Delaware Code
Chapter 33. ADMINISTRATIVE PROVISIONS
§ 3314. Limitation on certain fiduciary powers.

(a) This section shall apply to:

(1) Any trust created under a governing instrument that, but for this section, would permit any of the powers described in subsection (c) of this section to be exercised by the fiduciary unless the governing instrument expressly provides that this section does not apply.
(2) For purposes of this section, the term “fiduciary” means any trustee or trust adviser or the personal representative of an estate except to the extent the governing instrument expressly states that such person is not serving in a fiduciary capacity.
(b) This section shall not apply to:

(1) Any trust during the time that the trust is revocable or amendable by its trustor.
(2) A spouse of a decedent or trustor where the spouse is a fiduciary of a testamentary or inter vivos trust for which a marital deduction has been allowed.
(3) A fiduciary who possesses in such fiduciary's individual, nonfiduciary, capacity an unlimited right to appoint all or part of the property held in trust to the fiduciary, the fiduciary's estate, the fiduciary's creditors, or the creditors of the fiduciary's estate.
(4) A trust under a governing instrument that by specific reference expressly rejects the application of this section.
(5) A trust created under a governing instrument executed on or before August 1, 2008, if, in the case of a fiduciary's possessing a power described in subsection (c) of this section and dying at any time on or after August 1, 2008, no part of the property of the trust would be included in the gross estate of the fiduciary for federal estate-tax purposes or, notwithstanding that all or some part of the property held in trust would be so included, no federal estate tax would be payable by such estate.
(6) A trust created under a governing instrument executed on or before August 1, 2008, if, in the case of a beneficiary's possessing a power to appoint a trustee and dying at any time on or after August 1, 2008, no part of the property of the trust would be included in the gross estate of the beneficiary for federal estate-tax purposes or, notwithstanding that all or some part of the property held in trust would be so included, no federal estate tax would be payable by such estate.
(c) The following powers conferred by a governing instrument upon a fiduciary in that fiduciary's capacity as a fiduciary shall not be exercised by that fiduciary:

(1) The power to make discretionary distributions of either principal or income to or for the benefit of the fiduciary, the fiduciary's estate, the creditors of the fiduciary, or the creditors of the fiduciary's estate unless the power is either:

a. Limited by an ascertainable standard relating to the fiduciary's health, education, support, or maintenance within the meaning of 26 U.S.C. §§ 2041 (relating to powers of appointment) and 2514 (relating to powers of appointment); or
b. Exercisable by the fiduciary only in conjunction with another person having a substantial interest in the property subject to the power which is adverse to the interest of the fiduciary within the meaning of 26 U.S.C. § 2041(b)(1)(C)(ii).
(2) The power to make discretionary distributions of either principal or income to satisfy any of the fiduciary's personal legal obligations for support or other purposes.
(3) The power to make discretionary allocations in the fiduciary's personal favor of receipts or expenses as between income and principal unless the fiduciary has no power to enlarge or shift any beneficial interest except as an incidental consequence of the discharge of the fiduciary's duties.
(4) The power to exercise any of the powers proscribed in this subsection with regard to an individual other than the fiduciary to the extent that the individual could exercise a similar prohibited power in connection with a trust that benefits the fiduciary.
(5) The power to make an election, other than an election under 26 U.S.C. §§ 2056(b)(7) and 2523(f) (relating to the federal estate-tax and gift-tax marital deductions), in a fiduciary capacity that would cause the property over which the election could be made to be included in the gross estate of the fiduciary for federal estate-tax purposes.
(d) Notwithstanding the foregoing provisions:

(1) If a fiduciary is prohibited by this section from exercising a power conferred upon the fiduciary, the fiduciary nevertheless may exercise that power but shall be limited to distributions for the fiduciary's health, education, support, or maintenance to the extent otherwise permitted by the terms of the trust.
(2) Unless otherwise prohibited by the provisions of this section, a fiduciary may exercise a power described herein in favor of someone other than the fiduciary, the fiduciary's estate, the creditors of the fiduciary, or the creditors of the fiduciary's estate.
(3) Subject to the preceding paragraphs of this subsection, any purported exercise of a power proscribed by subsection (c) of this section shall be void and of no effect.
(e) If a governing instrument creates a power proscribed by this section:

(1) If the power is conferred on 2 or more fiduciaries, it may be exercised by the fiduciary or fiduciaries who are not so prohibited as if they were the only fiduciary or fiduciaries.
(2) If there is no fiduciary in office who can exercise the power as provided in paragraph (e)(1) of this section, the court, upon petition and hearing after such notice as it may direct, shall appoint a fiduciary who is not disqualified and whose term in office shall be as the court directs for the sole purpose of exercising the power that the other fiduciary or fiduciaries cannot exercise.
(3) The court may, upon petition by any fiduciary or beneficiary of the trust subject to the power, appoint an additional fiduciary or fiduciaries.
(f) No beneficiary of a trust in an individual, fiduciary, or other capacity may appoint, or remove and appoint, a fiduciary who is related or subordinate to the beneficiary within the meaning of 26 U.S.C. § 672(c) unless:

