1Amending Title 20 (Decedents, Estates and Fiduciaries) of the
2Pennsylvania Consolidated Statutes, in wills, further
3providing for rules of interpretation; in dispositions
4independent of letters, family exemption, probate of wills
5and grant of letters, providing for submission to
6jurisdiction; in administration and personal representatives,
7further providing for continuation of business and for
8incorporation of estate's business; in accounts and
9distribution, further providing for determination of title to
10decedent's interest in real estate; in estates, further
11providing for release or disclaimer of powers or interests;
12in estates, providing for release of powers and interests and
13disclaimer of powers; providing for powers of appointment; in
14trusts, further providing for nonjudicial settlement
15agreements - UTC 111, for representation of parties in
16interest in general, for division of trusts, for resignation
17of trustee and filing resignation, for duty to inform and
18report and for powers, duties and liabilities identical with
19personal representatives; codifying provisions of the
20Charitable Instruments Act of 1971; in principal and income,
21further providing for charitable trusts; and making a related
22repeal.

23The General Assembly of the Commonwealth of Pennsylvania
24hereby enacts as follows:

25Section 1. Section 2514(13) of Title 20 of the Pennsylvania
26Consolidated Statutes is amended to read:

27§ 2514. Rules of interpretation.

28In the absence of a contrary intent appearing therein, wills

1shall be construed as to real and personal estate in accordance
2with the following rules:

3* * *

4[(13) Power of appointment.--A general devise of the
5real estate of the testator, or of the real estate of the
6testator in any place, or in the occupation of any person
7mentioned in his will, or otherwise described in a general
8manner, shall be construed to include any real estate, or any
9real estate to which such description shall extend, as the
10case may be, which he shall have power to appoint in any
11manner he shall think proper, and shall operate as an
12execution of such power. In like manner, a bequest of the
13personal estate of the testator, or any bequest of personal
14property described in a general manner, shall be construed to
15include any personal estate, or any personal estate to which
16such description shall extend, as the case may be, which he
17shall have power to appoint in any manner he shall think
18proper, and shall operate as an execution of such power. In
19like manner, a general pecuniary legacy, when the assets of
20the individual estate of the testator are not sufficient for
21its payment, shall, to the extent necessary to make possible
22the payment of the legacy, be construed to include any estate
23which the testator shall have power to appoint in any manner
24he shall think proper, and shall to such extent operate as an
25execution of such power.]

26* * *

27Section 2. Title 20 is amended by adding a section to read:

28§ 3163. Submission to jurisdiction.

29A person granted letters testamentary or letters of
30administration shall be deemed to submit to the jurisdiction of

1the orphans' court division of the county in which the register
2granted the letters.

3Section 3. Sections 3314, 3315 and 3546 of Title 20 are
4amended to read:

5§ 3314. Continuation of business.

6[The court,] Giving due regard to the provisions of the 
7governing instrument and any other factor that the court deems 
8relevant, and aided by the report of a master if necessary, the 
9court may authorize the personal representative to continue any
10business of the estate for the benefit of the estate [and in
11doing so the court, for cause shown, may disregard the
12provisions of the governing instrument, if any]. The order may
13be with or without notice. If prior notice is not given to all
14parties in interest, it shall be given within five days after
15the order or within such extended time as the court, for cause
16shown, shall allow. Any party in interest may, at any time,
17petition the court to revoke or modify the order. The order may
18provide:

19(1) for the conduct of business, by the personal
20representative alone or jointly with others, or, unless
21restricted by the terms of the governing instrument, as a
22corporation, partnership, limited liability company or other 
23entity to be formed;

24(2) the extent of the liability of the estate or any
25part thereof, or of the personal representative, for
26obligations incurred in the continuation of the business;

27(3) whether liabilities incurred in the conduct of the
28business are to be chargeable solely to the part of the
29estate set aside for use in the business or to the estate as
30a whole;

1(4) the period of time the business may be conducted;
2[and]

3(4.1) for the compensation of a personal representative
4actively managing, supervising or engaging in the operation
5of an entity or business, from the estate's assets or from
6the entity or business, as appropriate, provided that the
7compensation is reasonably based upon the actual
8responsibilities assumed and performed; and

9(5) such other regulations, including accountings, as
10the court shall deem advisable.

11§ 3315. Incorporation of or formation of entity to operate
12estate's business.

13After notice to all parties in interest, aided by the report
14of a master if necessary, and giving due regard to the 
15provisions of the governing instrument and any other factor that 
16the court deems relevant, the court[, unless restricted by the
17terms of the governing instrument,] may authorize the personal
18representative alone or jointly with others, to organize a
19corporation, or form a partnership, limited liability company or 
20other entity, to carry on the business of the estate, whether
21the business was owned solely or with others, and may contribute
22for stock of the corporation, as capital, or for an interest in 
23a partnership, limited liability company or other entity, all or
24part of the property of the estate which was invested in the
25business.

