Since 1986, 23 jurisdictions in the United States have abrogated or modified the rule against perpetuities, the injunction that prevents trusts from continuing without end. More states are considering doing so. What's driving this fundamental shift is each state's desire to attract trust business — or at least prevent trusts from migrating to states that have altered their rules.
The new perpetuities laws allow trusts to continue for decades, centuries and in some jurisdictions, perhaps forever. The advantages for clients are substantial. Families can have the use of trust assets and income from it, but don't ever have to own the property outright. That means the assets don't have to be included in an estate and subject to transfer tax.
If a client owns a ranch or any kind of business, property, stocks or bonds, for example, it may make more sense to hold those assets in a perpetual trust, so each successive generation can influence decisions about the assets, derive income from them, and even work with the trustee to buy and sell them. If the assets were instead willed from parent to child to grandchild, estate taxes would have to be paid each time ownership changed.
The complex new perpetuities regimes being created demandcareful study. But it's critical to simply be aware of the changing landscape. All the so-called “perpetuities jurisdictions” are not created equally.1 Advisors must be able to inform their clients about the problems and opportunities associated with creating trusts in each of them.2
Indeed, providing clients with sophisticated advice about the multi-jurisdictional and multi-generational options now available may even have risen to the level of ethical obligation. Don't be surprised to see a successful lawsuit against some hapless advisor who fails to give proper counsel about the panoply of options offered by perpetuities jurisdictions.
At press time, the perpetuities jurisdictions included Idaho, South Dakota and Wisconsin — the three that changed their rules before 1986 and are known as the bellwether states on this issue.3 The states that altered their perpetuities rules after 1986 are: Alaska, Arizona, Delaware, Colorado, District of Columbia, Florida, Illinois, Indiana, Maine, Maryland, Missouri, Nebraska, New Hampshire, New Jersey, Ohio, Rhode Island, Utah, Virginia, Washington and Wyoming.4 A number of others have proposed but so far failed to modify their rules, including Connecticut, Hawaii, Iowa, Kentucky, Nevada, New York, and Texas.5
Clients used to bestow trusts on their grandchildren, while giving their children the use and income of the trust assets. In this way, the property was included in one estate for tax purposes rather than two as it was passed down. To close that loophole, Congress passed the Generation Skipping Transfer (GST) Tax in 1986, imposing a tax on property transferred to “skip persons,” that is to say grandchildren or others beyond the next generation. States reacted by changing their rules against perpetuities to allow donors to keep assets untaxed in trusts for longer periods of time, if not forever.6
The common law rule against perpetuities forces assets to vest before 21 years plus “lives in being” from the time the interest in the trust was first created, which generally translated into a trust lasting about 80 or 90 years, depending on how long people lived. This rule was known to produce harsh and inequitable results when applied strictly because it held invalid unvested future interests to beneficiaries. If, for example, a grandfather established a trust and one of the beneficiaries was an as-yet unborn grandson. Unfortunately for the grandson, he would not inherit if it were possible he wouldn't vest in his beneficial interest in the trust until the clock had run out on the common law rule against perpetuities.
Many states adopted a so-called “wait and see” approach to the common law rule (wait and see if the grandson does in fact vest in time). Others adopted the Uniform Statutory Rule against Perpetuities (which allowed the period to be the longer of either 90 years or the common law rule).7 Both lessened the common law rule's harshness. But still the rule against perpetuities was criticized as an albatross and thought to be a fitting victim to modern forms of wealth.8
As anxious as states may be to keep trust business in their jurisdictions, a growing number of state lawmakers are reluctant to abolish the rule against perpetuities. In some states, there's a real fear that dynasties will be built and wealth may never change hands. In others, there are constitutional barriers to altering the rule.
As a result, some states have sought a compromise — to accommodate the need to stay competitive, while preserving elements of traditional law. They've devised other approaches, variously known as “term of years” and “opt-out.” Unfortunately, these half-measures create a host of problems.
