The Rule Against Perpetuities (RAP) is a notoriously complex legal principle governing trusts and estates, designed to prevent property from being tied up in trusts for an unreasonably long time – essentially, indefinitely. Established in 1682, its core purpose is to balance the desire to control the distribution of assets after death with the public policy favoring the free alienability of property. At its heart, the RAP states that an interest in property must vest, if at all, no later than 21 years after the death of a “life in being” at the creation of the interest. This means that within one generation plus 21 years, it must be certain *who* will ultimately own the property. It’s a rule designed to prevent “dead hand control” over property for centuries to come.
How Does the RAP Impact Trust Creation?
The RAP most commonly affects trusts that contain contingent beneficiaries or specify distributions that depend on future events. For example, a trust might state that income is to be distributed to “my grandchildren who achieve a college degree.” The issue is that we don’t know *who* those grandchildren will be, or if they *will* achieve a degree, within the 21-year period following the death of the grantor (the person creating the trust) and any other “lives in being” named in the trust document. If the trust doesn’t vest within that timeframe, the contingent interest could be void, leading to unintended consequences. Roughly 20% of estate plans initially drafted without consideration of the RAP require adjustments to avoid invalidating portions of the trust. It’s a tricky area, and even seemingly simple trust provisions can run afoul of the rule.
What Happens When a Trust Violates the RAP?
If a trust provision violates the RAP, it doesn’t necessarily invalidate the entire trust. The offending provision is typically struck down, and the trust document will often contain a “savings clause” to dictate what happens to the property previously intended for the invalid provision. This clause generally directs the property to the next in line to receive it, as if the invalid provision never existed. However, this can still result in a distribution plan drastically different than what the grantor intended. I recall a case involving a local rancher, Mr. Henderson, who created a trust to provide for his grandchildren’s education, with funds distributed upon their completion of a four-year university degree. Unfortunately, the trust document did not account for the RAP. His grandchildren were slow to begin college and one never did. The offending clause was ultimately voided. The trust assets, instead of going to his great-grandchildren as educational funds, were distributed to his children, missing the educational purpose entirely.
Can the Rule Against Perpetuities Be Avoided?
Absolutely. There are several methods to avoid RAP issues. One common solution is the “wait and see” approach. This involves allowing a certain period of time to pass (often 21 years) to see if the contingent interests vest. If they do, the trust is valid. If not, the offending provision is reformed. Another method is to use a statutory “exception” to the RAP. Many states have enacted statutes that modify or abolish the traditional RAP, or create exceptions for certain types of trusts. For example, many states now allow for “self-settled” trusts, where the grantor is also a beneficiary. This type of trust was historically invalid under the RAP. I remember assisting a client, Mrs. Abernathy, who wanted to create a trust to benefit her disabled son indefinitely. Using a carefully drafted statutory trust, we were able to ensure that the trust would continue to provide for her son without violating the RAP. It was a relief to both of us knowing her son would be taken care of long after she was gone.
What Role Does an Estate Planning Attorney Play?
Navigating the RAP requires careful planning and a thorough understanding of the complex legal principles involved. An experienced estate planning attorney can help you draft a trust that achieves your goals while avoiding potential RAP issues. We analyze each provision of the trust to identify potential violations and recommend appropriate solutions. This may involve revising the trust language, using a statutory exception, or adopting a “wait and see” approach. Ultimately, the goal is to ensure that your wishes are carried out as intended and that your assets are distributed efficiently and effectively. A proactive approach is essential, and engaging legal counsel is the best way to safeguard your estate plan and protect your legacy.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
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● Estate Planning Law: Minimize taxes & distribute assets smoothly.
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● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
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Map To Steve Bliss Law in Temecula:
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Feel free to ask Attorney Steve Bliss about: “What is a revocable living trust and how does it work?” Or “What should I do if I’m named in someone’s will?” or “Can a trust be challenged or contested like a will? and even: “How soon can I start rebuilding credit after a bankruptcy discharge?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.