26§ 3546. Determination of title to decedent's interest in real
27estate.

28[When a person shall die leaving an interest in real estate
29within the Commonwealth and no letters testamentary or of
30administration have been granted on the estate of the decedent

1in the Commonwealth, and one year has expired since the
2decedent's death, or if a personal representative has been
3appointed and has not filed his account within six years of the
4death of the decedent, any person claiming an interest in the
5real estate as or through an heir or devisee of the decedent may
6present a petition to establish title thereto in the orphans'
7court division of the county where the letters testamentary or
8of administration have been granted, or should no letters have
9been granted, then in the orphans' court division of the county
10within which was the family or principal residence of the
11decedent. If the decedent was a nonresident of the Commonwealth,
12the petition may be presented in the orphans' court division of
13any county wherein any of the real estate shall lie. The court,
14aided if necessary by the report of a master, may enter its
15decree nisi adjudging that the title to the decedent's interest
16in the real estate is in such person or persons as the court
17shall determine. Notice of the decree nisi shall be given to
18creditors and other parties in interest, by advertisement and
19otherwise, as the court shall direct. If no exception to the
20decree is filed within three months, it shall be confirmed
21absolutely, free of all decedent's debts not then liens of
22record, and regardless of the provisions of any testamentary
23writing of the decedent thereafter probated. A certified copy of
24the decree shall be recorded in the office of the recorder of
25deeds of each county where real estate included in the decree
26shall lie, shall be indexed by the recorder in the grantor's
27index under the name of the decedent and in the grantee's index
28under the name of each distributee, and shall be registered in
29the survey bureau or with the proper authorities empowered to
30keep a register of real estate in the county.]

1(a) Applicability.--This section shall apply if:

2(1) A person dies leaving an interest in real estate
3within this Commonwealth.

4(2) Either of the following occurs:

5(i) No letters testamentary or letters of
6administration have been granted on the estate of the
7decedent in this Commonwealth and one year has expired
8since the decedent's death.

9(ii) A personal representative has been appointed
10but has not filed an account within six years of the
11decedent's death.

12(b) Subject of petition.--A person or entity authorized by
13subsection (c) may present a petition under this section to:

14(1) terminate an interest in the real estate of other
15heirs or devisees of the decedent who, after being given
16proper notice as directed by the court under subsection
17(f)(2), fail to file timely an exception to the court's
18decree; or

19(2) have declared as void, unenforceable and canceled of
20record a fraudulent conveyance of the decedent's interest in
21the real estate and to the extent otherwise authorized by law
22any lien, title, claim or interest arising in the property
23by, from or under the fraudulent conveyance, including any
24subsequent transfers of property following the fraudulent
25conveyance and any liens to the extent that they have
26attached to the property as a result of the fraudulent
27conveyance, after all interested parties have been given
28proper notice as directed by the court under subsection
29(f)(2).

30(c) Who may petition.--The following persons and entities

1may petition to establish title to the decedent's real estate:

2(1) A person claiming an interest in the real estate:

3(i) as an heir or devisee of the decedent;

4(ii) through the decedent; or

5(iii) through an heir or devisee of the decedent,
6when the heir or devisee is deceased or has conveyed all
7or part of the heir or devisee's interest in the property
8to the person.

9(2) A nonprofit corporation organized for community
10development purposes under section 501(c)(3) of the Internal
11Revenue Code (Public Law 99-514, 26 U.S.C. § 1 et seq.), a
12municipality in which the real estate is located or a
13redevelopment authority created and organized under the act
14of May 24, 1945 (P.L.991, No.385), known as the Urban
15Redevelopment Law, having jurisdiction in the municipality in
16which the real estate is located:

17(i) In a manner that the court prescribes.

18(ii) Upon a showing by clear and convincing evidence
19to the court that:

20(A) No heirs or devisees exist or have taken
21action with respect to the real estate for at least
22five years since the decedent's death.

23(B) The real estate is not occupied by a person
24claiming rights by adverse possession.

25(d) Priority of petitions.--Where there are two or more
26petitions for the same real estate under subsection (c)(2), the
27court shall give priority in entering a decree nisi or order to
28one of the petitioners in the following order:

29(1) The municipality.

30(2) The redevelopment authority.

1(3) The nonprofit corporation.

2(e) Where to petition.--A petition under this section shall
3be filed in the orphans' court division of the county where:

4(1) the letters testamentary or letters of
5administration have been granted;

6(2) the principal residence of the decedent was located,
7if no letters testamentary or letters of administration have
8been granted; or

9(3) any of the real estate is located, if the decedent
10was a nonresident of this Commonwealth.

