Section 8-1.1 Disposition of property for charitable purposes.
8-1.2 Certain charitable trusts authorized.
8-1.3 Certain charitable trusts regulated.
8-1.4 Supervision of trustees for charitable purposes.
8-1.5 Trusts for cemetery purposes.
8-1.6 Deposit of money in trust by owner of lots in private unincorporated cemetery.
8-1.7 Authority of trustee to accumulate income.
8-1.8 Private foundations: administration of certain trusts as defined in the United States internal revenue code of 1954.
PART 1. RULES GOVERNING CHARITABLE TRUSTS
S 8-1.1 Disposition of property for charitable purposes
(a) No disposition of property for religious, charitable, educational or benevolent purposes, otherwise valid under the laws of this state, is invalid by reason of the indefiniteness or uncertainty of the persons designated as beneficiaries. If a trustee is named in the disposing instrument, legal title to the property transferred for such a purpose vests in such trustee; if no person is named as trustee, title vests in the court having jurisdiction over the trust.
(b) No disposition of property made in a will, executed and attested as prescribed by law, is invalid by reason of the incorporation by reference in the will of any existing written resolution, declaration or deed of trust, identified in such will and made or adopted by any corporation authorized by law to execute or accept trusts, to assist, encourage and promote the well-being and well-doing of mankind in general or the inhabitants of any community in particular; provided that a copy of such resolution, declaration or deed of trust, certified, under its corporate seal, by the secretary or assistant secretary or the cashier or assistant cashier of such corporation, is filed for record in the office of the secretary of state and in the office of the clerk or register of the county of the corporation`s principal place of business, in which the conveyances of real property are required by law to be filed for record, the secretary of state and the officer in charge of such record office being hereby authorized and directed to receive and record such resolution, declaration or deed of trust upon payment of the fees provided by law. Any such testamentary disposition to a corporation for the religious, charitable, educational or benevolent purposes set forth in such resolution, declaration or deed of trust is effective although the terms, conditions and purposes of such disposition are established only through such reference in the will.
(c) (1) The supreme court and, where the disposition is made by will, the surrogate`s court in which such will is probated have jurisdiction over dispositions referred to and authorized by paragraphs (a) and (b), and whenever it appears to such court that circumstances have so changed since the execution of an instrument making a disposition for religious, charitable, educational or benevolent purposes as to render impracticable or impossible a literal compliance with the terms of such disposition, the court may, on application of the trustee or of the person having custody of the property subject to the disposition and on such notice as the court may direct, make an order or decree directing that such disposition be administered and applied in such manner as in the judgment of the court will most effectively accomplish its general purposes, free from any specific restriction, limitation or direction contained therein; provided, however, that any such order or decree is effective only with the consent of the creator of the disposition if he is living.
(2) (i) The attorney general or any trustee or beneficiary of a testamentary or lifetime trust wholly benefitting one or more charitable beneficiaries may petition a court of competent jurisdiction, on notice to the attorney general and all parties interested in the trust, seeking a termination of such trust when the trust is comprised of assets, the market value of which is one hundred thousand dollars or less and the expense of administering the trust is uneconomic when considered relative to income. When the court finds upon such application that continuation of the trust is economically impracticable or is not in the best interests of the beneficiaries, the court shall make an order or decree terminating the trust and directing the distribution of the trust assets to accomplish its charitable purposes, provided, however, that if the trust is one for the benefit of a particular charitable beneficiary or beneficiaries named therein, the court shall direct the distribution of the trust assets to such named charitable beneficiary or beneficiaries, and provided further that no such proceeding may be instituted without the consent of the creator of the disposition if he is living.
(ii) For purposes of this paragraph, the term "charitable beneficiary" shall mean the beneficiary of a disposition for a religious, charitable, educational or benevolent purpose.
