What is the rule against perpetuities?

The Wex legal dictionary states that the Rule Against Perpetuities is:

“A common law property rule that states that no interest in land is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.”

Basically, this means that an individual’s interest in a piece of property is good so long as that individual: A) was born within the life of someone who...

The Wex legal dictionary states that the Rule Against Perpetuities is:

“A common law property rule that states that no interest in land is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.”

Basically, this means that an individual’s interest in a piece of property is good so long as that individual: A) was born within the life of someone who was alive at the creation of the interest, and B) can claim that interest no more than 21 years after the person alive at the creation of the interest has passed away.

Let’s look at an example:

Mr. Smith has a large piece of land. He also has one child named Bill, who is two years old. Mr. Smith decides to write his last will and testament in which he states, “The land shall be inherited by my son, Bill, and then pass to any child Bill has after Bill’s death, and after that child graduates from college.” Mr. Smith dies a day after writing his will. 

This violates the rule.

The grandchild’s interest was created through Bill, who was the “life at being” (alive) when the will was written. But since Bill is only two, there is no way to know if or when he will have children. But that’s only half of the problem: There is no way to know if Bill's yet-to-be-born child will graduate from college. This would be viewed as a violation of the rule because it puts too many restrictions on the land’s use.

The Rule Against Perpetuities, therefore, prevents individuals from determining how land is to be used long after they die. Courts are reluctant to rule against a person’s last wishes unless, of course, those wishes are clearly illegal. However, courts also do not look favorably on property being controlled by a “dead hand.” In the above case, Mr. Smith’s “dead hand” would be controlling the property far too long into the future.