Text: SSB01063 Text: SSB01065 Text: SSB01000 - SSB01099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 557.7, Code 2003, is amended to read as 1 2 follows: 1 3 557.7 CONTINGENT REMAINDERS. 1 4AExcept as provided in section 558.68A, a contingent 1 5 remainder shall take effect, notwithstanding any determination 1 6 of the particular estate, in the same manner in which it would 1 7 have taken effect if it had been an executory devise or a 1 8 springing or shifting use, and shall, as well as such 1 9 limitations, be subject to the rule respecting remoteness 1 10 known as the rule against perpetuities, exclusive of any other1 11supposed rule respecting limitations to successive generations1 12or double possibilities. 1 13 Sec. 2. NEW SECTION. 558.68A EXCEPTION TO RULE AGAINST 1 14 PERPETUITIES. 1 15 1. Notwithstanding section 558.68, a rule of law against 1 16 perpetuities, a suspension of the power of alienation of the 1 17 title to property, or a law restricting or limiting the 1 18 duration of trusts shall not apply with respect to any 1 19 interest in real or personal property held in trust if the 1 20 instrument creating the trust specifically states that such 1 21 rule or the provisions of section 558.68 shall not apply to 1 22 the trust and if either the trustee of the trust has unlimited 1 23 power to sell all trust assets, or one or more persons, one of 1 24 whom may be the trustee, has unlimited power to terminate the 1 25 entire trust. 1 26 2. A trust of real or personal property created by an 1 27 employer as part of a stock bonus plan, pension plan, 1 28 disability or death benefit plan, or profit sharing plan, for 1 29 the benefit of some or all the employer's employees, to which 1 30 contributions are made by the employer or employees, or both, 1 31 for the purposes of distributing to the employees or their 1 32 beneficiaries the earnings or the principal, or both, of such 1 33 trust is not invalid as violating the rule against 1 34 perpetuities or any other law restricting or limiting the 1 35 duration of trusts; but the trust may continue for the time 2 1 that is necessary to accomplish the purposes for which it was 2 2 created. 2 3 3. Subsection 1 shall be effective for interests in real 2 4 or personal property in trust created by an inter vivos or 2 5 testamentary trust or will executed on or after July 1, 2003, 2 6 or pursuant to the exercise of a general power of appointment 2 7 on or after July 1, 2003. For the purposes of this 2 8 subsection, "general power of appointment" means a power that 2 9 is exercisable in favor of the individual possessing the 2 10 power, the person's estate, the person's creditors, or the 2 11 creditors of the person's estate. 2 12 EXPLANATION 2 13 This bill creates an exception to the statutory rule 2 14 against perpetuities codified in Code section 558.68, which is 2 15 a legal rule related to invalidating interests in property 2 16 that are intended to belong to a person at some point in the 2 17 future, but for which the actual determination of ownership 2 18 cannot or will not be accomplished within a specified period 2 19 of time. The purpose of the rule is to keep property from 2 20 being frozen in trust beyond a certain period of years. 2 21 The bill allows a creator of a trust to suspend, explicitly 2 22 in the trust document, the rule from applying to a particular 2 23 trust, but only if the trustee has the power to sell all trust 2 24 assets or if one or more people, including the trustee, has 2 25 the power to terminate the trust. 2 26 The bill further allows suspension of the rule in 2 27 situations where an employer creates a stock bonus plan, 2 28 pension plan, disability or death benefit plan, or profit 2 29 sharing plan, in trust, for the benefit of the employer's 2 30 employees, for the purpose of distributing to the employees or 2 31 their beneficiaries earnings or principal or both. 2 32 This exception applies to all interests in real or personal 2 33 property by testamentary or inter vivos trust or will, or to 2 34 the exercise of a general power of appointment, executed on or 2 35 created after July 1, 2003. 3 1 LSB 1918XC 80 3 2 rh/sh/8
Text: SSB01063 Text: SSB01065 Text: SSB01000 - SSB01099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
© 2003 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Tue Feb 18 11:45:08 CST 2003
URL: /DOCS/GA/80GA/Legislation/SSB/01000/SSB01064/030210.html
jhf