Statutory Rule Replaces Common Law

One Rule, Not Two

Before Arizona adopted its statutory rule against perpetuities, the common law rule governed how long property could remain tied up in a trust. The common law rule was notoriously complex. It produced surprising results and trapped well-intentioned estate plans in technical violations.

This statute makes a clean break. Arizona's modern framework under A.R.S. 14-2901, with its 500-year maximum and alternative validation methods, is the only rule that applies. The common law rule and the older statute at A.R.S. 33-261 are both replaced. There is no need to analyze a trust under both the old and new rules.

What This Means for Estate Planning

For families creating trusts today, this simplification is good news. The old common law rule required analyzing hypothetical scenarios involving unborn people and improbable events. A trust could be struck down because of a theoretical possibility that would almost certainly never happen. Courts across the country, including cases reviewed by a state supreme court, have wrestled with these absurd outcomes for centuries.

Arizona's statutory approach is more straightforward. The 500-year outer limit gives families enormous flexibility for planning that spans future generations. The reformation provisions in A.R.S. 14-2903 ensure that even a technical violation does not destroy the creator's intent. The court fixes the problem rather than voiding the trust.

How This Compares to Other States

Some states, like North Carolina, have taken different approaches to perpetuities reform. A few states have abolished the rule entirely, allowing trusts to last indefinitely. Arizona chose a middle path: a generous but finite time limit of 500 years after the creation of the interest.

Under the old common law rule, property had to vest within twenty one years (21 years) after the death of a measuring life. That meant a trust lasting more than a few decades could face challenges. Arizona's modern rule eliminates that pressure. The period of years after the death of a measuring life is still available as one path to validity, but the 500-year alternative makes it largely unnecessary.

For existing trusts created before December 31, 1994, the judicial reformation provision in A.R.S. 14-2905 provides a safety net. If an older trust is found to violate the previous rule, the court can reform it to comply with the modern statute. The practical result is that virtually no Arizona trust should fail outright because of perpetuities concerns.