11(f) Notice of petition.--

12(1) Notice shall be given to all persons reasonably
13identifiable as eligible to file a petition under subsection
14(c), creditors that do not have liens of record, to the
15extent known, and all other persons and parties in interest
16reasonably known to hold or claim a lien, title, claim or
17other interest in the property in accordance with
18Pennsylvania Orphans' Court Rule 5.1 or, if the notice cannot
19be given in accordance with Pennsylvania Orphans' Court Rule
205.1 (a) or (b), the petition shall be accompanied by a motion
21for service pursuant to Pennsylvania Rule of Civil Procedure
22430, including an affidavit, attested by the petitioner or
23petitioner's counsel of record, stating the reasons why
24notice cannot be given under Rule 5.1 (a) or (b) and the
25nature and extent of the investigation that has been made to
26determine the whereabouts of creditors that do not have liens
27of record and other parties in interest.

28(2) If letters testamentary or letters of administration
29have been granted on the estate of the decedent, notice of
30the petition under this section shall be given to the

1personal representative of the decedent.

2(3) A lis pendens notice shall be given in each county
3where the real estate is located in the same manner and place
4as provided in section 3390 (relating to specific performance
5of contracts) for an action of specific performance.

6(g) Decree or order.--

7(1) Aided if necessary by the report of a master, the
8court may enter a decree nisi adjudging that the title to the
9decedent's interest in the real estate is in the petitioner
10or an order directing other appropriate relief as the court
11determines.

12(2) Notice of the decree nisi or order shall be given
13to:

14(i) creditors that do not have liens of record, to
15the extent known;

16(ii) creditors that have liens of record, if relief
17is being sought under subsection (b)(2); and

18(iii) other parties in interest, by advertisement or
19as otherwise directed by the court.

20(3) If no exception to the decree or order is filed
21within three months after notice is given in accordance with
22paragraph (2), it shall be confirmed absolutely, free of all
23decedent's debts not then liens of record, and regardless of
24the provisions of any testamentary writing of the decedent
25thereafter probated.

26(4) A certified copy of the decree or order shall be:

27(i) Recorded in the office of the recorder of deeds
28of each county where real estate included in the decree
29or order shall lie.

30(ii) Indexed by the recorder in the grantor's index

1under the name of the decedent and in the grantee's index
2under the name of each distributee.

3(iii) Registered in the survey bureau or with the
4proper authorities empowered to keep a register of real
5estate in the county.

6(h) Parcel number or identifier.--

7(1) A petition filed under subsection (b) and notice of
8petition given under subsection (f) shall include the county
9tax parcel number or Uniform Parcel Identifier for each
10parcel included. A party alleging any failure to comply with
11the requirements of this paragraph must do so in the manner
12provided for raising an affirmative defense.

13(2) A decree presented for recording under subsection
14(g) shall comply with section 3 of the act of April 24, 1931
15(P.L.48, No.40), entitled "An act requiring the recording of
16certain written agreements pertaining to real property, and
17prescribing the effect thereof as to subsequent purchasers,
18mortgages, and judgment creditors of the parties thereto."

19(i) Definition.--For the purposes of this section,
20"fraudulent conveyance" shall mean a transfer of an interest,
21lien, title or claim in real estate that occurs as a result of:

22(1) a forgery of the grantor's signature on a document
23purporting to make such transfer;

24(2) the grantor being induced by fraud,
25misrepresentation, duress or coercion to sign a document
26purporting to make such transfer; or

27(3) some other inappropriate means used to obtain the
28grantor's signature on the document purporting to make such
29transfer, as determined by a court.

30Section 4. Section 6103 of Title 20 is repealed:

1[§ 6103. Release or disclaimer of powers or interests.

2(a) Powers and interests releasable.--Any power of
3appointment, or power of consumption, whether general or
4special, other than a power in trust which is imperative, and
5any interest in, to, or over real or personal property held or
6owned outright, or in trust, or in any other manner which is
7reserved or given to any person by deed, will or otherwise, and
8irrespective of any limitation of such power or interest by
9virtue of any restriction in the nature of a so-called
10spendthrift trust provision, or similar provision, may be
11released or disclaimed, either with or without consideration by
12written instrument signed by the person possessing the power or
13the interest and delivered as hereinafter provided, but nothing
14in this section shall authorize an income beneficiary of a
15spendthrift trust to release or disclaim his right to such
16income, unless as a result of the release or disclaimer the
17released or disclaimed income will pass to one or more of the
18beneficiary's descendants. This section shall not apply to an
19interest that may be disclaimed under Chapter 62 (relating to
20disclaimers).

