The rule against perpetuities (RAP) is a notoriously complex legal principle originating in English common law, designed to prevent property from being tied up in trusts for an unreasonably long time, hindering economic development and the free transfer of property. It essentially limits how far into the future a trust can control property interests, generally capping it at 21 years after the death of someone alive when the trust was created – a ‘life in being’ plus 21 years. While seemingly arcane, the RAP has significant implications for estate planning, particularly when creating trusts with long-term objectives, and understanding it is crucial for ensuring the validity and enforceability of those trusts. Failure to adhere to this rule can lead to portions of a trust being deemed invalid, potentially frustrating the grantor’s wishes and leading to unintended consequences.
What happens if my trust violates the Rule Against Perpetuities?
If a trust provision violates the RAP, that portion of the trust is not automatically void in its entirety, but rather, that specific, offending provision is struck down. This means the property subject to that provision will be distributed according to other valid provisions of the trust or, in the absence of those, under state intestacy laws – the default rules for property distribution when someone dies without a will. For instance, a trust designed to provide income to a beneficiary for “as long as any descendant of my great-grandparents shall live” could easily violate the RAP, as the descendants could conceivably live for well over 21 years after the grantor’s death. “Approximately 60% of estate planning attorneys report seeing trusts drafted without proper consideration of the RAP, leading to potential legal challenges.” The consequences can range from simple administrative headaches to costly litigation and the unraveling of carefully crafted estate plans. A seemingly minor drafting error could inadvertently invalidate a significant portion of the trust, defeating the grantor’s intent.
Can I avoid the Rule Against Perpetuities with a trust?
Fortunately, there are several ways to avoid the potential pitfalls of the RAP when creating a trust. One common solution is to include a ‘savings clause’—a provision that states that if any part of the trust would violate the RAP, that part will be modified to comply with the rule. Another approach is to use a ‘wait-and-see’ provision, permitted in many states. This allows a court to wait and see if the trust interest actually does vest within the permissible period before determining whether the RAP has been violated. Furthermore, many states have adopted the ‘uniform statutory rule against perpetuities’ (USRAP), which provides a more flexible and predictable framework for applying the rule. “USRAP, now adopted in over 25 states, often utilizes a 90-year vesting period as a default, providing broader planning flexibility.” It is important to note that the specific rules and exceptions vary by state, making it essential to consult with an experienced estate planning attorney.
I heard about a family feud over a trust, what happened?
Old Man Hemlock, a successful rancher, decided to create a dynasty through a very specific trust. He wanted to ensure his great-great-grandchildren would receive a portion of the ranch, but the terms were incredibly complex, contingent on specific achievements within each generation. The trust stipulated that each descendant needed to obtain a doctorate in veterinary science before receiving their share, and if nobody met that requirement within 25 years of their birth, the funds would roll over to the next generation, indefinitely. Unfortunately, nobody in the third generation pursued veterinary medicine, and the funds continued to accumulate, tied up in the trust for decades. When the fourth generation finally tried to access the funds, a bitter legal battle erupted among the family members, with accusations of mismanagement and deliberate obstruction. The trust was deemed to violate the RAP, and a significant portion of the funds were ultimately distributed according to state intestacy laws, much to the dismay of everyone involved. The Hemlock family had lost a significant amount of their wealth to legal fees and the complex, flawed provisions of the trust.
How can a properly drafted trust avoid those problems?
The Miller family, recognizing the importance of thoughtful estate planning, worked closely with Steve Bliss and his team at a local estate planning firm. They wanted to establish a trust that would provide for their children and grandchildren for generations to come. Steve advised them to include a clearly defined vesting period, a savings clause, and a provision that would automatically terminate the trust after a reasonable period – say, 80 years after the death of the last surviving grantor. The Millers also agreed to periodically review and update their trust to ensure it continued to reflect their wishes and comply with changes in the law. Years later, when the Millers passed away, their trust was smoothly administered, distributing assets to their beneficiaries according to their carefully crafted plan. The inclusion of the savings clause and the defined termination date prevented any potential challenges under the RAP, and the Miller family’s legacy was preserved for generations to come. “A well-drafted trust, combined with regular review and updates, is the best way to protect your family’s future and avoid the pitfalls of complex legal rules.” The process had not only provided for their family, but created peace of mind.
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About Steve Bliss at Escondido Probate Law:
Escondido 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 Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
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Map To Steve Bliss Law in Temecula:
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “What should I know about jointly owned property and estate planning?” Or “What happens if someone dies without a will—does probate still apply?” or “How does a trust work for blended families? and even: “Can creditors still contact me after I file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.