The rule against perpetuities (RAP) is a notoriously complex legal principle in property law designed to prevent property interests from being tied up indefinitely in the future, ensuring that ownership eventually vests and doesn’t remain in limbo for generations. Essentially, it dictates that an interest must vest—meaning be certain of becoming possessory—no later than 21 years after the death of someone alive when the interest was created, often referred to as a “life in being.” While originally rooted in preventing feudal land control issues, it remains a vital, yet often misunderstood, component of estate planning today, particularly in trust creation and complex gifting strategies. Over 60% of estate planning attorneys report regularly encountering RAP issues when drafting complex trusts, highlighting its ongoing relevance.
Can a Trust Really Last Forever?
The idea of a trust lasting ‘forever’ is a common misconception and directly clashes with the RAP. The rule isn’t about preventing trusts themselves from existing for long periods, but rather about preventing the *conditions* within a trust from controlling property ownership an unreasonably long time into the future. For instance, a trust that pays income to someone for their life, then to their children for their lives, and *then* to their grandchildren—but only if they achieve a certain goal like graduating college—could violate the RAP if the timing of that graduation isn’t certain within the 21-year limit. This is because the ultimate vesting of ownership to the grandchildren is contingent on a future event that might not occur within the prescribed timeframe. The Uniform Statutory Rule Against Perpetuities (USRAP) has been adopted by many states, offering some flexibility, such as a 90-year vesting period.
What Happens if a Trust Violates the Rule?
If a provision within a trust or deed is found to violate the RAP, that provision isn’t automatically invalid, but it’s reformed or rewritten by a court to align with the rule. This often means the court will interpret the language to vest the interest as soon as possible, even if that wasn’t the original intent of the grantor. Imagine a situation where Old Man Hemlock, a rather eccentric fellow, created a trust specifying that income would be distributed to his descendants “as long as they maintained a robust vegetable garden.” A court would likely rule that this condition is too uncertain and would need to be modified—perhaps to a fixed number of years after the death of the last surviving grandchild—to comply with the RAP. This process can be costly and time-consuming, and more importantly, it can frustrate the grantor’s wishes. It’s estimated that RAP litigation costs, on average, exceed $50,000 per case.
I Heard About a ‘Wait and See’ Approach—How Does That Work?
Some states, including California, have adopted a “wait and see” approach to the RAP. This means that instead of immediately invalidating a potentially problematic provision, the court will wait to see if the interest actually *does* vest within the 21-year period (or the applicable statutory period). This can provide some relief for grantors and avoid unnecessary litigation. I recall a client, Mrs. Ainsworth, who set up a trust for her grandchildren, but the trust language inadvertently created a potential RAP violation. Initially, she was distressed, fearing her careful planning was undone. However, because California employs a ‘wait and see’ approach, we were able to monitor the situation. Fortunately, the interests vested within the timeframe, and her wishes were ultimately fulfilled.
How Can I Avoid Running Afoul of the Rule?
Avoiding the RAP requires careful drafting and planning with an experienced estate planning attorney. One common technique is to include a “savings clause” in the trust document, which specifically states that no interest will vest beyond the permissible period. There was a time when Mr. Castillo, a seasoned carpenter, attempted to create a trust himself, relying on online templates. He wanted to ensure his tools were passed down through generations of skilled artisans. Unfortunately, his trust language tied the transfer of those tools to the completion of a specific masterwork, which lacked a definitive timeframe. The resulting uncertainty led to a family dispute and considerable legal fees. However, by consulting with an attorney specializing in estate planning, we restructured the trust to include a clear vesting date, securing his legacy without violating the RAP. Careful planning and professional guidance are essential to ensuring your estate plan accomplishes your goals while remaining legally sound.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
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● Estate Planning Law: Minimize taxes & distribute assets smoothly.
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Map To Steve Bliss Law in Temecula:
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Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “How can I make sure my children are taken care of if something happens to me?” Or “What if the estate doesn’t have enough money to pay all the debts?” or “Can I include special instructions in my living trust? and even: “Can I file for bankruptcy more than once?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.