As Downton Abbey captivates audiences worldwide with its portrayal of British aristocracy, it may be timely to consider some old English concepts which have an enduring effect on contemporary trusts practice.
The historical drama depicts the lives of the well-to-do Crawley family who reside at “Downton Abbey”, a fictional estate in the British countryside. While neither the television series nor the film provide sufficient details for how the Crawleys structure their wealth, it is fair to assume that trusts would be heavily utilised in holding the family’s assets, including perhaps Downton Abbey.
As the Downton Abbey estate has apparently been held by the family for over 300 hundred years, the film (which centres on a royal visit from King George V and Queen Mary) provides a fitting background to consider the rule against perpetuities and the peculiar Royal Lives clause which often feature in many existing Cayman Islands trust deeds.
The rule against perpetuities
The rule against perpetuities prevents people from using legal instruments (such as a trust deed or will) to exert control over the ownership of property for an extended or indefinite period of time. For example, it would not be permissible for the proprietor of Downton Abbey to establish a trust which failed to vest (i.e. by conferring someone ownership of the Estate) indefinitely or for countless generations into the future.
There is certainly logic in the origins of the rule in that it places limits on the extent to which someone can govern from the grave. It is not difficult to imagine an overbearing Lord of Downton Abbey trying unreasonably to exert control over the estate for many future generations. The rule in its traditional form provided that the maximum future interest which could be created was a life in being at the time of creation, plus 21 years.