(d) The power of the supreme court or the surrogate`s court, as provided in paragraph (c), to prevent the failure of, and to give effect to dispositions for religious, charitable, educational or benevolent purposes is not defeated by the circumstance that the beneficiary of any such disposition does not exist or, if in existence, lacks capacity to take such disposition at the time it would otherwise become effective, whether or not the disposition creates an express trust to effectuate its purposes. (
e) Any accumulation of income from property subject to a disposition in trust for a religious, charitable, educational or benevolent purpose, or otherwise acquired by such trust, shall in all respects, including its reasonableness, amount and duration, be within the jurisdiction of the supreme court or the surrogate`s court, as the case may be. In exercising such jurisdiction, (1) any accumulation of income which might otherwise be applied for the purposes of the trust may be prohibited or limited, despite a valid direction therefor in the trust instrument or authority therefor under 8-1.7 and (2) such an accumulation may be authorized by order of the court despite the absence of a direction therefor in the trust instrument.
(f) The attorney general shall represent the beneficiaries of such dispositions for religious, charitable, educational or benevolent purposes and it shall be his duty to enforce the rights of such beneficiaries by appropriate proceedings in the courts.
(g) The supreme court or the surrogate`s court, as the case may be, may authorize the trustee or any person holding title thereto to sell, mortgage or lease any real property which is the subject of a disposition for a religious, charitable, educational or benevolent purpose, whenever it appears to the satisfaction of the court that such real property, or any part thereof, has become or is likely to become unproductive, has depreciated or is likely to depreciate in value, that it is advisable to raise money to improve or erect buildings upon property so held or that it is expedient for any other reason that such real property be sold, mortgaged or leased. This paragraph shall not restrict in any manner the powers or rights any trustee may have by law or by the terms of any disposition of such real property. The provisions of this paragraph shall not apply to any corporation which is subject to sections 509 through 511 of the not-for-profit corporation law.
(h) The supreme court or the surrogate`s court shall not make an order or decree under paragraph (g) unless it appears that eight days written notice, stating the time and place of the application for such order or decree, has been served upon the attorney general, who shall represent the state, the beneficiaries of any trust and the persons who might benefit from the religious, charitable, educational or benevolent purpose for which the real property, which is the subject of the application, is held. A like eight days notice of such application shall be given to any adult within the state who has a vested or contingent future estate in such real property and to any minor, incompetent, conservatee or absentee who is interested in such property, in such manner as the court may direct. Before making a final order or decree, the court shall appoint a guardian ad litem for any minor who is not represented by a guardian or parent, for any incompetent who is not represented by a committee, and for any absentee.
(i) A sale, mortgage or lease made, as required by law, in accordance with an order or decree of a court under this section is effective against the state as representative of the beneficiaries of such trust and persons who might benefit from the purposes for which such real property is held, and against persons with a vested or contingent future interest in such property and minors, incompetents, conservatees, absentees and persons not in being who have an interest in such property, as well as all other persons who, having been made parties to such proceeding, consent to such order or decree. The purchaser, mortgagee or lessee, or any person claiming under them, shall not be responsible for the disposition of the proceeds of any such sale, mortgage or lease.
(j) Whenever a voluntary association or committee has received, by public subscription, a fund for a charitable or benevolent purpose from more than one thousand contributors, a portion of which remains unexpended after the expiration of five years from the time of its receipt, and it appears that a literal compliance with the terms of the subscription is impracticable, the supreme court may make an order directing that such unexpended balance be transferred for administration and application to such domestic corporation as in the judgment of the court will most effectively accomplish the general purpose for which such fund was collected, free from any restriction, limitation or direction upon which the subscription was made; and on the transfer of such fund to the corporation designated in the order, such voluntary association, its officers and trustees, or such committee and its officers shall be fully exonerated and discharged from all liability to account for such fund.
(k) An order shall be made under paragraph (j) on the application of the association or the treasurer of the committee, having custody of the unexpended balance, on twenty days personal notice to the attorney general and notice by publication once a week for four consecutive weeks in a newspaper of general circulation published in the county in which the treasurer of such association or committee resides. If such treasurer resides outside of the state, such notice shall be published in the county in which at least ten per cent of the contributors of such fund resided at the time of its receipt or in such other manner as the court may direct to the contributors as a class, to ten specified members of such class and to the trustees of such association or the surviving members of such committee.
(l) Where public subscriptions for charitable or benevolent purposes were made or begun prior to the year nineteen hundred twenty and the total number of subscribers exceeded five hundred but were less than one thousand, any unexpended balance of a fund obtained for such purpose which, at the time this section takes effect, is in the custody of a surviving member of a committee may be transferred for administration, on the application of such surviving member, in accordance with the procedure and with the effect set forth in paragraphs (j) and (k).
