Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S1112 Compare Versions

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2	2	SENATE DOCKET, NO. 2447 FILED ON: 1/17/2025
3	3	SENATE . . . . . . . . . . . . . . No. 1112
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Barry R. Finegold
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 establishing the Massachusetts Uniform Trust Decanting Act.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Barry R. FinegoldSecond Essex and Middlesex 1 of 28
16	16	SENATE DOCKET, NO. 2447 FILED ON: 1/17/2025
17	17	SENATE . . . . . . . . . . . . . . No. 1112
18	18	By Mr. Finegold, a petition (accompanied by bill, Senate, No. 1112) of Barry R. Finegold for
19	19	legislation relative to the Massachusetts Uniform Trust Decanting Act. The Judiciary.
20	20	[SIMILAR MATTER FILED IN PREVIOUS SESSION
21	21	SEE SENATE, NO. 977 OF 2023-2024.]
22	22	The Commonwealth of Massachusetts
23	23	_______________
24	24	In the One Hundred and Ninety-Fourth General Court
25	25	(2025-2026)
26	26	_______________
27	27	An Act establishing the Massachusetts Uniform Trust Decanting Act.
28	28	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
29	29	of the same, as follows:
30	30	1 SECTION 1. Section 103 of article 1 of chapter 203E of the General Laws, as appearing
31	31	2in the 2022 Official Edition, is hereby amended by striking out the definition of “Qualified
32	32	3beneficiary” and inserting in place thereof the following definition:-
33	33	4 “Qualified beneficiary”, a beneficiary who, on the date the beneficiary’s qualification is
34	34	5determined:
35	35	6 (i) is a distributee or permissible distributee of trust income or principal;
36	36	7 (ii) would be a distributee or permissible distributee of trust income or principal if the
37	37	8interests of the distributees described in clause (i) terminated on that date without causing the
38	38	9trust to terminate; or 2 of 28
39	39	10 (iii) would be a distributee or permissible distributee of trust income or principal if the
40	40	11trust terminated on that date.
41	41	12 SECTION 2. Said section 103 of said article 1 of said chapter 203E, as so appearing, is
42	42	13hereby further amended by striking out the definition of “Terms of a trust” and inserting in place
43	43	14thereof the following definition:-
44	44	15 “Terms of a trust”:
45	45	16 (i) except as otherwise provided in clause (ii), the manifestation of the settlor’s intent
46	46	17regarding a trust’s provisions as expressed in the trust instrument or established by other
47	47	18evidence that would be admissible in a judicial proceeding; or
48	48	19 (ii) the trust’s provisions as established, determined or amended by a trustee or other
49	49	20person in accordance with applicable law, a court order or a non-judicial settlement agreement
50	50	21under section 111.
51	51	22 SECTION 3. Section 110 of said Article 1 of said chapter 203E, as so appearing, is
52	52	23hereby further amended by striking out subsection (b) and inserting in place thereof the
53	53	24following subsection:-
54	54	25 (b) A charitable organization expressly designated to receive distributions under the
55	55	26terms of a charitable trust shall have the rights of a qualified beneficiary under this chapter if, on
56	56	27the date the charitable organization’s qualification is being determined, the charitable
57	57	28organization:
58	58	29 (i) is a distributee or permissible distributee of trust income or principal; 3 of 28
59	59	30 (ii) would be a distributee or permissible distributee of trust income or principal upon the
60	60	31termination of the interests of other distributees or permissible distributees then receiving or
61	61	32eligible to receive distributions; or
62	62	33 (iii) would be a distributee or permissible distributee of trust income or principal if the
63	63	34trust terminated on that date.
64	64	35 SECTION 4. Said Chapter 203E of the General Laws is hereby further amended by
65	65	36inserting after Article 8 the following article:-
66	66	37 ARTICLE 9. Massachusetts Uniform Trust Decanting Act
67	67	38 Section 901. Short title
68	68	39 This article shall be known and may be cited as the Massachusetts Uniform Trust
69	69	40Decanting Act.
70	70	41 Section 902. Definitions
71	71	42 As used in this article the following words shall have the following meanings unless the
72	72	43context clearly requires otherwise:-
73	73	44 “Appointive property”, a property or property interest subject to a power of appointment.
74	74	45 “Authorized fiduciary”:
75	75	46 (i) a trustee or other fiduciary, other than a settlor, that has discretion to distribute or
76	76	47direct a trustee to distribute part or all of the principal of the first trust to 1 or more current
77	77	48beneficiaries; 4 of 28
78	78	49 (ii) a special fiduciary appointed under section 909; or
79	79	50 (iii) a special-needs fiduciary under section 913.
80	80	51 “Beneficiary”, includes an identified charitable organization that will or may receive
81	81	52distributions under the terms of the trust.
82	82	53 “Charitable interest”, an interest in a trust which:
83	83	54 (i) is held by an identified charitable organization and makes the organization a qualified
84	84	55beneficiary;
85	85	56 (ii) benefits only charitable organizations and, if the interest were held by an identified
86	86	57charitable organization, would make the organization a qualified beneficiary; or
87	87	58 (iii) is held solely for charitable purposes described in subsection (a) of section 405 and,
88	88	59if the interest were held by an identified charitable organization, would make the organization a
89	89	60qualified beneficiary.
