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.