IC 32-17-8
Chapter 8. Uniform Statutory Rule Against Perpetuities
IC 32-17-8-1 Application of chapter; reformation of disposition created before
May 8, 1991
Sec. 1. (a) Except as provided in subsection (b), this chapter
applies to a nonvested property interest or a power of appointment
that is created on or after May 8, 1991. For purposes of this section,
a nonvested property interest or a power of appointment created by
the exercise of a power of appointment is created when the power is
irrevocably exercised or when a revocable exercise becomes
irrevocable.
(b) If a nonvested property interest or a power of appointment was
created before May 8, 1991, and:
(1) is determined in a judicial proceeding commenced on or
after May 8, 1991, to violate this state's rule against perpetuities
as that rule existed before May 8, 1991; or
(2) may violate this state's rule against perpetuities as that rule
existed before May 8, 1991;
a court upon the petition of an interested person shall reform the
disposition by inserting a savings clause that most closely preserves
the transferor's plan of distribution and is within the limits of the rule
against perpetuities applicable when the nonvested property interest
or 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 appointment
arising out of a nondonative transfer, except a nonvested
property interest or a power of appointment arising out of any
of 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, an
existing, or a previous marital relationship between the
parties.
(E) A contract to make or not to revoke a will or trust.
(F) A contract to exercise or not to exercise a power of
appointment.
(G) A transfer in satisfaction of a duty of support.
(H) A reciprocal transfer.
(2) A fiduciary's power relating to the administration or
management of assets, including the power of a fiduciary to
sell, lease, or mortgage property, and the power of a fiduciary
to determine principal and income.
(3) A power to appoint a fiduciary.
(4) A discretionary power of a trustee to distribute principal
before termination of a trust to a beneficiary having an
indefeasibly vested interest in the income and principal.
(5) A nonvested property interest held by a charity, government,
or governmental agency or subdivision, if the nonvested
property interest is preceded by an interest held by another
charity, government, or governmental agency or subdivision.
(6) A nonvested property interest in or a power of appointment
with respect to a trust or other property arrangement forming
part of a pension, a profit sharing, a stock bonus, a health, a
disability, a death benefit, an income deferral, or other current
or deferred benefit plan for one (1) or more employees,
independent contractors, or their beneficiaries or spouses, to
which contributions are made for the purpose of distributing to
or for the benefit of the participants or their beneficiaries or
spouses the property, income, or principal in the trust or other
property arrangement, except a nonvested property interest or
a power of appointment that is created by an election of a
participant or a beneficiary or spouse.
(7) A property interest, power of appointment, or arrangement
that was not subject to the common law rule against perpetuities
or is excluded by another Indiana statute.
(8) A:
(A) provision for the accumulation of an amount of the
income 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 wholly
or in part to the principal of the trust of stock dividends or
stock 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 or
terminate not later than twenty-one (21) years after the death of
an 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 exercisable
because of a condition precedent is valid if:
(1) when the power is created, the condition precedent is certain
to be satisfied or become impossible to satisfy not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the condition precedent either is satisfied or becomes
impossible to satisfy within ninety (90) years after the condition
precedent's creation.
(c) A nongeneral power of appointment or a general testamentary
power of appointment is valid if:
(1) when the power is created, the power is certain to be
irrevocably exercised or otherwise to terminate not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the power is irrevocably exercised or otherwise terminates
within ninety (90) years after the power's creation.
(d) In determining whether a nonvested property interest or a
power of appointment is valid under subsection (a)(1), (b)(1), or
(c)(1), the possibility that a child will be born to an individual after
the 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 of
creation
Sec. 4. (a) Except as provided in subsections (b) and (c) and in
section 1(a) of this chapter, the time of creation of a nonvested
property interest or a power of appointment is determined under
general principles of property law.
(b) For purposes of this chapter, if there is a person who alone can
exercise a power created by a governing instrument to become the
unqualified beneficial owner of:
(1) a nonvested property interest; or
(2) a property interest subject to a power of appointment
described in section 3(b) or 3(c) of this chapter;
the nonvested property interest or power of appointment is created
when the power to become the unqualified beneficial owner
terminates.
