What the Rule Against Perpetuities Does
The rule against perpetuities is one of the oldest doctrines in property law. Its purpose is straightforward: prevent property from being tied up indefinitely under conditions that may never be met. Without this rule, a property owner could create interests that stay contingent for centuries, making it nearly impossible for anyone to sell, develop, or fully own the property.
The common law rule known as the rule against perpetuities shall hereafter be applicable to all property of every kind and nature and estates and other interests therein, whether personal, real or mixed, legal or equitable by way of trust or otherwise.
A.R.S. § 33-261This 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, the rule against perpetuities sets a deadline for it to vest.
How Arizona Modified the Traditional Rule
The common law version of this rule was notoriously complex, requiring interests to vest within "a life in being plus 21 years." Arizona simplified this through the Uniform Statutory Rule Against Perpetuities (A.R.S. 14-2901 through 14-2906), which allows nonvested interests to remain valid for up to 500 years.
This extended timeframe is what makes dynasty trusts possible in Arizona. A family can create a trust that lasts for 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, as long as the trust terms comply with the statutory framework.
Understanding how the rule against perpetuities interacts with trust planning is important for anyone creating long-term estate plans. Partner attorneys who work with RJP Estate Planning can help structure trusts that take full advantage of Arizona's generous timeframe.
