S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2815

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            January 18, 2013
                               ___________

Introduced by M. of A. WRIGHT -- read once and referred to the Committee
  on Judiciary

AN  ACT  to  amend  the estates, powers and trusts law and the insurance
  law, in relation to creating a Uniform Statutory Rule Against Perpetu-
  ities; and repealing part 1 of article 9 of the  estates,  powers  and
  trusts law relating thereto

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Part 1 of article 9 of the estates, powers and  trusts  law
is REPEALED and a new part 1 of article 9 is added to read as follows:
           PART 1. UNIFORM STATUTORY RULE AGAINST PERPETUITIES
SECTION 9-1.1 SHORT TITLE
        9-1.2 VALIDITY  OF  NONVESTED  PROPERTY  INTEREST  OR  POWER  OF
               APPOINTMENT
        9-1.3 CREATION OF PROPERTY INTERESTS AND POWERS OF APPOINTMENT
        9-1.4 REFORMATION OF PROPERTY DISPOSITIONS
        9-1.5 EXCEPTIONS TO RULE
        9-1.6 EFFECT OF TIMING OF CREATION OF PROPERTY INTEREST; SAVINGS
               CLAUSE
        9-1.7 APPLICATION AND CONSTRUCTION
        9-1.8 EFFECT ON COMMON LAW
S 9-1.1 SHORT TITLE
  THIS PART SHALL BE KNOWN AS AND MAY BE CITED AS THE "UNIFORM STATUTORY
RULE AGAINST PERPETUITIES."
S 9-1.2 VALIDITY OF NONVESTED PROPERTY INTEREST OR POWER OF APPOINTMENT
  (A) A NONVESTED PROPERTY INTEREST IS INVALID UNLESS:
  (1) WHEN THE INTEREST IS CREATED, IT IS CERTAIN TO VEST  OR  TERMINATE
NO  LATER  THAN  TWENTY-ONE  YEARS AFTER THE DEATH OF AN INDIVIDUAL THEN
ALIVE; OR
  (2) THE INTEREST EITHER VESTS OR TERMINATES WITHIN NINETY YEARS  AFTER
ITS CREATION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00614-01-3
              

