Legal Definitions - perpetuities, rule against

The Rule Against Perpetuities is a legal principle designed to prevent property from being tied up indefinitely in the future. Its purpose is to ensure that property ownership eventually becomes clear and transferable, rather than remaining subject to conditions that might not be met for many generations.

In simpler terms, the rule sets a time limit for when a future interest in property must "vest" – meaning, when the identity of the owner becomes certain and their interest is no longer subject to any further conditions. This time limit is generally defined as 21 years after the death of someone who was alive when the interest was created (a "life in being"). If there's any possibility, no matter how remote, that a future interest might not vest within this period, the interest is considered void from the outset.

Here are some examples to illustrate how the Rule Against Perpetuities applies:

• Example 1: Conditional Gift in a Will

  Imagine a will that states: "My beach house shall pass to the first of my great-great-grandchildren who successfully climbs Mount Everest."

  How it illustrates the rule: The condition of climbing Mount Everest might not be met for many generations, long after anyone alive at the time the will takes effect (the "lives in being") has passed away, plus 21 years. It's entirely possible that no great-great-grandchild ever attempts or succeeds in climbing Everest, or that it happens so far in the future that the ownership of the beach house remains uncertain for an unreasonable amount of time. The Rule Against Perpetuities would likely void this specific condition, ensuring the beach house passes to a more immediate heir or according to other provisions in the will, preventing the property from being stuck in legal limbo.

• Example 2: Long-Term Trust for Future Descendants

  A wealthy individual establishes a trust with the instruction: "The income from this trust shall be paid to my children for their lives, then to my grandchildren for their lives, and upon the death of my last grandchild, the principal shall be distributed to those of my great-grandchildren who reach the age of 30."

  How it illustrates the rule: While the children and grandchildren are "lives in being" whose deaths can be measured, the condition for the great-grandchildren to reach age 30 might occur too remotely. It's possible that a great-grandchild is born long after the last grandchild dies, and then takes more than 21 years to reach 30. Because there's a possibility that the interest of the great-grandchildren might not vest within the perpetuity period (lives in being + 21 years), the Rule Against Perpetuities would likely strike down the condition for the great-grandchildren, ensuring the trust principal vests in a more timely manner, perhaps upon the death of the last grandchild, or to the great-grandchildren alive at that point.

• Example 3: Indefinite Option to Purchase Land

  A property owner sells a large parcel of land but includes a clause in the deed stating: "The seller, or their heirs, shall have the option to repurchase this land at a fixed price at any time in the future if the buyer ever decides to sell it."

  How it illustrates the rule: This option could potentially last forever, as the "heirs" of the seller could extend indefinitely into the future. This creates significant uncertainty for the current owner of the land, making it difficult for them to sell, develop, or obtain financing, because their ownership is perpetually encumbered by a remote repurchase right. The Rule Against Perpetuities would likely void this indefinite option, ensuring that the buyer's ownership is clear and not subject to such a long-lasting and uncertain future claim.