HB 316: "An Act adopting the Uniform Statutory Rule Against Perpetuities; and providing for an effective date."
00HOUSE BILL NO. 316 01 "An Act adopting the Uniform Statutory Rule Against Perpetuities; and providing 02 for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 34.27 is amended by adding new sections to read: 05 ARTICLE 2. RULE AGAINST PERPETUITIES. 06 Sec. 34.27.050. STATUTORY RULE AGAINST PERPETUITIES. (a) 07 A nonvested property interest is invalid unless 08 (1) when the interest is created, it is certain to vest or terminate no later 09 than 21 years after the death of an individual then alive; or 10 (2) the interest either vests or terminates within 90 years after its 11 creation. 12 (b) A general power of appointment not presently exercisable because of a 13 condition precedent is invalid unless 14 (1) when the power is created, the condition precedent is certain to be
01 satisfied or become impossible to satisfy no later than 21 years after the death of an 02 individual then alive; or 03 (2) the condition precedent either is satisfied or becomes impossible to 04 satisfy within 90 years after its creation. 05 (c) A nongeneral power of appointment or a general testamentary power of 06 appointment is invalid unless 07 (1) when the power is created, it is certain to be irrevocably exercised 08 or otherwise to terminate no later than 21 years after the death of an individual then 09 alive; or 10 (2) the power is irrevocably exercised or otherwise terminates within 11 90 years after its creation. 12 (d) In determining whether a nonvested property interest or a power of 13 appointment is valid under (a)(1), (b)(1), or (c)(1) of this section, the possibility that 14 a child will be born to an individual after the individual's death is disregarded. 15 (e) If, in measuring a period from the creation of a trust or other property 16 arrangement, language in a governing instrument (1) seeks to disallow the vesting or 17 termination of any interest or trust beyond, (2) seeks to postpone the vesting or 18 termination of any interest or trust until, or (3) seeks to operate in effect in any similar 19 fashion upon, the later of the expiration of a period of time not exceeding 21 years 20 after the death of the survivor of specified lives in being at the creation of the trust or 21 other property arrangement or the expiration of a period of time that exceeds or might 22 exceed 21 years after the death of the survivor of lives in being at the creation of the 23 trust or other property arrangement, that language is inoperative to the extent that it 24 produces a period of time that exceeds 21 years after the death of the survivor of the 25 specified lives. 26 Sec. 34.27.055. WHEN NONVESTED PROPERTY INTEREST OR POWER 27 OF APPOINTMENT CREATED. (a) Except as provided in (b) and (c) of this section 28 and in AS 34.27.070(a), the time of creation of a nonvested property interest or a 29 power of appointment is determined under general principles of property law. 30 (b) For purposes of AS 34.27.050 - 34.27.090, if there is a person who alone 31 can exercise a power created by a governing instrument to become the unqualified
01 beneficial owner of (1) a nonvested property interest or (2) a property interest subject 02 to a power of appointment described in AS 34.27.050(b) or (c), the nonvested property 03 interest or power of appointment is created when the power to become the unqualified 04 beneficial owner terminates. 05 (c) For purposes of AS 34.27.050 - 34.27.090, a nonvested property interest 06 or a power of appointment arising from a transfer of property to a previously funded 07 trust or other existing property arrangement is created when the nonvested property 08 interest or power of appointment in the original contribution was created. 09 Sec. 34.27.060. REFORMATION. Upon the petition of an interested person, 10 a court shall reform a disposition in the manner that most closely approximates the 11 transferor's manifested plan of distribution and is within the 90 years allowed by 12 AS 34.27.050(a)(2), (b)(2), or (c)(2) if 13 (1) a nonvested property interest or a power of appointment becomes 14 invalid under AS 34.27.050; 15 (2) a class gift is not but might become invalid under AS 34.27.050 and 16 the time has arrived when the share of any class member is to take effect in possession 17 or enjoyment; or 18 (3) a nonvested property interest that is not validated by 19 AS 34.27.050(a)(1) can vest but not within 90 years after its creation. 