21(b) Form of release or disclaimer.--A power or interest
22which is releasable or disclaimable may be released or
23disclaimed either absolutely or conditionally, and may also be
24released or disclaimed with respect to the whole or any part of
25the property subject to such power or interest, and may also be
26released or disclaimed in such manner as to reduce or limit the
27persons or objects or classes of persons or objects in whose
28favor such power or interest would otherwise be exercisable. No
29release or disclaimer of a power or of an interest shall be
30deemed to make imperative a power or interest which was not

1imperative prior to such release or disclaimer unless the
2instrument of release or disclaimer expressly so provides.

3(c) Delivery of release or disclaimer.--Such release or
4disclaimer may be delivered to any one of the following:

5(1) Any person specified for such purpose in the
6instrument creating the power or interest.

7(2) Any trustee of the property to which the power or
8interest relates.

9(3) The clerk of the court having jurisdiction of the
10trust for filing in said court.

11(4) The recorder of deeds for recording in the county in
12which the person possessing the power or interest resides, or
13in which the deed, will, or other instrument creating the
14power or interest is recorded or filed.

15(d) Grantee or lienholder.--A release or disclaimer shall be
16void as against a bona fide grantee of or holder of a lien on
17real estate in any county unless the release or disclaimer or a
18duplicate original or certified copy thereof is recorded in the
19county where the real estate lies before the recording or
20entering of the instrument or lien under which such grantee or
21lienholder claims.]

22Section 5. Title 20 is amended by adding a section to read:

23§ 6103.1. Release of powers and interests and disclaimer of
24powers.

25(a) Interests releasable.--

26(1) Subject to paragraph (2), an interest in property
27that has been accepted may be released.

28(2) An income interest in a spendthrift trust may be
29released only if the released income passes to one or more of
30the releasor's descendants.

1(b) Effect of release of interest.--A releasor of an
2interest in property shall be treated as having died at the time
3of the release for purposes of determining and accelerating the
4interests of other parties in the property.

5(c) Nonfiduciary powers disclaimable or releasable.--A power
6of appointment, power of withdrawal or other power held in a
7nonfiduciary capacity may be disclaimed prior to its acceptance
8or released after its acceptance.

9(d) Fiduciary powers disclaimable or releasable.--

10(1) Except as otherwise provided in the instrument
11creating the power, a power held in a fiduciary capacity that
12is not imperative may be disclaimed prior to its acceptance
13or released after its acceptance.

14(2) A disclaimer or release under this subsection is
15effective as to a successor fiduciary if the disclaimer or
16release so provides.

17(e) Terms of disclaimer or release.--

18(1) A release of a power or interest or a disclaimer of
19a power under this section may:

20(i) Be absolute or conditional.

21(ii) Be made with respect to the whole or any part
22of the property subject to the power or interest.

23(iii) Reduce or limit the persons or objects or
24classes of persons or objects in whose favor the power or
25interest would otherwise be exercisable.

26(2) Unless the disclaimer or release so provides, a
27disclaimer or release under this section shall not make
28imperative a power or interest that was not imperative prior
29to the disclaimer or release.

30(f) Date of effect.--

1(1) A disclaimer of a power held in a fiduciary capacity
2that is not imperative takes effect as of the time the
3instrument creating the power becomes irrevocable.

4(2) A release of a power held in a fiduciary capacity
5that is not imperative takes effect immediately after the
6last exercise of the power.

7(g) Procedural requirements.--A release and a disclaimer
8under this section shall be in writing and filed, delivered and
9recorded in a similar manner as a disclaimer under section 6204
10(relating to filing, delivery and recording).

11Section 6. Title 20 is amended by adding a chapter to read:

12CHAPTER 76

13POWERS OF APPOINTMENT

14Sec.

157601. Definitions.

167602. Exercise of powers of appointment.

177603. Contract to exercise power.

187604. Manner of appointment.

197605. Antilapse provision.

207606. Partially effective exercise.

217607. Creditors' rights.

22§ 7601. Definitions.

23The following words and phrases when used in this chapter
24shall have the meanings given to them in this section unless the
25context clearly indicates otherwise:

26"Broad power of appointment." A power of appointment that
27the donee may exercise in favor of any one or more of the
28following:

29(1) One or more persons selected by the donee.

30(2) The donee.

1(3) The donee's estate.

2(4) Every person other than the donee, the donee's
3creditors, the donee's estate or the creditors of the donee's
4estate.

5"Limited power of appointment." A power of appointment that
6is not a broad power of appointment. The term includes a power
7to appoint to the donee's creditors or the creditors of the
8donee's estate.

9§ 7602. Exercise of powers of appointment.

10(a) Broad power of appointment.--Subject to subsection (c),
11in the absence of a contrary intent appearing in the instrument
12creating a broad power of appointment or in the donee's
13instrument exercising the power, a broad power of appointment
14may be exercised only by the donee's instrument making:

15(1) specific reference to the power;

16(2) general reference to any or all powers of
17appointment held by the donee;

18(3) a testamentary or inter vivos gift specifically
19describing the appointive property;

20(4) an insufficiently funded testamentary pecuniary
21legacy, to the extent to satisfy the legacy;

22(5) a general testamentary gift; or

23(6) a testamentary residuary gift.

