Royal lives clause
Encyclopedia
A Royal lives clause is a contract
clause which provides that a certain right must be exercised within (usually) the lifetime plus 21 years of the last living descendant of a British Monarch who happens to be alive at the time when the contract is made.
rule developed by the courts known as the rule against perpetuities
. That rule provided that any future disposition of property must vest within "a life in being plus 21 years". The rule generally affects two types of transactions: trusts
and options
to acquire property. Generally speaking, such transfers must vest before the end of the maximum period, or the grant will be void
. Under the old common law, a transaction would be void even if the property might possibly vest after the end of the maximum period, but now most jurisdictions have, by statute, adopted "wait and see" laws.
In an attempt to mitigate the perceived harshness of the common law rule, and to maximise the possible length of time for which trusts in particular could subsist, lawyers began to draft so-called Royal lives clauses. Royal lives were chosen because (a) it was assumed that being affluent, at least one or two members of the family could be assumed to live a reasonably long period of time, and (b) being Royalty, it would be reasonably easy to calculate the lives of the descendants. In practice, a dead monarch was usually chosen so as to maximise the possibility of a grandchild or great-grandchild who would be outside of the immediate Royal family having recently been born.
Despite the purported ease of finding out the descendants of British Monarchs, attempts to choose much older Monarchs to widen the pool of descendants have periodically been known to cause trouble.
, President's lives clauses are used for similar reasons; well-documented political and industrial families (such as the Kennedys
and Rockefellers
) are also used. In the Commonwealth
, use of Royal lives tends to persist. In Ireland
, the descendants of Éamon de Valera
are frequently used.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
clause which provides that a certain right must be exercised within (usually) the lifetime plus 21 years of the last living descendant of a British Monarch who happens to be alive at the time when the contract is made.
Form
A sample clause would read:Rationale
The clause became part of contractual drafting in response to common lawCommon law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
rule developed by the courts known as the rule against perpetuities
Rule against perpetuities
The common law rule against perpetuities forbids some future interests that may not vest within the time permitted; the rule "limit[s] the testator's power to earmark gifts for remote descendants"...
. That rule provided that any future disposition of property must vest within "a life in being plus 21 years". The rule generally affects two types of transactions: trusts
Trust law
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
and options
Option (law)
In law, an option is the right to convey a piece of property. The person granting the option is called the optionor and the person who has the benefit of the option is called the optionee .Options characteristically exist in one of two forms:* Call options, which give the beneficiary the right to...
to acquire property. Generally speaking, such transfers must vest before the end of the maximum period, or the grant will be void
Void (law)
In law, void means of no legal effect. An action, document or transaction which is void is of no legal effect whatsoever: an absolute nullity - the law treats it as if it had never existed or happened....
. Under the old common law, a transaction would be void even if the property might possibly vest after the end of the maximum period, but now most jurisdictions have, by statute, adopted "wait and see" laws.
In an attempt to mitigate the perceived harshness of the common law rule, and to maximise the possible length of time for which trusts in particular could subsist, lawyers began to draft so-called Royal lives clauses. Royal lives were chosen because (a) it was assumed that being affluent, at least one or two members of the family could be assumed to live a reasonably long period of time, and (b) being Royalty, it would be reasonably easy to calculate the lives of the descendants. In practice, a dead monarch was usually chosen so as to maximise the possibility of a grandchild or great-grandchild who would be outside of the immediate Royal family having recently been born.
Despite the purported ease of finding out the descendants of British Monarchs, attempts to choose much older Monarchs to widen the pool of descendants have periodically been known to cause trouble.
Outside the United Kingdom
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, President's lives clauses are used for similar reasons; well-documented political and industrial families (such as the Kennedys
Kennedy family
In the United States, the phrase Kennedy family commonly refers to the family descending from the marriage of the Irish-Americans Joseph P. Kennedy, Sr. and Rose Elizabeth Fitzgerald that was prominent in American politics and government. Their political involvement has revolved around the...
and Rockefellers
Rockefeller family
The Rockefeller family , the Cleveland family of John D. Rockefeller and his brother William Rockefeller , is an American industrial, banking, and political family of German origin that made one of the world's largest private fortunes in the oil business during the late 19th and early 20th...
) are also used. In the Commonwealth
Commonwealth of Nations
The Commonwealth of Nations, normally referred to as the Commonwealth and formerly known as the British Commonwealth, is an intergovernmental organisation of fifty-four independent member states...
, use of Royal lives tends to persist. In Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, the descendants of Éamon de Valera
Éamon de Valera
Éamon de Valera was one of the dominant political figures in twentieth century Ireland, serving as head of government of the Irish Free State and head of government and head of state of Ireland...
are frequently used.