KembaraXtra - Legal Terms - Rule Against Perpetuities

The rule against perpetuities is a common-law doctrine that prevents future interests in property from vesting too remotely. It ensures that property cannot be tied up indefinitely through future gifts. A future interest must vest, if at all, within the prescribed perpetuity period. If there is any possibility that vesting may occur too late, the interest is void. The rule promotes the free transferability of property.

Traditionally, the perpetuity period consisted of the lives of relevant persons alive when the disposition took effect, plus twenty-one years, together with any actual period of gestation where applicable. The period begins when the relevant deed is executed or, in the case of a will, upon the testator’s death. The relevant lives are those whose existence determines when the interest may vest. The calculation could therefore become highly technical. Careful drafting was often required.

The purpose of the rule is to prevent excessive control over property by previous generations. Without the rule, property could remain unavailable for sale or development for centuries. Such restrictions would reduce economic efficiency and commercial certainty. The doctrine therefore supports the wider public interest. It limits the ability of owners to control property indefinitely after their death.

The Perpetuities and Accumulations Act 1964 modified the common-law rule. It introduced the “wait and see” approach, allowing courts to determine whether the interest actually vests within the permitted period instead of invalidating it immediately. The Act also introduced statutory lives in being and permitted fixed perpetuity periods. These reforms reduced the harshness of the original common-law rule. They made the law more practical.

The rule against perpetuities remains one of the most technically demanding areas of property law. Although statutory reform has simplified its application, its underlying policy remains unchanged. Lawyers drafting wills and trusts must ensure that future interests comply with perpetuity rules. Failure to do so may invalidate intended gifts. The doctrine continues to protect the free circulation of property.