Perpetuity

Question 1

What is the only kind of trust that can in theory last indefinitely?

Answer 1

Charitable trusts

Question 2

Can an express clause extend the relevant legal perpetuity period?

Answer 2

No - it will be void

Question 3

What trusts do the statutory rule against remoteness of vesting apply to?

Answer 3

Trusts with people or charities as their objects

Question 4

How long is the statutory perpetuity period?

Answer 4

125 years

Question 5

What must happen during the 125 years statutory perpetuity period for a trust to be valid?

Answer 5

Trust property must vest in a person or charity before or at the end of that period

Question 6

Does it have to be clear from the outset that the trust property will vest within 125 years for trusts for people or charities as their objects?

Answer 6

No - wait and see rule applies which means trust can subsist until clear that interest cannot vest within the perpetuity period

Question 7

What happens if at the end of the 125 year period with regards to beneficiaries if it is still not certain who can or could benefit under trust?

Answer 7

Class closing rules apply to make the class of beneficiaries certain and excluding anyone whose interest would otherwise have vested after the perpetuity period

Question 8

What trusts do the rule against inalienability apply to?

Answer 8

Non-charitable purpose trusts

Question 9

How long is the perpetuity period under the inalienability rule?

Answer 9

21 years

Question 10

Can the perpetuity period for non-charitable trusts be extended?

Answer 10

Yes by reference to a life in being

Question 11

What happens if it is not clear from the outset if the trust will end within the common law perpetuity period?

Answer 11

The trust will be void and fail. It must be clear from the outset.