Navigating the Rule Against Perpetuities
Understand this complex property law concept and its impact on estate planning and future interests.
Understanding the Rule Against Perpetuities
The “Rule Against Perpetuities” is a legal principle that often sends shivers down the spine of legal students and professionals alike due to its complexity. However, its core purpose is quite straightforward: to prevent the “dead hand” of the past from controlling property ownership for an unreasonably long time after death. It ensures that property remains “alienable,” or freely transferable, for future generations.
What is the Core Principle?
At its heart, the common law Rule Against Perpetuities dictates that an interest in property must “vest,” or become a non-contingent, absolute right, no later than 21 years after the death of someone who was alive when the interest was created. This is often referred to as “a life in being plus 21 years”.
💡 Pro Tip:
The “life in being” can be any individual or group of people, as long as they are alive at the time the interest is created and are not an “unreasonably large” group. This individual’s life acts as the “measuring life” to determine the perpetuity period.
Example of a Valid Interest
Imagine a will that states, “I give my property to my son, Adam, for his life, and then to his first child to turn 21”. At the time the will takes effect, Adam is the “life in being.” It is certain that Adam’s child will turn 21, if at all, within 21 years of Adam’s death. Therefore, this gift does not violate the rule, as the interest vests within the allowed period.
Example of a Void Interest
Now, consider a will that says, “I give my property to my son, Adam, for his life, and then to his first great-grandchild to get a law degree.” Here, it is not certain that Adam’s great-grandchild will get a law degree within 21 years of Adam’s death. There is a possibility, however remote, that the interest could vest outside of the perpetuity period, making the gift void at common law.
⚠️ Important Considerations:
- The rule applies to “non-vested property interests,” meaning rights that are not yet certain.
- The common law rule is strict: if there is even a remote possibility that an interest might not vest within the period, it is considered void from the beginning.
Modern Modifications to the Rule
Recognizing the harshness of the common law rule, many U.S. states have adopted reforms. A common approach is the “wait-and-see” method, which allows courts to see what actually happens before invalidating an interest. For instance, the Uniform Statutory Rule Against Perpetuities (USRAP) adopts a “wait-and-see” approach with a flat 90-year waiting period. This reform allows for dispositions to be valid if they either meet the common law test at creation or if they actually vest within 90 years.
Here is a summary of the two primary approaches:
| Rule Type | Principle | Time Frame |
|---|---|---|
| Common Law Rule | Validity is determined at the moment of creation. If there is any possibility of delayed vesting, the interest is void. | A life in being plus 21 years. |
| “Wait-and-See” (USRAP) | Validity is determined by what actually happens. An interest is only void if it fails to vest within the statutory period. | 90 years after the interest’s creation. |
Why This Rule Matters
The Rule Against Perpetuities is crucial for estate planning, particularly when creating trusts or complex wills that involve future interests in property. It applies to both real property (land) and personal property held in trusts. Without careful consideration, a seemingly simple condition in a will or deed could be rendered invalid, disrupting the grantor’s intentions and potentially causing significant legal complications.
Case in Point: A Classic Scenario
A testator leaves property to their children for life, then to their grandchildren for life, with the final transfer of the property’s “corpus” to their great-grandchildren. This is a classic example of a “perpetual” transfer that could violate the rule if not carefully drafted. The identity of future beneficiaries (great-grandchildren) may not be determinable within the required time frame. A legal expert would need to ensure that such an arrangement includes a “savings clause” to avoid violating the rule.
Summary of Key Points
- The Rule Against Perpetuities prevents long-term control of property by a past owner.
- It requires that a property interest must vest, if at all, within 21 years after the death of a “life in being”.
- Common law applies a strict “what if” test, voiding any interest with a possibility of delayed vesting.
- Modern reforms, like the USRAP, often use a “wait-and-see” approach with a longer, fixed period (e.g., 90 years).
- The rule is critical for drafting wills, trusts, and deeds that involve future interests.
Final Takeaway: A Foundational Concept
While the Rule Against Perpetuities may seem arcane, it is a foundational concept in property and estate law. Its purpose is to balance the desires of property owners with the need to keep property in the stream of commerce for future generations. For anyone creating a will or trust with complex provisions, consulting with a legal expert is essential to ensure the provisions are legally sound and your intentions are carried out.
Frequently Asked Questions (FAQs)
Q1: What does it mean for an interest to “vest”?
“Vesting” means that a property right has become a certain, non-contingent right held by a known individual. Before an interest vests, there may be conditions or uncertainties surrounding its ownership.
Q2: Does the rule apply to charitable trusts?
No, the Rule Against Perpetuities generally does not apply to charitable trusts, as they are not restricted to a specific time period. The rule is primarily concerned with private trusts and future interests.
Q3: What happens if a will violates the rule?
If a provision in a will or deed violates the common law rule, that specific interest or gift is considered void and is typically stricken from the instrument. The rest of the will remains in effect, and the voided property interest would typically revert back to the original estate.
Q4: What is a “savings clause”?
A “savings clause” is a provision often included in a trust or will that is designed to prevent a violation of the rule. It typically states that if any interest would violate the rule, it will instead vest at the latest possible time within the perpetuity period to ensure its validity.
Disclaimer: This blog post provides general information and is for educational purposes only. It is not a substitute for professional legal advice. The law is subject to change and may vary by jurisdiction. You should not act or rely on this information without seeking the advice of a competent legal expert.
Property,Inheritance,Wills,Trusts,Case Law,Statutes & Codes,Legal Forms,Filing & Motions
Please consult a qualified legal professional for any specific legal matters.