59-22a01. Order for administration in accordance with intent; order of change to qualify for federal estate tax deduction.
59-22a01
59-22a01. Order for administration in accordance with intent;order of change to qualify for federal estate tax deduction.(a) If a trust for charity is or becomes illegal orimpossible or impracticable of fulfillment or if a devise or bequest forcharity, at the time it was intended to become effective is illegal orimpossible or impracticable of fulfillment, and if the settlor or testator,manifested a general intention to devote the property to charity, anyjudge, on application of any trustee, executor, administrator, anyinterested party or the attorney general, may order an administration ofthe trust, devise or bequest as nearly as possible to fulfill themanifested general charitable intention of the settlor or testator.In every such proceeding, the attorney general, as representative of thepublic interest, shall be notified and given an opportunity to be heard.The provisions of this act shall not be applicable if the settlor ortestator has provided, either directly or indirectly, for an alternativeplan in the event the charitable trust, devise or bequest is or becomesillegal or impossible or impracticable of fulfillment. If the alternativeplan is also a charitable trust or devise or bequest for charity and suchtrust, devise or bequest for charity fails, the intention shown in theoriginal plan shall prevail in the application of this act.
(b) In the case of a will, trust or other governinginstrument, if a federal estate tax deductionis not allowable at the time of a decedent's death because of the failureof an interest in property which passes from the decedent to a person, orfor a use, described in section 2055(a) of the internal revenue code of1986, to meet the requirements of section 170(f)(3)(B) or 2055(e)(2) ofthe internal revenue code of 1986,then in order that such deduction shallnevertheless be allowable under section 2055(a) of theinternal revenuecode of 1986, any judge, on applicationof any trustee, executor, administrator or any interested party may:
(1) With the written consent of the charitable beneficiaries, thenoncharitable beneficiaries not under any legal disability and dulyappointed guardians or guardians ad litem acting on behalf of anybeneficiaries under legal disability or conservator; or
(2) upon a finding that the interest of such beneficiaries issubstantially preserved, order a change to the governing instrument by reformation,amendment, construction or otherwise, which changes a reformable interest intoa qualified interest within the meaning of section 2055(e)(3) of the internalrevenue code of 1986. In every such proceeding, the attorney general, asrepresentative of the public interest, shall be notified and given anopportunity to be heard.
(c) As used in this act:
(1) "Charity" and "charitable" includes, but is notlimited to, any eleemosynary, religious, benevolent, educational, scientific,artisticor literary purpose.
(2) "Impracticable of fulfillment" includes, but is not limited to, thefailure of any trust for charity, testamentary or inter vivos,including, without limitation, trusts described in section 509 of theinternal revenue code of 1986and charitableremainder trusts described in section 664 of the internal revenue code of1986, toinclude, if required to do so by section 508(e) or section 4947(a) of theinternal revenue code of 1986, theprovisions relating to governing instruments set forth in section 508(e) ofthe internal revenue code of 1986.
(d) The provisions of this act shall be effective as to all wills andtrusts not construed prior to the effective date of this act.
History: L. 1988, ch. 199, § 1;L. 1991, ch. 168, § 1; May 2.