust to which the property
765+20 was transferred, would have prevented the transfer from
766+21 qualifying for the deduction, or would have reduced the
767+22 amount of the deduction, under the same provisions of the
768+23 Internal Revenue Code or state law under which the transfer
769+24 qualified.
770+25 (2) If the first trust contains property that qualified, or would
771+26 have qualified but for provisions of this chapter other than
772+27 this section, for a charitable deduction for purposes of the
773+28 income, gift, or estate tax under the Internal Revenue Code or
774+29 a state income, gift, estate, or inheritance tax, the second-trust
775+30 instrument must not include or omit any term that, if included
776+31 in or omitted from the trust instrument for the trust to which
777+32 the property was transferred, would have prevented the
778+33 transfer from qualifying for the deduction, or would have
779+34 reduced the amount of the deduction, under the same
780+35 provisions of the Internal Revenue Code or state law under
781+36 which the transfer qualified.
782+37 (3) If the first trust contains property that qualified, or would
783+38 have qualified but for provisions of this chapter other than
784+39 this section, for the exclusion from the gift tax described in 26
785+40 U.S.C. 2503(b), as amended and in effect on July 1, 2022, the
786+41 second-trust instrument must not include or omit a term that,
787+42 if included in or omitted from the trust instrument for the
788+HB 1205—LS 6169/DI 107 19
789+1 trust to which the property was transferred, would have
790+2 prevented the transfer from qualifying under 26 U.S.C.
791+3 2503(b), as amended and in effect on July 1, 2022. If the first
792+4 trust contains property that qualified, or would have qualified
793+5 but for provisions of this chapter other than this section, for
794+6 the exclusion from the gift tax described in 26 U.S.C. 2503(b),
795+7 as amended and in effect on July 1, 2022, by application of 26
796+8 U.S.C. 2503(c), as amended and in effect on July 1, 2022, the
797+9 second-trust instrument must not include or omit a term that,
798+10 if included in or omitted from the trust instrument for the
799+11 trust to which the property was transferred, would have
800+12 prevented the transfer from qualifying under 26 U.S.C.
801+13 2503(c), as amended and in effect on July 1, 2022.
802+14 (4) If the property of the first trust includes shares of stock in
803+15 an S corporation, as defined in 26 U.S.C. 1361, as amended
804+16 and in effect on July 1, 2022, and the first trust is, or but for
805+17 provisions of this chapter other than this section would be, a
806+18 permitted shareholder under any provision of 26 U.S.C. 1361,
807+19 as amended and in effect on July 1, 2022, an authorized
808+20 fiduciary may exercise the power with respect to part or all of
809+21 the S corporation stock only if any second trust receiving the
810+22 stock is a permitted shareholder under 26 U.S.C. 1361(c)(2),
811+23 as amended and in effect on July 1, 2022. If the property of
812+24 the first trust includes shares of stock in an S corporation and
813+25 the first trust is or, but for provisions of this chapter other
814+26 than this section, would be a qualified subchapter S trust
815+27 within the meaning of 26 U.S.C. 1361(d), as amended and in
816+28 effect on July 1, 2022, the second-trust instrument must not
817+29 include or omit a term that prevents the second trust from
818+30 qualifying as a qualified subchapter S trust.
819+31 (5) If the first trust contains property that qualified, or would
820+32 have qualified but for provisions of this chapter other than
821+33 this section, for a zero (0) inclusion ratio for purposes of the
822+34 generation skipping transfer tax under 26 U.S.C. 2642(c), as
823+35 amended and in effect on July 1, 2022, the second-trust
824+36 instrument must not include or omit a term that, if included
825+37 in or omitted from the first-trust instrument, would have
826+38 prevented the transfer to the first trust from qualifying for a
827+39 zero (0) inclusion ratio under 26 U.S.C. 2642(c), as amended
828+40 and in effect on July 1, 2022.
829+41 (6) If the first trust is directly or indirectly the beneficiary of
830+42 qualified benefits property, the second-trust instrument may
831+HB 1205—LS 6169/DI 107 20
832+1 not include or omit any term that, if included in or omitted
833+2 from the first-trust instrument, would have increased the
834+3 minimum distributions required with respect to the qualified
835+4 benefits property under 26 U.S.C. 401(a)(9), as amended and
836+5 in effect on July 1, 2022, and any applicable regulations, or
837+6 any similar requirements that refer to 26 U.S.C. 401(a)(9), as
838+7 amended and in effect on July 1, 2022, or the regulations. If
839+8 an attempted exercise of the decanting power violates this
840+9 subdivision, the trustee is deemed to have held the qualified
841+10 benefits property and any reinvested distributions of the
842+11 property as a separate share from the date of the exercise of
843+12 the power and section 52 of this chapter applies to the
844+13 separate share.
