2006 Minnesota Statutes

CHAPTER 501A. STATUTORY RULE AGAINST PERPETUITIES

501A.01 WHEN NONVESTED INTEREST, POWERS OF APPOINTMENT ARE
INVALID; EXCEPTIONS.
(a) A nonvested property interest is invalid unless:
(1) when the interest is created, it is certain to vest or terminate no later than 21 years after
the death of an individual then alive; or
(2) the interest either vests or terminates within 90 years after its creation.
(b) A general power of appointment not presently exercisable because of a condition
precedent is invalid unless:
(1) when the power is created, the condition precedent is certain to be satisfied or become
impossible to satisfy no later than 21 years after the death of an individual then alive; or
(2) the condition precedent either is satisfied or becomes impossible to satisfy within
90 years after its creation.
(c) A nongeneral power of appointment or a general testamentary power of appointment is
invalid unless:
(1) when the power is created, it is certain to be irrevocably exercised or otherwise to
terminate no later than 21 years after the death of an individual then alive; or
(2) the power is irrevocably exercised or otherwise terminates within 90 years after its
creation.
(d) In determining whether a nonvested property interest or a power of appointment is
valid under paragraph (a), clause (1), paragraph (b), clause (1), or paragraph (c), clause (1), the
possibility that a child will be born to an individual after the individual's death is disregarded.
(e) If, in measuring a period from the creation of a trust or other property arrangement,
language in a governing instrument seeks to:
(1) disallow the vesting or termination of any interest trust beyond;
(2) postpone the vesting or termination of any interest or trust until; or
(3) operate in effect in any similar fashion upon,
the later of the expiration of a period of time not exceeding 21 years after the death of the survivor
of specified lives in being at the creation of the trust or other property arrangement, or the
expiration of a period of time that exceeds or might exceed 21 years after the death of the survivor
of lives in being at the creation of the trust or other property arrangement;
that language is inoperative to the extent it produces a period of time that exceeds 21 years after
the death of the survivor of the specified lives.
History: 1987 c 60 s 1; 2002 c 347 s 1

501A.02 WHEN NONVESTED PROPERTY INTEREST OR POWER OF APPOINTMENT
CREATED.
(a) Except as provided in subsections (b) and (c) and in section 501A.05, subsection (a), 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 sections 501A.01 to 501A.07, if there is a person who alone can exercise
a power created by a governing instrument to become the unqualified beneficial owner of (i) a
nonvested property interest or (ii) a property interest subject to a power of appointment described
in section 501A.01, subsection (b) or (c), the nonvested property interest or power of appointment
is created when the power to become the unqualified beneficial owner terminates.
(c) For purposes of sections 501A.01 to 501A.07, 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.
History: 1987 c 60 s 2

501A.03 REFORMATION.
Upon the petition of an interested person, a court shall reform a disposition in the manner
that most closely approximates the transferor's manifested plan of distribution and is within the 90
years allowed by section 501A.01, subsection (a)(2), (b)(2), or (c)(2) if:
(1) a nonvested property interest or a power of appointment becomes invalid under section
501A.01 (statutory rule against perpetuities);
(2) a class gift is not but might become invalid under section 501A.01 (statutory rule against
perpetuities) 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 501A.01, subsection (a)(1)
can vest but not within 90 years after its creation.
History: 1987 c 60 s 3

501A.04 EXCLUSIONS FROM STATUTORY RULE.
Section 501A.01 (statutory rule against perpetuities) does not apply to:
(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 (i) a
premarital or postmarital agreement, (ii) a separation or divorce settlement, (iii) a spouse's
election, (iv) a similar arrangement arising out of a prospective, existing, or previous marital
relationship between the parties, (v) a contract to make or not to revoke a will or trust, (vi) a
contract to exercise or not to exercise a power of appointment, (vii) a transfer in satisfaction of a
duty of support, or (viii) 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, profit sharing, stock bonus, health,
disability, death benefit, income deferral, or other current or deferred benefit plan for one 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; or
(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 statute of this state.
History: 1987 c 60 s 4

501A.05 PROSPECTIVE APPLICATION.
(a) Except as extended by subsection (b), sections 501A.01 to 501A.07 apply to a nonvested
property interest or a power of appointment that is created after December 31, 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 January
1, 1992, and is determined in a judicial proceeding, commenced after December 31, 1991, to
violate this state's rule against perpetuities as that rule existed before January 1, 1992, a court
upon the petition of an interested person may reform the disposition in the manner that most
closely approximates the transferor's manifested 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.
History: 1987 c 60 s 5; 1988 c 482 s 1; 1989 c 340 art 3 s 1; 1990 c 581 s 1

501A.06 SUPERSEDES COMMON LAW RULE.
Sections 501A.01 to 501A.07 supersede the rule of the common law known as the rule
against perpetuities.
History: 1987 c 60 s 6; 1989 c 340 art 2 s 2

501A.07 SHORT TITLE.
Sections 501A.01 to 501A.07 may be cited as the Uniform Statutory Rule Against
Perpetuities.
History: 1987 c 60 s 7