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conveyance, or bequest of such trust fund; and if no directions for that purpose are contained in such grant, conveyance, or bequest, then such diminution may be made up in whole or in part by such accumulation, in the discretion of the trustees of such trust fund; but in no case shall such accumulation be allowed to increase the trust fund beyond the true amount or value thereof, actually received by the trustees, to be estimated after the deduction of all liens and incumbrances on such trust fund, and of all expenses incurred or paid by the trustees in the collection or obtaining the possession of the same.

Provided, further, that where a gift, grant, devise or bequest of real and personal property, or of personal property alone, is made in trust by the owner thereof to a religious, educational, charitable or benevolent corporation, for any of the purposes specified or comprehended in its charter, not more than one-fourth of the total value of such gift, grant, devise or bequest of real and personal property, or of personal property alone, not exceeding in value the sum of fifty thousand dollars, may be set apart for the accumulation of the rents and profits, and income, of such property, for the benefit of such corporation, until such time as such accumulation shall amount to the sum of one hundred thousand dollars, whereupon such accumulation shall be available for the use of such corporation, as a part of the permanent endowment fund thereof, or otherwise as provided in the conditions of the gift, grant, devise or bequest to such corporation. (Amended by L. 1915, ch. 670,

in effect May 22, 1915.)

Derivation: Personal Property Law, § 4; L. 1846, ch. 74, § 1; L. 1855, ch. 432, § 1.

§ 17. Anticipation of directed accumulation.

When a minor, for whose benefit a valid accumulation of the income of personal property has been directed, shall be destitute of other sufficient means of support or education, the supreme court, at special term in any case, or, if such accumulation shall have been directed by a will, the surrogate's court of the county in which such will shall have been admitted to probate, may, on the application of such minor or his guardian, cause a suitable sum to be taken from the moneys accumulated or directed to be accumulated, to be applied for the support or education of such minor. Derivation: Personal Property Law, § 5.

§ 18. Power to bequeath executed by general provision in will. Personal property embraced in a power to bequeath, passes by a ll or testament purporting to pass all the personal property of

the testator; unless the intent, that the will or testament shall not operate as an execution of the power, appears herein either expressly or by necessary implication.

Derivation: Personal Property Law, § 6.

§ 19. Disaffirmance of fraudulent acts by executors and others. An executor, administrator, receiver, assignee or trustee, may, for the benefit of creditors or others interested in personal property, held in trust, disaffirm, treat as void and resist any act done, or transfer or agreement made in fraud of the rights of any creditor, including himself, interested in such estate, or property, and a person who fraudulently receives, takes or in any manner interferes with the personal property of a deceased person, or an insolvent corporation, association, partnership or individual is liable to such executor, administrator, receiver or trustee for the same or the value thereof, and for all damages caused by such act to the trust estate. A creditor of a deceased insolvent debtor, having a claim against the estate of such debtor, exceeding in amount the sum of one hundred dollars, may, without obtaining a judgment on such claim, in like manner, for the benefit of himself and other creditors interested in said estate, disaffirm, treat as void and resist any act done or conveyance, transfer or agreement made in fraud of creditors or maintain an action to set aside such act, conveyance, transfer or agreement. Such claim, if disputed, may be established in such action. The judgment in such action may provide for the sale of the property involved, when a conveyance or transfer thereof is set aside, and that the proceeds thereof be brought into court or paid into the proper surrogate's court to be administered according to law.

Derivation: Personal Property Law, § 7.

§ 20. When trust vests in supreme court.

On the death of a last surviving or sole surviving trustee of an express trust, the trust estate does not pass to his next of kin or personal representative, but, if the trust be unexecuted, in the absence of a contrary direction on the part of the person creating the same, it vests in the supreme court and shall be executed by some person appointed by the court, whom the court may invest with all or any of the powers and duties of the original trustee or trustees. The beneficiary or beneficiaries of the trust shall have such notice as the court may direct of the application for the appointment of such person; and the person so appointed shall give

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such security as the court may require, and shall be subject to the same requirements of law as to accounting and as to the administration of the trust as apply to testamentary trustees; and shall be entitled to such compensation for his services by way of commissions as may be fixed by any court which has power to pass upon his final account, which shall in no case exceed that now allowed by law to executors and administrators, besides his just and reasonable expenses in the matter in which he is appointed. (Amended by L. 1911, ch. 217, in effect May 31, 1911.)

Derivation: Personal Property Law, § 8, as amended by L. 1902, ch. 150,

§ 1.

§ 21. Investment of trust funds.