(c) For purposes of this chapter, a nonvested property interest or
a power of appointment arising from a transfer of property to a
previously funded trust or other existing property arrangement is
created when the nonvested property interest or power of
appointment 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; portion
invalid; construction
Sec. 5. (a) This section applies to a clause in a governing
instrument that:
(1) purports to:
(A) postpone the vesting or termination of any interest or
trust until;
(B) disallow the vesting or termination of any interest or
trust beyond;
(C) require all interests or trusts to vest or terminate not later
than; 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 the
death of the survivor of lives in being at the creation of the
trust or other property arrangement.
(B) The death of, or the expiration of a period not exceeding
twenty-one (21) years after the death of, the survivor of
specified lives in being at the creation of the trust or other
property arrangement.
(b) If a clause described in subsection (a) appears in an instrument
creating a trust or other property arrangement, then, in measuring a
period from the creation of a trust or other property arrangement, the
portion of the clause that pertains to the period that exceeds
twenty-one (21) years or that might exceed twenty-one (21) years
after the death of the survivor of lives in being at the creation of the
trust or other property arrangement is not valid. The court shall
construe 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 trust
or 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 shall
reform a disposition in the manner that most closely preserves the
transferor's plan of distribution and is within the ninety (90) years
allowed 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 appointment
becomes invalid under section 3 of this chapter;
(2) a class gift is not but might become invalid under section 3
of this chapter and the time has arrived when the share of any
class member is to take effect in possession or enjoyment; or
(3) a nonvested property interest that is not validated by section
3(a)(1) of this chapter can vest but not within ninety (90) years
after the interest's creation. As added by P.L.2-2002, SEC.2.
IC 32-17-8
Chapter 8. Uniform Statutory Rule Against Perpetuities
IC 32-17-8-1 Application of chapter; reformation of disposition created before
May 8, 1991
Sec. 1. (a) Except as provided in subsection (b), this chapter
applies to a nonvested property interest or a power of appointment
that is created on or after May 8, 1991. For purposes of this section,
a nonvested property interest or a power of appointment created by
the exercise of a power of appointment is created when the power is
irrevocably exercised or when a revocable exercise becomes
irrevocable.
(b) If a nonvested property interest or a power of appointment was
created before May 8, 1991, and:
(1) is determined in a judicial proceeding commenced on or
after May 8, 1991, to violate this state's rule against perpetuities
as that rule existed before May 8, 1991; or
(2) may violate this state's rule against perpetuities as that rule
existed before May 8, 1991;
a court upon the petition of an interested person shall reform the
disposition by inserting a savings clause that most closely preserves
the transferor's plan of distribution and is within the limits of the rule
against perpetuities applicable when the nonvested property interest
or 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 appointment
arising out of a nondonative transfer, except a nonvested
property interest or a power of appointment arising out of any
of 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, an
existing, or a previous marital relationship between the
parties.
(E) A contract to make or not to revoke a will or trust.
(F) A contract to exercise or not to exercise a power of
appointment.
(G) A transfer in satisfaction of a duty of support.
(H) A reciprocal transfer.
(2) A fiduciary's power relating to the administration or
management of assets, including the power of a fiduciary to
sell, lease, or mortgage property, and the power of a fiduciary
to determine principal and income.
(3) A power to appoint a fiduciary.
(4) A discretionary power of a trustee to distribute principal
before termination of a trust to a beneficiary having an
indefeasibly vested interest in the income and principal.
(5) A nonvested property interest held by a charity, government,
or governmental agency or subdivision, if the nonvested
property interest is preceded by an interest held by another
charity, government, or governmental agency or subdivision.
(6) A nonvested property interest in or a power of appointment
with respect to a trust or other property arrangement forming
part of a pension, a profit sharing, a stock bonus, a health, a
disability, a death benefit, an income deferral, or other current
or deferred benefit plan for one (1) or more employees,
independent contractors, or their beneficiaries or spouses, to
which contributions are made for the purpose of distributing to
or for the benefit of the participants or their beneficiaries or
spouses the property, income, or principal in the trust or other
property arrangement, except a nonvested property interest or
a power of appointment that is created by an election of a
participant or a beneficiary or spouse.
(7) A property interest, power of appointment, or arrangement
that was not subject to the common law rule against perpetuities
or is excluded by another Indiana statute.
(8) A:
(A) provision for the accumulation of an amount of the
income 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 wholly
or in part to the principal of the trust of stock dividends or
stock 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 or
terminate not later than twenty-one (21) years after the death of
an 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 exercisable
because of a condition precedent is valid if:
(1) when the power is created, the condition precedent is certain
to be satisfied or become impossible to satisfy not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the condition precedent either is satisfied or becomes
impossible to satisfy within ninety (90) years after the condition
precedent's creation.