24(b) Limited power of appointment.--

25(1) Subject to paragraph (2) and subsection (c), in the
26absence of a contrary intent appearing in the instrument
27creating a limited power of appointment or in the donee's
28instrument exercising the power, a limited power of
29appointment may be exercised only by the donee's instrument
30making:

1(i) specific reference to the power;

2(ii) a testamentary or inter vivos gift specifically
3describing the appointive property;

4(iii) a general testamentary gift to all, and only
5to all, the objects of the power; or

6(iv) a testamentary residuary gift to all, and only
7to all, the objects of the power.

8(2) The objects of the power described in paragraph (1)
9(iii) and (iv) who have a common ancestor shall be only those
10descendants of the common ancestor determined on a per
11stirpes basis.

12(c) Necessity of donee's specific reference to power.--A
13power of appointment may be exercised only by specific reference
14to the power if the instrument creating the power so requires.

15(d) Exercise before testamentary power granted.--In the
16absence of a contrary intent appearing in the instrument
17creating a power of appointment exercisable at the donee's death
18or in the donee's instrument exercising the power, the donee's
19instrument may exercise a power of appointment existing at the
20donee's death even though the power was granted after the date
21of the donee's instrument.

22(e) Testamentary powers.--

23(1) Notwithstanding any contrary provision in an
24instrument creating a power of appointment, a testamentary
25power of appointment shall not be exercisable in favor of the
26donee or the donee's creditors.

27(2) A grant of a testamentary power to appoint to the
28donee's creditors shall be construed as a power to appoint to
29the creditors of the donee's estate.

30(3) An attempted exercise of a testamentary power of

1appointment in favor of the donee's creditors shall be
2construed as an exercise in favor of those creditors of the
3donee's estate who were also creditors of the donee at the
4time of the donee's death.

5(4) If the donee is an issue of the donor, a
6testamentary power of appointment to appoint to the donor's
7issue shall not be exercisable in favor of the donee or the
8donee's estate.

9§ 7603. Contract to exercise power.

10(a) Contract prohibited.--Unless the donor and donee are the
11same person, the donee of a power of appointment that is not
12presently exercisable may not contract to exercise the power.

13(b) Actions for recovery.--A prohibited contract under
14subsection (a), if made, may not be the basis of an action for
15specific performance or damages, but the promisee can obtain
16restitution from the donee of the value given for the promise,
17unless the donee has exercised the power pursuant to the
18contract.

19(c) No limitation on disclaimer or release.--This section
20does not limit the power of a donee to disclaim or release a
21power of appointment in whole or in part.

22§ 7604. Manner of appointment.

23(a) Outright or in trust.--Subject to section 7602(e)
24(relating to exercise of powers of appointment), unless
25expressly prohibited by the instrument creating a power of
26appointment, a donee may exercise a power by appointing in any
27manner, including, but not limited to:

28(1) Appointing outright to one or more objects of the
29power.

30(2) Appointing to one or more trustees to hold the

1appointive property in trust for the benefit of one or more
2objects of the power and specifying the terms and
3administrative provisions of the trust and the powers and
4duties of the trustees, even if the trustees themselves are
5not objects of the power.

6(3) Creating a broad or limited power of appointment
7exercisable by any one or more objects of the original power
8to whom the donee could have appointed outright, even if some
9of the objects of the new power are not among the objects of
10the original power, provided that if the original power is a
11limited power, other than a power to appoint to the donee's
12creditors or the creditors of the donee's estate:

13(i) All the objects of the original power are among
14the objects of the new power.

15(ii) All the takers in default of exercise of the
16new power are among the objects of the original power.

17(b) Exclusive and nonexclusive powers.--Unless the
18instrument creating a power of appointment expressly specifies a
19minimum share of, a minimum pecuniary amount of or a particular
20item of appointive property to be appointed to an object of the
21power, the donee may exclude any object of the power as the
22donee deems appropriate.

23§ 7605. Antilapse provision.

24(a) General rule.--

25(1) Subject to paragraphs (2) and (3), in the absence of
26a contrary intent appearing in the instrument creating a
27power of appointment or, in the donee's instrument,
28exercising the power, an exercise of the power of appointment
29in favor of any of the following, whether designated by name
30or as one of a class, shall not fail if the appointee is not

1living at the time the appointment becomes effective:

2(i) A child or other issue of the donee.

3(ii) A brother or sister of the donee.

4(iii) A child of a brother or sister of the donee.