A trustee or other person holding trust funds for investment may invest the same in the same kind of securities as those in which savings banks of this state are by law authorized to invest the money deposited therein, and the income derived therefrom, and in bonds and mortgages on unincumbered real property in this state worth fifty per centum more than the amount loaned thereon, and in shares or parts of such bonds and mortgages, provided that any share or part of such bond and mortgage so held shall not be subordinate to any other shares thereof and shall not be subject to any prior interest therein, and provided further that bonds and mortgages in parts of which any trustee may invest trust funds together with any guaranties of payment, insurance policies and other instruments and evidences of title relating therto shall be held for the benefit of such trustee and of any other persons interested in such bonds and mortgages by a trust company or title guaranty corporation organized under the laws of this state and that a certificate setting forth that such corporation holds such instruments for the benefit of such trustee and of any other persons who may be interested in such bonds and mortgages among whom the corporation holding such instruments may be included, be executed by such trust company or title insurance corporation and delivered to each person who becomes interested in such bond and mortgage. Every corporation issuing any such certificate shall keep a record in proper books of account of all certificates issued pursuant to the foregoing provisions. A trustee or other person holding trust funds may require such personal bonds or guaranties of payment to accompany investments as may seem prudent, and all premiums paid on such guaranties may be charged to or paid cut of income, providing that such charge or payment be not more than at the rate of one-half of one per centum per annum on the par value of such investments. But no trustee shall purchase securities hereunder from himself. (Amended by L. 1918, ch. 544, in effect May 8, 1918.)

Derivation: Personal Property Law, § 9, as amended by L. 1902, ch. 295, § 1, and L. 1907, ch. 669, § 1. For remainder of old section, see Decedent Estate Law, § 111, and Domestic Relations Law, § 85.

§ 22. Commissions of trustees.

Any trustee, under a deed of trust to sell personal property for the benefit of creditors, shall be entitled to and allowed upon an accounting the same commissions as an assignee for the benefit of creditors.

Derivation: L. 1896, ch. 249, § 1.

§ 23. Revocation of trusts upon consent of all persons interested.

Upon the written consent of all the persons beneficially interested in a trust in personal property or any part thereof heretofore or hereafter created, the creator of such trust may revoke the same as to the whole or such part thereof, and thereupon the estate of the trustee shall cease in the whole or such part thereof. (Added by L. 1909, ch. 247, in effect April 23, 1909.)

§ 24 Compromise of controversies arising between claimants to property or estates where the interest of infants, incompetents or persons unknown or not in being are or may be affected.

(a) The supreme court or the surrogate's court having jurisdiction of the estate or property involved may authorize executors, administrators and trustees to adjust by compromise any controversy that may arise between different claimants to the estate or property in their hands to which agreement such executors, administrators or trustees and all other parties in being who claim an interest in such estate shall be parties in person or by guardian as hereinafter provided.

(b) The supreme court or the surrogate's court having jurisdiction of the estate or property involved may likewise authorize the person or persons named as executors in one or more instruments purporting to be the last will and testament of a person de ceased, or the petitioners for administration with such will or wills annexed, to adjust by compromise any controversy that may arise between the persons claiming as devisees or legatees under such will or wills and the persons entitled to or claiming the estate of the deceased under the statutes regulating the descent and distribution of intestate estates, to which agreement of compromise the persons named as executors or the petitioners for administration with the will annexed, as the case may be, those claiming as devisees or legatees and those claiming the estate as intestate, shall be parties. Provided that persons named as executors in any instrument who have renounced or shall renounce such executorship shall not be required to be parties to such compromise.

(c) Where an infant, lunatic, person of unsound mind or habitual drunkard is a necessary party to a compromise under this

section he shall be represented in the proceedings by a special guardian appointed by the court, who shall in the name and on the behalf of the party he represents make all proper instruments necessary to carry into effect any compromise that is sanctioned by the court.

(d) If it appears to the satisfaction of the court that the interests of persons unknown or the future contingent interests of persons not in being are or may be affected by the compromise, the court must appoint some suitable person or persons to represent such interests in the compromise and to make all proper instruments necessary to carry into effect any compromise that is sanctioned by the court. In the event that by the terms of any compromise made pursuant to this section money or property is directed to be set apart or held for the benefit of or to represent the interests of infants, incompetents or persons unknown or unborn, the same may in a proper case be paid or deposited in court and remain subject to the order of the court.

(e) An agreement of compromise made in writing pursuant to this section, if found by the court to be just and reasonable in its effects upon the interests in said estate or property of infants, lunatics, persons of unsound mind, unknown persons or the future contingent interests of persons not in being, shall be valid and binding upon such interests as well as upon the interests of adult persons of sound mind.

(f) An application for the approval of a compromise pursuant to this section must be made by petition duly verified, which shall set forth the provisions of any instruments or documents by virtue of which any claim is made to the property or estate and any and all facts relating to the claims of the various parties to the controversy and the possible contingent interests of persons not in being and all facts which make it proper and necessary that the proposed compromise be approved by the court. After taking proof of the facts either before the court or by a referee and hearing the parties and fully examining into the matter the court must make an order upon the application. (Added by L. 1919, ch. 419, in effect May 5, 1919.)

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