Rule against perpetuities

The rule against perpetuities is a legal rule in common law that prevents people from using legal instruments (usually a deed or a will) to exert control over the ownership of private property for a time long beyond the lives of people living at the time the instrument was written.

In essence, the rule prevents a person from putting qualifications and criteria in a deed or a will that would continue to affect the ownership of property long after he or she has died, a concept often referred to as control by the "dead hand" or "mortmain".

Lastly, the rule against perpetuities was sometimes used to prevent very large, possibly aristocratic, estates from being kept in one family for more than one or two generations at a time.

For example, a bequest in a will may be to one's grandchildren, often with a life interest to one's surviving spouse and then to the children, to avoid the payment of multiple death duties or inheritance taxes on the testator's estate.

Charles sued to enforce his interest, and the court (in this instance, the House of Lords) held that such a shifting condition could not exist indefinitely.

"[6] For this reason, another court has declared that the provisions of the rule are predicated upon "public policy" and thus "constitute non-waivable, legal prohibitions.

[21] In the United States, the common law rule has been abolished by statute in Alaska, Idaho, New Jersey, Pennsylvania,[22] Kentucky,[23] Rhode Island,[24] and South Dakota.

[26] As of 2018[update], 31 jurisdictions have adopted the new rule: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Indiana, Kansas, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, and West Virginia, and the District of Columbia and the U.S. Virgin Islands.

[25] In 1919, Michigan lumber baron Wellington R. Burt died, leaving a will that specified that apart from small allowances, his estate was not to be distributed until 21 years after the death of the last of his grandchildren to be born in his lifetime.

Although Freeman's will stated that the payments were intended "to continue in force as long as this glorious government lasts", the trustees of the fund determined that maintaining the trust for more than 21 years after 1989 would violate the rule against perpetuities, and terminated the trust by agreement with then-First Lady Michelle Obama in 2010 to give the fund to charity instead.

For example, a conveyance "to the Red Cross, so long as it operates an office on the property, but if it does not, then to the World Wildlife Fund" would be valid under the rule, because both parties are charities.

Also, if the original conveyance was "to John Smith and his heirs for as long as John Smith or his heirs do not use the premises to sell liquor, but if he does, then to the Red Cross" this would violate the rule because it could be more than 21 years before the interest in Red Cross would vest, and therefore, their interest is void.

Eleanor Elkins Widener, the library's benefactor, stipulated that no "additions or alterations" could be made to the façade of the building.

Conversely, Harvard would benefit if Boston's Isabella Stewart Gardner Museum violated conditions established in the will of its namesake and founder.

To avoid problems caused by incorrectly drafted legal instruments, practitioners in some jurisdictions include a "saving clause" almost universally as a form of disclaimer.

The fertile octogenarian and the unborn widow are two legal fictions from the law of real property (and trusts) that can be used either to invoke the rule against perpetuities to make an interest in property void or, alternatively and much more frequently, to demonstrate the seemingly bizarre results that can occur as a result of the rule.

[34] For instance, suppose that a will devises a piece of land known as Blackacre "to A for her life, and then to the first of A's children to reach 25 years of age".

[37][38] If, for example, a grantor's will devised land "to my son, for life; then to his wife [or widow], for life; then to his children living at the time of her death", the children's contingent remainder (contingent on their status as "living" at the time of the widow's death) would be invalid, even if the grantor's son was an elderly and already-married man.

[38] Other hypothetically relevant possibilities which almost never actually occur but have been invoked by lawyers or courts to invalidate transfers under the rule against perpetuities include the slothful executor (a situation where the executor of the estate does not probate the will for many years after the testator's death), the magic gravel pit (a transfer to be made as soon as a gravel pit is out of gravel may not vest for hundreds of years), the war that never ends (a transfer to be made at the end of a war might never happen), and other similar situations.

Because these hypothetical scenarios show how a reasonable gift can be voided based on so unlikely an outcome, they have generated much criticism among legal scholars, resulting in the abrogation of the rule against perpetuities by statute in many jurisdictions.