In a 2003 Harvard Law Review note, Garrett Moritz outlined six approaches that then 15 jurisdictions had undertaken to create perpetual trusts.9
The first approach, adopted by seven states, shifts the “perpetuities inquiry from remoteness of vesting to suspension of the power to alienate.”10 States that take this tack generally have abrogated the rule against perpetuities. Trustees have been given the power to sell or distribute assets to statutorily prevent the suspension of alienation.11 Three bellwether states (South Dakota, Idaho, and Wisconsin) adopted this approach and found it very effective. Several others have followed their example, including Delaware, New Jersey, and Missouri. Alaska also went this route but imposed a 1,000 year power of appointment statute, which may effectively limit the duration of Alaska trusts.
The second approach is to abolish the rule as applied to trusts, but retain it in other situations.12 Several states retain the rule for all interests — unless those interests are specifically exempt (for example, for certain trusts where the trustee has certain powers such as the power to sell, distribute, or terminate a trust). The jurisdictions in this camp: Arizona, District of Columbia, Colorado, and Nebraska. This approach is troublesome, because the rule against perpetuities is the default statutory posture in these jurisdictions. While the power to sell, distribute, or terminate a trust prevents the suspension of alienation, these powers themselves do not create the requisite vesting for purposes of the rule against perpetuities, which remains intact in these jurisdictions. While not altogether clear, the likely result is that the state's default rule applies for purpose of the GST tax exemption.
A third method, the “term of years” approach, merely extends the perpetuities period.13 The Uniform Statutory Rule against Perpetuities is 90 years. Washington has pushed it to 150 years; Florida, to 360 years; and Utah and Wyoming, to 1,000 years.14 Several aspects of the “term of years” approach are worrisome.15 It is unclear whether merely extending the Uniform Statutory Rule against Perpetuities is effective for GST tax planning purposes. While it is true a trust may exist for the stated term of state law, it is less certain that the GST tax exemption allocation is not compromised when the term of the trust exceeds the 90-year statutory period (or other default period that may exist), especially if no alternative vesting mechanism is put in place. Perhaps most troublesome in “term of years” states, is that the grantor's heirs could face a constructive addition problem if a change in situs later becomes necessary, thus impairing any GST tax exemption or exclusion ratio that would otherwise be grand-fathered.16
A fourth method is to keep the rule intact as a default, but permit drafters to “opt out” of the rule,17 as Illinois, Indiana, Maine, Maryland, Ohio and Virginia have done. But, because these states' laws have not abrogated the rule against perpetuities, it is unclear (at best) whether this approach is effective. Rather, the state's choice of default rule, whether the common law or the uniform statutory rule against perpetuities, probably controls for purposes of the allocation of GST tax exemption in these jurisdictions. This raises an important distinction: There is a difference between whether a trust may continue for a period beyond the common law or stated rule against perpetuities, and whether the interests themselves are not subject to the rule for state and federal transfer tax purposes.
A fifth approach is to apply the traditional rule to real property, but exempt other assets altogether.18 For example, although Delaware has abrogated its rule against perpetuities, it has retained a special 110-year rule for real property interests.19 This is a hold-over from the concern over land holdings and the rule against suspension and alienation of powers under British Common Law. This approach creates difficulties for estates that have high concentrations of real property interests. Perhaps alternative vesting provisions can be a solution to this problem. Another solution would be to hold real property in business entities, which interests may be exempt under this regime. In some ways, the bellwether states have taken this approach with respect to the rule against suspension and alienation of powers.
Rhode Island provides yet another permutation in perpetuities laws. That state has completely abrogated the rule against perpetuities, without leaving any rule against alienation as a stop-gap.20 While Rhode Island's method certainly handles the timing issue associated with the rule against perpetuities, it leaves the vesting element open to challenge, and therefore may be unwise. It'd be better to handle the vesting problem statutorily, as the bellwether states have.
