*HB1209.1*
January 29, 2024
HOUSE BILL No. 1209
_____
DIGEST OF HB 1209 (Updated January 29, 2024 11:22 am - DI 151)
Citations Affected: IC 30-4; IC 32-17.
Synopsis: Rule against perpetuities. Adds provisions regarding a
second power of appointment. Extends the period of time for which
certain nonvested property interests are valid from 90 years to 360
years after the interest is created. Extends the period of time for which
certain powers of appointment are valid under specified conditions
from 90 years to 360 years. Makes conforming changes.
Effective: July 1, 2024.
Heine, Snow, Steuerwald
January 9, 2024, read first time and referred to Committee on Judiciary.
January 29, 2024, amended, reported — Do Pass.
HB 1209—LS 6543/DI 149 January 29, 2024
Second Regular Session of the 123rd General Assembly (2024)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2023 Regular Session of the General Assembly.
HOUSE BILL No. 1209
A BILL FOR AN ACT to amend the Indiana Code concerning
property.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 30-4-5-26 IS ADDED TO THE INDIANA CODE
2 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
3 1, 2024]: Sec. 26. (a) If the trustee has the full, unrestricted power
4 to alienate trust property and the trust expressly states that this
5 exception applies to the trust, IC 32-17-8-3 shall apply to a
6 nonvested property interest or power of appointment contained in
7 the trust by substituting three hundred sixty (360) years instead of
8 ninety (90) years in each place where the term appears in
9 IC 32-17-8-3, unless the terms of the trust require that all
10 beneficial interests in the trust vest or terminate within a lesser
11 period.
12 (b) When a power of appointment in a trust ("first power") is
13 exercised to create another power of appointment ("second
14 power"), then a nonvested property interest or second power
15 created through the exercise of the first power is considered to
16 have been created at the time of irrevocable exercise of the first
17 power, unless the instrument exercising the first power provides
HB 1209—LS 6543/DI 149 2
1 that the second power was created at the time of creation of the
2 first power.
3 SECTION 2. IC 32-17-8-3 IS AMENDED TO READ AS
4 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 3. (a) A nonvested
5 property interest is valid if:
6 (1) when the interest is created, the interest is certain to vest or
7 terminate not later than twenty-one (21) years after the death of
8 an individual then alive; or
9 (2) the interest either vests or terminates within ninety (90) years
10 after the interest's creation. three hundred sixty (360) years
11 after the interest's creation, unless the terms of the trust
12 require that all beneficial interests in the trust vest or
13 terminate within a lesser period of time.
14 (b) A general power of appointment not presently exercisable
15 because of a condition precedent is valid if:
16 (1) when the power is created, the condition precedent is certain
17 to be satisfied or become impossible to satisfy not later than
18 twenty-one (21) years after the death of an individual then alive;
19 or
20 (2) the condition precedent either is satisfied or becomes
21 impossible to satisfy within ninety (90) years after the condition
22 precedent's creation. three hundred sixty (360) years after the
23 condition precedent's creation, unless the terms of the trust
24 require that all beneficial interests in the trust vest or
25 terminate within a lesser period of time.
26 (c) A nongeneral power of appointment or a general testamentary
27 power of appointment is valid if:
28 (1) when the power is created, the power is certain to be
29 irrevocably exercised or otherwise to terminate not later than
30 twenty-one (21) years after the death of an individual then alive;
31 or
32 (2) the power is irrevocably exercised or otherwise terminates
33 within ninety (90) years after the power's creation. three hundred
34 sixty (360) years after the power's creation, unless the terms
35 of the trust require that all beneficial interests in the trust vest
36 or terminate within a lesser period of time.
37 (d) In determining whether a nonvested property interest or a power
38 of appointment is valid under subsection (a)(1), (b)(1), or (c)(1), the
39 possibility that a child will be born to an individual after the
40 individual's death is disregarded.
41 SECTION 3. IC 32-17-8-3.5 IS ADDED TO THE INDIANA CODE
42 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
HB 1209—LS 6543/DI 149 3
1 1, 2024]: Sec. 3.5. When the initial power of appointment in a
2 legacy trust is exercised to create a second power of appointment,
3 a nonvested property interest or the second power of appointment
4 created through the exercise of the initial power of appointment is
5 considered to have been created at the time of the irrevocable
6 exercise of the initial power of appointment, unless the instrument
7 exercising the initial power of appointment provides that the
8 second power of appointment was created at the time of the
9 creation of the initial power of appointment.
