The December 31, 1994 Dividing Line
Arizona adopted its version of the Uniform Statutory Rule Against Perpetuities with an effective date of December 31, 1994. Any trust or property interest created on or after that date falls under the modern statute. This includes the 500-year maximum period.
Except as otherwise provided, this article applies to a nonvested property interest or a power of appointment that is created on or after December 31, 1994.
A.R.S. § 14-2905(A)Property interests created before that date were governed by the previous rule. If one of those older interests is later found to violate the pre-1994 rule, the court can still step in. It reforms the arrangement to match the creator's intent as closely as possible, within the limits set by this article.
How Exercising a Power of Appointment Affects Timing
When someone exercises a power of appointment, the question arises: does the new interest have its own creation date, or does it relate back to when the power was originally granted? This statute provides a clear answer.
For the purposes of this article, if the person who exercises a power of appointment so provides in the exercise, 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.
A.R.S. § 14-2905(C)If the person exercising the power includes this provision, the perpetuities clock starts fresh from the date of exercise. This can be a useful planning tool for multi-generational trusts. It effectively gives each generation a new 500-year window when a power of appointment is exercised.