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California Law (Last Updated: March 4, 2014) |
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Probate Code - PROB |
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Division 9. TRUST LAW |
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Part 4. TRUST ADMINISTRATION |
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Chapter 3. Uniform Principal and Income Act |
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ARTICLE 2. General Provisions and Fiduciary Duties |
Section 16336.5.
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(a) The trustee may convert a trust into a unitrust upon terms other than those set forth in subdivision (e) of Section 16336.4, without court order, if all of the following apply:
(1) The conditions set forth in subdivision (a) of Section 16336 are satisfied.
(2) The trustee gives written notice of the trustee's intention to convert the trust into a unitrust and furnishes the information required by subdivision (c) of Section 16336.4. The notice shall comply with the requirements of Chapter 5 (commencing with Section 16500), including notice to a beneficiary who is a minor and to the minor's guardian, if any.
(3) The payout percentage to be adopted is at least 3 percent and no greater than 5 percent.
(4) All beneficiaries entitled to notice under Section 16501 consent in writing to the proposed action after having been furnished with the notice described in subdivision (c) of Section 16336.4.
(b) The court may order the conversion of a trust into a unitrust as provided in this subdivision.
(1) (A) The trustee may petition the court to approve the conversion to a unitrust for any one of the following reasons:
(i) A beneficiary timely objects to a proposed conversion to a unitrust.
(ii) The trustee proposes to make the conversion upon terms other than those described in subdivision (e) of Section 16336.4.
(iii) Paragraph (3) or (4) of subdivision (h) of Section 16336.4 applies to all currently acting trustees.
(iv) If the trustee determines, in its discretion, that a petition is advisable.
(B) In no event, however, may the court authorize conversion to a unitrust with a payout percentage of less than 3 percent or greater than 5 percent of the fair market value of the trust assets.
(2) A beneficiary may petition the court to order the conversion.
(3) The court shall approve the conversion proposed by the trustee or direct the conversion requested by the beneficiary if the conditions set forth in subdivision (a) of Section 16336 are satisfied and the court concludes that conversion of the trust on the terms proposed will enable the trustee to better comply with the provisions of subdivision (b) of Section 16335.
(4) In deciding whether to approve a proposed conversion or direct a requested conversion, the court may consider, among other factors, those described in subdivision (g) of Section 16336.