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Indiana House Bill HB1209

Indiana 2024 Regular Session

Indiana House Bill HB1209 Compare Versions

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1+*EH1209.1*
2+February 23, 2024
3+ENGROSSED
4+HOUSE BILL No. 1209
5+_____
6+DIGEST OF HB 1209 (Updated February 21, 2024 4:07 pm - DI 140)
7+Citations Affected: IC 30-4; IC 32-17.
8+Synopsis: Rule against perpetuities. Adds provisions regarding a
9+second power of appointment. Extends the period of time for which
10+certain nonvested property interests are valid from 90 years to 360
11+years after the interest is created. Extends the period of time for which
12+certain powers of appointment are valid under specified conditions
13+from 90 years to 360 years. Makes conforming changes.
14+Effective: July 1, 2024.
15+Heine, Snow, Steuerwald, Prescott
16+(SENATE SPONSORS — BROWN L, JOHNSON T)
17+January 9, 2024, read first time and referred to Committee on Judiciary.
18+January 29, 2024, amended, reported — Do Pass.
19+January 31, 2024, read second time, ordered engrossed. Engrossed.
20+February 1, 2024, read third time, passed. Yeas 85, nays 8.
21+SENATE ACTION
22+February 12, 2024, read first time and referred to Committee on Judiciary.
23+February 22, 2024, reported favorably — Do Pass.
24+EH 1209—LS 6543/DI 149 February 23, 2024
125 Second Regular Session of the 123rd General Assembly (2024)
226 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
327 Constitution) is being amended, the text of the existing provision will appear in this style type,
428 additions will appear in this style type, and deletions will appear in this style type.
529 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
630 provision adopted), the text of the new provision will appear in this style type. Also, the
731 word NEW will appear in that style type in the introductory clause of each SECTION that adds
832 a new provision to the Indiana Code or the Indiana Constitution.
933 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
1034 between statutes enacted by the 2023 Regular Session of the General Assembly.
11-HOUSE ENROLLED ACT No. 1209
12-AN ACT to amend the Indiana Code concerning property.
35+ENGROSSED
36+HOUSE BILL No. 1209
37+A BILL FOR AN ACT to amend the Indiana Code concerning
38+property.
1339 Be it enacted by the General Assembly of the State of Indiana:
14-SECTION 1. IC 30-4-5-26 IS ADDED TO THE INDIANA CODE
40+1 SECTION 1. IC 30-4-5-26 IS ADDED TO THE INDIANA CODE
41+2 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
42+3 1, 2024]: Sec. 26. (a) If the trustee has the full, unrestricted power
43+4 to alienate trust property and the trust expressly states that this
44+5 exception applies to the trust, IC 32-17-8-3 shall apply to a
45+6 nonvested property interest or power of appointment contained in
46+7 the trust by substituting three hundred sixty (360) years instead of
47+8 ninety (90) years in each place where the term appears in
48+9 IC 32-17-8-3, unless the terms of the trust require that all
49+10 beneficial interests in the trust vest or terminate within a lesser
50+11 period.
51+12 (b) When a power of appointment in a trust ("first power") is
52+13 exercised to create another power of appointment ("second
53+14 power"), then a nonvested property interest or second power
54+15 created through the exercise of the first power is considered to
55+16 have been created at the time of irrevocable exercise of the first
56+17 power, unless the instrument exercising the first power provides
57+EH 1209—LS 6543/DI 149 2
58+1 that the second power was created at the time of creation of the
59+2 first power.
60+3 SECTION 2. IC 32-17-8-3 IS AMENDED TO READ AS
61+4 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 3. (a) A nonvested
62+5 property interest is valid if:
63+6 (1) when the interest is created, the interest is certain to vest or
64+7 terminate not later than twenty-one (21) years after the death of
65+8 an individual then alive; or
66+9 (2) the interest either vests or terminates within ninety (90) years
67+10 after the interest's creation. three hundred sixty (360) years
68+11 after the interest's creation, unless the terms of the trust
69+12 require that all beneficial interests in the trust vest or
70+13 terminate within a lesser period of time.
