CHAPTER 8. UNIFORM STATUTORY RULE AGAINST PERPETUITIES
IC 32-17-8
Chapter 8. Uniform Statutory Rule Against Perpetuities
IC 32-17-8-1
Application of chapter; reformation of disposition created beforeMay 8, 1991
Sec. 1. (a) Except as provided in subsection (b), this chapterapplies to a nonvested property interest or a power of appointmentthat is created on or after May 8, 1991. For purposes of this section,a nonvested property interest or a power of appointment created bythe exercise of a power of appointment is created when the power isirrevocably exercised or when a revocable exercise becomesirrevocable.
(b) If a nonvested property interest or a power of appointment wascreated before May 8, 1991, and:
(1) is determined in a judicial proceeding commenced on orafter May 8, 1991, to violate this state's rule against perpetuitiesas that rule existed before May 8, 1991; or
(2) may violate this state's rule against perpetuities as that ruleexisted before May 8, 1991;
a court upon the petition of an interested person shall reform thedisposition by inserting a savings clause that most closely preservesthe transferor's plan of distribution and is within the limits of the ruleagainst perpetuities applicable when the nonvested property interestor power of appointment was created.
As added by P.L.2-2002, SEC.2.
IC 32-17-8-2
Exclusions
Sec. 2. This chapter does not apply to the following:
(1) A nonvested property interest or a power of appointmentarising out of a nondonative transfer, except a nonvestedproperty interest or a power of appointment arising out of anyof the following:
(A) A premarital or postmarital agreement.
(B) A separation or divorce settlement.
(C) A spouse's election.
(D) A similar arrangement arising out of a prospective, anexisting, or a previous marital relationship between theparties.
(E) A contract to make or not to revoke a will or trust.
(F) A contract to exercise or not to exercise a power ofappointment.
(G) A transfer in satisfaction of a duty of support.
(H) A reciprocal transfer.
(2) A fiduciary's power relating to the administration ormanagement of assets, including the power of a fiduciary tosell, lease, or mortgage property, and the power of a fiduciaryto determine principal and income.
(3) A power to appoint a fiduciary. (4) A discretionary power of a trustee to distribute principalbefore termination of a trust to a beneficiary having anindefeasibly vested interest in the income and principal.
(5) A nonvested property interest held by a charity, government,or governmental agency or subdivision, if the nonvestedproperty interest is preceded by an interest held by anothercharity, government, or governmental agency or subdivision.
(6) A nonvested property interest in or a power of appointmentwith respect to a trust or other property arrangement formingpart of a pension, a profit sharing, a stock bonus, a health, adisability, a death benefit, an income deferral, or other currentor deferred benefit plan for one (1) or more employees,independent contractors, or their beneficiaries or spouses, towhich contributions are made for the purpose of distributing toor for the benefit of the participants or their beneficiaries orspouses the property, income, or principal in the trust or otherproperty arrangement, except a nonvested property interest ora power of appointment that is created by an election of aparticipant or a beneficiary or spouse.
(7) A property interest, power of appointment, or arrangementthat was not subject to the common law rule against perpetuitiesor is excluded by another Indiana statute.
(8) A:
(A) provision for the accumulation of an amount of theincome of a trust estate reasonably necessary for the upkeep,repair, or proper management of the subject of the estate;
(B) direction in a trust that provides for the allocation whollyor in part to the principal of the trust of stock dividends orstock rights derived from shares held in a trust;
(C) provision for a sinking or reserve fund; or
(D) statutory provision directing an accumulation.
As added by P.L.2-2002, SEC.2.
IC 32-17-8-3
Nonvested property interests; powers of appointment; validity
Sec. 3. (a) A nonvested property interest is valid if:
(1) when the interest is created, the interest is certain to vest orterminate not later than twenty-one (21) years after the death ofan individual then alive; or
(2) the interest either vests or terminates within ninety (90)years after the interest's creation.
