The Rule Against Perpetuities
May 28, 2011No Comments
MSNBC has an interesting story: After 92 years, Millionaire Miser’s Heirs Finally Split $100M
In a bizarre bequest, Wellington Burt stipulated that no one could inherit his fortune until 21 years after his last grandchild died. Now, after nearly a century, 12 distant (and lucky) descendants are finally divvying up $100 million.
This isn’t as bizarre as the article makes it sound. It is an application of an arcane common law legal principle originating in England over 400 years ago, in 1682 C.E. The courts of that period recognized the need to limit the extent to which the deceased could exert control over the affairs of the living through complicated estate planning (also known as control by the “dead hand”.) The rule against perpetuities prevents the dead from restraining the alienation of property, which is a way of saying that property should be freely transferable.
The Rule Against Perpetuities is defined by Black’s Law Dictionary as:
“a grant of an estate unless the interest must vest, if at all, no later than 21 years (plus a period of gestation to cover a posthumous birth) after the death of some person alive when the interest was created.”
In this case, the “lives in being” were his grandchildren, and he wrote his last will such that the bequest would not vest until 21 years after the death of his last grandchild. The Rule Against Perpetuities puts a limit on how long you can delay distributing an estate, and he drafted his will to delay it for as long as the Rule would allow.
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Benjamin Jarrell is the founder of The Law Office of Benjamin Jarrell and focuses his practice on helping individuals and families preserve what matters to them through estate planning. He practices in Huntsville, Madison, Decatur, Florence, Guntersville, Scottsboro, Birmingham and other cities throughout the State of Alabama.