Governing instrument; contents

A. Notwithstanding any provision in this Section or in the governing instrument to the contrary (except as provided in Subsection C of this Section), the governing instrument of each trust that is a private foundation described in Section 509 of the Internal Revenue Code1 (including each nonexempt charitable trust described in Section 4947(a)(1) of the Code2 that is treated as a private foundation) and the governing instrument of each nonexempt split-interest trust described in Section 4947(a)(2) of the Code3 (but only to the extent that Section 508(e) of the Code4 is applicable to such nonexempt split-interest trust under Section 4947(a)(2) of the Code) shall be deemed to contain the following provisions: the trust shall make distributions at such time and in such manner as not to subject the trust to tax under Section 4942 of the Code;5 the trust shall not engage in any act of self-dealing that would subject it to tax under Section 4941 of the Code;6 the trust shall not retain any excess business holdings that would subject it to tax under Section 4943 of the Code;7 the trust shall not make any investments that would subject it to tax under Section 4944 of the Code;8 and the trust shall not make any taxable expenditures that would subject it to tax under Section 4945 of the Code.9 B. The trustee of any trust described in Subsection A of this Section (with the consent of the settlor, if then living and competent to give consent) may, without judicial proceedings, amend the governing instrument to expressly include the provisions required by Section 508(e) of the Code by executing a written amendment to the trust. C. The trustee of any trust described in Subsection A of this Section (with the consent of the settlor, if then living and competent to give consent) may, without judicial proceedings, amend such trust to expressly exclude the application of Subsection A of this Section by executing a written amendment to the trust instrument. D. All references in this Section to the "Code" are to the United States Internal Revenue Code of 1986, as amended, and all references in this Section to specific sections of the Code include corresponding provisions of any subsequent federal tax laws. Added by Acts 1971, No. 154, §1; Acts 2008, No. 637, §1, eff. Jan. 1, 2009. 1 26 U.S.C.A. §509. 2 26 U.S.C.A. §4947(a)(1). 3 26 U.S.C.A. §4947(a)(2). 4 26 U.S.C.A. §508(e). 5 26 U.S.C.A. §4942. 6 26 U.S.C.A. §4941. 7 26 U.S.C.A. §4943. 8 26 U.S.C.A. §4944. 9 26 U.S.C.A. §4945.