While these six categories are useful for a general understanding of today's perpetuities landscape, advisors must consider other state-specific factors when evaluating the most favorable trust situs:
The income tax treatment of resident and non-resident grantors and beneficiaries. Only five perpetuities states have no income tax: Alaska, Florida, South Dakota, Washington and Wyoming. Four tax their residents but do not tax non-residents:21 Delaware, Illinois, Ohio and Wisconsin.
The effectiveness of flexible trust planning and administration tools, including limited powers of appointment. Only the bellwether states of Idaho, South Dakota, and Wisconsin; and the later adopting states of Alaska, Delaware, Missouri, New Hampshire, and New Jersey have a clear advantage in this respect. All are clearly perpetual, but Alaska limits powers of appointment to 1,000 years. The power of appointment rules in the remaining jurisdictions may create problems with Internal Revenue Code Section 2041(a)(3) if powers are exercised beyond the default statute applicable in the state. In term-of-years states, the result is less clear, although the argument can be made that any exercise of a power within the statutory term must be exercised within the term of years limit as it relates to the creation of the trust, thus avoiding a triggering of Section 2041(a)(3). The answer to whether the power of appoint statute works in these jurisdictions is dependent on individual statutory interpretation.
The ability to change situs without triggering a constructive addition problem. The problem presented by change of situs is related to the allocation of GST tax exemption either upon the funding of the trust or at the close of the estate tax inclusion period (ETIP). Once GST tax exemption has been allocated to a trust, any material change to the nature of the beneficial interest might trigger a constructive addition, thereby eroding the GST tax inclusion ratio. Each of the jurisdictions have somewhat different perpetuities rules, except for the bellwether states of Idaho, South Dakota and Wisconsin, and the states of Alaska (with exception of the power of appointment statute), Delaware, Missouri, New Hampshire, and New Jersey. Although Rhode Island has no rule against perpetuities, it also has no vesting statute; thus, it's unclear whether Rhode Island is in the same class as the other states for change of situs purposes.
The presence of an effective “directed trust” statute. Only five states appear to have effective directed trust statutes. These facilitate the use of administrative trustees for situs purposes, and other fiduciaries, trust advisors, and the like for other purposes. Only Alaska, Colorado, Delaware, Illinois, and South Dakota have codified the directed trust.
The statutory acknowledgement of the role of “trust protector.” The presence of a trust protector provides greater flexibility for future generations as conditions change. Only Alaska, Delaware, Idaho, South Dakota, and Wyoming appear to have effective trust protector statutes.
The treatment of other non-resident fiduciaries doing business with the trust. Often clients want to use a number of trust advisors. But multiple trust advisors who do not reside in the perpetuities jurisdiction of choice creates contacts with other jurisdictions, with possible situs rule conflicts.
The situs rules under applicable law (including possible conflict-of-laws issues). Generally perpetuities jurisdictions mandate that trusts must be administered in the state of choice for the trusts to have their situs in that jurisdiction. These rules are established to define the quality and character of activities and minimum contacts required to establish situs in a state. When the rules are too weak, a trust actually may fall within the situs rules of competing jurisdictions, each having a justifiable claim to the trust, creating a possible conflict-of-laws problem. This may create income tax, GST tax, and other difficulties in the long term. When the rules are too rigid, trust business is driven to more accommodating jurisdictions.
Asset protection considerations. While all the perpetuities jurisdictions provide an added level of asset protection, several have adopted the so-called “self-settled trust” statutory scheme for grantors and their families. It's said that these rules let grantors have their cake and eat it too. In these jurisdictions trusts are established so that the grantors can be a permissible beneficiary of their trusts — if creditors cannot otherwise reach the trust assets to satisfy the legal obligations of the settler. It is clearly established that a transfer to a trust in a qualified jurisdiction is complete for gift tax purposes; it is equally unclear whether a transfer to the trust is complete for estate tax purposes, because of the non-qualified retained interest under IRC Section 2036. This leaves open the ETIP question for GST tax planning purposes, thus possibly foiling the inclusion ratio of an unsuspecting grantor. Seven states have adopted versions of these statutes, including the four perpetuities jurisdictions of Alaska, Delaware, Missouri, Rhode Island and Utah:22
The application of the federal and state transfer tax systems, especially with regard to property law definitions, possible inadvertent constructive addition problems and other technical termination rules.