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  (B)  A  GENERAL POWER OF APPOINTMENT NOT PRESENTLY EXERCISABLE BECAUSE
OF A CONDITION PRECEDENT IS INVALID UNLESS:
  (1)  WHEN  THE POWER IS CREATED, THE CONDITION PRECEDENT IS CERTAIN TO
BE SATISFIED OR BECOME IMPOSSIBLE TO SATISFY NO  LATER  THAN  TWENTY-ONE
YEARS AFTER THE DEATH OF AN INDIVIDUAL THEN ALIVE; OR
  (2)  THE CONDITION PRECEDENT EITHER IS SATISFIED OR BECOMES IMPOSSIBLE
TO SATISFY WITHIN NINETY YEARS AFTER ITS CREATION.
  (C) A NONGENERAL POWER OF APPOINTMENT OR A GENERAL TESTAMENTARY  POWER
OF APPOINTMENT IS INVALID UNLESS:
  (1)  WHEN  THE POWER IS CREATED, IT IS CERTAIN TO BE IRREVOCABLY EXER-
CISED OR TO TERMINATE NO LATER THAN TWENTY-ONE YEARS AFTER THE DEATH  OF
AN INDIVIDUAL THEN ALIVE; OR
  (2)  THE  POWER  IS  IRREVOCABLY EXERCISED OR TERMINATES WITHIN NINETY
YEARS AFTER ITS CREATION.
  (D) IN DETERMINING WHETHER A NONVESTED PROPERTY INTEREST OR A POWER OF
APPOINTMENT IS VALID PURSUANT TO  SUBPARAGRAPH  ONE  OF  PARAGRAPH  (A),
SUBPARAGRAPH  ONE OF PARAGRAPH (B), OR SUBPARAGRAPH ONE OF PARAGRAPH (C)
OF THIS SECTION, THE POSSIBILITY THAT A CHILD WILL BE BORN TO  AN  INDI-
VIDUAL AFTER THE INDIVIDUAL'S DEATH IS DISREGARDED.
S 9-1.3 CREATION OF PROPERTY INTERESTS AND POWERS OF APPOINTMENT
  (A)  EXCEPT  AS PROVIDED IN PARAGRAPHS (B) AND (C) OF THIS SECTION AND
IN PARAGRAPH (A) OF SECTION 9-1.6 OF THIS PART, THE TIME OF CREATION  OF
A  NONVESTED  PROPERTY  INTEREST OR A POWER OF APPOINTMENT IS DETERMINED
UNDER GENERAL PRINCIPLES OF PROPERTY LAW.
  (B) IF THERE IS A PERSON WHO ALONE CAN EXERCISE A POWER CREATED  BY  A
GOVERNING INSTRUMENT TO BECOME THE UNQUALIFIED BENEFICIAL OWNER OF (I) A
NONVESTED  PROPERTY  INTEREST  OR  (II) A PROPERTY INTEREST SUBJECT TO A
POWER OF APPOINTMENT PURSUANT TO PARAGRAPHS (B) AND (C) OF SECTION 9-1.2
OF THIS PART, THE NONVESTED PROPERTY INTEREST OR POWER OF APPOINTMENT IS
CREATED WHEN THE POWER TO BECOME THE UNQUALIFIED BENEFICIAL OWNER TERMI-
NATES. A JOINT POWER WITH RESPECT TO MARITAL PROPERTY HELD  BY  INDIVID-
UALS MARRIED TO EACH OTHER IS A POWER EXERCISABLE BY ONE PERSON ALONE.
  (C)  A  NONVESTED  PROPERTY INTEREST OR A POWER OF APPOINTMENT ARISING
FROM A TRANSFER OF PROPERTY TO A PREVIOUSLY FUNDED TRUST OR OTHER EXIST-
ING PROPERTY ARRANGEMENT IS CREATED WHEN THE NONVESTED PROPERTY INTEREST
OR POWER OF APPOINTMENT IN THE ORIGINAL CONTRIBUTION WAS CREATED.
S 9-1.4 REFORMATION OF PROPERTY DISPOSITIONS
  (A) UPON THE PETITION OF AN INTERESTED PERSON, A COURT SHALL REFORM  A
DISPOSITION   IN   THE   MANNER   THAT  MOST  CLOSELY  APPROXIMATES  THE
TRANSFEROR'S MANIFESTED PLAN OF DISTRIBUTION AND IS  WITHIN  THE  NINETY
YEARS PERMITTED BY THIS CHAPTER IF:
  (1)  A  NONVESTED  PROPERTY INTEREST OR A POWER OF APPOINTMENT BECOMES
INVALID;
  (2) A CLASS GIFT IS NOT BUT MAY BECOME  INVALID  PURSUANT  TO  SECTION
9-1.2  OF THIS PART AND THE TIME HAS ARRIVED WHEN THE SHARE OF ANY CLASS
MEMBER IS TO TAKE EFFECT IN POSSESSION OR ENJOYMENT; OR
  (3) A NONVESTED PROPERTY INTEREST THAT IS NOT  VALIDATED  PURSUANT  TO
SUBPARAGRAPH ONE OF PARAGRAPH (A) OF SECTION 9-1.2 OF THIS PART CAN VEST
BUT NOT WITHIN NINETY YEARS AFTER ITS CREATION.
S 9-1.5 EXCEPTIONS TO RULE
  SECTION 9-1.2 OF THIS PART DOES NOT APPLY TO:
  (A)  A  NONVESTED  PROPERTY INTEREST OR A POWER OF APPOINTMENT ARISING
OUT OF A NONDONATIVE TRANSFER, EXCEPT A NONVESTED PROPERTY INTEREST OR A
POWER OF APPOINTMENT ARISING OUT OF:
  (1) A PREMARITAL OR POSTMARITAL AGREEMENT;
  (2) A SEPARATION OR DIVORCE SETTLEMENT;

