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HOUSE DOCKET, NO. 2618 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 1648
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Jay D. Livingstone
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to the Massachusetts Uniform Trust Decanting Act.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Jay D. Livingstone8th Suffolk1/19/2023 1 of 30
HOUSE DOCKET, NO. 2618 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 1648
By Representative Livingstone of Boston, a petition (accompanied by bill, House, No. 1648) of
Jay D. Livingstone relative to the distribution of property and the modification of the terms of
trusts. The Judiciary.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act relative to the Massachusetts Uniform Trust Decanting Act.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Article 1 of Chapter 203E of the General Laws is hereby amended by
2striking out Section 103, as so appearing, and inserting in place thereof the following section:-
3 Section 103. Definitions.
4 In this chapter the following words shall, unless the context clearly requires otherwise,
5have the following meanings:-
6 “Action”, with respect to an act of a trustee, includes a failure to act.
7 “Ascertainable standard”, a standard relating to an individual’s health, education, support
8or maintenance.
9 “Beneficiary”, a person who has a present or future beneficial interest in a trust, vested or
10contingent. 2 of 30
11 “Charitable trust”, a trust, or portion of a trust, created for a charitable purpose described
12in subsection (a) of section 405.
13 “Environmental law”, a federal, state or local law, rule, regulation or ordinance relating
14to protection of the environment.
15 “Interests of the beneficiaries”, the beneficial interests provided in the terms of the trust.
16 “Jurisdiction”, a geographic area, including a state or country.
17 “Person”, an individual, corporation, business trust, estate, trust, partnership, limited
18liability company, association, joint venture, government, governmental subdivision, agency or
19instrumentality, public corporation or any other legal or commercial entity.
20 “Property”, anything that may be the subject of ownership, whether real, personal, legal,
21equitable or any interest therein.
22 “Qualified beneficiary”, a beneficiary who, on the date the beneficiary’s qualification is
23determined:
24 (i) is a distributee or permissible distributee of trust income or principal;
25 (ii) would be a distributee or permissible distributee of trust income or principal if the
26interests of the distributees described in clause (i) terminated on that date without causing the
27trust to terminate; or
28 (iii) would be a distributee or permissible distributee of trust income or principal if the
29trust terminated on that date. 3 of 30
30 “Revocable”, a trust that is revocable by the settlor without the consent of the trustee or a
31person holding an adverse interest.
32 “Settlor”, a person, including a testator, who creates or contributes property to a trust. If
33more than one person creates or contributes property to a trust, each person is a settlor of the
34portion of the trust property attributable to that person’s contribution except to the extent another
35person has the power to revoke or withdraw that portion.
36 “Spendthrift provision”, a term of a trust which restrains transfer of a beneficiary’s
37interest.
38 “State”, a state of the United States, the District of Columbia, Puerto Rico, the United
39States Virgin Islands or any territory or insular possession subject to the jurisdiction of the
40United States, including an Indian tribe or band recognized by federal law or formally
41acknowledged by a state.
42 “Terms of a trust”:
43 (i) except as otherwise provided in clause (ii), the manifestation of the settlor’s intent
44regarding a trust’s provisions as expressed in the trust instrument or established by other
45evidence that would be admissible in a judicial proceeding; or
46 (ii) the trust’s provisions as established, determined, or amended by a trustee or other
47person in accordance with applicable law, a court order, or a non-judicial settlement agreement
48under section 111.
49 “Trust instrument”, an instrument that contains terms of the trust, including any
50amendments thereto. 4 of 30
51 “Trustee”, an original, additional or successor trustee or a co-trustee.
52 SECTION 2. Said Article 1 of Chapter 203E of the General Laws is hereby further
53amended by striking out section 110, as so appearing, and inserting in place thereof the following
54section:-
55 Section 110. Others treated as qualified beneficiaries
56 (a) Whenever notice to qualified beneficiaries of a trust is required under this chapter, the
57trustee shall also give notice to any other beneficiary who has sent the trustee a request for
58notice.
59 (b) A charitable organization expressly designated to receive distributions under the
60terms of a charitable trust shall have the rights of a qualified beneficiary under this chapter if, on
61the date the charitable organization’s qualification is being determined, the charitable
62organization:
63 (1) is a distributee or permissible distributee of trust income or principal;
64 (2) would be a distributee or permissible distributee of trust income or principal upon the
65termination of the interests of other distributees or permissible distributees then receiving or
66eligible to receive distributions; or
67 (3) would be a distributee or permissible distributee of trust income or principal if the
68trust terminated on that date.
