§ 7-1.11 Application of principal to creator of trust as reimbursement
for taxes (a) Notwithstanding any contrary provision of law, the trustee of an
express trust, unless otherwise provided in the disposing instrument,
may, from time to time, pay from principal to the creator of such trust
an amount equal to any income taxes on any portion of the trust
principal with which he is charged.
(b) The provisions of this section do not apply to any trust by which
a future estate is indefeasibly vested in the United States or a
political subdivision for exclusively public purposes; a corporation
organized exclusively for religious, charitable, scientific, literary or
educational purposes, including the encouragement of art and the
prevention of cruelty to children or animals, no part of the net
earnings of which inures to the benefit of any private shareholder or
individual, and no substantial part of the activities of which is
carrying on propaganda or otherwise attempting to influence legislation;
a trustee, or a fraternal society, order or association operating under
the lodge system, provided the principal or income of such trust is to
be used by such trustee or by such fraternal society, order or
association exclusively for religious, charitable, scientific, literary
or educational purposes, or for the prevention of cruelty to children or
animals, and no substantial part of the activities of such trustee or of
such fraternal society, order or association is carrying on propaganda
or otherwise attempting to influence legislation; or any veteran's
organization incorporated by Act of Congress, or of its department or
local chapters or posts, no part of the net earnings of which inures to
the benefit of any private shareholder or individual.
