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What does the perpetuities savings clause in a revocable trust mean?

What does the perpetuities savings clause in a revocable trust mean?

Q: What is the date of a trust created under a will?

The date of a trust created under a will is generally the date the will is executed, unless the will specifies a different date for the trust to take effect. The trust only becomes operational after the testator's death, at which point the assets are transferred to the trust as outlined in the will.

Full question:

In a revocable trust under the "Perpetuities Savings Clause" it is stated: All trusts created under this instrument shall terminate 21 years after the death of the last survivor of the issue of the settlor living on the date of the death of the settlor. What is the meaning of this ?

Category: Courts
Subcategory: Legal Definitions
Date: 04/07/2025
State: California

Answer:

The clause you mentioned sets a time limit for the trusts created under the revocable trust. Specifically, it states that these trusts will end 21 years after the death of the last surviving descendant of the settlor who was alive at the time of the settlor's death. This is in line with the rule against perpetuities, which aims to prevent trusts from lasting indefinitely. Essentially, it ensures that the trust will not be in effect forever and will have a defined termination date.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What happens to a revocable living trust after death?

After the death of the settlor, a revocable living trust typically becomes irrevocable. The assets in the trust are then managed according to the terms outlined in the trust document. The successor trustee takes over management and distribution of the assets to the beneficiaries, as specified in the trust. This process can help avoid probate, allowing for a more streamlined transfer of assets.

What is the date of a trust created under a will?

What is the rule against perpetuities explained simply?

The rule against perpetuities is a legal principle that prevents property interests from being controlled for an indefinite period. Specifically, it states that certain interests must vest, if at all, within 21 years after the death of a relevant person. This rule ensures that property does not remain tied up in trusts or conditions forever.

What is the savings clause in a will?

A savings clause in a will is a provision that aims to prevent the will from being invalidated due to potential issues, such as a beneficiary predeceasing the testator. It typically clarifies that if a specific provision is found invalid, the remaining provisions will still be enforceable, ensuring the testator's intentions are upheld.

What is the Rule Against Perpetuities savings clause?

The Rule Against Perpetuities savings clause is a provision that modifies a trust or will to ensure compliance with the rule against perpetuities. It typically specifies that if any part of the trust is deemed to violate this rule, that part will be reformed or limited to meet legal requirements, thus preserving the trust's validity.

What is the Rule Against Perpetuities for dynasty trusts?

The Rule Against Perpetuities applies to dynasty trusts by limiting how long the trust can last. While dynasty trusts are designed to benefit multiple generations, they must still comply with the rule, which typically means that the trust must terminate within a specified time frame, often 21 years after the death of a relevant descendant.