Are Arizona's 500-year wait-and-see period and the perpetual-trust exception in A.R.S. § 14-2901 unconstitutional under the state constitution's ban on perpetuities and entailments?

Plain-English summary

The Rule Against Perpetuities is one of the oldest doctrines in property law. Its modern common-law form requires that any contingent future interest in property must vest (become certain) or fail within "lives in being plus 21 years." A reasonable upper bound: somewhere between 80 and 100 years. The point is to prevent dead settlors (or living ones who think they know what they want for the next ten generations) from controlling property forever.

Arizona's Constitution bakes this idea in. Article II, § 29 says: "No hereditary emoluments, privileges, or powers shall be granted or conferred, and no law shall be enacted permitting any perpetuity or entailment in the state." That language is a directive to the Legislature: don't pass laws that permit perpetuities or entailments.

For most of Arizona's history, the Legislature codified the common-law rule (A.R.S. § 33-261). In 1994, Arizona joined many states in adopting the Uniform Statutory Rule Against Perpetuities (USRAP), which replaced the lives-in-being-plus-21 framework with a fixed 90-year "wait-and-see" period (A.R.S. § 14-2901(A)(2), as enacted in 1994). The 90-year period was a simplification: it approximated the common-law range without changing it materially.

Then two things happened that took Arizona out of step with the common-law tradition:

1. 1998: § 14-2901(A)(3) added a perpetual-trust exception. Under this provision, a trust can hold property indefinitely if the trustee has the power to sell trust assets and at least one person alive at the trust's creation has unlimited power to terminate the trust. In practice, this lets settlors create dynasty trusts that continue for many generations.

2. 2008: § 14-2901(A)(2) extended the wait-and-see period from 90 years to 500 years. Future interests could now vest as far out as five centuries from creation.

Senator Olivia Cajero Bedford asked the AG whether these two provisions violated Article II, § 29. The AG's answer: yes, both likely do.

On § 14-2901(A)(2) (the 500-year period): The Legislature could legitimately translate "lives in being plus 21 years" into a workable fixed period in the general range of the common-law rule (the 90-year period was fine). But 500 years is more than four centuries beyond what any reasonable interpretation of the common-law "perpetuities period" would allow. The framers of Article II, § 29 used "perpetuity" in its common-law sense (per In re Hayward's Estate, 57 Ariz. 51 (1941); Buehman v. Bechtel, 57 Ariz. 363 (1941)), and no plausible reading of that meaning permits 500-year vesting windows.

On § 14-2901(A)(3) (the perpetual-trust exception): This is the harder one. The provision allows trusts that, in theory, could last forever; the assets pass through generations of beneficiaries via vested life-interest analogs. The AG concluded these "perpetual trusts" function as "equitable fee tails," the very thing the framers' "entailment" prohibition targeted. Even the trustee's power to sell trust assets does not save the structure, because the trust itself continues to exist and to generate vesting interests in successor generations. The fact that someone alive at creation can terminate the trust is also not a fix: the constitutional concern is the potential for perpetual existence, not the certainty of it.

The opinion noted one outlier authority going the other way: Brown Bros. Harriman Trust Co., N.A. v. Benson, 688 S.E.2d 752 (N.C. App. 2010), upheld a similar perpetual-trust statute. But North Carolina's constitution does not include the explicit "entailment" prohibition that Arizona's does, so the analogy did not hold.

The opinion explicitly carved out charitable trusts (which have always been an equitable exception to the common-law rule, per Olivas v. Board of Nat. Missions of Presbyterian Church, 1 Ariz. App. 543 (Ct. App. 1965); Russell v. Allen, 107 U.S. 163 (1883)).

A note on legal weight: an AG opinion is persuasive authority, not binding. Courts can disagree. But this opinion would be a roadmap for any litigant challenging an Arizona dynasty trust on Article II, § 29 grounds.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. The Arizona Legislature has not (as of the date this opinion was written) repealed § 14-2901(A)(2) or (A)(3), and as far as the public record shows, no Arizona court had directly ruled on the constitutional question this opinion identifies. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, threshold, or remedy mentioned here.

