2006 New York Code - Exercise Of A Power Of Appointment; Effect When More Extensive Or Less Extensive Than Authorized; Trustee\'s Authority To Invade Principal In Trust.

 
  § 10-6.6 Exercise  of a power of appointment; effect when more extensive
             or less extensive than  authorized;  trustee's  authority  to
             invade principal in trust.
    (a)  An  exercise  of  a  power of appointment is not void because its
  exercise is:
    (1) More extensive than was authorized but  is  valid  to  the  extent
  authorized by the instrument creating the power.
    (2)  Less  extensive  than  authorized  by the instrument creating the
  power, unless the donor has manifested a contrary intention.
    (b) Unless the terms of the instrument expressly provide otherwise:
    (1) A trustee who has the absolute discretion, under the  terms  of  a
  testamentary  instrument  or irrevocable inter vivos trust agreement, to
  invade the principal of a trust for the benefit of one  or  more  proper
  objects  of  the  exercise of the power, may exercise such discretion by
  appointing all or part of the principal of  the  trust  in  favor  of  a
  trustee  of  a trust under an instrument other than that under which the
  power to invade is created  or  under  the  same  instrument,  provided,
  however,  that  the  exercise of such discretion (A) does not reduce any
  fixed income interest of any income beneficiary of the trust, (B) is  in
  favor  of  the proper objects of the exercise of the power, and (C) does
  not violate the limitations of 11-1.7; and
    (2) A trustee described in subparagraph (1) of this paragraph may  act
  thereunder  without  consent  of any interested person and without prior
  court approval but is also authorized to seek such court  approval,  and
  the  court  having  jurisdiction  of the trust, upon the petition of the
  trustee and upon notice to all persons  interested  in  the  trust,  may
  direct  the trustee to exercise its discretion by appointing all or part
  of the principal of the trust in favor of a trustee of a trust under  an
  instrument other than that under which the power to invade is created or
  under  the same instrument, provided, however, that the exercise of such
  discretion (A) does not reduce any fixed income interest of  any  income
  beneficiary  of  the trust, (B) is in favor of the proper objects of the
  exercise of the power, and (C)  does  not  violate  the  limitations  of
  11-1.7.
    (c)  Unless  the  court  upon  application  of  the  trustee otherwise
  directs, the aggregate annual and principal  commissions  of  a  trustee
  shall  not  be  increased  by  its  action  under  paragraph (b) of this
  section.
    (d) The exercise of the power to invade the  principal  of  the  trust
  under  subparagraph  (1) of paragraph (b) of this section shall be by an
  instrument in writing, signed and acknowledged by the trustee and  filed
  in  the  office  of  the clerk of the court having jurisdiction over the
  trust; and a copy thereof shall be served on all persons  interested  in
  the trust (or on the guardian of the property, committee, conservator or
  personal  representative  of  such  persons or the parent or person with
  whom a minor resides), by registered or certified mail,  return  receipt
  requested, or by personal delivery or upon application of the trustee in
  any other manner directed by the court.
    (e)  For  the  purposes  of  this  section,  the  phrase  "all persons
  interested in the trust" shall mean all the persons upon whom service of
  process would be required in a proceeding for the judicial settlement of
  the account of the trustee, taking into account  section  three  hundred
  fifteen of the surrogate's court procedure act.
    (f)  The  exercise  of  the power to invade the principal of the trust
  under paragraph (b) of this section shall be considered the exercise  of
  a special power of appointment as defined in 10-3.2 and shall be subject
  to  the  provisions  of 10-8.1 and 10-8.2 covering the time at which the
  permissible period of the rule against perpetuities begins and  the  law
  which   determines   the   permissible   period   of  the  rule  against
  perpetuities.
    (g)  The  provisions of this section shall not be construed to abridge
  the right of any trustee who has a power of invasion to appoint property
  in further trust which arises under any other section of this chapter or
  under another statute or under common law.