Key Takeaways
- The rule against perpetuities (RAP) prevents property interests from being controlled or tied up for an indefinite period by requiring that certain interests must vest no later than 21 years after the death of a relevant living person at the time of creation.
- The RAP is notoriously complex, often resulting in confusion and inadvertent invalidation of property interests if not properly understood and applied. Both traditional common law and statutory modifications exist, with some jurisdictions adopting reforms to simplify or abolish the rule.
- The rule primarily affects wills, trusts, and other donative transfers, ensuring property remains transferable and does not become stagnant, but practical application requires careful legal drafting and awareness of jurisdictional variations.
Introduction: What is the Rule Against Perpetuities?
The rule against perpetuities is a foundational doctrine in property law, especially in common law jurisdictions such as the United States and England. Its main purpose is to prevent individuals from using legal instruments—like wills, trusts, or deeds—to control the ownership and use of property for an unreasonably long period after their death. The classic statement of the rule is: "No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest." This principle is designed to keep property interests from being locked away for generations, thereby ensuring that property remains marketable and accessible to future owners (Thomson Reuters).
While the rule’s intention is straightforward, its application is famously difficult, sometimes described as the most challenging concept in property law. Even seasoned attorneys and judges can struggle with the nuances of the rule, which has led to widespread calls for reform and simplification (Harvard Law Property Materials).
The Purpose and Policy Behind the Rule
Historical Context
The RAP emerged in English common law during the 17th and 18th centuries, at a time when wealthy families sought to keep their estates intact and out of the hands of creditors or distant relatives for as long as possible. The law responded by limiting the duration for which future interests—such as those created by trusts or conditional gifts—could remain unvested.
Policy Goals
The rule serves several important policy goals:
- Preventing the Dead Hand Problem: The RAP limits the ability of a deceased person to control property indefinitely, promoting the free transfer and productive use of property.
- Promoting Marketability: By ensuring that interests vest within a predictable timeframe, the rule helps keep property interests clear and transferable.
- Limiting Uncertainty: The RAP reduces legal uncertainty by requiring that future interests are either definitively vested or voided within a set period (Cornell Law School - Legal Information Institute).
How the Rule Works: The Mechanics of Vesting
The Classic Formulation
At its core, the RAP states that a future interest in property is invalid unless it is certain to vest or fail within 21 years after the death of a life in being at the creation of the interest. A "life in being" refers to a person alive at the time the interest is created.
Types of Interests Affected
The rule generally applies to:
- Contingent remainders
- Executory interests
- Certain options and powers of appointment
- Interests in trusts
It does not apply to present possessory interests, vested remainders, or interests held by charities (under the charitable exception).
Example: A Classic Violation
Suppose Homer grants a house "to Marge for life, then to the oldest of Marge's children who survive her when he or she reaches the age of 30." If Marge has children alive at the time of the grant, but it is possible (even if unlikely) that the oldest surviving child might not reach 30 within 21 years of Marge's death, the interest could vest too late. Because of this possibility, the gift violates the RAP and is void (Reddit LawSchool Example).
Practical Applications: Trusts, Wills, and Estate Planning
Trusts
The RAP is particularly relevant in the context of trusts. For example, a trust that attempts to delay distribution of assets to beneficiaries for several generations may run afoul of the rule. To be valid, the interests created by the trust must vest, if at all, within the permissible period—21 years after the death of a life in being at the time the trust was created (Washington University Law Review).
Wills and Gifts
Similarly, testamentary gifts (gifts made in a will) that are conditioned on uncertain future events—such as a beneficiary reaching a certain age—must comply with the RAP. If there is any possibility, however remote, that the interest might vest too late, the gift is void.
Options and Powers of Appointment
Certain options to purchase property and powers of appointment (the right to decide who will receive property in the future) are also subject to the rule. Drafters must ensure these interests cannot extend beyond the permissible period.
Statutory Reform and Modern Trends
The Uniform Statutory Rule Against Perpetuities (USRAP)
Recognizing the complexity and harshness of the common law rule, many U.S. states have adopted statutory reforms. The Uniform Statutory Rule Against Perpetuities (USRAP), promulgated by the Uniform Law Commission, provides a more flexible approach. Under USRAP, a nonvested property interest is valid if it either:
- Satisfies the traditional common law rule, or
- Actually vests or terminates within 90 years after its creation (a "wait and see" approach).
This modification reduces the risk of technical violations and allows for more practical estate planning.
State Variations and Abolition
Some states have gone further, either abolishing the rule altogether or creating exceptions for certain types of trusts (such as dynasty trusts). For example, states like South Dakota and Delaware have effectively eliminated the RAP for certain trusts, allowing property to be held in trust for multiple generations without violating the rule.
The Restatement (Second) of Property
The American Law Institute's Restatement (Second) of Property (Donative Transfers) has also influenced statutory reform, aiming to clarify and modernize the application of the RAP.
The Rule in Legal Education and Practice
Teaching the Rule
The RAP is infamous in law school curricula for its difficulty. Professors often use hypothetical scenarios and "problem method" teaching to help students grasp the abstract concepts and practical consequences of the rule (University of Georgia Law Faculty Publications).
Drafting and Litigation
For practicing attorneys, careful drafting is essential to avoid inadvertent violations. Many lawyers use "savings clauses" to ensure that any interest that might violate the RAP is automatically reformed or distributed within the permissible period.
Common Challenges and Criticisms
Complexity and Unintended Consequences
The RAP has been criticized for its technical complexity and the seemingly arbitrary invalidation of otherwise reasonable property interests. Its application often depends on highly unlikely scenarios, leading to outcomes that may defeat the intent of the person creating the interest.
Calls for Reform
Given these issues, there are ongoing debates about whether the rule should be further reformed, simplified, or abolished. Many legal scholars and practitioners support statutory modifications to make the rule less draconian and more aligned with modern estate planning needs.
Conclusion
The rule against perpetuities remains a cornerstone of property law, designed to prevent the indefinite control of property and ensure its continued transferability. While the rule’s policy objectives are clear, its practical application is fraught with complexity and traps for the unwary. With statutory reforms and evolving legal doctrines, the RAP continues to adapt to the needs of modern property owners and estate planners. For attorneys and law students alike, a deep understanding of the rule—and its variations across jurisdictions—is essential for effective legal practice.
For further authoritative reading, consult the Cornell Law School Legal Information Institute and the Uniform Law Commission.
Disclaimer: This guide is intended as a general overview for educational purposes only. The rule against perpetuities is subject to numerous exceptions, statutory modifications, and jurisdictional nuances. For specific legal advice or research, consult an experienced attorney or visit Counsel Stack for comprehensive legal resources.