The state's inheritance or death tax provisions, capital gains tax, documentary tax, premium tax, and etc.
This is just a glimpse of the complex issues associated with perpetual jurisdictions. Much more needs to be done in terms of both the science and the art of intergenerational planning.
Like it or not, the perpetuities horse is out of the barn, and we advisors need to learn to ride with competence and skill.
- See W. Barton Leach, Cases and Text on the Law of Wills, (2d ed. 1951). Note, though, that a year later Professor Beach was calling for the end of the rule as a “technically ridden legalnightmare in need of urgent reform.” (W. Barton Leach, “Perpetuities in Perspective: Ending the Reign of Terror,” 65 Harvard L. Rev. at pp. 721, 723 (1952)); Jesse Dukeminier and James E. Krier, “The Rise of the Perpetual Trust,” 50 UCLA L. Rev. at pp. 1303, 1304-1305 (2003); See also Jesse Dukeminier, “Dynasty Trusts: Sheltering Descendants from Transfer Taxation,” 23 Est. Plan. at p. 417 (1996). The term “dynasty trust” generally refers to “a trust set up primarily to perpetuate the estate for as long a period as possible,” often by “a chain of life interests.” See Lawrence M. Friedman, “The Dynastic Trust,” 73 Yale L. J. at pp. 547, 547-48 (1964). The term “perpetuities trust” refers to dynasty-type trusts that are established in jurisdictions that have abrogated the common law or uniform statutory rule against perpetuities; however, the beneficial interest of permissible trust beneficiaries are far more flexible and sophisticated than envisioned by Professor Friedman.
- One of the greatest concerns in multigenerational planning is to provide as much flexibility and as much incentive as possible for future generations. In “Building Your Own Dynasty, States Toss Out Restrictions on Creating Perpetual Trusts; Downside — Fees Last Forever Too,” Wall St. J. (Sept. 15, 2004). One article suggests that “a dynasty trust could lead to nasty family disputes as the number of heirs multiply over time.” Even the “litigators are salivating as dynasty trusts grow in popularity.” “Building Your Own Dynasty, States Toss Out Restrictions on Creating Perpetual Trusts; Downside — Fees Last Forever Too,” Wall St. J. (Sept. 15, 2004).
- These states are sometimes referred to as the “clean hands” jurisdictions for trust situs purposes, because they made changes to their applicable law before the generation skipping transfer tax was imposed in 1986 (South Dakota was the latest of the three in 1983), thus their statutory purpose could not have been to circumvent the Internal Revenue Code. Idaho Code s 55-11 (Michie 2000); Wis. Stat. Section 700.16(5) (1999); S.D. Codified Laws Section 43-5-8 (Michie 1997). Compare Steven E. Greer, “The Alaska Dynasty Trust,” 18 Alaska L. Rev. at pp. 253, 281-282 (2001). South Dakota was often then the preferred jurisdiction because it had no state income tax, and the state law made it relatively easy for affluent families to obtain trust powers and administrative support. See Dukemier and Krier, supra note 1, fn. 58; Charles D. Fox IV and Michael J. Huft, “Asset Protection and Dynasty Trusts,” 37 Real Prop. Prob. & Tr. at pp. 287, 377-43 (2002).