20 Sec. 34.27.065. EXCLUSIONS FROM STATUTORY RULE AGAINST 21 PERPETUITIES. AS 34.27.050 does not apply to 22 (1) a nonvested property interest or a power of appointment arising out 23 of a nondonative transfer, except a nonvested property interest or a power of 24 appointment arising out of 25 (A) a premarital or postmarital agreement; 26 (B) a separation or divorce settlement; 27 (C) a spouse's election; 28 (D) a similar arrangement arising out of a prospective, existing, 29 or previous marital relationship between the parties; 30 (E) a contract to make or not to revoke a will or trust; 31 (F) a contract to exercise or not to exercise a power of
01 appointment; 02 (G) a transfer in satisfaction of a duty of support; or 03 (H) a reciprocal transfer; 04 (2) a fiduciary's power relating to the administration or management 05 of assets, including the power of a fiduciary to sell, lease, or mortgage property, and 06 the power of a fiduciary to determine principal and income; 07 (3) a power to appoint a fiduciary; 08 (4) a discretionary power of a trustee to distribute principal before 09 termination of a trust to a beneficiary having an indefeasibly vested interest in the 10 income and principal; 11 (5) a nonvested property interest held by a charity, government, or 12 governmental agency or subdivision, if the nonvested property interest is preceded by 13 an interest held by another charity, government, or governmental agency or 14 subdivision; 15 (6) a nonvested property interest in or a power of appointment with 16 respect to a trust or other property arrangement forming part of a pension, profit-sharing, stock bonus, health, 17 disability, death benefit, income deferral, or other current 18 or deferred benefit plan for one or more employees, independent contractors, or their 19 beneficiaries or spouses, to which contributions are made for the purpose of 20 distributing to or for the benefit of the participants or their beneficiaries or spouses the 21 property, income, or principal in the trust or other property arrangement, except a 22 nonvested property interest or a power of appointment that is created by an election 23 of a participant or a beneficiary or spouse; or 24 (7) a property interest, power of appointment, or arrangement that was 25 not subject to the common law rule against perpetuities or is excluded by another 26 statute of this state. 27 Sec. 34.27.070. PROSPECTIVE APPLICATION. (a) Except as extended by 28 (b) of this section, AS 34.27.050 - 34.27.090 apply to a nonvested property interest or 29 a power of appointment that is created on or after January 1, 1996. For purposes of 30 this section, a nonvested property interest or a power of appointment created by the 31 exercise of a power of appointment is created when the power is irrevocably exercised
01 or when a revocable exercise becomes irrevocable. 02 (b) If a nonvested property interest or a power of appointment was created 03 before January 1, 1996, and is determined in a judicial proceeding, commenced on or 04 after that date, to violate this state's rule against perpetuities as that rule existed before 05 January 1, 1996, a court upon the petition of an interested person may reform the 06 disposition in the manner that most closely approximates the transferor's manifested 07 plan of distribution and is within the limits of the rule against perpetuities applicable 08 when the nonvested property interest or power of appointment was created. 09 Sec. 34.27.075. SUPERSESSION OF COMMON LAW RULE. 10 AS 34.27.050 - 34.27.090 supersede the rule of the common law known as the rule 11 against perpetuities. 12 Sec. 34.27.090. SHORT TITLE AND UNIFORMITY OF APPLICATION 13 AND CONSTRUCTION. AS 34.27.050 - 34.27.090 may be cited as the Uniform 14 Statutory Rule Against Perpetuities and shall be applied and construed to effectuate 15 their general purpose to make uniform the law with respect to the subject of 16 AS 34.27.050 - 34.27.090 among states enacting the Uniform Statutory Rule Against 17 Perpetuities. 18 * Sec. 2. AS 34.27.010 is repealed. 19 * Sec. 3. This Act takes effect January 1, 1996.