The Rule Against Perpetuities Explained

What the Rule Against Perpetuities Does

The rule against perpetuities is one of the oldest doctrines in property law. Its purpose is simple: prevent property from being tied up under conditions that may never be met.

Without this rule, a property owner could create interests that stay contingent for centuries. That would make it nearly impossible for anyone to sell, develop, or fully own the property.

This statute confirms that the rule applies broadly. It does not matter whether the property is a house, a bank account, or an interest held inside a trust. If a property interest is contingent, it must vest or fail within the allowed time period.

How the Traditional Rule Was Modified

The common law version of this rule required interests to vest within "a life in being plus twenty one years." That formula was notoriously hard to apply. Arizona simplified it through the Uniform Statutory Rule Against Perpetuities (A.R.S. 14-2901 through 14-2906). That law allows nonvested interests to remain valid for up to 500 years.

This extended timeframe is what makes dynasty trusts possible. A family can create a trust that lasts for future generations without running afoul of the perpetuities rule.

For most families, this means a properly drafted trust can protect and manage assets for children, grandchildren, and beyond. The trust terms must comply with the statutory framework, but the 500-year window gives families broad flexibility.

The rule against perpetuities may sound academic, but it has real consequences. If a trust or deed creates a contingent interest that violates the rule, a court can strike that provision. The supreme court and lower courts have addressed these issues in cases involving multi-generational trusts and conditional property transfers.

Families who want long-term protection for future generations should make sure their estate plans account for this rule. A well-structured trust avoids perpetuities problems while keeping assets safe for decades.