N.Y. Estates, Powers & Trusts Law § 7-1.19: Application for termination of uneconomical trust

§ 7-1.19 Application for termination of uneconomical trust

(a) Notwithstanding sections 7-1.5 and 7-2.4 of this article or any

other contrary provision of law:

(1) Any trustee or beneficiary of a lifetime or testamentary express

trust (other than a wholly charitable trust) may, by application to the

surrogate's court having jurisdiction over the trust, seek a termination

of such trust when the expense of administering the trust is

uneconomical.

(2) If, upon such application, the court finds that continuation of

the trust is economically impracticable, that the express terms of the

disposing instrument do not prohibit its early termination, and that

such termination would not defeat the specified purpose of the trust and

would be in the best interests of the beneficiaries, the court may make

an order or decree terminating the trust and directing the distribution

of the trust assets to and among those beneficiaries who at the time are

entitled (or entitled in the discretion of the trustee) to the income

and/or principal of the trust and those beneficiaries who would be

entitled (or entitled in the discretion of the trustee) to the income

and/or principal of the trust if it were to terminate immediately before

such order or decree. The distribution of the trust assets shall be made

in such manner, proportions and shares as in the judgment of the court

will effectuate the intention of the creator.

(b) Notice of the application shall be given to such persons and at

such time and in such manner as the court, in its discretion, may

direct.

(c) If the application or the possibility of the application of this

section to any trust would reduce or eliminate a charitable deduction

otherwise available to any person under the income tax, gift tax, estate

tax or generation-skipping transfer tax provisions of the United States

Internal Revenue Code, or the laws of any state of the United States or

of the District of Columbia, this section shall not apply to such trust.

(d) This section shall not apply to a supplemental needs trust which

conforms to the provisions of section 7-1.12 of this part.