(1) The fiduciary's discretionary power to make distributions to or for the beneficiary is limited by an ascertainable standard relating to the beneficiary's health, education, support, or maintenance within the meaning of 26 U.S.C. §§ 2041 and 2514;
(2) The fiduciary's discretionary power may not be exercised to satisfy any of the beneficiary's legal obligations for support or other purposes; and
(3) The fiduciary's discretionary power may not be exercised to grant to the beneficiary a general power to appoint property of the trust to the beneficiary, the beneficiary's estate, or the creditors thereof within the meaning of 26 U.S.C. § 2041.
(4) This subsection shall not apply if the appointment of the fiduciary by the beneficiary may be made only in conjunction with another person having a substantial interest in the property of the trust subject to the power which is adverse to the exercise of the power in favor of the beneficiary within the meaning of 26 U.S.C. § 2041(b)(1)(C)(ii).

Structure Delaware Code

Delaware Code

Title 12 - Decedents' Estates and Fiduciary Relations

Chapter 33. ADMINISTRATIVE PROVISIONS

§ 3301. Application of chapter; definitions [For application of this section, see 79 Del. Laws, c. 172, § 6].

§ 3302. Degree of care; authorized investments [For application of this section, see 79 Del. Laws, c. 172, § 6].

§ 3303. Effect of provisions of instrument [For application of this section, see 79 Del. Laws, c. 172, § 6].

§ 3304. Retention by fiduciary of decedent's or settlor's investments.

§ 3305. Retention by bank or trust company acting as a fiduciary of its own stock.

§ 3306. Deviation from terms of instrument.

§ 3307. Common fund investments by bank or trust company; regulations.

§ 3308. Power of bank or trust company acting as a fiduciary to purchase property held by its commercial or banking department.

§ 3309. Identification of securities.

§ 3310. Storage of securities.

§ 3311. Deposit of securities in clearing corporation.

§ 3312. Investments in affiliated investments; transactions with affiliates [For application of this section, see 80 Del. Laws, c. 153, § 5].

§ 3313. Advisers [For application of this section, see 80 Del. Laws, c. 153, § 5].

§ 3313A. Excluded cotrustee.

§ 3314. Limitation on certain fiduciary powers.

§ 3315. Trustee's exercise of discretion; review by court; discretionary interests.

§ 3316. Substituted property; equivalent value; fiduciary duty.

§ 3317. Cofiduciaries and co-nonfiduciaries; duty to keep informed.

§ 3321. Applicability of chapter; definitions.

§ 3322. Fiduciary agency contracts; delegation.

§ 3323. Cofiduciaries and co-nonfiduciaries.

§ 3324. General powers of trustee.

§ 3325. Specific powers of trustee [For application of this section, see 79 Del. Laws, c. 172, § 6; 80 Del. Laws, c. 153, § 5].

§ 3326. Resignation of an officeholder.

§ 3327. Removal of an officeholder.

§ 3328. Limitation on personal liability of fiduciary.

§ 3329. Effect of no-contest provision.

§ 3330. Construction or interpretation affecting validity under rule against perpetuities, applicability of later-enacted laws, and class determination; effect of survivorship requirement.

§ 3331. Preference for early vesting [For application of the section, see 83 Del. Laws, c. 271, § 1].

§ 3332. Governing law; change of situs [For application of this section, see 80 Del. Laws, c. 153, § 5].

§ 3333. Retention of counsel by fiduciary [For application of this section, see 79 Del. Laws, c. 172, § 6; 80 Del. Laws, c. 153, § 5].

§ 3334. Contributions to revocable trusts [For application of this section, see 79 Del. Laws, c. 172, § 6].

§ 3335. Effect of formula clauses in certain wills and trusts.

§ 3336. Appointment of successor trustee [For application of this section, see 79 Del. Laws, c. 172, § 6].

§ 3337. Claims against revocable trusts [For application of this section, see 79 Del. Laws, c. 172, § 6].

§ 3338. Nonjudicial settlement agreements [For application of this section, see 79 Del. Laws, c. 172, § 6; 80 Del. Laws, c. 153, § 5].

§ 3339. Designated representatives of trusts.

§ 3340. Place of administration [For application of this section, see 80 Del. Laws, c. 153, § 5].

§ 3341. Consequences of trust merger and similar transactions [For application of this section, see 80 Del. Laws, c. 153, § 5].

§ 3342. Modification of trust by consent while trustor is living.

§ 3343. Authority to allocate trustee duties among multiple trustees.

§ 3344. Income tax reimbursement or payment.