90	90	61 “Current beneficiary”:
91	91	62 (i) a beneficiary who, on the date the beneficiary’s qualification is determined, is a
92	92	63distributee or permissible distributee of trust income or principal; or
93	93	64 (ii) a holder of a presently exercisable general power of appointment.
94	94	65 “Decanting power”, the power of an authorized fiduciary under this article to distribute
95	95	66property of a first trust to 1 or more second trusts or to modify the terms of the first trust. 5 of 28
96	96	67 “Expanded distributive discretion”, a discretionary power of distribution that is not
97	97	68limited to an ascertainable standard or a reasonably definite standard.
98	98	69 “First trust”, a trust over which an authorized fiduciary may exercise the decanting
99	99	70power.
100	100	71 “First-trust instrument”, the trust instrument for a first trust.
101	101	72 “General power of appointment”, a power of appointment exercisable in favor of a
102	102	73powerholder, the powerholder’s estate, a creditor of the powerholder or a creditor of the
103	103	74powerholder’s estate.
104	104	75 “Power of appointment”, a power, other than a power of attorney, that enables a
105	105	76powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in
106	106	77or another power of appointment over the appointive property.
107	107	78 “Powerholder”, a person in whom a donor creates a power of appointment.
108	108	79 “Presently exercisable power of appointment”, a power of appointment exercisable by the
109	109	80powerholder at the relevant time; provided, however, that a presently exercisable power of
110	110	81appointment:
111	111	82 (i) shall include a power of appointment exercisable only after the occurrence of a
112	112	83specified event, the satisfaction of an ascertainable standard or the passage of a specified time
113	113	84only after: (A) the occurrence of the specified event; (B) the satisfaction of the ascertainable
114	114	85standard; or (C) the passage of the specified time; and
115	115	86 (ii) shall not include a power exercisable only at the powerholder’s death. 6 of 28
116	116	87 “Reasonably definite standard”, a clearly measurable standard under which a holder of a
117	117	88power of distribution is legally accountable within the meaning of subsection (b)(5)(A) of
118	118	89section 674 of the Internal Revenue Code and any applicable regulations.
119	119	90 “Record”, information that is inscribed on a tangible medium or that is stored in an
120	120	91electronic or other medium and is retrievable in perceivable form.
121	121	92 “Second trust”:
122	122	93 (i) a first trust after modification under this article; or
123	123	94 (ii) a trust to which a distribution of property from a first trust is or may be made under
124	124	95this article.
125	125	96 “Second-trust instrument”, the trust instrument for a second trust.
126	126	97 “Sign”, with present intent to authenticate or adopt a record:
127	127	98 (i) to execute or adopt a tangible symbol; or
128	128	99 (ii) to attach to or logically associate with the record an electronic symbol, sound or
129	129	100process.
130	130	101 Section 903. Scope
131	131	102 (a) Except as otherwise provided in subsections (b) and (c), this article shall apply to an
132	132	103express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or
133	133	104a person holding an adverse interest. 7 of 28
134	134	105 (b) This article shall not apply to a trust held solely for charitable purposes described in
135	135	106subsection (a) of section 405.
136	136	107 (c) Subject to section 915, a trust instrument may restrict or prohibit exercise of the
137	137	108decanting power.
138	138	109 (d) This article shall not limit the power of a trustee, powerholder or other person to
139	139	110distribute or appoint property in further trust or to modify a trust under the trust instrument, law
140	140	111of the commonwealth other than this article, common law, a court order or a non-judicial
141	141	112settlement agreement.
142	142	113 (e) This article shall not affect the ability of a settlor to provide in a trust instrument for
143	143	114the distribution of the trust property or appointment in further trust of the trust property or for
144	144	115modification of the trust instrument.
145	145	116 Section 904. Fiduciary duty
146	146	117 (a) In exercising the decanting power, an authorized fiduciary shall act in accordance
147	147	118with its fiduciary duties, including the duty to act in accordance with the purposes of the first
148	148	119trust.
149	149	120 (b) This article shall not be construed to create or imply a duty to exercise the decanting
150	150	121power or to inform beneficiaries about the applicability of this article.
151	151	122 (c) Except as otherwise provided in a first-trust instrument, for purposes of this article
152	152	123and sections 801 and 802(a) of article 8, the terms of the first trust shall be deemed to include the
153	153	124decanting power.
154	154	125 Section 905. Application; governing law 8 of 28
155	155	126 This article shall apply to a trust created before, on or after the effective date of this
156	156	127article which has its principal place of administration in the commonwealth.
157	157	128 Section 906. Reasonable reliance
158	158	129 A trustee or other person that reasonably relies on the validity of a distribution of part or
159	159	130all of the property of a trust to another trust, or a modification of a trust, under this article, law of
160	160	131the commonwealth other than this article or the law of another jurisdiction is not liable to any
161	161	132person for any action or failure to act as a result of the reliance.
