§560:2-707  Survivorship with respect to
future interests under terms of trust; substitute takers.  (a) 
Definitions.  In this section:



"Alternative future interest" means
an expressly created future interest that can take effect in possession or
enjoyment instead of another future interest on the happening of one or more
events, including survival of an event or failure to survive an event, whether
an event is expressed in condition-precedent, condition-subsequent, or any
other form.  A residuary clause in a will does not create an alternative future
interest with respect to a future interest created in a nonresiduary devise in
the will, whether or not the will specifically provides that lapsed or failed
devises are to pass under the residuary clause.



"Beneficiary" means the beneficiary
of a future interest and includes a class member if the future interest is in
the form of a class gift.



"Class member" includes an individual
who fails to survive the distribution date but who would have taken under a future
interest in the form of a class gift had the individual survived the
distribution date.



"Distribution date", with respect to
a future interest, means the time when the future interest is to take effect in
possession or enjoyment.  The distribution date need not occur at the beginning
or end of a calendar day, but can occur at a time during the course of a day.



"Future interest" includes an
alternative future interest and a future interest in the form of a class gift.



"Future interest under the terms of a
trust" means a future interest that was created by a transfer creating a
trust or to an existing trust or by an exercise of a power of appointment to an
existing trust, directing the continuance of an existing trust, designating a
beneficiary of an existing trust, or creating a trust.



"Surviving beneficiary" or
"surviving descendant" means a beneficiary or a descendant who
neither predeceased the distribution date nor is deemed to have predeceased the
distribution date under section 560:2-702.



(b)  Survivorship required; substitute gift.  A
future interest under the terms of a trust executed after January 1, 1997 is
contingent on the beneficiary's surviving the distribution date.  If a
beneficiary of a future interest under the terms of a trust fails to survive
the distribution date, the following apply:



(1)  Except as provided in paragraph (4), if the
future interest is not in the form of a class gift and the deceased beneficiary
leaves surviving descendants, a substitute gift is created in the beneficiary's
surviving descendants.  They take by representation the property to which the
beneficiary would have been entitled had the beneficiary survived the
distribution date;



(2)  Except as provided in paragraph (4), if the
future interest is in the form of a class gift, other than a future interest to
"issue", "descendants", "heirs of the body",
"heirs", "next of kin", "relatives", or
"family", or a class described by language of similar import, a
substitute gift is created in the surviving descendants of any deceased
beneficiary.  The property to which the beneficiaries would have been entitled
had all of them survived the distribution date passes to the surviving
beneficiaries and the surviving descendants of the deceased beneficiaries. 
Each surviving beneficiary takes the share to which the surviving beneficiary
would have been entitled had the deceased beneficiaries survived the
distribution date.  Each deceased beneficiary's surviving descendants who are
substituted for the deceased beneficiary take by representation the share to
which the deceased beneficiary would have been entitled had the deceased
beneficiary survived the distribution date.  For the purposes of this
paragraph, "deceased beneficiary" means a class member who failed to
survive the distribution date and left one or more surviving descendants;



(3)  For the purposes of section 560:2-701, words of
survivorship attached to a future interest are not, in the absence of
additional evidence, a sufficient indication of an intent contrary to the application
of this section.  Words of survivorship include words of survivorship that
relate to the distribution date or to an earlier or an unspecified time,
whether those words of survivorship are expressed in condition-precedent,
condition-subsequent, or any other form;



(4)  If a governing instrument creates an alternative
future interest with respect to a future interest for which a substitute gift
is created by paragraph (1) or (2), the substitute gift is superseded by the
alternative future interest only if an expressly designated beneficiary of the
alternative future interest is entitled to take in possession or enjoyment.



(c)  More than one substitute gift; which one
takes.  If, under subsection (b), substitute gifts are created and not
superseded with respect to more than one future interest and the future
interests are alternative future interests, one to the other, the determination
of which of the substitute gifts takes effect is resolved as follows:



(1)  Except as provided in paragraph (2), the property
passes under the primary substitute gift;



(2)  If there is a younger-generation future interest,
the property passes under the younger-generation substitute gift and not under
the primary substitute gift;



(3)  In this subsection:



"Primary future interest"
means the future interest that would have taken effect had all the deceased
beneficiaries of the alternative future interests who left surviving
descendants survived the distribution date.



"Primary substitute gift"
means the substitute gift created with respect to the primary future interest.



"Younger-generation future
interest" means a future interest that:



(A)  Is
to a descendant of a beneficiary of the primary future interest;



(B)  Is
an alternative future interest with respect to the primary future interest;



(C)  Is
a future interest for which a substitute gift is created; and



(D)  Would
have taken effect had all the deceased beneficiaries who left surviving
descendants survived the distribution date except the deceased beneficiary or
beneficiaries of the primary future interest.



"Younger-generation substitute
gift" means the substitute gift created with respect to the
younger-generation future interest.



(d)  If no other takers, property passes under
residuary clause or to transferor's heirs.  Except as provided in subsection
(e), if, after the application of subsections (b) and (c), there is no
surviving taker, the property passes in the following order:



(1)  If the trust was created in a nonresiduary devise
in the transferor's will or in a codicil to the transferor's will, the property
passes under the residuary clause in the transferor's will; for purposes of
this section, the residuary clause is treated as creating a future interest
under the terms of a trust;



(2)  If no taker is produced by the application of
paragraph (1), the property passes to the transferor's heirs under section
560:2-711.



(e)  If no other takers and if future interest
created by exercise of power of appointment.  If, after the application of
subsections (b) and (c), there is no surviving taker and if the future interest
was created by the exercise of a power of appointment:



(1)  The property passes under the donor's
gift-in-default clause, if any, which clause is treated as creating a future
interest under the terms of a trust; and



(2)  If no taker is produced by the application of
paragraph (1), the property passes as provided in subsection (d). For purposes
of subsection (d), "transferor" means the donor if the power was a
nongeneral power and means the donee if the power was a general power.



(f)  Notwithstanding the foregoing, if a
revocable inter vivos trust terminates on the death of the settlor of the trust
and all the assets are to be distributed outright, sections 560:2-603 and
560:2-604 shall determine whether a gift has lapsed and who shall receive the
property. [L 1996, c 288, pt of §1; am L 2000, c 48, §2]