(b) A general power of appointment not presently exercisablebecause of a condition precedent is valid if:
(1) when the power is created, the condition precedent is certainto be satisfied or become impossible to satisfy not later thantwenty-one (21) years after the death of an individual then alive;or
(2) the condition precedent either is satisfied or becomesimpossible to satisfy within ninety (90) years after the conditionprecedent's creation. (c) A nongeneral power of appointment or a general testamentarypower of appointment is valid if:
(1) when the power is created, the power is certain to beirrevocably exercised or otherwise to terminate not later thantwenty-one (21) years after the death of an individual then alive;or
(2) the power is irrevocably exercised or otherwise terminateswithin ninety (90) years after the power's creation.
(d) In determining whether a nonvested property interest or apower of appointment is valid under subsection (a)(1), (b)(1), or(c)(1), the possibility that a child will be born to an individual afterthe individual's death is disregarded.
As added by P.L.2-2002, SEC.2.
IC 32-17-8-4
Nonvested property interests or powers of appointment; time ofcreation
Sec. 4. (a) Except as provided in subsections (b) and (c) and insection 1(a) of this chapter, the time of creation of a nonvestedproperty interest or a power of appointment is determined undergeneral principles of property law.
(b) For purposes of this chapter, if there is a person who alone canexercise a power created by a governing instrument to become theunqualified beneficial owner of:
(1) a nonvested property interest; or
(2) a property interest subject to a power of appointmentdescribed in section 3(b) or 3(c) of this chapter;
the nonvested property interest or power of appointment is createdwhen the power to become the unqualified beneficial ownerterminates.
(c) For purposes of this chapter, a nonvested property interest ora power of appointment arising from a transfer of property to apreviously funded trust or other existing property arrangement iscreated when the nonvested property interest or power ofappointment in the original contribution was created.
As added by P.L.2-2002, SEC.2.
IC 32-17-8-5
Clauses taking effect upon the later of certain occurrences; portioninvalid; construction
Sec. 5. (a) This section applies to a clause in a governinginstrument that:
(1) purports to:
(A) postpone the vesting or termination of any interest ortrust until;
(B) disallow the vesting or termination of any interest ortrust beyond;
(C) require all interests or trusts to vest or terminate not laterthan; or
(D) operate in any similar fashion upon; the occurrence of an event described in subdivision (2); and
(2) takes effect upon the later of the following occurrences:
(A) The expiration of a period that exceeds twenty-one (21)years or that might exceed twenty-one (21) years after thedeath of the survivor of lives in being at the creation of thetrust or other property arrangement.
(B) The death of, or the expiration of a period not exceedingtwenty-one (21) years after the death of, the survivor ofspecified lives in being at the creation of the trust or otherproperty arrangement.
(b) If a clause described in subsection (a) appears in an instrumentcreating a trust or other property arrangement, then, in measuring aperiod from the creation of a trust or other property arrangement, theportion of the clause that pertains to the period that exceedstwenty-one (21) years or that might exceed twenty-one (21) yearsafter the death of the survivor of lives in being at the creation of thetrust or other property arrangement is not valid. The court shallconstrue the clause as becoming effective upon:
(1) the death of; or
(2) the expiration of the period not exceeding twenty-one (21)years after the death of;
the survivor of the specified lives in being at the creation of the trustor other property arrangement.
As added by P.L.2-2002, SEC.2.
IC 32-17-8-6
Judicial reformation of disposition
Sec. 6. Upon the petition of an interested person, a court shallreform a disposition in the manner that most closely preserves thetransferor's plan of distribution and is within the ninety (90) yearsallowed by section 3(a)(2), 3(b)(2), or 3(c)(2) of this chapter if:
(1) a nonvested property interest or a power of appointmentbecomes invalid under section 3 of this chapter;
(2) a class gift is not but might become invalid under section 3of this chapter and the time has arrived when the share of anyclass member is to take effect in possession or enjoyment; or
(3) a nonvested property interest that is not validated by section3(a)(1) of this chapter can vest but not within ninety (90) yearsafter the interest's creation.
As added by P.L.2-2002, SEC.2.