The Rule Against Perpetuities (RAP) is a legal principle in property law that states no contingent interest is valid unless it must vest, if at all, no later than 21 years after the death of a relevant person (often referred to as a “measuring life”) who was alive at the time the interest was created. This rule is designed to prevent property from being tied up indefinitely and to forbid long-term restrictions that could impede the free transfer and use of property.
History and Purpose
The Rule Against Perpetuities originates from English common law in the 17th and 18th centuries. It was intended to restrict the long-term control of property, ensuring that it remained alienable and could be freely transferred rather than locked within family dynasties for generations. This was crucial for economic flexibility and the reduction of dead-hand control.
Perpetuities Period
The “perpetuities period” is the time frame within which a contingent interest must vest. It involves a combination of:
- A measuring life: any person alive at the time the interest is created.
- An additional period of 21 years after the death of the measuring life.
Application in Modern Law
United States
In the United States, the Rule Against Perpetuities has been adopted by most states but often with modifications or reforms. For example, some jurisdictions have enacted statutes like the Uniform Statutory Rule Against Perpetuities (USRAP), which includes an alternative 90-year vesting period.
United Kingdom
In the UK, the Perpetuities and Accumulations Act 1964 modified the rule, and it was further reformed by the Perpetuities and Accumulations Act 2009. These changes modernized the rule, accommodating more contemporary forms of property and interests.
Key Elements of RAP
Contingent Interest
A property interest is considered contingent if it depends on the occurrence of a future event. Examples include:
- A future gift to a beneficiary contingent upon them reaching a certain age.
- A remainder interest that will vest only if a specific condition is met.
Measuring Life
The measuring life is typically someone connected to the grantor or the property interest itself—often a family member or individual alive at the time the interest is created.
Examples and Application
Example 1: Valid Interest
A testator leaves property to their grandchild, who is alive at the time of the testator’s death, to be given 20 years after the grandchild reaches age 21. Assuming the grandchild is a measuring life, compliance with RAP as the interest will vest within 21 years of the grandchild’s death.
Example 2: Invalid Interest
A testator leaves property to their grandchild’s descendants, contingent upon a descendant becoming a lawyer. This could violate RAP if a descendant becoming a lawyer occurs beyond the perpetuities period since it is exceedingly remote and indeterminable at the time of creation.
Special Considerations
Reformed RAP
Some jurisdictions have reformed RAP to better fit contemporary property transactions and trusts. Examples include allowing for “wait and see” approaches or statutory extensions.
Trusts and Estate Planning
Estate planners must carefully draft documents to avoid violations of RAP, often using savings clauses to ensure compliance. Trusts can be particularly complex, requiring attention to how and when interests vest.
FAQs
Q: What happens if a property interest violates RAP?
A: Typically, the interest is deemed void at inception, meaning it never takes effect.
Q: Can RAP be waived or altered by agreement?
A: No, RAP is a mandatory rule in jurisdictions where it applies, and it cannot be waived or altered by private agreement.
Q: How does RAP apply to charitable trusts?
A: Charitable trusts are generally exempt from RAP, provided they follow specific statutes and public policy considerations.
Related Terms
- Contingent Remainder: A future interest in property that will take effect only upon the occurrence of a specified event.
- Vested Interest: An interest that is secured and already owned, though possession or enjoyment may be future.
- Measuring Life: An individual whose life is used as the reference point for the vesting period under RAP.
Summary
The Rule Against Perpetuities is a cornerstone of property law aimed at preventing the indefinite restriction on property interests. While its traditional form can be complex, recent reforms and statutory adaptations have helped align it with modern property practices. Understanding RAP is crucial for legal professionals in estate planning, trusts, and real estate transactions to ensure compliance and promote the free transferability of property.
