‘The Perpetuities Whodunnit’

Grayson MP McCouch, Who Killed the Rule Against Perpetuities?, 40 Pepperdine Law Review 1291 (2013). Ding, dong, the Rule Against Perpetuities is dead. Well, in about half of all states. No longer must property interests vest within “lives in being plus twenty-one years”. Wealthy individuals can put their money in trust forever. Even better, when that trust is created in a state without an income tax, and the trust assets never become included in the estate of a beneficiary, assets transferred to a perpetual trust remain … perpetually tax-free. What is the explanation behind the rush among states to repeal the RAP, beginning in the mid-1990’s? Professors Robert Sitkoff and Max Schanzenbach, among others, have pointed to the generation-skipping transfer tax as the engine driving repeal. Other theories include settlors’ desires for post-mortem control or creditor protection for beneficiaries. Enter into the conversation Grayson MP McCouch with his concise and well-written article, Who Killed the Rule Against Perpetuities? McCouch argues that the repeal of RAP is as much the work of bankers and lawyers as it is of any tax law … (more)

[Bridget J Crawford, JOTWELL, 10 June]

First posted 2014-06-10 13:22:03

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