| | | The new Title 18-B, section 103, subsection 1-A and the | | changes to section 103, subsection 10 provide a definition of | | "ascertainable standard," relating to limits on a trustee's | | exercise of discretion, that is identical to the definition found | | in the federal Internal Revenue Code of 1986. These amendments, | | and others related to the federal Internal Revenue Code of 1986, | | will protect Maine taxpayers using trusts from "accidental" | | taxation of the trustee because the trustee's discretion appeared | | too broad. |
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| | | The amendment to Title 18-B, section 103, subsection 12, | | paragraph B is added to clarify the definition of a "qualified | | beneficiary." A qualified beneficiary is entitled to receive | | certain notices and trustee reports. |
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| | | The addition to Title 18-B, section 105, subsection 3 and the | | modification of Title 18-B, section 105, subsection 2, paragraphs | | H and I will allow the settlor of a Maine trust to keep the trust | | private by limiting the persons to whom notice and reports must | | be given. To keep the trustee accountable to someone, a trust | | that takes advantage of the option to restrict notice must | | designate a representative, sometimes called a "trust protector," | | to receive the same information that would otherwise be provided | | to qualified beneficiaries. |
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| | | The changes to Title 18-B, section 110 clarify when a | | charitable organization, a person other than a beneficiary | | appointed to enforce a trust and the Attorney General are | | entitled to the notice and reports that are required to be | | provided to a qualified beneficiary. The change to Title 18-B, | | section 110, subsection 2 recognizes that the State already has a | | specific statutory provision allowing the Attorney General to | | receive and act on information regarding charitable trusts, and | | eliminates the potentially conflicting provisions of the uniform | | law in favor of a reference to the Maine-specific provisions of | | Title 5. |
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| | | The addition of Title 18-B, section 301, subsection 4 is | | designed to prevent an adverse federal estate and gift tax result | | that some commentators have identified as a possibility when the | | settlor of an irrevocable trust can give consent on behalf of a | | beneficiary to a modification or termination of the trust. | | Similarly, the new sentence added to Title 18-B, section 411, | | subsection 1 is designed to require court approval if the settlor | | and all the beneficiaries agree to modify or terminate an | | irrevocable trust. Without required approval by the court, some | | commentators believe that the property in an irrevocable trust | | that can be modified in such a way could be included in the | | settlor's taxable estate. |
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| | | Title 18-B, section 501 is amended to make it clear that, if |
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