[ Back ] [ Bottom ]
90_HB1432
765 ILCS 305/4 from Ch. 30, par. 194
Amends the Statute Concerning Perpetuities. Provides
that the rule against perpetuities shall not apply to trusts
created by an inter-vivos instrument, executed or amended on
or after January 1, 1998, or to trusts created by will or
through the exercise of a testamentary power of appointment
where the testator has died on or after January 1, 1998.
Effective immediately.
LRB9004789SMdv
LRB9004789SMdv
1 AN ACT to amend the Statute Concerning Perpetuities by
2 changing Section 4.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Statute Concerning Perpetuities is
6 amended by changing Section 4 as follows:
7 (765 ILCS 305/4) (from Ch. 30, par. 194)
8 Sec. 4. Application of the Rule Against Perpetuities.
9 (a) The rule against perpetuities shall not apply:
10 (1) to any disposition of property or interest therein
11 which, at the effective date of this Act, does not violate,
12 or is exempted by statute from the operation of, the common
13 law rule against perpetuities;
14 (2) to powers of a trustee to sell, lease or mortgage
15 property or to powers which relate to the administration or
16 management of trust assets, including, without limitation,
17 discretionary powers of a trustee to determine what receipts
18 constitute principal and what receipts constitute income and
19 powers to appoint a successor trustee;
20 (3) to mandatory powers of a trustee to distribute
21 income, or to discretionary powers of a trustee to distribute
22 principal prior to termination of a trust, to a beneficiary
23 having an interest in the principal which is irrevocably
24 vested in quality and quantity;
25 (4) to discretionary powers of a trustee to allocate
26 income and principal among beneficiaries, but no exercise of
27 any such power after the expiration of the period of the rule
28 against perpetuities is valid;
29 (5) to leases to commence in the future or upon the
30 happening of a future event, but no such lease shall be valid
31 unless the term thereof actually commences in possession
-2- LRB9004789SMdv
1 within 40 years from the date of execution of the lease;
2 (6) to commitments (A) by a lessor to enter into a lease
3 with a subtenant or with the holder of a leasehold mortgage
4 or (B) by a lessee or sublessee to enter into a lease with
5 the holder of a mortgage; nor
6 (7) to options in gross or to preemptive rights in the
7 nature of a right of first refusal, but no option in gross
8 shall be valid for more than 40 years from the date of its
9 creation.
10 (8) to trusts created by an inter-vivos instrument,
11 including an inter-vivos instrument which exercises a power
12 of appointment, executed or amended on or after January 1,
13 1998 or to trusts created by will, or through the exercise of
14 a testamentary power of appointment, where the testator in
15 either case has died on or after January 1, 1998.
16 (b) The period of the rule against perpetuities shall
17 not commence to run in connection with any disposition of
18 property or interest therein, and no instrument shall be
19 regarded as becoming effective for purposes of the rule
20 against perpetuities, and no interest or power shall be
21 deemed to be created for purposes of the rule against
22 perpetuities as long as, by the terms of the instrument, the
23 maker of the instrument has the power to revoke the
24 instrument or to transfer or direct to be transferred to
25 himself the entire legal and equitable ownership of the
26 property or interest therein.
27 (c) In determining whether an interest violates the rule
28 against perpetuities:
29 (1) it shall be presumed (A) that the interest was
30 intended to be valid, (B) in the case of an interest
31 conditioned upon the probate of a will, the appointment of an
32 executor, administrator or trustee, the completion of the
33 administration of an estate, the payment of debts, the sale
34 or distribution of property, the determination of federal or
-3- LRB9004789SMdv
1 state tax liabilities or the happening of any administrative
2 contingency, that the contingency must occur, if at all,
3 within the period of the rule against perpetuities, and (C)
4 where the instrument creates an interest in the "widow",
5 "widower", or "spouse" of another person, that the maker of
6 the instrument intended to refer to a person who was living
7 at the date that the period of the rule against perpetuities
8 commences to run;
9 (2) where any interest, but for this subparagraph (c)
10 (2), would be invalid because it is made to depend upon any
11 person attaining or failing to attain an age in excess of 21
12 years, the age specified shall be reduced to 21 years as to
13 every person to whom the age contingency applies;
14 (3) if, notwithstanding the provisions of subparagraphs
15 (c) (1) and (2) of this Section, the validity of any interest
16 depends upon the possibility of the birth or adoption of a
17 child, (A) no person shall be deemed capable of having a
18 child until he has attained the age of 13 years, (B) any
19 person who has attained the age of 65 years shall be deemed
20 incapable of having a child, (C) evidence shall be admissible
21 as to the incapacity of having a child by a living person who
22 has not attained the age of 65 years, and (D) the possibility
23 of having a child or more remote descendant by adoption shall
24 be disregarded.
25 (d) Subparagraphs (a) (2), (3) and (6) and paragraph (b)
26 of this Section shall be deemed to be declaratory of the law
27 prevailing in this State at the effective date of this Act.
28 (Source: P.A. 76-1428.)
29 Section 99. Effective date. This Act takes effect upon
30 becoming law.
[ Top ]