N.Y. Estates, Powers & Trusts Law § 7-1.6: Application of principal to income beneficiary

§ 7-1.6 Application of principal to income beneficiary

(a) Notwithstanding any contrary provision of law, the court having

jurisdiction of an express trust, heretofore created or declared, to

receive the income from property and apply it to the use of or pay it to

any person, unless otherwise provided in the disposing instrument, may

in its discretion make an allowance from principal to any income

beneficiary whose support or education is not sufficiently provided for,

to the extent that such beneficiary is indefeasibly entitled to the

principal of the trust or any part thereof or, in case the income

beneficiary is not entitled to the principal of the trust or any part

thereof, to the extent that all persons beneficially interested in the

trust are adult and competent and consent thereto in writing; provided

that the court, after a hearing on notice to all those beneficially

interested in the trust in such manner as the court may direct, is

satisfied that the original purpose of the creator of the trust cannot

be carried out and that such allowance effectuates the intention of the

creator.

(b) Notwithstanding any contrary provision of law, the court having

jurisdiction of an express trust, hereafter created or declared, to

receive income from property and apply it to the use of or pay it to any

person, unless otherwise provided in the disposing instrument, may in

its discretion make an allowance from principal to any income

beneficiary whose support or education is not sufficiently provided for,

whether or not such person is entitled to the principal of the trust or

any part thereof; provided that the court, after a hearing on notice to

all those beneficially interested in the trust in such manner as the

court may direct, is satisfied that the original purpose of the creator

of the trust cannot be carried out and that such allowance effectuates

the intention of the creator.

(c) In the event that an income beneficiary to whom an allowance is

made, as provided in this section, is or becomes entitled to a share of

the principal of the trust, such allowance, without interest thereon,

shall be a charge upon such share.

(d) 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 or entity under the income tax, gift

tax or estate tax provisions of the internal revenue code, the

provisions of this section shall not apply to such trust.

(e) A supplemental needs trust which conforms to the provisions of

7-1.12 of this article shall be construed in accordance with the

provisions of that section.