S 8-1.2 Certain charitable trusts authorized
(a) Property may be disposed of to any incorporated educational or literary institution in this state, to be held in trust for any one or more of the following purposes:
(1) To establish and maintain an observatory;
(2) To found and maintain professorships and scholarships;
(3) To provide and keep in repair a place for the burial of the dead.
(4) For any other specific purpose comprehended in the general objects authorized by its charter.
(b) The trust may be made subject to such conditions as may be prescribed by the creator and agreed to by the trustee, and all property which is hereafter disposed of to any incorporated educational or literary institution in trust for any of the foregoing purposes, may be held by such institution under such trust, subject to such conditions as may be prescribed.
(c) Property may be disposed of to any incorporated city or village of this state to be held in trust for any educational purpose, the diffusion of knowledge, or for the relief of distress, or for parks, gardens, other ornamental grounds or grounds for military parades, exercise, health and recreation, within or near such incorporated city or village, upon such conditions as may be prescribed by the creator and agreed to by such corporation; and all property so transferred to such corporation may be held by it, under such trust, subject to such conditions as may be prescribed.
(d) Property may be disposed of to commissioners of common schools of any town and to trustees of any school district, in trust for the benefit of such common schools or the schools of such district.
(e) The trusts authorized by this section may continue for such time as may be necessary to accomplish the purposes for which they are created.
S 8-1.3 Certain charitable trusts regulated
(a) Any person desiring in his lifetime to promote the public welfare by founding, endowing and maintaining, within this state, a public library, museum or other educational institution, a chapel, crematory or a board of trade or chamber of commerce may, by a disposition for such purpose, transfer property to a trustee named in such disposition or to his successor.
(b) The creator of such disposition may describe: (1) The nature, object and purpose of the institution to be founded, endowed and maintained or of the corporation to be benefited thereby. (2) In case of the founding of an institution, the name by which it shall be known. (3) The powers and duties of the trustee and, if accounting is required, the manner in which and to whom he shall account; but the powers conferred shall not be exclusive of other powers which may be necessary to enable such trustee to execute fully the object of such disposition. (4) Such rules for the management of the property as the creator may prescribe; but, unless otherwise provided, such rules shall be advisory only and shall not preclude the trustee from making such changes as new circumstances may from time to time require. (5) The manner and by whom the successor to the trustee named in the disposition is to be appointed. (6) The place where, and the time when, the buildings necessary and proper for the institution shall be erected, and the character and extent of such buildings. The creator may provide for all matters necessary and proper to carry out the purposes of the institution, and may provide for such lectures, exhibitions, instruction or amusement in connection therewith as he may consider desirable.
(c) The trustee named in the disposition or his successor may sue and defend, in the name of an institution established by such disposition, with respect to all matters affecting such institution.
(d) The creator of the disposition may provide for the right, during his lifetime, to personally perform the duties and exercise the powers which the disposition imposes and confers upon the trustee, and may further provide that his surviving spouse may, during her lifetime, perform such duties and exercise such powers. In all cases in which such duties and powers are performed and exercised by the creator or his spouse, during his or her lifetime, upon his death or the death of his spouse such duties and powers devolve upon and shall be performed and exercised by the trustee or his successor.
(e) The creator may reserve the right to alter, amend or modify his disposition with respect to any of the matters described in subparagraphs (1) to (6). He may also reserve the right, during his lifetime, to exercise complete control over the property subject to his disposition, without obligation to account therefor in any manner whatever, and may further provide that his surviving spouse shall, during her lifetime, have like control over such property, without obligation to account therefor in any manner whatever.
(f) A disposition described in this section may be executed, acknowledged and recorded in the manner provided by the law of this state for the execution, acknowledgment and recording of conveyances of real property.
(g) No action or proceeding shall be maintained by any person to affect, impair, or defeat a disposition described in this section or to affect the title to property subject to such disposition or the right to the possession of such property or the income therefrom, unless such action or proceeding is commenced within two years from the time such disposition is recorded. Nor shall any defense be made to any action or proceeding maintained by a trustee or his successor which involves the legality of such disposition or affects the title to property subject thereto or the right to the possession of such property or the income therefrom, unless such defense is made in an action or proceeding commenced within two years from the time such disposition is recorded.
