One Rule, Not Two
Before Arizona adopted its statutory rule against perpetuities, the common law version governed how long property could remain tied up in a trust or other arrangement. The common law rule was notoriously complex, producing surprising results and trapping well-intentioned estate plans in technical violations.
This article applies notwithstanding common law rules against perpetuities or section 33-261.
A.R.S. § 14-2906This statute makes a clean break. Arizona's modern statutory framework, 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 The common law rule and the older statute at A.R.S. 33-261 are both superseded. 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.
Arizona's statutory approach is more straightforward. The 500-year outer limit gives families enormous flexibility for multi-generational planning, while 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.
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.
