Trusts are legal arrangements used to protect assets from creditor claims, from dissipation by beneficiaries, as tax shelters, to maintain investment portfolios and to manage financial affairs for an incapacitated person.
A trust is not perpetual. A trust cannot last forever.
A trust ends on the expiry of the vesting period.
This article explains the vesting periods for trusts in Australia.
The common law rule against perpetuities
The common law rule against perpetuities was established in the Duke of Norfolk’s Case in 1683, when Lord Nottingham, the Lord Chancellor, ruled that tying up property too long beyond the lives of people living at the time was wrong.
The common law rule against perpetuities (known also as the rule against remoteness of vesting) sets the maximum period before a trust must vest. This is the rule:
The rule against perpetuities forbids any disposition by which the absolute vesting of property is or may be postponed beyond the life or lives of any number of persons living at the time of the disposition, and the further period of twenty-one years after the death of the survivor, with the possible addition of the period of gestation.
(Cadell v. Palmer (1833) 1 Cl. & Fin. 372) - Osborn’s Law Dictionary (5th Ed 1964)
The rule against perpetuities applies to settlements created by dispositions of assets by trust deed (inter vivos trusts) and by will (testamentary trusts). It applies to family trusts and discretionary trusts.
Dispositions which infringe against the rule against perpetuities are void.
Drafting the longest possible trust vesting period without infringing the rule against perpetuities became a test of a drafter’s ingenuity.
Royal lives are well documented. Royal lives clauses were commonly used in Australia to set the trust vesting period for the rule against perpetuities because a life in being was easily identified. This is an example:
the trust continues until the expiration of 21 years after the death of the last survivor now living of his late Majesty King George V
 Queen Elizabeth II |
Royal lives can be long lived. King George V’s granddaughter, her late Majesty Queen Elizabeth II lived to the age of 96 years. A trust settled on the day after she was born on 21 April 1926 will not vest until 2043 (a period of 117 years). George V died on 20 January 1936, so it is possible his last survivor will live to 100 years and a trust will not vest until 2057. |
 King George V |
Why was King George V chosen, not an earlier king or queen? The reason is that it is necessary to trace all survivors to definitively establish the vesting date and to establish their dates of birth and death. It is understandable that drafters would err on the side of caution and would choose survivors of Kind George V as lives in being so that the trust was not invalid for remoteness.
Trust vesting periods in Australia
From the early 20th century, trusts with royal lives clauses were popular in Australia to protect large rural real estate holdings, retail and industrial estates, from being broken up and sold to pay death and estate taxes after the death of the owner.
From the 1960s, the Australian States began to introduce a fixed trust vesting period / perpetuity period of 80 years. This was seen as ‘simple solution’ to the complexities of the rule against perpetuities.
This explanation is from the preamble to the Perpetuities and Accumulations Act 1992 (Tas):
- the application of the rule against perpetuities has been found to be harsh and capricious and to have defeated the reasonable intentions of testators, settlors and other persons dealing with property; and
- it is considered that the law should continue to exercise a measure of control over dispositions of property, whether by will, by settlement or otherwise, to ensure that there are reasonable time limits for the vesting of future interests but that it is desirable to modify the rigidity of the application of the rule against perpetuities.
This is an overview of the trust vesting periods in each State, in order of introduction.
In Western Australia, the perpetuity period was fixed at 80 years for trusts established from 6 December 1962, when the Law Reform (Property, Perpetuities, and Succession) Act 1962 (WA) commenced. It is now found in the Property Law Act 1969 (WA):
Section 101 The perpetuity period
“In determining whether any limitation is invalid as infringing the rule against perpetuities, the perpetuity period is, for the purposes of that rule, such period of years not exceeding 80 as may be specified in the instrument creating that limitation or, if no such period of years is specified, the period that is applicable under the rule at law.”
In Victoria, the perpetuity period was fixed at 80 years for trusts established from 10 December 1968, when the Perpetuities and Accumulations Act 1968 (Vic) commenced.
Section 5 Power to specify perpetuity period
“(1) …where the instrument by which any disposition is made so provides the perpetuity period [it] shall be such number of years not exceeding eighty as is specified in the instrument as the perpetuity period applicable to the disposition”
In Queensland, the vesting period was fixed at 80 years for trusts established from 1 December 1975 when the Property Law Act 1974 commenced. The Act was replaced by the Property Law Act 2023 (Qld) which extended the vesting period to 125 years for trusts established from 1 August 2025.
Section 200 Abolition of rule against perpetuities
“The common law rule known as the rule against perpetuities is abolished.”
Section 201 What is the perpetuity period
“The perpetuity period, for a disposition of property under a trust, is—
-
- 125 years starting on the day on which the disposition is made;”
It also provides ‘opt-in’ rights for existing trusts.
Section 216 Variation of trust to opt in to 125-year perpetuity period if trustee has power of variation
‘(2) The trustee may vary the vesting date to a date not later than the last day of the period of 125 years starting on the day of the disposition of the property under the trust.”
Section 217 Variation of trust to opt in to 125-year perpetuity period if trustee does not have power of variation
“(2) If all of the beneficiaries under the trust are adults and of full capacity, the beneficiaries may execute a deed to vary the vesting date to a date not later than the last day of the period of 125 years starting on the day of the disposition of the property under the trust.”
Section 219 Application to Court to opt in to 125-year perpetuity period
“(1) A person interested in a disposition of property under the terms of a trust, settled before the commencement, may apply to the court for an order that the property vest within 125 years after the creation of the trust.”