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  (3) A SPOUSE'S ELECTION;
  (4)  A  SIMILAR ARRANGEMENT ARISING OUT OF A PROSPECTIVE, EXISTING, OR
PREVIOUS MARITAL RELATIONSHIP BETWEEN THE PARTIES;
  (5) A CONTRACT TO MAKE OR NOT TO REVOKE A WILL OR TRUST;
  (6) A CONTRACT TO EXERCISE OR NOT TO EXERCISE A POWER OF APPOINTMENT;
  (7) A TRANSFER IN SATISFACTION OF A DUTY OF SUPPORT; OR
  (8) A RECIPROCAL TRANSFER;
  (B) A FIDUCIARY'S POWER RELATING TO THE ADMINISTRATION  OR  MANAGEMENT
OF  ASSETS,  INCLUDING THE POWER OF A FIDUCIARY TO SELL, LEASE, OR MORT-
GAGE PROPERTY, AND THE POWER OF A FIDUCIARY TO DETERMINE  PRINCIPAL  AND
INCOME;
  (C) A POWER TO APPOINT A FIDUCIARY;
  (D)  A DISCRETIONARY POWER OF A TRUSTEE TO DISTRIBUTE PRINCIPAL BEFORE
TERMINATION OF A TRUST TO A BENEFICIARY HAVING  AN  INDEFEASIBLY  VESTED
INTEREST IN THE INCOME AND PRINCIPAL;
  (E)  A  NONVESTED  PROPERTY INTEREST HELD BY A CHARITY, GOVERNMENT, OR
GOVERNMENTAL AGENCY OR SUBDIVISION, IF THE NONVESTED  PROPERTY  INTEREST
IS  PRECEDED  BY  AN  INTEREST  HELD  BY ANOTHER CHARITY, GOVERNMENT, OR
GOVERNMENTAL AGENCY OR SUBDIVISION;
  (F) A NONVESTED PROPERTY INTEREST IN OR A POWER  OF  APPOINTMENT  WITH
RESPECT  TO  A  TRUST  OR  OTHER  PROPERTY ARRANGEMENT FORMING PART OF A
PENSION, PROFIT-SHARING, STOCK  BONUS,  AND  HEALTH,  DISABILITY,  DEATH
BENEFIT,  INCOME DEFERRAL, OR OTHER CURRENT OR DEFERRED BENEFIT PLAN FOR
ONE OR MORE EMPLOYEES, INDEPENDENT CONTRACTORS, OR  THEIR  BENEFICIARIES
OR  SPOUSES, TO WHICH CONTRIBUTIONS ARE MADE FOR THE PURPOSE OF DISTRIB-
UTING TO OR FOR THE BENEFIT OF THE PARTICIPANTS OR  THEIR  BENEFICIARIES
OR  SPOUSES  THE  PROPERTY,  INCOME,  OR PRINCIPAL IN THE TRUST OR OTHER
PROPERTY ARRANGEMENT, EXCEPT A NONVESTED PROPERTY INTEREST OR A POWER OF
APPOINTMENT THAT IS CREATED BY AN ELECTION OF A PARTICIPANT OR A BENEFI-
CIARY OR SPOUSE; OR
  (G) A PROPERTY INTEREST, POWER OF APPOINTMENT, OR ARRANGEMENT THAT WAS
NOT SUBJECT TO THE COMMON LAW RULE AGAINST PERPETUITIES OR  IS  EXCLUDED
BY  ANOTHER  STATUTE  OF  THIS STATE, INCLUDING, BUT NOT LIMITED TO, THE
INTERESTS, POWERS, AND ARRANGEMENTS.
S 9-1.6 EFFECT OF TIMING  OF  CREATION  OF  PROPERTY  INTEREST;  SAVINGS
CLAUSE
  (A)  EXCEPT  AS  EXTENDED  BY PARAGRAPH (B) OF THIS SECTION, THIS PART
APPLIES TO A NONVESTED PROPERTY INTEREST OR A POWER OF APPOINTMENT  THAT
IS  CREATED  ON OR AFTER JULY FIRST, NINETEEN HUNDRED EIGHTY-SEVEN.  FOR
PURPOSES OF THIS SECTION, A NONVESTED PROPERTY INTEREST OR  A  POWER  OF
APPOINTMENT CREATED BY THE EXERCISE OF A POWER OF APPOINTMENT IS CREATED
WHEN  THE  POWER  IS  IRREVOCABLY EXERCISED OR WHEN A REVOCABLE EXERCISE
BECOMES IRREVOCABLE.
  (B) IF A NONVESTED PROPERTY INTEREST OR A  POWER  OF  APPOINTMENT  WAS
CREATED  BEFORE JULY FIRST, NINETEEN HUNDRED EIGHTY-SEVEN, AND IS DETER-
MINED IN A JUDICIAL PROCEEDING, COMMENCED ON OR AFTER JULY FIRST,  NINE-
TEEN HUNDRED EIGHTY-SEVEN, TO VIOLATE THIS STATE'S RULE AGAINST PERPETU-
ITIES   AS  THAT  RULE  EXISTED  BEFORE  JULY  FIRST,  NINETEEN  HUNDRED
EIGHTY-SEVEN, A COURT UPON THE PETITION OF AN  INTERESTED  PERSON  SHALL
REFORM THE DISPOSITION BY INSERTING A SAVINGS CLAUSE THAT PRESERVES MOST
CLOSELY  THE TRANSFEROR'S PLAN OF DISTRIBUTION AND THAT BRINGS THAT PLAN
WITHIN THE LIMITS OF THE RULE AGAINST PERPETUITIES APPLICABLE  WHEN  THE
NONVESTED PROPERTY INTEREST OR POWER OF APPOINTMENT WAS CREATED.
S 9-1.7 APPLICATION AND CONSTRUCTION

