In the law of future interests, a rule that provides that even though the validity of interests created by the exercise of a power of appointment is ordinarily measured from the date the power is created, not from its exercise, the facts existing on the date of its exercise can be considered in order to determine if the RULE AGAINST PERPETUITIES has been violated.
At COMMON LAW, the rule against perpetuities prescribed that no interest in property is valid unless it vests, if at all, not later than 21 years plus the period of gestation after some life or lives in being at the time of the creation of the interest. A property interest vests when it is given to a person in being and is not subject to a condition precedent (the occurrence of a designated event). This rule restricts a person's power to control the ownership and possession of her property after her death and ensures the transferability of property.
The second look doctrine has been applied to mitigate the harsh effect of the rule against perpetuities on a power of appointment?authority granted by one person by deed or will to another, the donee, to select a person or persons who are to receive property.
For example, B was the life income beneficiary (one who profits from the act of another) of a trust and the donee of a special power over the succeeding remainder?the property that passes to another after the expiration of an intervening income interest. His father, F, who predeceased him, established the trust in his will. B exercised his power through his own will, directing that the income be paid after his death to his children for the life of the survivor and that, upon the death of his last surviving child, the corpus?the main body or principal of a trust?be paid to his grandchildren. At F's death, B had two children, X and Y. No other children were born to B, and at his death, X and Y are still alive.
B's appointment is valid. The perpetuity period is measured from F's death. If only the facts existing at F's death could be considered, however, B's appointment would partly fail because of the possibility that he might have another child after F's death who would have children more than 21 years after the deaths of B, X, and Y. In considering the validity of B's appointment, however, not just the facts existing when the perpetuity period commences to run on B's appointment are considered. The facts existing at B's death...