HB 219: "An Act relating to the rule against perpetuities, nonvested property interests, and powers of appointment; and providing for an effective date."
00HOUSE BILL NO. 219 01 "An Act relating to the rule against perpetuities, nonvested property interests, and 02 powers of appointment; and providing 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 article 1 to read: 05 Sec. 34.27.040. Abolition of rule against perpetuities. (a) Unless expressly 06 stated otherwise in the governing instrument, the duration of a nonvested property 07 interest, a general power of appointment not presently exercisable because of a 08 condition precedent, a nongeneral power of appointment, and a general testamentary 09 power of appointment is perpetual and is not subject to termination, limitation, or 10 restriction. 11 (b) This section supersedes the rule of the common law known as the rule 12 against perpetuities. 13 (c) Except as provided in AS 34.27.042, this section does not apply if the 14 governing instrument was entered into before the effective date of this Act.
01 Sec. 34.27.042. Applicability of AS 34.27.040 to certain nonvested property 02 interests. (a) AS 34.27.040 applies to an instrument creating a nonvested property 03 interest in a trust under which all or part of the income or principal of the trust may 04 be distributed, in the discretion of the trustee, to a person who was living when the 05 trust was created if the nonvested interest in the trust was executed on or after April 2, 06 1997. 07 (b) AS 34.27.040 applies to an instrument creating a nonvested property 08 interest in a trust if the trust instrument was created in another state or country before 09 April 2, 1997, and the situs of the trust was moved to this state on or after April 2, 10 1997. 11 * Sec. 2. AS 34.27.050(a) is amended to read: 12 (a) A nonvested property interest is invalid unless the interest is created on 13 or after January 1, 1996, and before the effective date of this Act and 14 (1) when the interest is created, it is certain to vest or terminate no later 15 than 21 years after the death of an individual then alive; or 16 (2) the interest either vests or terminates within 90 years after its 17 creation [; OR 18 (3) THE INTEREST IS IN A TRUST AND ALL OR PART OF THE 19 INCOME OR PRINCIPAL OF THE TRUST MAY BE DISTRIBUTED, IN THE 20 DISCRETION OF THE TRUSTEE, TO A PERSON WHO IS LIVING WHEN THE 21 TRUST IS CREATED]. 22 * Sec. 3. AS 34.27.050(b) is amended to read: 23 (b) A general power of appointment not presently exercisable because of a 24 condition precedent is invalid unless the power of appointment is created on or 25 after January 1, 1996, and before the effective date of this Act and 26 (1) when the power is created, the condition precedent is certain to be 27 satisfied or become impossible to satisfy no later than 21 years after the death of an 28 individual then alive; or 29 (2) the condition precedent either is satisfied or becomes impossible to 30 satisfy within 90 years after its creation. 31 * Sec. 4. AS 34.27.050(c) is amended to read:
01 (c) A nongeneral power of appointment or a general testamentary power of 02 appointment is invalid unless the power is created on or after January 1, 1996, and 03 before the effective date of this Act and 04 (1) when the power is created, it is certain to be irrevocably exercised 05 or otherwise to terminate no later than 21 years after the death of an individual then 06 alive; or 07 (2) the power is irrevocably exercised or otherwise terminates within 08 90 years after its creation. 09 * Sec. 5. AS 34.27.070(a) is amended to read: 10 (a) Except as extended by (b) of this section, AS 34.27.050 - 34.27.090 apply 11 to a nonvested property interest or a power of appointment that is created on or after 12 January 1, 1996 , and before the effective date of this Act . For purposes of this 13 section, a nonvested property interest or a power of appointment created by the 14 exercise of a power of appointment is created when the power is irrevocably exercised 15 or when a revocable exercise becomes irrevocable. 16 * Sec. 6. AS 34.27.075 is amended to read: 17 Sec. 34.27.075. Supersession of common law rule. AS 34.27.050 - 34.27.090 18 supersede the rule of the common law known as the rule against perpetuities to the 19 extent provided under AS 34.27.050 - 34.27.090 . 20 * Sec. 7. AS 34.27.042, added by sec. 1 of this Act, is retroactive to April 2, 1997, and 21 applies to nonvested property interests in trusts as described in that section. 22 * Sec. 8. This Act takes effect immediately under AS 01.10.070(c).