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Rule against Perpetuities

What is the rule against perpetuities?

The rule against perpetuities prevents an individual from creating a trust that will affect the distribution of property among the beneficiaries long after the individual’s death. This rule was first enacted in England in 1680. This rule was mainly created to prevent people from tying up property in one place for many generations.

Would the rule against perpetuities apply to a testamentary trust in Louisiana?

The rule against perpetuities may not apply to the state of Louisiana. Hence, a testamentary trust may not have to have a set end date.

Would the rule against perpetuities apply to a dynasty trust in Pennsylvania?

The rule against perpetuities may not apply to a dynasty trust in the state of Pennsylvania. These trusts are irrevocable and though in some states there may be a limit on how long they can exist, there is no such limit in the state of Pennsylvania.

Will the rule against perpetuities applies to charitable trusts?

In many cases, the rule against perpetuities may not apply to charitable trusts.

Can a property be kept in a trust forever?

In most situations, it may not be possible to keep property in a trust forever. Most of the times, the trust may get terminated after a specific time period and be distributed among the beneficiaries.

According to the rule against perpetuities, what is the time limit on keeping property in a trust?

According to the rule against perpetuities, a property may be kept in a trust for a period of 90 years or for a period of 21 years after the death of the youngest beneficiary, depending on whichever time period is longer.

What would be the consequences of violating the rule against perpetuities?

A trust may be considered to be invalid if it violated the rule against perpetuities.

For how long can the grandfather clause be used for generation skipping transfer tax exemptions?

If the trust that has been set up is a generation skipping transfer tax exempt trust, then it can exist for several generations. However, this time period may depend on the rule against perpetuities that applies to the state in which the trust is created. In some states of the US, like Delaware, these trusts can exist forever as the rule does not apply to them.

Is the rule against perpetuities valid in Minnesota?

Though the rule against perpetuities has been cancelled in some states of the US, it may be applicable to the state of Minnesota.

It is very important for both the creators of a trust and its beneficiaries to understand what the rule against perpetuities is and what the consequences of violating it would be. Some of the states in the US may not recognize this rule. You need to be aware of the different states in which this rule may apply. You may ask an Expert if you have any questions or need more information about this rule.
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