New Mexico § 46-12-111 - Decanting power under expanded distributive discretion

§ 46-12-111. Decanting power under expanded distributive discretion

A. As used in this section: (1) “ 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. “ Noncontingent right ” does not include a right held by a beneficiary if any person has discretion to distribute

property subject to the right to any person other than the beneficiary or the beneficiary's

estate; (2) “ presumptive remainder beneficiary ” means a qualified beneficiary other than a current beneficiary; (3) “ successor beneficiary ” means a beneficiary that is not a qualified beneficiary on the date the beneficiary's

qualification is determined. “ Successor beneficiary ” does not include a person that is a beneficiary only because the person holds a

nongeneral power of appointment; and (4) “ vested interest ” means: (a) a right to a mandatory distribution that is a noncontingent right as of the date

of the exercise of the decanting power; (b) a current and noncontingent right, annually or more frequently, to a mandatory

distribution of income, a specified dollar amount or a percentage of value of some

or all of the trust property; (c) a current and noncontingent right, annually or more frequently, to withdraw income,

a specified dollar amount or a percentage of value of some or all of the trust property; (d) a presently exercisable general power of appointment; or (e) a right to receive an ascertainable part of the trust property on the trust's

termination that is not subject to the exercise of discretion or to the occurrence

of a specified event that is not certain to occur. B. Subject to Subsection C of this section and Section 1-114 of the Uniform Trust

Decanting Act, 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. Subject to Section 1-113 of the Uniform Trust Decanting Act, in an exercise of

the decanting power under this section, a second trust shall not: (1) include as a current beneficiary a person that is not a current beneficiary of

the first trust, except as otherwise provided in Subsection D of this section; (2) 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, except as otherwise provided in Subsection D of this

section; or (3) reduce or eliminate a vested interest. D. Subject to Paragraph (3) of Subsection C of this section and Section 1-114 of the

Uniform Trust Decanting Act, in an exercise of the decanting power under this section,

a second trust may be a trust 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 the beneficiary; and (4) create or modify a power of appointment if the powerholder is a presumptive remainder

beneficiary or successor beneficiary of the first trust, but the exercise of the power

may take effect only after the powerholder becomes, or would have become if then living,

a current beneficiary. E. A power of appointment described in Paragraphs (1) through (4) of Subsection D

of this section may be general or nongeneral. The class of permissible appointees in favor of which the power 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 fiduciary may exercise the decanting power

under this section over that part of the principal over which the authorized fiduciary

has expanded distributive discretion.