Unlimited Duration Trusts - Minnesota CLE

Unlimited Duration Rule Against
Perpetuities (RAP):
Existing Dynasty (GST) Trust/Change of Situs/Extend the RAP
(Duration)?:
Decanting Existing Trust
Reform/Modifying
Existing Trust
Change of Situs by
Naming SD Trustee
(and Change of Law Provision)
Grandfathered
GST Trust
Problem to extend RAP
Reg. section 26.2601-1(b)(4)(i)(D)(l).
See South Dakota statute: SDCL 55-2-20
Problem to extend RAP
(ok, for administrative purposes and other
possible non-RAP modifications)
Problem to extend RAP?
(Generally keep existing RAP)
Exempt
GST Trust
Problem to extend RAP
See South Dakota statute: SDCL 55-2-20
Problem to extend RAP*
PLR 200714016, PLR 200919009
(Change of situs of exempt trust did not affect
it’s tax status because duration of trust not
lengthened)
Problem to extend RAP?
(Generally keep existing RAP)
Springing Situs
SD Law Trust
(Initially administered in another state,
then moved to SD)
Problem to extend RAP?
(Generally keep existing RAP)
Problem to extend RAP?
(Generally keep existing RAP)
* IRS ruled that a GST exempt trust will not lose its exempt status if it is moved in a way
that is acceptable for grandfathered trusts.
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