CHAPTER 397

FORMERLY

SENATE BILL NO. 313

AN ACT TO AMEND CHAPTER 5, TITLE 25 OF THE DELAWARE CODE RELATING TO THE RULE AGAINST PERPETUITIES AND POWERS OF APPOINTMENT.

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

Section 1. Amend Subsection (c) of Section 503 of Title 25, Delaware Code, by adding the following sentence at the end thereof:

“Notwithstanding the foregoing, in the case of a power of appointment described in §504 of this title as a “first power,” trusts created by the exercise of the power of appointment, whether by will, deed or other instrument, shall be deemed to have become irrevocable by the trustor or testator on the date on which the first power was created.”

Section 2. Amend Title 25, Delaware Code, by adding a new section 504 to read as follows:

Ҥ504. Certain Powers of Appointment.

Notwithstanding any other provision of this chapter, in the case of a power of appointment over property held in trust (the “first power”), if the trust is not subject to, or has an inclusion ratio of zero for purposes of, the tax on generation-skipping transfers imposed pursuant to chapter 13 of the Internal Revenue Code [26 U.S.C. Ch. 13] or any successor provision thereto and the first power may not be exercised in favor of the donee, the donee’s creditors, the donee’s estate, or the creditors of the donee’s estate, then every estate or interest in property, real or personal, created through the exercise, by will, deed or other instrument, of the first power, irrespective of:

(1) The manner in which the first power was created or may be exercised, or

(2) Whether the first power was created before or after the passage of this section,

shall, for the purpose of any rule of law against perpetuities, remoteness in vesting, restraint upon the power of alienation or accumulations now in effect or hereafter enacted, be deemed to have been created at the time of the creation of, and not at the time of the exercise of, the first power. For purposes of applying the foregoing rule, if any part of an estate or interest in property created through the exercise of the first power includes another power of appointment (the “second power”), then the second power of appointment and any estate or interest in property (including additional powers of appointment) created through the exercise of the second power shall be deemed to have been created at the time of the creation of the first power.”

Section 3. This Act shall apply to wills, deeds, and other instruments exercising powers of appointment that are executed after the date on which this Act is enacted into law without regard to when any power of appointment so exercised was created.

Approved July 06, 2000