When planning an estate, one aspect your trusts and estates attorney will consider is the location of your property, particularly real property, when setting up your trusts. This is especially true when you want the trusts to run for a long period of time and control your assets for the benefit of your children and grandchildren.
The Dead Hand Shall Not Control
In most states, and in the Uniform Statutory Rule Against Perpetuities, the goal is to limit how long a person can control assets after their death. While there are certainly situations where you would want to be able to do so, generally, this control does not last forever. For example, parents of young children need to be able to place their assets into a trust and have another adult manage that trust until the children reach adulthood. This is why, in most cases, the limit placed on trusts is “a life in being plus 21 years.”
Just as it’s a good idea to allow parents some control over their assets, most states do not allow that control to extend much further than one or two generations or approximately 90 years after your death. Allowing the control to extend further creates a different set of issues with the dead hand controlling assets in a way that may no longer be in the best interest of the living.
The rule against perpetuities was created to prevent testators from using their wills and trusts to control property for a long period of time. It prevents people from creating future interests in property that will vest significantly outside of their lifetime. These interests are qualifications that will impact, and generally complicate property ownership. A piece of property with these types of qualifications on it is generally less marketable.
The Utah Rule Against Perpetuities
In 1998, the Utah legislature adopted the Uniform Statutory Rule Against Perpetuities, setting the perpetuities period for 90 years. In 2003, the legislature amended the statute, changing the perpetuities period to 1,000 years.
With this change, Utah joins a handful of other states with a rule stating that a nonvested property interest is invalid unless, when the interest is created, it is certain to vest or terminate no later than 1,000 years after the death of an individual then alive. The period of neighboring Nevada, on the other hand, is more reflective of the traditional “life in being plus 21 years.”
At Dunn Law Firm, we want to make sure you estate plan is comprehensive and covers a variety of possible scenarios. We will help you understand the applicable laws and how you can use those laws to create the situation you want for your children and loved ones. To learn more, reach out to the Dunn Law Firm by calling (435) 628-5405 to set up a free consultation today.