Section 59-16.1-16 - ProhibitionsAn authorized trustee may exercise a power authorized by this chapter to appoint a trust that is a supplemental needs trust that conforms to chapter 59-08. However, an authorized trustee may not exercise a power authorized by this chapter to effect the following:
1. To reduce, limit, or modify any beneficiary's current right to:a. A mandatory distribution of income or principal;b. A mandatory annuity or unitrust interest;c. A current right to withdraw a percentage of the value of the trust; ord. A current right to withdraw a specified dollar amount;2. Notwithstanding subsection 2 of section 59-18-08, to decrease or indemnify against a trustee's liability or exonerate a trustee from liability for failure to exercise reasonable care, diligence, and prudence;3. To alter or eliminate a provision granting another individual the right to remove or replace the authorized trustee exercising the power under sections 59-16.1-04 or 59-16.1-05, unless notice has been provided to the persons under subsection 3 of section 59-16.1-12, or approval is granted by a court having jurisdiction over the trust;4. To make a binding and conclusive fixation of the value of an asset for purposes of distribution, allocation, or otherwise;5. To extend the term of the appointed trust beyond a permissible period of the rule against perpetuities of the invaded trust, and an exercise of the power that extends the term of the appointed trust beyond the permissible period of the rule against perpetuities of the invaded trust voids the entire exercise of the power; or6. To jeopardize: a. The deduction or exclusion originally claimed with respect to a contribution to the invaded trust that qualified for the annual exclusion under section 2503(b) of the Internal Revenue Code; the marital deduction under section 2056(a) or 2523(a) of the Internal Revenue Code; or the charitable deduction under section 170(a), 642(c), 2055(a), or 2522(a) of the Internal Revenue Code.b. The qualification of a transfer as a direct skip under section 2642(c) of the Internal Revenue Code; orc. Any other specific tax benefit for which a contribution originally qualified for income, gift, estate, or generation-skipping transfer tax purposes under the Internal Revenue Code.Added by S.L. 2017, ch. 416 (HB 1228),§ 8, eff. 8/1/2017.