Bill Text: NY A06762 | 2009-2010 | General Assembly | Introduced

---

Bill Title: Clarifies and declares as the existing law of the state of New York the provisions of rules relating to the lapse of a power of withdrawal over the income or principal of a trust.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced - Dead) 2010-01-06 - referred to judiciary [A06762 Detail]

Download: New_York-2009-A06762-Introduced.html

---

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         6762
                              2009-2010 Regular Sessions
                                 I N  A S S E M B L Y
                                    March 12, 2009
                                      ___________
       Introduced  by M. of A. CARROZZA, COLTON, ORTIZ -- Multi-Sponsored by --
         M. of A. BRENNAN, TOWNS, WEISENBERG -- read once and referred  to  the
         Committee on Judiciary
       AN  ACT  to amend the estates, powers and trusts law and the civil prac-
         tice law and rules, in relation to clarifying  and  declaring  as  the
         existing law of the state of New York the provisions of rules relating
         to  the lapse of a power of withdrawal over the income or principal of
         a trust
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Paragraph (a) of section 7-3.1 of the estates, powers and
    2  trusts law, as amended by chapter 108 of the laws of 1987, is amended to
    3  read as follows:
    4    (a) A disposition in trust for the use  of  the  creator  is  void  as
    5  against the existing or subsequent creditors of the creator. NO INDIVID-
    6  UAL  SHALL  BE  TREATED  FOR  PURPOSES  OF THIS SECTION AS HAVING MADE A
    7  DISPOSITION IN TRUST FOR THE USE OF THAT INDIVIDUAL BY REASON OF A LAPSE
    8  OF A POWER OF WITHDRAWAL OVER THE INCOME OR CORPUS OF A TRUST CREATED BY
    9  ANOTHER PERSON.
   10    S 2. Paragraph 1 of subdivision (c) of section 5205 of the civil prac-
   11  tice law and rules, as amended by chapter 93 of the  laws  of  1995,  is
   12  amended to read as follows:
   13    1. Except as provided in paragraphs four and five of this subdivision,
   14  all  property while held in trust for a judgment debtor, where the trust
   15  has been created by, or the fund so held in trust has proceeded from,  a
   16  person other than the judgment debtor, is exempt from application to the
   17  satisfaction  of a money judgment. FOR PURPOSES OF THIS SECTION, A JUDG-
   18  MENT DEBTOR SHALL NOT BE TREATED AS  CREATING  OR  FUNDING  A  TRUST  BY
   19  REASON  OF THE LAPSE OF A POWER OF WITHDRAWAL OVER THE INCOME OR PRINCI-
   20  PAL OF A TRUST CREATED AND FUNDED BY A PERSON OR PERSONS OTHER THAN  THE
   21  JUDGMENT DEBTOR.
   22    S  3.  This act shall take effect immediately and shall be enforceable
   23  as to all trusts created under New York law, regardless of when created,
   24  as it is declaratory of existing New York law.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10256-01-9