Historical context: what the opinion meant in 2018

For estate planning attorneys

The opinion was a yellow flag for Arizona dynasty trusts. Attorneys had been treating § 14-2901(A)(3) as solid legal cover for setting up perpetual trusts, often using Arizona as the situs because of its trust-friendly statutory framework. After this opinion, settlors and their counsel had to weigh the risk that an Arizona court might ultimately invalidate the perpetual-trust structure on constitutional grounds. Common practical responses: choose a different state for the trust situs (e.g., South Dakota or Nevada with no analogous perpetuities prohibition); add savings clauses; build in earlier termination triggers that would keep the trust within a defensible vesting period.

For dynasty-trust settlors

The opinion identified a litigation risk that did not previously appear on settlors' radar. A trust that was supposed to operate for a century or more might face a successful constitutional challenge. The downside: trust assets could be forced into distribution earlier than planned, with significant tax and family-relationship consequences.

For Arizona legislators

The opinion offered a roadmap for legislative action. If the Legislature wanted to keep dynasty trusts available in Arizona, it could either (a) place a constitutional amendment on the ballot to expressly authorize them (which would defeat the Article II, § 29 ban as to those structures), or (b) accept the AG's analysis as a warning and roll the statute back to a defensible vesting period.

For trust litigators

The opinion provided ready-made constitutional arguments for any party trying to break a dynasty trust. The framework: Article II, § 29 means what it said in 1912 (when Arizona's constitution was drafted); 1912's perpetuities concept came from the common law; 500 years is not within that concept; perpetual trusts are entailments.

For probate judges

The opinion is not binding but is persuasive. A judge in a perpetuities-related case in Arizona would likely have to engage with the analysis and either adopt it or explain a different reading of Article II, § 29.

Common questions

Q: What is the Rule Against Perpetuities?
A: A common-law doctrine requiring contingent future interests in property to vest (or fail) within "lives in being plus 21 years." It exists to prevent dead-hand control over property by settlors who try to dictate use forever.

Q: What is a "perpetuity"?
A: At common law, a future interest that can vest more than 21 years after the death of every life in being at the time of the conveyance. Arizona courts read Article II, § 29's "perpetuity" in this common-law sense (Hayward's Estate, Buehman v. Bechtel).

Q: What is an "entailment"?
A: At common law, a "fee tail" estate, sometimes called a "perpetual string of life estates." The estate passes by inheritance through successive generations and cannot be alienated outside the inheritance line. The framers prohibited entailments to prevent concentrated family wealth and dynastic power.

Q: What is a perpetual or "dynasty" trust?
A: A trust designed to continue for many generations (potentially forever), holding wealth for a settlor's descendants. The trustee has discretion to distribute income and corpus among the beneficiaries; the trust itself persists.

Q: Why did the AG say a 500-year period is unconstitutional?
A: Because the Legislature can pick a workable fixed period within the general range of the common-law rule (90 years was fine), but 500 years is hundreds of years beyond what any reasonable interpretation of "perpetuity" in 1912 would allow. The framers were trying to prevent multi-century dead-hand control, and 500 years is exactly that.

Q: Why is the perpetual-trust provision (§ 14-2901(A)(3)) unconstitutional too?
A: Because perpetual trusts function as equitable fee tails, a recognized form of entailment, which Article II, § 29 expressly prohibits. The trustee's power to sell assets does not change this; the trust continues to exist and to generate vesting interests in each generation, potentially forever.

Q: Doesn't a "power to terminate" save the trust?
A: No, per the AG. The constitutional concern is the possibility of perpetual existence, not the certainty of it. A trust that could persist forever is unconstitutional even if someone has the power to end it.

Q: What about charitable trusts?
A: The opinion carves charitable trusts out. They have long been treated as an equitable exception to the common-law rule. Olivas (Ariz. Ct. App. 1965); Russell v. Allen, 107 U.S. 163 (1883).

