Trust 7 Perpetuity Flashcards

1
Q

Can trusts be permanent arrangements?

A

only charitable purpose trusts

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2
Q

What are the two rules to prevent perpetuity?

A
  • remoteness of vesting (people or charities)
  • rule against inalienability (non-charitable purpose trusts)
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3
Q

What is the Statutory rule against remoteness of vesting?

A

a person must obtain a vested interest within 125 years

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4
Q

What happens if the Statutory rule against remoteness of vesting is breached?

A

the trust will become void at the time of breach

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5
Q

What happens to the trust before the Statutory rule against remoteness of vesting is breached?

A

trust still valid - can wait and see

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6
Q

Does the Statutory rule against remoteness of vesting apply to non-charitable purpose trusts?

A

No

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7
Q

What is the Common Law rule against inalienability?

A

non-charitable purpose trust cannot exceed a life + 21 years

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8
Q

From what time does the Common Law rule against inalienability apply?

A

From creation of the trust. It must be certain from the creation of the trust that it will come to an end before the perpetuity period of a life + 21 years.

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9
Q

What happens if the Common Law rule against inalienability is breached?

A

The trust is void - the ‘wait and see’ rule does not apply.

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10
Q

What trusts does the Common Law rule against inalienability apply to?

A

Non-charitable purpose trusts

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11
Q

What happens if a non-charitable purpose trust has a perpetuity period that might exceed the lifetime +21 year limit?

A

It will fail. Unlike the 125 year rule, the 21 year limit is not a “wait and see”, it fails immediately.

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