162	162	133 Section 907. Notice; exercise of decanting power
163	163	134 (a) In this section, a notice period begins on the day notice is given under subsection (c)
164	164	135and ends 59 days after the day notice is given.
165	165	136 (b) Except as otherwise provided in this article, an authorized fiduciary may exercise the
166	166	137decanting power without the consent of any person and without court approval.
167	167	138 (c) Except as otherwise provided in subsection (f), an authorized fiduciary shall give
168	168	139notice in a record of the intended exercise of the decanting power not later than 60 days before
169	169	140the exercise to:
170	170	141 (i) each settlor of the first trust, if living or then in existence;
171	171	142 (ii) each qualified beneficiary of the first trust;
172	172	143 (iii) each holder of a presently exercisable power of appointment over any part or all of
173	173	144the first trust;
174	174	145 (iv) each person that currently has the right to remove or replace the authorized fiduciary; 9 of 28
175	175	146 (v) each other fiduciary of the first trust;
176	176	147 (vi) each fiduciary of the second trust; and
177	177	148 (vii) the attorney general, if subsection (b) of section 914 applies.
178	178	149 (d) An authorized fiduciary shall not be required to give notice under subsection (c) to a
179	179	150person that is not known to the fiduciary or is known to the fiduciary but cannot be located by
180	180	151the fiduciary after reasonable diligence.
181	181	152 (e) A notice under subsection (c) must:
182	182	153 (i) specify the manner in which the authorized fiduciary intends to exercise the decanting
183	183	154power;
184	184	155 (ii) specify the proposed effective date for exercise of the power;
185	185	156 (iii) include a copy of the first-trust instrument; and
186	186	157 (iv) include a copy of all second-trust instruments.
187	187	158 (f) The decanting power may be exercised before expiration of the notice period under
188	188	159subsection (a) if all persons entitled to receive notice waive the period in a signed record.
189	189	160 (g) The receipt of notice, waiver of the notice period or expiration of the notice period
190	190	161shall not affect the right of a person to file an application under section 909 asserting that:
191	191	162 (i) an attempted exercise of the decanting power is ineffective because it did not comply
192	192	163with this article or was an abuse of discretion or breach of fiduciary duty; or
193	193	164 (ii) section 922 applies to the exercise of the decanting power. 10 of 28
194	194	165 (h) An exercise of the decanting power shall not be deemed ineffective because of the
195	195	166failure to give notice to 1 or more persons under subsection (c) if the authorized fiduciary acted
196	196	167with reasonable care to comply with subsection (c).
197	197	168 Section 908. [Reserved]
198	198	169 Section 909. Court involvement
199	199	170 (a) On application of an authorized fiduciary, a person entitled to notice under subsection
200	200	171(c) of section 907, a beneficiary or, with respect to a charitable interest, the attorney general or
201	201	172other person that has standing to enforce the charitable interest, the court may:
202	202	173 (i) provide instructions to the authorized fiduciary regarding whether a proposed exercise
203	203	174of the decanting power is permitted under this article and consistent with the fiduciary duties of
204	204	175the authorized fiduciary;
205	205	176 (ii) appoint a special fiduciary and authorize the special fiduciary to determine whether
206	206	177the decanting power should be exercised under this article and to exercise the decanting power;
207	207	178 (iii) approve an exercise of the decanting power;
208	208	179 (iv) determine that a proposed or attempted exercise of the decanting power is ineffective
209	209	180because:
210	210	181 (A) after applying section 922, the proposed or attempted exercise does not or did not
211	211	182comply with this article; or
212	212	183 (B) the proposed or attempted exercise would be or was an abuse of the fiduciary’s
213	213	184discretion or a breach of fiduciary duty; 11 of 28
214	214	185 (v) determine the extent to which section 922 applies to a prior exercise of the decanting
215	215	186power;
216	216	187 (vi) provide instructions to the trustee regarding the application of section 922 to a prior
217	217	188exercise of the decanting power; or
218	218	189 (vii) order other relief to carry out the purposes of this article.
219	219	190 (b) On application of an authorized fiduciary, the court may approve:
220	220	191 (i) an increase in the fiduciary’s compensation under section 916;
221	221	192 (ii) a modification of fiduciary liability under section 917; or
222	222	193 (iii) a modification under section 918 of a provision granting a person the right to remove
223	223	194or replace the fiduciary.
224	224	195 Section 910. Formalities
225	225	196 An exercise of the decanting power shall be made in a record signed by an authorized
226	226	197fiduciary. The signed record shall, directly or by reference to the notice required by section 917,
227	227	198identify the first trust and the second trust or trusts and state the property of the first trust being
228	228	199distributed to each second trust and the property, if any, that remains in the first trust.
