The GST Tax Tail is Killing the Rule Against Perpetuities

8 Pages Posted: 1 Feb 2010  

Ira Mark Bloom

Albany Law School

Date Written: 2000

Abstract

This Article examines the affect the generation-skipping transfer (GST) tax system has on the Rule against Perpetuities. The author asserts that the Rule Against Perpetuities is being repealed by states not because it is an ancient rule which no longer serves any social policy, but rather so that wealthy individuals will be able to create perpetual dynasty trusts to exploit the GST tax system. This Article shows that states, in the blind race to facilitate the exploitation of the GST exemption by perpetual dynasty trusts, have overlooked the non-tax societal reasons for some rule against perpetuities. The author evaluates the positive and negative consequences of the perpetuities repeal movement, concluding that the GST tax tail is sadly killing a vitally important societal rule that limits unacceptable control by the dead hand.

Keywords: GST tax tail, generation-skipping transfer tax system, Rule against Perpetuities, Repeal, perpetual dynasty trusts

Suggested Citation

Bloom, Ira Mark, The GST Tax Tail is Killing the Rule Against Perpetuities (2000). Tax Notes, Vol. 87, No. 4, 2000. Available at SSRN: https://ssrn.com/abstract=1545844

Ira Mark Bloom (Contact Author)

Albany Law School ( email )

80 New Scotland Avenue
Albany, NY 12208
United States

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