Indiana Code 30-4-10-41. Exercise of decanting power and distributive discretion; limitations; general or nongeneral appointment
(1) exercise of discretion; or
Terms Used In Indiana Code 30-4-10-41
- authorized fiduciary: means :
Indiana Code 30-4-10-4
- 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
- beneficiary: means a person that:
Indiana Code 30-4-10-5
- current beneficiary: means a beneficiary who, on the date that the beneficiary's qualification is determined, is a distributee or permissible distributee of trust income or principal. See Indiana Code 30-4-10-11
- decanting power: means the power of an authorized fiduciary under this chapter to:
Indiana Code 30-4-10-12
- expanded distributive discretion: means a discretionary power of distribution that is not limited to an ascertainable standard or a reasonably definite standard. See Indiana Code 30-4-10-14
- Fiduciary: A trustee, executor, or administrator.
- first trust: means a trust over which an authorized fiduciary may exercise the decanting power. See Indiana Code 30-4-10-15
- general power of appointment: means a power of appointment exercisable in favor of:
Indiana Code 30-4-10-17
- Income: except as otherwise stated in a trust agreement, has the meaning set forth in IC 30-2-14-4. See Indiana Code 30-4-1-2
- person: means :
Indiana Code 30-4-10-19
- power of appointment: means a power that enables a powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over the appointive property. See Indiana Code 30-4-10-20
- powerholder: means a person in which a donor creates a power of appointment. See Indiana Code 30-4-10-21
- Principal: has the meaning set forth in IC 30-2-14-10. See Indiana Code 30-4-1-2
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- qualified beneficiary: has the meaning set forth in IC 30-4-1-2(19). See Indiana Code 30-4-10-23
- 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.
- second trust: means :
Indiana Code 30-4-10-26
- Trust property: means property either placed in trust or purchased or otherwise acquired by the trustee for the trust regardless of whether the trust property is titled in the name of the trustee or the name of the trust. See Indiana Code 30-4-1-2
The term does not include a right held by a beneficiary if any person has discretion to distribute property subject to the right of any person other than the beneficiary or the beneficiary’s estate.
(b) As used in this section, “presumptive remainder beneficiary” means a qualified beneficiary other than a current beneficiary.
(c) As used in this section, “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.
(d) As used in this section, “vested interest” means a:
(1) right to a mandatory distribution that is a noncontingent right as of the date of the exercise of the decanting power;
(2) 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;
(3) 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;
(4) presently exercisable general power of appointment; or
(5) 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.
(e) Subject to subsection (f) and section 44 of this chapter, an authorized fiduciary that has expanded distributive discretion over the principal of a first trust for the benefit of one (1) or more current beneficiaries may exercise the decanting power over the principal of the first trust.
(f) Subject to section 43 of this chapter, an exercise of the decanting power under this section must not:
(1) except as provided in subsection (g), include as a current beneficiary a person that is not a current beneficiary of the first trust;
(2) except as provided in subsection (g), 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; or
(3) reduce or eliminate a vested interest.
(g) Subject to subsection (f)(3) and section 44 of this chapter, in an exercise of the decanting power under this subsection, a second trust may be a trust created or administered under the law of any jurisdiction and may:
(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; and
(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 a current beneficiary.
(h) A power of appointment described in subsections (g)(1) through (g)(4) 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.
(i) If an authorized fiduciary has expanded distributive discretion over part of the principal of a first trust, the fiduciary may exercise the decanting power under this section over the principal that the authorized fiduciary has expanded distributive discretion.
As added by P.L.161-2022, SEC.3.