CHAPTER 538
FORMERLY
SENATE BILL NO. 451
AN ACT TO AMEND CHAPTER 5, OF TITLE 25, RELATING TO THE RULE AGAINST PERPETUITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §503, Chapter 5, Title 25 by deleting the Section in its entirety and adding in lieu thereof the following:
"§503. Rule Against Perpetuities
(a) No interest created in real property held in trust shall be void by reason of the common law rule against perpetuities and no interest created in personal property held in trust shall be void by reason of any rule against perpetuities, whether the common law rule or otherwise.
(b) In this State, the rule against perpetuities for real property held in trust is that at the expiration of 110 years from the later of the date on which a parcel of real property or an interest in real property is added to or purchased by a trust or the date the trust became irrevocable, such parcel or interest, if still held in such trust, shall be distributed in accordance with the trust instrument regarding distribution of such property upon termination of the trust as though termination occurred at that time, or if no such provisions exist, to the persons then entitled to receive the income of the trust in proportion to the amount of the income so receivable by such beneficiaries, or in equal shares if specific proportions are not specified in the trust instrument. In the event that the trust instrument does not provide for distribution upon termination and there are no income beneficiaries of the trust, such parcel or interest shall be distributed to such then-living persons who are then determined to be the trustor's or testator's distributees by the application of the intestacy laws of this State then in effect governing the distribution of intestate real property as though the trustor or testator had died at that particular time, intestate, a resident of this State, and owning the property so distributable.
This rule shall not apply to the following trusts, all of which may he perpetual.
(1) A trust for the benefit of one or more charitable organizations as described in §§170(c), 2055(a) and 2522(a) of the United States Internal Revenue Code of 1986 (Title 26 of the United States Code), or under any similar statute: or
(2) A trust created by an employer as part of a stock bonus plan. pension plan, disability or death benefit plan, or profit sharing plan for the exclusive benefit of some or all of its employees, to which contributions are made by such employer or employees, or both, for the purpose of distributing to such employees the earnings or the principal, or both earnings and principal. of the hind held in trust; or
(3) A business trust formed under Chapter 38 of Title 12 for which a certificate of business trust is on tile in the Office of the Secretary of State; or
- (4) A (rust of real or personal property created for the perpetual care of cemeteries pursuant to the provisions of Subchapter IV of Chapter 35 of title 12 of the Delaware Code.
(c) For purposes of this rule against perpetuities, trusts created by the exercise of a power of appointment, whether limited or general, and whether by will, deed or other instrument, shall be deemed to have become irrevocable by the trustor or testator on the date on which such exercise became irrevocable. Donors, not donees, of limited powers of appointment, and donees exercising, not donors of general powers of appointment, shall be deemed the trustors or testators for purposes of distributions to the trustor's or testator's distributees pursuant to subsection (b) of this Section.
(d) The rule contained in this Section is subject to §§50I and 502 of this Title concerning powers of appointment.-
Section 2. This Act shall apply to trust instruments becoming irrevocable before or after enactment of this Act.