Examine the validity of transfer: 'To X, a bachelor, for life and then to X's son when he turns 18'.

Question: Examine the validity of transfer: 'To X, a bachelor, for life and then to X's son when he turns 18'.

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Answer

Section 14 of The Transfer of Property Act,1882 states about the rule against perpetuity. This section reads as:-

No transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

Therefore, the rule against perpetuity under Section 14 states that when an interest is created for an unborn, the vesting of such interest cannot be postponed beyond the lifetime of those in whose favour a life interest is created plus the minority of the unborn i.e. before he turns 18.

In the present case at hand, if the transfer is to B for life and to B's son who shall attain 18 years, it is valid as this condition does not violate the perpetuity rule. But it is to be noted that here the unborn child would not attain a vested interest in the property upon his birth but would do so only upon his attaining majority. Such a transfer is a valid transfer as per section 14 of the Act. But if the first child dies before attaining the age of 18yearrs the property would revert back to A or his heirs as the case may.

In between the period when the last person in whose favour a life interest is created, dies and the majority of the ultimate beneficiary the unborn has a contingent interest which becomes vested upon his attaining majority.