SENATE BILL NO. 311
AN ACT AMENDING TITLE 12 OF THE DELAWARE CODE RELATING TO TRUSTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Title 12, Section 3322, of the Delaware Code by Amending the Section title to read “Fiduciary agency contracts; delegation.” designating the present Section as Subsection (a) and adding new Subsections (b) through (e) to read as follows:
“(b) A fiduciary may delegate investment functions to any person including a co-fiduciary subject to the standard of care required of the fiduciary in making investment decisions of the type so delegated with respect to the fiduciary fund. A fiduciary may delegate management functions to any person including a co-fiduciary subject to the standard of care required of the fiduciary in making management decisions of the type so delegated with respect to the fiduciary fund.
(c) A fiduciary shall not be responsible for the decisions or actions of any agent to which functions are delegated pursuant to this section if the fiduciary exercises the standard of care required of the fiduciary in making such decisions when selecting the agent, when establishing the scope and specific terms of the delegation and when reviewing periodically the agent’s actions in order to monitor the agent’s performance and compliance with the scope and specific terms of the delegation.
(d) The agent shall comply with the scope and terms of the delegation and shall exercise the delegated function subject to the standard of care required of the fiduciary and shall be liable to the trust for failure to do so.
(e) An agent who accepts the delegation of a fiduciary’s function from a fiduciary who is subject to the jurisdiction of a court of this State shall be deemed to have submitted to the jurisdiction of that court even if the delegation agreement provides for a different jurisdiction or venue.”
Section 2. Amend Title 12, Section 3528, of the Delaware Code by deleting the parenthetical language appearing in Subsection 3528(a)(2) and inserting the following language in lieu thereof:
“(26 U.S.C. § 1 et seq.) (hereinafter referred to in this section as the “I.R.C.”), by reason of the application of I.R.C. §2503(c)”, replacing the period at the end of Subsection (a)(2) with a semicolon; and adding new Subsections (a)(3) and (4) as follows:
“(3) the exercise of such authority does not reduce any income interest of any income beneficiary of a trust for which a marital deduction has been taken for federal tax purposes under I.R.C. §2056 or §2523 or for state tax purposes under any comparable provision of applicable state law; and
(4) the exercise of such authority does not apply to trust property subject to a presently exercisable power of withdrawal held by a trust beneficiary who is the only trust beneficiary to whom, or for the benefit of whom, the trustee has authority to make distributions.”
Section 3. Amend Title 12, Chapter 33, by adding the following a new Section to read as follows:
“§3332. Governing Law; Change of Situs.
(a) The duration of a trust and time of vesting of interests in the trust property shall not change merely because the place of administration of the trust is changed from some other jurisdiction to this State.
(b) Except as otherwise expressly provided by the terms of a governing instrument or by court order, the laws of this State shall govern the administration of a trust while the trust is administered in this State.”
Section 4. Amend Title 12, Section 3588 of the Delaware Code by deleting the word “A” appearing at the beginning of the Section and substituting the following language in lieu thereof:
“Whether or not the consent, release, or ratification is supported by consideration, a”.
Section 5. Sections 1 through 4 of the Act shall be effective on August 1, 2006 and shall apply to trusts whenever created.
Approved June 27,2006