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Full-Text Articles in Law

Unconstitutional Perpetual Trusts, Steven J. Horowitz, Robert H. Sitkoff Nov 2014

Unconstitutional Perpetual Trusts, Steven J. Horowitz, Robert H. Sitkoff

Vanderbilt Law Review

"I never can be thankful, Mr. Bennet, for any thing about the entail."t Perpetual trusts are an established feature of today's estate planning firmament. Yet little-noticed provisions in the constitutions of nine states, including in five states that purport to allow perpetual trusts by statute, proscribe ')erpetuities." This Article examines those provisions in light of the meaning of ')erpetuity" as a legal term of art across history. We consider the constitutionality of perpetual trust statutes in states that have a constitutional ban on perpetuities and whether courts in states with such a ban may give effect to a perpetual trust …


Who Killed The Rule Against Perpetuities?, Grayson M. P. Mccouch May 2013

Who Killed The Rule Against Perpetuities?, Grayson M. P. Mccouch

Pepperdine Law Review

During the last two decades more than half the states have either abolished or substantially weakened the traditional rule against perpetuities. The increased demand for perpetual trusts is widely attributed to the ability of such trusts to avoid federal wealth transfer taxes. Furthermore, recent empirical studies confirm a correlation between repeal of the rule against perpetuities (coupled with favorable state income tax treatment) and increased personal trust assets and average account size. This symposium article discusses the asymmetric benefits and drawbacks of perpetual trusts and concludes that the decline of the rule against perpetuities cannot be explained solely in terms …


Distracted From Distraction By Distraction: Reimagining Estate Tax Reform, Edward J. Mccaffery May 2013

Distracted From Distraction By Distraction: Reimagining Estate Tax Reform, Edward J. Mccaffery

Pepperdine Law Review

Recent legislation has left a gift and estate tax that will apply to far fewer than 1% of all decedents each year. This Article, prepared for a symposium on Tax Advice for the Second Obama Administration, argues that the estate tax has become largely irrelevant, except ironically as a spur to the creation and perpetuation of dynastic wealth via 'Dynasty Trusts.' The tax no longer meets any compelling policy rationale, such as raising revenue, 'backing up” the income tax, injecting progression into the tax system, or breaking up large concentrations of wealth. It is time to move on, and to …


Who Is Afraid Of Perpetual Trusts?, Bridget J. Crawford Jul 2012

Who Is Afraid Of Perpetual Trusts?, Bridget J. Crawford

Michigan Law Review First Impressions

Throw a stone into a room full of law professors, and it is virtually impossible to hit someone who will defend perpetual trusts. Yet since 1995, eighteen states have repealed their rules against perpetuities, and there are now twenty-one states that permit trusts to last forever. Many academics have responded with a virtual pile-on, calling the repeals a "race to the bottom" at best and "loony" at worst. Lawrence Waggoner, Professor Emeritus at the University of Michigan School of Law and Reporter for the Restatement (Third) of Property: Wills and Other Donative Transfers, has made another contribution to the scrum. …