vesting and the duration
14.1The courts of the common law and equity have devised several interconnected ways of encouraging the free alienability of property (the ability for property to be sold or transferred). The rule against perpetuities, which should more accurately be called the rule against remoteness of vesting, is one of these rules. The rule provides that a future interest in property is only valid if it is to take effect within 21 years of the death of someone who was alive at the time the interest was created (the “perpetuity period”). This rule has ramifications for structuring trusts, and limits their duration. It also applies more broadly to other property arrangements.
14.2In this chapter we put forward proposals for reform of the rule against perpetuities. The topics examined in the chapter are:
- the rule against perpetuities / remoteness of vesting;
- the duration of trusts;
- the rule against accumulations; and
- exceptions to allow perpetual trusts in expanded circumstances.