This section is from the book "Real Property, An Introductory Explanation Of The Law Relating To Land", by Alfred F Topham. Also available from Amazon: The New Law Of Property.
The rule very roughly stated is this, that you cannot at this moment tie up property for longer than the lives of persons now living and 21 years after their deaths.
The history of the rule shows that it is founded on the practice of a modern settlement of land (see p. 34), by which land is settled on a man for life, and then on his first son in tail; the property is thus tied up until the son is born and reaches 21. Thus, it was held by four successive decisions of the Courts that property could be tied up -
(i.) During the life of any existing person and the minority of any person living at his death.
(ii.) During the lives of any number of existing persons and during the minority of any person living at the death of the survivor of them.
(iii.) During the life of any existing persons and for 21 years after the death of the survivor, irrespective of the minority of any particular person.
(iv.) If the person who became entitled on the death of the existing person should happen to be a posthumous child, who was en ventre sa mere at the time of the death, not being born until afterwards, the 21 years can be extended by the addition of the time which elapsed between the death of the person in question and the birth of the child.
This was decided in Cadell v. Palmer (1833), 7 Bli. N.S. 202. Land was devised to trustees on trust for a term of 120 years, if 28 named persons or any of them should so long live, and after the end of that term to trustees for a term of 20 years, and after the end of both terms on trust for persons to be then ascertained.
Held, the gift at the end of 28 lives in being and 20 years (or even 21 years) after such lives, without reference to the minority of any person, was good.
The rule against perpetuities is as follows: -
"Every attempted disposition of land or goods is void, unless, at the time when the instrument creating it takes effect, one can say, that it must take effect (if it take effect at all) within a life or lives then in being and 21 years after the termination of such life or lives, with the possible addition of the period of gestation."
It is impossible to say of any human disposition that it must take effect, and therefore the words in brackets must be added.
Points to note.
(1) The date from which the period commences is the date when the gift takes effect.
Thus, if a gift is contained in a will, the period commences from the death of the testator: if it is in a deed, then from the date of the deed.
(2) You do not wait to see what happens in fact, but you imagine yourself to be living at the time of the death of the testator (or the date of the deed) and the gift will only be good if you can then be absolutely certain that within the period described above the gift must either (i.) take effect or (ii.) fail altogether.
If there is any possibility that the gift might be contingent or doubtful at the end of the period allowed, or might take effect after the period allowed, the gift is void from the beginning.
Thus, A made a will in 1900, and died in 1908. By the will A gave land upon trusts for his son 8 for Ms life, and after his death for the first child of S who should reach 21. This gift to the child of S is good, because S is a "life in being " at the date of A's death. And, whatever happens, no child of S can reach the age of 21 years more than 21 years after the death of S, unless it is a posthumous child, in which case the extra time is allowed by the rule.
But if it had been given to the first child of S who should reach 25, the gift would have been bad, because S might have died when his eldest child was under 4.
Again, suppose the same testator, A, gave other land upon trusts for his daughter D for her life, and after her death to the first of her issue (children, grandchildren, and so on) who should reach 21.
The gift to the issue will be bad, because, although at first sight one would think that some of her issue must either reach 21 within 21 years of D's death, or else die out altogether, yet the following might happen.
D might die in 1910, leaving one child, aged 1 year old. That child might marry in 1927, at the age of 18, and die in 1929, leaving one child, aged 1 year old, who would not reach 21 until 1949, or 39 years after the death of D.
And, because this might happen, the gift to the issue of D is void altogether.
Exceptions to the Rule against perpetuities.
(1) Estates taking effect upon failure of an estate tail.
If land is granted "to A and the heirs of his body," with remainder to B in fee simple, B's estate may not take effect in possession until many generations of A's issue have lived and died. But the gift to B is not void, because A could at any time bar the entail and sell the fee simple, and therefore the land is not tied up at all.
(2) Gifts of land for charitable purposes are not void merely because they may go on for ever. But if a future gift of land is made to a charity, it will be void unless it must commence within the period allowed.
Re Lord Stratheden and Campbell (1894), 3 Ch. 265.
A testator gave an annuity to a volunteer corps, to commence on the appointment of the next lieutenant-colonel.
Held, though this is a gift to a charity it is void, for the next lieutenant-colonel need not necessarily be appointed for many years after the death or retirement of the present officer.
(3) Provisions for payment of the debts of the grantor.
Bateman v. Hotchkin (1847), 10 Beav. 426.
H. by will devised land to trustees for 1000 years upon trust to raise £500 each year and accumulate it until all his debts (which amounted to £72,000) should be paid.
Held. - This trust was good, though it might take 53 years or more to pay off the debts.
(4) The Cy Pres doctrine. - If a testator devises land to a living person for life, and after his death to that person's child (not yet born) for his life, and after the child's death to the son of that child in tail, the gift to the child's son would be void under the rule against perpetuities; but the gift will be construed as nearly as possible (cy pres) to the intentions of the testator, and he will be deemed to have intended to give an estate tail to the child.
Humberston v. Humberston (1716), 1 P. W. 332.
A testator divised land to Matthew H. for life, and upon the death of Matthew to his first son for life, and so to the first son of that first son for life, etc. The gift to the son of Matthew's son is void, for he might not be born within 21 years after Matthew's death.
Held. - "Where the limitation is to the first son unborn, there the limitation to such unborn son shall be in tail male."
This doctrine does not however extend to any other form of gift; and the general rule is that the meaning of the will or deed must be ascertained without reference to the rule against perpetuities, and then the gift will he void if it infringes that rule.
Thus the doctrine of cy pres will not be applied if the effect of giving an estate tail to the son would be to alter the order in which the persons selected by the testator will take the land.
Re Mortimer. Gray v. Gray,  2 Oh. 502.
Land was devised to F. Gray for life; remainder to the sons of F. Gray successively for life; remainder (after each life estate) to the sons of each son of F.
Gray successively in tail male; remainder to the daughters of each son of F. Gray in tail; remainder to the daughters of F. Gray in tail.
Held, The Cy pres doctrine cannot be applied in this case, for, if the gift were construed as an estate tail to each son of F. Gray, the estate would descend first to the eldest son of F. Gray, then to the eldest son's sons, then to the eldest son's daughters.
Whereas the testator intended it to go first to the eldest son of F. Gray, then to the eldest son's sons, then to the second son of F. Gray and his sons.
Therefore the gift to the sons of the sons of F. Gray was void.