Bill Text: NY A07800 | 2021-2022 | General Assembly | Introduced

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Bill Title: Relates to the computation and allocation of the commissions of trustees of charitable trusts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-01-05 - referred to judiciary [A07800 Detail]

Download: New_York-2021-A07800-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7800

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                      May 21, 2021
                                       ___________

        Introduced  by  M.  of A. DINOWITZ -- (at request of the Office of Court
          Administration) -- read once and referred to the Committee on  Judici-
          ary

        AN  ACT to amend the surrogate's court procedure act, in relation to the
          computation and allocation of the commissions of trustees of  charita-
          ble  trusts;  and  to  repeal  certain provisions of such law relating
          thereto

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Paragraphs (a) and (b) of subdivision 5 of section 2308 of
     2  the surrogate's court procedure act, as amended by chapter  601  of  the
     3  laws of 2019, are amended to read as follows:
     4    (a) During the continuance of a trust created solely for public, reli-
     5  gious,  charitable,  scientific, literary, educational or fraternal uses
     6  and during the period of continuance of such a trust  established  after
     7  the  termination  of a life use or uses the trustee shall be entitled to
     8  and may retain annual commissions [from income  in  an  amount  annually
     9  equal to 6 per cent of income collected in each year] according  to  the
    10  terms specified in subdivision 2 of this section, but only to the extent
    11  of    80   percent   of   the rates stated therein.  Notwithstanding any
    12  other provision of law, with respect   to   any portion  of  such  trust
    13  which  exceeds  a principal value of twenty million dollars, the trustee
    14  may only take annual commissions to the extent of 50 percent of the rate
    15  specified in paragraph (c) of subdivision 2 of this section.
    16    (b) In the case of a trust  [created  solely  for  public,  religious,
    17  charitable,  scientific,  literary,  educational  or fraternal uses the]
    18  described in paragraph (a) of this subdivision, a trustee shall  not  be
    19  entitled  to any commission from principal as specified in subdivision 1
    20  of this section for paying out principal.
    21    § 2. Paragraph (c) of subdivision 6 of section 2308 of the surrogate's
    22  court procedure act is REPEALED.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08844-02-1
        A. 7800                             2

     1    § 3. Subdivision 12 of section 2308 of the surrogate's court procedure
     2  act, as added by chapter 601 of the laws of 2019, is amended to read  as
     3  follows:
     4    12.  If a trustee of a trust [or donee of a power in trust] is author-
     5  ized or required by the terms of the will to accumulate income  for  any
     6  purpose  permitted  by law, any income so accumulated which is not added
     7  to principal of the trust [or to the principal of the  property  subject
     8  to  the  power  in  trust] shall be deemed a separate trust [or separate
     9  fund subject to the power in trust] for purposes of this subdivision and
    10  the trustee [or donee of the  power  in  trust]  shall  be  entitled  to
    11  commissions  in  respect thereof at the rates and according to the terms
    12  and provisions of subdivisions 1 [and], 2  and  5  of  this  section  as
    13  though,  for purposes of computing commissions of the trustee, income so
    14  accumulated was principal.
    15    § 4. Subdivision 3 of section 2309 of the surrogate's court  procedure
    16  act,  as  amended by chapter 601 of the laws of 2019, is amended to read
    17  as follows:
    18    3. Unless the will or lifetime trust instrument  otherwise  explicitly
    19  provides, the annual commissions allowed by [subdivision 2] this section
    20  shall  be  payable  one-third  from the income of the trust [or property
    21  subject to the power in trust] and two-thirds from the principal of  the
    22  trust  [or property subject to the power in trust]. However, in the case
    23  of a trust whose definition of income is governed by section  11-2.4  of
    24  the  estates,  powers  and  trusts law or a charitable remainder annuity
    25  trust or a charitable remainder unitrust,  as  defined  in  section  six
    26  hundred  sixty-four  of  the  Internal  Revenue Code of nineteen hundred
    27  eighty-six, as amended, such annual commissions shall  be  payable  from
    28  the corpus of any such trust after allowance for the annuity or unitrust
    29  amounts  and  shall  not  be  payable  out  of  such annuity or unitrust
    30  amounts.
    31    § 5. Paragraphs (a) and (b) of subdivision 5 of section  2309  of  the
    32  surrogate's  court  procedure act, as amended by chapter 601 of the laws
    33  of 2019, are amended to read as follows:
    34    (a) During the continuance of a trust created solely for public, reli-
    35  gious, charitable, scientific, literary, educational or  fraternal  uses
    36  and  during  the period of continuance of such a trust established after
    37  the termination of a life use or uses the trustee shall be  entitled  to
    38  and  may  retain  annual  commissions [from income in an amount annually
    39  equal to 6 per cent of income collected in each year] according  to  the
    40  terms specified in subdivision 2 of this section, but only to the extent
    41  of  80  percent  of the rates stated therein.  Notwithstanding any other
    42  provision of law, with respect  to  any  portion  of  such  trust  which
    43  exceeds  a  principal  value  of twenty million dollars, the trustee may
    44  only take annual commissions to the extent of 50  percent  of  the  rate
    45  specified in paragraph (c) of subdivision 2 of this section.
    46    (b) In the case of a trust  [created  solely  for  public,  religious,
    47  charitable,  scientific,  literary,  educational  or fraternal uses the]
    48  described in paragraph (a) of this subdivision, a trustee shall  not  be
    49  entitled  to any commission from principal as specified in subdivision 1
    50  of this section for paying out principal.
    51    § 6. Paragraphs (a) and (b) of subdivision 3 of section  2312  of  the
    52  surrogate's  court  procedure act, as amended by chapter 601 of the laws
    53  of 2019, are amended to read as follows:
    54    (a) during the continuance of a trust created solely for public, reli-
    55  gious, charitable, scientific, literary, educational or  fraternal  uses
    56  and  during  the period of continuance of such a trust established after
        A. 7800                             3

     1  the termination of a life use or uses a corporate trustee shall be enti-
     2  tled to and may retain annual commissions [from  income]  in  accordance
     3  with  the  provisions of subdivision 1 or 2 [hereof] of this section, as
     4  the  case  may  be,  except  that the trustee shall not be entitled to a
     5  commission for paying out principal.
     6    (b) In the case of a trust created solely for public, religious, char-
     7  itable, scientific, literary, educational or fraternal uses a  corporate
     8  trustee  shall  not  be entitled to any commission [from] for paying out
     9  principal.
    10    § 7. This act shall take effect immediately and  shall  apply  to  all
    11  trusts  in  existence on or after such effective date; provided, however
    12  that a trustee of a trust in existence on such effective date may  elect
    13  to  continue  to  take commissions under the law in effect prior to such
    14  effective date until December 31 of the year this act takes effect.