- Del. Code Ann tit 25 Section 503(a) (Supp. 2000); 765 Ill. Comp. Stat. Ann. 305/4 (West 2001); Alaska Stat. Section 34.27.100 et. al.; N.J. Stat. Ann. Section 46:2F-9 (West Supp. 2002); Ohio Rev. Code Ann. Section 2131.08(B) (West Supp. 2003); Md. Code Ann. Est. & Trusts Section 11-102(C) (2001); Fla. Stat. Ann. Section 689.225 (West 2003); Ariz. Rev. Stat. Ann. (A) (1) Section 14-2901 (West Supp. 2002); Mo. Ann. Stat. Section 456.236 (West Supp. 2003); Neb. Rev. Stat. Sections 76-2001 (1996 & and Supp. 2002); Colo. Rev. Stat. Section 15-11-1102(c)(2002); Me. Rev. Stat. Ann. tit. 33, Section 101 (West 1964); R.I. Gen. Laws Section 34-11-38 (Supp. 2003); Va. Code Ann. Section 55-13-3(C) (Michie Supp. 2202); D.C. Code Section 19-109(10)(2002); Wash. Rev. Code Ann. Section 11.98.130 (West 2002); Wyo. H.B. 77 (2003); N.H. Rev. Stat. Ann. Section Rev. Stat. Ann. Section 547:3-k and 564:24 (West, Westlaw through 2003 Sess.); Utah Code Ann. Sections 75-2-1201 (Lexis Supp. 2002); Ind. H.B. 116 (2003). In Nevada, the legislature authorized a vote on a constitutional amendment that would have permitted a law change, but the amendment failed. See Nev. Rev. Stat. Ann. Section 111.103-1039 (Michie Supp. 2004).
- Dukeminier and Krier, supra, note 1, at p. 1316. Whether perpetual trusts are wise from a policy perspective is discussion for another article. But it does sometimes feel like a crusade to develop the idea of perpetual trusts. Just because we can create perpetuities trusts, doesn't mean it is “one size fits all” for clients. Of course, the client's goals must drive the discussion. One must take the perspective that the perpetual trust is more likely to be in modern terms, “a wait and see trust.” Far from the “dead hand” approach, modern trust theory permits significant ongoing flexibility. The search for the “best” situs for a “dynastic trust” is a matter of providing clients a trust structure and situs where they and their families will have the most options and future flexibility in a favorable financial and tax planning environment to reach their goals.
- See discussion and examples, Duke-minier and Krier, supra note 1 at pp. 1304-1305. The rule also limits the effective duration of GST tax exempt trusts resulting from the 1986 law. The effect of the elimination of the perpetuities rule is also to eliminate future GST and estate taxes on assets protected by the trust, while not affecting enjoyment of those assets. This is often referred to as “property plus,” because heirs can benefit from property without having the attendant legal responsibilities and liabilities associated with direct ownership. See George Cooper, “A Voluntary Tax? New Perspective on Sophisticated Estate Avoidance,” 77 Colum. L. Rev. at p. 161 (1977). This begs the question of how long is long enough? The answer lies not in the number of years that a trust may last, but it is the future flexibility that the jurisdiction offers to future generations of the clients' families. Perpetuities jurisdiction make a legislative statement that the client and the client's family decide how long is long enough, not the state. Also, my first attempt at a theoretical framework for this discussion appeared in the notes of an earlier article published in Trusts and Estates regarding the Florida Rule against Perpetuities. See Daniel G. Worthington, “The Florida Rule Against Perpetuities, A Tax Trap for the Unwary?” Trusts & Estates (December 2004). In that article, I argued the common law or Uniform Statutory Rule against Perpetuities must be abrogated to effectively create a perpetual trust jurisdiction.
- The Uniform Statutory Rule against Perpetuities was adopted in 24 jurisdictions. See Dukeminier and Krier, supra, note 1, at p. 1308, fn 20.
- Garret Moritz, “Dynasty Trusts and the Rule Against Perpetuities,” 116 Harv. L. Rev. at pp. 2588, 2596 (2003). The rule against perpetuities was established to make sure that wealth, then largely real property, changed ownership, thereby preventing one family from controlling it all for all time. Modern forms of wealth (stocks, bonds etc.) by their very nature are more mobile.
- Ibid. at p. 2591. South Dakota, Idaho, and Wisconsin were the early adopters of this approach. These states abrogated the rule against perpetuities while maintaining the rule against alienation and suspension of powers, providing that alienation may be avoided by giving the trustee the power to sale, distribute, or in some cases terminate the trust. This approach was later adopted by Alaska, after a brief experiment with the so-called discretionary trust exception.