69 (c) A person appointed to enforce a trust created for the care of an animal or other non-
70charitable purpose, as provided in sections 408 and 409, shall have the rights of a qualified
71beneficiary under this chapter. 5 of 30
72 SECTION 3. Said Chapter 203E of the General Laws is hereby further amended by
73inserting after Article 8 the following article:-
74 ARTICLE 9
75 MASSACHUSETTS UNIFORM TRUST DECANTING ACT
76 Section 901. Short title
77 This article shall be known and may be cited as the Massachusetts Uniform Trust
78Decanting Act.
79 Section 902. Definitions
80 In this article the following words shall, unless the context clearly requires otherwise,
81have the following meanings:-
82 “Appointive property”, the property or property interest subject to a power of
83appointment.
84 “Authorized fiduciary”:
85 (i) a trustee or other fiduciary, other than a settlor, that has discretion to distribute or
86direct a trustee to distribute part or all of the principal of the first trust to one or more current
87beneficiaries;
88 (ii) a special fiduciary appointed under section 909; or
89 (iii) a special-needs fiduciary under section 913. 6 of 30
90 “Beneficiary”, for purposes of this article, includes an identified charitable organization
91that will or may receive distributions under the terms of the trust.
92 “Charitable interest”, an interest in a trust which:
93 (i) is held by an identified charitable organization and makes the organization a qualified
94beneficiary;
95 (ii) benefits only charitable organizations and, if the interest were held by an identified
96charitable organization, would make the organization a qualified beneficiary; or
97 (iii) is held solely for charitable purposes described in subsection (a) of section 405 and,
98if the interest were held by an identified charitable organization, would make the organization a
99qualified beneficiary.
100 “Current beneficiary”:
101 (i) a beneficiary who, on the date the beneficiary’s qualification is determined, is a
102distributee or permissible distributee of trust income or principal; or
103 (ii) a holder of a presently exercisable general power of appointment.
104 “Decanting power”, the power of an authorized fiduciary under this article to distribute
105property of a first trust to one or more second trusts or to modify the terms of the first trust.
106 “Expanded distributive discretion”, a discretionary power of distribution that is not
107limited to an ascertainable standard or a reasonably definite standard.
108 “First trust”, a trust over which an authorized fiduciary may exercise the decanting
109power. 7 of 30
110 “First-trust instrument”, the trust instrument for a first trust.
111 “General power of appointment”, a power of appointment exercisable in favor of a
112powerholder, the powerholder’s estate, a creditor of the powerholder, or a creditor of the
113powerholder’s estate.
114 “Power of appointment”, a power (other than a power of attorney) that enables a
115powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in
116or another power of appointment over the appointive property.
117 “Powerholder”, a person in which a donor creates a power of appointment.
118 “Presently exercisable power of appointment”, a power of appointment exercisable by the
119powerholder at the relevant time. The term:
120 (i) includes a power of appointment exercisable only after the occurrence of a specified
121event, the satisfaction of an ascertainable standard, or the passage of a specified time only after
122(a) the occurrence of the specified event, (b) the satisfaction of the ascertainable standard, or (c)
123the passage of the specified time; and
124 (ii) does not include a power exercisable only at the powerholder’s death.
125 “Reasonably definite standard” means a clearly measurable standard under which a
126holder of a power of distribution is legally accountable within the meaning of subsection
127(b)(5)(A) of section 674 of the Internal Revenue Code and any applicable regulations.
128 “Record” means information that is inscribed on a tangible medium or that is stored in an
129electronic or other medium and is retrievable in perceivable form. 8 of 30
130 “Second trust”:
131 (i) a first trust after modification under this article; or
132 (ii) a trust to which a distribution of property from a first trust is or may be made under
133this article.
134 “Second-trust instrument”, the trust instrument for a second trust.
135 “Sign” means, with present intent to authenticate or adopt a record:
136 (i) to execute or adopt a tangible symbol; or
137 (ii) to attach to or logically associate with the record an electronic symbol, sound, or
138process.
139 Section 903. Scope
140 (a) Except as otherwise provided in subsections (b) and (c), this article applies to an
141express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or
142a person holding an adverse interest.
143 (b) This article does not apply to a trust held solely for charitable purposes described in
144subsection (a) of section 405.
145 (c) Subject to section 915, a trust instrument may restrict or prohibit exercise of the
146decanting power.