S 8-1.4 Supervision of trustees for charitable purposes
(a) For the purposes of this section, "trustee" means (1) any individual, group of individuals, executor, trustee, corporation or other legal entity holding and administering property for charitable purposes, whether pursuant to any will, trust, other instrument or agreement, court appointment, or otherwise pursuant to law, over which the attorney general has enforcement or supervisory powers, (2) any non-profit corporation organized under the laws of this state for charitable purposes and (3) any non-profit foreign corporation organized for charitable purposes, doing business or holding property in this state. Neither a foreign corporation nor a trustee acting under the will of, or an agreement executed by, a non-resident of this state shall become subject to the provisions of this section merely by reason of maintaining a bank, custody, investment or similar account in this state.
(b) The registration and reporting provisions of this section do not apply to (1) the United States, any state, territory or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico or to any of their agencies or governmental subdivisions, (2) any trustee which is required by any other provision of law to render a full, complete and itemized annual financial report to the congress of the United States or to the legislature of this state, provided that such report contains the information required of trustees pursuant to this article, (3) corporations organized under the religious corporations law and other religious agencies and organizations, and charities, agencies and organizations operated, supervised or controlled by or in connection with a religious organization, (4) educational institutions incorporated under the education law or by special act, (5) any hospital, (6) fraternal, patriotic, veterans, volunteer firefighters, volunteer ambulance workers, social, student or alumni organizations and historical societies chartered by the New York state board of regents,
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(7) a trust for which there is a corporate trustee acting as sole trustee or co-trustee under the terms of a will of a decedent who died domiciled in a state other than New York or a trust instrument executed by a non-resident of the state of New York, (8) any trust in which and so long as the charitable interest is deferred or contingent, (9) any person who, in his or her capacity as an officer, director or trustee of any corporation or organization mentioned in this paragraph, holds property for the religious, educational or charitable purposes of such corporation or organization so long as such corporation or organization is registered with the attorney general pursuant to this section, (10) any cemetery corporation subject to the provisions of article fifteen of the not-for-profit corporation law, (11) the state parent teachers association and any parent teachers association affiliated with an educational institution that is subject to the jurisdiction of the state education department, (12) any corporation organized under article forty-three of the insurance law. The provisions of this subdivision shall apply only to the registration and reporting requirements of this section and shall not limit, impair, change or alter any other provision of this article, the not-for-profit corporation law or any other provision of law.
(c) The attorney general shall establish and maintain a register of all trustees containing such information as the attorney general deems appropriate, and to that end may conduct such investigations as he or she deems necessary and shall obtain from public records, court officers, taxing authorities, trustees and other sources without the payment of any fee or charge, whatever information, copies of instruments, reports and records are needed for the establishment and maintenance of the register.
(d) Every trustee shall file with the attorney general, within six months after any property held by him or her or any income therefrom is required to be applied to charitable purposes, a copy of the instrument providing for his or her title, powers and duties; provided, however, that any trustee currently registered with the department of law pursuant to article 7-A of the executive law shall be deemed to have complied with this paragraph. If any property held by a trustee or any income therefrom is required to be applied to charitable purposes at the time this section becomes effective, the filing shall be made within six months thereafter.
(e)
(1) Whenever any trustee or other person, holding property or any income therefrom, which may be required at any time to be devoted to charitable purposes, shall file in any court in this state (A) any petition for instructions relating to the administration or use of such property or income, (B) any petition for the construction of the instrument under which such property or income is held, (C) any petition respecting the disposition or distribution of such property or income or (D) any accounting, due notice of the action or proceeding shall be served by the petitioner upon the attorney general together with a copy of any petition, accounting, will or trust instrument.
(2) Whenever any instrument of a testamentary nature which provides for a disposition for charitable purposes is the subject of (A) an application for denial of probate, (B) objections to probate or (C) an application for approval of a compromise agreement in respect of probate, due notice of the action or proceeding shall be served by the petitioner upon the attorney general together with a copy of the instrument and of any such application, objections or agreement.
