The rule against perpetuities (RAP) is a legal doctrine that applies to the creation of future interests in property, particularly in the context of trusts and estates. It is designed to prevent property from being tied up in a trust or other arrangement for an excessively long period, thereby limiting the ability of future generations to use and manage the property. The RAP is based on the idea that property should not be removed from the market for an excessively long time, as this can hinder economic growth and development.
Overview of the Rule Against Perpetuities
The RAP applies to any interest in property that is created to vest at a future time, such as a trust or a remainder interest. The rule states that any such interest must vest, if at all, within 21 years after the death of a life in being at the time the interest was created. A “life in being” refers to a person who is alive at the time the interest is created. This means that if an interest is created to vest at a future time, it must do so within 21 years after the death of someone who was alive when the interest was created.
Key Elements of the Rule Against Perpetuities
There are several key elements to the RAP, including:
- Life in being: The RAP is measured from the death of a life in being, which is a person who is alive at the time the interest is created.
- 21-year period: The RAP requires that any future interest must vest within 21 years after the death of a life in being.
- Vesting: An interest is said to vest when it becomes certain and no longer subject to being defeated by a condition or contingency.
- Future interests: The RAP applies to any interest in property that is created to vest at a future time, such as a trust or a remainder interest.
The RAP can be complex and difficult to apply, particularly in situations where multiple lives in being are involved or where the interest is created to vest at a future time that is uncertain. In such cases, the rule may be applied using a variety of techniques, including the use of cy pres doctrine, which allows a court to modify a trust or other arrangement to conform to the RAP.
| Type of Interest | Application of RAP |
|---|---|
| Trust | The RAP applies to any trust that is created to vest at a future time, such as a trust for the benefit of a minor child. |
| Remainder interest | The RAP applies to any remainder interest that is created to vest at a future time, such as a remainder interest in a piece of real property. |
| Future interest | The RAP applies to any future interest in property, such as a future interest in a business or investment. |
Consequences of Violating the Rule Against Perpetuities
If an interest in property is created in violation of the RAP, it may be deemed void or unenforceable. This can have significant consequences, including the loss of property rights and the disruption of estate plans. In some cases, a court may be able to modify a trust or other arrangement to conform to the RAP, but this is not always possible.
Reforming the Rule Against Perpetuities
In recent years, there has been a trend towards reforming the RAP to make it more flexible and easier to apply. Some states have adopted wait and see approaches, which allow the RAP to be applied at the time the interest is scheduled to vest, rather than at the time it is created. Others have adopted perpetuities periods that are longer than 21 years, such as 90 years or more.
Despite these reforms, the RAP remains a complex and challenging area of law. It's essential to carefully consider the RAP when creating any interest in property that is intended to vest at a future time, and to seek the advice of a qualified attorney or other expert if necessary.
What is the purpose of the rule against perpetuities?
+The purpose of the RAP is to prevent property from being tied up in a trust or other arrangement for an excessively long period, thereby limiting the ability of future generations to use and manage the property.
How does the RAP apply to trusts?
+The RAP applies to any trust that is created to vest at a future time, such as a trust for the benefit of a minor child. The rule requires that any such trust must vest, if at all, within 21 years after the death of a life in being at the time the trust was created.
What are the consequences of violating the RAP?
+If an interest in property is created in violation of the RAP, it may be deemed void or unenforceable. This can have significant consequences, including the loss of property rights and the disruption of estate plans.