229	229	200 Section 911. Decanting power under expanded distributive discretion
230	230	201 (a) For purposes of this section, the following terms shall have the following meanings
231	231	202unless the context clearly requires otherwise: 12 of 28
232	232	203 “Noncontingent right”, a right that is not subject to the exercise of discretion or the
233	233	204occurrence of a specified event that is not certain to occur; provided, however, that the term
234	234	205“noncontingent right” shall not include a right held by a beneficiary if any person has discretion
235	235	206to distribute property subject to the right to any person other than the beneficiary or the
236	236	207beneficiary’s estate.
237	237	208 “Presumptive remainder beneficiary”, a qualified beneficiary other than a current
238	238	209beneficiary.
239	239	210 “Successor beneficiary”, a beneficiary who is not a qualified beneficiary on the date the
240	240	211beneficiary’s qualification is determined.
241	241	212 “Vested interest”:
242	242	213 (i) a right to a mandatory distribution that is a noncontingent right as of the date of the
243	243	214exercise of the decanting power;
244	244	215 (ii) a current and noncontingent right, annually or more frequently, to a mandatory
245	245	216distribution of income, a specified dollar amount or a percentage of value of some or all of the
246	246	217trust property;
247	247	218 (iii) a current and noncontingent right, annually or more frequently, to withdraw income,
248	248	219a specified dollar amount or a percentage of value of some or all of the trust property;
249	249	220 (iv) a presently exercisable general power of appointment; or
250	250	221 (v) a right to receive an ascertainable part of the trust property on the trust’s termination
251	251	222which is not subject to the exercise of discretion or to the occurrence of a specified event that is
252	252	223not certain to occur. 13 of 28
253	253	224 (b) Subject to subsection (c) and section 914, an authorized fiduciary who has expanded
254	254	225distributive discretion over the principal of a first trust for the benefit of 1 or more current
255	255	226beneficiaries may exercise the decanting power over the principal of the first trust.
256	256	227 (c) Subject to section 913, in an exercise of the decanting power under this section, a
257	257	228second trust shall not:
258	258	229 (i) include as a current beneficiary a person who is not a current beneficiary of the first
259	259	230trust or include as a current beneficiary with respect to trust principal a person who is a current
260	260	231beneficiary of the first trust only with respect to trust income, except as otherwise provided in
261	261	232subsection (d);
262	262	233 (ii) include as a presumptive remainder beneficiary or successor beneficiary a person who
263	263	234is not a current beneficiary, presumptive remainder beneficiary or successor beneficiary of the
264	264	235first trust, except as otherwise provided in subsection (d); or
265	265	236 (iii) reduce or eliminate a vested interest.
266	266	237 (d) Subject to clause (iii) of subsection (c) and section 914, in an exercise of the
267	267	238decanting power under this section, a second trust may be a trust created or administered under
268	268	239the law of any jurisdiction and may:
269	269	240 (i) retain a power of appointment granted in the first trust;
270	270	241 (ii) omit a power of appointment granted in the first trust, other than a presently
271	271	242exercisable general power of appointment; 14 of 28
272	272	243 (iii) create or modify a power of appointment if the powerholder is a current beneficiary
273	273	244of the first trust and the authorized fiduciary has expanded distributive discretion to distribute
274	274	245principal to the beneficiary; or
275	275	246 (iv) create or modify a power of appointment if the powerholder is a presumptive
276	276	247remainder beneficiary or successor beneficiary of the first trust; provided, however, that the
277	277	248exercise of the power may take effect only after the powerholder becomes, or would have
278	278	249become if then living, a current beneficiary.
279	279	250 (e) A power of appointment described in subsection (d) may be general or nongeneral.
280	280	251The class of permissible appointees in favor of which the power may be exercised may be
281	281	252broader than or different from the beneficiaries of the first trust.
282	282	253 (f) If an authorized fiduciary has expanded distributive discretion over part, but not all, of
283	283	254the principal of a first trust, the fiduciary may exercise the decanting power under this section
284	284	255over that part of the principal over which the authorized fiduciary has expanded distributive
285	285	256discretion.
286	286	257 Section 912. Decanting power under limited distributive discretion
287	287	258 (a) In this section, “limited distributive discretion” shall mean a discretionary power of
288	288	259distribution that is limited to an ascertainable standard or a reasonably definite standard.
289	289	260 (b) An authorized fiduciary who has limited distributive discretion over the principal of
290	290	261the first trust for the benefit of 1 or more current beneficiaries may exercise the decanting power
291	291	262over the principal of the first trust. 15 of 28
292	292	263 (c) Under this section and subject to section 914, a second trust may be created or
293	293	264administered under the law of any jurisdiction. Under this section, the second trusts, in the
294	294	265aggregate, shall grant each beneficiary of the first trust beneficial interests which are
295	295	266substantially similar to the beneficial interests of the beneficiary in the first trust.
296	296	267 (d) A power to make a distribution under a second trust for the benefit of a beneficiary
297	297	268who is an individual shall be substantially similar to a power under the first trust to make a
298	298	269distribution directly to the beneficiary. A distribution is for the benefit of a beneficiary if:
299	299	270 (i) the distribution is applied for the benefit of the beneficiary;
300	300	271 (ii) the beneficiary is under a legal disability or the trustee reasonably believes the
301	301	272beneficiary is incapacitated, and the distribution is made as permitted under this chapter; or
302	302	273 (iii) the distribution is made as permitted under the terms of the first-trust instrument and
303	303	274the second-trust instrument for the benefit of the beneficiary.