(c) A nongeneral power of appointment or a general testamentary
power of appointment is valid if:
(1) when the power is created, the power is certain to be
irrevocably exercised or otherwise to terminate not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the power is irrevocably exercised or otherwise terminates
within ninety (90) years after the power's creation.
(d) In determining whether a nonvested property interest or a
power of appointment is valid under subsection (a)(1), (b)(1), or
(c)(1), the possibility that a child will be born to an individual after
the 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 of
creation
Sec. 4. (a) Except as provided in subsections (b) and (c) and in
section 1(a) of this chapter, the time of creation of a nonvested
property interest or a power of appointment is determined under
general principles of property law.
(b) For purposes of this chapter, if there is a person who alone can
exercise a power created by a governing instrument to become the
unqualified beneficial owner of:
(1) a nonvested property interest; or
(2) a property interest subject to a power of appointment
described in section 3(b) or 3(c) of this chapter;
the nonvested property interest or power of appointment is created
when the power to become the unqualified beneficial owner
terminates.
(c) For purposes of this chapter, a nonvested property interest or
a power of appointment arising from a transfer of property to a
previously funded trust or other existing property arrangement is
created when the nonvested property interest or power of
appointment 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; portion
invalid; construction
Sec. 5. (a) This section applies to a clause in a governing
instrument that:
(1) purports to:
(A) postpone the vesting or termination of any interest or
trust until;
(B) disallow the vesting or termination of any interest or
trust beyond;
(C) require all interests or trusts to vest or terminate not later
than; 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 the
death of the survivor of lives in being at the creation of the
trust or other property arrangement.
(B) The death of, or the expiration of a period not exceeding
twenty-one (21) years after the death of, the survivor of
specified lives in being at the creation of the trust or other
property arrangement.
(b) If a clause described in subsection (a) appears in an instrument
creating a trust or other property arrangement, then, in measuring a
period from the creation of a trust or other property arrangement, the
portion of the clause that pertains to the period that exceeds
twenty-one (21) years or that might exceed twenty-one (21) years
after the death of the survivor of lives in being at the creation of the
trust or other property arrangement is not valid. The court shall
construe 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 trust
or 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 shall
reform a disposition in the manner that most closely preserves the
transferor's plan of distribution and is within the ninety (90) years
allowed 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 appointment
becomes invalid under section 3 of this chapter;
(2) a class gift is not but might become invalid under section 3
of this chapter and the time has arrived when the share of any
class member is to take effect in possession or enjoyment; or
(3) a nonvested property interest that is not validated by section
3(a)(1) of this chapter can vest but not within ninety (90) years
after the interest's creation. As added by P.L.2-2002, SEC.2.
IC 32-17-8
Chapter 8. Uniform Statutory Rule Against Perpetuities
IC 32-17-8-1 Application of chapter; reformation of disposition created before
May 8, 1991
Sec. 1. (a) Except as provided in subsection (b), this chapter
applies to a nonvested property interest or a power of appointment
that is created on or after May 8, 1991. For purposes of this section,
a nonvested property interest or a power of appointment created by
the exercise of a power of appointment is created when the power is
irrevocably exercised or when a revocable exercise becomes
irrevocable.
(b) If a nonvested property interest or a power of appointment was
created before May 8, 1991, and:
(1) is determined in a judicial proceeding commenced on or
after May 8, 1991, to violate this state's rule against perpetuities
as that rule existed before May 8, 1991; or
(2) may violate this state's rule against perpetuities as that rule
existed before May 8, 1991;
a court upon the petition of an interested person shall reform the
disposition by inserting a savings clause that most closely preserves
the transferor's plan of distribution and is within the limits of the rule
against perpetuities applicable when the nonvested property interest
or 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 appointment
arising out of a nondonative transfer, except a nonvested
property interest or a power of appointment arising out of any
of 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, an
existing, or a previous marital relationship between the
parties.
(E) A contract to make or not to revoke a will or trust.
(F) A contract to exercise or not to exercise a power of
appointment.
(G) A transfer in satisfaction of a duty of support.
(H) A reciprocal transfer.
