The rule against perpetuities sounds like a technicality buried in a dusty law book, but it actually dictates when you are legally allowed to pass assets to heirs. If you want to set up a trust that keeps wealth locked inside your family for generations, this doctrine is the wall you will hit. It is not a suggestion. It is a strict legal boundary designed to stop the “dead hand” from controlling the future of land and money indefinitely.
Why courts hate inalienable property
In Anglo-American law, the core assumption is that property must stay in circulation. This concept is called alienation, which simply means transferring property by voluntary deed rather than through inheritance. When English conveyancers in the late 16th century tried to create a form of conveyance that made land inalienable forever, the courts rejected it. They viewed such an attempt as an invalid human rival to the permanence of God.
The word perpetuity comes from the Latin in perpetuum, a Biblical phrase referring to God’s eternal continuance. Courts used it to describe limitations that tried to freeze property outside the market forever.
The term became the antithesis of freedom. By the end of the 17th century, it was clear that future interests preventing property from being sold or transferred for “too long” a time were also invalid. The next century and a half, from 1687 to 1833, was spent by English courts trying to define exactly what “too long” meant.
How the 21-year rule works
The solution was a specific, measurable period. The permissible time for tying up property was fixed at the lifetimes of human beings alive when the conveyance was made, plus 21 years, plus one or more periods of gestation.
This structure had a practical origin. It mirrored the English marriage settlement, where land would be held until the eldest son reached full age. The rule invalidates any interest in property, whether real or personal, that might take longer than this period to vest in the donee. Crucially, the rule looks at possible events, not actual ones. If there is a chance the asset won’t be free to transfer within the window, the interest is void from the start.
This “common-law rule against perpetuities” still operates in England and a large percentage of American states. It serves two purposes simultaneously:
– It assures the alienability of property by the end of a period that is not inconveniently long.
– It sets an outer limit on the power of the dead to control the future.
Why New York broke the mold and then reversed it
The classical rule has always felt arbitrary to many jurists. In 1830, the New York legislature adopted statutes that substantially shortened the permissible period. They also applied the rule to the duration of the most common form of private express trusts, not just future interests.
This statutory innovation spread to other states. However, over the next century, there was a general reversal of this trend. Even New York itself returned largely to the common-law permissible period in 1958. The shift highlighted a tension between legislative convenience and the traditional common-law framework.
How modern laws try to fix the capriciousness
Opinion is widespread in the common-law world that the classical rule needs statutory modification because its operation can be capricious. A single month difference in when a life ends can void a trust that otherwise seems reasonable.
In England, far-reaching alterations were made by the Perpetuities and Accumulations Act 1964. This act provided that a disposition made after the act would be valid if it in fact vested during a statutory “perpetuity period,” even if it would have been void under the common-law rule. It substituted actual for possible events.
Key changes included:
– Allowing a settlor or testator to specify a period of years not exceeding 80 as the perpetuity period for that particular deed or will.
– The Perpetuities and Accumulations Act 2009 extended the prescribed perpetuity period to 125 years.
Since the whole rule rests on social policy, exceptions based on superior social policies have gained acceptance. These include perpetual trusts for burial lots, trusts for pension plans, charitable gifts, and some other less frequent types of conveyance. The law bends, but it does not break completely.
