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The rule against perpetuities serves a number of purposes. First, English courts have long recognized that allowing owners to attach long-lasting contingencies to their property harms the ability of future generations to freely buy and sell the property, since few people would be willing to buy property that had unresolved issues regarding its ownership hanging over it.
The clause became part of contractual drafting in response to common law rule developed by the courts known as the rule against perpetuities. [note 1] That rule provided that any future disposition of property must vest within "a life in being plus 21 years". The rule generally affects two types of transactions: trusts and options to
The Perpetuities and Accumulations Act 2009 (c. 18) is an Act of the Parliament of the United Kingdom that reforms the rule against perpetuities. The Act resulted from a Law Commission report published in 1998. [3] It abolishes the rule against perpetuities in most non-trust contexts, such as easements. [3]
The reforms introduced a statutory limitation on how long income could be accumulated before it must be distributed. In 2009, many of the Act's principles were further reformed by the Perpetuities and Accumulations Act 2009, which introduced a single, simplified perpetuity period of 125 years, replacing the earlier rules. [1]
The Rule in Shelley's Case is a rule of law that may apply to certain future interests in real property and trusts created in common law jurisdictions. [1]: 181 It was applied as early as 1366 in The Provost of Beverly's Case [1]: 182 [2] but in its present form is derived from Shelley's Case (1581), [3] in which counsel stated the rule as follows:
Perpetuity n. a stream of income that will continue forever. The common law rule against perpetuities in the Duke of Norfolk's case [3] had the purpose of preventing assets being tied up indefinitely, by granting gifts to far off descendants. It said that a gift must become unconditional 21 years after the death of its maker.
Features of an annuity. Annuities can be structured in many different ways, depending on a customer’s needs. Some may guarantee you’ll receive a specific dollar amount of payments from the ...
The focus on vesting is important in many states because contingent remainders (and certain other future interests) are invalidated if they might vest after the period defined by the Rule Against Perpetuities (RAP). [14] The Rule Against Perpetuities traditionally requires an interest to vest "if at all, not later than twenty-one years after ...