5(2) Paragraph (1) applies if:

6(i) One or more issues of the appointee are living
7at the time the appointment becomes effective.

8(ii) The issue under subparagraph (i), per stirpes,
9are objects of the power.

10(3) The property appointed to the deceased appointee
11shall pass per stirpes to the appointee's issue living at the
12time the appointment becomes effective, but the appointment
13to a brother or sister or child of a brother or sister of the
14donee shall fail to the extent the property would pass to the
15spouse or issue of the donee if the appointment were to
16lapse.

17(b) Lapsed share of residue.--In the absence of a contrary
18intent appearing in the donee's instrument exercising a power of
19appointment, if an appointment of an amount or share of the
20residue of the property subject to the power fails, the amount
21or share shall pass to the other appointees of the residue of
22the property subject to the power, if any, in proportion to
23their shares in the residue of the property subject to the
24power.

25§ 7606. Partially effective exercise.

26In the absence of a contrary intent appearing in the
27instrument creating a power of appointment or in the donee's
28instrument exercising the power, a partially ineffective
29exercise of a power of appointment shall not make ineffective
30any otherwise effective portion of the exercise, unless the

1appointment regarded as a whole constitutes such an integrated
2plan that the parts cannot be separated without defeating the
3plan.

4§ 7607. Creditors' rights.

5Property subject to a presently exercisable inter vivos broad
6power of appointment that does not exceed the greater of $5,000
7or 5% of the assets subject to the power is not, by virtue of
8the power, available to the creditors of the donee of the power.

9Section 7. Sections 7710.1(c), 7722 and 7740.7(b) of Title
1020 are amended to read:

11§ 7710.1. Nonjudicial settlement agreements - UTC 111.

12* * *

13(c) Exception.--A nonjudicial settlement agreement is valid
14only to the extent it [does not violate] is not inconsistent 
15with a material purpose of the trust and includes terms and
16conditions that could be properly approved by the court under
17this chapter or other applicable law.

18* * *

19§ 7722. Representation of parties in interest in general.

20(a) Judicial proceeding.--In a judicial proceeding involving
21a trust matter, an order or decree of the court that binds the
22representative [or representatives] is binding upon a person,
23class of persons or both represented in accordance with section
247723 (relating to representatives and persons represented) if:

25(1) the trustee notifies the [representatives]
26representative in writing whom [they represent, they do] he 
27represents, the representative does not decline the
28representation as provided in section 7725 (relating to
29notice of representation) and [they act] the representative 
30acts in good faith[.];

1(2) the petitioner avers the representation in the
2petition, the representative is the petitioner or a
3respondent over whom the court has jurisdiction and, if a
4respondent, the representative does not decline the
5representation in a responsive pleading filed and served as
6required by law; or

7(3) the representative has signed a certification of 
8representation described in subsection (d) and has not 
9rescinded the certification on the court's records by the 
10time the court acts upon the petition.

11(b) Nonjudicial resolution.--In a nonjudicial resolution of
12a trust matter, notice to, the consent or approval of or the
13waiver or release by the representative [or representatives] is
14binding upon a person, class of persons or both represented in
15accordance with section 7723 if:

16(1) the trustee notifies the [representatives]
17representative in writing whom [they represent, they do] he 
18represents, the representative does not decline the
19representation as provided in section 7725 and [they act] the 
20representative acts in good faith[.]; or

21(2) the representative has signed a certification of
22representation described in subsection (d) and has not
23rescinded the certification in a writing received by the
24trustee by the time of the nonjudicial settlement.

25(c) Permissible consideration.--In making decisions, a
26representative may consider the general benefit accruing to the
27living members of the family of the person represented.

28(d) Certification of representation.--

29(1) A certification signed by the representative
30describing his representation of another person, class of

1persons or both in accordance with section 7723 may be filed
2with:

3(i) the court, in the case of a judicial proceeding;
4or

5(ii) the trustee, in the case of a nonjudicial
6resolution of a trust matter.

7(2) A certification of representation may be rescinded
8in a writing signed by the representative and filed with:

9(i) the court at any time before the court acts in
10reliance upon the certification, in the case of a
11judicial proceeding; or

12(ii) the trustee before a trust matter is resolved
13without application to the court.

14§ 7740.7. Division of trusts.

15* * *

16(b) With court approval.--The court, for cause shown, may
17authorize the division of a trust into [two] separate trusts
18upon such terms and conditions and with notice as the court
19shall direct.

20* * *

21Section 8. Section 7765(a), (b) and (c) of Title 20 are
22amended and the section is amended by adding a subsection to
23read:

24§ 7765. Resignation of trustee; filing resignation.

25[(a) Court approval.--A trustee may resign with court
26approval.

27(b) Without court approval if authorized by trust
28instrument.--A trustee may resign without court approval if
29authorized to resign by the trust instrument.

