Rule against perpetuities

The common law rule against perpetuities forbids instruments (contracts, wills, and so forth) from tying up property for too long a time beyond the lives of people living at the time the instrument was written. For instance, willing property to one's great-great-great-great grandchildren (to be held in trust for them, but not fully owned, by the intervening generations) would normally violate the rule against perpetuities. The law is applied differently or not at all, and even contravened, in various jurisdictions and circumstances.

Stated more formally, the common law rule against perpetuities forbids some future interests (traditionally contingent remainders and executory interests) that may not vest within the time permitted; the rule "limits the ability of a decedent to exercise dead hand control over property, which the state wishes to be alienable. In essence, the rule prevents a person from putting qualifications and criteria in his/her will that will continue to control or affect the distribution of assets long after he or she has died, a concept often referred to as control by the "dead hand" or "mortmain".

The rule is often stated as follows: “No interest is good unless it must vest, if at all, not later than twenty-one years after the death of some life in being at the creation of the interest.” For the purposes of the rule, a life is "in being" at conception. Although most discussions and analysis relating to the rule revolve around wills and trusts, the rule applies to any future dispositions of property, including options. When a part of a grant or will violates the rule, only that portion of the grant or devise is removed. All other parts that do not violate the rule are still valid. The perpetuities period under the common law rule is not a fixed term of years. By its terms, the rule limits the period to at the latest 21 years after the death of the last identifiable individual living at the time the interest was created ("life in being"). This "measuring" life (often incorrectly called the "validating" life) need not have been a purchaser or taker in the conveyance or devise. The measuring life could be the grantor, a life tenant, a tenant for a term of years, or in the case of a contingent remainder or executory devise to a class of unascertained individuals, the person capable of producing members of that class. Any one of the "measuring" lives that vindicates the conveyance by resolving all contingencies will be called a "validating" life. This is because this "measuring" life has made the conveyance.

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Wikipedia