845+14 (7) If the first trust qualifies as a grantor trust because of the
846+15 application of 26 U.S.C. 672(f)(2)(A), as amended and in effect
847+16 on July 1, 2022, the second trust may not include or omit a
848+17 term that, if included in or omitted from the first-trust
849+18 instrument, would have prevented the first trust from
850+19 qualifying under 26 U.S.C. 672(f)(2)(A), as amended and in
851+20 effect on July 1, 2022.
852+21 (8) As used in this subdivision, "tax benefit" means a federal
853+22 or state tax deduction, exemption, exclusion, or other benefit
854+23 not otherwise listed in this section, except for a benefit arising
855+24 from being a grantor trust. Subject to subdivision (9), a
856+25 second-trust instrument may not include or omit a term that,
857+26 if included in or omitted from the first-trust instrument,
858+27 would have prevented qualification for a tax benefit if:
859+28 (A) the first-trust instrument expressly indicates an intent
860+29 to qualify for the benefit or the first-trust instrument is
861+30 clearly designed to enable the first trust to qualify for the
862+31 benefit; and
863+32 (B) the transfer of property held by the first trust or the
864+33 first trust qualified or, but for provisions of this chapter
865+34 other than this section, would have qualified for the tax
866+35 benefit.
867+36 (9) Subject to subdivision (4):
868+37 (A) except as provided in subdivision (7), the second trust
869+38 may be a nongrantor trust, even if the first trust is a
870+39 grantor trust; and
871+40 (B) except as otherwise provided in subdivision (10), the
872+41 second trust may be a grantor trust, even if the first trust
873+42 is a nongrantor trust.
874+HB 1205—LS 6169/DI 107 21
875+1 (10) An authorized fiduciary may not exercise the decanting
876+2 power if a settlor objects in a signed record delivered to the
877+3 fiduciary within the notice period and:
878+4 (A) the first trust and a second trust are both grantor
879+5 trusts, in whole or in part, the first trust grants the settlor
880+6 or another person the power to cause the first trust to
881+7 cease to be a grantor trust, and the second trust does not
882+8 grant an equivalent power to the settlor or other person;
883+9 or
884+10 (B) the first trust is a nongrantor trust and a second trust
885+11 is a grantor trust, in whole or in part, with respect to the
886+12 settlor, unless:
887+13 (i) the settlor has the power at all times to cause the
888+14 second trust to cease to be a grantor trust; or
889+15 (ii) the first-trust instrument contains a provision
890+16 granting the settlor or another person a power that
891+17 would cause the first trust to cease to be a grantor trust
892+18 and the second-trust instrument contains the same
893+19 provision.
894+20 Sec. 50. (a) Subject to subsection (b), a second trust may have a
895+21 duration that is the same as or different from the duration of the
896+22 first trust.
897+23 (b) To the extent that property of a second trust is attributable
898+24 to property of the first trust, the property of the second trust is
899+25 subject to any rules governing maximum perpetuity, accumulation,
900+26 or suspension of the power of alienation that apply to property of
901+27 the first trust.
902+28 Sec. 51. An authorized fiduciary may exercise the decanting
903+29 power whether under the first trust's discretionary distribution
904+30 standard the fiduciary would have made or could have been
905+31 compelled to make a discretionary distribution of principal at the
906+32 time of the exercise.
907+33 Sec. 52. (a) If exercise of the decanting power would be effective
908+34 under this chapter except that the second-trust instrument in part
909+35 does not comply with this chapter, the exercise of the power is
910+36 effective and the following rules apply with respect to the principal
911+37 of the second trust attributable to the exercise of the power:
912+38 (1) A provision in the second-trust instrument that is not
913+39 permitted under this chapter is void to the extent necessary to
914+40 comply with this chapter.
915+41 (2) A provision required by this chapter to be in the
916+42 second-trust instrument that is not contained in the
917+HB 1205—LS 6169/DI 107 22
918+1 instrument is deemed to be included in the instrument to the
919+2 extent necessary to comply with this chapter.
920+3 (b) If a trustee or other fiduciary of a second trust determines
921+4 that subsection (a) applies to a prior exercise of the decanting
922+5 power, the fiduciary shall take corrective action consistent with the
923+6 fiduciary's duties.
924+7 Sec. 53. (a) As used in this section, "animal trust" means a trust
925+8 or an interest in a trust created to provide for the care of one (1) or
926+9 more animals.
