The Greystocke Project is a 501(c)(4) organization whose purpose is to lobby Congress to enact a statute limiting the interval over which a trust may be exempted from the generation-skipping transfer tax to ninety years.
A version of this proposal was advanced back in 2005 by the staff of the Joint Committee on Taxation, and another version has appeared in each of the the Obama Administration's budget proposals for the past several years.
The 2005 Joint Committee staff proposal would prohibit the allocation of GST tax exemption amounts to a transfer to a perpetual trust, except to the extent the trust required distributions to the first or second generation. The Obama Administration's proposal would limit the duration of the exemption to ninety years from the date the trust was funded.
Under either proposal, the change would be effective only with respect to trusts created after the date of enactment.
University of Michigan law professor Lawrence W. Waggoner has suggested a third alternative, denying exemption to a trust that does not conform to the common law rule -- lives in being plus twenty-one years --, or to the ninety-year "wait and see" proviso of the Uniform Statutory Rule, or to the "two-generation" rule of the Third Restatement.
Prof. Waggoner argues such a change in the statute could be made to apply to existing trusts by providing a "grace period" within which these could be brought into compliance. The Greystocke Project shares this view. To the extent possible, existing trusts should be brought back into the transfer tax system.
The Greystocke Project also intends to lobby state legislatures, to frame and promote voter initiatives and referenda, and to support appropriate litigation in state courts to reverse the trend toward abrogating the common law rule against perpetuities by statute.
Early initiatives will focus on states in which statutes effectively abrogating the rule would appear to conflict with state constitutional provisions forbidding perpetuities or entails.
A version of this proposal was advanced back in 2005 by the staff of the Joint Committee on Taxation, and another version has appeared in each of the the Obama Administration's budget proposals for the past several years.
The 2005 Joint Committee staff proposal would prohibit the allocation of GST tax exemption amounts to a transfer to a perpetual trust, except to the extent the trust required distributions to the first or second generation. The Obama Administration's proposal would limit the duration of the exemption to ninety years from the date the trust was funded.
Under either proposal, the change would be effective only with respect to trusts created after the date of enactment.
University of Michigan law professor Lawrence W. Waggoner has suggested a third alternative, denying exemption to a trust that does not conform to the common law rule -- lives in being plus twenty-one years --, or to the ninety-year "wait and see" proviso of the Uniform Statutory Rule, or to the "two-generation" rule of the Third Restatement.
Prof. Waggoner argues such a change in the statute could be made to apply to existing trusts by providing a "grace period" within which these could be brought into compliance. The Greystocke Project shares this view. To the extent possible, existing trusts should be brought back into the transfer tax system.
The Greystocke Project also intends to lobby state legislatures, to frame and promote voter initiatives and referenda, and to support appropriate litigation in state courts to reverse the trend toward abrogating the common law rule against perpetuities by statute.
Early initiatives will focus on states in which statutes effectively abrogating the rule would appear to conflict with state constitutional provisions forbidding perpetuities or entails.