147 (d) This article does not limit the power of a trustee, powerholder, or other person to
148distribute or appoint property in further trust or to modify a trust under the trust instrument, law 9 of 30
149of the commonwealth other than this article, common law, a court order, or a non-judicial
150settlement agreement.
151 (e) This article does not affect the ability of a settlor to provide in a trust instrument for
152the distribution of the trust property or appointment in further trust of the trust property or for
153modification of the trust instrument.
154 Section 904. Fiduciary duty
155 (a) In exercising the decanting power, an authorized fiduciary shall act in accordance
156with its fiduciary duties, including the duty to act in accordance with the purposes of the first
157trust.
158 (b) This article does not create or imply a duty to exercise the decanting power or to
159inform beneficiaries about the applicability of this article.
160 (c) Except as otherwise provided in a first-trust instrument, for purposes of this article
161and sections 801 and 802(a), the terms of the first trust are deemed to include the decanting
162power.
163 Section 905. Application; governing law
164 This article applies to a trust created before, on, or after the effective date of this article
165which has its principal place of administration in the commonwealth.
166 Section 906. Reasonable reliance
167 A trustee or other person that reasonably relies on the validity of a distribution of part or
168all of the property of a trust to another trust, or a modification of a trust, under this article, law of 10 of 30
169the commonwealth other than this article, or the law of another jurisdiction is not liable to any
170person for any action or failure to act as a result of the reliance.
171 Section 907. Notice; exercise of decanting power
172 (a) In this section, a notice period begins on the day notice is given under subsection (c)
173and ends 59 days after the day notice is given.
174 (b) Except as otherwise provided in this article, an authorized fiduciary may exercise the
175decanting power without the consent of any person and without court approval.
176 (c) Except as otherwise provided in subsection (f), an authorized fiduciary shall give
177notice in a record of the intended exercise of the decanting power not later than 60 days before
178the exercise to:
179 (1) each settlor of the first trust, if living or then in existence;
180 (2) each qualified beneficiary of the first trust;
181 (3) each holder of a presently exercisable power of appointment over any part or all of the
182first trust;
183 (4) each person that currently has the right to remove or replace the authorized fiduciary;
184 (5) each other fiduciary of the first trust;
185 (6) each fiduciary of the second trust; and
186 (7) the attorney general, if subsection (b) of section 914 applies. 11 of 30
187 (d) An authorized fiduciary is not required to give notice under subsection (c) to a person
188that is not known to the fiduciary or is known to the fiduciary but cannot be located by the
189fiduciary after reasonable diligence.
190 (e) A notice under subsection (c) must:
191 (1) specify the manner in which the authorized fiduciary intends to exercise the decanting
192power;
193 (2) specify the proposed effective date for exercise of the power;
194 (3) include a copy of the first-trust instrument; and
195 (4) include a copy of all second-trust instruments.
196 (f) The decanting power may be exercised before expiration of the notice period under
197subsection (a) if all persons entitled to receive notice waive the period in a signed record.
198 (g) The receipt of notice, waiver of the notice period, or expiration of the notice period
199does not affect the right of a person to file an application under section 909 asserting that:
200 (1) an attempted exercise of the decanting power is ineffective because it did not comply
201with this article or was an abuse of discretion or breach of fiduciary duty; or
202 (2) section 922 applies to the exercise of the decanting power.
203 (h) An exercise of the decanting power is not ineffective because of the failure to give
204notice to one or more persons under subsection (c) if the authorized fiduciary acted with
205reasonable care to comply with subsection (c). 12 of 30
206 Section 908. [Reserved]
207 Section 909. Court involvement
208 (a) On application of an authorized fiduciary, a person entitled to notice under subsection
209(c) of section 907, a beneficiary, or with respect to a charitable interest the attorney general or
210other person that has standing to enforce the charitable interest, the court may:
211 (1) provide instructions to the authorized fiduciary regarding whether a proposed exercise
212of the decanting power is permitted under this article and consistent with the fiduciary duties of
213the authorized fiduciary;
214 (2) appoint a special fiduciary and authorize the special fiduciary to determine whether
215the decanting power should be exercised under this article and to exercise the decanting power;
216 (3) approve an exercise of the decanting power;
217 (4) determine that a proposed or attempted exercise of the decanting power is ineffective
218because:
219 (A) after applying section 922, the proposed or attempted exercise does not or did not
220comply with this article; or
221 (B) the proposed or attempted exercise would be or was an abuse of the fiduciary’s
222discretion or a breach of fiduciary duty;
223 (5) determine the extent to which section 922 applies to a prior exercise of the decanting
224power; 13 of 30
225 (6) provide instructions to the trustee regarding the application of section 922 to a prior
226exercise of the decanting power; or
227 (7) order other relief to carry out the purposes of this article.
