Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1856 Compare Versions

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2	2	HOUSE DOCKET, NO. 2382 FILED ON: 1/16/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1856
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Jay D. Livingstone
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to the Massachusetts Uniform Trust Decanting Act.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Jay D. Livingstone8th Suffolk1/16/2025 1 of 30
16	16	HOUSE DOCKET, NO. 2382 FILED ON: 1/16/2025
17	17	HOUSE . . . . . . . . . . . . . . . No. 1856
18	18	By Representative Livingstone of Boston, a petition (accompanied by bill, House, No. 1856) of
19	19	Jay D. Livingstone relative to the distribution of property and the modification of the terms of
20	20	trusts. The Judiciary.
21	21	The Commonwealth of Massachusetts
22	22	_______________
23	23	In the One Hundred and Ninety-Fourth General Court
24	24	(2025-2026)
25	25	_______________
26	26	An Act relative to the Massachusetts Uniform Trust Decanting Act.
27	27	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
28	28	of the same, as follows:
29	29	1 SECTION 1. Article 1 of Chapter 203E of the General Laws is hereby amended by
30	30	2striking out Section 103, as so appearing, and inserting in place thereof the following section:-
31	31	3 Section 103. Definitions.
32	32	4 In this chapter the following words shall, unless the context clearly requires otherwise,
33	33	5have the following meanings:-
34	34	6 “Action”, with respect to an act of a trustee, includes a failure to act.
35	35	7 “Ascertainable standard”, a standard relating to an individual’s health, education, support
36	36	8or maintenance.
37	37	9 “Beneficiary”, a person who has a present or future beneficial interest in a trust, vested or
38	38	10contingent. 2 of 30
39	39	11 “Charitable trust”, a trust, or portion of a trust, created for a charitable purpose described
40	40	12in subsection (a) of section 405.
41	41	13 “Environmental law”, a federal, state or local law, rule, regulation or ordinance relating
42	42	14to protection of the environment.
43	43	15 “Interests of the beneficiaries”, the beneficial interests provided in the terms of the trust.
44	44	16 “Jurisdiction”, a geographic area, including a state or country.
45	45	17 “Person”, an individual, corporation, business trust, estate, trust, partnership, limited
46	46	18liability company, association, joint venture, government, governmental subdivision, agency or
47	47	19instrumentality, public corporation or any other legal or commercial entity.
48	48	20 “Property”, anything that may be the subject of ownership, whether real, personal, legal,
49	49	21equitable or any interest therein.
50	50	22 “Qualified beneficiary”, a beneficiary who, on the date the beneficiary’s qualification is
51	51	23determined:
52	52	24 (i) is a distributee or permissible distributee of trust income or principal;
53	53	25 (ii) would be a distributee or permissible distributee of trust income or principal if the
54	54	26interests of the distributees described in clause (i) terminated on that date without causing the
55	55	27trust to terminate; or
56	56	28 (iii) would be a distributee or permissible distributee of trust income or principal if the
57	57	29trust terminated on that date. 3 of 30
58	58	30 “Revocable”, a trust that is revocable by the settlor without the consent of the trustee or a
59	59	31person holding an adverse interest.
60	60	32 “Settlor”, a person, including a testator, who creates or contributes property to a trust. If
61	61	33more than one person creates or contributes property to a trust, each person is a settlor of the
62	62	34portion of the trust property attributable to that person’s contribution except to the extent another
63	63	35person has the power to revoke or withdraw that portion.
64	64	36 “Spendthrift provision”, a term of a trust which restrains transfer of a beneficiary’s
65	65	37interest.
66	66	38 “State”, a state of the United States, the District of Columbia, Puerto Rico, the United
67	67	39States Virgin Islands or any territory or insular possession subject to the jurisdiction of the
68	68	40United States, including an Indian tribe or band recognized by federal law or formally
69	69	41acknowledged by a state.
70	70	42 “Terms of a trust”:
71	71	43 (i) except as otherwise provided in clause (ii), the manifestation of the settlor’s intent
72	72	44regarding a trust’s provisions as expressed in the trust instrument or established by other
73	73	45evidence that would be admissible in a judicial proceeding; or
74	74	46 (ii) the trust’s provisions as established, determined, or amended by a trustee or other
75	75	47person in accordance with applicable law, a court order, or a non-judicial settlement agreement
76	76	48under section 111.
77	77	49 “Trust instrument”, an instrument that contains terms of the trust, including any
78	78	50amendments thereto. 4 of 30
79	79	51 “Trustee”, an original, additional or successor trustee or a co-trustee.
80	80	52 SECTION 2. Said Article 1 of Chapter 203E of the General Laws is hereby further
81	81	53amended by striking out section 110, as so appearing, and inserting in place thereof the following
82	82	54section:-
83	83	55 Section 110. Others treated as qualified beneficiaries
84	84	56 (a) Whenever notice to qualified beneficiaries of a trust is required under this chapter, the
85	85	57trustee shall also give notice to any other beneficiary who has sent the trustee a request for
86	86	58notice.
