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Posted by Drew Edmundson on February 13, 2007, 5:22 pm
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>>> But don't forget the rule against perpetuities. The trust
>>> must terminate at some point and the property distributed to
>>> the heirs at that point. The amount of time is not specific
>>> in terms of numbers, but is calculated by adding 21 years to
>>> the date of death of the last person to die out of a
>>> specified group.
>> Some states, Alaska comes to mind, allow trusts to continue
>> for an unlimited amount of time. Just do an Internet search
>> on "dynasty trust" for more information. One of the first
>> hits I got said there are 13 states that now allow them.
>> One does not have to be a resident of these states to
>> establish a dynasty trust.
> I did a google search on dynasty trusts. The first three
> links didn't work - there was nothing there. The fourth
> link was to a page of information that was by someone who
> had no clue what he was talking about.
>
> I also checked the Alaska law on the subject. They appear
> to still follow the rule against perpetutities. The
> difference is that normally the rule works prospectively.
> That is to say that you need to be able to determine who
> will be the beneficiaries and when the trust will terminate,
> at the time it is created.
>
> In Alaska, and several other states, the rule works
> retroactively. That is to say that they take a wait and see
> approach. The rule does not void trusts based on
> information had when they are created, but later on as time
> goes by.
>
> But the trusts still must terminate within the time
> specified by the rule.
That is not my understanding. Hopefully our esteemed moderator
will allow this link through (it is to dook university):
https://www.law.duke.edu/journals/alr/downloads/alr18p253.pdf
Note on page 4 of the PDF the line: "On April 2, 1997,
Alaska effectively eliminated its Rule Against Perpetuities
with regard to beneficial interests held in trust, but only
where all or part of the income or principal of the trust
could be distributed at the trustee's discretion to a person
who was living when the trust was created."
Perhaps the author is incorrect or perhaps we are
disagreeing on semantics (he does say "effectively"). I am
not an attorney, I was just relaying the information I have
been told and read from those who are attorneys.
--
Drew Edmundson, CPA
Cary, NC
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