CHAPTER 378

FORMERLY

HOUSE BILL NO. 541

AN ACT AMENDING TITLE 12, DELAWARE CODE RELATING TO TRUSTS.

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

Section 1. Amend § 3570, Title 12 by deleting Subsection (8) in its entirety and substituting in lieu thereof the following:

“(8) ‘Transferor’ means a person who, as an owner of property, as a holder of a power of appointment which authorizes the holder to appoint in favor of the holder, the holder’s creditors, the holder’s estate or the creditors of the holder’s estate, or as a trustee, directly or indirectly makes a disposition or causes a disposition to be made.”.

Section 2. Amend § 3570(10)(b), Title 12 by deleting said paragraph in its entirety and substituting in lieu thereof the following:

“b. Is irrevocable, but a trust instrument shall not be deemed revocable on account of its inclusion of 1 or more of the following:

1. A transferor’s power to veto a distribution from the trust;

2. A power of appointment (other than a power to appoint to the transferor, the transferor’s creditors, the transferor’s estate or the creditors of the transferor’s estate) exercisable by will or other written instrument of the transferor effective only upon the transferor’s death;

3. The transferor’s potential or actual receipt of income, including rights to such income retained in the trust instrument;

4. The transferor’s potential or actual receipt of income or principal from a charitable remainder unitrust or charitable remainder annuity trust as such terms are defined in § 664 of the Internal Revenue Code of 1986 and any successor provision thereto;

5. The transferor’s receipt each year of a percentage (not to exceed 5) specified in the trust instrument of the initial value of the trust or its value determined from time to time pursuant to the trust instrument;

6. The transferor’s potential or actual receipt or use of principal if such potential or actual receipt or use of principal would be the result of a qualified trustee or qualified trustees, including a qualified trustees or qualified trustees acting at the direction of an adviser described in § 3570(9) c.2. of this Chapter, acting either in such qualified trustee’s or qualified trustees’ sole discretion or pursuant to an ascertainable standard contained in the trust instrument;

7. The transferor’s right to remove a trustee or adviser and to appoint a new trustee or adviser (other than a person who is a related or subordinate party with respect to the transferor within the meaning of § 672 (c) of the Internal Revenue Code of 1986 and any successor provision thereto);

8. The transferor’s potential or actual use of real property held under a qualified personal residence trust within the meaning of such term as described in § 2702 (c) of the Internal Revenue Code of 1986 and any successor provision thereto”.

Section 3. Amend § 3570, Title 12 by adding new Subsection (11) to read as follows:

“(11) ‘Person’ has the meaning ascribed to it in § 302(16), Title 1 of this Code.”.

Section 4. Amend § 3572, Title 12 by adding new Subsection (f) to read as follows:

“f. In circumstances where more than one qualified disposition is made by means of the same trust instrument, then (i) the making of a subsequent qualified disposition shall be disregarded in determining whether a creditor’s claim with respect to a prior qualified disposition is extinguished as provided in Subsection (b) of this Section and (ii) any distribution to a beneficiary shall be deemed to have been made from the latest such qualified disposition.”.

Section 5. §§ 1, 3, and 4 of this Act shall be effective as of July 1, 1997. Section 2 of this Act shall be effective as of July 1, 1997, except that Subparagraphs 6 and 8 of said Paragraph b, as so amended, shall be effective as of June 29, 1998, and Subparagraph 5 of said Paragraph b, as so amended, shall be effective upon enactment.

Approved July 08, 2002