87	87	59 (b) A charitable organization expressly designated to receive distributions under the
88	88	60terms of a charitable trust shall have the rights of a qualified beneficiary under this chapter if, on
89	89	61the date the charitable organization’s qualification is being determined, the charitable
90	90	62organization:
91	91	63 (1) is a distributee or permissible distributee of trust income or principal;
92	92	64 (2) would be a distributee or permissible distributee of trust income or principal upon the
93	93	65termination of the interests of other distributees or permissible distributees then receiving or
94	94	66eligible to receive distributions; or
95	95	67 (3) would be a distributee or permissible distributee of trust income or principal if the
96	96	68trust terminated on that date.
97	97	69 (c) A person appointed to enforce a trust created for the care of an animal or other non-
98	98	70charitable purpose, as provided in sections 408 and 409, shall have the rights of a qualified
99	99	71beneficiary under this chapter. 5 of 30
100	100	72 SECTION 3. Said Chapter 203E of the General Laws is hereby further amended by
101	101	73inserting after Article 8 the following article:-
102	102	74 ARTICLE 9
103	103	75 MASSACHUSETTS UNIFORM TRUST DECANTING ACT
104	104	76 Section 901. Short title
105	105	77 This article shall be known and may be cited as the Massachusetts Uniform Trust
106	106	78Decanting Act.
107	107	79 Section 902. Definitions
108	108	80 In this article the following words shall, unless the context clearly requires otherwise,
109	109	81have the following meanings:-
110	110	82 “Appointive property”, the property or property interest subject to a power of
111	111	83appointment.
112	112	84 “Authorized fiduciary”:
113	113	85 (i) a trustee or other fiduciary, other than a settlor, that has discretion to distribute or
114	114	86direct a trustee to distribute part or all of the principal of the first trust to one or more current
115	115	87beneficiaries;
116	116	88 (ii) a special fiduciary appointed under section 909; or
117	117	89 (iii) a special-needs fiduciary under section 913. 6 of 30
118	118	90 “Beneficiary”, for purposes of this article, includes an identified charitable organization
119	119	91that will or may receive distributions under the terms of the trust.
120	120	92 “Charitable interest”, an interest in a trust which:
121	121	93 (i) is held by an identified charitable organization and makes the organization a qualified
122	122	94beneficiary;
123	123	95 (ii) benefits only charitable organizations and, if the interest were held by an identified
124	124	96charitable organization, would make the organization a qualified beneficiary; or
125	125	97 (iii) is held solely for charitable purposes described in subsection (a) of section 405 and,
126	126	98if the interest were held by an identified charitable organization, would make the organization a
127	127	99qualified beneficiary.
128	128	100 “Current beneficiary”:
129	129	101 (i) a beneficiary who, on the date the beneficiary’s qualification is determined, is a
130	130	102distributee or permissible distributee of trust income or principal; or
131	131	103 (ii) a holder of a presently exercisable general power of appointment.
132	132	104 “Decanting power”, the power of an authorized fiduciary under this article to distribute
133	133	105property of a first trust to one or more second trusts or to modify the terms of the first trust.
134	134	106 “Expanded distributive discretion”, a discretionary power of distribution that is not
135	135	107limited to an ascertainable standard or a reasonably definite standard.
136	136	108 “First trust”, a trust over which an authorized fiduciary may exercise the decanting
137	137	109power. 7 of 30
138	138	110 “First-trust instrument”, the trust instrument for a first trust.
139	139	111 “General power of appointment”, a power of appointment exercisable in favor of a
140	140	112powerholder, the powerholder’s estate, a creditor of the powerholder, or a creditor of the
141	141	113powerholder’s estate.
142	142	114 “Power of appointment”, a power (other than a power of attorney) that enables a
143	143	115powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in
144	144	116or another power of appointment over the appointive property.
145	145	117 “Powerholder”, a person in which a donor creates a power of appointment.
146	146	118 “Presently exercisable power of appointment”, a power of appointment exercisable by the
147	147	119powerholder at the relevant time. The term:
148	148	120 (i) includes a power of appointment exercisable only after the occurrence of a specified
149	149	121event, the satisfaction of an ascertainable standard, or the passage of a specified time only after
150	150	122(a) the occurrence of the specified event, (b) the satisfaction of the ascertainable standard, or (c)
151	151	123the passage of the specified time; and
152	152	124 (ii) does not include a power exercisable only at the powerholder’s death.
153	153	125 “Reasonably definite standard” means a clearly measurable standard under which a
154	154	126holder of a power of distribution is legally accountable within the meaning of subsection
155	155	127(b)(5)(A) of section 674 of the Internal Revenue Code and any applicable regulations.
156	156	128 “Record” means information that is inscribed on a tangible medium or that is stored in an
157	157	129electronic or other medium and is retrievable in perceivable form. 8 of 30
158	158	130 “Second trust”:
159	159	131 (i) a first trust after modification under this article; or
160	160	132 (ii) a trust to which a distribution of property from a first trust is or may be made under
161	161	133this article.
162	162	134 “Second-trust instrument”, the trust instrument for a second trust.
163	163	135 “Sign” means, with present intent to authenticate or adopt a record:
164	164	136 (i) to execute or adopt a tangible symbol; or
165	165	137 (ii) to attach to or logically associate with the record an electronic symbol, sound, or
166	166	138process.
