The legal system in the UK states that property cannot be held in a Trust indefinitely. Future interest in a property held in trust must take effect within what is called the perpetuity period. In practice most trusts are set up for a fixed period of 80 years.
However the perpetuities and Accumulations act 2009 which comes into force on 6th April 2010 will make several key changes to all future will and life time trusts.
The key change is that a perpetuity period will no longer have to be specified as the new period of 125 years will apply to all lifetime trusts set up after the 6th April 2010.
In addition accumulations (growth inside a trust) can now be made throughout the entire perpetuity period of the trust. This used to be the lifetime of the settlor plus 21 years. The previous limit of 21 years still applies to charitable trusts.
The new law provides an opportunity to revisit existing trusts or existing wills that create trusts of significant value to extend the perpetuity period to 100 years if for some reason 80 years is deemed insufficient. However this extension can only be applied to lifetime trusts if the trustees “believe it is difficult or not reasonably practical for them to ascertain whether the lives of the beneficiaries have ended.
As always with any trust work experienced financial and legal advice should be taken before carrying out your wishes.