Conversion to Unitrust - Alternatives
The trustee may convert a trust into a unitrust upon
terms other than those set forth in subdivision (e) of Section
16336.4, without court order, if all of the following apply:
The conditions set forth in subdivision (a) of Section 16336
The trustee gives written notice of the trustee's intention to
convert the trust into a unitrust and furnishes the information
required by subdivision (c) of Section 16336.4. The notice shall
comply with the requirements of Chapter 5 (commencing with Section
16500), including notice to a beneficiary who is a minor and to the
minor's guardian, if any.
The payout percentage to be adopted is at least 3 percent and
no greater than 5 percent.
All beneficiaries entitled to notice under Section 16501
consent in writing to the proposed action after having been furnished
with the notice described in subdivision (c) of Section 16336.4.
The court may order the conversion of a trust into a unitrust
as provided in this subdivision.
The trustee may petition the court to approve the
conversion to a unitrust for any one of the following reasons:
A beneficiary timely objects to a proposed conversion to a
The trustee proposes to make the conversion upon terms other
than those described in subdivision (e) of Section 16336.4.
Paragraph (3) or (4) of subdivision (h) of Section 16336.4
applies to all currently acting trustees.
If the trustee determines, in its discretion, that a
petition is advisable.
In no event, however, may the court authorize conversion to a
unitrust with a payout percentage of less than 3 percent or greater
than 5 percent of the fair market value of the trust assets.
A beneficiary may petition the court to order the conversion.
The court shall approve the conversion proposed by the trustee
or direct the conversion requested by the beneficiary if the
conditions set forth in subdivision (a) of Section 16336 are
satisfied and the court concludes that conversion of the trust on the
terms proposed will enable the trustee to better comply with the
provisions of subdivision (b) of Section 16335.
In deciding whether to approve a proposed conversion or direct
a requested conversion, the court may consider, among other factors,
those described in subdivision (g) of Section 16336.