Q: How did the AG distinguish North Carolina's contrary case (Brown Bros. Harriman)?
A: North Carolina's constitution prohibits "perpetuities and monopolies" and is generally read to bar only "unreasonable restraints on alienation." Arizona's constitution explicitly prohibits "entailments" too. That extra prohibition was decisive: a perpetual trust in Arizona is an entailment regardless of the trustee's power of sale, because Arizona's text is broader.

Q: Is this opinion binding on Arizona courts?
A: No. AG opinions are persuasive authority. A court could read Article II, § 29 differently. But the opinion would be a serious analytical hurdle for any party defending a perpetual trust against a constitutional challenge.

Background and statutory framework

The common-law Rule Against Perpetuities

A contingent future interest is invalid at its creation unless it must vest, if at all, within 21 years after the death of some life in being at the conveyance. Gray, The Rule Against Perpetuities § 201. The interest is not measured by years; it is measured by the chosen lives in being plus 21 years. In practice, this caps the period at roughly 80 to 100 years from the conveyance, depending on how lives in being are selected.

Arizona's constitutional ban

Article II, § 29 of the Arizona Constitution: "No hereditary emoluments, privileges, or powers shall be granted or conferred, and no law shall be enacted permitting any perpetuity or entailment in the state." The provision uses two terms ("perpetuity" and "entailment") and is phrased as a directive to the Legislature.

The historical statutory codification

A.R.S. § 33-261 codified the common-law rule. Malad, Inc. v. Miller, 219 Ariz. 368 (Ct. App. 2008), confirmed that this was Arizona's rule for most of the state's history.

USRAP and the 90-year period (1994)

In 1994, Arizona adopted the Uniform Statutory Rule Against Perpetuities. Under USRAP, future interests are not invalid at creation; instead, courts "wait and see" whether they vest within 90 years. The 90-year period was a simplification approximating the lives-in-being-plus-21-years range. USRAP § 1, comment c.

The 1998 perpetual-trust exception

A.R.S. § 14-2901(A)(3), enacted in 1998, allows future interests in trust to be valid (potentially forever) if the trustee has express or implied power to sell trust assets and one or more persons alive at the trust's creation has unlimited power to terminate the interest. This effectively created an opt-out from the perpetuities rule for properly structured trusts.

The 2008 extension to 500 years

In 2008, the Legislature extended the wait-and-see period in § 14-2901(A)(2) from 90 years to 500 years. This made Arizona one of the longest-vesting jurisdictions in the country.

Constitutional interpretation

Per Earhart v. Frohmiller, 65 Ariz. 221 (1947), the Arizona Constitution is a limit on legislative power, not a grant. Statutes are presumed constitutional until shown to violate a specific constitutional provision (express or implied). State ex rel. Montgomery v. Mathis, 231 Ariz. 103 (Ct. App. 2012). For Article II, § 29's terms, courts use the original common-law meaning. In re Hayward's Estate, 57 Ariz. 51 (1941); Buehman v. Bechtel, 57 Ariz. 363 (1941). The framers' concerns: restraints on alienation and concentrated dynastic wealth. Buehman; Les Raatz, State Constitution Perpetuities Provisions, 48 Ariz. St. L.J. 803 (2016).

Citations and references

Statutes and constitutional provisions:
- Ariz. Const. art. II, § 29 (no perpetuity or entailment)
- A.R.S. § 14-2901(A)(2) (500-year wait-and-see period)
- A.R.S. § 14-2901(A)(3) (perpetual-trust exception)
- A.R.S. § 33-261 (codified common-law rule)