228 (b) On application of an authorized fiduciary, the court may approve:
229 (1) an increase in the fiduciary’s compensation under section 916;
230 (2) a modification of fiduciary liability under section 917; or
231 (3) a modification under section 918 of a provision granting a person the right to remove
232or replace the fiduciary.
233 Section 910. Formalities
234 An exercise of the decanting power must be made in a record signed by an authorized
235fiduciary. The signed record must, directly or by reference to the notice required by section 917,
236identify the first trust and the second trust or trusts and state the property of the first trust being
237distributed to each second trust and the property, if any, that remains in the first trust.
238 Section 911. Decanting power under expanded distributive discretion
239 (a) In this section:
240 (1) “Noncontingent right” means a right that is not subject to the exercise of discretion or
241the occurrence of a specified event that is not certain to occur. The term does not include a right
242held by a beneficiary if any person has discretion to distribute property subject to the right to any
243person other than the beneficiary or the beneficiary’s estate. 14 of 30
244 (2) “Presumptive remainder beneficiary” means a qualified beneficiary other than a
245current beneficiary.
246 (3) “Successor beneficiary” means a beneficiary who is not a qualified beneficiary on the
247date the beneficiary’s qualification is determined.
248 (4) “Vested interest” means:
249 (A) a right to a mandatory distribution that is a noncontingent right as of the date of the
250exercise of the decanting power;
251 (B) a current and noncontingent right, annually or more frequently, to a mandatory
252distribution of income, a specified dollar amount, or a percentage of value of some or all of the
253trust property;
254 (C) a current and noncontingent right, annually or more frequently, to withdraw income,
255a specified dollar amount, or a percentage of value of some or all of the trust property;
256 (D) a presently exercisable general power of appointment; or
257 (E) a right to receive an ascertainable part of the trust property on the trust’s termination
258which is not subject to the exercise of discretion or to the occurrence of a specified event that is
259not certain to occur.
260 (b) Subject to subsection (c) and section 914, an authorized fiduciary who has expanded
261distributive discretion over the principal of a first trust for the benefit of one or more current
262beneficiaries may exercise the decanting power over the principal of the first trust. 15 of 30
263 (c) Subject to section 913, in an exercise of the decanting power under this section, a
264second trust may not:
265 (1) include as a current beneficiary a person who is not a current beneficiary of the first
266trust or include as a current beneficiary with respect to trust principal a person who is a current
267beneficiary of the first trust only with respect to trust income, except as otherwise provided in
268subsection (d);
269 (2) include as a presumptive remainder beneficiary or successor beneficiary a person who
270is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the
271first trust, except as otherwise provided in subsection (d); or
272 (3) reduce or eliminate a vested interest.
273 (d) Subject to subsection (c)(3) and section 914, in an exercise of the decanting power
274under this section, a second trust may be a trust created or administered under the law of any
275jurisdiction and may:
276 (1) retain a power of appointment granted in the first trust;
277 (2) omit a power of appointment granted in the first trust, other than a presently
278exercisable general power of appointment;
279 (3) create or modify a power of appointment if the powerholder is a current beneficiary of
280the first trust and the authorized fiduciary has expanded distributive discretion to distribute
281principal to the beneficiary; and
282 (4) create or modify a power of appointment if the powerholder is a presumptive
283remainder beneficiary or successor beneficiary of the first trust, but the exercise of the power 16 of 30
284may take effect only after the powerholder becomes, or would have become if then living, a
285current beneficiary.
286 (e) A power of appointment described in subsection (d)(1) through (4) may be general or
287nongeneral. The class of permissible appointees in favor of which the power may be exercised
288may be broader than or different from the beneficiaries of the first trust.
289 (f) If an authorized fiduciary has expanded distributive discretion over part but not all of
290the principal of a first trust, the fiduciary may exercise the decanting power under this section
291over that part of the principal over which the authorized fiduciary has expanded distributive
292discretion.
293 Section 912. Decanting power under limited distributive discretion
294 (a) In this section, “limited distributive discretion” means a discretionary power of
295distribution that is limited to an ascertainable standard or a reasonably definite standard.
