Bill Text: MS HB891 | 2014 | Regular Session | Engrossed
Bill Title: Rule against perpetuities; revise with respect to certain trusts.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2014-03-31 - Died In Conference [HB891 Detail]
Download: Mississippi-2014-HB891-Engrossed.html
MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Judiciary A
By: Representative Baker
House Bill 891
(As Passed the House)
AN ACT TO REPEAL THE COMMON LAW RULE AGAINST PERPETUITIES; TO SUSPEND THE POWER OF ALIENATION; TO PROVIDE GENERAL AND NONGENERAL POWERS OF APPOINTMENT; TO PROVIDE FOR THE TREATMENT OF ASSETS UPON EXPIRATION OF A TRUST TERM; TO PROVIDE A SAVINGS PROVISION; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. No interest created in real or personal property held in a noncharitable trust shall be void by reason of the common law Rule Against Perpetuities or any common law rule limiting the duration of a trust if the document creating the trust explicitly states the term for the trust and does not exceed three hundred sixty (360) years as provided in Section 2(1)(a) of this act.
SECTION 2. (1) A future interest or trust is void if, as to real or personal property subject to the future interest or trust:
(a) The future interest or trust suspends the power of
alienation of the real or personal property for a period of more
than three hundred sixty (360) years after the time of the creation of the future interest or trust and the suspension of the power of alienation occurs in the document creating the future interest or trust;
(b) The future interest or trust suspends the power of
alienation of the real or personal property for a period of more
than three hundred sixty (360) years after the creation of the future interest or trust as computed from the time of the termination of a settlor's power to revoke the trust;
(c) The future interest or trust suspends the power of
alienation of the real or personal property; the future interest
or trust is created by the exercise of a presently exercisable
general power of appointment, whether by will or otherwise; and
the suspension of the power of alienation is for a period of
more than three hundred sixty (360) years after the creation of the future interest or trust as computed from the time of creation of the presently exercisable power of appointment; or
(d) The future interest or trust suspends the power of
alienation of the property; the future interest or trust is
created by the exercise of a nongeneral or testamentary general
power of appointment; and the suspension of the power of
alienation is for a period of more than three hundred sixty (360) years after the creation of the future interest or trust as computed from the time of creation of the original instrument or conveyance creating the original power of appointment that was exercised to create a new or successive nongeneral or testamentary general power of appointment.
(2) For purposes of subsection (1) of this section, the power of alienation:
(a) Is suspended if there is no person alive who, alone or in combination with others, can, as to property that is part of
the future interest or trust, convey:
(i) Title to real property in fee; or
(ii) Complete ownership of personal property;
(b) Is not suspended by a future interest or trust or by an equitable interest in a trust if:
(i) The trustee of the trust has power, either
express or implied, to sell the property; or
(ii) At least one (1) person has an unlimited power to terminate the trust.
(3) The provisions of subsection (1) of this section do not apply to:
(a) A trust for the benefit of one or more charitable organizations described in Sections 170 (C), 2055(a) and 2522(a) of the United States Internal Revenue Code of 1986 (26 USCS Sections 170(c), 2055(a) and 2522(a)) or under any successor statutes;
(b) A trust created by an employer as part of a stock
bonus plan, pension plan, disability plan, death benefit plan or
profit sharing plan for the exclusive benefit of some or all of
its employees, to whom contributions are made by such employer
or employees, or both, for the purpose of distributing to the
employees the earnings or principal, or both earnings and
principal, of the fund held in trust.
SECTION 3. (1) A general or nongeneral power of appointment not presently exercisable because of a condition precedent is valid if the power is irrevocably exercised or the power terminates within a period of three hundred sixty (360) years after its creation. For purposes of this subsection, the period in which the power must be exercised or the power terminated is computed from the time of creation of the original power of appointment under which a subsequent power of appointment, not presently exercisable, was created;
(2) If a nongeneral power of appointment is exercised to create a new presently exercisable general power of appointment, all property interests subject to that new presently exercisable general power of appointment are valid if the property interests that are subject to the new presently exercisable general power of appointment either vest or terminate within three hundred sixty (360) years after the creation of the new presently exercisable general power of appointment;
(3) If a nongeneral power of appointment is exercised to create a new or successive nongeneral power of appointment or a new or successive testamentary general power of appointment, all property interests subject to the exercise of that new or successive power of appointment are valid if the property interests that are subject to the new power of appointment
either vest or terminate within three hundred sixty (360) years from the time of creation of the original instrument or conveyance creating the original nongeneral power of appointment.
SECTION 4. A real or personal property interest that becomes invalid under this act upon the expiration of the three hundred sixty-year period shall be distributed:
(a) If income from the property interest is payable:
(i) To one (1) person, be distributed to the person to whom the income is then payable;
(ii) To more than one (1) person, be distributed to the persons to whom the income is then payable:
1. In the shares to which the persons are entitled to the income; or
2. Equally among all persons who are entitled to the income if shares are not specified;
(b) If income from the property interest is payable in the discretion of a trustee and is payable:
(i) To one (1) person, be distributed to the person then eligible to receive the income; or
(ii) To more than one (1) person, be distributed to the persons then eligible to receive the income:
1. In the shares to which the persons are entitled to the income; or
2. Equally among all persons who are entitled to the income if shares are not specified;
(c) When there is no person then living to whom the property interest may be distributed under paragraph (a) or (b) of this subsection, be payable to one or more organizations described in Section 170(c), 2055(a) and 2522(a) of the United Stated Internal Revenue Code of 1986 (26 USCS Sections 170(c), 2055(a) and 2522(a)) or under any successor statute, the shares or
proportions that the trustee or trustees then acting may
determine.
SECTION 5. (1) This act applies only to trusts created after July 1, 2014.
(2) This act does not affect any action, case, or proceeding
commenced before July 1, 2014.
SECTION 6. The provision of this act shall be codified in a separate chapter in Title 91, Mississippi Code of 1972.
SECTION 7. This act shall take effect and be in force from and after July 1, 2014.
