New Jersey Statutes 46:2F-10. Permissible period of power of alienation under trust, future interest
Terms Used In New Jersey Statutes 46:2F-10
- Contract: A legal written agreement that becomes binding when signed.
- Donee: The recipient of a gift.
- 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
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: extends to and includes any State, territory or possession of the United States, the District of Columbia and the Canal Zone. See New Jersey Statutes 1:1-2
- Statute: A law passed by a legislature.
- Trustee: A person or institution holding and administering property in trust.
(2) If the settlor of a living trust has an unlimited power to revoke, the permissible period is computed from termination of that power.
(3) If a future property interest or trust is created by exercise of a power of appointment, the permissible period is computed from the time the power is exercised if the power is a general power exercisable in favor of the donee, the donee’s estate, the donee’s creditors or the creditors of the donee’s estate, whether or not it is exercisable in favor of others, and even if the general power is exercisable only by will; in the case of other powers the permissible period is computed from the time the power is created but facts at the time the power is exercised are considered in determining whether the power of alienation is suspended beyond the death of an individual or individuals alive at the time of creation of the power plus 21 years.
b. The power of alienation is suspended when there are no persons then alive who, alone or in combination with others, can convey an absolute fee in possession of land, or full ownership of personalty.
c. There is no suspension of the power of alienation by a trust or by equitable interests under a trust if the trustee has power to sell, either expressed or implied, or if there is an unlimited power to terminate in one or more persons then alive.
d. This section does not apply to limit any of the following:
(1) Transfers, outright or in trust, for charitable purposes;
(2) Transfers to one or more charitable organizations as described in Sections 170(c), 2055(a) and 2522(a) of the United States Internal Revenue Code of 1986 (26 U.S.C. ss. 170(c), 2055(a) and 2522(a), or under any similar statute;
(3) A future 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:
(a) a premarital or postmarital agreement;
(b) a separation or divorce settlement;
(c) a spouse’s election;
(d) a similar arrangement arising out of a prospective, existing, or previous marital relationship between the parties;
(e) a contract to make or revoke a will or trust;
(f) a contract to exercise or not to exercise a power of appointment;
(g) a transfer in satisfaction of a duty of support; or
(h) a reciprocal transfer;
(4) Transfers 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; or
(5) 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.
L.1999,c.159,s.14.