296 (b) An authorized fiduciary who has limited distributive discretion over the principal of
297the first trust for the benefit of one or more current beneficiaries may exercise the decanting
298power over the principal of the first trust.
299 (c) Under this section and subject to section 914, a second trust may be created or
300administered under the law of any jurisdiction. Under this section, the second trusts, in the
301aggregate, must grant each beneficiary of the first trust beneficial interests which are
302substantially similar to the beneficial interests of the beneficiary in the first trust. 17 of 30
303 (d) A power to make a distribution under a second trust for the benefit of a beneficiary
304who is an individual is substantially similar to a power under the first trust to make a distribution
305directly to the beneficiary. A distribution is for the benefit of a beneficiary if:
306 (1) the distribution is applied for the benefit of the beneficiary;
307 (2) the beneficiary is under a legal disability or the trustee reasonably believes the
308beneficiary is incapacitated, and the distribution is made as permitted under this chapter; or
309 (3) the distribution is made as permitted under the terms of the first-trust instrument and
310the second-trust instrument for the benefit of the beneficiary.
311 (e) If an authorized fiduciary has limited distributive discretion over part but not all of the
312principal of a first trust, the fiduciary may exercise the decanting power under this section over
313that part of the principal over which the authorized fiduciary has limited distributive discretion.
314 Section 913. Trust for beneficiary with disability
315 (a) In this section:
316 (1) “Beneficiary with a disability” means a beneficiary of a first trust who the special-
317needs fiduciary believes may qualify for governmental benefits based on disability, whether or
318not the beneficiary currently receives those benefits or is an individual who has been adjudicated
319incompetent.
320 (2) “Governmental benefits” means financial aid or services from a state, federal, or other
321public agency. 18 of 30
322 (3) “Special-needs fiduciary” means, with respect to a trust that has a beneficiary with a
323disability:
324 (A) a trustee or other fiduciary, other than a settlor, who has discretion to distribute part
325or all of the principal of a first trust to one or more current beneficiaries;
326 (B) if no trustee or fiduciary has discretion under subsection (A), a trustee or other
327fiduciary, other than a settlor, who has discretion to distribute part or all of the income of the first
328trust to one or more current beneficiaries; or
329 (C) if no trustee or fiduciary has discretion under subsections (A) and (B), a trustee or
330other fiduciary, other than a settlor, who is required to distribute part or all of the income or
331principal of the first trust to one or more current beneficiaries.
332 (4) “Special-needs trust” means a trust the trustee believes would not be considered a
333resource for purposes of determining whether a beneficiary with a disability is eligible for any
334governmental benefit.
335 (b) A special-needs fiduciary may exercise the decanting power under section 911 over
336the principal of a first trust as if the fiduciary had authority to distribute principal to a beneficiary
337with a disability subject to expanded distributive discretion if:
338 (1) a second trust is a special-needs trust that benefits the beneficiary with a disability;
339and
340 (2) the special-needs fiduciary determines that exercise of the decanting power will
341further the purposes of the first trust.
342 (c) In an exercise of the decanting power under this section, the following rules apply: 19 of 30
343 (1) Notwithstanding subsection (c)(2) of section 911, the interest in the second trust of a
344beneficiary with a disability may:
345 (A) be a pooled trust as defined by Medicaid law for the benefit of the beneficiary with a
346disability under 42 U.S.C. section 1396p(d)(4)(C); or
347 (B) contain payback provisions complying with reimbursement requirements of Medicaid
348law under 42 U.S.C. section 1396p(d)(4)(A).
349 (2) Subsection (c)(3) of section 911 does not apply to the interests of the beneficiary with
350a disability.
351 (3) Except as affected by any change to the interests of the beneficiary with a disability,
352the second trust, or if there are two or more second trusts, the second trusts in the aggregate,
353must grant each other beneficiary of the first trust beneficial interests in the second trusts which
354are substantially similar to the beneficiary’s beneficial interests in the first trust.
355 Section 914. Protection of charitable interest
356 (a) In this section:
357 (1) “Determinable charitable interest” means a charitable interest that is a right to a
358mandatory distribution currently, periodically, on the occurrence of a specified event, or after the
359passage of a specified time and which is unconditional or will be held solely for charitable
360purposes described in subsection (a) of section 405.
361 (2) “Unconditional” means not subject to the occurrence of a specified event that is not
362certain to occur, other than a requirement in a trust instrument that a charitable organization be in
363existence or qualify under a particular provision of the Internal Revenue Code of the United 20 of 30
364States on the date of the distribution, if the charitable organization meets the requirement on the
365date of determination.
