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PARRIS N. GLENDENING, Governor
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H.B. 881
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(4) POSSESSING OR EXERCISING THE POWER TO CONVERT WOULD
CAUSE AN INDIVIDUAL TO BE TREATED AS THE OWNER OF ALL OR PART OF THE
TRUST FOR FEDERAL INCOME TAX PURPOSES AND THE INDIVIDUAL WOULD NOT BE
TREATED AS THE OWNER IF THE TRUSTEE DID NOT POSSESS THE POWER TO
CONVERT;
(5) POSSESSING OR EXERCISING THE POWER TO CONVERT WOULD
CAUSE ALL OR PART OF THE TRUST ASSETS TO BE SUBJECT TO ESTATE OR GIFT TAX
WITH RESPECT TO AN INDIVIDUAL AND THE ASSETS WOULD NOT BE SUBJECT TO
ESTATE OR GIFT TAX WITH RESPECT TO THE INDIVIDUAL IF THE TRUSTEE DID NOT
POSSESS THE POWER TO CONVERT; OR
(6) THE TRUSTEE IS A BENEFICIARY OF THE TRUST.
(G) (1) IF SUBSECTION (F)(4), (5), OR (6) OF THIS SECTION APPLIES TO A
TRUSTEE AND THERE IS MORE THAN ONE TRUSTEE, A COTRUSTEE TO WHOM THE
PROVISION DOES NOT APPLY MAY CONVERT THE TRUST TO A UNITRUST UNDER
SUBSECTION (A) OF THIS SECTION, UNLESS EXERCISE OF THE POWER BY THE
REMAINING TRUSTEE OR TRUSTEES IS PROHIBITED BY THE GOVERNING
INSTRUMENT.
(2) IF SUBSECTION (F)(4), (5), OR (6) OF THIS SECTION APPLIES TO ALL
THE TRUSTEES, THE TRUSTEES MAY PETITION A COURT UNDER § 15-502.3 OF THIS
SUBTITLE TO DIRECT A CONVERSION UNDER SUBSECTION (A) OF THIS SECTION.
(H) (1) A TRUSTEE MAY RELEASE THE POWER CONFERRED BY SUBSECTION
(A) OF THIS SECTION TO CONVERT TO A UNITRUST IF;
(I) THE TRUSTEE IS UNCERTAIN ABOUT WHETHER POSSESSING
OR EXERCISING THE POWER WILL CAUSE A RESULT DESCRIBED IN SUBSECTION (F)
(4), (5), OR (6) OF THIS SECTION; OR
(II) THE TRUSTEE DETERMINES THAT POSSESSING OR EXERCISING
THE POWER WILL OR MAY DEPRIVE THE TRUST OF A TAX BENEFIT OR IMPOSE A TAX
BURDEN NOT DESCRIBED IN SUBSECTION (F) OF THIS SECTION.
(2) A RELEASE DESCRIBED IN PARAGRAPH (1) OF THIS SUBSECTION MAY
BE PERMANENT OR FOR A SPECIFIED PERIOD, INCLUDING A PERIOD MEASURED BY
THE LIFE OF AN INDIVIDUAL.
(I) IF THE TRUSTEE RECEIVES A WRITTEN REQUEST FROM A BENEFICIARY
TO RECONVERT A TRUST FROM A UNITRUST, THE TRUSTEE MAY RECONVERT A
TRUST FROM A UNITRUST IF:
(1) THE TRUSTEE COMPLIES WITH THE NOTICE REQUIREMENTS OF §
15-202.3 15-502.3 OF THIS SUBTITLE AND ALL QUALIFIED BENEFICIARIES CONSENT
TO RECONVERT FROM A UNITRUST; OR
(2) A COURT REVIEWS A PETITION FILED UNDER § 15-502.3 OF THIS
SUBTITLE AND APPROVES THE PROPOSED DECISION TO RECONVERT FROM A
UNITRUST.
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- 5251 -
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