167	167	139 Section 903. Scope
168	168	140 (a) Except as otherwise provided in subsections (b) and (c), this article applies to an
169	169	141express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or
170	170	142a person holding an adverse interest.
171	171	143 (b) This article does not apply to a trust held solely for charitable purposes described in
172	172	144subsection (a) of section 405.
173	173	145 (c) Subject to section 915, a trust instrument may restrict or prohibit exercise of the
174	174	146decanting power.
175	175	147 (d) This article does not limit the power of a trustee, powerholder, or other person to
176	176	148distribute or appoint property in further trust or to modify a trust under the trust instrument, law 9 of 30
177	177	149of the commonwealth other than this article, common law, a court order, or a non-judicial
178	178	150settlement agreement.
179	179	151 (e) This article does not affect the ability of a settlor to provide in a trust instrument for
180	180	152the distribution of the trust property or appointment in further trust of the trust property or for
181	181	153modification of the trust instrument.
182	182	154 Section 904. Fiduciary duty
183	183	155 (a) In exercising the decanting power, an authorized fiduciary shall act in accordance
184	184	156with its fiduciary duties, including the duty to act in accordance with the purposes of the first
185	185	157trust.
186	186	158 (b) This article does not create or imply a duty to exercise the decanting power or to
187	187	159inform beneficiaries about the applicability of this article.
188	188	160 (c) Except as otherwise provided in a first-trust instrument, for purposes of this article
189	189	161and sections 801 and 802(a), the terms of the first trust are deemed to include the decanting
190	190	162power.
191	191	163 Section 905. Application; governing law
192	192	164 This article applies to a trust created before, on, or after the effective date of this article
193	193	165which has its principal place of administration in the commonwealth.
194	194	166 Section 906. Reasonable reliance
195	195	167 A trustee or other person that reasonably relies on the validity of a distribution of part or
196	196	168all of the property of a trust to another trust, or a modification of a trust, under this article, law of 10 of 30
197	197	169the commonwealth other than this article, or the law of another jurisdiction is not liable to any
198	198	170person for any action or failure to act as a result of the reliance.
199	199	171 Section 907. Notice; exercise of decanting power
200	200	172 (a) In this section, a notice period begins on the day notice is given under subsection (c)
201	201	173and ends 59 days after the day notice is given.
202	202	174 (b) Except as otherwise provided in this article, an authorized fiduciary may exercise the
203	203	175decanting power without the consent of any person and without court approval.
204	204	176 (c) Except as otherwise provided in subsection (f), an authorized fiduciary shall give
205	205	177notice in a record of the intended exercise of the decanting power not later than 60 days before
206	206	178the exercise to:
207	207	179 (1) each settlor of the first trust, if living or then in existence;
208	208	180 (2) each qualified beneficiary of the first trust;
209	209	181 (3) each holder of a presently exercisable power of appointment over any part or all of the
210	210	182first trust;
211	211	183 (4) each person that currently has the right to remove or replace the authorized fiduciary;
212	212	184 (5) each other fiduciary of the first trust;
213	213	185 (6) each fiduciary of the second trust; and
214	214	186 (7) the attorney general, if subsection (b) of section 914 applies. 11 of 30
215	215	187 (d) An authorized fiduciary is not required to give notice under subsection (c) to a person
216	216	188that is not known to the fiduciary or is known to the fiduciary but cannot be located by the
217	217	189fiduciary after reasonable diligence.
218	218	190 (e) A notice under subsection (c) must:
219	219	191 (1) specify the manner in which the authorized fiduciary intends to exercise the decanting
220	220	192power;
221	221	193 (2) specify the proposed effective date for exercise of the power;
222	222	194 (3) include a copy of the first-trust instrument; and
223	223	195 (4) include a copy of all second-trust instruments.
224	224	196 (f) The decanting power may be exercised before expiration of the notice period under
225	225	197subsection (a) if all persons entitled to receive notice waive the period in a signed record.
226	226	198 (g) The receipt of notice, waiver of the notice period, or expiration of the notice period
227	227	199does not affect the right of a person to file an application under section 909 asserting that:
228	228	200 (1) an attempted exercise of the decanting power is ineffective because it did not comply
229	229	201with this article or was an abuse of discretion or breach of fiduciary duty; or
230	230	202 (2) section 922 applies to the exercise of the decanting power.
231	231	203 (h) An exercise of the decanting power is not ineffective because of the failure to give
232	232	204notice to one or more persons under subsection (c) if the authorized fiduciary acted with
233	233	205reasonable care to comply with subsection (c). 12 of 30
234	234	206 Section 908. [Reserved]
235	235	207 Section 909. Court involvement
236	236	208 (a) On application of an authorized fiduciary, a person entitled to notice under subsection
237	237	209(c) of section 907, a beneficiary, or with respect to a charitable interest the attorney general or
238	238	210other person that has standing to enforce the charitable interest, the court may:
239	239	211 (1) provide instructions to the authorized fiduciary regarding whether a proposed exercise
240	240	212of the decanting power is permitted under this article and consistent with the fiduciary duties of
241	241	213the authorized fiduciary;
242	242	214 (2) appoint a special fiduciary and authorize the special fiduciary to determine whether
243	243	215the decanting power should be exercised under this article and to exercise the decanting power;
244	244	216 (3) approve an exercise of the decanting power;
245	245	217 (4) determine that a proposed or attempted exercise of the decanting power is ineffective
246	246	218because:
247	247	219 (A) after applying section 922, the proposed or attempted exercise does not or did not
248	248	220comply with this article; or
249	249	221 (B) the proposed or attempted exercise would be or was an abuse of the fiduciary’s
250	250	222discretion or a breach of fiduciary duty;
251	251	223 (5) determine the extent to which section 922 applies to a prior exercise of the decanting
252	252	224power; 13 of 30
253	253	225 (6) provide instructions to the trustee regarding the application of section 922 to a prior
254	254	226exercise of the decanting power; or
255	255	227 (7) order other relief to carry out the purposes of this article.
