10 October 2026 Educational publication, not investment advice

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Rule Against Perpetuities (RAP)

Definition

A legal rule that historically limited how long a trust could hold property before it had to terminate and distribute assets to beneficiaries.

The Rule Against Perpetuities, often abbreviated RAP, developed in English common law to prevent families from tying up property in trusts indefinitely. The traditional formulation required that all interests in a trust vest, or become legally fixed, within a life in being at the trust's creation plus twenty-one years. In plain terms, a trust could not last forever; it had to eventually end and transfer assets outright to people.

For wealthy families, the RAP mattered enormously because dynasty-style planning (holding assets in trust across many generations) ran directly into this limit. A family hoping to shelter wealth in a dynasty trust for great-grandchildren and beyond could find the structure legally invalid in states that still enforced the rule strictly.

A common confusion is assuming the RAP applies uniformly everywhere. Many U.S. states have now abolished or substantially relaxed it, allowing perpetual or near-perpetual trusts. Other states retain modified versions. A hypothetical founder who sells her manufacturing company and wants to establish a multi-generational trust must work with a qualified attorney to understand which state's law governs, because the choice of trust situs, meaning the state where the trust is administered, can determine whether the RAP applies at all.

Last reviewed August 25, 2026 · Editorial Policy

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