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  THIS  PART  SHALL  BE  APPLIED AND CONSTRUED TO EFFECTUATE ITS GENERAL
PURPOSE TO MAKE UNIFORM THE LAW WITH RESPECT  TO  THE  SUBJECT  OF  THIS
CHAPTER AMONG STATES ENACTING IT.
S 9-1.8 EFFECT ON COMMON LAW
  THIS PART SUPERSEDES THE COMMON LAW RULE AGAINST PERPETUITIES.
  S  2.  The  opening paragraph of paragraph (c) of section 7-2.1 of the
estates, powers and trusts law, as added by chapter 1031 of the laws  of
1973, is amended to read as follows:
  A  trust as described [in sections 9-1.5, 9-1.6 and 9-1.7] PURSUANT TO
PART ONE OF ARTICLE NINE of [the estates, powers and  trusts  law]  THIS
CHAPTER,  including  a  business  trust as defined in subdivision two of
section two of the general associations law, may acquire property in the
name of the trust as such name is designated in the instrument  creating
said  trust.  Any  property,  so acquired can be conveyed, encumbered or
otherwise disposed of only in such name by a conveyance, encumbrance  or
other instrument executed by:
  S 3. Subparagraph 8 of paragraph (a) of section 11-2.2 of the estates,
powers and trusts law, as amended by chapter 217 of the laws of 1991, is
amended to read as follows:
  (8)  Investment  by a fiduciary in a limited partnership or investment
trust, as defined in [9-1.5] ARTICLE NINE of this chapter, shall not  be
deemed to be an improper delegation of investment authority.
  S  4.  Paragraph  8 of subsection (a) of section 7302 of the insurance
law is amended to read as follows:
  (8) In pursuance of any such plan to convert  a  domestic  stock  life
insurance  company  into  a  mutual life insurance company, such company
shall have power, and shall be privileged, to acquire any of its  shares
by  gift,  bequest, or purchase. Until all of its outstanding shares are
acquired, any shares so acquired shall be taken and held  in  trust  for
all  the  policyholders  of  such company, by the trustees named in such
plan. Before undertaking any of the duties of the appointment each trus-
tee shall file with the company an acceptance of the appointment  and  a
declaration  that  he  will  faithfully discharge his duties as trustee,
subscribed and affirmed by him as true under the penalties  of  perjury.
All  shares  held by the trustees shall be deemed admitted assets of the
company at their par value. The trustees shall have power  to  vote  any
shares  so acquired at all corporate meetings at which shareholders have
the right to vote. All dividends and other sums received by  such  trus-
tees on the shares acquired by them, after paying the necessary expenses
of  the trust, shall be immediately repaid to such company for the bene-
fit of all who are or may become policyholders of such company and enti-
tled to participate in the profits thereof, and shall be  added  to  and
become  a part of the surplus earned by such company, apportionable as a
part of such surplus  among  such  policyholders.    The  provisions  of
section  six  hundred twenty-one of the business corporation law and [of
section 9-1.1] PART ONE OF ARTICLE  NINE  of  the  estates,  powers  and
trusts law shall not apply to the trust hereinbefore authorized.
  S  5.  This  act  shall  take  effect  on  the first of September next
succeeding the date on which it shall have become a law.