§ 14-608
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§14–608.
(1)In this section the following words have the meanings indicated.
(i)“Noncontingent right” means a right that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur.
(ii)“Noncontingent right” does not include a right held by a beneficiary if any other person has discretion to distribute property subject to the right to any person other than the beneficiary or the beneficiary’s estate.
(3)“Presumptive remainder beneficiary” means a qualified beneficiary other than a current beneficiary.
(i)“Successor beneficiary” means a beneficiary that is not a qualified beneficiary on the date that the beneficiary’s qualification is determined.
(ii)“Successor beneficiary” does not include a person that is a beneficiary solely because the person holds a nongeneral power of appointment.
(5)“Vested interest” means:
(i)A right to a mandatory distribution that is a noncontingent right as of the date of the exercise of the decanting power;
(ii)A current and noncontingent right, at least annually, to a mandatory distribution of income, a specified dollar amount, or a percentage value of some or all of the trust property;
(iii)A current and noncontingent right, at least annually, to withdraw income, a specified dollar amount, or a percentage value of some or all of the trust property;
(iv)A presently exercisable general power of appointment; or
(v)A right to receive an ascertainable part of trust property on termination of the trust that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur.
(b)Except as otherwise provided in § 14–610 of this subtitle, an authorized fiduciary that has expanded distributive discretion over the principal of a first trust for the benefit of one or more current beneficiaries may exercise the decanting power over the principal of the first trust.
(c)Except as otherwise provided in § 14–610 of this subtitle, in exercising the decanting power, a second trust may not:
(1)Except as provided in subsection
(d)of this section, include as a current beneficiary a person that is not a current beneficiary of the first trust;
(2)Except as provided in subsection
(d)of this section, 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.
(d)Subject to subsection (c)(3) of this section and § 14–611 of this subtitle, in the exercise of the decanting power under this section, one or more second trusts may be 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 that beneficiary; or
(4)Create or modify a power of appointment if the powerholder is a presumptive remainder beneficiary or successor beneficiary of the first trust and the exercise of the power may take effect only after the powerholder becomes, or would have become if then living, a current beneficiary.
(1)A power of appointment described in subsection
(d)of this section may be general or nongeneral.
(2)The class of permissible appointees in favor of which a power of appointment described in subsection
(d)of this section may be exercised may be broader than or different from the beneficiaries of the first trust.
(f)If an authorized fiduciary has expanded distributive discretion over part but not all of the principal of a first trust, the authorized fiduciary may exercise the decanting power under this section only over the part of the principal over which the authorized fiduciary has expanded distributive discretion.