Cases:
- Hodel v. Irving, 481 U.S. 704 (1987) (right to control disposition is a fundamental property right, with limits)
- Earhart v. Frohmiller, 65 Ariz. 221 (1947) (Arizona Constitution as limit on legislative power)
- State ex rel. Montgomery v. Mathis, 231 Ariz. 103 (Ct. App. 2012) (implied prohibition test)
- In re Hayward's Estate, 57 Ariz. 51 (1941) (common-law definition of "perpetuity")
- Buehman v. Bechtel, 57 Ariz. 363 (1941) (framers' concerns about restraints on alienation)
- Malad, Inc. v. Miller, 219 Ariz. 368 (Ct. App. 2008) (Arizona's historical use of common-law rule)
- County of Apache v. Southwest Lumber Mills, Inc., 92 Ariz. 323 (1962) (constitutional construction principle)
- Brown Bros. Harriman Trust Co., N.A. v. Benson, 688 S.E.2d 752 (N.C. Ct. App. 2010) (contrary North Carolina holding, distinguished)
- Russell v. Allen, 107 U.S. 163 (1883) (charitable trusts exempt from rule)
- Nat'l Sav. & Trust Co. v. Sarolea, 269 F. Supp. 4 (D.D.C. 1967) (charitable trusts construed liberally)
- Olivas v. Board of Nat. Missions of Presbyterian Church, 1 Ariz. App. 543 (Ct. App. 1965) (Arizona charitable-trust exception)

Source

• Landing page: https://www.azag.gov/opinions/i18-006-r17-010
• Original PDF: https://www.azag.gov/sites/default/files/2025-06/I18-006.pdf

Original opinion text

To:

The Honorable Olivia Cajero Bedford

Arizona State Senate

Questions Presented

You have requested an opinion related to Arizona's statutory and constitutional provisions on the Rule Against Perpetuities, specifically whether Arizona Revised Statutes ("A.R.S.") § 14-2901(A)(2) and (3) violate Article II, § 29 of the Arizona Constitution.

Summary Answer

Section 14-2901(A)(2) is likely unconstitutional. The original meaning of Arizona's constitutional prohibition on "perpetuities" cannot reasonably allow a future interest to vest as long as five hundred years after its creation. Thus, A.R.S. § 14-2901(A)(2) permits restrictions on the alienability of property in contravention of the Arizona Constitution.

Section 14-2901(A)(3) is likely unconstitutional. The constitutional prohibition on "perpetuities" and "entailments" was not reasonably understood at the time of its drafting to allow the creation of perpetual trusts. Section 14-2901(A)(3) allows for the creation of just such trusts. The statute also allows for the vesting of future interests far outside the framers' conception of the perpetuities period.

Background

A. The Common Law Rule Against Perpetuities

A fundamental property right in common law jurisdictions is the right to control the disposition of property. Hodel v. Irving, 481 U.S. 704, 716 (1987). That right, however, is limited. The common law rule requires all contingent future interests—whether in trust or otherwise—to vest or fail during the lives of every person reasonably known to the donor, known as the "lives in being," plus a "reasonable time after," defined as twenty-one years. John Chipman Gray, The Rule Against Perpetuities § 201, at 191 (Roland Gray ed., 4th ed. 1942). To survive a Rule Against Perpetuities analysis at common law, the person conveying property had the burden to show—upon conveyance—that the future interest was certain to vest or fail within this "vesting period." Id.

B. Arizona's Constitution and the Rule Against Perpetuities

Arizona's Constitution prohibits perpetuities and entailments. It provides that "[n]o hereditary emoluments, privileges, or powers shall be granted or conferred, and no law shall be enacted permitting any perpetuity or entailment in the state." Ariz. Const. art. II, § 29. The Arizona Legislature codified the common law Rule Against Perpetuities in A.R.S. § 33-261. For most of the State's history, this statute governed whether a future interest was valid. Malad, Inc. v. Miller, 219 Ariz. 368, 373, ¶ 27 (Ct. App. 2008). That is, future interests were valid upon creation only if they were guaranteed to vest or fail to vest within twenty-one years after the death of a life in being. Id.; see also Restatement (Second) of Property: Donative Transfers § 1.1 (1983).

