H*2093 Session 107 (1987-1988)
H*2093(Rat #0026, Act #0012 of 1987) General Bill, By Hayes
A Bill to amend Title 27, Code of Laws of South Carolina, 1976, relating to
property and conveyances, by adding Chapter 6 so as to abolish the common law
rule against perpetuities and replace it with a statutory rule against
perpetuities which adopts provisions which prevent the defeat of the
transferor's intent.
12/31/86 House Prefiled
12/31/86 House Referred to Committee on Judiciary
01/13/87 House Introduced and read first time HJ-57
01/13/87 House Referred to Committee on Judiciary HJ-58
02/04/87 House Committee report: Favorable with amendment
Judiciary HJ-372
02/05/87 House Amended HJ-428
02/05/87 House Read second time HJ-429
02/10/87 House Read third time and sent to Senate HJ-460
02/11/87 Senate Introduced and read first time SJ-522
02/11/87 Senate Referred to Committee on Judiciary SJ-522
02/25/87 Senate Committee report: Favorable with amendment
Judiciary SJ-659
02/26/87 Senate Amended SJ-705
02/26/87 Senate Read second time SJ-706
02/26/87 Senate Ordered to third reading with notice of
amendments SJ-706
03/03/87 Senate Read third time SJ-734
03/03/87 Senate Returned SJ-734
03/04/87 House Concurred in Senate amendment and enrolled HJ-843
03/10/87 Ratified R 26
03/12/87 Signed By Governor
03/12/87 Effective date 03/12/87
03/12/87 Act No. 12
03/19/87 Copies available
(A12, R26, H2093)
AN ACT TO AMEND TITLE 27, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO
PROPERTY AND CONVEYANCES, BY ADDING CHAPTER 6 SO AS TO ABOLISH THE COMMON LAW
RULE AGAINST PERPETUITIES AND REPLACE IT WITH A STATUTORY RULE AGAINST
PERPETUITIES WHICH ADOPTS PROVISIONS WHICH PREVENT THE DEFEAT OF THE TRANSFEROR'S
INTENT.
Be it enacted by the General Assembly of the State of South Carolina:
Rule against perpetuities
SECTION 1. Title 27 of the 1976 Code is amended by adding:
"CHAPTER 6
Uniform Statutory Rule Against Perpetuities
Section 27-6-10. This chapter may be cited as the Uniform Statutory Rule
Against Perpetuities.
Section 27-6-20. (A) A nonvested property interest is invalid unless:
(1) when the interest is created, it is certain to vest or terminate no
later than twenty-one years after the death of an individual then alive; or
(2) the interest either vests or terminates within ninety years after its
creation.
(B) A general power of appointment not presently exercisable because of a
condition precedent is invalid unless:
(1) 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 then alive; or
(2) the condition precedent either is satisfied or becomes impossible to
satisfy within ninety years after its creation.
(C) A nongeneral power of appointment or a general testamentary power of
appointment is invalid unless:
(1) when the power is created, it is certain to be irrevocably exercised or
to terminate no later than twenty-one years after the death of an individual then
alive; or
(2) the power is irrevocably exercised or terminates within ninety years
after its creation.
(D) In determining whether a nonvested property interest or a power of
appointment is valid under subsection (A)(1), (B)(1), or (C)(1), the possibility
that a child will be born to an individual after the individual's death is
disregarded.
Section 27-6-30. (A) Except as provided in subsections (B) and (C) and in
Section 27-6-60(A), the time of creation of a nonvested property interest or a
power of appointment is determined under general principles of property law.
(B) If there is a person who alone can exercise a power created by a governing
instrument to become the unqualified beneficial owner of (i) a nonvested property
interest or (ii) a property interest subject to a power of appointment described
in Section 27-6-20(B) or 27-6-20(C), the nonvested property interest or power of
appointment is created when the power to become the unqualified beneficial owner
terminates. A joint power with respect to community property or to marital
property under a Uniform Marital Property Act held by individuals married to each
other is a power exercisable by one person alone.
(C) A nonvested property interest or a power of appointment arising from a
transfer of property to a previously funded trust or other existing property
arrangement is created when the nonvested property interest or power of
appointment in the original contribution was created.
Section 27-6-40. Upon the petition of an interested person, a court shall
reform a disposition in the manner that most closely approximates the
transferor's manifested plan of distribution and is within the ninety years
permitted by this chapter if:
(1) a nonvested property interest or a power of appointment becomes invalid
under Section 27-6-20;
(2) a class gift is not but may become invalid under Section 27-6-20 and the
time has arrived when the share of any class member is to take effect in
possession or enjoyment; or
(3) a nonvested property interest that is not validated by Section
27-6-20(A)(1) can vest but not within ninety years after its creation.
Section 27-6-50. Section 27-6-20 does not apply to:
(1) a nonvested property 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 (i) a premarital or postmarital agreement, (ii) a
separation or divorce settlement, (iii) a spouse's election, (iv) a similar
arrangement arising out of a prospective, existing, or previous marital
relationship between the parties, (v) a contract to make or not to revoke a will
or trust, (vi) a contract to exercise or not to exercise a power of appointment,
(vii) a transfer in satisfaction of a duty of support, or (viii) a reciprocal
transfer;
(2) a fiduciary's power relating to the administration or management of
assets, including the power of a fiduciary to sell, lease, or mortgage property,
and the power of a fiduciary to determine principal and income;
(3) a power to appoint a fiduciary;
(4) a discretionary power of a trustee to distribute principal before
termination of a trust to a beneficiary having an indefeasibly vested interest
in the income and principal;
(5) a nonvested property interest held by a charity, government, or
governmental agency or subdivision, if the nonvested property interest is
preceded by an interest held by another charity, government, or governmental
agency or subdivision;
(6) a nonvested property interest in or a power of appointment with respect
to a trust or other property arrangement forming part of a pension,
profit-sharing, stock bonus, and 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, except a nonvested property
interest or a power of appointment that is created by an election of a
participant or a beneficiary or spouse; or
(7) 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, including, but not limited to, the interests, powers, and
arrangements coming within Sections 13-7-30, 21-27-50, 27-5-70, 27-5-80,
33-53-30, and 39-55-135.
Section 27-7-60. (A) Except as extended by subsection (B), this chapter
applies to a nonvested property interest or a power of appointment that is
created on or after July 1, 1987. For purposes of this section, 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) If a nonvested property interest or a power of appointment was created
before July 1, 1987, and is determined in a judicial proceeding, commenced on or
after July 1, 1987, to violate this State's rule against perpetuities as that
rule existed before July 1, 1987, a court upon the petition of an interested
person shall reform the disposition by inserting a savings clause that preserves
most closely the transferor's plan of distribution and that brings that plan
within the limits of the rule against perpetuities applicable when the nonvested
property interest or power of appointment was created.
Section 27-6-70. This chapter shall be applied and construed to effectuate its
general purpose to make uniform the law with respect to the subject of this
chapter among states enacting it.
Section 27-6-80. This chapter supersedes the common law rule against
perpetuities."
Time effective
SECTION 2. This act takes effect upon approval by the Governor. |