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ACROSS SESSIONS
- Subject Index: Since 1995
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Developed and maintained by the Division of Legislative Automated Systems.
1994 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 64.1-73 of the Code of Virginia is amended and reenacted as follows:
§ 64.1-73. Devise or bequest to trustee of an established trust.
A. A devise or bequest (including the exercise of a power of appointment) may be made by a will duly executed pursuant to the provisions of this chapter to the trustee or trustees of an inter vivos trust or testamentary trust, whether the trust was established by the testator, by the testator and another, or by some other person if:
1. In the case of an inter vivos trust, the trust is identified in the testator's will and its terms are set forth in a written instrument (other than a will) executed before or concurrently with the execution of the testator's will; or
2. In the case of a testamentary trust, the trust is identified in the testator's will and its terms are set forth in the valid last will of a person who has predeceased the testator and whose will was executed before or concurrently with the execution of the testator's will.
In either event, at the time the devise or bequest is to be distributed to
the trustee or trustees at least one trustee of the trust shall be (i) an
individual resident of this Commonwealth, (ii) a corporation or association
authorized to do a trust business in this Commonwealth or (iii) a nonresident
of this Commonwealth who is a parent, brother, or sister of the testator, a
child or other descendent of the testator, the spouse of a child of the
testator, the surviving spouse of the testator, or a person or all such
persons otherwise eligible to file a statement in lieu of an accounting
pursuant to § 26-20.1, or any combination of them, provided that .
However, prior to distribution of the devise or bequest to the trustee,
each such nonresident shall file, with the clerk of the circuit court of the
jurisdiction wherein the testator's will was admitted to probate, his consent
in writing that service of process in any action against him as trustee or
any other notice with respect to administration of the trust in his charge,
may be by service upon a resident of this Commonwealth at such address as he
may appoint in the written instrument filed with the clerk. Where any
nonresident qualifies pursuant to this paragraph, bond with surety shall be
required in every case unless at least one other trustee is a resident.
A corporation or association not authorized to do a trust business in this Commonwealth at the time the devise or bequest is to be distributed shall not, in any case, be a trustee of such trust.
B. The inter vivos trust may be an unfunded insurance trust with
the trustee being the beneficiary under the insurance contract and with the
testator or some other person having the right to change the beneficiary or
having any or all other rights of ownership in such contract.
For the purposes of this section:
1. An unfunded insurance inter vivos trust shall be deemed
established upon execution of the instrument creating such trust
regardless of the existence, size or character of the corpus of the
trust; and
2. An unfunded insurance inter vivos trust may contain
provisions whereby the amount of corpus to be allocated to any particular
portion of the trust will be determined, measured or affected by the
"adjusted gross estate" of the settlor or testator for federal estate tax
purposes, or by the amount of the "marital deduction allowable" to the
settlor's or testator's estate, the amount of deductions or credits available
to the estate of the settlor or testator for federal estate tax purposes, or
by the value of such estate for federal estate tax purposes, or by any other
method, and such unfunded trust shall not be deemed testamentary by reason
thereof.
C. The devise or bequest shall not be invalid because (i) the trust is amendable or revocable or both by the settlor or any other person, either prior or subsequent to the testator's death, (ii) the trust instrument or any amendment thereto was not executed in the manner required for wills, or (iii) the trust was amended after the execution of the will or after the death of the testator.
D. Unless the testator's will provides otherwise, the property so devised or bequeathed:
1. Shall not be deemed held under a testamentary trust of the testator, but shall become a part of the corpus of the trust to which it is given or, if the will so specifies, it shall become a part of any one or more particular portions of the corpus; and
2. Shall be administered and disposed of (i) in accordance with the terms of the trust as they appear in writing at the testator's death, including any amendments thereto made before the death of the testator and regardless of whether made before or after the execution of the testator's will, or (ii) if the testator expressly so specifies in his will, and only in such event, as such terms are amended after the death of the testator.
E. In the event that the settlor or other person having the right to do so revokes or otherwise terminates the trust pursuant to a power so to do reserved in the trust instrument, and such revocation or termination is effected at a date subsequent to the death of a testator who has devised or bequeathed property to such trust, the revocation or termination shall be ineffective as to property devised or bequeathed to such trust by a testator other than the settlor, unless the testator's will expressly provides to the contrary.
F. The devise or bequest shall not be valid should the entire trust not be operative for any reason at the testator's death. If the devise or bequest is to augment only one or more portions of the trust, the devise or bequest shall not be valid should the trust not be operative for any reason as to such portion at the testator's death.
G. This section shall apply to any devise or bequest made by a testator
living on June 29, 1962, or born thereafter, without regard to the date of
the execution of the will or of the trust instrument or any amendment
thereto. However, the provisions of this section shall not be construed as
casting any doubt upon the validity as heretofore existing of any devise or
bequest made by a testator who died prior to June 29, 1962, or any devise or
bequest which does not come within the provisions of this section.
H. In any case in which the devise or bequest to the trustee of a
trust such as is contemplated in the foregoing provisions fails to take
effect by reason of the fact that there is no qualified trustee acting at the
time the devise or bequest is to be distributed, or that one or more of the
trustees then acting is a corporation or association not authorized to do a
trust business in this Commonwealth, the court having jurisdiction with
respect to the probate of the will or the administration of the testator's
estate, upon sufficient evidence of the existence of a trust estate for
administration, independent of the testator's estate, and of the validity of
the trust established by virtue of such separate written instrument, may
determine that the trusts declared by such separate written instrument are
the trusts upon which the devise or bequest is made, so far as applicable in
the nature of the case, to the same extent and with like effect as if such
trust provisions had been extensively incorporated in the testamentary
documents, and that such trusts will not fail for want of a qualified trustee
to administer the trust estate so devised or bequeathed. The court may then
grant such further and ancillary relief as the nature of the case may
require, including the appointment of a qualified trustee to perform the
trusts with respect to the estate so devised or bequeathed, and granting
instruction and guidance to the trustee so appointed in the performance of
his duties. Nothing herein shall be deemed to authorize any such trustee to
be excused from any obligations of accounting or performance such as are
required by law of fiduciaries, nor to prevent the transfer of the trust
estate to a trustee appointed by or qualified in a court of record in a
foreign state in accordance with the provisions of § 26-64.
H. This section shall apply to any devise or bequest under the will of a decedent dying on or after July 1, 1994.