366 (b) If a first trust contains a determinable charitable interest, the attorney general has the
367rights of a qualified beneficiary and may represent and bind the charitable interest.
368 (c) This article does not limit the powers and duties of the attorney general under law of
369the commonwealth other than this article.
370 Section 915. Trust limitation on decanting
371 (a) An authorized fiduciary may not exercise the decanting power to the extent the first-
372trust instrument expressly prohibits exercise of:
373 (1) the decanting power; or
374 (2) a power granted by state law to the fiduciary to distribute part or all of the principal of
375the trust to another trust or to modify the trust.
376 (b) Exercise of the decanting power is subject to any restriction in the first-trust
377instrument that expressly applies to exercise of:
378 (1) the decanting power; or
379 (2) a power granted by state law to a fiduciary to distribute part or all of the principal of
380the trust to another trust or to modify the trust.
381 (c) A general prohibition of the amendment or revocation of a first trust, a spendthrift
382clause, or a clause restraining the voluntary or involuntary transfer of a beneficiary’s interest
383does not preclude exercise of the decanting power. 21 of 30
384 (d) Subject to subsections (a) and (b), an authorized fiduciary may exercise the decanting
385power under this article even if the first-trust instrument permits the authorized fiduciary or
386another person to modify the first-trust instrument or to distribute part or all of the principal of
387the first trust to another trust.
388 (e) If a first-trust instrument contains an express prohibition described in subsection (a) or
389an express restriction described in subsection (b), the provision must be included in the second-
390trust instrument.
391 Section 916. Change in compensation
392 (a) If a first-trust instrument specifies an authorized fiduciary’s compensation, the
393fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above
394the specified compensation unless:
395 (1) all qualified beneficiaries of the second trust consent to the increase in a signed
396record; or
397 (2) the increase is approved by the court.
398 (b) If a first-trust instrument does not specify an authorized fiduciary’s compensation, the
399fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above
400the compensation permitted by this chapter unless:
401 (1) all qualified beneficiaries of the second trust consent to the increase in a signed
402record; or
403 (2) the increase is approved by the court. 22 of 30
404 (c) A change in an authorized fiduciary’s compensation which is incidental to other
405changes made by the exercise of the decanting power is not an increase in the fiduciary’s
406compensation for purposes of subsections (a) and (b).
407 Section 917. Relief from liability and indemnification
408 (a) Except as otherwise provided in this section or approved by the court, a second-trust
409instrument may not relieve an authorized fiduciary from liability for breach of trust to a greater
410extent than the first-trust instrument.
411 (b) A second-trust instrument may provide for indemnification of an authorized fiduciary
412of the first trust or another person acting in a fiduciary capacity under the first trust for any
413liability or claim that would have been payable from the first trust if the decanting power had not
414been exercised.
415 (c) Except as approved by the court, a second-trust instrument may not reduce fiduciary
416liability in the aggregate.
417 (d) Subject to subsection (c), a second-trust instrument may divide and reallocate
418fiduciary powers among fiduciaries, including one or more trustees, distribution advisors,
419investment advisors, trust protectors, or other persons, and relieve a fiduciary from liability for
420an act or failure to act of another fiduciary as permitted by law of the commonwealth other than
421this article.
422 Section 918. Removal or replacement of authorized fiduciary
423 An authorized fiduciary may not exercise the decanting power to modify a provision in a
424first-trust instrument granting another person power to remove or replace the fiduciary unless: 23 of 30
425 (a) the person holding the power consents to the modification in a signed record and the
426modification applies only to the person;
427 (b) the person holding the power and the qualified beneficiaries of the second trust
428consent to the modification in a signed record and the modification grants a substantially similar
429power to another person; or
430 (c) the court approves the modification and the modification grants a substantially similar
431power to another person.
432 Section 919. Tax-related limitations
433 (a) In this section:
434 (1) “Grantor trust” means a trust as to which a settlor of a first trust is considered the
435owner under sections 671 through 677 or section 679 of the Internal Revenue Code.
436 (2) “Internal Revenue Code” means the Internal Revenue Code of the United States as
437amended and as then in effect, and references to a specific provision of the Internal Revenue
438Code are intended to include a successor provision of the same general effect.
439 (3) “Nongrantor trust” means a trust that is not a grantor trust.
