This article examines the relationship between the federal wealth transfer taxes and the rule against perpetuities. The decline of the RAP is often attributed primarily to the GST tax amendments enacted in 1986. However, while perpetual trusts were available long before 1986, their estate tax avoidance possibilities were not widely used. Even after 1986, simple repeal of the RAP leaves perpetual trusts exposed to potential estate taxation. In addition, settlors should consider non-tax considerations in assessing the attractions of perpetual trusts.
Grayson M.P. McCouch, Who Killed the Rule Against Perpetuities?, 40 Pepp. L. Rev. 1291 (2013), available at http://scholarship.law.ufl.edu/facultypub/568