(a) It is the purpose of this section to preserve the intent of testators and grantors of testamentary and inter vivos charitable remainder trusts created prior to and after August 31, 1972, by minimizing the imposition of federal income and excise taxes, imposed upon the assets of such trusts, and thereby preserving the maximum amount of the trust assets for the charitable, educational, religious and benevolent purposes for which their remainders were intended. The attorney general and reporter shall perform such acts as, in the attorney general and reporter’s opinion, will result in the effectuation of this declaration of purpose.
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Terms Used In Tennessee Code 35-9-106

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Bequest: Property gifted by will.
  • Code: includes the Tennessee Code and all amendments and revisions to the code and all additions and supplements to the code. See Tennessee Code 1-3-105
  • Decedent: A deceased person.
  • Devise: To gift property by will.
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Grantor: The person who establishes a trust and places property into it.
  • Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
  • Inter vivos: Transfer of property from one living person to another living person.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Testator: A male person who leaves a will at death.
  • Trustee: A person or institution holding and administering property in trust.
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b)

(1) Notwithstanding any provisions to the contrary in the governing instrument or in any other law of this state, the trustee of any split-interest trust as defined in § 4947(a)(2) of the Internal Revenue Code of 1954 ( 26 U.S.C. § 4947(a)(2) ), with the consent of all the beneficiaries under the governing instrument, may, without application to any court and either before or after the funding of the trust, amend the governing instrument to conform to §§ 170(f), 642(c)(5), 664, 2055(e), and 2522(c) of the Internal Revenue Code of 1954 ( 26 U.S.C. §§ 170(f), 642(c)(5), 664, 2055(e), and 2522(c) ), to the extent applicable, by executing a written amendment to the trust for that purpose. Consent shall not be required as to individual beneficiaries not living at the time of amendment or as to charitable beneficiaries not named or not in existence at the time of amendment. The possibility of beneficial interests arising after the amendment of the governing instruments shall not defeat the ability to amend. In the case of an individual beneficiary not competent to give consent, the consent of the beneficiary’s guardian or conservator, if any, or the consent of a guardian ad litem appointed by a court of competent jurisdiction, shall be treated as the consent of the beneficiary. A copy of the proposed amendment, executed by the trustee and consented to by all beneficiaries whose consent is required under this subdivision (b)(1), shall be delivered in person or by registered mail to the attorney general and reporter. The attorney general and reporter may, within sixty (60) days after receipt of the proposed amendment, indicate by registered mail to the trustee any specific objections to the proposed amendment, in which event subdivision (b)(2) shall apply if the attorney general and reporter does not withdraw the objections. In the case of any amendment to a trust created by will or to a trust created by inter vivos instrument, unless otherwise provided, the amendment shall be deemed to apply as of the date of death of the decedent or as of the date of gift.
(2) In the event that all of the trustees and beneficiaries under the governing instrument do not consent to the amendment, or in the event there are no named beneficiaries, any court of competent jurisdiction shall have the power to amend the governing instrument in accordance with subdivision (b)(1) upon petition of the trustee or any beneficiary and upon a subsequent finding by the court that the testator‘s or the grantor‘s intention would not be defeated by the amendment. A copy of the petition shall be delivered in person or by registered mail to the attorney general and reporter.
(3) Unless otherwise expressly provided in the governing instrument, any devise, bequest or transfer in a testamentary or inter vivos trust for religious, educational, charitable or benevolent uses to be determined by the trustee or any other person shall be made only to organizations and for purposes within the meaning of §§ 170(c), 2055(a), and 2522(a) of the Internal Revenue Code of 1954 ( 26 U.S.C. §§ 170(c), 2055(a), and 2522(a) ).
(4) This section also applies to executors and administrators of estates of decedents whose wills create trusts described in subdivision (b)(1).
(c) All references to sections of the Internal Revenue Code of 1954 refer to the Internal Revenue Code of 1954 as it exists on August 31, 1972. All references to the Internal Revenue Code of 1954 in subdivisions (b)(1) and (3) refer to the Internal Revenue Code of 1954 as it exists on June 4, 1975.
(d) This section applies in the case of all decedents dying after December 31, 1969, and in the case of all irrevocable inter vivos trusts created after July 31, 1969.
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