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Delaware Laws | Title 12 Decedents' Estates and Fiduciary Relations
Subchapter VI. Qualified Dispositions in Trust

(c) A creditor shall have the burden of proving that a trustee or beneficiary acted in bad faith as required under subsection (b) of this section by clear and convincing evidence except that, in the case of a beneficiary who is also the transferor, the burden on the creditor shall be to prove that the transferor-beneficiary acted in bad faith by a preponderance of the evidence. The preceding sentence provides substantive not procedural rights under Delaware law. (3953)

(d) For purposes of this subchapter, attachment, garnishment, sequestration, or other legal or equitable process shall be permitted only in those circumstances permitted by the express terms of this subchapter. (3954)

(e) Notwithstanding any other provision of this subchapter, a creditor shall have no right against the interest of a beneficiary in a trust solely because such beneficiary has the right to authorize or direct the trustee to pay all or part of the trust property in satisfaction of estate or inheritance taxes imposed upon or with respect to the beneficiary's estate, or the debts of the beneficiary's estate, or the expenses of administering the beneficiary's estate unless such beneficiary actually directs the payment of such taxes, debts or expenses and then only to the extent of such direction. (3955)

(f) Where a husband and wife make a qualified disposition of property and, immediately before such qualified disposition, such property or any part thereof or any accumulation thereto was, pursuant to applicable law, owned by them as tenants by the entireties, then notwithstanding such qualified disposition and except where the provisions of the trust instrument may expressly provide to the contrary, that property and any accumulation thereto shall, while held in trust during the lifetime of both spouses, be treated as though it were tenancy by the entireties property and be dealt with in a manner consistent with that applicable law but in every other respect shall be dealt with in accordance with the terms of the trust instrument. Furthermore, in any action concerning whether a creditor of either or both spouses may recover the debt from the trust, upon avoidance of the qualified disposition, the sole remedy available to the creditor with respect to trust property treated as though it were tenancy by the entireties property shall be an order directing the trustee to transfer the property to both spouses as tenants by the entireties. (3956)

(g) Subject to all of the foregoing provisions of this section, and except as otherwise expressly provided in subsection (f) of this section, upon avoidance of a qualified disposition to the extent permitted under subsection (a) of this section, the sole remedy available to the creditor shall be an order directing the trustee to transfer to the transferor such amount as is necessary to satisfy the transferor's debt to the creditor at whose instance the disposition has been avoided. (3957)

(71 Del. Laws, c. 159, Sec. 1; 70 Del. Laws, c. 186, Sec. 1; 71 Del. Laws, c. 343, Sec. 9; 72 Del. Laws, c. 195, Sec. 2; 75 Del. Laws, c. 97, Sec. 16; 76 Del. Laws, c. 90, Sec. 15; 77 Del. Laws, c. 330, Sec. 17.) (3958)

This subchapter shall apply to qualified dispositions and dispositions by transferors who are trustees made on or after July 1, 1997. (3959)

(71 Del. Laws, c. 159, Sec. 1; 71 Del. Laws, c. 343, Sec. 10.) (3960)

This subchapter may be cited as the "Qualified Dispositions in Trust Act." (3961)

(71 Del. Laws, c. 159, Sec. 1.) (3962)

Decedents' Estates and Fiduciary Relations Fiduciary Relations (3963)

Subchapter VII. Liability of Trustees and Rights of Persons Dealing With Trustee (3964)(Text)

Sec. 3580. Definition. (3965)(Text)

In this subchapter, "good faith" means honesty in fact and the observance of reasonable standards of fair dealing. (3966)

(72 Del. Laws, c. 388, Sec. 7.) (3967)

Sec. 3581. Breach of trust; equitable remedies. (3968)(Text)

(a) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. (3969)

(b) To remedy a breach of trust that has occurred or may occur, the court may order any equitable remedy, including: (3970)

(1) Compelling the trustee to perform the trustee's duties; (3971)

(2) Enjoining the trustee from committing a breach of trust; (3972)

(3) Compelling the trustee to redress a breach of trust by paying money, restoring property, or other means; (3973)

(4) Ordering a trustee to account; (3974)

(5) Appointing a special fiduciary to take possession of the trust property and administer the trust; (3975)

(6) Suspending or removing the trustee; (3976)

(7) Reducing or denying compensation to the trustee; (3977)

(8) Subject to Sec. 3590 of this title, voiding an act of the trustee, imposing a lien or a constructive trust on trust property or tracing trust property wrongfully disposed of and recover the property or its proceeds; or (3978)

(9) Granting any other appropriate relief. (3979)

(72 Del. Laws, c. 388, Sec. 7; 73 Del. Laws, c. 409, Sec. 4.) (3980)

Sec. 3582. Damages against trustee for breach of trust. (3981)(Text)

A beneficiary may charge a trustee who commits a breach of trust with: (3982)

(1) The amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; (3983)

(2) The profit that the trustee made by reason of the breach; or (3984)

(3) Such other relief as may be fashioned by the court. (3985)

(72 Del. Laws, c. 388, Sec. 7.) (3986)

Sec. 3583. Liability of trustee in absence of breach. (3987)(Text)

(a) Except to the extent a trustee realizes a profit from conduct expressly permitted by law or the terms of the trust, a trustee is accountable to a beneficiary for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust. (3988)

(b) Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for the failure to make a profit. (3989)

(72 Del. Laws, c. 388, Sec. 7; 77 Del. Laws, c. 330, Sec. 18.) (3990)

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