304	304	275 (e) If an authorized fiduciary has limited distributive discretion over part, but not all, of
305	305	276the principal of a first trust, the fiduciary may exercise the decanting power under this section
306	306	277over that part of the principal over which the authorized fiduciary has limited distributive
307	307	278discretion.
308	308	279 Section 913. Trust for beneficiary with disability
309	309	280 For the purposes of this section, the following terms shall have the following meanings
310	310	281unless the context clearly requires otherwise:
311	311	282 “Beneficiary with a disability”, a beneficiary of a first trust who the special-needs
312	312	283fiduciary believes may qualify for governmental benefits based on disability, whether or not the 16 of 28
313	313	284beneficiary currently receives those benefits or is an individual who has been adjudicated
314	314	285incompetent.
315	315	286 “Governmental benefits”, financial aid or services from a state, federal or other public
316	316	287agency.
317	317	288 “Special-needs fiduciary”, with respect to a trust that has a beneficiary with a disability:
318	318	289 (i) a trustee or other fiduciary, other than a settlor, who has discretion to distribute part or
319	319	290all of the principal of a first trust to 1 or more current beneficiaries;
320	320	291 (ii) if no trustee or fiduciary has discretion under clause (i), a trustee or other fiduciary,
321	321	292other than a settlor, who has discretion to distribute part or all of the income of the first trust to 1
322	322	293or more current beneficiaries; or
323	323	294 (iii) if no trustee or fiduciary has discretion under clause (i) or (ii), a trustee or other
324	324	295fiduciary, other than a settlor, who is required to distribute part or all of the income or principal
325	325	296of the first trust to one or more current beneficiaries.
326	326	297 “Special-needs trust”, a trust which the trustee believes would not be considered a
327	327	298resource for purposes of determining whether a beneficiary with a disability is eligible for any
328	328	299governmental benefit.
329	329	300 (b) A special-needs fiduciary may exercise the decanting power under section 911 over
330	330	301the principal of a first trust as if the fiduciary had authority to distribute principal to a beneficiary
331	331	302with a disability subject to expanded distributive discretion if:
332	332	303 (i) a second trust is a special-needs trust that benefits the beneficiary with a disability;
333	333	304and 17 of 28
334	334	305 (ii) the special-needs fiduciary determines that exercise of the decanting power will
335	335	306further the purposes of the first trust.
336	336	307 (c) In an exercise of the decanting power under this section, the following rules shall
337	337	308apply:
338	338	309 (1) Notwithstanding clause (ii) of subsection (c) of section 911, the interest in the second
339	339	310trust of a beneficiary with a disability may:
340	340	311 (i) be a pooled trust as defined by Medicaid law for the benefit of the beneficiary with a
341	341	312disability under 42 U.S.C. section 1396p(d)(4)(C); or
342	342	313 (ii) contain payback provisions complying with reimbursement requirements of Medicaid
343	343	314law under 42 U.S.C. section 1396p(d)(4)(A).
344	344	315 (2) Clause (iii) of subsection (c) of section 911 shall not apply to the interests of the
345	345	316beneficiary with a disability.
346	346	317 (3) Except as affected by any change to the interests of the beneficiary with a disability,
347	347	318the second trust, or if there are 2 or more second trusts, the second trusts in the aggregate shall
348	348	319grant each other beneficiary of the first trust beneficial interests in the second trusts which are
349	349	320substantially similar to the beneficiary’s beneficial interests in the first trust.
350	350	321 Section 914. Protection of charitable interest
351	351	322 (a) For the purposes of this section, the following terms shall have the following
352	352	323meanings unless the context clearly requires otherwise: 18 of 28
353	353	324 “Determinable charitable interest”, a charitable interest that is a right to a mandatory
354	354	325distribution currently, periodically, on the occurrence of a specified event or after the passage of
355	355	326a specified time and which is unconditional or will be held solely for charitable purposes
356	356	327described in subsection (a) of section 405.
357	357	328 (2) “Unconditional”, not subject to the occurrence of a specified event that is not certain
358	358	329to occur, other than a requirement in a trust instrument that a charitable organization be in
359	359	330existence or qualify under a particular provision of the Internal Revenue Code of the United
360	360	331States on the date of the distribution, if the charitable organization meets the requirement on the
361	361	332date of determination.
362	362	333 (b) If a first trust contains a determinable charitable interest, the attorney general has the
363	363	334rights of a qualified beneficiary and may represent and bind the charitable interest.
364	364	335 (c) This article shall not be construed to limit the powers or duties of the attorney general
365	365	336under law of the commonwealth other than this article.
