Court Reformation for Perpetuities

Saving a Trust Provision Instead of Destroying It

Under older perpetuities rules, a trust provision that violated the time limit was simply invalid. The future interest failed, and the creator's intent was lost. Arizona takes a more practical approach under the common law rule replacement. Rather than voiding the provision entirely, the statute allows a court to reform it.

The key phrase is "most closely approximates." The court does not rewrite the trust from scratch. It preserves the creator's plan as much as possible while trimming whatever falls outside the legal time limits. This approach respects both the rule and the person who created the arrangement.

When Reformation Applies

The court can step in under three circumstances. First, when a nonvested property interest or power of appointment has already become invalid under the rule. Second, when a class gift has not yet violated the rule but might, and the time has come for some class members to receive their shares. Third, when an interest created under the trust could eventually vest but not within the perpetuities period allowed.

This third trigger is a practical safety net. If an interest to vest would take longer than 90 years after the creation of the interest, the court can reform it now. There is no need to wait decades to see if it fails. For families with complex multi-generational trusts, this means the court can step in early to preserve the arrangement.

What This Means for Families With Long-Term Trusts

Many estate plans include a saving clause designed to prevent perpetuities violations. A saving clause sets a backstop date, often twenty one years after the death of the last named measuring life. If the trust has not fully distributed by then, the saving clause forces distribution.

Even without a saving clause, Arizona's reformation statute provides protection. The court will not destroy the trust. Instead, it adjusts the terms to fit within the legal limits. This gives families confidence that a technical drafting error will not undo years of careful planning.

If you are concerned about whether your trust complies with the common law rule or the modern statutory rule, an attorney can review the document. In most cases, the 500-year window and the reformation option together provide more than enough protection for even the most ambitious multi-generational plans.