The Alberta Law Reform Institute (ALRI) recently published a Perpetuities Law Report for Discussion. This latest Report for Discussion 29 – Perpetuities Law: Abolish or Reform? – addresses complex perpetuities issues in our modern context. You can learn more about the report in today’s guest blog by ALRI’s Carol Burgess.
As with all their Reports, ALRI values the input of the legal community in considering what recommendations to put forward. Take time to share your thoughts on the Perpetuities Law Report for Discussion by completing the survey. Responses are due by June 30!
In Alberta, the Perpetuities Act seeks to balance an owner’s desire to control disposition of their property into the future by use of contingent interests with the need of the recipients of those interests to be able to respond to changed times and circumstances. Has the time come to abolish the Rule Against Perpetuities in this province? Three other Canadian jurisdictions have done so and the Uniform Law Conference of Canada has recently recommended in its Uniform Trustee Act that all others follow suit.
To explore this and other issues, ALRI has published Report for Discussion 29 on Perpetuities Law: Abolish or Reform? The Report asks open-ended questions to facilitate discussion of how perpetuities issues should be addressed in our province.
In the 21st century, do legal mechanisms other than the Rule Against Perpetuities now exist that could adequately handle perpetuities issues? One such possibility might be the income tax system’s 21-year Deemed Disposition Rule. It provides a powerful incentive for trust holders to avoid capital gains tax by making sure the trust property vests before the 21 year deadline. Another mechanism that can limit perpetuities is court variation of trusts legislation. It allows for trusts to be varied or terminated by consent of the beneficiaries and allows a court to give substituted consent on behalf of beneficiaries who are minors, incapacitated, unborn or unascertained. Both mechanisms have changed the landscape for perpetuities in the context of trusts, but are they sufficient controls?
If it is thought that the Perpetuities Act should be retained, the Report also explores whether any reforms are needed to the statute. Is there a way to simplify and clarify how a perpetuity period is set or calculated? Would it be better to enact a straightforward duration limit instead of the Act’s current vesting and wait-and-see model? There is a larger question as well. Quite apart from whatever model is best, should perpetuities law also continue to apply to non-trust and commercial dispositions, or should its application be restricted to trusts and estates only?
ALRI’s consultation on Perpetuities Law: Abolish or Reform? Report for Discussion 29 runs until June 30, 2016. Feedback from interested persons is needed to help determine what recommendations should be made to the government of Alberta. Input is sought via letter, email or by taking a survey.
ALRI thanks everyone for their continued help with the important work of law reform.
Carol Burgess
ALRI Operations Manager
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