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 of rational tax planning.
Grayson M. P. McCouch
Who Killed the Rule Against Perpetuities?,
40 Pepp. L. Rev.
Available at: http://digitalcommons.pepperdine.edu/plr/vol40/iss5/7