The rule against perpetuities stops a grantor controlling land for generations through contingent future interests. In its classic form, an interest is void unless it must vest, if it vests at all, no later than twenty one years after the death of someone alive when the interest was created. The rule is about certainty rather than probability. If there is any possible sequence of events in which the interest vests too late, it fails from the outset.
Rule
- What it covers. Contingent remainders, executory interests, vested remainders subject to open, and in many states options and rights of first refusal.
- What it does not cover. Interests retained by the grantor, and vested remainders held by an ascertained person.
- The perpetuities period. Lives in being at the creation of the interest, plus twenty one years.
- The method. Find a validating life, meaning a person alive at creation about whom you can say with certainty that the interest will vest or fail within twenty one years of that person's death.
- Classic traps. The fertile octogenarian assumes anyone can have children at any age. The unborn widow assumes the widow might be someone not yet born. The slothful executor assumes probate might take longer than twenty one years.
- Modern reform. Many states have adopted wait and see approaches, a flat ninety year period, or judicial reformation to carry out the grantor's intent, and some have abolished the rule for trusts.
Leading cases
- Jee v. Audley: an interest was void because the law assumed a couple in their seventies could still have another child, the origin of the fertile octogenarian problem.
- Symphony Space, Inc. v. Pergola Properties, Inc.: New York applied the rule to a long term commercial option to repurchase, holding that it was void even between sophisticated parties.
Where students go wrong
The first mistake is asking what is likely. The common law rule asks what is possible, so an outcome with a vanishingly small chance still destroys the interest.
The second is applying the rule to interests it does not reach. Check the classification first, because a reversion or a fully vested remainder is never at risk.
The third is ignoring the reforms. Most states no longer apply the rule in its unforgiving form, so a complete answer states the common law result and then applies the local statute.
FAQ
Why twenty one years?
It approximated the time from a child's birth to the age of majority, so a grantor could provide for people alive at the time plus their children reaching adulthood, and no further.
What is a validating life?
A person alive when the interest was created whose life you can use to prove the interest must vest or fail within the period. Finding one saves the gift; being unable to find any means it fails.
Does the rule still matter?
Yes, though less than it did. Many states have softened or abolished it, but it still appears on exams and on the bar, and it still catches commercial options in some jurisdictions.
Related terms
Working through this in your own casebook takes longer than reading it here. Syllume starts from your syllabus and turns each assigned case into a brief you can study from.