§ 36C-4-417. Combination and division of trusts.
§ 36C‑4‑417. Combination and division of trusts.
(a) Unless otherwiseprovided in the trust instrument, a trustee may do any of the following:
(1) Consolidate theassets of more than one trust and administer the assets as one trust under theterms of one of the trusts if the terms of the trusts are substantially similarand the beneficiaries of the trusts are identical.
(2) Divide one trustinto two or more separate trusts if the new trusts provide in the aggregate forthe same succession of interests and beneficiaries as are provided in theoriginal trust.
(b) In dividing a trustinto two or more separate trusts, a trustee shall accomplish the division bysevering the trusts on a fractional basis and funding the separate trustseither (i) with a pro rata portion of each asset held by the undivided trust;or (ii) on a non‑pro rata basis based on either the fair market value ofthe assets on the date of funding or in a manner that fairly reflects the netappreciation or depreciation in the value of the assets measured from thevaluation date to the date of funding.
(c) In any case wheretwo separate identical trusts are created under this section, one of which isfully exempt from the federal generation‑skipping transfer tax and one ofwhich is fully subject to that tax, the trustee may thereafter, to the extentpossible consistent with the terms of the trust, determine the value of anymandatory or discretionary distributions to trust beneficiaries on the basis ofthe combined value of both trusts, but may satisfy those distributions by amethod other than pro rata from the separate trusts in a manner designed tominimize the current and potential generation‑skipping transfer tax. (2005‑192, s. 2; 2006‑259,s. 13(h).)