Arizona Laws 14-2901. Nonvested property interest; general power of appointment; validity; exception
A. A nonvested property interest is invalid unless at least one of the following is true:
Terms Used In Arizona Laws 14-2901
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Child: includes a person who is entitled to take as a child under this title by intestate succession from the parent whose relationship is involved. See Arizona Laws 14-1201
- Governing instrument: means a deed, will, trust, insurance or annuity policy, account with pay on death designation, security registered in beneficiary form, pension, profit sharing, retirement or similar benefit plan, instrument creating or exercising a power of appointment or power of attorney or supported decision-making agreement or a dispositive, appointive or nominative instrument of any similar type. See Arizona Laws 14-1201
- Person: means an individual or an organization. See Arizona Laws 14-1201
- Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
- Property: includes both real and personal property. See Arizona Laws 1-215
- Trust: includes an express trust, private or charitable, with any additions, wherever and however created. See Arizona Laws 14-1201
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional or successor trustee, whether or not appointed or confirmed by the court. See Arizona Laws 14-1201
1. At the time the interest is created it is certain to vest or to terminate not later than twenty-one years after the death of a person who is then alive.
2. The interest either vests or terminates within five hundred years after its creation.
3. The interest is under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest.
B. A general power of appointment that is not presently exercisable because of a condition precedent is invalid unless any of the following is true:
1. At the time the power is created the condition precedent is certain to be satisfied or becomes impossible to satisfy no later than twenty-one years after the death of a person who is then alive.
2. The condition precedent either is satisfied or becomes impossible to satisfy within five hundred years after its creation.
3. The power is with respect to an interest under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest.
C. A nongeneral power of appointment or a general testamentary power of appointment is invalid unless at least one of the following is true:
1. At the time the power is created it is certain to be irrevocably exercised or otherwise to terminate not later than twenty-one years after the death of a person who is then alive.
2. The power is irrevocably exercised or otherwise terminates within five hundred years after its creation.
3. The power is with respect to an interest under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest.
D. In determining whether a nonvested property interest or a power of appointment is valid under subsection A, paragraph 1, subsection B, paragraph 1 or subsection C, paragraph 1, the possibility that a child will be born to a person after that person’s death is disregarded.
E. If the governing instrument seeks to do either of the following after the expiration of the latest period described by subsection A, B or C, that language is inoperative to the extent it produces a period of time that exceeds five hundred years after the creation of the trust:
1. Disallow the vesting or termination of an interest or trust beyond that time.
2. Postpone the vesting or termination of an interest or trust until that time.