2010 Pennsylvania Code
Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES
Chapter 75 - Limitations on Exercise of Trustee Powers and Powers of Beneficiaries to Appoint Trustees
7506 - Certain powers of beneficiaries not exercisable.

     § 7506.  Certain powers of beneficiaries not exercisable.
        (a)  General rule.--No beneficiary of a trust in an
     individual, trustee or other capacity may appoint himself or
     herself as trustee or remove a trustee and appoint in place of
     the trustee so removed a trustee who is related or subordinate
     to the beneficiary within the meaning of section 672(c) of the
     Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
     672(c)) in each case unless:
            (1)  the trustee's discretionary power to make
        distributions to or for the beneficiary is limited by an
        ascertainable standard relating to the beneficiary's health,
        education, support or maintenance within the meaning of
        sections 2041 and 2514 of the Internal Revenue Code of 1986
        (26 U.S.C. §§ 2041 and 2514);
            (2)  the trustee's discretionary power may not be
        exercised to satisfy any of the beneficiary's legal
        obligations for support or other purposes; and
            (3)  the trustee's discretionary power may not be
        exercised to grant to the beneficiary a general power to
        appoint property of the trust to the beneficiary, the
        beneficiary's estate or the creditors of either within the
        meaning of section 2041 of the Internal Revenue Code of 1986
        (26 U.S.C. § 2041).
        (b)  Exceptions.--This section shall not apply:
            (1)  if the appointment of the trustee by the beneficiary
        may be made only in conjunction with another person having a
        substantial interest in the property of the trust subject to
        the power which is adverse to the exercise of the power in
        favor of the beneficiary within the meaning of section
        2041(b)(1)(C)(ii) of the Internal Revenue Code of 1986 (26
        U.S.C. § 2041(b)(1)(C)(ii)) or the appointment is in
        conformity with a procedure governing appointments approved
        by the court before December 21, 1998;
            (2)  to any beneficiary who possesses in an 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; or
            (3)  to 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 beneficiary for Federal estate tax purposes if
        the beneficiary had died on March 21, 1999.
     (July 7, 2006, P.L.625, No.98, eff. 60 days)