71+14 (b) A general power of appointment not presently exercisable
72+15 because of a condition precedent is valid if:
73+16 (1) when the power is created, the condition precedent is certain
74+17 to be satisfied or become impossible to satisfy not later than
75+18 twenty-one (21) years after the death of an individual then alive;
76+19 or
77+20 (2) the condition precedent either is satisfied or becomes
78+21 impossible to satisfy within ninety (90) years after the condition
79+22 precedent's creation. three hundred sixty (360) years after the
80+23 condition precedent's creation, unless the terms of the trust
81+24 require that all beneficial interests in the trust vest or
82+25 terminate within a lesser period of time.
83+26 (c) A nongeneral power of appointment or a general testamentary
84+27 power of appointment is valid if:
85+28 (1) when the power is created, the power is certain to be
86+29 irrevocably exercised or otherwise to terminate not later than
87+30 twenty-one (21) years after the death of an individual then alive;
88+31 or
89+32 (2) the power is irrevocably exercised or otherwise terminates
90+33 within ninety (90) years after the power's creation. three hundred
91+34 sixty (360) years after the power's creation, unless the terms
92+35 of the trust require that all beneficial interests in the trust vest
93+36 or terminate within a lesser period of time.
94+37 (d) In determining whether a nonvested property interest or a power
95+38 of appointment is valid under subsection (a)(1), (b)(1), or (c)(1), the
96+39 possibility that a child will be born to an individual after the
97+40 individual's death is disregarded.
98+41 SECTION 3. IC 32-17-8-3.5 IS ADDED TO THE INDIANA CODE
99+42 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
100+EH 1209—LS 6543/DI 149 3
101+1 1, 2024]: Sec. 3.5. When the initial power of appointment in a
102+2 legacy trust is exercised to create a second power of appointment,
103+3 a nonvested property interest or the second power of appointment
104+4 created through the exercise of the initial power of appointment is
105+5 considered to have been created at the time of the irrevocable
106+6 exercise of the initial power of appointment, unless the instrument
107+7 exercising the initial power of appointment provides that the
108+8 second power of appointment was created at the time of the
109+9 creation of the initial power of appointment.
110+10 SECTION 4. IC 32-17-8-6 IS AMENDED TO READ AS
111+11 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 6. Upon the petition of
112+12 an interested person, a court shall reform a disposition in the manner
113+13 that most closely preserves the transferor's plan of distribution and is
114+14 within the ninety (90) three hundred sixty (360) years allowed by
115+15 section 3(a)(2), 3(b)(2), or 3(c)(2) of this chapter if:
116+16 (1) a nonvested property interest or a power of appointment
117+17 becomes invalid under section 3 of this chapter;
118+18 (2) a class gift is not but might become invalid under section 3 of
119+19 this chapter and the time has arrived when the share of any class
120+20 member is to take effect in possession or enjoyment; or
121+21 (3) a nonvested property interest that is not validated by section
122+22 3(a)(1) of this chapter can vest but not within ninety (90) three
123+23 hundred sixty (360) years after the interest's creation.
124+EH 1209—LS 6543/DI 149 4
125+COMMITTEE REPORT
126+Mr. Speaker: Your Committee on Judiciary, to which was referred
127+House Bill 1209, has had the same under consideration and begs leave
128+to report the same back to the House with the recommendation that said
129+bill be amended as follows:
130+Page 1, delete lines 1 through 17, begin a new paragraph and insert:
131+"SECTION 1. IC 30-4-5-26 IS ADDED TO THE INDIANA CODE
15132 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
16133 1, 2024]: Sec. 26. (a) If the trustee has the full, unrestricted power
17134 to alienate trust property and the trust expressly states that this
18135 exception applies to the trust, IC 32-17-8-3 shall apply to a
19136 nonvested property interest or power of appointment contained in
20137 the trust by substituting three hundred sixty (360) years instead of
21138 ninety (90) years in each place where the term appears in
22139 IC 32-17-8-3, unless the terms of the trust require that all
23140 beneficial interests in the trust vest or terminate within a lesser
24141 period.
25142 (b) When a power of appointment in a trust ("first power") is
26143 exercised to create another power of appointment ("second
27144 power"), then a nonvested property interest or second power
28145 created through the exercise of the first power is considered to
29146 have been created at the time of irrevocable exercise of the first
30147 power, unless the instrument exercising the first power provides
31148 that the second power was created at the time of creation of the
32149 first power.
