Disney’s Lawyers Wield The Magical “Rule Against Perpetuities” (2024)

The plight of the first-year law student perilously attempting to wrap their head around the infamous Rule Against Perpetuities is a tale as old as time. (See what I did there?)

“No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.”

So goes the notorious phrasing of the Rule Against Perpetuities (the “Rule”) coined by John Chipman Gray, who constructed the standard formulation of the Rule in his 1886 treatise. Little did Gray know that his creation would — ironically — plague law students and lawyers with migraines in perpetuity for generations to come.

The Rule Against Perpetuities is an archaic construction of American property law intended to limit the extent to which a property owner can control land ownership after death. It prevents land owners from creating future interests that dynastically tie up property . . . in perpetuity. The Rule prevents a future interest in property from vesting (becoming legally effective) too far into the future. Specifically, a conveyance of property that could cause an ownership interest to vest later than 21 years after the death of a person alive at the time of the conveyance is void under the Rule. (Clear as mud isn’t it?)

If at all, it’s extremely rare that the Rule rears its ugly head in regular legal practice. (For context, I am a real estate finance attorney at an AmLaw 200 law firm. I review restrictive covenants, encumbrances, and other documents affecting real property every day, and I’ve never seen the Rule make an appearance in my practice.) In fact, a quick search on LexisNexis seems to reveal more malpractice claims against lawyers misunderstanding the Rule than cases applying the Rule. However, the Rule remains a consistently covered topic in law school courses on property and estate law — as well as on bar exams across the country.

In fact, the Rule made not just one — but two — appearances on the written component of the July 2022 Uniform Bar Exam (“UBE”) between two different fact patterns. This was despite the many assurances of bar preparation course lecturers that the Rule is hardly tested on the UBE, and should not be a top study priority for examinees.

Despite its reputation, the Rule somehow has a way of making appearances in the most unexpected places . . . even Disney World.

Yes. Disney World.

It is no secret that Florida Governor Ron DeSantis has been going toe to toe with Walt Disney World for control of Florida real estate and associated intellectual property and land rights. Disney World had previously controlled its oversight board for its tax district before the implementation of a new board. The prior board had controlled fire and police departments, development planning initiatives, and road maintenance, the ABA Journal explains in its story covering the topic. However, the state legislature voted to remove Disney’s self-governing privileges and instill a new board as approved by Governor DeSantis.

In the latest chapter of what has been a lengthy and ongoing battle between the state government and Disney, an agreement between Reedy Creek Improvement District (a government entity established by the State of Florida, also referred to as “RCID”) and Disney has made an entrance into the debacle. The agreement was effectuated one day before the Florida House of Representatives voted to instill the new board.

The agreement is a Declaration of Restrictive Covenants — a legal document that purports to establish prohibitions (legally known as restrictive covenants) on the Florida government’s ability to use Disney intellectual property without approval, as well as prevent the RCID from operating certain types of businesses (hotels, retail stores, flea markets, theaters, nursing homes, etc.) within the district.

It appears that Disney’s lawyers — as part of their efforts to keep the restrictive covenants running in perpetuity and from being challenged—uniquely invoked the Rule Against Perpetuities not as a shield, but as a sword.

In the “Term” provision of the Declaration, the drafting attorneys wrote, “[I]f the perpetual term of this Declaration is deemed to violate the ‘Rule Against Perpetuities,’ . . . this Declaration shall continue in effect until twenty one (21) years after the death of the last survivor of the descendants of King Charles III, King of England living as the date of this Declaration.”

Yes. You read that right. King Charles III has entered the fray.

You might be thinking, “Why? Why on earth did Disney’s lawyers draft this term provision like this? Why is King Charles III relevant?”

Let’s unpack this.

The Rule defines an unacceptable measurement of duration as 21 years after the death of some person who is alive on the document’s effective date. The John Chipman Gray formulation of the Rule does not specify who that living person needs to be, or even if that person needs to have any kind of connection to the conveyance.

So, Disney’s lawyers seem to have picked a person whose descendant’s information is public knowledge and readily accessible. The most recently born descendant of King Charles — Princess Lilibet — was born in 2021, which would mean that if she lived to age 80, the term of the Declaration would continue into 2122, over one hundred years later. Moreover, such a provision seems intended to simply foreclose any type of challenge based on the Rule’s limitations. A potential challenger of the Declaration’s effectiveness (such as the lawyers reviewing the document on Governor DeSantis’ behalf) may think twice about invoking the Rule against a document that so expressly contemplates it. (Put simply, Disney said “You want to fight this? Be our guest.”).

However, it is worth noting that the provision is only triggered if the Declaration is deemed to violate the Rule in the first place — presumably by a court with jurisdiction over a case brought by a party with standing to invoke a legal challenge to the document’s enforceability (unlikely).

Regardless of the strategic reasons underlying the provision, there’s no doubt Disney’s lawyers enjoyed themselves in the process of drafting this provision. The decision to drop one of the most laughed-at constructs in American law into a legal document has sparked a cavalcade of memes, jokes, and discussions between law students in both online and academic communities. Undoubtedly, property law professors across the nation are surely rewriting their exam questions.

As Mary Poppins once said, “In every job that must be done, there is an element of fun.”