927+10 (b) As used in this section, "protector" means a person
928+11 appointed in an animal trust to enforce the trust on behalf of the
929+12 animal or, if no such person is appointed in the trust, a person
930+13 appointed by the court for that purpose.
931+14 (c) The decanting power may be exercised over an animal trust
932+15 that has a protector to the extent the trust could be decanted under
933+16 this chapter if each animal that benefits from the trust were an
934+17 individual, if the protector consents in a signed record to the
935+18 exercise of the power.
936+19 (d) A protector for an animal has the rights under this chapter
937+20 of a qualified beneficiary.
938+21 (e) If a first trust is an animal trust, in an exercise of the
939+22 decanting power, the second trust must provide that trust property
940+23 may be applied only to its intended purpose for the period the first
941+24 trust benefitted the animal.
942+25 Sec. 54. A reference in this article to a trust instrument or terms
943+26 of the trust includes a second-trust instrument and the terms of the
944+27 second trust.
945+28 Sec. 55. (a) For purposes of law of this state other than this
946+29 chapter and subject to subsection (b), a settlor of a first trust is
947+30 deemed to be the settlor of the second trust with respect to the
948+31 portion of the principal of the first trust subject to the exercise of
949+32 the decanting power.
950+33 (b) In determining settlor intent with respect to a second trust,
951+34 a settlor of the first trust, a settlor of the second trust, and the
952+35 authorized fiduciary may be considered.
953+36 Sec. 56. (a) Except as provided in subsection (c), if exercise of
954+37 the decanting power was intended to distribute all of the principal
955+38 of the first trust to one (1) or more second trusts, later discovered
956+39 property belonging to the first trust and property paid to or
957+40 acquired by the first trust after the exercise of the power is part of
958+41 the trust estate of the second trust.
959+42 (b) Except as provided in subsection (c), if exercise of the
960+HB 1205—LS 6169/DI 107 23
961+1 decanting power was intended to distribute less than all of the
962+2 principal of the first trust to one (1) or more second trusts, later
963+3 discovered property belonging to the first trust or property paid to
964+4 or acquired by the first trust after exercise of the power remains
965+5 part of the trust estate of the first trust.
966+6 (c) An authorized fiduciary may provide in an exercise of the
967+7 decanting power or by the terms of a second trust for disposition
968+8 of later discovered property belonging to the first trust or property
969+9 paid to or acquired by the first trust after exercise of the power.
970+10 Sec. 57. A debt, liability, or other obligation enforceable against
971+11 property of a first trust is enforceable to the same extent against
972+12 the property when held by the second trust after exercise of the
973+13 decanting power.
974+14 Sec. 58. In applying and construing this uniform act,
975+15 consideration must be given to the need to promote uniformity of
976+16 the law with respect to its subject matter among states that enact
977+17 it.
978+18 Sec. 59. This chapter modifies, limits, or supersedes the
979+19 Electronic Signatures in Global and National Commerce Act, 15
980+20 U.S.C. 7001 as amended and in effect on July 1, 2022, but does not
981+21 modify, limit, or supersede Section 101(c) of that act, 15 U.S.C.
982+22 7001(c) as amended and in effect on July 1, 2022, or authorize
983+23 electronic delivery of any of the notices described in Section 103(b)
984+24 of that act, 15 U.S.C. 7003(b) as amended and in effect on July 1,
985+25 2022.
986+26 Sec. 60. If any provision of this chapter or its application to any
987+27 person or circumstance is held invalid, the invalidity does not affect
988+28 other provisions or applications of this chapter that can be given
989+29 effect without the invalid provision or application, and to this end
990+30 the provisions of this chapter are severable.
991+31 SECTION 4. IC 34-30-2-132.7 IS ADDED TO THE INDIANA
992+32 CODE AS A NEW SECTION TO READ AS FOLLOWS
993+33 [EFFECTIVE JULY 1, 2022]: Sec. 132.7. IC 30-4-10-34 (Concerning
994+34 a trustee who reasonably relies on a distribution or modification of
995+35 a trust that transfers property to a second trust and does not act).
996+HB 1205—LS 6169/DI 107 24
997+COMMITTEE REPORT
998+Mr. Speaker: Your Committee on Judiciary, to which was referred
999+House Bill 1205, has had the same under consideration and begs leave
1000+to report the same back to the House with the recommendation that said
1001+bill do pass.
1002+(Reference is to HB 1205 as introduced.)
1003+TORR
1004+Committee Vote: Yeas 10, Nays 0
1005+HB 1205—LS 6169/DI 107