256	256	228 (b) On application of an authorized fiduciary, the court may approve:
257	257	229 (1) an increase in the fiduciary’s compensation under section 916;
258	258	230 (2) a modification of fiduciary liability under section 917; or
259	259	231 (3) a modification under section 918 of a provision granting a person the right to remove
260	260	232or replace the fiduciary.
261	261	233 Section 910. Formalities
262	262	234 An exercise of the decanting power must be made in a record signed by an authorized
263	263	235fiduciary. The signed record must, directly or by reference to the notice required by section 917,
264	264	236identify the first trust and the second trust or trusts and state the property of the first trust being
265	265	237distributed to each second trust and the property, if any, that remains in the first trust.
266	266	238 Section 911. Decanting power under expanded distributive discretion
267	267	239 (a) In this section:
268	268	240 (1) “Noncontingent right” means a right that is not subject to the exercise of discretion or
269	269	241the occurrence of a specified event that is not certain to occur. The term does not include a right
270	270	242held by a beneficiary if any person has discretion to distribute property subject to the right to any
271	271	243person other than the beneficiary or the beneficiary’s estate. 14 of 30
272	272	244 (2) “Presumptive remainder beneficiary” means a qualified beneficiary other than a
273	273	245current beneficiary.
274	274	246 (3) “Successor beneficiary” means a beneficiary who is not a qualified beneficiary on the
275	275	247date the beneficiary’s qualification is determined.
276	276	248 (4) “Vested interest” means:
277	277	249 (A) a right to a mandatory distribution that is a noncontingent right as of the date of the
278	278	250exercise of the decanting power;
279	279	251 (B) a current and noncontingent right, annually or more frequently, to a mandatory
280	280	252distribution of income, a specified dollar amount, or a percentage of value of some or all of the
281	281	253trust property;
282	282	254 (C) a current and noncontingent right, annually or more frequently, to withdraw income,
283	283	255a specified dollar amount, or a percentage of value of some or all of the trust property;
284	284	256 (D) a presently exercisable general power of appointment; or
285	285	257 (E) a right to receive an ascertainable part of the trust property on the trust’s termination
286	286	258which is not subject to the exercise of discretion or to the occurrence of a specified event that is
287	287	259not certain to occur.
288	288	260 (b) Subject to subsection (c) and section 914, an authorized fiduciary who has expanded
289	289	261distributive discretion over the principal of a first trust for the benefit of one or more current
290	290	262beneficiaries may exercise the decanting power over the principal of the first trust. 15 of 30
291	291	263 (c) Subject to section 913, in an exercise of the decanting power under this section, a
292	292	264second trust may not:
293	293	265 (1) include as a current beneficiary a person who is not a current beneficiary of the first
294	294	266trust or include as a current beneficiary with respect to trust principal a person who is a current
295	295	267beneficiary of the first trust only with respect to trust income, except as otherwise provided in
296	296	268subsection (d);
297	297	269 (2) include as a presumptive remainder beneficiary or successor beneficiary a person who
298	298	270is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the
299	299	271first trust, except as otherwise provided in subsection (d); or
300	300	272 (3) reduce or eliminate a vested interest.
301	301	273 (d) Subject to subsection (c)(3) and section 914, in an exercise of the decanting power
302	302	274under this section, a second trust may be a trust created or administered under the law of any
303	303	275jurisdiction and may:
304	304	276 (1) retain a power of appointment granted in the first trust;
305	305	277 (2) omit a power of appointment granted in the first trust, other than a presently
306	306	278exercisable general power of appointment;
307	307	279 (3) create or modify a power of appointment if the powerholder is a current beneficiary of
308	308	280the first trust and the authorized fiduciary has expanded distributive discretion to distribute
309	309	281principal to the beneficiary; and
310	310	282 (4) create or modify a power of appointment if the powerholder is a presumptive
311	311	283remainder beneficiary or successor beneficiary of the first trust, but the exercise of the power 16 of 30
312	312	284may take effect only after the powerholder becomes, or would have become if then living, a
313	313	285current beneficiary.
314	314	286 (e) A power of appointment described in subsection (d)(1) through (4) may be general or
315	315	287nongeneral. The class of permissible appointees in favor of which the power may be exercised
316	316	288may be broader than or different from the beneficiaries of the first trust.
317	317	289 (f) If an authorized fiduciary has expanded distributive discretion over part but not all of
318	318	290the principal of a first trust, the fiduciary may exercise the decanting power under this section
319	319	291over that part of the principal over which the authorized fiduciary has expanded distributive
320	320	292discretion.
