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Economics

The Rule Against Perpetuities

Quick fact

Under the traditional rule, a future interest is void if there is any possibility—no matter how unlikely—that it will vest more than 21 years after all lives in being at the creation of the interest have died. This means a gift to 'my great-grandchildren who reach 30' can be invalid even if all great-grandchildren actually do reach 30 within the allowed period.

Why this is interesting

You’ve just written a will that gives your great-grandchild your family farm, but a court could strike it down as illegal—even though you’re just trying to be generous. Why would the law refuse to honor your wish?