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.
STATE OF NEW YORK
________________________________________________________________________
935
2023-2024 Regular Sessions
IN ASSEMBLY
January 11, 2023
___________
Introduced by M. of A. WEPRIN, COLTON -- 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 § 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.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01522-01-3
A. 935 2
1 § 3. This act shall take effect immediately and shall be enforceable
2 as to all trusts created under New York law, regardless of when created,
3 as it is declaratory of existing New York law.