366	366	337 Section 915. Trust limitation on decanting
367	367	338 (a) An authorized fiduciary may not exercise the decanting power to the extent the first-
368	368	339trust instrument expressly prohibits exercise of:
369	369	340 (i) the decanting power; or
370	370	341 (ii) a power granted by state law to the fiduciary to distribute part or all of the principal of
371	371	342the trust to another trust or to modify the trust.
372	372	343 (b) Exercise of the decanting power is subject to any restriction in the first-trust
373	373	344instrument that expressly applies to exercise of: 19 of 28
374	374	345 (i) the decanting power; or
375	375	346 (ii) a power granted by state law to a fiduciary to distribute part or all of the principal of
376	376	347the trust to another trust or to modify the trust.
377	377	348 (c) A general prohibition of the amendment or revocation of a first trust, a spendthrift
378	378	349clause or a clause restraining the voluntary or involuntary transfer of a beneficiary’s interest shall
379	379	350not preclude exercise of the decanting power.
380	380	351 (d) Subject to subsections (a) and (b), an authorized fiduciary may exercise the decanting
381	381	352power under this article even if the first-trust instrument permits the authorized fiduciary or
382	382	353another person to modify the first-trust instrument or to distribute part or all of the principal of
383	383	354the first trust to another trust.
384	384	355 (e) If a first-trust instrument contains an express prohibition described in subsection (a) or
385	385	356an express restriction described in subsection (b), the provision shall be included in the second-
386	386	357trust instrument.
387	387	358 Section 916. Change in compensation
388	388	359 (a) If a first-trust instrument specifies an authorized fiduciary’s compensation, the
389	389	360fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above
390	390	361the specified compensation unless:
391	391	362 (i) all qualified beneficiaries of the second trust consent to the increase in a signed record;
392	392	363or
393	393	364 (ii) the increase is approved by the court. 20 of 28
394	394	365 (b) If a first-trust instrument does not specify an authorized fiduciary’s compensation, the
395	395	366fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above
396	396	367the compensation permitted by this chapter unless:
397	397	368 (i) all qualified beneficiaries of the second trust consent to the increase in a signed record;
398	398	369or
399	399	370 (ii) the increase is approved by the court.
400	400	371 (c) A change in an authorized fiduciary’s compensation which is incidental to other
401	401	372changes made by the exercise of the decanting power shall not be an increase in the fiduciary’s
402	402	373compensation for purposes of subsections (a) and (b).
403	403	374 Section 917. Relief from liability and indemnification
404	404	375 (a) Except as otherwise provided in this section or approved by the court, a second-trust
405	405	376instrument shall not relieve an authorized fiduciary from liability for breach of trust to a greater
406	406	377extent than the first-trust instrument.
407	407	378 (b) A second-trust instrument may provide for indemnification of an authorized fiduciary
408	408	379of the first trust or another person acting in a fiduciary capacity under the first trust for any
409	409	380liability or claim that would have been payable from the first trust if the decanting power had not
410	410	381been exercised.
411	411	382 (c) Except as approved by the court, a second-trust instrument shall not reduce fiduciary
412	412	383liability in the aggregate.
413	413	384 (d) Subject to subsection (c), a second-trust instrument may divide and reallocate
414	414	385fiduciary powers among fiduciaries, including 1 or more trustees, distribution advisors, 21 of 28
415	415	386investment advisors, trust protectors or other persons and relieve a fiduciary from liability for an
416	416	387act or failure to act of another fiduciary as permitted by law of the commonwealth other than this
417	417	388article.
418	418	389 Section 918. Removal or replacement of authorized fiduciary
419	419	390 An authorized fiduciary shall not exercise the decanting power to modify a provision in a
420	420	391first-trust instrument granting another person power to remove or replace the fiduciary unless:
421	421	392 (i) the person holding the power consents to the modification in a signed record and the
422	422	393modification applies only to the person;
423	423	394 (ii) the person holding the power and the qualified beneficiaries of the second trust
424	424	395consent to the modification in a signed record and the modification grants a substantially similar
425	425	396power to another person; or
426	426	397 (iii) the court approves the modification and the modification grants a substantially
427	427	398similar power to another person.
428	428	399 Section 919. Tax-related limitations
429	429	400 (a) For the purposes of this section, the following terms shall have the following
430	430	401meanings unless the context clearly requires otherwise:
431	431	402 “Grantor trust”, a trust to which a settlor of a first trust is considered the owner under
432	432	403sections 671 through 677, inclusive, or section 679 of the Internal Revenue Code. 22 of 28
433	433	404 “Internal Revenue Code”, the Internal Revenue Code of the United States as amended
434	434	405and as then in effect; provided, however, that references to a specific provision of the Internal
435	435	406Revenue Code shall include a successor provision of the same general effect.
436	436	407 “Nongrantor trust”, a trust that is not a grantor trust.
437	437	408 “Qualified benefits property”, property subject to the minimum distribution requirements
438	438	409of section 401(a)(9) of the Internal Revenue Code and any applicable regulations, or to any
439	439	410similar requirements that refer thereto.