- This is for purposes of the rule against suspension and alienation of powers. See, for example, S.D. Codified Laws Section 43-5-8.
- Ibid. This was the approach first embraced, but later abandoned by Alaska. Other states still embrace this approach, which is misguided.
- While Florida, Utah, Washington, and Wyoming have used this approach, a specific statutory analysis of each is required to determine the possible pitfalls of this approach. It is possible, for example, that the duration of term of a trust can be for whatever period allowed by the statute, but because of poor draftsmanship, the actual effective term of the trust is much shorter. See discussion, supra, note 6.
- Fla. Stat. Ann. Section 689.225 (West 2003).
- Among other considerations, for example, it is unclear how the Florida statute works in the GST tax exemption allocation context, when the beneficiaries (or any “interested person”) have a right under the statute to petition the court for reformation within 90 years of creation of the trust. Fla. Stat. Ann. Section 689.225(4) (West 2003).
- Because each of the “term of years” jurisdictions have either different statutory periods or different statutory schemes, it is unlikely that there would be no place to change the situs of trusts created in these jurisdictions, where GST tax exemption was allocated.
- Ibid. The opt-out approach is uncertain at best, because the underlying rule against perpetuities remains under state law, and the underlying rule is often the measuring stick for federal law purposes and for purposes of the grandfather GST tax regulations that may apply to generation-skipping trusts post-year 2010.
- Ibid. This seems to be the approach of both Delaware and Nebraska.
- Del. Code Ann. tit. 25 Section 503(b) (Supp 2000).
- R.I. Gen Laws Section 24-11-38 (Supp 2003).
- This creates a possible equal protection challenge by residents of these jurisdictions that establish multi-generational trusts in these states and are then taxed.
- Non-perpetuities states that have self-settled provisions include Nevada and Oklahoma. Oklahoma passed the Family Wealth Preservation Act on June 9, 2004, with the same effective date. The Missouri statute was passed on July 9, 2004, but will not be effective until Jan. 1, 2005 (however, the Missouri statute replaces a similar law). See Gideon Rothschild, “New Asset Protection Laws,” Wealth Management Letter (Aug. 25, 2004).
RANKING PERPETUITIES JURISDICTIONS
The best places to establish a perpetual trust
The laws in the 20 perpetuities jurisdictions differ substantially in quality and advantages offered. But, when all is said and done, my analysis shows that the eight best places in which to establish perpetual trusts are, in order of preference:
Delaware and South Dakota (both states allow truly perpetual trusts; each has a full range of trust law advantages);
Alaska (allows a truly perpetual trust, but limits power of appointment to 1,000 years, which effectively limits the flexibility of a trust beyond 1,000 years);
Idaho and Missouri (permit truly perpetual trusts and offer other advantages, but the trusts have to pay state income tax on any money earned; that's a 6 percent or 7 percent haircut, which can amount to a great deal on larger trusts);
Wisconsin (allows a truly perpetual trust and does not have income tax for non-residents, but lacks other advantages such as a trust protector statute, which allows a trustee to modify trusts so they comply with current law without going to court or triggering nasty tax consequences);
New Hampshire and New Jersey (allow truly perpetual trusts but lack other advantages, including the trust protector statute).HE “ALSO RAN”S
The remaining quasi-perpetual jurisdictions have flaws in their statutory approach to perpetual trusts. These flaws create serious uncertainties. Factor in these uncertainties and the best are, again in order of preference:
Florida (360 years), Wyoming (1,000 years), and Washington (150 years). (All have no state income tax and Wyoming has the advantage of a trust protector statue);
Illinois (unclear whether there is any real perpetual trust advantage but the state does not tax non-residents and it does permit directed trusts, which allows advisors who are outside the state to direct investments in the trust);
Ohio (also uncertain whether it has perpetual trust status for generation skipping tax, plus the state has the disadvantage of imposing an accumulated earnings tax; however it does not have an income tax on non-residents);
Utah (allows trusts to last 1,000 years and permits self-settled trusts, that is trusts that permit the trustee to make discretionary distributions to the person who created the trust, but the state has an income tax);
This accounts for only 14 of the 23 jurisdictions with perpetuities laws. But the remaining jurisdictions have such questionable perpetuities provisions and/or supporting law that they don't yet deserve honorable mention.
