(1)Year 2001 rule.
(a)Paragraph (b) of this subsection (1) shall apply to interests in trust and powers of
appointment with respect to all or any part of a trust, which interest or power is
created after May 31, 2001.
(b)(I) A nonvested property interest is invalid unless it either vests or
terminates within one thousand years after its creation.
(II)A general power of appointment not presently exercisable because of a
condition precedent is invalid unless the condition precedent either is satisfied or
becomes impossible to satisfy within one thousand years after its creation.
(III)A nongeneral power of appointment or a general testamentary power of
appointment is invalid unless the power is irrevocably exercised or otherwise
terminates within one thousand years after its
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(1) Year 2001 rule. (a)
Paragraph (b) of this subsection (1) shall apply to interests in trust and powers of
appointment with respect to all or any part of a trust, which interest or power is
created after May 31, 2001.
(b) (I) A nonvested property interest is invalid unless it either vests or
terminates within one thousand years after its creation.
(II) A general power of appointment not presently exercisable because of a
condition precedent is invalid unless the condition precedent either is satisfied or
becomes impossible to satisfy within one thousand years after its creation.
(III) A nongeneral power of appointment or a general testamentary power of
appointment is invalid unless the power is irrevocably exercised or otherwise
terminates within one thousand years after its creation.
(2) Year 1991 rule. (a) Paragraph (b) of this subsection (2) shall apply to
interests and powers created on or after May 31, 1991, other than interests and
powers subject to paragraph (b) of subsection (1) of this section.
(b) (I) A nonvested property interest is invalid unless:
(A) When the interest is created, it is certain to vest or terminate no later
than twenty-one years after the death of an individual who is then alive; or
(B) The interest either vests or terminates within ninety years after its
creation.
(II) A general power of appointment not presently exercisable because of a
condition precedent is invalid unless:
(A) When the power is created, the condition precedent is certain to be
satisfied or become impossible to satisfy no later than twenty-one years after the
death of an individual who is then alive; or
(B) The condition precedent either is satisfied or becomes impossible to
satisfy within ninety years after its creation.
(III) A nongeneral power of appointment or a general testamentary power of
appointment is invalid unless:
(A) When the power is created, it is certain to be irrevocably exercised or to
otherwise terminate no later than twenty-one years after the death of an individual
who is then alive; or
(B) The power is irrevocably exercised or otherwise terminates within ninety
years after its creation.
(IV) In determining whether a nonvested property interest or a power of
appointment is valid under subparagraphs (I) to (III) of paragraph (b) of this
subsection (2), the possibility that a child will be born to an individual after the
individual's death is disregarded.
(V) If, in measuring a period from the creation of a trust or other property
arrangement for purposes of interests, powers, and trusts subject to this paragraph
(b), language in a governing instrument seeks to disallow the vesting or termination
of any interest or trust beyond, seeks to postpone the vesting or termination of any
interest or trust until, or seeks to operate in effect in any similar fashion upon the
later of the expiration of a period of time not exceeding twenty-one years after the
death of the survivor of specified lives in being at the creation of the trust or other
property arrangement or the expiration of a period of time that exceeds or might
exceed twenty-one years after the death of the survivor or lives in being at the
creation of the trust or other property arrangement, that language is inoperative to
the extent it produces a period of time that exceeds twenty-one years after the
death of the survivor of the specified lives.
(3) Nonvested interest or power created by the exercise of a power. (a) For
the purposes of paragraph (a) of subsection (1) of this section, paragraph (a) of
subsection (2) of this section, and subparagraph (II) of paragraph (c) of this
subsection (3), a nonvested property interest or a power of appointment created by
the exercise of a power of appointment is created when the power is irrevocably
exercised or when a revocable exercise becomes irrevocable.
(b) For the purposes of paragraph (b) of subsection (1) of this section and
paragraph (b) of subsection (2) of this section, a power of appointment created by
the exercise of a nongeneral power of appointment shall be considered as created
when the first power of appointment is created. This paragraph (b) shall be applied
and construed in a manner that is consistent with the treatment of the exercise of a
nongeneral power of appointment as nontaxable for purposes of the estate and gift
tax under the federal internal revenue laws.
(c) (I) Paragraph (b) of subsection (1) of this section shall not apply with
respect to nonvested property interests and powers of appointment created by the
exercise of a nongeneral power of appointment over all or any part of a trust that
was irrevocable on September 25, 1985.
(II) Nonvested property interests and powers of appointment, which interests
or powers are so created on or after May 31, 1991, shall be subject to paragraph (b)
of subsection (2) of this section.
(III) This paragraph (c) shall be applied and construed in a manner that is
consistent with the treatment of such a trust as exempt from the generation-skipping transfer tax under the federal internal revenue laws.