440	440	411 (b) An exercise of the decanting power is subject to the following limitations:
441	441	412 (1) If a first trust contains property that qualified, or would have qualified but for
442	442	413provisions of this article other than this section, for a marital deduction for purposes of the gift or
443	443	414estate tax under the Internal Revenue Code or a state gift, estate or inheritance tax, the second-
444	444	415trust instrument shall not include or omit any term that, if included in or omitted from the trust
445	445	416instrument for the trust to which the property was transferred, would have prevented the transfer
446	446	417from qualifying for the deduction or would have reduced the amount of the deduction under the
447	447	418same provisions of the Internal Revenue Code or state law under which the transfer qualified.
448	448	419 (2) If the first trust contains property that qualified, or would have qualified but for
449	449	420provisions of this article other than this section, for a charitable deduction for purposes of the
450	450	421income, gift or estate tax under the Internal Revenue Code or a state income, gift, estate or
451	451	422inheritance tax, the second-trust instrument shall not include or omit any term that, if included in
452	452	423or omitted from the trust instrument for the trust to which the property was transferred, would
453	453	424have prevented the transfer from qualifying for the deduction or would have reduced the amount 23 of 28
454	454	425of the deduction under the same provisions of the Internal Revenue Code or state law under
455	455	426which the transfer qualified.
456	456	427 (3) If the first trust contains property that qualified, or would have qualified but for
457	457	428provisions of this article other than this section, for the exclusion from the gift tax described in
458	458	429section 2503(b) of the Internal Revenue Code, the second-trust instrument shall not include or
459	459	430omit a term that, if included in or omitted from the trust instrument for the trust to which the
460	460	431property was transferred, would have prevented the transfer from qualifying under such section.
461	461	432If the first trust contains property that qualified, or would have qualified but for provisions of this
462	462	433article other than this section, for the exclusion from the gift tax described in section 2503(b) of
463	463	434the Internal Revenue Code by application of section 2503(c) of the Internal Revenue Code, the
464	464	435second-trust instrument shall not include or omit a term that, if included or omitted from the trust
465	465	436instrument for the trust to which the property was transferred, would have prevented the transfer
466	466	437from qualifying under section 2503(c) of the Internal Revenue Code.
467	467	438 (4) If the property of the first trust includes shares of stock in an S corporation, as defined
468	468	439in section 1361 of the Internal Revenue Code and the first trust is, or but for provisions of this
469	469	440article other than this section would be, a permitted shareholder under any provision of section
470	470	4411361 of the Internal Revenue Code, an authorized fiduciary may exercise the power with respect
471	471	442to part or all of the S corporation stock only if any second trust receiving the stock is a permitted
472	472	443shareholder under section 1361(c)(2) of the Internal Revenue Code. If the property of the first
473	473	444trust includes shares of stock in an S corporation and the first trust is, or but for provisions of this
474	474	445article other than this section would be, a qualified subchapter S trust within the meaning of
475	475	446section 1361(d) of the Internal Revenue Code, the second-trust instrument shall not include or
476	476	447omit a term that prevents the second trust from qualifying as a qualified subchapter S trust. 24 of 28
477	477	448 (5) If the first trust contains property that qualified, or would have qualified but for
478	478	449provisions of this article other than this section, for a 0 inclusion ratio for purposes of the
479	479	450generation-skipping transfer tax under section 2642(c) of the Internal Revenue Code, the second-
480	480	451trust instrument shall not include or omit a term that, if included in or omitted from the first-trust
481	481	452instrument, would have prevented the transfer to the first trust from qualifying for a 0 inclusion
482	482	453ratio under such section.
483	483	454 (6) If the first trust is directly or indirectly the beneficiary of qualified benefits property,
484	484	455the second-trust instrument shall not include or omit any term that, if included in or omitted from
485	485	456the first-trust instrument, would have increased the minimum distributions required with respect
486	486	457to the qualified benefits property under section 401(a)(9) of the Internal Revenue Code and any
487	487	458applicable regulations or any similar requirements that refer thereto. If an attempted exercise of
488	488	459the decanting power violates the preceding sentence, the trustee shall be deemed to have held the
489	489	460qualified benefits property and any reinvested distributions of the property as a separate share
490	490	461from the date of the exercise of the power and section 922 shall apply to the separate share.
491	491	462 (7) If the first trust qualifies as a grantor trust because of the application of section
492	492	463672(f)(2)(A) of the Internal Revenue Code, the second trust shall not include or omit a term that,
493	493	464if included in or omitted from the first-trust instrument, would have prevented the first trust from
494	494	465qualifying under such section.
495	495	466 (8) In this paragraph, “tax benefit” shall mean a federal or state tax deduction, exemption,
496	496	467exclusion or other benefit not otherwise listed in this section, except for a benefit arising from
497	497	468being a grantor trust. Subject to paragraph (9), a second-trust instrument shall not include or omit 25 of 28
498	498	469a term that, if included in or omitted from the first-trust instrument, would have prevented
499	499	470qualification for a tax benefit if:
500	500	471 (i) the first-trust instrument expressly indicates an intent to qualify for the benefit or the
501	501	472first-trust instrument clearly is designed to enable the first trust to qualify for the benefit; and
502	502	473 (ii) the transfer of property held by the first trust or the first trust qualified or, but for
503	503	474provisions of this article other than this section, would have qualified for the tax benefit.