30(c) Without court approval and without authorization in

1trust instrument.--

2(1) Unless expressly provided to the contrary in the
3trust instrument, an individual trustee may resign without
4court approval and without authorization in the trust
5instrument if:

6(i) there is at least one cotrustee and all
7cotrustees consent in writing to the resignation; and

8(ii) all the qualified beneficiaries consent in
9writing to the resignation.

10(2) This subsection shall not authorize the sole trustee
11of a trust to resign unless the trust instrument names a
12successor trustee or provides a method for appointing a
13successor trustee, and in either case the resignation shall
14not be effective until the successor trustee accepts the
15appointment in writing.]

16(a.1) General rule.--A trustee may resign:

17(1) with court approval;

18(2) without court approval if authorized to resign by
19the trust instrument; or

20(3) pursuant to a nonjudicial settlement agreement
21described in section 7710.1 (relating to nonjudicial
22settlement agreements - UTC 111).

23* * *

24Section 9. Section 7780.3 of Title 20 is amended by adding a
25subsection to read:

26§ 7780.3. Duty to inform and report.

27* * *

28(k.1) Nomination by current beneficiary.--A current
29beneficiary of a trust who has capacity may nominate another
30person to receive, on behalf of the current beneficiary, the

1notice required by this section. The current beneficiary shall
2notify the trustee of the nomination. The trustee giving the
3notice required by this section to that nominee satisfies the
4trustee's duty to give to the named current beneficiary the
5notice required by this section if:

6(1) the trustee notifies the nominee that the notice is
7being given to the nominee as representing the named current
8beneficiary; and

9(2) the nominee does not decline to receive the notice in
10a writing that is given to the trustee no later than 60 days
11after receipt of the trustee's notice.

12* * *

13Section 10. Section 7792 of Title 20 is amended to read:

14§ 7792. Powers, duties and liabilities identical with personal
15representatives.

16The provisions concerning the powers, duties and liabilities
17of a trustee shall be the same as those set forth in the
18following provisions of this title for the administration of a
19decedent's or a minor's estate:

20Section 3184 (relating to discharge of personal
21representative and surety).

22Section 3321(d) and (e) (relating to nominee registration;
23corporate fiduciary as agent; deposit of securities in a
24clearing corporation; book-entry securities).

25Section 3323 (relating to compromise of controversies).

26Section 3324 (relating to death or incapacity of fiduciary).

27Section 3332 (relating to inherent powers and duties).

28Section 3353 (relating to order of court).

29Section 3354 (relating to power given in governing
30instrument).

1Section 3355 (relating to restraint of sale).

2Section 3356 (relating to purchase by personal
3representative).

4Section 3358 (relating to collateral attack).

5Section 3359 (relating to record of proceedings; county where
6real estate lies).

7Section 3532(c) (relating to at risk of personal
8representative).

9Section 11. Title 20 is amended by adding a chapter to read:

10CHAPTER 79

11CHARITABLE INSTRUMENTS

12Sec.

137901. Short title of chapter.

147902. Definitions.

157903. Deemed provisions of governing instrument.

167904. Power to amend governing instrument.

177905. Court authority.

187906. Applicability.

19§ 7901. Short title of chapter.

20This chapter shall be known and may be cited as the
21Charitable Instruments Act.

22§ 7902. Definitions.

23The following words and phrases when used in this chapter
24shall have the meanings given to them in this section unless the
25context clearly indicates otherwise:

26"Charitable organization." A corporation, trust or other
27instrumentality governed by Pennsylvania law, including:

28(1) A trust described in section 4947(a)(1) or (2) of
29the Internal Revenue Code of 1986 (Public Law 99-514, 26
30U.S.C. § 4947(a)(1) or (2)), which is or is treated as a

1private foundation under section 509 of the Internal Revenue
2Code of 1986 (26 U.S.C. § 509).

3(2) A trust governed by Pennsylvania law that is or is
4treated as a pooled income fund under section 642(c)(5) of
5the Internal Revenue Code of 1986 (26 U.S.C. § 642(c)(5)).

6§ 7903. Deemed provisions of governing instrument.

7(a) Effect of deemed provisions.--The governing instrument
8of a charitable organization is deemed to include provisions,
9the effects of which are to:

10(1) Require distributions for each taxable year in such
11amounts and at such times and in such manner as not to
12subject the organization to tax under section 4942 of the
13Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
144942).

15(2) Prohibit the organization from:

16(i) Engaging in an act of self-dealing, as defined
17in section 4941(d) of the Internal Revenue Code of 1986
18(26 U.S.C. § 4941(d)).

19(ii) Retaining excess business holdings, as defined
20in section 4943(c) of the Internal Revenue Code of 1986
21(26 U.S.C. § 4943(c)).