321	321	293 Section 912. Decanting power under limited distributive discretion
322	322	294 (a) In this section, “limited distributive discretion” means a discretionary power of
323	323	295distribution that is limited to an ascertainable standard or a reasonably definite standard.
324	324	296 (b) An authorized fiduciary who has limited distributive discretion over the principal of
325	325	297the first trust for the benefit of one or more current beneficiaries may exercise the decanting
326	326	298power over the principal of the first trust.
327	327	299 (c) Under this section and subject to section 914, a second trust may be created or
328	328	300administered under the law of any jurisdiction. Under this section, the second trusts, in the
329	329	301aggregate, must grant each beneficiary of the first trust beneficial interests which are
330	330	302substantially similar to the beneficial interests of the beneficiary in the first trust. 17 of 30
331	331	303 (d) A power to make a distribution under a second trust for the benefit of a beneficiary
332	332	304who is an individual is substantially similar to a power under the first trust to make a distribution
333	333	305directly to the beneficiary. A distribution is for the benefit of a beneficiary if:
334	334	306 (1) the distribution is applied for the benefit of the beneficiary;
335	335	307 (2) the beneficiary is under a legal disability or the trustee reasonably believes the
336	336	308beneficiary is incapacitated, and the distribution is made as permitted under this chapter; or
337	337	309 (3) the distribution is made as permitted under the terms of the first-trust instrument and
338	338	310the second-trust instrument for the benefit of the beneficiary.
339	339	311 (e) If an authorized fiduciary has limited distributive discretion over part but not all of the
340	340	312principal of a first trust, the fiduciary may exercise the decanting power under this section over
341	341	313that part of the principal over which the authorized fiduciary has limited distributive discretion.
342	342	314 Section 913. Trust for beneficiary with disability
343	343	315 (a) In this section:
344	344	316 (1) “Beneficiary with a disability” means a beneficiary of a first trust who the special-
345	345	317needs fiduciary believes may qualify for governmental benefits based on disability, whether or
346	346	318not the beneficiary currently receives those benefits or is an individual who has been adjudicated
347	347	319incompetent.
348	348	320 (2) “Governmental benefits” means financial aid or services from a state, federal, or other
349	349	321public agency. 18 of 30
350	350	322 (3) “Special-needs fiduciary” means, with respect to a trust that has a beneficiary with a
351	351	323disability:
352	352	324 (A) a trustee or other fiduciary, other than a settlor, who has discretion to distribute part
353	353	325or all of the principal of a first trust to one or more current beneficiaries;
354	354	326 (B) if no trustee or fiduciary has discretion under subsection (A), a trustee or other
355	355	327fiduciary, other than a settlor, who has discretion to distribute part or all of the income of the first
356	356	328trust to one or more current beneficiaries; or
357	357	329 (C) if no trustee or fiduciary has discretion under subsections (A) and (B), a trustee or
358	358	330other fiduciary, other than a settlor, who is required to distribute part or all of the income or
359	359	331principal of the first trust to one or more current beneficiaries.
360	360	332 (4) “Special-needs trust” means a trust the trustee believes would not be considered a
361	361	333resource for purposes of determining whether a beneficiary with a disability is eligible for any
362	362	334governmental benefit.
363	363	335 (b) A special-needs fiduciary may exercise the decanting power under section 911 over
364	364	336the principal of a first trust as if the fiduciary had authority to distribute principal to a beneficiary
365	365	337with a disability subject to expanded distributive discretion if:
366	366	338 (1) a second trust is a special-needs trust that benefits the beneficiary with a disability;
367	367	339and
368	368	340 (2) the special-needs fiduciary determines that exercise of the decanting power will
369	369	341further the purposes of the first trust.
370	370	342 (c) In an exercise of the decanting power under this section, the following rules apply: 19 of 30
371	371	343 (1) Notwithstanding subsection (c)(2) of section 911, the interest in the second trust of a
372	372	344beneficiary with a disability may:
373	373	345 (A) be a pooled trust as defined by Medicaid law for the benefit of the beneficiary with a
374	374	346disability under 42 U.S.C. section 1396p(d)(4)(C); or
375	375	347 (B) contain payback provisions complying with reimbursement requirements of Medicaid
376	376	348law under 42 U.S.C. section 1396p(d)(4)(A).
377	377	349 (2) Subsection (c)(3) of section 911 does not apply to the interests of the beneficiary with
378	378	350a disability.
379	379	351 (3) Except as affected by any change to the interests of the beneficiary with a disability,
380	380	352the second trust, or if there are two or more second trusts, the second trusts in the aggregate,
381	381	353must grant each other beneficiary of the first trust beneficial interests in the second trusts which
382	382	354are substantially similar to the beneficiary’s beneficial interests in the first trust.
383	383	355 Section 914. Protection of charitable interest
384	384	356 (a) In this section:
385	385	357 (1) “Determinable charitable interest” means a charitable interest that is a right to a
386	386	358mandatory distribution currently, periodically, on the occurrence of a specified event, or after the
387	387	359passage of a specified time and which is unconditional or will be held solely for charitable
388	388	360purposes described in subsection (a) of section 405.
