Rule Against Perpetuities (RAP)

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.