(a) Notwithstanding any contrary provision of law, unless expressly prohibited by the terms of the disposing instrument:

(1) the trustee of an express trust (which term as defined in paragraph (g) of this section may mean the executor or administrator) is authorized without prior court approval or the consent of the persons interested to establish two or more separate trusts in order to segregate for any of the following purposes:

(A) property held in trust in which a spouse or surviving spouse has a qualifying income interest with respect to which an election has been or will be made in whole or in part under section 2056(b)(7), 2056A or 2523(f) of the United States Internal Revenue Code of 1986 from property with respect to which no election has been or will be made;

(B) property held in trust with respect to which a marital deduction under section 2056 or 2523 of the United States Internal Revenue Code would be available, by election or otherwise, from property held in trust for persons other than the spouse or surviving spouse, so that one or more of such separate trusts qualify for the deduction under said sections;

(C) property held in trust with respect to which a charitable deduction under section 2055 or 2522 of the United States Internal Revenue Code would be available from property held in trust for persons not described in said sections, so that one or more of such separate trusts qualify for the deduction under said sections;

(D) property held in trust which is or would be excepted, excluded or exempt from or under Chapter 13 (tax on generation-skipping transfers) of the United States Internal Revenue Code from such property which is not so excepted, excluded or exempt, so that one or more of such separate trusts will have an inclusion ratio of zero, or so that one or more of such separate trusts qualify for the grandchild exception under section 1433(b)-(d) of the Tax Reform Act of 1986, as amended;

(E) property held in trust for one (of two or more beneficiaries) from property held in trust for such other beneficiaries, so that one or more of such separate trusts shall be a qualified subchapter S trust under section 1361(d) of the United States Internal Revenue Code;

(F) property transferred in trust by a creator (including but not limited to a transfer treated as made by a spouse by reason of section 2513 of the United States Internal Revenue Code) from property transferred in trust by one or more different creators; and

(G) property transferred in trust by a creator (including but not limited to a transfer treated as made by a spouse by reason of section 2513 of the United States Internal Revenue Code) pursuant to a disposing instrument from property transferred by the same creator pursuant to another disposing instrument;

(2) the trustee of an express trust may divide such trust into two or more separate trusts, with the consent of all persons interested in the trust but without prior court approval, for any reason which is not directly contrary to the primary purpose of the trust; and

(3) the court having jurisdiction of an express trust, upon the petition of the trustee or of any person interested in the trust and upon notice to all such persons, may direct the establishment of two or more separate trusts for any reason not directly contrary to the primary purpose of the trust.

(b) Unless the court otherwise directs, the trusts established under this section shall be deemed to have been established as of the effective date of the disposing instrument; provided that the establishment of separate trusts under subparagraph two of paragraph (a) of this section may become effective upon the date or dates provided in the instrument filed under paragraph (e) of this section.

(c) Except as implicit in the establishment of separate trusts authorized by this section, the terms of the disposing instrument, subject to modifications approved by the court, shall govern each separate trust established hereunder, except that separate trusts for one or more members of a class of beneficiaries may be established under subparagraph two of paragraph (a) of this section without modification by the court if the property held in trust is distributed to such separate trusts for one or more members of such class on the basis of share per stirpes, per capita, or by representation, whichever is consistent with the terms of the disposing instrument.

(d) Unless the court otherwise directs, and except in the case of the establishment of separate trusts under clauses (F) and (G) of subparagraph one of paragraph (a) of this section where the original assets remain or can be traced, the property distributed to the separate trust shall be fairly representative of appreciation or depreciation and shall be based upon the fair market value of the assets on the date or dates of the distributions of such assets to the separate trusts.

(e) Separate trusts shall be established under subparagraphs one and two of paragraph (a) of this section by an instrument or instruments in writing, signed and acknowledged by the trustee and if under subparagraph two of paragraph (a) of this section shall also be signed and acknowledged by all the persons interested in the trust (or the guardian of the property, committee, conservator, adult guardian, or personal representative of such persons each of whom is hereby empowered to consent thereto without prior court approval). Such instruments shall be filed in the office of the clerk of the court having jurisdiction over the trust; and a copy thereof shall be served on all persons interested in the trusts (or the guardian of the property, committee, conservator, adult guardian, or personal representative of such persons), by registered or certified mail, return receipt requested, or by personal delivery or upon application of the trustee in any other manner directed by the court.

(f) The term "disposing instrument" shall mean the will, trust agreement, instrument exercising a power of appointment or other instrument creating such a trust or transferring property to such trust; provided that in the case of an instrument exercising a limited or testamentary power of appointment, the term "disposing instrument" may also refer to the instrument creating such power (if applicable under the circumstances).

(g) In any case where the United States Internal Revenue Code requires that an election or other action be made or taken by the executor or if no trustee of a trust under a will has qualified, the term "trustee" as used in this section shall mean the executor or administrator of an estate. In any such case, the trustee shall comply with any action taken by the executor or administrator under this section.

(h) For the purposes of this section, the phrase "all persons interested in the trust" shall mean all the persons upon whom service of process would be required in a proceeding for the judicial settlement of the account of the trustee, taking into account section three hundred fifteen of the surrogate's court procedure act.

(i) References to sections of the United States Internal Revenue Code shall refer to the United States Internal Revenue Code of 1986 as amended from time to time, or to corresponding provisions of subsequent internal revenue laws, and shall also refer to corresponding provisions of state law.

(j) Unless otherwise provided for in the disposing instrument, the commissions allowed to a trustee as determined under article twenty-three of the surrogate's court procedure act, as amended from time to time, shall not be increased by reason of the establishment of separate trusts pursuant to subparagraph one of paragraph (a) of this section unless the court otherwise permits an increase, provided, however, that such trustee shall be entitled to charge the trust for any additional reasonable and necessary expenses incurred in the administration of such separate trusts.

(k) For purposes of subparagraphs (a)(2) and (3) of this section, a division of a trust into two or more separate trusts to permit one or more such trusts to be governed by article 11-A and another one or more such trusts to be governed by 11-2.4 shall be deemed to be for a reason which is not directly contrary to the primary purpose of the trust unless such division is expressly prohibited by the terms of the disposing instrument.