389	389	361 (2) “Unconditional” means not subject to the occurrence of a specified event that is not
390	390	362certain to occur, other than a requirement in a trust instrument that a charitable organization be in
391	391	363existence or qualify under a particular provision of the Internal Revenue Code of the United 20 of 30
392	392	364States on the date of the distribution, if the charitable organization meets the requirement on the
393	393	365date of determination.
394	394	366 (b) If a first trust contains a determinable charitable interest, the attorney general has the
395	395	367rights of a qualified beneficiary and may represent and bind the charitable interest.
396	396	368 (c) This article does not limit the powers and duties of the attorney general under law of
397	397	369the commonwealth other than this article.
398	398	370 Section 915. Trust limitation on decanting
399	399	371 (a) An authorized fiduciary may not exercise the decanting power to the extent the first-
400	400	372trust instrument expressly prohibits exercise of:
401	401	373 (1) the decanting power; or
402	402	374 (2) a power granted by state law to the fiduciary to distribute part or all of the principal of
403	403	375the trust to another trust or to modify the trust.
404	404	376 (b) Exercise of the decanting power is subject to any restriction in the first-trust
405	405	377instrument that expressly applies to exercise of:
406	406	378 (1) the decanting power; or
407	407	379 (2) a power granted by state law to a fiduciary to distribute part or all of the principal of
408	408	380the trust to another trust or to modify the trust.
409	409	381 (c) A general prohibition of the amendment or revocation of a first trust, a spendthrift
410	410	382clause, or a clause restraining the voluntary or involuntary transfer of a beneficiary’s interest
411	411	383does not preclude exercise of the decanting power. 21 of 30
412	412	384 (d) Subject to subsections (a) and (b), an authorized fiduciary may exercise the decanting
413	413	385power under this article even if the first-trust instrument permits the authorized fiduciary or
414	414	386another person to modify the first-trust instrument or to distribute part or all of the principal of
415	415	387the first trust to another trust.
416	416	388 (e) If a first-trust instrument contains an express prohibition described in subsection (a) or
417	417	389an express restriction described in subsection (b), the provision must be included in the second-
418	418	390trust instrument.
419	419	391 Section 916. Change in compensation
420	420	392 (a) If a first-trust instrument specifies an authorized fiduciary’s compensation, the
421	421	393fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above
422	422	394the specified compensation unless:
423	423	395 (1) all qualified beneficiaries of the second trust consent to the increase in a signed
424	424	396record; or
425	425	397 (2) the increase is approved by the court.
426	426	398 (b) If a first-trust instrument does not specify an authorized fiduciary’s compensation, the
427	427	399fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above
428	428	400the compensation permitted by this chapter unless:
429	429	401 (1) all qualified beneficiaries of the second trust consent to the increase in a signed
430	430	402record; or
431	431	403 (2) the increase is approved by the court. 22 of 30
432	432	404 (c) A change in an authorized fiduciary’s compensation which is incidental to other
433	433	405changes made by the exercise of the decanting power is not an increase in the fiduciary’s
434	434	406compensation for purposes of subsections (a) and (b).
435	435	407 Section 917. Relief from liability and indemnification
436	436	408 (a) Except as otherwise provided in this section or approved by the court, a second-trust
437	437	409instrument may not relieve an authorized fiduciary from liability for breach of trust to a greater
438	438	410extent than the first-trust instrument.
439	439	411 (b) A second-trust instrument may provide for indemnification of an authorized fiduciary
440	440	412of the first trust or another person acting in a fiduciary capacity under the first trust for any
441	441	413liability or claim that would have been payable from the first trust if the decanting power had not
442	442	414been exercised.
443	443	415 (c) Except as approved by the court, a second-trust instrument may not reduce fiduciary
444	444	416liability in the aggregate.
445	445	417 (d) Subject to subsection (c), a second-trust instrument may divide and reallocate
446	446	418fiduciary powers among fiduciaries, including one or more trustees, distribution advisors,
447	447	419investment advisors, trust protectors, or other persons, and relieve a fiduciary from liability for
448	448	420an act or failure to act of another fiduciary as permitted by law of the commonwealth other than
449	449	421this article.
450	450	422 Section 918. Removal or replacement of authorized fiduciary
451	451	423 An authorized fiduciary may not exercise the decanting power to modify a provision in a
452	452	424first-trust instrument granting another person power to remove or replace the fiduciary unless: 23 of 30
453	453	425 (a) the person holding the power consents to the modification in a signed record and the
454	454	426modification applies only to the person;
455	455	427 (b) the person holding the power and the qualified beneficiaries of the second trust
456	456	428consent to the modification in a signed record and the modification grants a substantially similar
457	457	429power to another person; or
458	458	430 (c) the court approves the modification and the modification grants a substantially similar
459	459	431power to another person.
460	460	432 Section 919. Tax-related limitations
461	461	433 (a) In this section:
462	462	434 (1) “Grantor trust” means a trust as to which a settlor of a first trust is considered the
463	463	435owner under sections 671 through 677 or section 679 of the Internal Revenue Code.
464	464	436 (2) “Internal Revenue Code” means the Internal Revenue Code of the United States as
465	465	437amended and as then in effect, and references to a specific provision of the Internal Revenue
466	466	438Code are intended to include a successor provision of the same general effect.
