Article 5. Duties Of Trustees Of Private Foundations, Charitable Trusts, And Split-interest Trusts of California Probate Code >> Division 9. >> Part 4. >> Chapter 1. >> Article 5.

As used in this article, the following definitions shall control:
  (a) "Charitable trust" means a charitable trust as described in Section 4947(a)(1) of the Internal Revenue Code.
  (b) "Private foundation" means a private foundation as defined in Section 509 of the Internal Revenue Code.
  (c) "Split-interest trust" means a split-interest trust as described in Section 4947(a)(2) of the Internal Revenue Code.

During any period when a trust is deemed to be a charitable trust or a private foundation, the trustee shall distribute its income for each taxable year (and principal if necessary) at a time and in a manner that will not subject the property of the trust to tax under Section 4942 of the Internal Revenue Code.

During any period when a trust is deemed to be a charitable trust, a private foundation, or a split-interest trust, the trustee shall not do any of the following:
  (a) Engage in any act of self-dealing as defined in Section 4941 (d) of the Internal Revenue Code.
  (b) Retain any excess business holdings as defined in Section 4943 (c) of the Internal Revenue Code.
  (c) Make any investments in such manner as to subject the property of the trust to tax under Section 4944 of the Internal Revenue Code.
  (d) Make any taxable expenditure as defined in Section 4945(d) of the Internal Revenue Code.

With respect to split-interest trusts:
  (a) Subdivisions (b) and (c) of Section 16102 do not apply to any trust described in Section 4947(b)(3) of the Internal Revenue Code.
  (b) Section 16102 does not apply with respect to any of the following:
  (1) Any amounts payable under the terms of such trust to income beneficiaries, unless a deduction was allowed under Section 170(f)(2) (B), 2055(e)(2)(B), or 2522(c)(2)(B) of the Internal Revenue Code.
  (2) Any amounts in trust other than amounts for which a deduction was allowed under Section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 of the Internal Revenue Code, if the amounts are segregated, as that term is defined in Section 4947(a)(3) of the Internal Revenue Code, from amounts for which no deduction was allowable.
  (3) Any amounts irrevocably transferred in trust before May 27, 1969.

The provisions of Sections 16101, 16102, and 16103 shall be deemed to be contained in the instrument creating every trust to which this article applies. Any provision of the instrument inconsistent with or contrary to this article is without effect.

(a) A proceeding contemplated by Section 101(l)(3) of the federal Tax Reform Act of 1969 (Public Law 91-172) may be commenced pursuant to Section 17200 by the organization involved. All specifically named beneficiaries of the organization and the Attorney General shall be parties to the proceedings. Notwithstanding Section 17000, this provision is not exclusive and does not limit any jurisdiction that otherwise exists.
  (b) If an instrument creating a trust affected by this section has been recorded, a notice of pendency of judicial proceedings under this section shall be recorded in a similar manner within 10 days from the commencement of the proceedings. A duly certified copy of any final judgment or decree in the proceedings shall be similarly recorded.