The rule against perpetuities allows individuals preparing wills to have control over their assets even after they pass on. There are limits to these powers, however. A person can restrict property from being sold or make sure that it is used for a certain purpose. Property can be passed on to family members as long as it is done on the condition that an individual maintains certain requirements or behaviors. The time limit on the ability to pass on assets is referred to as the rule against perpetuities.
Complex and often confusing, the rule of perpetuities can be utilized at the time of the passing of a testator or heirs. Heirs are classified as “lives in being.” This means that if a child is conceived but not born at the time of the creator’s death, the child will be classified as a life in being. After the last living heir named in a will passes away, the restrictions on property continue in place as desired for a certain period. The idea is that the creator can control his or her assets for a full generation after death. If the rule applies, however, the conditions on the bequest are abandoned and the gift returns to the residual estate.
What makes the rule complicated is that when a person creates an estate planning document, that individual makes gifts to children or grandchildren. It is sometimes the case, however, that children and grandchildren are not born until years later. If a child has been born at the time that the individual passes away, that individual is subject to the restrictions placed on the assets. If a child is conceived and born after the testator’s death, the child can sometimes avoid the restriction. There is no way to predict when these situations might occur. Fortunately, an experienced estate planning attorney can help create an equitable trust in such situations. Similar to wills, trusts often place conditions on the use of assets but are not subject to the rule against perpetuities.
The idea behind the rule of perpetuities is that a person cannot tie up their assets forever in a trust after they pass away. The limit provides time to make provisions for your children and grandchildren, but often not more than that. The rule against perpetuities premises that a will or trust does not mean to provide for descendants who are born in the future and long after your death.
Remember, however, that exceptions exist with the rule against perpetuities. For example, if a will or trust passes on an asset to a charity, the rule might not apply. If you are interested in passing on assets to a charity, you should consider speaking with an attorney to make sure your estate planning documents are properly written.
Obtain the Assistance of a Compassionate Estate Planning Attorney
If you or a loved one needs help reaching your estate planning goals, one of the best things that you can do is to obtain the assistance of an experienced estate planning attorney. Contact attorney Jim A Lyon today to schedule a free case evaluation.