22(iii) Making an investment in such manner as to
23subject the organization to tax under section 4944 of the
24Internal Revenue Code of 1986 (26 U.S.C. § 4944).

25(iv) Making a taxable expenditure, as defined in
26section 4945(d) of the Internal Revenue Code of 1986 (26
27U.S.C. § 4945(d)).

28(b) Effect of contrary provision.--The deemed provisions
29under subsection (a) supersede any contrary provision of the
30governing instrument.

1(c) Applicability.--This section applies only to the extent
2that the charitable organization is subject to one or more of
3the sections of the Internal Revenue Code of 1986 set forth in
4subsection (a).

5§ 7904. Power to amend governing instrument.

6The trustees or directors of every charitable organization
7have the power, acting alone, without the approval of a member,
8court, donor or beneficiary, to amend the instrument governing
9the charitable organization in any manner required for the sole
10purpose of ensuring that:

11(1) Gifts and bequests to the charitable organization
12qualify for charitable deductions available for Federal
13income, gift and estate tax purposes.

14(2) The charitable organization qualifies for tax
15exemptions available for Federal income tax purposes.

16§ 7905. Court authority.

17Nothing in this chapter precludes a court of competent
18jurisdiction from authorizing a deviation from the express terms
19of an instrument governing a charitable organization.

20§ 7906. Applicability.

21This chapter shall apply to:

22(1) A charitable organization created after December 31,
231969.

24(2) A charitable organization created before January 1,
251970, unless a court of competent jurisdiction in a
26proceeding instituted before January 1, 1972, explicitly
27decided that the operation of this chapter would
28substantially impair the accomplishment of the purposes of
29the charitable organization involved in that proceeding.

30Section 12. Section 8113(f) of Title 20 is amended to read:

1§ 8113. Charitable trusts.

2* * *

3(f) Charitable organizations.--For a charitable organization
4defined under [the act of June 17, 1971 (P.L.181, No.23), known
5as the Charitable Instruments Act of 1971,] Chapter 79 (relating 
6to charitable instruments) the provisions of [that act] Chapter
779 shall supersede subsection (c) if necessary to comply with
8the minimum investment return requirements.

9Section 13. This act shall apply as follows:

10(1) The addition of 20 Pa.C.S. Ch. 76 shall apply to all
11powers of appointment created before, on or after the
12effective date of that chapter.

13(2) The addition of 20 Pa.C.S. Ch. 79 is a continuation
14of the act of June 17, 1971 (P.L.181, No.23), known as the
15Charitable Instruments Act of 1971. The following apply:

16(i) All activities initiated under the Charitable
17Instruments Act of 1971 shall continue and remain in full
18force and effect and may be completed under 20 Pa.C.S.
19Ch. 79. Resolutions, orders, regulations, rules and
20decisions which were made under the Charitable
21Instruments Act of 1971 and which are in effect on the
22effective date of this section shall remain in full force
23and effect until revoked, vacated or modified under 20
24Pa.C.S. Ch. 79. Contracts, obligations and agreements
25entered into under the Charitable Instruments Act of 1971
26are not affected nor impaired by the repeal of the
27Charitable Instruments Act of 1971.

28(ii) Any difference in language between 20 Pa.C.S.
29Ch. 79 and the Charitable Instruments Act of 1971 is
30intended only to conform to the style of the Pennsylvania

1Consolidated Statutes and is not intended to change or
2affect the legislative intent, judicial construction or
3administrative interpretation and implementation of the
4Charitable Instruments Act of 1971.

5Section 14. Repeals are as follows:

6(1) The General Assembly declares that the repeal under
7paragraph (2) is necessary to effectuate the addition of 20
8Pa.C.S. Ch. 79.

9(2) The act of June 17, 1971 (P.L.181, No.23), known as
10the Charitable Instruments Act of 1971, is repealed.

11Section 15. This act shall take effect as follows:

12(1) The following provisions shall take effect in 60
13days:

14(i) The amendment of 20 Pa.C.S. § 3314.

15(ii) The amendment of 20 Pa.C.S. § 3315.

16(iii) The amendment of 20 Pa.C.S. § 3546.

17(iv) The repeal of 20 Pa.C.S. § 6103.

18(v) The addition of 20 Pa.C.S. § 6103.1.

19(vi) The amendment of 20 Pa.C.S. § 7710.1(c).

20(vii) The amendment of 20 Pa.C.S. § 7722.

21(viii) The amendment of 20 Pa.C.S. § 7740.7(b).

22(ix) The amendment or addition of 20 Pa.C.S. §
237765(a), (a.1), (b) and (c).

24(x) The addition of 20 Pa.C.S. § 7780.3(k.1).

25(xi) The amendment of 20 Pa.C.S. § 7792.

26(2) The remainder of this act shall take effect
27immediately.