33150 SECTION 2. IC 32-17-8-3 IS AMENDED TO READ AS
34151 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 3. (a) A nonvested
35152 property interest is valid if:
36-HEA 1209 2
37153 (1) when the interest is created, the interest is certain to vest or
38154 terminate not later than twenty-one (21) years after the death of
39155 an individual then alive; or
40156 (2) the interest either vests or terminates within ninety (90) years
41157 after the interest's creation. three hundred sixty (360) years
42158 after the interest's creation, unless the terms of the trust
43159 require that all beneficial interests in the trust vest or
44160 terminate within a lesser period of time.
45161 (b) A general power of appointment not presently exercisable
46162 because of a condition precedent is valid if:
47163 (1) when the power is created, the condition precedent is certain
48164 to be satisfied or become impossible to satisfy not later than
49165 twenty-one (21) years after the death of an individual then alive;
50166 or
167+EH 1209—LS 6543/DI 149 5
51168 (2) the condition precedent either is satisfied or becomes
52169 impossible to satisfy within ninety (90) years after the condition
53170 precedent's creation. three hundred sixty (360) years after the
54171 condition precedent's creation, unless the terms of the trust
55172 require that all beneficial interests in the trust vest or
56173 terminate within a lesser period of time.
57174 (c) A nongeneral power of appointment or a general testamentary
58175 power of appointment is valid if:
59176 (1) when the power is created, the power is certain to be
60177 irrevocably exercised or otherwise to terminate not later than
61178 twenty-one (21) years after the death of an individual then alive;
62179 or
63180 (2) the power is irrevocably exercised or otherwise terminates
64181 within ninety (90) years after the power's creation. three hundred
65182 sixty (360) years after the power's creation, unless the terms
66183 of the trust require that all beneficial interests in the trust vest
67184 or terminate within a lesser period of time.
68185 (d) In determining whether a nonvested property interest or a power
69186 of appointment is valid under subsection (a)(1), (b)(1), or (c)(1), the
70187 possibility that a child will be born to an individual after the
71188 individual's death is disregarded.
72189 SECTION 3. IC 32-17-8-3.5 IS ADDED TO THE INDIANA CODE
73190 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
74191 1, 2024]: Sec. 3.5. When the initial power of appointment in a
75192 legacy trust is exercised to create a second power of appointment,
76193 a nonvested property interest or the second power of appointment
77194 created through the exercise of the initial power of appointment is
78195 considered to have been created at the time of the irrevocable
79-HEA 1209 3
80196 exercise of the initial power of appointment, unless the instrument
81197 exercising the initial power of appointment provides that the
82198 second power of appointment was created at the time of the
83-creation of the initial power of appointment.
84-SECTION 4. IC 32-17-8-6 IS AMENDED TO READ AS
85-FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 6. Upon the petition of
86-an interested person, a court shall reform a disposition in the manner
87-that most closely preserves the transferor's plan of distribution and is
88-within the ninety (90) three hundred sixty (360) years allowed by
89-section 3(a)(2), 3(b)(2), or 3(c)(2) of this chapter if:
90-(1) a nonvested property interest or a power of appointment
91-becomes invalid under section 3 of this chapter;
92-(2) a class gift is not but might become invalid under section 3 of
93-this chapter and the time has arrived when the share of any class
94-member is to take effect in possession or enjoyment; or
95-(3) a nonvested property interest that is not validated by section
96-3(a)(1) of this chapter can vest but not within ninety (90) three
97-hundred sixty (360) years after the interest's creation.
98-HEA 1209 Speaker of the House of Representatives
99-President of the Senate
100-President Pro Tempore
101-Governor of the State of Indiana
102-Date: Time:
103-HEA 1209
199+creation of the initial power of appointment.".
200+Page 2, delete lines 1 through 13.
201+Renumber all SECTIONS consecutively.
202+and when so amended that said bill do pass.
203+(Reference is to HB 1209 as introduced.)
204+JETER
205+Committee Vote: yeas 10, nays 0.
206+EH 1209—LS 6543/DI 149 6
207+COMMITTEE REPORT
208+Madam President: The Senate Committee on Judiciary, to which
209+was referred House Bill No. 1209, has had the same under
210+consideration and begs leave to report the same back to the Senate with
211+the recommendation that said bill DO PASS.
212+ (Reference is to HB 1209 as printed January 29, 2024.)
213+
214+BROWN L, Chairperson
215+Committee Vote: Yeas 6, Nays 5
216+EH 1209—LS 6543/DI 149