Eventually, many State legislatures utilized the Uniform Statutory Rule Against Perpetuities ("USRAP") to reform their common law rules. In 1994, the Arizona Legislature adopted a "wait-and-see" rule, which does not invalidate future interests upon their creation. Unif. Statutory Rule Against Perpetuities § 1 (amended 1990). Under the reformed rule, courts will wait and see whether the interest does vest or fail before modifying the trust or conveyance at issue. A.R.S. § 14-2901(A)(2) (2018). Instead of requiring the interest to vest or fail within "the lives in being plus twenty-one years," courts wait for a fixed period of ninety years after conveyance. A.R.S. § 14-2901(A)(2) (1994). If the interest fails to vest in that period, the property reverts back to its original owner (or more likely, the owner's heirs). USRAP § 1 (amended 1990).

In 1998, the Arizona Legislature significantly amended the common law rule by essentially creating an exception to it. Section 14-2901(A)(3) allows a person to create a future interest—which may never vest—so long as the interest is in a trust and the trustee has the power of sale. Specifically, the interest is valid if it "is under a trust whose trustee has express or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest." Id. Finally, in 2008, the Arizona Legislature's most recent amendment to the Rule Against Perpetuities statute extended the wait-and-see period from ninety to 500 years. A.R.S. § 14-2901(A)(2).

Analysis

The "Constitution of Arizona is . . . a limitation upon the power of" the Legislature. Earhart v. Frohmiller, 65 Ariz. 221, 224 (1947). In reviewing the constitutionality of legislation, courts presume "the Legislature is acting within the Constitution . . . until it is made to appear in what particular it is violating constitutional limitations." Id. (internal quotations omitted). In determining whether the Constitution prohibits legislation, courts consider "the constitution itself and the effect that particular legislation has on the constitution." State ex rel. Montgomery v. Mathis, 231 Ariz. 103, 113, ¶ 34 (Ct. App. 2012).

The Arizona Constitution provides that "[n]o hereditary emoluments, privileges, or powers shall be granted or conferred, and no law shall be enacted permitting any perpetuity or entailment in the state." Ariz. Const. art. II, § 29. It does not define "perpetuity" or "entailment."

Arizona courts have consistently defined "perpetuity" in accordance with its common law definition. See In re Hayward's Estate, 57 Ariz. 51, 61 (1941). In Buehman v. Bechtel, 57 Ariz. 363, 376 (1941), the Arizona Supreme Court understood that the founders' prohibition on perpetuities centered around their concerns about restraints on alienation. The court explained that "restraints on alienation have been generally regarded as obnoxious to public policy, which is best subserved by great freedom of traffic in such things as pass from hand to hand." Id. This policy goal, the court's consistent use of the common law rule, and the Legislature's codification of the common law rule in A.R.S. § 33-261 suggests the Constitution's definition of "perpetuity" accords with its common law definition. Thus, without any legislation enforcing the prohibition, courts would apply the common law rule.

A. A.R.S. § 14-2901(A)(2) likely violates Article II, § 29 of the Arizona Constitution by allowing a person to create a "perpetuity" within the original meaning of Article II, § 29.

At common law, the Rule Against Perpetuities required a future interest to "vest, if at all, not later than twenty-one years after some life in being at the creation of the interest." Gray, supra at 191. The interest was invalid at its creation if it violated this rule. Id. The rule did not change in Arizona until the late-twentieth century, when the Legislature adopted the USRAP's ninety-year "wait-and-see" period. That legislation selected 90 years because it approximated the average time period produced "through the use of an actual set of measuring lives identified by statute and then adding the traditional 21-year tack-on period after the death of the survivor." USRAP § 1, comment c (1990). The original reform adopting a 90-year rule was a mere simplification that did not materially expand the common law rule. By contrast, § 14 2901(A)(2) now allows for the creation of a future interest so long as it vests within 500 years of its creation. Because it allows contingencies far outside the common law time period—by hundreds of years—A.R.S. § 14-2901(A)(2) is likely unconstitutional.

