Unlimited Duration Trusts - Minnesota CLE

Selected
Directed Trust States:
Alaska *
North Carolina
Arizona
Ohio
Colorado South Dakota *
Delaware *
Tennessee
Florida **
Virginia
Maine Washington **
Nebraska
Washington D.C.
Nevada **
Wyoming
New Hampshire
*Murphy Case Dynasty Statutes and no state income tax state (Best)
**No state income tax, but not Murphy case Dynasty Statute state
Murphy Case/Suspension of the Power to Alienate (Best Dynasty Trust States):
• The Murphy case approach, which the IRS acquiesced in 1979, to abrogating or abolishing the RAP is key
according to most GST and RAP experts.
• This approach shifts the perpetuities inquiry from remoteness of vesting to suspension of the power to
alienate.
– For example, if the trustee has an explicit or implied power to sell, the trust jumps outside the rule of suspension
of alienation, which limits the duration of the trust.
• Generally, these states have also abrogated their RAP, which addresses the timing issue.
• As a result, these states address both the timing and the vesting issues associated with doing away with
their RAP as required by the Murphy case.
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