(f)
(1) Every trustee shall, in addition to filing copies of any instrument required under paragraph (d) of this section, file with the attorney general and all identified current charitable beneficiaries written annual financial reports, under penalties for perjury, on forms prescribed by the attorney general, setting forth information as to the nature of the assets held for charitable purposes and the administration thereof by the trustee, and shall, file with the attorney general and all identified current charitable beneficiaries a notice of the termination of the interest of any party in a trust that would cause all or part of the trust assets to be applied to charitable purposes or to have the income therefrom so applied, in accordance with rules and regulations of the attorney general.
(2) Trustees required to report to the attorney general under article 7-A of the executive law shall comply with this paragraph by filing with the attorney general in addition to any other reports required herein, copies of the financial reports required by section 172-b of the executive law unless such reports have been filed previously.
(g) Unless the filing of reports is suspended as herein provided, the first report of any trustee shall be filed no later than six months after the end of the fiscal year of the trustee during which he or she becomes subject to this section.
(h) The attorney general shall make rules and regulations necessary for the administration of this section, including rules and regulations as to the time for filing reports, the contents thereof, and the manner of executing and filing them. He or she may classify trusts, estates, corporations and other trustees as to purpose, nature of assets, duration, amount of assets, amounts to be devoted to charitable purposes, or otherwise, and may establish different rules for different classes as to time and nature of the reports required, to the ends that he or she shall receive current financial reports as to all such trusts, estates, corporations or other trustees which will enable him or her to ascertain whether they are being properly administered. The attorney general may suspend the filing of financial reports as to a particular trustee for a reasonable, specifically designated time upon written application of the trustee, signed under penalties for perjury, and filed with the attorney general and after the attorney general has filed in the register of trustees a written statement that the interests of the beneficiaries will not be prejudiced thereby and that periodic reports during the term of such suspension are not required for proper supervision by his or her office. The filing of the financial reports required by this section, or the exemption from such filing or the suspension therefrom, shall not have the effect of absolving trustees from any responsibility for accounting for property or income held by them for charitable purposes. A copy of an account or other financial report filed by a trustee in any court in this state, if the account or other financial report substantially complies with the rules and regulations of the attorney general, may be filed as a financial report under this section.
(i) The attorney general may investigate transactions and relationships of trustees for the purpose of determining whether or not property held for charitable purposes has been and is being properly administered. The attorney general, his or her assistants, deputies or such other officers as may be designated by him or her, are empowered to subpoena any trustee, agent, fiduciary, beneficiary, institution, association or corporation or other witness, examine any such witness under oath and, for this purpose, administer the necessary oaths, and require the production of any books or papers which they deem relevant to the inquiry.
(j) No person shall be excused from attending such inquiry pursuant to the mandate of a subpoena, or from producing a paper or book, or from being examined or required to answer a question on the ground of failure of tender or payment of a witness fee or mileage, unless at the time of such appearance or production, as the case may be, such witness makes a demand for such payment as a condition precedent to the offering of the testimony or production required by the subpoena and such payment is not thereupon made. The provisions for payment of a witness fee or mileage do not apply to any trustee or other person holding funds for charitable purposes, or to any person in the employ of any such person, whose conduct or practices are being investigated.
(k) If a person subpoenaed to attend such inquiry fails to obey the mandate of a subpoena without reasonable cause, or if a person in attendance upon such inquiry shall without reasonable cause refuse to be sworn or to be examined or to answer a question or to produce a paper or book when ordered so to do by the officer conducting such inquiry, he or she shall be subject to proceedings under subdivision (b) of section 2308 of the civil practice law and rules.
(l) The register, copies of the instruments and the reports filed with the attorney general shall be open to public inspection, subject to reasonable rules and regulations adopted by the attorney general, which may include such limitations as to type of information subject to inspection or purpose of inspection as the attorney general shall deem to be in the public interest. The attorney general shall withhold from public inspection copies of any report filed with any other governmental agency of this state or of the United States and required by law to be kept confidential by such agency, and shall, upon request of the trustee, withhold from public inspection that portion of any instrument filed which does not relate to charitable purposes and which is not otherwise of public record.
