Estate planning.

              INTERIM STUDY REPORT
Judiciary Committee
Rep. Fred Jordan, Chairman
Oklahoma House of Representatives
Interim Study 11-010, Rep. Mark McCullough
October 17, 2011
Estate Planning
Rep. Mark McCullough
• This study will focus on the rule against perpetuities which has not been looked at in a
while.
• Introduced speaker.
David Carpenter, Attorney at Law
Tulsa, OK
• In Article II, Section 32 of the Oklahoma State Constitution provides for the rule against
perpetuities.
• Oklahoma is in the minority of states in that the class of lives is more restricted than the
common law rule provides (which states that the measuring life must be an identifiable
class).
• 60 O.S. §175.47 requires that the class of lives must be the beneficiaries of the trusts. This
means that, Oklahoma law does not permit the use of the large class of lives that the
common law provides.
• Provided a summary of the states that have modified the rule against perpetuities. About 38
states have increased the length of time for the rule against perpetuities. South Dakota
abolished the rule against perpetuities.
• Uniform statutory rule against perpetuities has been adopted with revisions in about 26
states. The uniform rule provides for a 90 year rule.
• Oklahoma is competing with other states to attract trust business. One thing that is
preventing Oklahoma from being fully competitive in the market is the unnecessarily
restrictive rule against perpetuities.
• Oklahoma has abolished its estate tax, while there is still a federal estate tax.
• The rule against perpetuities, at its core, prohibits deferring the transfer of assets out of a
trust to ultimate beneficiaries, which, in turn, defers the imposition of the federal estate tax.
• The adoption of an extended rule against perpetuities would have the effect of attracting
more trust business to the state and would defer federal estate tax for those families who
seek to take that into consideration. A family would be able to provide multiple benefits to
multiple generations.
• Recommends that Oklahoma adopt a 350 year rule against perpetuities that is not repugnant
against the Oklahoma State Constitution. The 350 years would give Oklahoma a reasonable
competitive position in attracting quality trust business and would save a lot of federal
taxes.
• Also recommends adoption of the Uniform statutory rule against perpetuities.