Unconstitutional Perpetual Trusts
Steven J. Horowitz
Sidley Austin LLP
Robert H. Sitkoff
Harvard Law School
August 8, 2014
67 Vanderbilt Law Review, Forthcoming
Harvard Public Law Working Paper No. 14-27
Perpetual trusts are an established feature of today’s estate planning firmament. Yet little-noticed provisions in the constitutions of nine states, including in five states that purport to allow perpetual trusts by statute, proscribe “perpetuities.” This Article examines those provisions in light of the meaning of “perpetuity” as a legal term of art across history. We consider the constitutionality of perpetual trust statutes in states that have a constitutional ban on perpetuities and whether courts in states with such a ban may give effect to a perpetual trust settled in another state. Because text, purpose, and history all suggest that the constitutional perpetuities bans were meant to proscribe entails, whether in form or in function, and because a perpetual trust is in purpose and in function an entail, we conclude that recognition of perpetual trusts is prohibited in states with a constitutional perpetuities ban.
Number of Pages in PDF File: 54
Keywords: perpetuities, perpetuity, entail, fee tail, jurisdictional competition, state constitution, perpetual trust, dynasty trust
JEL Classification: K11, K34
Date posted: June 18, 2014 ; Last revised: November 22, 2014
© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 1.218 seconds