(m) The attorney general may institute appropriate proceedings to secure compliance with this section and to secure the proper administration of any trust, corporation or other relationship to which this section applies. The powers and duties of the attorney general provided in this section are in addition to all other powers and duties he or she may have. No court shall modify or terminate the powers and responsibilities of any trust, corporation or other trustee unless the attorney general is a party to the proceeding, but nothing in this section shall otherwise impair or restrict the jurisdiction of any court with respect to the matters covered by it. The failure of any trustee to register or to file reports as required by this section may be ground for judicial removal of any person responsible for such failure.
(n) This section shall apply regardless of any contrary provisions of any instrument and shall be liberally construed so as to effectuate its general purpose of protecting the public interest in charitable uses, purposes and dispositions.
(o) Every officer, agency, board or commission of this state or political subdivisions of this state or agencies thereof receiving applications for exemption from taxation of any trustee subject to this section shall annually file with the attorney general a list of all applications received during the year and shall notify the attorney general of any suspension or revocation of a tax exempt status previously granted.
(p) The attorney general shall collect from each trustee at the time of filing of the periodic reports required by this section a fee for the filing of such reports as follows: (1) Twenty-five dollars, if the net worth of the property held by such trustee for charitable purposes is less than fifty thousand dollars, (2) Fifty dollars if such net worth is fifty thousand dollars or more but less than two hundred and fifty thousand dollars, (3) One hundred dollars if such net worth is two hundred and fifty thousand dollars or more but less than one million dollars, (4) Two hundred fifty dollars if such net worth is one million dollars or more but less than ten million dollars, (5) Seven hundred and fifty dollars if such net worth is ten million dollars or more but less than fifty million dollars, and (6) One thousand five hundred dollars if such net worth is fifty million dollars or more.
(q) Any trustee shall be exempt from the annual reporting requirements of this section by filing each year with the attorney general a verified statement executed by such trustee attesting that during the annual reporting period (1) the gross receipts received by said trustee during such annual reporting period were less than twenty-five thousand dollars and that (2) the total assets held by such trustee at no time during such annual reporting period exceeded twenty-five thousand dollars. For the purposes of this paragraph, gross receipts mean the total received during the financial reporting period of (A) gifts, grants, and contributions; (B) gross income and revenue from all sources; and (C) gross amounts from sales of assets, other than inventory; and total assets mean the total principal and the accumulated income, if any, held by such trustee for purposes of charitable distribution on any day during such annual reporting period.
(r) A trustee who fails to comply with paragraph (d), (f) or (g) of this section shall, after notice of said failure served upon him or her by the attorney general by certified mail, return receipt requested, be liable to the state of New York for a fine of ten dollars a day not to exceed one thousand dollars for each failure to comply after the expiration of the thirty day period following the receipt of the notice from the attorney general, except that the time to comply may be extended by the attorney general. Where the attorney general, after such thirty day period has expired, finds that the failure to comply with paragraph (d), (f) or (g) of this section is due to excusable ignorance or inadvertence or other reasonable cause, the attorney general shall waive the fine imposed by this paragraph.
(s) A trustee shall not be qualified to make application for funds or grants or to receive such funds from any department or agency of the state without certifying compliance with paragraphs (d), (f) and (g) of this section and all applicable registration and reporting requirements of article seven-A of the executive law.
S 8-1.5 Trusts for cemetery purposes
Dispositions of property in trust for the purpose of the perpetual care, maintenance, improvement or embellishment of cemeteries or private burial lots in cemeteries, and the roadways, lawns, hedges, walks, fences, monuments, structures and tombs in such cemeteries or on such private burial lots are permitted and shall be deemed to be for charitable and benevolent purposes. Such dispositions are not invalid by reason of any indefiniteness or uncertainty of the persons designated as beneficiaries, nor shall they be invalid as violating any existing rule against perpetuities. Nothing herein contained shall affect any existing authority of the courts to determine the reasonableness of the amount of such disposition. Any cemetery association may act as trustee of and execute any such trust with respect to lots, roadways, lawns, hedges, walks, fences, monuments, structures and tombs both within its own cemetery limits and outside of any cemetery under its control but within the county where such cemetery is located, whether or not such power is included among its corporate powers.
