CHAPTER 165

FORMERLY

HOUSE BILL NO. 264

AN ACT TO AMEND CHAPTER 61, TITLE 12, DELAWARE CODE, RELATING TO THE ALLOCATION OF TRUST INCOME AND PRINCIPAL.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 61, Title 12, Delaware Code, by adding thereto a new Section 6112 as follows:

"§ 6112. Certain Charitable Remainder Unitrusts.

(a) Notwithstanding any contrary provision of this chapter, if the trust instrument adopts the provisions of this section by reference, an increase in the value of the following obligations owned by a charitable remainder unitrust, of the type authorized in § 664(d)(3) of the Internal Revenue Code or any successor provision thereof, is distributable as income when it becomes available for distribution:

(1) a zero coupon bond;

(2) an annuity contract before annuitization;

(3) a life insurance contract before the death of the insured;

(4) an interest in a common trust fund (as defined in § 584 of the Internal Revenue Code or any successor provision thereof);

(5) an interest in a partnership (as defined in § 7701 of the Internal Revenue Code or any successor provision thereof); or

(6) any other obligation for the payment of money that is payable at a future time in accordance with a fixed, variable or discretionary schedule of appreciation in excess of the price at which it was issued.

(b) The increase in value of the obligations described in subsection (a) of this section is distributable to the beneficiary who was the income beneficiary at the time of the increase.

(c) For purposes of this section, the increase in value of an obligation described in subsection (a) is available for distribution only when the trustee receives cash on account of the obligation."

Section 2. This Act shall apply to trust instruments becoming irrevocable on or after the date of enactment of this Act.

Approved July 7, 1995