Also known as: disabling restraint · disablingly restrained
Written by attorneys · grounded in primary & secondary sources — see below
A provision included in a donative transfer of property that prevents the transferee from alienating the interest by rendering any attempted transfer void or ineffective.
Deanna Davenport devises Blackacre to her son Dylan Duffy in fee simple but adds a clause stating that Dylan or his heirs shall never have power to transfer any interest by any means. The clause creates a disabling restraint that renders transfer impossible from the moment the devise takes effect. Dylan remains free to convey Blackacre despite the attempted restriction.
Dominic Drake devises controlling membership units in a wireless LLC to his niece Deborah Dunn but bars any transfer to foreign carriers or competing network operators during the trust term. The clause imposes a disabling restraint limited to a defined class of buyers. A court must weigh the specialized telecom assets and security purpose against the policy favoring alienation to decide whether the restraint survives.
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A disabling restraint is invalid if it would make transfer impossible for any period of time from the date of the donative transfer. Absolute bars lasting for the full term of a trust or for decades fall within this prohibition regardless of the settlor's purpose.
Supporting sources
The restraint is valid only if under all the circumstances the purpose, nature, and duration show that the policy favoring freedom of alienation does not reasonably apply. Courts balance the donor's objectives against market effects and the breadth of excluded buyers.
Supporting sources
No. The rule voids only the restraint itself and leaves the donative transfer intact so the property passes to the intended recipient without the restriction.
Supporting sources
A disabling restraint renders any attempted transfer void. A forfeiture restraint terminates the estate upon attempted transfer. A promissory restraint imposes contractual liability for breach of a promise not to transfer.
…hampered, id. Thus the general rule is that a restraint on alienation which provides that the property cannot be alienated, a disabling restraint, Simes & Smith, supra at § 1131, Restatement of the Law of Property § 404, is per se invalid, Simes & Smith, supra at § 1137; Restatement of the Law of Property § 406, while…