SECTION 2-905. PROSPECTIVE APPLICATION.
(a) Except as extended by subsection (b), [Subpart] 1 of this [part] applies to a nonvested property interest or a power of appointment that is created on or after the effective date of [Subpart] 1 of this [part]. 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 the effective date of [Subpart] 1 of this [part] and is determined in a judicial proceeding, commenced on or after the effective date of [Subpart] 1 of this [part], to violate this state’s rule against perpetuities as that rule existed before the effective date of [Subpart] 1 of this [part], a court upon the petition of an interested person may reform the disposition in the manner that most closely approximates the transferor’s manifested plan of distribution and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment
(a) Except as extended by subsection (b), [Subpart] 1 of this [part] applies to a nonvested property interest or a power of appointment that is created on or after the effective date of [Subpart] 1 of this [part]. 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 the effective date of [Subpart] 1 of this [part] and is determined in a judicial proceeding, commenced on or after the effective date of [Subpart] 1 of this [part], to violate this state’s rule against perpetuities as that rule existed before the effective date of [Subpart] 1 of this [part], a court upon the petition of an interested person may reform the disposition in the manner that most closely approximates the transferor’s manifested plan of distribution and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment
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was created.
Comment
Section 2-905 provides that, except for Section 2-905(b), this part applies only to
nonvested property interests or powers of appointment created on or after the effective date of
this subpart. The second sentence of subsection (a) establishes a special rule for nonvested
property interests (and powers of appointment) created by the exercise of a power of
appointment. The import of this special rule, which applies to the exercise of all types of powers
of appointment (general testamentary powers and nongeneral powers as well as presently
exercisable general powers), is that all the provisions of this subpart except Section 2-905(b)
apply if the donee of a power of appointment exercises the power on or after the effective date of
this subpart, whether the donee’s exercise is revocable or irrevocable. In addition, all the
provisions of Subpart 1 except Section 2-905(b) apply if the donee exercised the power before
the effective date of this subpart if (i) that pre-effective-date exercise was revocable and (ii) that
revocable exercise becomes irrevocable on or after the effective date of this subpart. The special
rule, in other words, prevents the common-law doctrine of relation back from inappropriately
shrinking the reach of this subpart.
Although the Uniform Statutory Rule does not apply retroactively, Section 2-905(b) authorizes a court to exercise its equitable power of reform instruments that contain a violation of the state’s former rule against perpetuities and to which the Uniform Statutory Rule does not apply because the offending property interest or power of appointment was created before the effective date of this subpart. Courts are urged to consider reforming such dispositions by judicially inserting a perpetuity saving clause, because a perpetuity saving clause would probably have been used at the drafting stage of the disposition had it been drafted competently. To obviate any possibility of an inequitable exercise of the equitable power to reform, Section 2- 905(b) limits the authority to reform to situations in which the violation of the former rule against perpetuities is determined in a judicial proceeding that is commenced on or after the effective date of this subpart. The equitable power to reform would typically be exercised in the same judicial proceeding in which the invalidity is determined.
Reference. Section 2-905 is Section 5 of the Uniform Statutory Rule Against Perpetuities (Uniform Act). For further discussion of this section, with examples illustrating its application, see the Official Comment to Section 5 of the Uniform Act.
Although the Uniform Statutory Rule does not apply retroactively, Section 2-905(b) authorizes a court to exercise its equitable power of reform instruments that contain a violation of the state’s former rule against perpetuities and to which the Uniform Statutory Rule does not apply because the offending property interest or power of appointment was created before the effective date of this subpart. Courts are urged to consider reforming such dispositions by judicially inserting a perpetuity saving clause, because a perpetuity saving clause would probably have been used at the drafting stage of the disposition had it been drafted competently. To obviate any possibility of an inequitable exercise of the equitable power to reform, Section 2- 905(b) limits the authority to reform to situations in which the violation of the former rule against perpetuities is determined in a judicial proceeding that is commenced on or after the effective date of this subpart. The equitable power to reform would typically be exercised in the same judicial proceeding in which the invalidity is determined.
Reference. Section 2-905 is Section 5 of the Uniform Statutory Rule Against Perpetuities (Uniform Act). For further discussion of this section, with examples illustrating its application, see the Official Comment to Section 5 of the Uniform Act.
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