(2) A fiduciary's power relating to the administration or
management of assets, including the power of a fiduciary to
sell, lease, or mortgage property, and the power of a fiduciary
to determine principal and income.
(3) A power to appoint a fiduciary.
(4) A discretionary power of a trustee to distribute principal
before termination of a trust to a beneficiary having an
indefeasibly vested interest in the income and principal.
(5) A nonvested property interest held by a charity, government,
or governmental agency or subdivision, if the nonvested
property interest is preceded by an interest held by another
charity, government, or governmental agency or subdivision.
(6) A nonvested property interest in or a power of appointment
with respect to a trust or other property arrangement forming
part of a pension, a profit sharing, a stock bonus, a health, a
disability, a death benefit, an income deferral, or other current
or deferred benefit plan for one (1) or more employees,
independent contractors, or their beneficiaries or spouses, to
which contributions are made for the purpose of distributing to
or for the benefit of the participants or their beneficiaries or
spouses the property, income, or principal in the trust or other
property arrangement, except a nonvested property interest or
a power of appointment that is created by an election of a
participant or a beneficiary or spouse.
(7) A property interest, power of appointment, or arrangement
that was not subject to the common law rule against perpetuities
or is excluded by another Indiana statute.
(8) A:
(A) provision for the accumulation of an amount of the
income 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 wholly
or in part to the principal of the trust of stock dividends or
stock 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 or
terminate not later than twenty-one (21) years after the death of
an 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 exercisable
because of a condition precedent is valid if:
(1) when the power is created, the condition precedent is certain
to be satisfied or become impossible to satisfy not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the condition precedent either is satisfied or becomes
impossible to satisfy within ninety (90) years after the condition
precedent's creation.
(c) A nongeneral power of appointment or a general testamentary
power of appointment is valid if:
(1) when the power is created, the power is certain to be
irrevocably exercised or otherwise to terminate not later than
twenty-one (21) years after the death of an individual then alive;
or
(2) the power is irrevocably exercised or otherwise terminates
within ninety (90) years after the power's creation.
(d) In determining whether a nonvested property interest or a
power of appointment is valid under subsection (a)(1), (b)(1), or
(c)(1), the possibility that a child will be born to an individual after
the 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 of
creation
Sec. 4. (a) Except as provided in subsections (b) and (c) and in
section 1(a) of this chapter, the time of creation of a nonvested
property interest or a power of appointment is determined under
general principles of property law.
(b) For purposes of this chapter, if there is a person who alone can
exercise a power created by a governing instrument to become the
unqualified beneficial owner of:
(1) a nonvested property interest; or
(2) a property interest subject to a power of appointment
described in section 3(b) or 3(c) of this chapter;
the nonvested property interest or power of appointment is created
when the power to become the unqualified beneficial owner
terminates.
(c) For purposes of this chapter, a nonvested property interest or
a power of appointment arising from a transfer of property to a
previously funded trust or other existing property arrangement is
created when the nonvested property interest or power of
appointment 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; portion
invalid; construction
Sec. 5. (a) This section applies to a clause in a governing
instrument that:
(1) purports to:
(A) postpone the vesting or termination of any interest or
trust until;
(B) disallow the vesting or termination of any interest or
trust beyond;
(C) require all interests or trusts to vest or terminate not later
than; 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 the
death of the survivor of lives in being at the creation of the
trust or other property arrangement.
(B) The death of, or the expiration of a period not exceeding
twenty-one (21) years after the death of, the survivor of
specified lives in being at the creation of the trust or other
property arrangement.
(b) If a clause described in subsection (a) appears in an instrument
creating a trust or other property arrangement, then, in measuring a
period from the creation of a trust or other property arrangement, the
portion of the clause that pertains to the period that exceeds
twenty-one (21) years or that might exceed twenty-one (21) years
after the death of the survivor of lives in being at the creation of the
trust or other property arrangement is not valid. The court shall
construe 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 trust
or 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 shall
reform a disposition in the manner that most closely preserves the
transferor's plan of distribution and is within the ninety (90) years
allowed 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 appointment
becomes invalid under section 3 of this chapter;
(2) a class gift is not but might become invalid under section 3
of this chapter and the time has arrived when the share of any
class member is to take effect in possession or enjoyment; or
(3) a nonvested property interest that is not validated by section
3(a)(1) of this chapter can vest but not within ninety (90) years
after the interest's creation. As added by P.L.2-2002, SEC.2.