467	467	439 (3) “Nongrantor trust” means a trust that is not a grantor trust.
468	468	440 (4) “Qualified benefits property” means property subject to the minimum distribution
469	469	441requirements of section 401(a)(9) of the Internal Revenue Code, and any applicable regulations,
470	470	442or to any similar requirements that refer thereto.
471	471	443 (b) An exercise of the decanting power is subject to the following limitations: 24 of 30
472	472	444 (1) If a first trust contains property that qualified, or would have qualified but for
473	473	445provisions of this article other than this section, for a marital deduction for purposes of the gift or
474	474	446estate tax under the Internal Revenue Code or a state gift, estate, or inheritance tax, the second-
475	475	447trust instrument must not include or omit any term that, if included in or omitted from the trust
476	476	448instrument for the trust to which the property was transferred, would have prevented the transfer
477	477	449from qualifying for the deduction, or would have reduced the amount of the deduction, under the
478	478	450same provisions of the Internal Revenue Code or state law under which the transfer qualified.
479	479	451 (2) If the first trust contains property that qualified, or would have qualified but for
480	480	452provisions of this article other than this section, for a charitable deduction for purposes of the
481	481	453income, gift, or estate tax under the Internal Revenue Code or a state income, gift, estate, or
482	482	454inheritance tax, the second-trust instrument must not include or omit any term that, if included in
483	483	455or omitted from the trust instrument for the trust to which the property was transferred, would
484	484	456have prevented the transfer from qualifying for the deduction, or would have reduced the amount
485	485	457of the deduction, under the same provisions of the Internal Revenue Code or state law under
486	486	458which the transfer qualified.
487	487	459 (3) If the first trust contains property that qualified, or would have qualified but for
488	488	460provisions of this article other than this section, for the exclusion from the gift tax described in
489	489	461section 2503(b) of the Internal Revenue Code, the second-trust instrument must not include or
490	490	462omit a term that, if included in or omitted from the trust instrument for the trust to which the
491	491	463property was transferred, would have prevented the transfer from qualifying under such section.
492	492	464If the first trust contains property that qualified, or would have qualified but for provisions of this
493	493	465article other than this section, for the exclusion from the gift tax described in section 2503(b) of
494	494	466the Internal Revenue Code by application of section 2503(c) of the Internal Revenue Code, the 25 of 30
495	495	467second-trust instrument must not include or omit a term that, if included or omitted from the trust
496	496	468instrument for the trust to which the property was transferred, would have prevented the transfer
497	497	469from qualifying under section 2503(c) of the Internal Revenue Code.
498	498	470 (4) If the property of the first trust includes shares of stock in an S corporation, as defined
499	499	471in section 1361 of the Internal Revenue Code and the first trust is, or but for provisions of this
500	500	472article other than this section would be, a permitted shareholder under any provision of section
501	501	4731361 of the Internal Revenue Code, an authorized fiduciary may exercise the power with respect
502	502	474to part or all of the S corporation stock only if any second trust receiving the stock is a permitted
503	503	475shareholder under section 1361(c)(2) of the Internal Revenue Code. If the property of the first
504	504	476trust includes shares of stock in an S corporation and the first trust is, or but for provisions of this
505	505	477article other than this section would be, a qualified subchapter S trust within the meaning of
506	506	478section 1361(d) of the Internal Revenue Code, the second-trust instrument must not include or
507	507	479omit a term that prevents the second trust from qualifying as a qualified subchapter S trust.
508	508	480 (5) If the first trust contains property that qualified, or would have qualified but for
509	509	481provisions of this article other than this section, for a zero inclusion ratio for purposes of the
510	510	482generation-skipping transfer tax under section 2642(c) of the Internal Revenue Code, the second-
511	511	483trust instrument must not include or omit a term that, if included in or omitted from the first-trust
512	512	484instrument, would have prevented the transfer to the first trust from qualifying for a zero
513	513	485inclusion ratio under such section.
514	514	486 (6) If the first trust is directly or indirectly the beneficiary of qualified benefits property,
515	515	487the second-trust instrument may not include or omit any term that, if included in or omitted from
516	516	488the first-trust instrument, would have increased the minimum distributions required with respect 26 of 30
517	517	489to the qualified benefits property under section 401(a)(9) of the Internal Revenue Code and any
518	518	490applicable regulations, or any similar requirements that refer thereto. If an attempted exercise of
519	519	491the decanting power violates the preceding sentence, the trustee is deemed to have held the
520	520	492qualified benefits property and any reinvested distributions of the property as a separate share
521	521	493from the date of the exercise of the power and section 922 applies to the separate share.
522	522	494 (7) If the first trust qualifies as a grantor trust because of the application of section
523	523	495672(f)(2)(A) of the Internal Revenue Code, the second trust may not include or omit a term that,
524	524	496if included in or omitted from the first-trust instrument, would have prevented the first trust from
525	525	497qualifying under such section.
