CHAPTER 538

An Act to amend und reenact § 64-71.1, as amended, of the Code of
Virginia, relating to devises and bequests to certain trustees.
Be it enacted by the General Assembly of Virginia:

1. That § 64-71.1, as amended, of the Code of Virginia be amended
and reenacted as follows:

§ 64-71.1. (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 established * by the testator or by the testator
and some other person or persons or by some other person or persons:

(1) If in the case of an inter vivos trust, such 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;

(2) If in the case of a testamentary trust, such trust is identified in
the testator’s will and its terms are set forth in the valid last will of a per-
son who has predeceased the testator and whose will was executed before
or concurrently with the execution of the testator’s will; and,

(3) Further provided that in either event, at the testator’s death
at least one trustee of such trust is an individual resident of this State
or is a corporation or association authorized to do a trust business in this
State and provided further that a corporation or association not author-
ized to do a trust business in this State is not at the testator’s death a
trustee of such trust.

(b) Such inter vivos trust may be an unfunded insurance trust with
the trustee or trustees being the beneficiary or beneficiaries under the
insurance contract or contracts and with the testator or some other person
having the right to change the beneficiary and/or having any or all other
rights of ownership in such contract or contracts. For the purposes of this
section :

(1) An unfunded insurance trust shall be deemed established upon
execution of the instrument creating such trust (regardless of the ezist-
ence, size or character of the corpus of the trust) ; and

(2) Such unfunded insurance 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 es-
tate” 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 for federal estate tax purposes and such trust shall not be deemed
testamentary by reason thereof.

(c) Such devise or bequest shall not be invalid because the trust is
amendable or revocable or both by the settlor or any other person or
persons, either prior or subsequent to the testator’s death, or because the
trust instrument or any amendment thereto was not executed in the man-
ner required for wills or because 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 80
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 tt ts
given or, tf the will so specifies, it shall become a part of any one or more
particular portions of such corpus; and,

(2) Shall be administered and disposed of in accordance with the
terms of the trust as they appear in writing at the testator’s death (includ-
tng 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, if the testator expressly so specifies in his will, and only in
such event, as such terms are amended after the death of such testator.

(e) Inthe event that the settlor (or other persons having the right
to so do) 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 bequeuthed 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.such de-
vise or bequest shall not be valid should the trust not be operative for
any reason as to such portion or portions at the testator’s death.

(g) This section shall apply to any devise or bequest made by
a testator living on June twenty-ninth, nineteen hundred and sixty-two,
or born thereafter, without regard to the date of the execution of the will
or of the trust instrument or any amendment thereto; provided, however,
that 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 shall have died prior to June twenty-ninth, nine-
teen hundred and sixty-two, or any devise or bequest which does not
come within the provisions of this section.