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There’s a law called the Rule Against Perpetuities, which says that you must eventually distribute the assets. At some point, a human being needs to own the assets so they can eventually be taxed. From an income tax perspective, the trust still pays taxes along the way. But from an estate tax perspective, the government wants to make sure a real person ultimately receives the assets. That’s why the law forces the trust to distribute at some point. Here’s how the Rule Against Perpetuities works:
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