The Rule Against Perpetuities is a property law doctrine that voids any future interest in property unless it is certain to vest within 21 years after the death of someone alive when the interest was created. It exists to stop a deceased owner from controlling who gets property generations into the future, and while most states have softened or abolished it, the rule still shapes how trusts, options, and long-term property arrangements have to be written.
Whether it affects your plan depends almost entirely on which state’s law governs the document and when it was drafted.
What the Rule Actually Says
The traditional common law formulation is often shortened to “a life in being plus 21 years.” A future interest is valid only if it must become certain within 21 years after the death of a relevant person alive at the moment the interest was created.1Legal Information Institute. Rule Against Perpetuities
Two features of the test make it harsher than it sounds. First, the clock starts when the instrument takes effect: a testator’s death for a will, the funding date for an irrevocable trust. Second, courts do not wait to see what actually happens. If any hypothetical scenario exists where the interest could remain uncertain past the deadline, the interest is struck down from the start, even if real-world events would almost certainly resolve it in time.
That “what if” approach is why the rule has such a reputation. A gift that would realistically vest within a few years can be voided because some unlikely sequence of events technically leaves it open past the deadline.
Which Future Interests Are at Risk
The rule does not touch every future interest. Interests that are already vested, meaning the recipient is identified and has a guaranteed right to future enjoyment, are safe. Reversions kept by the original grantor and remainders given to specific living people fall in this category.
The rule targets interests where the recipient or the triggering event is still uncertain:
- Contingent remainders that depend on an event that may or may not happen, such as a gift to “my first grandchild to finish law school.”
- Executory interests that would cut short someone else’s ownership if a triggering event occurs.
- Class gifts to a group like “all my grandchildren,” which vest only when the class closes and every member is known. If one potential member might join too late, the whole gift to the class can fail.
- Open-ended options to purchase real estate and rights of first refusal, especially those that run to a buyer’s heirs and assigns with no expiration.
The options problem catches commercial parties off guard. A long-term lease with an open-ended purchase option looks like ordinary business, but it is exactly the kind of indefinite future transfer the rule was designed to prevent. Attaching an explicit time limit avoids the trap.
What Vesting Means
An interest vests when the recipient is identified and every condition attached to the gift is satisfied. A gift to “my daughter Jane when she turns 25” vests on Jane’s 25th birthday. For class gifts, vesting waits until no new members can join, and under the common law the class stays open as long as the grantor or any of the grantor’s children are alive and theoretically capable of having more children. That last word, theoretically, is where the famous traps come from.
The Classic Traps
Two scenarios made the common law rule notorious because both rest on biological assumptions the law refused to abandon no matter how unrealistic.
The Fertile Octogenarian
Every living person is presumed capable of having children, regardless of age or medical condition. Take a gift “to A for life, then to A’s children who reach age 25,” where A is 75 when the interest is created. Common sense says A’s children are already born. The law assumes A could still have another child. That hypothetical child would not turn 25 until more than 21 years after A’s death, so the interest could vest too late, and the entire gift to all of A’s children fails.
The Unborn Widow
A will leaves property “to my son for life, then to my son’s widow for life, then to my son’s children.” The law refuses to assume the son’s current wife is his widow. He might divorce, remarry someone who was not yet born when the testator died, and leave her as his surviving spouse. Because that hypothetical widow is not a life in being, the remainder to the children might vest too late, and the gift to the children is void.
Both traps turn on the same point: the common law judged validity by what could theoretically happen, not what was likely. Even a one-in-a-million scenario was fatal. That unfairness drove the modern reform movement.
Does the Rule Still Apply in Your State?
Most states have moved away from the strict common law version. The reforms generally take one of three shapes, and the governing law of the trust or deed determines which applies.
Wait and See
Wait-and-see jurisdictions reject the hypothetical test. Instead of voiding an interest at creation because a violation is theoretically possible, courts wait to see whether the interest actually vests within the allowed period. An interest is struck down only if it remains uncertain after all the measuring lives have died and the 21-year grace period has run.
The Uniform Statutory Rule Against Perpetuities
USRAP provides an alternative flat 90-year period. An interest valid under the common law rule stays valid. An interest that would fail the traditional test gets a second chance: it survives as long as it actually vests within 90 years. If it still has not vested after 90 years, courts can reform the instrument to carry out the creator’s intent as closely as possible within legal bounds. This reformation power replaces the all-or-nothing outcome of the old rule.
Complete Abolition
Roughly two dozen states and the District of Columbia have eliminated perpetuities restrictions entirely, at least for interests held in trust. These jurisdictions permit “dynasty trusts” that can last indefinitely. South Dakota, Nevada, and Delaware have actively marketed themselves as favorable jurisdictions for these arrangements.
Dynasty Trusts and the Tax Reason People Care
The abolition trend is tied closely to federal tax planning. When a trust transfers wealth from grandparent to grandchild or beyond, the federal generation-skipping transfer tax applies. Every individual has a GST exemption that shields a set amount of transferred wealth. For 2026, the GST exemption is $15 million per person, so a married couple can shelter up to $30 million.2Office of the Law Revision Counsel. 26 USC 2631 – GST Exemption The exemption is tied to the basic exclusion amount under Section 2010(c) of the Internal Revenue Code and is adjusted annually for inflation.3Internal Revenue Service. What’s New – Estate and Gift Tax
The strategy is to create a trust in a state that has abolished the rule, allocate the GST exemption to it, and fund it with up to the exempt amount. Properly structured, those assets and all future growth can pass to children, grandchildren, and later generations without being subject to estate or generation-skipping taxes again. The savings compound because the exemption shelters not just the original contribution but all appreciation inside the trust.
The current exemption is a product of legislation that could change. If Congress reduced it, existing trusts that already received their GST allocation would generally be grandfathered, but new contributions would face the lower limit. That uncertainty makes timing a real consideration for families weighing whether to fund a dynasty trust now.
How to Keep Your Trust or Deed From Tripping the Rule
Regardless of which state’s law applies, a well-drafted savings clause is the single most effective safeguard. A savings clause is boilerplate language that forces all interests to vest no later than 21 years after the death of the last surviving beneficiary alive when the instrument takes effect. If any provision would otherwise violate the rule, the savings clause overrides it and distributes the property outright.
Treat the savings clause as insurance for the whole document. Without one, a single overlooked contingency can void a gift worth millions. With one, the worst case is that the trust terminates earlier than planned and distributes assets outright to the beneficiaries. Any competent estate planning attorney includes a savings clause as a matter of course, and its absence in an older document is worth addressing.
For existing trusts drafted without a savings clause, some states permit “decanting,” in which a trustee pours the assets of a flawed trust into a new trust with corrected terms. Judicial reformation is another option, letting a court rewrite the offending provision. Both involve legal fees and court involvement, so fixing a document in advance is far cheaper than cleaning up a problem after it has surfaced.