In NSW, the perpetuity period was fixed at 80 years for trusts established from 31 October 1984 when the Perpetuities Act 1984 (NSW) commenced.
Section 7 provides a fixed period:
“(1) For the purposes of the rule against perpetuities, the perpetuity period applicable to an interest created by a settlement shall be 80 years from the date on which the settlement takes effect.”
In South Australia, the vesting period is not fixed. Instead, the Law of Property Act 1936 (SA) gives the Court the power to order vesting of interests after 80 years, which commenced on 16 October 1996.
Section 62 Court may order vesting of interests
“(1) If, 80 years or more after the date of a disposition of property, there remain interests in the property that have not vested, the court may …. vary the terms of the disposition so that the interests vest immediately.”
In Tasmania, the perpetuity period was fixed at 80 years for trusts established from 1 December 1992, when the Perpetuities and Accumulations Act 1992 (Tas) commenced.
Section 6 Power to specify perpetuity period
“(1) the perpetuity period, instead of being of any other duration, is the period so specified [in the disposition or instrument] or a period of 80 years, whichever is the lesser period, from the date on which the disposition takes effect.”
Case Study on a Legacy trust established pre-fixed perpetuity periods
In my article Old trusts should continue as long as possible, I included a Case Study on the Application of Barratt Nominees.
Justice Parker has decided to withdraw that judgment and set aside the orders made. He has made replacement orders in accordance with a corrected set of reasons.
The new judgment is Application of Barratt Nominees Pty Ltd (No 2) [2026] NSWSC 1104 Supreme Court New South Wales (14 September 2026).
The Trust is a discretionary family trust, established by a deed of settlement dated 2 May 1977, which was before the fixed trust vesting period of 80 years was introduced in 1984.
The vesting date clause was as follows:
“Distribution Date” means the first to occur of the following three dates:
-
- Fifty (50) years from the date hereof [that is, 2 May 2027] [the fixed period]
- The date twenty-one (21) years after the death of the last survivor of the lineal descendants of his late Majesty King George VI living at the date hereof; [the royal lives period]
- The date (if any) which the Trustee in its discretion shall by deed or in writing or by oral declaration appoint as the Distribution Date.” [the early termination period]
Justice Parker observed that “Clauses in this form appear to have been not uncommonly used in discretionary trust deeds drawn up [in New South Wales] in the 1970s and early 1980s”.
Justice Parker explained the thinking behind such drafting as:
“If the intention had been for the vesting date to be deferred for as long as possible, the royal lives period would have been used on its own.
In my opinion, it is clear that the royal lives period was not intended to define the maximum period before the vesting of the beneficiaries' interests. It was there as a backstop so as to ensure, with as much certainty as was possible, that it would be the fixed … period which would determine the vesting date (unless the Trustee should exercise its discretion to bring the date forward).”
(quoting from his judgment in Cisera v Cisera Holdings Pty Ltd [2017] NSWSC 960)
The Application before the Court was to obtain judicial advice upon an amendment made to the Trust Deed in November 2020 to substitute the period of 80 years for the period of 50 years as the fixed period.
The difficulty lay with the way the power of amendment was drafted, which was:
“to vary, amend or add to the provisions of this Deed by deed, or in writing or by oral declaration not being variations, amendments, or additions:
(i.)– (iii) ….
(iv) Extending the Distribution Date beyond the latest date provided by this Deed.”
Justice Parker focused on the phrase beyond the latest date provided by this Deed, and said:
“When the Trustee made the purported amendment in November 2020, there were numerous descendants of King George VI who had been born before the Trust Deed was executed in May 1977 and were still alive. It was therefore certain that the royal lives period would extend at least until November 2041, well after the end of the fixed period.”
“The Trust Deed, in its amended form, postpones the distribution date until the earlier of the fixed period and the royal lives date. Should the royal lives period end before the fixed period, the Trust will vest on the royal lives date, consistently with the rule.”
“I conclude that the purported amendment was valid.”
The decision in the Application of Barratt Nominees will continue to be relevant to trusts established in New South Wales (and elsewhere) which contain clauses such as this which were established before fixed perpetuity periods became law.
The trend towards extending the trust vesting date to 125 years
The United Kingdom introduced the fixed perpetuity period to 80 years following upon a recommendation of the Law Reform Committee in England in 1956. As seen, the Australian States adopted the recommendation, over time.
In 2010, the United Kingdom replaced the 80-year perpetuity period with a longer 125-year period. The Perpetuities and Accumulations Act 2009 (UK) applies to trusts established from 6 April 2010. The stated reason was that the old 80-year period was too short in modern society with people living longer.
The fixed period of 125 years equates to the projected maximum period under the rule against perpetuities of a life in being attaining an age of 104 years plus 21 years.
In 2019, the New Zealand Government extended the perpetuity period of trusts created in New Zealand from 80-years to 125-years, following the UK legislation.
In 2025, Queensland extended the perpetuity period for trusts under the law of Queensland to 125-years. The stated reason was that it was a ‘new simplified system’.
The 125 year period has been promoted by some as an incentive to establish a trust governed by the State of Queensland, or to relocate the domicile of an existing trust to Queensland.
But the law which applies to the proper law of a trust is more nuanced than simply nominating a jurisdiction as the law for a trust.
As Justice Sackar stated In the matter of the Kien Trust (No 1) [2019] NSWSC 1601 (Supreme Court of New South Wales):
“I note further that the proper law is that of NSW given that the settlor, most of the beneficiaries and trustee are or were domiciled in the state.”
The other States will no doubt follow the lead of Queensland and extend the fixed period to 125 years, in due course.