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Post by Sapphire Capital on Nov 14, 2013 1:06:41 GMT 4
Trust Term Extension Reid K. Weisbord Rutgers Law School - Newark October 28, 2013 Abstract: Until recently, the Rule Against Perpetuities (or some form of it) existed in nearly all jurisdictions in the United States. As its name suggests, the Rule prohibits perpetual control over property, including property held in trust, but over the last thirty years, most jurisdictions abrogated or repealed it. This, in turn, led estate planning practitioners to consider whether a trust created to comply with the Rule could, after the Rule’s repeal, be extended in perpetuity to provide for future generations of the settlor’s descendants. This Article examines the issue of trust term extension in this context and considers whether equitable deviation, a trust law doctrine authorizing modification of the instrument’s original terms, could be applied to extend the duration of such a trust. The Article concludes that such modification would constitute a misapplication of equitable deviation and would be inconsistent with the modern trend in trust law favoring the rights of living beneficiaries over dead hand control. Financial institutions receiving compensation for serving as a corporate trustee would stand to benefit from this type of modification at the cost of impairing the interests of existing beneficiaries selected by the settlor. Number of Pages in PDF File: 44 find at: papers.ssrn.com/sol3/papers.cfm?abstract_id=2346522
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