(a) The rule against perpetuities does not apply:
         (1) to any disposition of property or interest
    
therein that, at the effective date of this Code, does not violate, or is exempted by statute from the operation of, the common law rule against perpetuities;
        (2) to powers of a trustee to sell, lease, or
    
mortgage property or to powers that relate to the administration or management of trust assets, including, but not limited to, discretionary powers of a trustee to determine what receipts constitute principal and what receipts constitute income and powers to appoint a successor trustee;
        (3) to mandatory powers of a trustee to distribute
    
income, or to discretionary powers of a trustee to distribute principal before termination of a trust, to a beneficiary having an interest in the principal that is irrevocably vested in quality and quantity;
        (4) to discretionary powers of a trustee to allocate
    
income and principal among beneficiaries, but no exercise of any such power after the expiration of the period of the rule against perpetuities is valid;
        (5) to leases to commence in the future or upon the
    
happening of a future event, but no such lease is valid unless the term of the lease actually commences in possession within 40 years from the date of execution of the lease;
        (6) to commitments (A) by a lessor to enter into a
    
lease with a subtenant or with the holder of a leasehold mortgage or (B) by a lessee or sublessee to enter into a lease with the holder of a mortgage;
        (7) to options in gross or to preemptive rights in
    
the nature of a right of first refusal, but no option in gross shall be valid for more than 40 years from the date of its creation; or
        (8) to qualified perpetual trusts as defined in
    
Section 1403.
    (b) The period of the rule against perpetuities shall not commence to run in connection with any disposition of property or interest therein, and no instrument shall be regarded as becoming effective for purposes of the rule against perpetuities, and no interest or power shall be deemed to be created for purposes of the rule against perpetuities as long as, by the terms of the instrument, the maker of the instrument has the power to revoke the instrument or to transfer or direct to be transferred to himself or herself the entire legal and equitable ownership of the property or interest therein.

Terms Used In Illinois Compiled Statutes 760 ILCS 3/1404

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Executor: A male person named in a will to carry out the decedent
  • Instrument: means any writing pursuant to which any legal or equitable interest in property or in the income therefrom is affected, disposed of, or created. See Illinois Compiled Statutes 760 ILCS 3/1403
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Probate: Proving a will
  • State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
  • Statute: A law passed by a legislature.
  • Trustee: A person or institution holding and administering property in trust.

     (c) In determining whether an interest violates the rule against perpetuities:
         (1) it is presumed:
             (A) that the interest was intended to be valid;
             (B) in the case of an interest conditioned upon
        
the probate of a will, the appointment of an executor, administrator or trustee, the completion of the administration of an estate, the payment of debts, the sale or distribution of property, the determination of federal or state tax liabilities or the happening of any administrative contingency, that the contingency must occur, if at all, within the period of the rule against perpetuities; and
            (C) if the instrument creates an interest in the
        
“widow”, “widower”, or “spouse” of another person, that the maker of the instrument intended to refer to a person who was living at the date that the period of the rule against perpetuities commences to run;
        (2) if any interest, but for this subsection, would
    
be invalid because it is made to depend upon any person attaining or failing to attain an age in excess of 21 years, the age specified shall be reduced to 21 years as to every person to whom the age contingency applies;
        (3) notwithstanding paragraphs (1) and (2), if the
    
validity of any interest depends upon the possibility of the birth or adoption of a child, the following apply:
            (A) no person shall be deemed capable of having a
        
child until he or she has attained the age of 13 years;
            (B) any person who has attained the age of 65
        
years shall be deemed incapable of having a child;
            (C) evidence is admissible as to the incapacity
        
of having a child by a living person who has not attained the age of 65 years; and
            (D) the possibility of having a child or more
        
remote descendant by adoption shall be disregarded.
    (d) Paragraphs (2), (3), and (6) of subsection (a) and subsection (b) are declaratory of existing law.
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