504	504	475 (9) Subject to paragraph (4):
505	505	476 (i) except as otherwise provided in paragraph (7), the second trust may be a nongrantor
506	506	477trust, even if the first trust is a grantor trust; and
507	507	478 (ii) the second trust may be a grantor trust, even if the first trust is a nongrantor trust.
508	508	479 Section 920. Duration of second trust
509	509	480 (a) Subject to subsection (b), a second trust may have a duration that is the same as or
510	510	481different from the duration of the first trust.
511	511	482 (b) To the extent that property of a second trust is attributable to property of the first trust,
512	512	483the property of the second trust is subject to any rules governing maximum perpetuity,
513	513	484accumulation or suspension of the power of alienation which apply to property of the first trust.
514	514	485 Section 921. Need to distribute not required
515	515	486 An authorized fiduciary may exercise the decanting power whether or not under the first
516	516	487trust’s discretionary distribution standard the fiduciary would have made or could have been
517	517	488compelled to make a discretionary distribution of principal at the time of the exercise. 26 of 28
518	518	489 Section 922. Saving provision
519	519	490 (a) If exercise of the decanting power would be effective under this article except that the
520	520	491second-trust instrument in part does not comply with this article, the exercise of the power shall
521	521	492be effective and the following rules shall apply with respect to the principal of the second trust
522	522	493attributable to the exercise of the power:
523	523	494 (1) A provision in the second-trust instrument which is not permitted under this article
524	524	495shall be void to the extent necessary to comply with this article.
525	525	496 (2) A provision required by this article to be in the second-trust instrument which is not
526	526	497contained in the instrument shall be deemed to be included in the instrument to the extent
527	527	498necessary to comply with this article.
528	528	499 (b) If a trustee or other fiduciary of a second trust determines that subsection (a) applies
529	529	500to a prior exercise of the decanting power, the fiduciary shall take corrective action consistent
530	530	501with the fiduciary’s duties.
531	531	502 Section 923. Trust for care of an animal
532	532	503 (a) For purposes of this section, the following terms shall have the following meanings
533	533	504unless the context clearly requires otherwise:
534	534	505 “Animal trust”, a trust or an interest in a trust described in section 408.
535	535	506 “Protector”, the person who may enforce the intended use of the principal or income of
536	536	507an animal trust under subsection (f) of section 408. 27 of 28
537	537	508 (b) The decanting power may be exercised over an animal trust that has a protector to the
538	538	509extent the trust could be decanted under this article if each animal that benefits from the trust
539	539	510were an individual if the protector consents in a signed record to the exercise of the power.
540	540	511 (c) Notwithstanding any other provision of this article, if a first trust is an animal trust, in
541	541	512an exercise of the decanting power, the second trust shall provide that trust property may be
542	542	513applied only to its intended purpose for the period the first trust benefitted the animal.
543	543	514 Section 924. Terms of second trust
544	544	515 A reference in this chapter to a trust instrument or terms of the trust includes a second-
545	545	516trust instrument and the terms of the second trust.
546	546	517 Section 925. Settlor
547	547	518 (a) For purposes of law of the commonwealth other than this article and subject to
548	548	519subsection (b), a settlor of a first trust is deemed to be the settlor of the second trust with respect
549	549	520to the portion of the principal of the first trust subject to the exercise of the decanting power.
550	550	521 (b) In determining settlor intent with respect to a second trust, the intent of a settlor of the
551	551	522first trust, a settlor of the second trust and the authorized fiduciary may be considered.
552	552	523 Section 926. Later-discovered and later-acquired property
553	553	524 (a) Except as otherwise provided in subsection (c), if exercise of the decanting power was
554	554	525intended to distribute all the principal of the first trust to 1 or more second trusts, later-
555	555	526discovered property belonging to the first trust and property paid to or acquired by the first trust
556	556	527after the exercise of the power shall be part of the trust estate of the second trust or trusts. 28 of 28
557	557	528 (b) Except as otherwise provided in subsection (c), if exercise of the decanting power was
558	558	529intended to distribute less than all of the principal of the first trust to 1 or more second trusts,
559	559	530later-discovered property belonging to the first trust or property paid to or acquired by the first
560	560	531trust after exercise of the power shall remain part of the trust estate of the first trust.
561	561	532 (c) An authorized fiduciary may provide in an exercise of the decanting power or by the
562	562	533terms of a second trust for disposition of later-discovered property belonging to the first trust or
563	563	534property paid to or acquired by the first trust after exercise of the power.
564	564	535 Section 927. Obligations
565	565	536 A debt, liability or other obligation enforceable against property of a first trust is
566	566	537enforceable to the same extent against the property when held by the second trust after exercise
567	567	538of the decanting power.
568	568	539 SECTION 5. This act shall take effect on January 1, 2026.