526	526	498 (8) In this subsection, “tax benefit” means a federal or state tax deduction, exemption,
527	527	499exclusion, or other benefit not otherwise listed in this section, except for a benefit arising from
528	528	500being a grantor trust. Subject to subsection (9), a second-trust instrument may not include or omit
529	529	501a term that, if included in or omitted from the first-trust instrument, would have prevented
530	530	502qualification for a tax benefit if:
531	531	503 (A) the first-trust instrument expressly indicates an intent to qualify for the benefit or the
532	532	504first-trust instrument clearly is designed to enable the first trust to qualify for the benefit; and
533	533	505 (B) the transfer of property held by the first trust or the first trust qualified, or but for
534	534	506provisions of this article other than this section, would have qualified for the tax benefit.
535	535	507 (9) Subject to subsection (4):
536	536	508 (A) except as otherwise provided in subsection (7), the second trust may be a nongrantor
537	537	509trust, even if the first trust is a grantor trust; and 27 of 30
538	538	510 (B) the second trust may be a grantor trust, even if the first trust is a nongrantor trust.
539	539	511 Section 920. Duration of second trust
540	540	512 (a) Subject to subsection (b), a second trust may have a duration that is the same as or
541	541	513different from the duration of the first trust.
542	542	514 (b) To the extent that property of a second trust is attributable to property of the first trust,
543	543	515the property of the second trust is subject to any rules governing maximum perpetuity,
544	544	516accumulation, or suspension of the power of alienation which apply to property of the first trust.
545	545	517 Section 921. Need to distribute not required
546	546	518 An authorized fiduciary may exercise the decanting power whether or not under the first
547	547	519trust’s discretionary distribution standard the fiduciary would have made or could have been
548	548	520compelled to make a discretionary distribution of principal at the time of the exercise.
549	549	521 Section 922. Saving provision
550	550	522 (a) If exercise of the decanting power would be effective under this article except that the
551	551	523second-trust instrument in part does not comply with this article, the exercise of the power is
552	552	524effective and the following rules apply with respect to the principal of the second trust
553	553	525attributable to the exercise of the power:
554	554	526 (1) A provision in the second-trust instrument which is not permitted under this article is
555	555	527void to the extent necessary to comply with this article. 28 of 30
556	556	528 (2) A provision required by this article to be in the second-trust instrument which is not
557	557	529contained in the instrument is deemed to be included in the instrument to the extent necessary to
558	558	530comply with this article.
559	559	531 (b) If a trustee or other fiduciary of a second trust determines that subsection (a) applies
560	560	532to a prior exercise of the decanting power, the fiduciary shall take corrective action consistent
561	561	533with the fiduciary’s duties.
562	562	534 Section 923. Trust for care of an animal
563	563	535 (a) In this section:
564	564	536 (1) “Animal trust” means a trust or an interest in a trust described in section 408.
565	565	537 (2) “Protector” means the person who may enforce the intended use of the principal or
566	566	538income of an animal trust under subsection (f) of section 408.
567	567	539 (b) The decanting power may be exercised over an animal trust that has a protector to the
568	568	540extent the trust could be decanted under this article if each animal that benefits from the trust
569	569	541were an individual, if the protector consents in a signed record to the exercise of the power.
570	570	542 (c) Notwithstanding any other provision of this article, if a first trust is an animal trust, in
571	571	543an exercise of the decanting power, the second trust must provide that trust property may be
572	572	544applied only to its intended purpose for the period the first trust benefitted the animal.
573	573	545 Section 924. Terms of second trust
574	574	546 A reference in this chapter to a trust instrument or terms of the trust includes a second-
575	575	547trust instrument and the terms of the second trust. 29 of 30
576	576	548 Section 925. Settlor
577	577	549 (a) For purposes of law of the commonwealth other than this article and subject to
578	578	550subsection (b), a settlor of a first trust is deemed to be the settlor of the second trust with respect
579	579	551to the portion of the principal of the first trust subject to the exercise of the decanting power.
580	580	552 (b) In determining settlor intent with respect to a second trust, the intent of a settlor of the
581	581	553first trust, a settlor of the second trust, and the authorized fiduciary may be considered.
582	582	554 Section 926. Later-discovered and later-acquired property
583	583	555 (a) Except as otherwise provided in subsection (c), if exercise of the decanting power was
584	584	556intended to distribute all the principal of the first trust to one or more second trusts, later-
585	585	557discovered property belonging to the first trust and property paid to or acquired by the first trust
586	586	558after the exercise of the power is part of the trust estate of the second trust or trusts.
587	587	559 (b) Except as otherwise provided in subsection (c), if exercise of the decanting power was
588	588	560intended to distribute less than all the principal of the first trust to one or more second trusts,
589	589	561later-discovered property belonging to the first trust or property paid to or acquired by the first
590	590	562trust after exercise of the power remains part of the trust estate of the first trust.
591	591	563 (c) An authorized fiduciary may provide in an exercise of the decanting power or by the
592	592	564terms of a second trust for disposition of later-discovered property belonging to the first trust or
593	593	565property paid to or acquired by the first trust after exercise of the power.
594	594	566 Section 927. Obligations 30 of 30
595	595	567 A debt, liability, or other obligation enforceable against property of a first trust is
596	596	568enforceable to the same extent against the property when held by the second trust after exercise
597	597	569of the decanting power.
598	598	570 SECTION 4. This act shall take effect on January 1, 2026.