10 SECTION 4. IC 32-17-8-6 IS AMENDED TO READ AS
11 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 6. Upon the petition of
12 an interested person, a court shall reform a disposition in the manner
13 that most closely preserves the transferor's plan of distribution and is
14 within the ninety (90) three hundred sixty (360) years allowed by
15 section 3(a)(2), 3(b)(2), or 3(c)(2) of this chapter if:
16 (1) a nonvested property interest or a power of appointment
17 becomes invalid under section 3 of this chapter;
18 (2) a class gift is not but might become invalid under section 3 of
19 this chapter and the time has arrived when the share of any class
20 member is to take effect in possession or enjoyment; or
21 (3) a nonvested property interest that is not validated by section
22 3(a)(1) of this chapter can vest but not within ninety (90) three
23 hundred sixty (360) years after the interest's creation.
HB 1209—LS 6543/DI 149 4
COMMITTEE REPORT
Mr. Speaker: Your Committee on Judiciary, to which was referred
House Bill 1209, has had the same under consideration and begs leave
to report the same back to the House with the recommendation that said
bill be amended as follows:
Page 1, delete lines 1 through 17, begin a new paragraph and insert:
"SECTION 1. IC 30-4-5-26 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2024]: Sec. 26. (a) If the trustee has the full, unrestricted power
to alienate trust property and the trust expressly states that this
exception applies to the trust, IC 32-17-8-3 shall apply to a
nonvested property interest or power of appointment contained in
the trust by substituting three hundred sixty (360) years instead of
ninety (90) years in each place where the term appears in
IC 32-17-8-3, unless the terms of the trust require that all
beneficial interests in the trust vest or terminate within a lesser
period.
(b) When a power of appointment in a trust ("first power") is
exercised to create another power of appointment ("second
power"), then a nonvested property interest or second power
created through the exercise of the first power is considered to
have been created at the time of irrevocable exercise of the first
power, unless the instrument exercising the first power provides
that the second power was created at the time of creation of the
first power.
SECTION 2. IC 32-17-8-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 3. (a) A nonvested
property interest is valid if:
(1) when the interest is created, the interest is certain to vest or
terminate not later than twenty-one (21) years after the death of
an individual then alive; or
(2) the interest either vests or terminates within ninety (90) years
after the interest's creation. three hundred sixty (360) years
after the interest's creation, unless the terms of the trust
require that all beneficial interests in the trust vest or
terminate within a lesser period of time.
(b) A general power of appointment not presently exercisable
because of a condition precedent is valid if:
(1) when the power is created, the condition precedent is certain
to be satisfied or become impossible to satisfy not later than
twenty-one (21) years after the death of an individual then alive;
or
HB 1209—LS 6543/DI 149 5
(2) the condition precedent either is satisfied or becomes
impossible to satisfy within ninety (90) years after the condition
precedent's creation. three hundred sixty (360) years after the
condition precedent's creation, unless the terms of the trust
require that all beneficial interests in the trust vest or
terminate within a lesser period of time.
(c) A nongeneral power of appointment or a general testamentary
power of appointment is valid if:
(1) when the power is created, the power is certain to be
irrevocably exercised or otherwise to terminate not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the power is irrevocably exercised or otherwise terminates
within ninety (90) years after the power's creation. three hundred
sixty (360) years after the power's creation, unless the terms
of the trust require that all beneficial interests in the trust vest
or terminate within a lesser period of time.
(d) In determining whether a nonvested property interest or a power
of appointment is valid under subsection (a)(1), (b)(1), or (c)(1), the
possibility that a child will be born to an individual after the
individual's death is disregarded.
SECTION 3. IC 32-17-8-3.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2024]: Sec. 3.5. When the initial power of appointment in a
legacy trust is exercised to create a second power of appointment,
a nonvested property interest or the second power of appointment
created through the exercise of the initial power of appointment is
considered to have been created at the time of the irrevocable
exercise of the initial power of appointment, unless the instrument
exercising the initial power of appointment provides that the
second power of appointment was created at the time of the
creation of the initial power of appointment.".
Page 2, delete lines 1 through 13.
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to HB 1209 as introduced.)
JETER
Committee Vote: yeas 10, nays 0.
HB 1209—LS 6543/DI 149