The Rule Against Perpetuities

The Rule Against Perpetuities is a foundational yet notoriously challenging doctrine in property law, designed to prevent the dead hand of the past from controlling property ownership for too long into an uncertain future. You must master it to understand how estates and future interests function within a coherent, marketable system. This rule invalidates interests that might vest—or fail to vest—too remotely in time, striking a balance between allowing settlors freedom to plan and ensuring property remains alienable for the benefit of the economy and society.

The Core Concept: Voiding Remote Vesting

At its heart, the Rule Against Perpetuities is a rule against remoteness of vesting. Its classic common law statement, as formulated by John Chipman Gray, is: No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest. The rule does not concern how long an interest lasts, but rather how long one must wait to see if it will ever become a present possessory right. An interest that might possibly vest outside the perpetuity period (a life in being plus twenty-one years) is void from the moment it is created. This rule primarily targets contingent remainders and executory interests, as these future interests are by definition subject to a condition precedent that may not occur within the allowable timeframe.

Understanding two key terms is essential. First, vest means the interest becomes certain to take effect in possession, either immediately or at a defined future time, with no conditions precedent remaining. Second, a life in being (or measuring life) is any person alive at the time the interest is created whose life can be used to measure the perpetuities period. This person must be relevant to the vesting condition—often a beneficiary or someone mentioned in the instrument. The twenty-one years accounts for a minority period, allowing for gestation and the coming of age of a beneficiary.

Applying the Common Law Rule: A Step-by-Step Analysis

To apply the rule, you examine each future interest at the moment of its creation (e.g., the execution of a will or deed) and consider any possible scenario, no matter how improbable, that could cause the interest to vest outside the perpetuities period. If such a scenario exists, the interest is void ab initio (from the beginning). The focus is on logical possibilities, not probabilities.

Consider this classic example: "To A for life, then to A's first child to reach the age of 25." At creation, A is alive and has no children.

1. Identify the future interest: A contingent remainder in A's first child to reach 25.
2. Identify the condition precedent: That child must survive A and reach age 25.
3. Test against the rule: Is it certain the interest will vest or fail within 21 years of a life in being? A is a valid life in being. However, imagine A dies the day after creating the interest, leaving a pregnant wife. That unborn child is not a life in being. That child could be born, become A's first child, and reach age 25 more than 21 years after A's death. This is a possible, if unlikely, scenario. Therefore, the contingent remainder is void under the common law rule.

The harshness of this "what might happen" test led to numerous common trap scenarios. The "unborn widow" and the "fertile octogenarian" are famous examples where courts presumed any person, regardless of age or circumstance, could have more children, creating a hypothetical chain of events that violates the rule.

Modern Reforms: Wait-and-See and the Uniform Statutory Rule

Due to the draconian nature of the common law rule, which often defeated a transferor's intent based on mere logical possibilities, states adopted significant reforms. The two major approaches are wait-and-see statutes and the Uniform Statutory Rule Against Perpetuities (USRAP).

The wait-and-see doctrine modifies the common law's "what might happen" approach. Instead of invalidating an interest at creation based on a remote possibility, the court allows the interest to remain valid and simply waits to see what actually happens. The interest is judged by actual events within the perpetuities period. Using our earlier example, the court would wait. If A's first child actually turns 25 within 21 years of A's death, the interest vests and is valid. This approach honors intent and saves many interests that the common law would have destroyed.

USRAP is a more comprehensive reform adopted in many states. It provides a two-tiered test. First, an interest is valid if it satisfies the traditional common law rule. If it does not, it is then tested under a 90-year wait-and-see period. Essentially, the interest is given a 90-year window from its creation to either vest or fail. If it vests within 90 years, it is valid. If not, it is reformed by the court (e.g., the age contingency is reduced) to vest at the close of the 90-year period. This creates a fixed, certain timeframe that is often easier for planners to work within than lives in being.

Common Pitfalls and How to Avoid Them

1. Focusing on Probability Instead of Possibility: The biggest mistake is arguing an event is "too unlikely" to consider. The common law rule cares only about the existence of a single possible chain of events leading to remote vesting. You must imagine the most extreme, but logically possible, circumstances—including after-born children and unlikely deaths.
2. Misidentifying the Relevant Lives: Only lives in being that are causally related to the vesting event can "validate" the interest. You cannot simply pick any random person alive at creation and add 21 years. The life must be one whose circumstances directly impact whether the condition is met (e.g., a beneficiary, a life tenant, or a parent mentioned in the contingency).
3. Forgetting the "Plus 21 Years": The period is a life in being plus twenty-one years. An interest that must vest within the lifetime of a measuring life is always valid. But if vesting is tied to an event that can occur after that person's death (like reaching an age), you must add the 21-year period to the date of their death in your analysis.
4. Confusing Vesting with Possession: An interest can vest long before the holder gets the right to possession. For example, a remainder given "to A's children who attain age 21" vests in each child the moment they turn 21, even if the life tenant (A) is still alive. The rule is concerned with the vesting event, not the takeover of possession.

Summary

• The Rule Against Perpetuities voids any future interest (like contingent remainders and executory interests) that might not vest within a period measured by a life in being plus twenty-one years.
• The traditional common law test is applied at creation and considers any possible scenario, no matter how improbable, making it a harsh rule that often invalidates interests based on remote possibilities like the "unborn widow."
• Wait-and-see statutes reformed the rule by validating interests based on what actually occurs within the perpetuities period, rather than what might happen.
• The Uniform Statutory Rule Against Perpetuities (USRAP) provides a salvage mechanism, first applying the common law rule and then, if the interest fails, allowing it a 90-year period to vest before the court reforms it.
• Successful application requires carefully identifying the condition precedent, selecting valid measuring lives, and rigorously testing for any logical path to remote vesting, not just probable ones.