130.232, 130.715 and 130.730 by sections 1 to 4, chapter 126, Oregon Laws 2015, apply only to trusts executed on or after January 1, 2016, and to trust proceedings commenced on or after the effective

130.232, 130.715 and 130.730 by sections 1 to 4, chapter 126, Oregon Laws 2015, apply only to trusts executed on or after January 1, 2016, and to trust proceedings commenced on or after the effective date of this 2017 Act [May 15, 2017], regardless of when the trust at issue was executed. [2015 c.126 �5; 2017 c.54 �1]

����� 130.232 Division of trust into separate shares or portions; legal effect. (1) If the occurrence of an event, satisfaction of a condition or exercise of a power allows or creates an obligation for the trustee to divide a trust or any portion of a trust into separate shares or portions for the benefit of separate beneficiaries:

����� (a) A separate share of a trust comes into existence at the earliest possible time that a trustee may reasonably determine, based upon the facts, that a separate economic interest exists for a beneficiary;

����� (b) Each income beneficiary�s share resulting from the division of the trust will be deemed to have the beneficiary�s share of income based upon the beneficiary�s share of the distributable net income for the trust�s tax year relative to that of the other beneficiaries;

����� (c) All of the terms of the trust instrument will be applied independently to each beneficiary�s share created pursuant to this section except as terms are specifically limited in the trust instrument; and

����� (d) The trust or portion of the trust from which a beneficiary�s share originates will be deemed to terminate to the extent of the beneficiary�s share, subject only to the proper administration of the terminated trust occasioned by the terminating event, condition or exercise.

����� (2) The provisions of this section are not elective and must be read so as to be consistent with section 663(c) of the Internal Revenue Code, as in effect on December 31, 2013. Application of this section shall apply for all tax years that the trust is in existence unless an event occurs, the result of which is that the terms of the trust prevail, in which case the requirements of appropriate trust administration may require and result in a different treatment than would otherwise result in accordance with the provisions of this section. [2013 c.529 �24; 2015 c.126 �1]

����� Note: See note under 130.230.

����� 130.235 In terrorem clause. (1) Except as provided in this section, an in terrorem clause in a trust is valid and enforceable. If a beneficiary challenges a trust that contains an in terrorem clause that applies to the beneficiary, the court shall enforce the clause against the beneficiary even though the beneficiary establishes that there was probable cause for the challenge.

����� (2) The court shall not enforce an in terrorem clause if the beneficiary challenging the trust establishes that the beneficiary has probable cause to believe that the trust is a forgery or that the trust has been revoked.

����� (3) The court shall not enforce an in terrorem clause if the challenge is brought by a fiduciary acting on behalf of a protected person under the provisions of ORS chapter 125, a guardian ad litem appointed for a minor or a guardian ad litem appointed for an incapacitated or financially incapable person.

����� (4) For the purposes of this section, �in terrorem clause� means a provision in a trust that reduces or eliminates the interest of a beneficiary under the trust if the beneficiary challenges the validity of part or all of the trust. [2005 c.348 �38]

����� 130.237 Abatement due to insufficiency of trust property. (1) As used in this section, �abate� or �abatement� means to reduce or the reduction of a gift from a trust at the settlor�s death on account of the insufficiency of the trust property to pay all claims and expenses and distribute all gifts in full.

����� (2) If the trust instrument expresses an order of abatement, or if the plan of distribution or the express or implied purpose of the distribution from the trust would be defeated by the order of abatement stated in subsection (3) of this section, the shares of the distributees abate as may be found necessary to give effect to the intention of the settlor.

����� (3) Except as provided in ORS 130.555 as to the shares of pretermitted children, and in ORS