440 (4) “Qualified benefits property” means property subject to the minimum distribution
441requirements of section 401(a)(9) of the Internal Revenue Code, and any applicable regulations,
442or to any similar requirements that refer thereto.
443 (b) An exercise of the decanting power is subject to the following limitations: 24 of 30
444 (1) If a first trust contains property that qualified, or would have qualified but for
445provisions of this article other than this section, for a marital deduction for purposes of the gift or
446estate tax under the Internal Revenue Code or a state gift, estate, or inheritance tax, the second-
447trust instrument must not include or omit any term that, if included in or omitted from the trust
448instrument for the trust to which the property was transferred, would have prevented the transfer
449from qualifying for the deduction, or would have reduced the amount of the deduction, under the
450same provisions of the Internal Revenue Code or state law under which the transfer qualified.
451 (2) If the first trust contains property that qualified, or would have qualified but for
452provisions of this article other than this section, for a charitable deduction for purposes of the
453income, gift, or estate tax under the Internal Revenue Code or a state income, gift, estate, or
454inheritance tax, the second-trust instrument must not include or omit any term that, if included in
455or omitted from the trust instrument for the trust to which the property was transferred, would
456have prevented the transfer from qualifying for the deduction, or would have reduced the amount
457of the deduction, under the same provisions of the Internal Revenue Code or state law under
458which the transfer qualified.
459 (3) If the first trust contains property that qualified, or would have qualified but for
460provisions of this article other than this section, for the exclusion from the gift tax described in
461section 2503(b) of the Internal Revenue Code, the second-trust instrument must not include or
462omit a term that, if included in or omitted from the trust instrument for the trust to which the
463property was transferred, would have prevented the transfer from qualifying under such section.
464If the first trust contains property that qualified, or would have qualified but for provisions of this
465article other than this section, for the exclusion from the gift tax described in section 2503(b) of
466the Internal Revenue Code by application of section 2503(c) of the Internal Revenue Code, the 25 of 30
467second-trust instrument must not include or omit a term that, if included or omitted from the trust
468instrument for the trust to which the property was transferred, would have prevented the transfer
469from qualifying under section 2503(c) of the Internal Revenue Code.
470 (4) If the property of the first trust includes shares of stock in an S corporation, as defined
471in section 1361 of the Internal Revenue Code and the first trust is, or but for provisions of this
472article other than this section would be, a permitted shareholder under any provision of section
4731361 of the Internal Revenue Code, an authorized fiduciary may exercise the power with respect
474to part or all of the S corporation stock only if any second trust receiving the stock is a permitted
475shareholder under section 1361(c)(2) of the Internal Revenue Code. If the property of the first
476trust includes shares of stock in an S corporation and the first trust is, or but for provisions of this
477article other than this section would be, a qualified subchapter S trust within the meaning of
478section 1361(d) of the Internal Revenue Code, the second-trust instrument must not include or
479omit a term that prevents the second trust from qualifying as a qualified subchapter S trust.
480 (5) If the first trust contains property that qualified, or would have qualified but for
481provisions of this article other than this section, for a zero inclusion ratio for purposes of the
482generation-skipping transfer tax under section 2642(c) of the Internal Revenue Code, the second-
483trust instrument must not include or omit a term that, if included in or omitted from the first-trust
484instrument, would have prevented the transfer to the first trust from qualifying for a zero
485inclusion ratio under such section.
486 (6) If the first trust is directly or indirectly the beneficiary of qualified benefits property,
487the second-trust instrument may not include or omit any term that, if included in or omitted from
488the first-trust instrument, would have increased the minimum distributions required with respect 26 of 30
489to the qualified benefits property under section 401(a)(9) of the Internal Revenue Code and any
490applicable regulations, or any similar requirements that refer thereto. If an attempted exercise of
491the decanting power violates the preceding sentence, the trustee is deemed to have held the
492qualified benefits property and any reinvested distributions of the property as a separate share
493from the date of the exercise of the power and section 922 applies to the separate share.
494 (7) If the first trust qualifies as a grantor trust because of the application of section
495672(f)(2)(A) of the Internal Revenue Code, the second trust may not include or omit a term that,
496if included in or omitted from the first-trust instrument, would have prevented the first trust from
497qualifying under such section.