See “Comparing Perpetuities Jurisdictions,” p.18 for a quick overview of the 23 states' trust laws on which this ranking is based.
— Daniel G. Worthington
COMPARING PERPETUTIES JURISDICTIONS
|Rank*||Situs||Common Law Rule||Uniform Statutory Rule||Rule Against Alienation||State Income Tax||Limited POA Rule||Change of Situs||Directed Trust Statue||Trust Protector Statue||Self-Settled Trusts||Effective GST Limit|
|2||AK||N/A||None||Power w/ Trustee||None||1,000 Years||Maybe Limited||Yes||Yes||Yes||Probably 1,000 yrs|
|AZ||Yes||90 yrs w/Exception||+30 yrs||All||Uncertain||Uncertain||No||No||No||Uncertain|
|DC||N/A||90 yrs w/ Exception||USRAP||All||Uncertain||Uncertain||No||No||No||Uncertain|
|CO||N/A||90 yrs w/Exception||USRAP||All||Uncertain||Uncertain||Yes||No||Unclear||Uncertain|
|1||DE||N/A||N/A||Power w/ Trustee||Tax only Residents||Unlimited||Perpetual Situs||Yes||Yes||Yes||Perpetual|
|6||FL||N/A||USRAP w/360 years||USRAP w/360 years||None||Uncertain||No||No||No||No||Uncertain|
|3||ID||N/A||N/A||Power w/Trustee||All||Unlimited||Perpetual Situs||No||Yes||No||Perpetual|
|7||IL||Yes||N/A||Power w Trustee||Tax only Residents||Uncertain||Uncertain||Yes||No||No||Uncertain|
|IN||No||90 w/Opt Out||Uncertain||All||Uncertain||Uncertain||No||No||No||Uncertain|
|ME||Yes Opt Out||N/A||Uncertain||All||Uncertain||Uncertain||Uncertain||No||IC||Uncertain|
|MD||Yes Opt Out||N/A||Uncertain||All||Uncertain||Uncertain||IC||No||No||Uncertain|
|3||MO||N/A||N/A||Power w/Trustee||All||Unlimited||Perpetual Situs||No||No||Yes||Perpetual|
|NE||N/A||90 yrs w/Exception||USRAP||All||Uncertain||Uncertain||No||No||No||Uncertain|
|5||NH||N/A||N/A||Power w/Trustee||Tax only Residents||Unlimited||Perpetual Situs||No||No||No||Perpetual|
|5||NJ||N/A||N/A||Power w/Trustee||All||Unlimited||Limited by Law||No||No||No||Perpetual|
|8||OH||Yes||N/A||Common Law||Tax only Residents||Uncertain||Uncertain||No||No||No||Uncertain|
|1||SD||N/A||N/A||Power w/Trustee||None||Unlimited||Perpetual Situs||Yes||Yes||No||Perpetual|
|9||UT||N/A/||USRAP w/1000 yrs||1,000 yrs Uncertain||All||Uncertain||No||No||No||Yes||Uncertain|
|VA||N/A||90 yrs w/Opt Out||USRAP||All||Uncertain||Uncertain||No||No||No||Uncertain|
|6||WA||No||150 yrs||150 yrs Uncertain||None||Uncertain||No||No||No||No||Uncertain|
|4||WI||None||None||Power w/Trustee||Tax only Residents||Unlimited||Perpetual Situs||No||No||No||Perpetual|
|— Daniel G. Worthington|
|* Author ranks best places to set up a perpetual trust. More than one state can share same rank. Not all States deserve a ranking; those that lack a number are not yet up to par.|
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