N.Y. Est. Powers & Trusts Law § 7-1.13

§ 7-1.13 Division of trusts and establishment of separate trusts\n (a) Notwithstanding any contrary provision of law, unless expressly\nprohibited by the terms of the disposing instrument:\n (1) the trustee of an express trust (which term as defined in\nparagraph (g) of this section may mean the executor or administrator) is\nauthorized without prior court approval or the consent of the persons\ninterested to establish two or more separate trusts in order to\nsegregate for any of the following purposes:\n (A) property held in trust in which a spouse or surviving spouse has a\nqualifying income interest with respect to which an election has been or\nwill be made in whole or in part under section 2056(b)(7), 2056A or\n2523(f) of the United States Internal Revenue Code of 1986 from property\nwith respect to which no election has been or will be made;\n (B) property held in trust with respect to which a marital deduction\nunder section 2056 or 2523 of the United States Internal Revenue Code\nwould be available, by election or otherwise, from property held in\ntrust for persons other than the spouse or surviving spouse, so that one\nor more of such separate trusts qualify for the deduction under said\nsections;\n (C) property held in trust with respect to which a charitable\ndeduction under section 2055 or 2522 of the United States Internal\nRevenue Code would be available from property held in trust for persons\nnot described in said sections, so that one or more of such separate\ntrusts qualify for the deduction under said sections;\n (D) property held in trust which is or would be excepted, excluded or\nexempt from or under Chapter 13 (tax on generation-skipping transfers)\nof the United States Internal Revenue Code from such property which is\nnot so excepted, excluded or exempt, so that one or more of such\nseparate trusts will have an inclusion ratio of zero, or so that one or\nmore of such separate trusts qualify for the grandchild exception under\nsection 1433(b)-(d) of the Tax Reform Act of 1986, as amended;\n (E) property held in trust for one (of two or more beneficiaries) from\nproperty held in trust for such other beneficiaries, so that one or more\nof such separate trusts shall be a qualified subchapter S trust under\nsection 1361(d) of the United States Internal Revenue Code;\n (F) property transferred in trust by a creator (including but not\nlimited to a transfer treated as made by a spouse by reason of section\n2513 of the United States Internal Revenue Code) from property\ntransferred in trust by one or more different creators; and\n (G) property transferred in trust by a creator (including but not\nlimited to a transfer treated as made by a spouse by reason of section\n2513 of the United States Internal Revenue Code) pursuant to a disposing\ninstrument from property transferred by the same creator pursuant to\nanother disposing instrument;\n (2) the trustee of an express trust may divide such trust into two or\nmore separate trusts, with the consent of all persons interested in the\ntrust but without prior court approval, for any reason which is not\ndirectly contrary to the primary purpose of the trust; and\n (3) the court having jurisdiction of an express trust, upon the\npetition of the trustee or of any person interested in the trust and\nupon notice to all such persons, may direct the establishment of two or\nmore separate trusts for any reason not directly contrary to the primary\npurpose of the trust.\n (b) Unless the court otherwise directs, the trusts established under\nthis section shall be deemed to have been established as of the\neffective date of the disposing instrument; provided that the\nestablishment of separate trusts under subparagraph two of paragraph (a)\nof this section may become effective upon the date or dates provided in\nthe instrument filed under paragraph (e) of this section.\n (c) Except as implicit in the establishment of separate trusts\nauthorized by this section, the terms of the disposing instrument,\nsubject to modifications approved by the court, shall govern each\nseparate trust established hereunder, except that separate trusts for\none or more members of a class of beneficiaries may be established under\nsubparagraph two of paragraph (a) of this section without modification\nby the court if the property held in trust is distributed to such\nseparate trusts for one or more members of such class on the basis of\nshare per stirpes, per capita, or by representation, whichever is\nconsistent with the terms of the disposing instrument.\n (d) Unless the court otherwise directs, and except in the case of the\nestablishment of separate trusts under clauses (F) and (G) of\nsubparagraph one of paragraph (a) of this section where the original\nassets remain or can be traced, the property distributed to the separate\ntrust shall be fairly representative of appreciation or depreciation and\nshall be based upon the fair market value of the assets on the date or\ndates of the distributions of such assets to the separate trusts.\n (e) Separate trusts shall be established under subparagraphs one and\ntwo of paragraph (a) of this section by an instrument or instruments in\nwriting, signed and acknowledged by the trustee and if under\nsubparagraph two of paragraph (a) of this section shall also be signed\nand acknowledged by all the persons interested in the trust (or the\nguardian of the property, committee, conservator, adult guardian, or\npersonal representative of such persons each of whom is hereby empowered\nto consent thereto without prior court approval). Such instruments shall\nbe filed in the office of the clerk of the court having jurisdiction\nover the trust; and a copy thereof shall be served on all persons\ninterested in the trusts (or the guardian of the property, committee,\nconservator, adult guardian, or personal representative of such\npersons), by registered or certified mail, return receipt requested, or\nby personal delivery or upon application of the trustee in any other\nmanner directed by the court.\n (f) The term "disposing instrument" shall mean the will, trust\nagreement, instrument exercising a power of appointment or other\ninstrument creating such a trust or transferring property to such trust;\nprovided that in the case of an instrument exercising a limited or\ntestamentary power of appointment, the term "disposing instrument" may\nalso refer to the instrument creating such power (if applicable under\nthe circumstances).\n (g) In any case where the United States Internal Revenue Code requires\nthat an election or other action be made or taken by the executor or if\nno trustee of a trust under a will has qualified, the term "trustee" as\nused in this section shall mean the executor or administrator of an\nestate. In any such case, the trustee shall comply with any action\ntaken by the executor or administrator under this section.\n (h) For the purposes of this section, the phrase "all persons\ninterested in the trust" shall mean all the persons upon whom service of\nprocess would be required in a proceeding for the judicial settlement of\nthe account of the trustee, taking into account section three hundred\nfifteen of the surrogate's court procedure act.\n (i) References to sections of the United States Internal Revenue Code\nshall refer to the United States Internal Revenue Code of 1986 as\namended from time to time, or to corresponding provisions of subsequent\ninternal revenue laws, and shall also refer to corresponding provisions\nof state law.\n (j) Unless otherwise provided for in the disposing instrument, the\ncommissions allowed to a trustee as determined under article\ntwenty-three of the surrogate's court procedure act, as amended from\ntime to time, shall not be increased by reason of the establishment of\nseparate trusts pursuant to subparagraph one of paragraph (a) of this\nsection unless the court otherwise permits an increase, provided,\nhowever, that such trustee shall be entitled to charge the trust for any\nadditional reasonable and necessary expenses incurred in the\nadministration of such separate trusts.\n (k) For purposes of subparagraphs (a)(2) and (3) of this section, a\ndivision of a trust into two or more separate trusts to permit one or\nmore such trusts to be governed by article 11-A and another one or more\nsuch trusts to be governed by 11-2.4 shall be deemed to be for a reason\nwhich is not directly contrary to the primary purpose of the trust\nunless such division is expressly prohibited by the terms of the\ndisposing instrument.\n