The Arizona Legislature need not adhere to the strict common law rule in prohibiting perpetuities. It could almost certainly alter the possible vesting period within the general parameters of the common law rule. See County of Apache v. Southwest Lumber Mills, Inc., 92 Ariz. 323, 327 (1962) ("The governing principle of constitutional construction is to give effect to the intent and purpose of the framers of the constitutional provision and of the people who adopted it.") A 500-year period, however, more than tests the margins of the Constitution's prohibition because an interest can now vest more than 400 years outside the period allowed at common law. No reasonable interpretation of Article II, § 29 would allow an interest to vest five hundred years from its creation.

B. A.R.S. § 14-2901(A)(3) likely violates Article II, § 29 of the Arizona Constitution by allowing a person to create a perpetuity or an entailment.

As explained above, Arizona courts have interpreted the word "perpetuity" in accordance with its common law meaning. Although Arizona courts have not defined it, an "entailment" at common law was a "perpetual string of life estates," or a fee tail estate. Dukeminier & Krier, supra at 1319-20. Fee tails perpetually passed on through inheritance. Gray, supra § 156 at 50. Courts developed the Rule Against Perpetuities in part to prevent their existence, and in part to prevent unreasonable restraints on alienation. See Gray, supra at 185. Some States prohibited fee tails to prevent concentrated power and wealth in family dynasties, which would give them "unequal and undue influence in a republic." John V. Orth, Does the Fee Tail Exist in North Carolina?, 23 Wake Forest L. Rev. 767, 779 (1988). The framers of the Arizona Constitution sought to address those same concerns when they drafted Article II, § 29. Les Raatz, State Constitution Perpetuities Provisions: Derivation, Meaning, and Application, 48 Ariz. St. L.J. 803, 821-822 (2016).

Section 14-2901(A)(3) allows any future interest if it exists "under a trust whose trustee has the expressed or implied power to sell the trust assets and at one or more times after the creation of the interest one or more persons who are living when the trust is created have an unlimited power to terminate the interest." A.R.S. § 14-2901(A)(3). This statute allows individuals to create perpetual or long-enduring trusts, which closely resemble fee tail estates.

The following is an example of a perpetual trust: "O funds a trust to pay the income of her daughter, A, for life. A has the power to appoint the trust corpus outright or in further trust to such of O's descendants, but not to herself, as A names by deed or will. On A's death, the remainder not appointed by A is to be held in separate share trusts for each of A's children, subject to the same terms, thus re-starting the cycle, which shall continue in perpetuity." Richard W. Nenno, Delaware Trusts, 333 (2012).

There are two major constitutional problems with perpetual trusts. First, A.R.S. § 14 2901(A)(3) allows individuals to place restrictive, perpetual future interests on property. The creation of these trusts implicates the core concerns the Rule Against Perpetuities—and Arizona's Constitution—sought to address. A person can create a trust with an infinite series of vesting future interests, or "perpetual clogs upon the estate." Duke of Norfolk's Case, 3 Chan. Cas. at 31. To be sure, these trusts are different than the former fee tail estates because the underlying trust property remains transferrable, meaning that the trust can sell one asset and buy another. However, this does not save perpetual trusts under the Arizona Constitution. Although the trust's assets can change over time, the trust remains in effect and interests in the trust's proceeds continue to vest in each subsequent generation—potentially forever. This effectively creates a perpetual series of life estates or an "equitable fee tail." Restatement (Third) of Property: Wills and Donative Transfers § 24.4 cmt. c (2011). The Arizona Constitution explicitly prohibits these "entailments."

Second, the future interests attached to these trusts also implicate constitutional concerns about remoteness in vesting. At their creation, the interests are not certain to vest within any time period, let alone the common law vesting period. If a trust is capable of existing even three or four generations after its creation, the interests in the trust will vest beyond the constitutional vesting period. In theory, the cycle of vesting interests in the trust could continue forever—something the Constitution explicitly prohibits. Ariz. Const. art. II, § 29.

Certainly, perpetual trusts are not identical to the former fee tail estate. Fee tails almost always consisted of real property, and only one person possessed the entire fee each generation. Here, the trusts can benefit multiple people in each generation, and the trustee can always sell the underlying property. But these distinctions are immaterial because the Constitution is not limited to fee tails and instead bans all perpetuities and entailments.

