As a law student, if you are writing a case study of the rule against perpetuity, you must know that the law of England describes it as one of the most complicated laws. It originated from the 1680's feudal law system of England when landlords tried to use and distribute property beyond the grave, a concept that is also referred to as a control by the dead hand. (Cost-Benefit Analysis, Foreign Direct Investment, antiderivative calculator, probability calculator)
· Formation
The rule against perpetuity was formed to stop people from joining real and personal property for numerous generations. In the feudal law of England, it kept the law in a perpetuity trust for succeeding generations to live in the land without owning it. It helped avoid specific tax imposed on the land upon the owner's death based on its net present value. When those situations came up, the trust avoided the tax.
· Definition of the rule
A case study will let you know that the rule against perpetuity was then designed to protect the person who will own the land for a reasonable period after the owner's death. The rule also stated that the property would not be handed unless it could be shown that a tax has been authorized before 21 years of handing the property.
· Complexity
The rule may appear to be straightforward, but it is one of the most complicated laws. Following are the reasons:
i. The rule says that a property will not be handed over before 21 years after the death of a transferor in any case.
ii. If someone does not show interest in the property or do not pay tax during the 21 years, then the gift fails ab initio, which means the time of paying tax begins or when the document creating the interest takes effect.
· Examples
a. Suppose Alan owns the property of Procter and Gamble. He will give the property to the first child Alex. When he reaches the age of 21. If Alex has children, they will get the property when they reach 21 years and within 21 years of Alex’s death. Thus the rule does not violate the rule against perpetuity.
b. Alan will provide the property to Alex’s first child when he marries. There is a void under the rule against perpetuities as
i. Alex may have children during his lifetime and
ii. If he does, there is no guarantee that any of his children will marry within 21 years of Alex’s death
c. Alan’s trust during his lifetime states that when he dies his friend John has the right to stay in that house. When John dies, the house will be given to his oldest child. Now the measuring period is John’s lifetime and an added 21 years. Since the gift is given to John’s oldest child, he will be the land owner unless it violates the rule against perpetuity
The rule against perpetuity is one of the most complex laws in federal England. The examples mentioned above will help you understand its intricacies.