498 (8) In this subsection, “tax benefit” means a federal or state tax deduction, exemption,
499exclusion, or other benefit not otherwise listed in this section, except for a benefit arising from
500being a grantor trust. Subject to subsection (9), a second-trust instrument may not include or omit
501a term that, if included in or omitted from the first-trust instrument, would have prevented
502qualification for a tax benefit if:
503 (A) the first-trust instrument expressly indicates an intent to qualify for the benefit or the
504first-trust instrument clearly is designed to enable the first trust to qualify for the benefit; and
505 (B) the transfer of property held by the first trust or the first trust qualified, or but for
506provisions of this article other than this section, would have qualified for the tax benefit.
507 (9) Subject to subsection (4):
508 (A) except as otherwise provided in subsection (7), the second trust may be a nongrantor
509trust, even if the first trust is a grantor trust; and 27 of 30
510 (B) the second trust may be a grantor trust, even if the first trust is a nongrantor trust.
511 Section 920. Duration of second trust
512 (a) Subject to subsection (b), a second trust may have a duration that is the same as or
513different from the duration of the first trust.
514 (b) To the extent that property of a second trust is attributable to property of the first trust,
515the property of the second trust is subject to any rules governing maximum perpetuity,
516accumulation, or suspension of the power of alienation which apply to property of the first trust.
517 Section 921. Need to distribute not required
518 An authorized fiduciary may exercise the decanting power whether or not under the first
519trust’s discretionary distribution standard the fiduciary would have made or could have been
520compelled to make a discretionary distribution of principal at the time of the exercise.
521 Section 922. Saving provision
522 (a) If exercise of the decanting power would be effective under this article except that the
523second-trust instrument in part does not comply with this article, the exercise of the power is
524effective and the following rules apply with respect to the principal of the second trust
525attributable to the exercise of the power:
526 (1) A provision in the second-trust instrument which is not permitted under this article is
527void to the extent necessary to comply with this article. 28 of 30
528 (2) A provision required by this article to be in the second-trust instrument which is not
529contained in the instrument is deemed to be included in the instrument to the extent necessary to
530comply with this article.
531 (b) If a trustee or other fiduciary of a second trust determines that subsection (a) applies
532to a prior exercise of the decanting power, the fiduciary shall take corrective action consistent
533with the fiduciary’s duties.
534 Section 923. Trust for care of an animal
535 (a) In this section:
536 (1) “Animal trust” means a trust or an interest in a trust described in section 408.
537 (2) “Protector” means the person who may enforce the intended use of the principal or
538income of an animal trust under subsection (f) of section 408.
539 (b) The decanting power may be exercised over an animal trust that has a protector to the
540extent the trust could be decanted under this article if each animal that benefits from the trust
541were an individual, if the protector consents in a signed record to the exercise of the power.
542 (c) Notwithstanding any other provision of this article, if a first trust is an animal trust, in
543an exercise of the decanting power, the second trust must provide that trust property may be
544applied only to its intended purpose for the period the first trust benefitted the animal.
545 Section 924. Terms of second trust
546 A reference in this chapter to a trust instrument or terms of the trust includes a second-
547trust instrument and the terms of the second trust. 29 of 30
548 Section 925. Settlor
549 (a) For purposes of law of the commonwealth other than this article and subject to
550subsection (b), a settlor of a first trust is deemed to be the settlor of the second trust with respect
551to the portion of the principal of the first trust subject to the exercise of the decanting power.
552 (b) In determining settlor intent with respect to a second trust, the intent of a settlor of the
553first trust, a settlor of the second trust, and the authorized fiduciary may be considered.
554 Section 926. Later-discovered and later-acquired property
555 (a) Except as otherwise provided in subsection (c), if exercise of the decanting power was
556intended to distribute all the principal of the first trust to one or more second trusts, later-
557discovered property belonging to the first trust and property paid to or acquired by the first trust
558after the exercise of the power is part of the trust estate of the second trust or trusts.
559 (b) Except as otherwise provided in subsection (c), if exercise of the decanting power was
560intended to distribute less than all the principal of the first trust to one or more second trusts,
561later-discovered property belonging to the first trust or property paid to or acquired by the first
562trust after exercise of the power remains part of the trust estate of the first trust.
563 (c) An authorized fiduciary may provide in an exercise of the decanting power or by the
564terms of a second trust for disposition of later-discovered property belonging to the first trust or
565property paid to or acquired by the first trust after exercise of the power.
566 Section 927. Obligations 30 of 30
567 A debt, liability, or other obligation enforceable against property of a first trust is
568enforceable to the same extent against the property when held by the second trust after exercise
569of the decanting power.
570 SECTION 4. This act shall take effect on January 1, 2024.