California Probate Code 19511 – (a) For purposes of this section:(1) “Noncontingent right” …
(a) For purposes of this section:
(1) “Noncontingent right” means a right that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur. The term does not include a right held by a beneficiary if any person has discretion to distribute property subject to the right to any person other than the beneficiary or the beneficiary’s estate.
Terms Used In California Probate Code 19511
- Beneficiary: means a person to whom a donative transfer of property is made or that person's successor in interest, and:
California Probate Code 24
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Fiduciary: means personal representative, trustee, guardian, conservator, attorney-in-fact under a power of attorney, custodian under the California Uniform Transfer To Minors Act (Part 9 (commencing with Section 3900) of Division 4), or other legal representative subject to this code. See California Probate Code 39
- Fiduciary: A trustee, executor, or administrator.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means an individual, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, limited liability company, association, or other entity. See California Probate Code 56
- Property: means anything that may be the subject of ownership and includes both real and personal property and any interest therein. See California Probate Code 62
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Trust: includes the following:
California Probate Code 82
(2) “Presumptive remainder beneficiary” means a qualified beneficiary other than a current beneficiary.
(3) “Successor beneficiary” means a beneficiary that is not a qualified beneficiary on the date the beneficiary’s qualification is determined. The term does not include a person that is a beneficiary only because the person holds a nongeneral power of appointment.
(4) “Vested interest” means any of the following:
(A) A right to a mandatory distribution that is a noncontingent right as of the date of the exercise of the decanting power.
(B) A current and noncontingent right, annually or more frequently, to a mandatory distribution of income, a specified dollar amount, or a percentage of value of some or all of the trust property.
(C) A current and noncontingent right, annually or more frequently, to withdraw income, a specified dollar amount, or a percentage of value of some or all of the trust property.
(D) A presently exercisable general power of appointment.
(E) A right to receive an ascertainable part of the trust property on the trust’s termination that is not subject to the exercise of discretion or to the occurrence of a specified event that is not certain to occur.
(b) Subject to subdivision (c) and Section 19514, an authorized fiduciary that has expanded distributive discretion over the principal of a first trust for the benefit of one or more current beneficiaries may exercise the decanting power over the principal of the first trust.
(c) Subject to Section 19513, in an exercise of the decanting power under this section, a second trust may not do any of the following:
(1) Include as a current beneficiary a person that is not a current beneficiary of the first trust, except as otherwise provided in subdivision (d).
(2) Include as a presumptive remainder beneficiary or successor beneficiary a person that is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the first trust, except as otherwise provided in subdivision (d).
(3) Reduce or eliminate a vested interest.
(d) Subject to paragraph (3) of subdivision (c) and Section 19514, in an exercise of the decanting power under this section, a second trust may be a trust created or administered under the law of any jurisdiction and may do each of the following:
(1) Retain a power of appointment granted in the first trust.
(2) Omit a power of appointment granted in the first trust, other than a presently exercisable general power of appointment.
(3) Create or modify a power of appointment if the powerholder is a current beneficiary of the first trust and the authorized fiduciary has expanded distributive discretion to distribute principal to the beneficiary.
(4) Create or modify a power of appointment if the powerholder is a presumptive remainder beneficiary or successor beneficiary of the first trust, but the exercise of the power may take effect only after the powerholder becomes, or would have become if then living, a current beneficiary.
(e) A power of appointment described in paragraphs (1) to (4), inclusive, of subdivision (d) may be general or nongeneral. The class of permissible appointees in favor of which the power may be exercised may be broader than, or different from, the beneficiaries of the first trust.
(f) If an authorized fiduciary has expanded distributive discretion over part but not all of the principal of a first trust, the fiduciary may exercise the decanting power under this section over that part of the principal over which the authorized fiduciary has expanded distributive discretion.
(Added by Stats. 2018, Ch. 407, Sec. 1. (SB 909) Effective January 1, 2019.)