Perpetuities Refinement: There Is an Alternative

A new uniform law is in the offing: a Uniform Statutory Rule Against Perpetuities (USRAP). The law is based on the wait-and-see approach to the common law Rule Against Perpetuities. Under this approach, a waiting period is prescribed to see whether the contingency which renders a nonvested interest void under the common law Rule actually occurs. The purpose of this article is twofold: first, to demonstrate why, in response to Professor Leach's basic question, we should not "wait-and-see"; second, to offer constructive alternatives to the wait-and-see approach.

Part I of this article identifies those areas of agreement between wait-and-see advocates and opponents, including the acknowledged desirability for some rule against perpetuities. In part II, the case for wait-and-see is summarized and the three major wait-and-see methods are described. These methods include: (1) the causal relationship method, (2) a measuring lives version under the Restatement (Second) of Property, and (3) the newly-unveiled proxy method under the USRAP. A recent debate between Professors Dukeminier and Waggoner highlights the controversy among scholars regarding the appropriate methodology under a wait-and-see approach.

Part III presents the case against the wait-and-see approach by addressing several underlying, but unfounded, assumptions. The most crucial assumption under wait-and-see is that a severe enough problem exists to warrant its adoption. Research, however, reveals a perpetuities violation averaging only one relevant case per year during the eight-year period, 1978-1985. Part IV makes the case for refining the common law Rule, based in part on a critique of an erroneous decision by the Indiana Supreme Court in 1985.

In addition, a statutory scheme for refinement is offered. Although the statutory package partially relies on existing or proposed solutions, the overall package has never been detailed. In the end, rejection of wait-and-see legislation generally, and the USRAP specifically, is urged. Adopting the wait-and-see approach to the common law Rule Against Perpetuities would be tantamount to buying and using "an atomic cannon to kill a gnat."