Likewise, a power to terminate the trust does not save it from the Constitution's ban on perpetuities. The Arizona Constitution prohibits transfers containing perpetual entailments of property. If a trust has enough assets to continue to distribute property beyond the common law perpetuities period, the trust remains unconstitutional because of the potential perpetuity; it is not saved by the potential disposition. One person's power to terminate a trust may create finality with respect to future vesting interests; however, that power does not necessarily prevent an unconstitutional remoteness in vesting.

We are aware of only one State with a constitutional prohibition on perpetuities that has directly addressed the constitutionality of perpetual trust statutes. In Brown Bros. Harriman Trust Co., N.A. v. Benson, 688 S.E.2d 752 (N.C. App. Ct. 2010), the North Carolina Court of Appeals held that a perpetual trust statute did not violate the State's constitutional prohibition on perpetuities. Id. at 757. The North Carolina Constitution provides that "[p]erpetuities and monopolies are contrary to the genius of a free state and shall not be allowed." N.C. Const. art. I, § 34. In Benson, the court found that this language prohibited "unreasonable restraints on alienation." Benson, 688 S.E.2d at 757. Accordingly, the court determined that a trustee's power to terminate the trust was enough to relieve perpetual trusts from "unreasonable restraints on alienation." Id. at 758.

Arizona's constitutional language on perpetuities is significantly different than that of the North Carolina Constitution. Arizona's constitutional language is a directive to the legislature: "no law shall be enacted permitting any perpetuity or entailment in this state." Ariz. Const. Art. II, § 29 (emphasis added). The Constitution also expressly prohibits "entailment[s][,]" whereas the North Carolina constitutional language is not so limiting. Thus, North Carolina provides flexibility for courts to weigh the reasonableness of laws that permit remote vesting of future interests because a trustee's power to terminate the trust ensures that restraints on alienation are not "unreasonable." Because Arizona's Constitution does not provide the same flexibility as the North Carolina Constitution, and expressly prohibits entailments, North Carolina's reasoning does not provide any guidance. Perpetual trusts in Arizona are essentially entailments, and for the reasons stated above, they implicate all the framers' concerns about remoteness in vesting and concentrations of family wealth.

Section 14-2901(A)(3) allows a person to create a perpetual trust, which likely violates the Constitution's prohibition on entailments and perpetuities.[1] The statute effectively allows "equitable fee tail" estates, which implicates both the constitutional prohibition on "perpetuities" and the constitutional concerns over the inalienability of property.

Conclusion

Article II, § 29 of the Arizona Constitution prohibits perpetuities and entailments, both of which carry their common law definitions. Arizona Revised Statutes § 14-2901(A)(2) allows a future interest to vest within 500 years of its creation, which is far outside the common law vesting period. Section 14 2901(A)(3) allows the creation of perpetual trusts, which enables a future interest to vest far outside the vesting period, if at all. Accordingly, A.R.S. § 14 2901(A)(2) and (3) likely violate Article II, § 29 of the Arizona Constitution.

Mark Brnovich

Attorney General

[1] This opinion does not reach the issue of whether charitable trusts violate the Arizona Constitution. However, the Arizona Court of Appeals has held that because a charitable trust's purpose is "beneficial to the community," they are subject to an equitable exception to the common law rule. Olivas v. Board of Nat. Missions of Presbyterian Church, U.S. of America, 1 Ariz. App. 543, 547 (App. Ct. 1965). Other courts have long understood the common law rule to allow charitable trusts. See Russell v. Allen, 107 U.S. 163, 167 (1883) ("Being for objects of permanent interest and benefit to a public, [charitable trusts] may be perpetual in their duration, and are not within the rule against perpetuities."); Nat'l Sav. & Trust Co. v. Sarolea, 269 F. Supp. 4, 7 (D. D.C. 1967) ("[C]haritable trusts have always been favorites of the law and they are construed with liberality.").