Print Friendly SENATE BILL NO. 1323 – Trusts, execution with will
SENATE BILL NO. 1323
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S1323................................................by JUDICIARY AND RULES
DRY TRUSTS - Amends and adds to existing law to reference trusts executed
concurrently with a will; and to set forth provisions applicable to dry
01/30 Senate intro - 1st rdg - to printing
01/31 Rpt prt - to Jud
02/09 Rpt out - rec d/p - to 2nd rdg
02/10 2nd rdg - to 3rd rdg
02/17 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
Gannon, Geddes, Goedde, Hill, Kelly, Keough, Langhorst, Little,
Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
Schroeder, Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Fulcher, Jorgenson
Floor Sponsor - Sweet
Title apvd - to House
02/20 House intro - 1st rdg - to Jud
03/06 Rpt out - rec d/p - to 2nd rdg
03/07 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 65-0-5
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bell,
Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford, Cannon,
Chadderdon, Clark, Deal, Denney, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson,
Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews,
McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini,
Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
Skippen, Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Mr.
NAYS -- None
Absent and excused -- Bedke, Collins, Crow, Smith(30), Wood
Floor Sponsor - Hart
Title apvd - to Senate
03/17 To enrol
03/20 Rpt enrol - Pres signed - Sp signed
03/21 To Governor
03/22 Governor signed
Session Law Chapter 161
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE SENATE
SENATE BILL NO. 1323
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO TRUSTS; AMENDING SECTION 15-2-511, IDAHO CODE, TO REFERENCE TRUSTS
3 EXECUTED CONCURRENTLY WITH A WILL; AND AMENDING CHAPTER 7, TITLE 15, IDAHO
4 CODE, BY THE ADDITION OF A NEW PART 7, CHAPTER 7, TITLE 15, IDAHO CODE, TO
5 SET FORTH PROVISIONS APPLICABLE TO DRY TRUSTS.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 15-2-511, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 15-2-511. TESTAMENTARY ADDITIONS TO TRUSTS.
10 (1) (a) A will may validly devise property to the trustee of a trust
11 established or to be established:
12 (i) During the testator's lifetime by the testator or by the testa-
13 tor and some other person or by some other person, including a funded
14 or unfunded life insurance trust, although the trustor has reserved
15 any or all rights of ownership of the insurance contracts; or
16 (ii) At the testator's death by the testator's devise to the trustee
17 if the trust is identified in the testator's will and its terms are
18 set forth in a written instrument, other than a will, executed
19 before, concurrently with, or after the execution of the testator's
20 will or in another individual's will if that other individual has
21 predeceased the testator, regardless of the existence, size, or char-
22 acter of the corpus of the trust.
23 (b) The devise is not invalid because the trust is amendable or revoca-
24 ble, or because the trust was amended after the execution of the will or
25 the testator's death.
26 (2) Unless the testator's will provides otherwise, property devised to a
27 trust described in subsection (1) of this section is not held under a testa-
28 mentary trust of the testator but it becomes a part of the trust to which it
29 is devised and must be administered and disposed of in accordance with the
30 provisions of the governing instrument setting forth the terms of the trust,
31 including any amendments thereto made before or after the testator's death.
32 (3) Unless the testator's will provides otherwise a revocation or termi-
33 nation of the trust before the testator's death causes the devise to lapse.
34 SECTION 2. That Chapter 7, Title 15, Idaho Code, be, and the same is
35 hereby amended by the addition thereto of a NEW PART, to be known and desig-
36 nated as Part 7, Chapter 7, Title 15, Idaho Code, and to read as follows:
37 PART 7.
38 DRY TRUSTS
39 15-7-701. DRY TRUSTS. A trust shall be valid and enforceable even though
40 it may not be funded at a given time, or from time to time, or does not have
1 any res or corpus or otherwise contain any asset of any nature.
STATEMENT OF PURPOSE
A question has arisen in the legal and banking community as to
whether a trust can be created, or exist, without any current
assets held by the trust - commonly called a "dry trust". Under
common law, these trusts were usually not allowed, and a trust
had to have a "corpus" or "res" at all times to be valid.
However, these types of trusts are now often created to receive
assets at a later date, often from the provisions of a Will, or
from an insurance policy or other beneficiary asset. Idaho has
previously authorized, in section 15 2-511, set forth in Section
One of the bill, the use of these types of trusts as the
beneficiary of a bequest from a Will. Section One adds
"concurrently with" to cover the situation where the Will and the
Trust are executed simultaneously.
However, that statute left unclear whether a dry trust could
exist under other circumstances. Dry trusts are a handy estate
planning tool, and requiring a small holding of some sort in the
trust can complicate their use, and may then require tax
reporting or accountings. Therefore, this bill, in Section Two,
clearly, under all circumstances, allows the existence of dry
This bill will have no fiscal impact.
Name: Robert L. Aldridge, Trust & Estate Professionals of Idaho, Inc.
STATEMENT OF PURPOSE/FISCAL NOTE S 1323