2010 Pennsylvania Code
Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES
Chapter 75 - Limitations on Exercise of Trustee Powers and Powers of Beneficiaries to Appoint Trustees
7504 - Certain trustee powers not exercisable.

     § 7504.  Certain trustee powers not exercisable.
        (a)  General rule.--The following powers conferred by a
     governing instrument upon a trustee in his or her capacity as a
     trustee shall not be exercised by that trustee:
            (1)  The power to make discretionary distributions of
        either principal or income to or for the benefit of the
        trustee, the trustee's estate or the creditors of either
        unless the power is either:
                (i)  limited by an ascertainable standard relating to
            the trustee's health, education, support or maintenance
            within the meaning of 26 U.S.C. §§ 2041 (relating to
            powers of appointment) and 2514 (relating to powers of
            appointment); or
                (ii)  exercisable by the trustee only in conjunction
            with another person having a substantial interest in the
            property subject to the power which is adverse to the
            interest of the trustee within the meaning of 26 U.S.C. §
            2041(b)(1)(C)(ii).
            (2)  The power to make discretionary distributions of
        either principal or income to satisfy any of the trustee's
        personal legal obligations for support or other purposes.
            (3)  The power to make discretionary allocations in the
        trustee's personal favor of receipts or expenses as between
        income and principal unless the trustee has no power to
        enlarge or shift any beneficial interest except as an
        incidental consequence of the discharge of the trustee's
        fiduciary duties.
            (4)  The power to exercise any of the powers proscribed
        in this subsection with regard to an individual other than
        the trustee to the extent that the individual could exercise
        a similar prohibited power in connection with a trust that
        benefits the trustee.
        (b)  Limited exercise of prohibited power.--
            (1)  If a trustee is prohibited by subsection (a)(1) from
        exercising a power conferred upon the trustee, the trustee
        nevertheless may exercise that power but shall be limited to
        distributions for the trustee's health, education, support or
        maintenance to the extent otherwise permitted by the terms of
        the trust.
            (2)  Unless otherwise prohibited by the provisions of
        this section, a trustee may exercise a power described herein
        in favor of someone other than the trustee, the trustee's
        estate or the creditors of either.
        (c)  Exceptions.--This section shall not apply to:
            (1)  A trustee who possesses in his individual capacity
        an unlimited right to withdraw the entire principal of the
        trust or has a general testamentary power of appointment over
        the entire principal of the trust.
            (2)  A trust created under a governing instrument
        executed on or before March 21, 1999, if no part of the
        principal of the trust would have been included in the gross
        estate of the trustee for Federal estate tax purposes if the
        trustee had died on March 21, 1999, without having exercised
        the power under the governing instrument to make
        discretionary distributions of principal or income to or for
        the benefit of the trustee, the trustee's estate or the
        creditors of either.
     (July 7, 2006, P.L.625, No.98, eff. 60 days)

        2006 Amendment.  Act 98 added subsec. (c).
        Cross References.  Section 7504 is referred to in section
     7505 of this title.