S 8-1.6 Deposit of money in trust by owner of lots in private unincorporated cemetery
The owner of lots in any private unincorporated cemetery may deposit in trust for the care of such lots a sum not exceeding four hundred dollars for each lot so owned with any bank or banking institution located in a city, town or village conveniently near such private unincorporated cemetery, provided such bank or banking institution is willing to accept such money in trust and agrees to apply the proceeds of the interest thereon to the care and upkeep of such lots. Such banks or banking institutions are hereby authorized to accept such money for the purpose described herein and to apply the proceeds of the interest thereon to the care and upkeep of any such lots. The provisions of this section do not apply to savings banks.
S 8-1.7 Authority of trustee to accumulate income
(a) Where property has been transferred in trust for any religious, charitable, educational or benevolent purpose, or acquired by the trustee of a trust for such purpose, the trustee is authorized in his discretion, notwithstanding the absence of any direction therefor in the disposition creating the trust, to accumulate the income therefrom to the extent necessary to carry out the purposes of the trust. The authority herein granted is subject:
(1) To any express or implied prohibition by the terms of the disposition creating the trust, by any statute in force at the time of the accumulation or by the charter of a corporate trustee or other document or regulation controlling the trustee in the administration of the trust.
(2) To the supervision of the supreme court or the surrogate`s court, as provided in 8-1.1, and to any contrary direction by order of the court in an action or proceeding thereunder.
S 8-1.8 Private foundations: administration of certain trusts as defined in the United States internal revenue code of 1954
(a) For purposes of this section, a "trust" means a private foundation as defined in section 509 of the United States Internal Revenue Code of 1986 ("code") including a private foundation charitable trust as defined in section 4947(a)(1) of the code, or a split-interest trust as defined in section 4947(a)(2) of the code, whether heretofore or hereafter created which is administered by a trustee described in subparagraph (a)(1) of section 8-1.4. The administration of a trust, as herein defined, is subject to the following provisions:
(1) The trust shall distribute for each taxable year such amounts at such time and in such manner as sufficient for such trust to avoid liability for any tax imposed on undistributed income under section 4942 of the code.
(2) The trust shall not engage in any act of self-dealing which would result in the taxation of any amount involved with respect to any such act of self-dealing under section 4941 of the code.
(3) The trust shall not retain any excess business holdings which would result in the taxation of any such excess business holdings under section 4943 of the code unless the trust is exempt from section 4943 of the code pursuant to section 4947(b)(3)(A) or (B) of the code. (4) The trust shall not make any investments in such a manner as to jeopardize the carrying out of any such trust`s exempt purposes which would result in the taxation of any such investments under section 4944 of the code unless the trust is exempt from section 4944 of the code pursuant to section 4947(b)(3)(A) or (B) of the code. (5) The trust shall not make any taxable expenditures which would result in the liability of the trust for any tax imposed on any such taxable expenditures under section 4945 of the code. Except as provided in paragraph (b), this paragraph applies notwithstanding any provision of the governing instrument of a trust.
(b) Paragraph (a) shall not apply with respect to assets transferred in trust prior to the effective date of this section to the extent that it conflicts with any mandatory direction in the governing instrument of the trust unless such conflicting direction is removed as impracticable under this article or in any other manner provided by law. The absence of a specific provision in the governing instrument of the trust for the current use of the principal of the fund, or the presence in such an instrument of a provision, as to the principal of a fund, limited to the principal`s being held, invested and reinvested, is not such a conflicting mandatory direction.
(b-1) A trust, as defined in paragraph (a) of this section, required by section 6104(d) of the code to make available for public inspection its annual return shall publish notice of the availability of such return for inspection. Such notice shall be published, not later than the day prescribed for filing such annual return (determined with regard to any extension of time for filing), in a newspaper designated by the clerk of the county in which the principal office of the trust is located, having general circulation in that county. The notice shall state that the annual return of the trust is available at its principal office for inspection during regular business hours by any citizen who requests it within one hundred eighty days after the date of such publication, and shall state the address and the telephone number of the trust`s principal office and the name of its principal manager.
(c) All references in this section to sections of the code shall be to such sections as amended from time to time, or to corresponding provisions of subsequent internal revenue laws.
(d) Nothing in this act shall impair the rights and powers of the courts or the attorney-general of this state.